Rule2026-07477
Rescinding Portions of Department of Commerce Title VI Regulations To Conform More Closely With the Statutory Text and To Implement Executive Order 14281
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
April 16, 2026
Effective
April 16, 2026
Issuing agencies
Commerce Department
Abstract
By this rule, the Department of Commerce (Department) amends its regulations implementing Title VI of the Civil Rights Act of 1964 (Title VI) to eliminate provisions concerning disparate-impact liability and affirmative action. These amendments align the Department's regulations with Title VI's original public meaning, avoid constitutional concerns, reduce compliance costs, and serve the public interest. In addition, these revisions implement changes directed in Executive Order 14281.
Full Text
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<title>Federal Register, Volume 91 Issue 73 (Thursday, April 16, 2026)</title>
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[Federal Register Volume 91, Number 73 (Thursday, April 16, 2026)]
[Rules and Regulations]
[Pages 20326-20333]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-07477]
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DEPARTMENT OF COMMERCE
15 CFR Part 8
[Docket No. 260108-0024]
RIN 0605-AA70
Rescinding Portions of Department of Commerce Title VI
Regulations To Conform More Closely With the Statutory Text and To
Implement Executive Order 14281
AGENCY: Office of Civil Rights, Department of Commerce.
ACTION: Final rule.
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SUMMARY: By this rule, the Department of Commerce (Department) amends
its regulations implementing Title VI of the Civil Rights Act of 1964
(Title VI) to eliminate provisions concerning disparate-impact
liability and affirmative action. These amendments align the
Department's regulations with Title VI's original public meaning, avoid
constitutional concerns, reduce compliance costs, and serve the public
interest. In addition, these revisions implement changes directed in
Executive Order 14281.
DATES: The rule is effective April 16, 2026.
FOR FURTHER INFORMATION CONTACT: Daniel Sweeney, Senior Counsel, Office
of the General Counsel, at (202) 482-1395.
SUPPLEMENTARY INFORMATION:
I. Executive Summary
The Department is revising and rescinding portions of its
regulations promulgated pursuant to Title VI, 42 U.S.C. 2000d-1, to
more closely align its regulations to the language that Congress
enacted in Title VI prohibiting intentionally discriminatory conduct,
see 42 U.S.C. 2000d. The Department is cross-referencing and
incorporating the reasoning of the Department of Justice (DOJ) final
rule published in the Federal Register on December 10, 2025. 90 FR
57141. There are serious statutory and constitutional concerns with the
legality of the Department's Title VI regulations, which go beyond
intentional discrimination to additionally prohibit conduct having an
unintentional disparate impact. This rule accordingly rescinds those
portions of the regulations that prohibit conduct having a disparate
impact, which are in considerable tension with both Title VI and the
Constitution and do not serve the public interest.
The rule's revisions also conform to Executive Order 14281,
``Restoring Equality of Opportunity and Meritocracy'' (Apr. 28, 2025;
90 FR 17537). That Order states that ``[i]t is the policy of the United
States to eliminate the use of disparate-impact liability in all
contexts to the maximum degree possible to avoid violating the
Constitution, Federal civil rights laws, and basic American ideals.''
Id. at 17537. Although the Department would take this action
independent of Executive Order 14281, the Order supports this action.
This rule makes clear that (i) the Department's Title VI
regulations do not prohibit conduct or activities that have a disparate
impact and instead prohibit only intentional discrimination, and (ii)
the Department thus will not pursue Title VI disparate-impact liability
against its Federal-funding recipients.
II. Discussion
A. Statutory History of Title VI
Title VI of the Civil Rights Act of 1964, as amended, provides:
``No person in the United States shall, on the ground of race, color,
or national origin, be excluded from participation in, be denied the
benefits of, or be subjected to discrimination under any program or
activity receiving Federal financial assistance.'' 42 U.S.C. 2000d.
Title VI also directs Federal departments and agencies that extend
Federal financial assistance to ``effectuate the provisions of'' Title
VI ``by issuing rules, regulations, or orders of general
applicability.'' 42 U.S.C. 2000d-1. The section of Title VI that sets
forth the prohibited conduct, 42 U.S.C. 2000d, prohibits intentional
discrimination and makes no reference to unintentional disparate
effects or impact. See Alexander v. Sandoval, 532 U.S. 275, 280 (2001)
(``[I]t is . . . beyond dispute--and no party disagrees--that [Title
VI] prohibits only intentional discrimination.''). The statute does not
explicitly provide any Federal department or agency with authority to
prohibit conduct having an unintentional disparate impact. And despite
having ample opportunities, Congress has not amended Title VI to impose
disparate-impact liability.
B. Regulatory History of Title VI
The Department originally published these regulations in a final
rule on July 5, 1973 (38 FR 17938). The rule was issued under Section
602 of the Civil Rights Act of 1964 (42 U.S.C. 2000d-1). Its issuance
was part of a coordinated effort among Federal departments and
agencies, based on recommendations from the Interagency Committee for
Uniform Title VI Regulation Amendments, to clarify and standardize the
application of Title VI. Shortly thereafter, the Department published a
correction notice on September 4, 1973 (38 FR 23777), to fix minor
typographical errors in the original publication.
In 2003, the Department added language defining ``program or
activity'' and ``program'' to reflect the amendment of Title VI by the
Civil Rights Restoration Act of 1987, Public Law 100-259. 68 FR 51334;
see 15 CFR 8.3(g). Thus, beyond the required updating of the phrases
``program or activity'' and ``program'' pursuant to the Civil Rights
Restoration Act, the Department has not substantively updated its Title
VI regulations since 1973.
C. Relevant Supreme Court Decisions
The Supreme Court has found that Title VI, 42 U.S.C. 2000d, does
not prohibit facially neutral policies that result in disparate
outcomes when there is no discriminatory intent. Rather, it prohibits
only intentional discrimination. In 1978, the Supreme Court found that
Congress intended Title VI to prohibit ``only those racial
classifications that would violate the Equal Protection Clause'' if
committed by a government actor. Regents of the Univ. of Cal. v. Bakke,
438 U.S. 265, 287 (1978) (Powell, J., announcing the judgment of the
Court); id. at 325, 328, 352-53 (Brennan, White, Marshall, and
Blackmun, JJ., concurring in part and dissenting in part); see also
Students for Fair Admissions, Inc. v. President & Fellows of Harvard
Coll., 600 U.S. 181, 198 n.2 (2023) (SFFA). Shortly before Bakke's
Title VI holding, the Supreme Court held that the Equal Protection
Clause prohibits only intentional discrimination and that ``a law or
other official act'' that has a ``racially disproportionate impact''
alone does not violate that Clause. Washington v. Davis, 426 U.S. 229,
239 (1976); see also Vill. of Arlington Heights v. Metro. Hous. Dev.
Corp., 429 U.S. 252, 265 (1977) (``Proof of racially discriminatory
intent or purpose is required to show a violation of the Equal
Protection Clause.''). Taken together, these Supreme Court cases
establish that Title VI's statutory prohibition, like the Equal
Protection Clause, extends only to intentional discrimination.
In 2001, the Supreme Court, in Alexander v. Sandoval, reaffirmed
that settled understanding. See 532 U.S. at 280 (``[I]t is . . . beyond
dispute . . . that [Title VI] prohibits only intentional
discrimination.''). In Sandoval, the Supreme Court held that private
plaintiffs lacked a private right of action to enforce DOJ's
``disparate-impact
[[Page 20327]]
regulations.'' Id. at 285-87. Although the Supreme Court had previously
found a private cause of action to enforce Title VI's bar on
intentional discrimination, id. at 279-80, that conclusion did not
extend to enforcing DOJ's ``disparate-impact regulations.'' Id. at 285.
As the Supreme Court explained, it is ``clear'' that ``the disparate-
impact regulations do not simply apply'' the statutory prohibition, as
the regulations ``forbid conduct that [Title VI] permits,'' so it is
equally ``clear that the private right of action to enforce [Title VI]
does not include a private right to enforce these regulations.'' Id.
While the Supreme Court in Sandoval ``assume[d]'' without deciding that
DOJ's disparate-impact regulations were valid, the Court explained that
the then-current version of the regulations were in ``considerable
tension'' with the Supreme Court's Title VI precedents. Similarly, the
regulations did not ``authoritatively'' construe Title VI because the
regulations ``forbid conduct''--namely, policies that unintentionally
result in a disparate impact--that Title VI ``permits.'' Id. at 281-82,
284-85; see also id. at 286 n.6 (``[Title VI] permits the very behavior
that the regulations forbid.'').
Finally, in 2024, the Supreme Court overruled Chevron U.S.A. Inc.
v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). See
Loper Bright Enters. v. Raimondo, 603 U.S. 369, 409-12 (2024). In
reaching that result, the Supreme Court made clear that ``statutes . .
. have a single, best meaning'' that is `` `fixed at the time of
enactment.' '' Id. at 400 (quoting Wis. Cent. Ltd. v. United States,
585 U.S. 274, 284 (2018)). Thus, Title VI's bar on discrimination can
have only one meaning. And under Supreme Court precedent, the single,
best meaning of Title VI is that it ``prohibits only intentional
discrimination'' and ``permits'' facially neutral policies that result
in disparate outcomes so long as there is no discriminatory intent.
Sandoval, 532 U.S. at 280, 286 n.6.
D. Executive Order 14281
On April 23, 2025, the President issued Executive Order 14281. This
Order restated the ``bedrock principle of the United States . . . that
all citizens are treated equally under the law.'' 90 FR at 17537. The
Order explained that this ``principle guarantees equality of
opportunity, not equal outcomes,'' and ``promises that people are
treated as individuals, not components of a particular race or group.''
Id.
That Order also explained that disparate-impact liability
``endangers this foundational principle.'' Id. Disparate-impact
liability, the Order reasoned, ``all but requires individuals and
businesses to consider race and engage in racial balancing to avoid
potentially crippling legal liability.'' Id. As the Order explained,
disparate-impact liability ``not only undermines our national values
but also runs contrary to equal protection under the law and,
therefore, violates our Constitution.'' Id.
The Order relayed that because of these problems, ``[i]t is the
policy of the United States to eliminate the use of disparate-impact
liability in all contexts to the maximum degree possible to avoid
violating the Constitution, Federal civil rights laws, and basic
American ideals.'' Id. Accordingly, this rule revises the Department's
currently existing Title VI regulations, consistent with the Order's
policy and purpose.
In any event, the Department would have independently initiated
steps toward making these changes regardless of Executive Order 14281.
Even if Executive Order 14281 did not exist, in other words, the
Department would have taken steps to adopt the policy to eliminate the
use of disparate-impact liability under Title VI. The Order states, and
the Department firmly agrees, that a ``bedrock principle of the United
States is that all citizens are treated equally under the law. This
principle guarantees equality of opportunity, not equal outcomes. It
promises that people are treated as individuals, not components of a
particular race or group. It encourages meritocracy and a colorblind
society,'' not race-, color-, or national-origin-based favoritism. 90
FR at 17537. And adherence to this principle, including in the issuance
of grants, ``is essential to creating opportunity, encouraging
achievement, and sustaining the American Dream.'' Id.
Imposing disparate-impact liability endangers these policy
objectives. Disparate-impact liability also raises serious
constitutional concerns, is in considerable tension with the original
public meaning of Title VI, creates confusion, increases the costs of
compliance, and does not serve the public interest. After considering
the relevant issues and factors and weighing the relevant
considerations, the Department concludes that these reasons support
eliminating disparate-impact liability from the Department's Title VI
regulations. In any event, the Department concludes that each reason is
a separate and independent basis for eliminating disparate-impact
liability from the Department's Title VI regulations.
E. Need for Rulemaking
The Department's regulation at 15 CFR 8.4, entitled
``Discrimination prohibited,'' outlines the core prohibitions against
discrimination and includes several provisions that go beyond the
statutory text and constitutional requirements by prohibiting facially
neutral policies that have a disparate impact. Specifically, Sec.
8.4(a) establishes the general principle that no person in the United
States shall, on the ground of race, color, or national origin, be
excluded from participation in, be denied the benefits of, or otherwise
be subjected to discrimination under any program to which the part
applies. Section 8.4(b) enumerates specific discriminatory acts that
are prohibited. These include, among others, providing different
services or benefits, subjecting individuals to segregation or separate
treatment, restricting the enjoyment of advantages or privileges
afforded to others, and using criteria or administrative methods that
have the effect of discriminating. This section also prohibits
recipients from selecting sites or locations for facilities with the
purpose or effect of excluding individuals on prohibited grounds.
Furthermore, Sec. 8.4(b)(6) requires a recipient to take affirmative
action to overcome the effects of prior discrimination. Section 8.4(c)
addresses employment practices. It establishes that where a primary
objective of the Federal financial assistance is to provide employment,
a recipient is prohibited from discriminating in its employment
practices. Even where providing employment is not a primary objective,
the rule specifies that the same prohibitions apply if a recipient's
discriminatory employment practices tend to exclude individuals from
participation in or deny them the benefits of the federally assisted
program.
There are serious statutory and constitutional concerns with the
legality of the Department's Title VI disparate-impact regulations. The
Department also has serious policy concerns with its current disparate-
impact regulations, including that the disparate-impact standard
creates confusion, undermines public confidence in the nation's civil
rights laws and the rule of law, and produces burdensome litigation and
compliance costs.
1. Serious Legal Concerns
In accordance with the reasoning of the DOJ final rule, this
Department recognizes that there are serious statutory concerns as to
whether the
[[Page 20328]]
Title VI statute authorizes the disparate-impact provisions of the
current regulations. As summarized above, the Supreme Court's Sandoval
decision makes clear that Title VI prohibits ``only intentional
discrimination'' and ``permits'' facially neutral policies that result
in disparate outcomes when there is no discriminatory intent. Sandoval,
532 U.S. at 280-81, 286 n.6. That is the ``single, best meaning'' of
Title VI. Loper Bright, 603 U.S. at 400. Sandoval calls into serious
doubt the legality of the Department's ``disparate-impact
regulations.'' Sandoval, 532 U.S. at 281-82, 284-85 (noting that DOJ's
substantially identical regulations were in ``considerable tension''
with the Supreme Court's Title VI precedents); see also id. at 286 n.6
(``[Title VI] permits the very behavior that the regulations
forbid.''). Although Sandoval resolved only the question of private
enforceability, subsequent cases such as Loper Bright have made clear
that the Department cannot extend Title VI beyond its original public
meaning. See Loper Bright, 603 U.S. at 412-13 (holding that ``courts
must . . . ensur[e] that [an] agency acts within'' its statutory
authority). And even in the absence of Supreme Court precedent, the
Department would have concluded that the best reading of Title VI is
that it prohibits only intentional discrimination.
Title VI authorizes agencies to promulgate regulations ``to
effectuate'' the statute's prohibition of intentional discrimination.
42 U.S.C. 2000d-1. The current regulations' extension of prohibited
conduct to include conduct with an unintentional disparate impact
reaches a vastly broader scope than the statute itself. This scope is
too broad to be considered a simple prophylactic measure aimed at
preventing intentional discrimination. See Sandoval, 532 U.S. at 286
n.6 (``[Title VI] permits the very behavior that the regulations
forbid.''). Thus, the disparate-impact regulations do not
``effectuate'' Title VI. 42 U.S.C. 2000d-1.
There are also serious concerns about whether the Department's
Title VI regulations pass constitutional muster under the Equal
Protection Clause. As the Supreme Court recently held in SFFA, ``the
Equal Protection Clause . . . applies without regard to any differences
of race, of color, or of nationality--it is universal in its
application'' and the ``guarantee of equal protection cannot mean one
thing when applied to one individual and something else when applied to
a person of another color.'' 600 U.S. at 206 (internal quotation marks
omitted) (first quoting Yick Wo v. Hopkins, 118 U.S. 356, 369 (1886);
and then quoting Bakke, 438 U.S. at 289-90 (Powell, J.)). Despite the
promises of the Equal Protection Clause, a funding recipient's risk of
disparate-impact liability under the Department's regulations is
triggered by unintentional disparate outcomes, which the recipient may
not even know about without investigation. To evaluate and avoid this
risk, the funding recipient must incur investigatory costs, such as
conducting an impact analysis, and is coerced to proactively consider
race, color, and national origin, and potentially use it to change the
unintended disparate outcomes. In short, disparate-impact liability
encourages and, in some cases, requires covered entities to engage in
the intentional use of race and racial balancing to eliminate those
disparate outcomes by treating certain racial groups differently from
others--the exact conduct the Equal Protection Clause forbids. See id.
The serious constitutional concerns raised by these perverse incentives
further confirm that the best reading of Title VI is that it prohibits
only intentional discrimination and does not authorize the Department
to impose disparate-impact liability. See Edward J. DeBartolo Corp. v.
Fla. Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568, 575
(1988) (``[W]here an otherwise acceptable construction of a statute
would raise serious constitutional problems, the Court will construe
the statute to avoid such problems unless such construction is plainly
contrary to the intent of Congress.'' (citing NLRB v. Catholic Bishop
of Chi., 440 U.S. 490, 499-501, 504 (1979))).
This encouraged or coerced use of race, color, or national origin
violates the Equal Protection Clause unless it survives review under
the ``daunting'' strict-scrutiny standard. SFFA, 600 U.S. at 206; see
also Free Speech Coal., Inc. v. Paxton, 145 S. Ct. 2291, 2310 (2025)
(``Strict scrutiny--which requires a restriction to be the least
restrictive means of achieving a compelling governmental interest--is
`the most demanding test known to constitutional law.''' (quoting City
of Boerne v. Flores, 521 U.S. 507, 534 (1997))). The use of race,
color, or national origin necessitated by the disparate-impact
provisions runs into serious issues with the requirement of narrow
tailoring to achieve a compelling interest. SFFA, 600 U.S. at 206-07.
Similarly, the ``affirmative action'' provision authorizes and
sometimes requires the intentional use of race without requiring that
this intentional use be narrowly tailored to serve a recognized
compelling interest. Instead, it encourages intentional racial
balancing ``to overcome the effects of'' unintended racial disparities.
28 CFR 42.104(b)(6). Thus, for substantially the same reasons as above,
the ``affirmative action'' provision raises serious constitutional
concerns.
As summarized above, there are serious statutory and constitutional
concerns with the Department's disparate-impact regulations. But even
if the regulations were consistent with the statute, the Department
finds that eliminating the potential constitutional concerns addressed
above would independently justify the amendment of the regulations. Cf.
U.S. Tel. Ass'n v. FCC, 188 F.3d 521, 528 (D.C. Cir. 1999) (concluding
it was not ``arbitrary and capricious'' to adopt a certain policy in
order to ``avoid[ ] raising a non-trivial constitutional question'').
And even if the regulations did not raise serious constitutional
concerns, the Department finds that eliminating the costs and confusion
caused by the mismatch between the statute and the disparate-impact
regulations would independently justify the repeal of the regulations.
2. Serious Policy Concerns
The Department also has serious policy concerns with the Title VI
regulations' imposition of disparate-impact liability. While the
Department expresses its policy concerns with disparate-impact
liability independent of Executive Order 14281, that Order sets forth
many valid policy concerns with disparate-impact liability:
On a practical level, disparate-impact liability has hindered
businesses from making hiring and other employment decisions based
on merit and skill, their needs, or the needs of their customers
because of the specter that such a process might lead to disparate
outcomes, and thus disparate-impact lawsuits. This has made it
difficult, and in some cases impossible, for employers to use bona
fide job-oriented evaluations when recruiting, which prevents job
seekers from being paired with jobs to which their skills are most
suited--in other words, it deprives them of opportunities for
success.
90 FR at 17537. Moreover, the legal concerns identified above have
caused uncertainty and confusion for Federal funding recipients as to
whether and when they need to comply with the disparate-impact
regulations and when they can or must consider race, color, and
national origin. As explained above, Sandoval casts substantial doubt
on the validity of the disparate-impact regulations that many Federal
departments and agencies have promulgated pursuant to Title VI. See 532
U.S. at 280-82.
[[Page 20329]]
Additionally, in practice, and as explained above, disparate-impact
liability leads covered entities to engage in racial balancing even as
the underlying Title VI statute forbids intentional racial
discrimination. This tension tends to create confusion and undermine
public confidence in the nation's civil rights laws and in the rule of
law itself, as the law seems to both forbid and require the same
conduct.
These problems are amplified by the arbitrary nature of the racial
and ethnic categories typically used to measure disparate effects,
which, by virtue of their arbitrariness, typically lack a meaningful
connection to a compelling interest. See, e.g., SFFA, 600 U.S. at 216-
17 (explaining that the ``[racial] categories'' utilized by Harvard and
University of North Carolina were ``themselves imprecise in many ways''
and ``the use of these opaque racial categories undermine[d], instead
of promote[d], [their] goals'').
The Department has considered, among other views, the view that
looking at disparate effects can sometimes be useful in uncovering or
deterring subtle discrimination or indifference to unnecessary and
arbitrary barriers; the view that placing a focus on disparate outcomes
can help undo the impact of prior instances of intentional
discrimination; the view that placing a focus on disparate outcomes is
critical for advancing the Department's goals of promoting economic
development and creating conditions that facilitate economic
opportunities for all communities; the view that covered entities and
affected individuals have already structured their policies and conduct
around the disparate-impact provisions at issue; the view that meeting
certain racial and/or ethnic thresholds carries benefits regarding
experience, knowledge, empathy, and cooperation; and the view that the
elimination of disparate-impact provisions is a disruption to the
status quo that places an unnecessary and inappropriate focus on race
and ethnicity. But all these alleged benefits are outweighed by the
other issues and factors the Department has considered.
The Department has also considered the alternative of trying to
adopt a modified version of disparate-impact liability, for example, by
requiring covered entities to try to remedy disparate impacts and/or
unintentional discrimination for only certain types of cases regarding
education, housing, or employment; or by requiring covered entities to
consider disparate impacts for special economic development and
opportunity purposes. But any version of imposing liability for
unintentional discrimination is inconsistent with Title VI's original
public meaning, and even a modified version of disparate-impact
liability would not sufficiently eliminate the Department's serious
legal and policy concerns. The Department determines that any benefits
from adopting alternative versions of disparate-impact liability are
outweighed by the Department's legal and policy concerns. And even if
possible, developing such a rule would not solve the confusion or rule-
of-law concerns expressed above, nor reduce the compliance and
litigation costs that covered entities face. The Department believes
that the better course is to avoid the complexities and litigation
associated with this alternative, which ultimately would leave some
parts of the problems unaddressed and others inadequately addressed.
The Department also considered the potential reliance interests of
funding recipients and others on the disparate-impact regulations.
Sandoval, however, cast serious doubt on the regulations more than 20
years ago. And Executive Order 14281 also directed all agencies to
``deprioritize enforcement of all statutes and regulations to the
extent they include disparate-impact liability,'' including
specifically the Department's Title VI disparate-impact regulations. 90
FR at 17538. The Department accordingly believes that any reliance
interests should be minimal and do not outweigh the Department's legal
and other policy concerns. Further, each of the Department's concerns,
whether considered cumulatively or separately, outweighs any reliance
interests.
The Department notes that Sandoval has also led to a divergence
between Title VI enforcement by private plaintiffs and enforcement by
Federal departments and agencies. After Sandoval, private plaintiffs
can enforce only Title VI's statutory prohibition on intentional
discrimination, while the Department can continue to pursue disparate-
impact liability. Repealing the disparate-impact regulations would
eliminate this incongruent enforcement.
Overall, after considering the relevant issues and factors and
weighing the relevant considerations, the Department finds that,
regardless of the legality of the Department's disparate-impact
regulations, the above summarized policy concerns, when viewed
separately or cumulatively, independently justify the repeal of its
disparate-impact regulations.
III. Regulatory Amendments
This rule's regulatory changes address the concerns regarding the
statutory authority supporting the scope of these regulations that the
Supreme Court questioned in Sandoval and the other legal and policy
concerns discussed above, harmonize the implementing regulations' scope
with the original public meaning of Title VI, promote consistent
enforcement among private plaintiffs and Federal departments and
agencies, and provide much needed clarity to the courts and Federal
funding recipients.
For the reasons summarized above, the Department amends the
following provisions in its Title VI implementing regulation that
explain the particular types of ``Discrimination prohibited,'' located
at 15 CFR 8.4.
A. Table Summarizing Amendments
The table below indicates the exact wording changes. For each
section indicated in the left column, the text shown in the middle
column is removed and the text shown in the right column is added:
----------------------------------------------------------------------------------------------------------------
Section Remove Add
----------------------------------------------------------------------------------------------------------------
8.4(b)(2)............................... Full text of paragraph: ``(2) A recipient ``[Removed and
. . . or national origin.''. Reserved]''.
8.4(b)(3)............................... ``or effect'' from both places............
8.4(b)(6)............................... Full text of paragraph (6), subparts (i)
and (ii).
8.4(c)(1)............................... ``(1)'' from ``(c) Employment practices.
(1) Where a primary objective of the . .
. .''.
In revised, remove ``(c) Employment
practices, ``Such recipients and other
parties . . . , develop a written
affirmative action plan.''.
8.4(c)(2)............................... Full text of paragraph: ``(2) In regard to
. . . of beneficiaries.''.
----------------------------------------------------------------------------------------------------------------
[[Page 20330]]
B. Section-by-Section Analysis
Section 8.4(b)(2)
Section 8.4(b)(2) is the current regulation's general prohibition
of unintentional disparate impact. This paragraph expands prohibited
conduct from purposeful discrimination to Federal funding recipients
who ``utilize criteria or methods of administration which have the
effect of subjecting individuals to discrimination.'' Because this
paragraph's only purpose is to extend the scope of the regulation to
unintentional disparate-impact discrimination, this rule deletes this
paragraph and thus amends the Department's Title VI implementing
regulations to conform more closely to the scope of the original public
meaning of Title VI. The rule replaces paragraph (b)(2) with a
placeholder to maintain the numbering accuracy of previous citations
and other references to parts of this section.
Section 8.4(b)(3)
Section 8.4(b)(3) addresses a Federal funding recipient's or
applicant's selection of sites or locations of facilities. The
paragraph provides that a funding recipient may not make selections
with the ``purpose or effect'' of discriminating, or ``with the purpose
or effect of defeating or substantially impairing the accomplishment of
the objectives of'' Title VI or the Department's implementing
regulations. The paragraph's two references to ``effect'' extend its
scope to unintentional disparate impacts. This rule deletes both ``or
effect'' references to conform paragraph (b)(3) more closely to the
scope of the original public meaning of Title VI.
Section 8.4(b)(6)
Section 8.4(b)(6) deals with ``affirmative action.'' Paragraph
(b)(6)(ii) authorizes affirmative action in programs even in the
absence of a finding of prior discrimination in a program ``to overcome
the effects of conditions which resulted in limiting participation by
persons of a particular race, color or national origin.'' This
provision points not to intentional discrimination, but rather to the
unintentional ``effects of conditions.'' The provision consequently
authorizes intentional racial classifications, racial preferences, and
other race-based actions without the supporting compelling interest and
narrow tailoring that the Equal Protection Clause demands. This section
has long conflicted with the Equal Protection Clause.
Paragraph (b)(6)(i) requires that a recipient ``take affirmative
action to overcome the effects of prior discrimination'' if in
``administering a program'' the ``recipient has previously
discriminated.'' This provision goes well beyond the Equal Protection
Clause, which permits in limited circumstances, but does not mandate, a
government to take narrowly tailored action to remedy the effects of
its identified past discrimination. See, e.g., Bakke, 438 U.S. at 307
(Powell, J.). Moreover, even putting aside the mandatory language in
the provision, this provision does not require sufficient narrow
tailoring to the particular past discrimination, but rather simply
``affirmative action to overcome the effects of prior discrimination.''
This provision accordingly promotes potentially illegal race
discrimination to the extent there is a lack of narrow tailoring.
Moreover, it problematically requires recipients to consider and use
race preferences when the recipient may not want to consider or use
race preferences. This is contrary to the Department's goal of
promoting and defending a culture of nondiscrimination and is
destructive of the public's understanding of, and faith in, the
nation's civil rights laws. This rule, therefore, deletes paragraph
(b)(6).
Section 8.4(c)
Section 8.4(c) addresses prohibited discriminatory employment
practices. Paragraph (c)(1) prohibits intentionally discriminatory
employment practices when a primary objective of the Federal financial
assistance is to provide employment. Paragraph (c)(2) extends the
prohibition to employment practices of the recipient even when the
financial assistance primary objective ``is not to provide employment''
if discrimination in the non-funded employment practices ``tends, on
the ground of race, color, or national origin, to exclude persons from
participation in, to deny them the benefits of, or to subject them to
discrimination under the program.'' This paragraph prohibits not only
intentional discrimination but also conduct that ``tends'' to have a
discriminatory effect on a program without the primary objective of
providing employment. Moreover, paragraph (c)(2)'s extension to
employment practices where the Federal funding's primary objective is
not to provide employment conflicts with the statutory limitation found
in 42 U.S.C. 2000d-3. Section 2000d-3 states, ``[n]othing contained in
[Title VI] shall be construed to authorize action under [Title VI] by
any department or agency with respect to any employment practice of any
employer, employment agency, or labor organization except where a
primary objective of the Federal financial assistance is to provide
employment.'' Id.; see also Johnson v. Transp. Agency, Santa Clara
Cnty., 480 U.S. 616, 628 n.6 (1987) (citing the statutory limitation
and noting Congress's intent that Title VI not ``impinge'' on Title
VII, which prohibits discriminatory employment practices). The rule
deletes paragraph (c)(2) so that the regulation more closely adheres to
the original public meaning of Title VI. This rule amends the current
text of paragraph (c)(1) to make a conforming edit to remove
affirmative action requirements in accordance with the reasoning of the
DOJ final rule and to implement a technical edit to reflect the removal
of paragraph (c)(2).
C. Severability
The Department's position is that each of these amendments serves a
vital and related but distinct purpose. The Department also confirms
that each of the amendments is intended to operate independently of
each other and that the potential invalidity of one amendment should
not affect the other amendments. The Department would adopt any of the
amendments independently of the invalidity of a separate amendment.
IV. Classification
A. Administrative Procedure Act
Pursuant to 5 U.S.C. 553(a)(2), the provisions of the
Administrative Procedure Act requiring notice of proposed rulemaking
and the opportunity for public participation are inapplicable to this
rule because it relates to ``agency management or personnel or to
public property, loans, grants, benefits, or contracts.''
Title VI concerns non-discrimination conditions on the receipt of
Federal financial assistance, and more particularly to the receipt of
Federal ``[g]rants and loans,'' ``property,'' ``personnel'' and ``[a]ny
Federal agreement, arrangement, or other contract which has as one of
its purposes the provision of assistance.'' 15 CFR 8.3(f); see also 15
CFR 8.5 (requiring funding recipient sign contractual assurance of
compliance with Title VI); Cummings v. Premier Rehab Keller, P.L.L.C.,
596 U.S. 212, 217-18 (2022) (observing that Congress enacted Title VI
``[p]ursuant to its authority to `fix the terms on which it shall
disburse federal money' '' (internal citation omitted)). Cf. Education
Programs or Activities Receiving or Benefitting from Federal Financial
[[Page 20331]]
Assistance, 82 FR 46655, 46655 (Oct. 6, 2017) (invoking the section
553(a)(2) exception to amend Title IX regulations to ``promote
consistency in the enforcement of Title IX for [the Department of
Agriculture] financial assistance recipients''); Preserving Community
and Neighborhood Choice, 85 FR 47899 (Aug. 7, 2020) (invoking the
exception to repeal Housing and Urban Development rule regarding
Federal grantees); Participation by Minority Business Enterprise in
Department of Transportation Programs, 53 FR 18285 (May 23, 1988)
(invoking the exception to expand coverage of Department of
Transportation regulation regarding Federal Aviation Administration's
airport financial assistance program); Nondiscrimination on the Basis
of Handicap in Federally Assisted Programs--Suspension of Guidelines
with Respect to Mass Transportation, 46 FR 40687 (Aug. 11, 1981)
(invoking the exception to suspend Department of Justice guidelines
regarding prohibiting disability discrimination in transportation
programs and activities receiving Federal financial assistance).
Indeed, invoking 5 U.S.C. 553(a)(2) is consistent with the Office
for Management and Budget's (OMB) definition for ``Federal financial
assistance'' under 2 CFR 200.1, which defines ``Federal financial
assistance'' with the same categories as the Administrative Procedure
Act's exception for rules ``relating to agency management or personnel
or to public property, loans, grants, benefits, or contracts,'' 5
U.S.C. 553(a)(2). With potentially limited exceptions not applicable to
the Department, all the forms of Federal financial assistance set forth
under 2 CFR 200.1 that the Department administers would fall under the
``public property, loans, grants, benefits, or contracts'' exception.
Thus, in accordance with the reasoning of the DOJ final rule, the
Department issues this final rule without prior public notice and
comment or a delayed effective date under 5 U.S.C. 553(a)(2).
B. Executive Orders 12866 and 13563 (Regulatory Review)
This rulemaking is a ``significant regulatory action'' under
section 3(f) of Executive Order 12866, 58 FR 51735, 51738 (Sep. 30,
1993). Accordingly, this rule has been submitted to the Office of
Management and Budget (OMB) for review.
This regulation has been drafted and reviewed in accordance with
Executive Order 12866 section 1(b), id. at 51735, and in accordance
with Executive Order 13563 section 1(b), 76 FR 3821, 3821 (Jan. 18,
2011), which supplements and reaffirms the principles of Executive
Order 12866. These Executive Orders direct agencies to assess all costs
and benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits.
58 FR at 51735; 76 FR at 3821. Executive Order 13563 also recognizes
that some benefits and costs are difficult to quantify and provides
that, where appropriate and permitted by law, agencies may consider and
discuss qualitatively values that are difficult or impossible to
quantify. Id.
As explained in the preamble, the regulatory modifications this
rule makes are necessary to conform Department regulations to Executive
Order 14281, address serious legal concerns regarding the Department's
Title VI regulation that the Supreme Court raised in Sandoval,
harmonize the implementing regulation's scope with the scope of conduct
that Congress intended Title VI to prohibit, promote consistency in
enforcement among private plaintiffs and Federal departments and
agencies, provide much needed clarity to courts and Federal funding
recipients and beneficiaries regarding the scope of the Department's
Title VI regulations, and implement the Department's general policy of
minimizing unnecessary attention to individuals' racial and ethnic
background(s).
Per USASpending data, the Department issued over 8,000 separate new
financial assistance awards and obligated over $63 billion over the
past four fiscal years (FYs 22, 23, 24, and 25). In FY2023 alone, the
Department issued over 2,000 separate new financial assistance awards
and obligated over $5.7 billion. The Department's Title VI-related
active investigations regarding these funds and their recipients were
traditionally coordinated through and conducted with other federal
agencies, including the DOJ, due to the Department's External Civil
Rights program being in its infancy and not having dedicated staff
until recently. As a result, the Department does not have information
about active investigations during that timeframe. Additionally, the
Department does not track which of its investigations and compliance
reviews involve solely allegations of disparate-impact discrimination.
For enforcement actions that relate to both intentional discrimination
and conduct having an unintentional disparate impact, the Department
does not track and cannot reliably quantify the costs attributable to
the varying disparate-impact portions of enforcement actions. That the
existence of a disparate impact is sometimes a factor that is
considered in determining whether discrimination is intentional further
impedes monetizing costs and benefits. Therefore, the overall cost
effect on the Department is difficult to quantify. This deregulatory
action should decrease the Department's enforcement costs, however. It
will also have the benefit, albeit difficult to quantify, of bringing
the Department's regulations in line with the law. The Department is
also unable to quantify how funding recipients will respond to the
regulatory changes, but the deregulatory action should result in
greater flexibility and lower compliance costs.
Although funding recipients may receive additional Federal funding
from sources other than the Department, the Department does not
envision that this rule will appreciably increase administrative costs
or compliance costs for funding recipients who must also adhere to the
regulations of another department or agency. This deregulatory action
does not create any new obligations for funding recipients. On the
contrary, by eliminating disparate-impact liability from the
regulation, it eliminates a source of regulatory confusion, narrows the
conduct prohibited, and thus lessens the costs of compliance and
potential liability. Moreover, recipients who receive funds for the
same program or activity from more than one Federal entity already
enter into separate contractual assurances with each funding entity;
such assurances already impose varying requirements that each Federal
funding source deems necessary.
Based on the analysis of the practical qualitative costs and
benefits noted above, the Department believes that this rule is
consistent with the principles of Executive Orders 12866 and 13563,
including the requirements that, to the extent permitted by law, the
Department adopt a regulation only upon a reasoned determination that
its benefits justify its costs and choose a regulatory approach that
maximizes net benefits. See 58 FR at 51735; 76 FR at 3821.
C. Executive Order 14192 (Unleashing Prosperity Through Deregulation)
Executive Order 14192 requires an agency, unless prohibited by law,
to identify at least 10 existing regulations to be repealed when the
agency publicly proposes for notice and comment or otherwise
promulgates a new regulation. 90 FR 9065, 9065 (Jan. 31, 2025). In
furtherance of this requirement, section 3(c) of the Order requires
that ``any new incremental costs associated with new regulations shall,
to the extent permitted
[[Page 20332]]
by law, be offset by the elimination of existing costs associated with
at least 10 prior regulations.'' The Department expects this rule to be
a deregulatory action under Executive Order 14192.
D. Executive Order 13132 (Federalism)
This rule does not contain policies having federalism implications
as the term is defined in Executive Order 13132. This rule will not
have a substantial, direct effect on the relationship between the
national government and the states, on distribution of power and
responsibilities among various levels of government, or on states'
policymaking discretion. States that choose to receive Federal
financial assistance from the Department do so voluntarily and agree to
comply with relevant statutory requirements as a condition of receiving
such funding. This rule does not subject states or any other funding
recipients or beneficiaries to new obligations. This rule amends and
clarifies existing regulations that are required by statute. Therefore,
in accordance with section 6 of Executive Order 13132, 64 FR 43255,
43257-58 (Aug. 4, 1999), the Department has determined that these
amendments do not have sufficient Federalism implications to warrant
the preparation of a federalism summary impact statement.
E. Regulatory Flexibility Act
Because a notice of proposed rulemaking and an opportunity for
public participation are not required, see 5 U.S.C. 553(a)(2), the
analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601
et seq.) do not apply. See Or. Trollers Ass'n v. Gutierrez, 452 F.3d
1104, 1123-24 (9th Cir. 2006) (noting that the RFA does not apply when
an agency validly invokes an exception to the public comment
requirements of 5 U.S.C. 553). Further, the Department, in accordance
with 5 U.S.C. 605(b), has reviewed these regulations and certifies that
the rule's changes will not have a significant economic impact on a
substantial number of small entities, in large part because these
regulatory changes do not impose any new substantive obligations on
Federal funding recipients. The rule amends and clarifies existing
regulations that are required by Title VI. The rule merely brings the
Department into compliance with the Equal Protection Clause and
harmonizes the scope of its regulations to conform with the scope of
Title VI, which does not prohibit conduct having an unintentional
disparate impact. All Federal funding recipients have been bound by the
existing standards that will remain in place after this rule since
their initial promulgation. Accordingly, no regulatory flexibility
analysis is required, and none has been prepared.
F. Executive Order 12250
Pursuant to Executive Order 12250, the DOJ has the responsibility
to ``review . . . proposed rules . . . of the Executive agencies''
implementing nondiscrimination statutes such as Title VI ``in order to
identify those which are inadequate, unclear or unnecessarily
inconsistent.'' Additionally, Executive Order 12250 delegated the
President's responsibility to approve Title VI regulations to the
Attorney General. See 42 U.S.C. 2000d-1. The DOJ has reviewed and
approved this rule.
G. Unfunded Mandates Reform Act of 1993
The Unfunded Mandates Reform Act of 1995 (UMRA), 15 U.S.C. 1532,
requires agencies to prepare several analytic statements before
proposing any rule that may result in annual expenditures of $100
million by state, local, tribal governments, or the private sector.
Section 4(2) of the UMRA, however, excludes from the Act's coverage any
proposed or final Federal regulation that ``establishes or enforces any
statutory rights that prohibit discrimination on the basis of race,
color, religion, sex, national origin, age, handicap, or disability.''
Accordingly, this rulemaking is not subject to the provisions of the
UMRA.
H. Congressional Review Act
This rule is not a ``major rule'' as defined by the Congressional
Review Act, 5 U.S.C. 804(2). This rule will not result in an annual
effect on the economy of $100 million or more; a major increase in
costs or prices; or significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
companies based in the United States to compete with foreign-based
companies in domestic and export markets. The rule merely narrows the
scope of the Department's Title VI regulations to conform them to the
scope of Title VI and the Equal Protection Clause. Doing so does not
impose any new obligations on any recipients of Federal funding.
I. Paperwork Reduction Act
This rule will not impose additional reporting or recordkeeping
requirements under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501,
et seq.
List of Subjects in 15 CFR Part 8
Administrative practice and procedure, Civil rights, Equal
employment opportunity, Government contracts, Grant programs, Grants
administration.
Dated: April 13, 2026.
Paul Dabbar,
Deputy Secretary of Commerce.
Accordingly, for the reasons set forth above, part 8 of title 15 of
the Code of Federal Regulations is amended as follows:
PART 8--NONDISCRIMINATION IN FEDERALLY ASSISTED PROGRAMS OF THE
DEPARTMENT OF COMMERCE--EFFECTUATION OF TITLE VI OF THE CIVIL
RIGHTS ACT OF 1964
0
1. The authority citation for part 8 continues to read as follows:
Authority: Sec. 602, Civil Rights Act of 1964 (42 U.S.C. 2000d-
1).
0
2. Amend Sec. 8.4 by revising paragraphs (b) and (c) to read as
follows:
Sec. 8.4 Discrimination prohibited.
* * * * *
(b) Specific discriminatory acts prohibited. (1) A recipient of
Federal financial assistance, or other party subject to this part,
shall not participate, directly or through contractual or other
arrangements, in any act or course of conduct which, on the ground of
race, color, or national origin:
(i) Denies to a person any service, financial aid, or other benefit
provided under the program;
(ii) Provides any service, financial aid, or other benefit, to a
person which is different, or is provided in a different manner, from
that provided to others under the program;
(iii) Subjects a person to segregation or separate or other
discriminatory treatment in any matter related to his receipt (or
nonreceipt) of any such service, financial aid, property, or other
benefit under the program.
(iv) Restricts a person in any way in the enjoyment of services,
facilities, or any other advantage, privilege, property, or benefit
provided to others under the programs;
(v) Treats a person differently from others in determining whether
he satisfies any admission, enrollment, quota, eligibility, membership,
or other requirement or condition which persons must meet in order to
be provided any service, financial aid, or other benefit provided under
the program;
(vi) Denies a person an opportunity to participate in the program
through the
[[Page 20333]]
provision of property or services or otherwise, or affords him an
opportunity to do so which is different from that afforded others under
the program (including the opportunity to participate in the program as
an employee but only to the extent set forth in paragraph (c) of this
section);
(vii) Denies a person the same opportunity or consideration given
others to be selected or retained or otherwise to participate as a
contractor, subcontractor, or subgrantee;
(viii) Denies a person the opportunity to participate as a member
of a planning or advisory body which is an integral part of the
program.
(2) [Reserved]
(3) In determining the site or location of facilities, a recipient
or other party subject to this part may not make selections with the
purpose of excluding persons from, denying them the benefits of, or
subjecting them to discrimination under any program to which this part
applies, on the grounds of race, color or national origin; or with the
purpose of defeating or substantially impairing the accomplishment of
the objectives of the Act or this part.
(4) As used in this section, the services, financial aid, or other
benefits provided under a program receiving Federal financial
assistance shall be deemed to include any service, financial aid, or
other benefit provided or made available in or through or utilizing a
facility provided with the aid of Federal financial assistance.
(5) The enumeration of specific forms of prohibited discrimination
in this paragraph and paragraph (c) of this section does not limit the
generality of the prohibition in paragraph (a) of this section.
(c) Employment practices. Where a primary objective of the Federal
financial assistance to a program to which this part applies is to
provide employment, a recipient or other party subject to this part
shall not, directly or through contractual or other arrangements,
subject a person to discrimination on the ground of race, color, or
national origin in its employment practices under such program
(including recruitment or recruitment advertising, hiring, firing,
upgrading, promotion, demotion, transfer, layoff, termination, rates of
pay or other forms of compensation or benefits, selection for training
or apprenticeship, use of facilities, and treatment of employees). The
requirements applicable to construction employment under any such
program shall be in addition to those specified in or pursuant to Part
III of Executive Order 11246 or any Executive order which supersedes
it. Federal financial assistance to programs under laws funded or
administered by the Department that has as a primary objective the
providing of employment include those set forth in appendix A II of
this part.
[FR Doc. 2026-07477 Filed 4-15-26; 8:45 am]
BILLING CODE 3510-BP-P
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</html>Indexed from Federal Register on April 16, 2026.
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