Rule2026-10258
Rescinding Portions of Department of the Interior 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
May 22, 2026
Effective
May 22, 2026
Issuing agencies
Interior Department
Abstract
The Department of the Interior amends its regulations implementing Title VI of the Civil Rights Act of 1964 ("Title VI") to eliminate disparate-impact liability. These amendments align the conduct prohibited by 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 99 (Friday, May 22, 2026)</title>
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[Federal Register Volume 91, Number 99 (Friday, May 22, 2026)]
[Rules and Regulations]
[Pages 30239-30247]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-10258]
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DEPARTMENT OF THE INTERIOR
43 CFR Part 17
[DOI-2026-0034; 256D0102DM; DS6CS00000; DLSN00000.000000; DX6CS25]
RIN 1093-AA30
Rescinding Portions of Department of the Interior Title VI
Regulations To Conform More Closely With the Statutory Text and To
Implement Executive Order 14281
AGENCY: Office of Civil Rights, Department of the Interior.
ACTION: Final rule.
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SUMMARY: The Department of the Interior amends its regulations
implementing Title VI of the Civil Rights Act of 1964 (``Title VI'') to
eliminate disparate-impact liability. These amendments align the
conduct prohibited by 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 on May 22, 2026.
[[Page 30240]]
FOR FURTHER INFORMATION CONTACT: Shayan Modarres, Acting Director,
Office of Civil Rights, 202-208-4548. Individuals in the United States
who are deaf, deafblind, hard of hearing, or have a speech disability
may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications
relay services. Individuals outside the United States should use the
relay services offered within their country to make international calls
to the point-of-contact in the United States.
SUPPLEMENTARY INFORMATION:
I. Executive Summary
The Department is 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.
There are serious statutory and constitutional concerns with the
legality of the Department's Title VI regulations that go beyond
intentional discrimination by prohibiting conduct that has 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 the statute and the
Constitution and do not sufficiently serve the public interest. First,
this rule rescinds the full text of 43 CFR 17.3(b)(2), which currently
prohibits the utilization of ``criteria or methods of administration
which have the effect of subjecting individuals to discrimination
because of their race, color, or national origin, or have the effect of
defeating or substantially impairing accomplishment of the objectives
of the program as respect individuals of a particular race, color, or
national origin.'' Second, this rule removes the two uses of the phrase
``or effect'' from 43 CFR 17.3(b)(3). Third, this rule rescinds the
full text of 43 CFR 17.3(b)(4). Fourth, this rule rescinds the full
text of 43 CFR 17.3(c)(3), which addresses employment practices subject
to Federal financial assistance.
The rule's revisions also conform to Executive Order 14281,
Restoring Equality of Opportunity and Meritocracy, 90 FR 17537 (Apr.
23, 2025). That Order stated 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. The Order directed the Attorney General to, among other
things, review Title VI regulations and ``initiate appropriate action
to repeal or amend'' these regulations ``to the extent they contemplate
disparate-impact liability.'' Id. at 17538. Section 3 of the Order
specifically revoked the Presidential approvals of certain Interior
Department Title VI regulations that address disparate-impact liability
promulgated under 42 U.S.C. 2000d-1. Id. Though the Department would
take this action independent of Executive Order 14281, the Order
supports this action.
The practical impact of this rule's modifications will be to make
clear to Department Federal-funded recipients that the Department's
Title VI regulations do not prohibit conduct or activities that have a
disparate impact and prohibit only intentional discrimination, and 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 specifically
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
unintentional disparate impact. Despite ample opportunities, Congress
has enacted no subsequent amendments to Title VI to impose disparate-
impact liability.
B. Regulatory History of Title VI
Pursuant to Executive Order 12250, ``[t]he Attorney General shall
coordinate the implementation and enforcement by Executive agencies of
. . . Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et
seq.).'' 45 FR 72995, 72995 (Nov. 2, 1980). Accordingly, the Department
of the Interior follows the Department of Justice as it is the lead
Federal agency responsible for defining the nature and scope of Title
VI's prohibition of discrimination on the basis of race, color, and
national origin in programs or activities receiving Federal financial
assistance. The Order directs the Department, among other things, to
``develop standards and procedures for taking enforcement actions and
for conducting investigations and compliance reviews.'' Id. Further, as
part of this responsibility, the Order provides that other agencies'
Federal regulations implementing Title VI are also subject to the
Attorney General's approval. Id. at 72996.
The Department's Title VI implementing regulations are codified at
43 CFR 17.1, and 17.12. The initial set of model regulations for Title
VI were issued by the then-Department of Health, Education, and Welfare
on December 4, 1964, which included only one reference to the ``effect
of'' language in the ``discrimination prohibited'' provision of the
rule. See 29 FR 16298, 16299 (Dec. 4, 1964) (provision found at 45 CFR
80.3(b)(2)). In 1973, the Department substantively amended its
regulatory description of prohibited discrimination. See 38 FR 17986
(July 5, 1973). These substantive changes include, among other things,
the addition of 43 CFR 17.3(b)(3) (which added the ``or effect''
language to an additional provision), 43 CFR 17.3(b)(4) (i-ii) (which
introduced the ``affirmative action'' language to the regulations), and
43 CFR 17.3(c)(3) (which extends the rule to Federal financial
assistance whose primary objective is not to provide employment). In
2003, the Department added language regarding ``program or activity''
to reflect the amendment of Title VI by the Civil Rights Restoration
Act of 1987. See 68 FR 51334, 51364 (Aug. 26, 2003); Public Law 100-
259, sec. 6, 102 Stat. 28, 31 (1988). Thus, beyond the required
updating of the phrase ``program or activity'' pursuant to the Civil
Rights Restoration Act, the Department has not substantively updated
its Title VI regulations since 1973--over 50 years ago.
The Department's implementing regulation describing the scope of
prohibited discriminatory conduct, 43 CFR 17.3, currently includes
prohibitions on conduct that has an unintentional disparate impact,
discussed more fully below.
C. Relevant Supreme Court Decisions
The Supreme Court has found that Title VI, 42 U.S.C. 2000d, does
not
[[Page 30241]]
prohibit facially neutral policies that result in disparate outcomes
when there is no discriminatory intent. Rather, it prohibits only
intentional discrimination. In 1978, five years after the Department
last substantively amended its Title VI regulations, 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 requires proof of 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. 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 the Department's
``disparate-impact regulations.'' Id. at 285-87. Though 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 the Department'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 the Department's disparate-impact
regulations were valid, the Court explained that the regulations are in
``considerable tension'' with the Supreme Court's Title VI precedents.
Similarly, the regulations do 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 when 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 disparate-impact liability's
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. The Order directed the Attorney
General to, among other things, review Title VI regulations and
``initiate appropriate action to repeal or amend'' them ``to the extent
they contemplate disparate-impact liability.'' Id. at 17538.
Section 3 of the Order also specifically revoked prior Presidential
approvals of the disparate-impact regulations promulgated under Title
VI, including the presidential approval of July 25, 1966, of 28 CFR
42.104(b)(2) and the presidential approval of July 5, 1973, of 28 CFR
42.104(b)(3), (b)(6)(ii) and (c)(2). Id. Section 5 of the Order
directed the Attorney General to ``initiate appropriate action to
repeal or amend the implementing regulations for Title VI of the Civil
Rights Act of 1964 for all agencies to the extent they contemplate
disparate-impact liability.'' Id. Accordingly, this rule revises the
Department's currently existing Title VI regulations to effectuate 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. But 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 together 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
[[Page 30242]]
disparate-impact liability from the Department's Title VI regulations.
E. Need for Rulemaking
The Department's regulation at 43 CFR 17.3, entitled
``Discrimination prohibited,'' contains several provisions that
prohibit conduct or activities causing unintentional disparate impact,
without a statutory or constitutional basis for doing so, and in some
instances, may encourage or even require unlawful discrimination
labeled as ``affirmative action.'' Section 17.3(b)(2) is the current
regulation's general disparate-impact prohibition, which states that a
``recipient . . . may not . . . utilize criteria or methods of
administration which have the effect of subjecting individuals to
discrimination because of their race, color, or national origin.'' 43
CFR 17.3(b)(2). Beyond that general prohibition, section 17.3(b)(3)
addresses a Federal funding recipient's selection of the site or
location of facilities and includes two references to ``effect'' that
extend the scope of prohibited conduct to include conduct with
unintentional disparate impact. Id. 17.3(b)(3). 43 CFR 17.3(b)(4)(i-ii)
concerns the use of ``affirmative action,'' and provides that funding
recipients may (and sometimes must) use race, color, or national origin
to overcome unintentional disparate ``effects,'' but does not expressly
specify that the funding recipient must narrowly tailor such use nor
that this use must serve a compelling governmental interest, as is
required to satisfy strict scrutiny. Id. 43 CFR 17.3(b)(4)(i-ii).
Finally, 43 CFR 17.3(c)(3) addresses prohibited discriminatory
employment practices and extends beyond intentional discrimination to
prohibiting conduct that ``tends'' to have a discriminatory effect. Id.
43 CFR 17.3(c)(3).
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 because they create confusion, undermine public
confidence in the nation's civil rights laws and the rule of law, and
produce burdensome litigation and compliance costs.
1. Serious Legal Concerns
There are serious statutory concerns as to whether Title VI
authorizes the disparate-impact provisions of the current regulations.
As the Supreme Court has made clear, 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, 286 n.6. That is the ``single, best
meaning'' of Title VI. Loper Bright, 603 U.S. at 400. As summarized
above, 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 the Department's regulations are 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 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.
This serious constitutional concern further confirms 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 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
[[Page 30243]]
the regulations were statutory, 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. As noted in section 1 of the Order,
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 financial assistance
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. 532 U.S. at 280-82.
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, undermine
public confidence in the nation's civil rights laws, and undermine
public confidence 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''). This confusion undermines the law's
ability to teach principles of nondiscrimination and is evident in,
among other things, some of the grant proposals that the Department
awarded funds to in past years. The Department believes that these
policy concerns independently justify repealing certain parts of its
regulation to cure this confusion, remove the incentive for covered
entities to engage in racial balancing, and maintain clarity and public
confidence in the nation's civil rights laws.
The Department has considered the view that looking at disparate
effects can sometimes be useful in uncovering or deterring subtle
intentional discrimination or intentional indifference to unnecessary
and arbitrary barriers. But that view's alleged benefits are outweighed
by the other issues and factors the Department has considered. And in
any event, the concern is mitigated by the fact that eliminating
disparate-impact liability does not preclude the use of data on
disparate outcomes to help prove intentional discrimination. Indeed,
under the Department's Title VI regulations, which the current changes
do not alter, ``recipients should have available for the Department
racial and ethnic data showing the extent to which members of minority
groups are beneficiaries of federally assisted programs.'' 43 CFR
17.5(b). Both the Department and private litigants rely on such data as
a potential indicator of intentional discrimination. This use of
statistical disparity to help establish, as an evidentiary matter,
liability for intentional discrimination materially differs from using
it to impose liability for an unintentional disparate impact.
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 remedy unintentional discrimination for
only certain types of cases in education or housing. But any version of
imposing liability for unintentional discrimination is inconsistent
with Title VI's original public meaning. Regardless, even a modified
version of disparate-impact liability would not eliminate the
Department's serious legal and policy concerns. The Department
determines that any benefits from a regulation 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, costs, and litigation
associated with this alternative, even if eliminating disparate-impact
liability ultimately would leave some problems unaddressed and others
inadequately addressed.
The Department has additionally considered the potential reliance
interests of funding recipients and others on the disparate-impact
regulations. The Sandoval decision in 2001, however, cast serious doubt
on the continuing viability of the regulations more than 20 years ago.
At least since Sandoval, the Department's enforcement of its Title VI
disparate-impact regulations has been minimal and sporadic. 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 could 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
[[Page 30244]]
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 that the Supreme Court questioned in Sandoval and
the other legal and policy concerns discussed above, harmonize the
implementing regulations' scope with the conduct that Congress intended
Title VI to prohibit, promote consistent enforcement among private
plaintiffs and Federal departments and agencies, and provide much
needed clarity to the courts and Federal financial assistance
recipients and beneficiaries.
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
43 CFR 17.3.
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
------------------------------------------------------------------------
43 CFR 17.3(b)(2)............. Full text of ``[Removed]''.
paragraph: ``(2) A
recipient . . . or
national origin.''.
43 CFR 17.3(b)(3)............. ``or effect'' from ................
both places.
43 CFR 17.3(b)(4)............. Full text of paragraph ................
(4), subparts (i) and
(ii).
43 CFR 17.3(c)(3)............. Full text of ................
paragraph: ``(3)
Where a primary
objective . . . of
beneficiaries.''.
------------------------------------------------------------------------
B. Section-by-Section Analysis
43 CFR 17.3(b)(2)
Section 17.3(b)(2) is the current regulation's general prohibition
of conduct with unintentional disparate impact. It expands prohibited
conduct from purposeful discrimination to imposed liability on Federal
funding recipients who ``utilize criteria or methods of administration
which have the effect of subjecting individuals to discrimination.''
Because section 43 CFR 17.3 (b)(2)'s only purpose is to extend the
scope of Title VI to reach unintentional disparate-impact
discrimination, this rule deletes this paragraph in its entirety. It
thus amends the Department's Title VI implementing regulations to
conform to the scope of coverage Congress intended when it enacted
Title VI and to address the legal and policy considerations and
determinations described in this document. 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.
43 CFR 17.3(b)(3)
Section 17.3(b)(3) addresses a Federal funding recipient's or
applicant's selection of the site or location of facilities. It
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 coverage Congress intended when it enacted Title VI and to
address the legal and policy considerations and determinations
described in this document.
43 CFR 17.3(b)(4)
Section 17.3(b)(4) deals with ``affirmative action.'' Paragraph
(b)(4)(ii) authorizes affirmative action 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.'' It consequently encourages intentional
racial classifications, racial preferences, and other race-based
actions without specifying the compelling governmental interest and
narrow tailoring that the Equal Protection Clause demands. This section
has long been unlawful under an Equal Protection Clause analysis.
Paragraph (b)(4)(i) requires that a recipient ``must take
affirmative action to overcome the effects of prior discrimination''
if, in ``administering a program,'' the funding ``recipient has
previously discriminated against persons on the grounds of race, color,
or national origin.'' This provision goes 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, this
provision does not expressly require narrow tailoring to counter
particular past discrimination, but rather just ``affirmative action to
overcome the effects of prior discrimination.'' This provision
accordingly promotes potentially illegal race, color, and national
origin discrimination. Moreover, in some instances, it may even coerce
recipients to consider and use race preferences when the recipient does
not want to. This is contrary to the Department's goal of promoting and
defending a culture of nondiscrimination and is destructive to the
public's understanding of and faith in the nation's civil rights laws.
This rule, therefore, removes paragraph (b)(4).
43 CFR 17.3(c)(3)
Section 17.3(c) addresses prohibited discriminatory employment
practices. Paragraph (c)(1) prohibits intentionally discriminatory
employment practices in a program when a primary objective of the
Federal financial assistance that program receives is to provide
employment.
Paragraph (c)(3) extends the prohibition on discrimination to
employment practices of the funding recipient even when ``a primary
objective of the Federal financial assistance is not to provide
employment'' if discrimination in the non-funded ``employment practices
of the recipient or other persons subject to the regulation tends, on
the ground of race, color, or national origin, to exclude individuals
from participation in, to deny them the benefit of, or to subject them
to discrimination under any program to which this regulation applies.''
This paragraph does not prohibit only intentional discrimination but
rather extends the prohibition to conduct that ``tends'' to have a
discriminatory effect.
Moreover, the Department notes that paragraph (c)(3)'s extension to
[[Page 30245]]
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. That section states that ``[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.'' 42 U.S.C. 2000d-3; see also Johnson v. Transp. Agency,
Santa Clara Cnty., 480 U.S. 616, 627-28 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)(3) to amend the regulation
so that it more closely adheres to the scope of conduct Congress
prohibited with Title VI and to address the legal and policy
considerations and determinations described in this document.
IV. Severability
The Department's position is that each of the amendments serve a
vital, 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 independent to, and regardless of, the invalidity of a
separate amendment.
V. Regulatory Certifications
Administrative Procedure Act
The Department issues this final rule without prior public notice
and comment or a delayed effective date pursuant to 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).
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.'' 43 CFR 17.12(e); see also
43 CFR 17.4 (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
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 the Interior
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
of 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, 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).
Executive Order 12250 (Regulatory Review)
In accordance with Executive Order 12550 which requires federal
agencies to submit proposed changes concerning this subject matter to
the Department of Justice, the Department of Justice has reviewed and
determined that these changes are warranted.
Executive Orders 12866 and 13563 (Regulatory Review)
The Department has determined that this rulemaking is a
``significant regulatory action'' under section 3(f) of Executive Order
12866, 58 FR 51735, 51738 (Sep. 30, 1993), but it is not an
``economically significant'' action under section 3(f)(1). Accordingly,
this rule has been submitted to 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 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, and provide
much needed clarity to courts and Federal funding recipients and
beneficiaries regarding the scope of the Department's Title VI
regulations. Indeed, with respect to section 42.104(c) of the
Department's Title VI-implementing regulations, the changes this rule
makes are clearly necessary to bring the regulations into compliance
with 42 U.S.C. 2000d-3. In short, this rule is necessary to conform the
Department's regulation to existing statutory law, as interpreted by
the Supreme Court.
Data limitations make the costs and benefits of the rule difficult
to quantify. While not representing the monetary impact of the rule,
more generally the Department of the Interior issued approximately
53,700 separate awards totaling approximately $28.4 billion over the
past four years. In FY2024 alone, the Department issued approximately
31,000 separate awards
[[Page 30246]]
totaling $8.2 billion. The Department's Title VI related, active
investigations and compliance reviews regarding these funds and their
recipients totaled just over 40 for FY2020 through FY2024. 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 may be
considered in determining whether discrimination was intentional
further impedes monetizing costs and benefits. Therefore, the overall
cost effect on the Department is difficult to quantify. The
deregulatory action should decrease the Department's enforcement costs,
however. It should also have the benefit, also difficult to quantify,
of bringing the Department's conduct in line with the law. Similarly,
the Department is 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 for
recipients.
The Department recognizes that a funding recipient may receive
Federal funds from sources other than, and in addition to, 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. The deregulatory action the Department takes here
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 and
makes more specific 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, see, e.g., 28 CFR 42.105. These contractual assurances
already impose varying requirements that each Federal funding source
deems necessary. Funding recipients will continue to be held to the
most stringent contractual assurance and regulation.
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.
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 by law, be offset by the elimination of
existing costs associated with at least 10 prior regulations.'' Id. By
revising the Department's current Title VI regulations, which extend
prohibited conduct to include unintentional disparate impacts and thus
expand the scope of those regulations to a vastly broader range of
conduct than the statute prohibits, this rule eliminates unnecessary
regulation. Accordingly, the Department expects this rule to be a
deregulatory action under Executive Order 14192.
Executive Order 14294 (Fighting Overcriminalization in Federal
Regulations)
Executive Order 14294 requires agencies promulgating regulations
with criminal regulatory offenses potentially subject to criminal
enforcement to ``explicitly describe the conduct subject to criminal
enforcement, the authorizing statutes, and the mens rea standard
applicable to'' each element of those offenses. 90 FR 20363, 20363 (May
9, 2025). This rule does not impose a criminal regulatory penalty and
is thus exempt from Executive Order 14294 requirements.
Executive Order 13132 (Federalism)
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.
Executive Order 12988 (Civil Justice Reform)
This rule meets the applicable standards set forth in sections 3(a)
and (b)(2) of Executive Order 12988 to specify provisions in clear
language. See 61 FR 4729, 4731-32 (Feb. 5, 1996). Pursuant to section
3(b)(1)(I) of the Executive Order, id. at 4731, nothing in this
proposed or any previous rule (or in any administrative policy,
directive, ruling, notice, guideline, guidance, or writing) directly
relating to the Program that is the subject of this proposed rule is
intended to create any legal or procedural rights enforceable against
the United States.
Regulatory Flexibility Act
This rule does not require a regulatory flexibility analysis under
the Regulatory Flexibility Act, 5 U.S.C. 603, 604, because, for the
reasons described above, no notice of proposed rulemaking is required
under 5 U.S.C. 553. 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 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.
Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (``UMRA''), 2 U.S.C. 1501
et seq., requires agencies to prepare several analytic statements
before proposing
[[Page 30247]]
any rule that may result in annual expenditures of $100 million by
state, local, or tribal governments, or the private sector. 2 U.S.C.
1532(a). The UMRA also, however, excludes from its 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.''
2 U.S.C. 1503(2). Accordingly, this rulemaking is not subject to the
provisions of the UMRA.
Congressional Review Act
The Office of Information and Regulatory Affairs determined that
this rule is not a ``major rule'' as defined by the Congressional
Review Act, 5 U.S.C. 804(2).
Paperwork Reduction Act of 1995
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 for 43 CFR Part 17
Administrative practice and procedure, civil rights, equal
employment opportunity,grant programs.
Accordingly, for the reasons set forth above, and pursuant to the
authority vested in the Secretary of the Interior by law, part 17 of
title 43 of the Code of Federal Regulations is amended as follows:
PART 17--NONDISCRIMINATION IN FEDERALLY ASSISTED PROGRAMS OF THE
DEPARTMENT OF THE INTERIOR
Subpart A--Nondiscrimination on the Basis of Race, Color, or
National Origin
0
1. The authority citation for subpart A of part 17 is revised to read
as follows:
Authority: Sec. 602, 78 Stat. 252; 42 U.S.C. 2000d-1; E.O.
12250; E.O. 14281, 90 FR 17537.
0
2. In Sec. 17.3:
0
a. Remove and reserve paragraph (b)(2);
0
b. Revise paragraph (b)(3);
0
c. Remove and reserve paragraph (b)(4); and
0
d. Remove paragraph (c)(3).The revisions read as follows:
Sec. 17.3 Discrimination prohibited.
* * * * *
(b) * * *
(3) In determining the site or location of facilities, a recipient
or applicant may not make selections with the purpose of excluding
individuals from, denying them the benefits of, or subjecting them to
discrimination under any program to which this regulation applies, on
the ground 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.
* * * * *
Troy Finnegan
Deputy Assistant Secretary, Exercising the Delegated Authority of the
Assistant Secretary--Policy, Management and Budget.
[FR Doc. 2026-10258 Filed 5-21-26; 8:45 am]
BILLING CODE 4334-CC-P
</pre></body>
</html>Indexed from Federal Register on May 22, 2026.
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