Equal Participation of Faith-Based Organizations in HUD Programs and Activities: Implementation of Executive Order 13831
| Published date | 13 February 2020 |
| Citation | 85 FR 8215 |
| Record Number | 2020-02495 |
| Section | Proposed rules |
| Court | Housing And Urban Development Department |
Federal Register, Volume 85 Issue 30 (Thursday, February 13, 2020)
[Federal Register Volume 85, Number 30 (Thursday, February 13, 2020)]
[Proposed Rules]
[Pages 8215-8225]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02495]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 5, 92 and 578
[Docket No FR-6130-P-01]
RIN 2501-AD91
Equal Participation of Faith-Based Organizations in HUD Programs
and Activities: Implementation of Executive Order 13831
AGENCY: Office of the Secretary, HUD.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would amend U.S. Department of Housing and
Urban Development (HUD) regulations to implement Executive Order 13831
(Establishment of a White House Faith and Opportunity Initiative).
Among other changes, this rule proposes to provide clarity regarding
the rights and obligations of faith-based organizations participating
in HUD's programs. This proposed rulemaking aligns with HUD's goal of
implementing its programs and activities consistent with the First
Amendment to the Constitution and the requirements of Federal law,
including the Religious Freedom Restoration Act.
DATES: Comment Due Date: April 13, 2020.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule. Communications must refer to the above docket
number and title. There are two methods for submitting public comments.
All submissions must refer to the above docket number and title.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, U.S.
Department of Housing and Urban Development, 451 7th Street SW, Room
10276, Washington, DC 20410-0500.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
www.regulations.gov. HUD strongly encourages commenters to submit
comments electronically. Electronic submission of comments allows the
commenter maximum time to prepare and submit a comment, ensures timely
receipt by HUD, and enables HUD to make them immediately available to
the public. Comments submitted electronically through the
www.regulations.gov website can be viewed by other commenters and
interested members of the public. Commenters should follow the
instructions provided on that site to submit comments electronically.
[[Page 8216]]
Note: To receive consideration as public comments, comments
must be submitted through one of the two methods specified above.
Again, all submissions must refer to the docket number and title of
the rule.
No Facsimile Comments. Facsimile (fax) comments are not acceptable.
Public Inspection of Public Comments. All properly submitted
comments and communications submitted to HUD will be available for
public inspection and copying between 8 a.m. and 5 p.m., weekdays, at
the above address. Due to security measures at the HUD Headquarters
building, an advance appointment to review the public comments must be
scheduled by calling the Regulations Division at 202-402-3055 (this is
not a toll-free number). Individuals with speech or hearing impairments
may access this number via TTY by calling the Federal Relay, toll-free,
at 800-877-8339. Copies of all comments submitted are available for
inspection and downloading at www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Richard Youngblood, Director, Center
for Faith-Based and Neighborhood Partnerships, U.S. Department of
Housing and Urban Development, 451 7th Street SW, Room 6230,
Washington, DC 20410; telephone number 202-402-5958 (this is not a
toll-free number). Individuals with hearing- and speech-impairments may
access this number through TTY by calling the Federal Relay, toll-free,
at 800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
Shortly after taking office in 2001, President George W. Bush
signed Executive Order 13199, ``Establishment of White House Office of
Faith-based and Community Initiatives.'' \1\ That Executive order
sought to ensure that ``private and charitable groups, including
religious ones . . . have the fullest opportunity permitted by law to
compete on a level playing field'' in the delivery of social services.
To do so, it created the White House Office of Faith-Based and
Community Initiatives, with the primary responsibility to ``establish
policies, priorities, and objectives for the Federal Government's
comprehensive effort to enlist, equip, enable, empower, and expand the
work of faith-based and other community organizations to the extent
permitted by law.''
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\1\ Executive Order 13199 was signed by President Bush on
January 29, 2001, and subsequently published in the Federal Register
on January 31, 2001, at 66 FR 8499.
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On December 12, 2002, President Bush signed Executive Order 13279,
``Equal Protection of the Laws for Faith-Based and Community
Organizations.'' \2\ Executive Order 13279 set forth the principles and
policymaking criteria to guide Federal agencies in formulating and
implementing policies with implications for faith-based organizations
and other community organizations, to ensure equal protection of the
laws for faith-based and community organizations and to expand
opportunities for, and strengthen the capacity of, faith-based and
other community organizations to meet social needs in America's
communities. In addition, Executive Order 13279 directed specified
agency heads, including the Secretary of HUD, to review and evaluate
existing policies that created barriers to faith-based organizations
participating equally compared to other community organizations in
programs receiving Federal financial assistance and, where appropriate,
to implement new policies that were consistent with and necessary to
further the fundamental principles and policymaking criteria
articulated in the order. Consistent with Executive Order 13279, HUD
promulgated regulations at 24 CFR part 5.
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\2\ Executive Order 13279 was published in the Federal Register
on December 16, 2002, at 67 FR 77141.
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HUD undertook three rulemakings to implement Executive Order 13279.
HUD undertook a comprehensive review of its program requirements and
regulations, particularly those that would be expected to attract
interest and participation by nonprofit organizations. HUD identified
regulations for eight programs administered by HUD's Office of
Community Planning and Development that imposed (or appeared to impose)
barriers to participation of faith-based organizations in these
programs. On September 30, 2003, HUD issued a final rule entitled
``Participation in HUD Programs by Faith-Based Organizations; Providing
for Equal Treatment of All HUD Program Participants.'' \3\ The final
rule eliminated the regulatory program barriers identified by HUD, to
ensure that these programs were open to all qualified organizations
regardless of their religious character.
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\3\ 68 FR 56395.
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On July 9, 2004, HUD published a second final rule entitled,
``Equal Participation of Faith-Based Organizations.'' \4\ The July 9,
2004, final rule added a new Sec. 5.109 to HUD's regulations in 24 CFR
part 5 containing the requirements generally applicable to all of HUD's
programs and activities. The new Sec. 5.109 clarified that faith-based
organizations are eligible, on the same basis as any other
organization, to participate in HUD's programs and activities. By
codifying the policy in those HUD regulations that contain across-the-
board requirements, HUD ensured the broadest application of the faith-
based requirements of Executive Order 13279.
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\4\ 69 FR 41711.
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The July 9, 2004, final rule, however, did not apply to HUD's
Native American housing programs. HUD determined that making the
policies and procedures contained in the final rule applicable to its
Native American programs required prior consultation with tribal
governments, in accordance with Executive Order 13175.\5\ Executive
Order 13175 requires Federal departments and agencies, to the extent
practicable and permitted by law, to consult with tribal governments
prior to taking actions that have substantial direct effects on
federally recognized tribal governments. HUD consulted with tribal
governments and undertook separate rulemaking to address the
applicability of the regulatory changes. HUD's final rule addressing
equal participation of faith-based organizations in Native American
programs, entitled ``Participation in HUD's Native American Programs by
Religious Organizations; Providing for Equal Treatment of All Program
Participants,'' was published on October 22, 2004.\6\
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\5\ Executive Order 13175 was signed on November 6, 2000, and is
entitled ``Consultation and Coordination with Indian Tribal
Governments.'' It was subsequently published in the Federal Register
on November 9, 2000, at 65 FR 67249.
\6\ 69 FR 62163.
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President Obama maintained President Bush's program but modified it
in certain respects. Shortly after taking office, President Obama
signed Executive Order 13498, ``Amendments to Executive Order 13199 and
Establishment of the President's Advisory Council for Faith-Based and
Neighborhood Partnerships.'' \7\ Among other things, this Executive
order changed the name of the White House Office of Faith-Based and
Community Initiatives to the White House Office of Faith-Based and
Neighborhood Partnerships and created an Advisory Council that
subsequently submitted a report of recommendations to President Obama,
including recommendations concerning partnerships between the
[[Page 8217]]
Federal Government and religious and other nongovernmental
organizations.
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\7\ President Obama signed Executive Order 13498 on February 5,
2009, and it was subsequently published in the Federal Register on
February 9, 2009, at 74 FR 6533.
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On November 17, 2010, President Obama signed Executive Order 13559,
``Fundamental Principles and Policymaking Criteria for Partnerships
with Faith-Based and Other Neighborhood Organizations''.\8\ Executive
Order 13559 made various changes to Executive Order 13279, which
included: (1) Making minor and substantive textual changes to the
fundamental principles; (2) adding a provision requiring that any
religious social service program provider supported with Federal
financial assistance refer beneficiaries or prospective beneficiaries
to an alternative provider if the beneficiaries object to the
provider's religious character; (3) adding a provision requiring that
the faith-based provider give notice of potential referral to potential
beneficiaries; and (4) adding a provision that awards must be free of
political interference and not be based on religious affiliation of a
recipient organization or lack thereof. This Executive order also
established an interagency working group tasked with developing model
changes to regulations and guidance to implement Executive Order 13279
as amended by Executive Order 13559, including provisions that
clarified the prohibited uses of direct Federal financial assistance,
allowed religious social service providers to maintain their religious
identities, and distinguished between direct and indirect Federal
financial assistance. These efforts eventually resulted in amendments
to agency regulations, including HUD's 24 CFR part 5. The revised
regulations defined ``indirect Federal financial assistance'' as
Government aid to a beneficiary, such as a voucher, that flows to a
religious provider only through the genuine and independent choice of
the beneficiary.\9\
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\8\ Executive Order 13559 was published in the Federal Register
on November 22, 2010, at 75 FR 71319.
\9\ 24 CFR 5.109(b).
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To implement the directives of Executive Order 13559, on August 6,
2015, HUD issued a proposed rule entitled, ``Equal Participation of
Faith-Based Organizations in HUD Programs: Implementation of E.O.
13559.'' \10\ The proposed rule was made final through an interagency
final rule entitled, ``Federal Agency Final Regulations Implementing
Executive Order 13559: Fundamental Principles and Policymaking Criteria
for Partnerships With Faith-Based and Other Neighborhood
Organizations'' published on April 4, 2016.\11\ In addition to HUD,
eight other Federal departments and agencies joined in the final rule
to amend or establish their regulations implementing Executive Order
13559. This final rule required not only that faith-based providers
give the notice of the right to an alternative provider specified in
Executive Order 13559, but also required faith-based providers, but not
other providers, to give written notice to beneficiaries and potential
beneficiaries of programs funded with direct Federal financial
assistance of various rights, including nondiscrimination based on
religion, the requirement that participation in any religious activity
must be voluntary and that they must be provided separately from the
federally funded activity, and that beneficiaries may report
violations.
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\10\ 80 FR 47301.
\11\ 81 FR 19353.
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President Trump has given new direction to the policy established
by President Bush and continued by President Obama. On May 4, 2017,
President Trump issued Executive Order 13798, ``Promoting Free Speech
and Religious Liberty.'' \12\ Executive Order 13798 states that
``Federal law protects the freedom of Americans and their organizations
to exercise religion and participate fully in civic life without undue
interference by the Federal Government. The executive branch will honor
and enforce those protections.'' It directed the Attorney General to
``issue guidance interpreting religious liberty protections in Federal
law.''
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\12\ Executive Order 13798 was subsequently published in the
Federal Register on May 9, 2017, at 82 FR 21675.
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Pursuant to this instruction, the Attorney General, on October 6,
2017, issued the Memorandum for All Executive Departments and Agencies,
``Federal Law Protections for Religious Liberty,'' (Attorney General's
Memorandum on Religious Liberty).\13\ The Attorney General's Memorandum
on Religious Liberty emphasized that individuals and organizations do
not give up religious liberty protections by providing Government-
funded social services, and that ``[g]overnment may not exclude
religious organizations as such from secular aid programs . . . when
the aid is not being used for explicitly religious activities such as
worship or proselytization.'' \14\
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\13\ 82 FR 49668.
\14\ Id. at page 2.
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On May 3, 2018, President Trump signed Executive Order 13831,
entitled ``Establishment of a White House Faith and Opportunity
Initiative.'' \15\ Among other things, Executive Order 13831 changed
the name of the ``White House Office of Faith-Based and Neighborhood
Partnerships,'' as established in Executive Order 13498, to the ``White
House Faith and Opportunity Initiative;'' changed the way that the
Initiative is to operate; directed departments and agencies with
``Centers for Faith-Based and Neighborhood Partnerships'' to change
those names to ``Centers for Faith and Opportunity Initiatives;'' and
ordered that departments and agencies without a Center for Faith and
Opportunity Initiatives designate a ``Liaison for Faith and Opportunity
Initiatives.'' Executive Order 13831 also eliminated the alternative
provider referral requirement and requirement of notice thereof in
Executive Order 13559 described above.
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\15\ Executive Order 13831 was subsequently published in the
Federal Register on May 8, 2018, at 83 FR 20715.
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Finally, recent Supreme Court decisions have addressed the freedoms
and anti-discrimination protections that must be afforded religion-
exercising organizations and individuals under the U.S. Constitution
and Federal law. See, e.g., Masterpiece Cakeshop, Ltd. v. Colo. Civil
Rights Comm'n, 138 S. Ct. 1719, 1731 (2018) (Government violates the
Free Exercise Clause of the First Amendment when its decisions are
based on hostility to religion or a religious viewpoint); Trinity
Lutheran Church of Columbia, Inc. v. Comer, 137 S. Ct. 2012, 2022
(2017) (Government violates the Free Exercise Clause of the First
Amendment when it conditions a generally available public benefit on an
entity's giving up its religious character, unless that condition
withstands the strictest scrutiny); Burwell v. Hobby Lobby Stores,
Inc., 134 S. Ct. 2751, 2775 (2014) (the Religious Freedom Restoration
Act applies to Federal regulation of the activities of for-profit
closely held corporations); Hosanna-Tabor Evangelical Lutheran Church &
Sch. v. EEOC, 565 U.S. 171, 196 (2012) (the ministerial exception,
grounded in the Establishment and Free Exercise Clauses of the First
Amendment, bars an employment-discrimination suit brought on behalf of
a minister against the religious school for which she worked). While
these decisions are not specific to HUD, they have reminded the Federal
Government of its duty to protect religious exercise--and not to impede
it.
[[Page 8218]]
II. This Proposed Rule
A. Overview
HUD proposes to amend its regulations governing equal participation
of faith-based organizations to implement Executive Order 13831 and
conform more closely to the Supreme Court's current First Amendment
jurisprudence; relevant Federal statutes such as the Religious Freedom
Restoration Act of 1993 (RFRA) (42 U.S.C. 2000bb et seq.); Executive
Order 13279, as amended by Executive Orders 13559 and 13831, and the
Attorney General's Memorandum on Religious Liberty. Consistent with
these authorities, this proposed rule would delete the requirement in
24 CFR 5.109(g) that faith-based social service providers that carry
out programs and activities with direct Federal financial assistance
provide written notice to beneficiaries and refer beneficiaries
objecting to the organization's religious character to an alternative
provider, and the requirement that faith-based organizations provide
notices that are not required of secular organizations.
This proposed rule would also make clear that a faith-based
organization that applies or requests to participate in any HUD funded
program or activity, is assessed for eligibility in any HUD funded
programs or activity, or actually participates in any HUD funded
program or activity retains its autonomy, right of expression,
religious character, and independence. It would further clarify that
none of the guidance documents that HUD or any intermediary or
recipient uses in administering HUD's financial assistance shall
require faith-based organizations to provide assurances or notices
where similar requirements are not imposed on secular organizations and
that any restrictions on the use of grant funds apply equally to faith-
based and secular organizations.
This proposed rule would also require that HUD's notices of funding
availability (NOFAs), grant agreements, and cooperative agreements
include language clarifying the rights and obligations of faith-based
organizations that apply for and receive Federal funding. The language
provides notice to those applying for HUD funds that, among other
things, faith-based organizations may apply for awards on the same
basis as any other organization; that HUD will not, in the selection of
recipients, discriminate against an organization on the basis of the
organization's religious exercise or affiliation; and that a faith-
based organization that applies to participate in, participates in, or
is assessed for eligibility to participate in, a HUD program retains
its independence from the Government and may continue to carry out its
mission consistent with religious freedom protections in Federal law,
including the Free Speech and Free Exercise Clauses of the First
Amendment to the Constitution.
This proposed rule, in the event of any conflict, will control over
any HUD guidance document. This is intended to be consistent with
Executive Order 13891, dated October 9, 2019, which provides that
guidance documents lack the force of law, except as authorized by law
or as incorporated into a contract.
Finally, the proposed rule would directly reference the definition
of ``religious exercise'' in the Religious Land Use and Individualized
Persons Act of 2000, 42 U.S.C. 2000cc-5(7)(A), and would amend the
definition of ``indirect Federal Financial assistance'' to align more
closely with the Supreme Court's definition in Zelman v. Simmons-
Harris, 536 U.S. 639 (2002).
B. Alternative Provider and Alternative Provider Notice Requirement
Executive Order 13559 imposed notice and referral burdens on faith-
based organizations not imposed on secular organizations. Section 1(b)
of Executive Order 13559, entitled ``Fundamental Principles,'' amended
section 2 of Executive Order 13279 by, in pertinent part, adding a new
subsection (h) to section 2. As amended by Executive Order 13559,
section 2(h)(i) directed agencies to ensure that ``[i]f a beneficiary
or a prospective beneficiary of a social service program supported by
Federal financial assistance objects to the religious character of an
organization that provides services under the program, that
organization shall, within a reasonable time after the date of the
objection, refer the beneficiary to an alternative provider.'' Section
2(h)(ii) directed agencies to establish policies and procedures to
ensure that referrals are timely and follow privacy laws and
regulations, that providers notify agencies of and track referrals, and
that each beneficiary ``receive[] written notice of the protections set
forth in this subsection prior to enrolling in or receiving services
from such program.''
In revising its regulations, HUD explained in 2015 that the
revisions would implement the alternative provider provisions in
Executive Order 13559. Executive Order 13831, however, has removed the
alternative provider requirements articulated in Executive Order 13559.
HUD also explained that the alternative provider provisions would
protect religious liberty rights of social service beneficiaries. But
the methods of providing such protections were not required by the
Constitution or any applicable law. Indeed, the selected methods are in
tension with more recent Supreme Court precedent regarding
nondiscrimination against religious organizations, with the Attorney
General's Memorandum on Religious Liberty, and with the RFRA, 42 U.S.C.
2000bb-2000bb-4.
As the Supreme Court recently clarified in Trinity Lutheran Church
of Columbia, Inc. v. Comer, 137 S. Ct. 2012, 2019 (2017): ``The Free
Exercise Clause `protect[s] religious observers against unequal
treatment' and subjects to the strictest scrutiny laws that target the
religious for `special disabilities' based on their `religious
status.''' (quoting Church of Lukumi Babalu Aye, Inc. v. Hialeah, 508
U.S. 520, 533 (1993) (alteration in original)). The Court in Trinity
Lutheran added: ``[T]his Court has repeatedly confirmed that denying a
generally available benefit solely on account of religious identity
imposes a penalty on the free exercise of religion that can be
justified only by a state interest `of the highest order.''' Id.
(quoting McDaniel v. Paty, 435 U.S. 618 (1978) (plurality opinion); see
also Mitchell v. Helms, 530 U.S. 793, 827 (2000) (plurality opinion)
(``The religious nature of a recipient should not matter to the
constitutional analysis, so long as the recipient adequately furthers
the government's secular purpose.''); Attorney General's Memorandum on
Religious Liberty, principle 6 (``Government may not target religious
individuals or entities for special disabilities based on their
religion.'').
Applying the alternative provider requirement categorically to all
faith-based providers and not to other providers of federally funded
social services is thus in tension with the nondiscrimination principle
articulated in Trinity Lutheran and the Attorney General's Memorandum
on Religious Liberty.
In addition, the alternative provider requirement raises
implications under RFRA. Under RFRA, where the Government substantially
burdens an entity's exercise of religion, the Government must prove
that the burden is in furtherance of a compelling government interest
and is the least restrictive means of furthering that interest. 42
U.S.C. 2000bb-1(b). The World Vision OLC opinion makes clear that when
a faith-based grant recipient carries out its social service programs,
it may engage in an exercise of religion protected by RFRA. See
Application of the Religious Freedom Restoration Act
[[Page 8219]]
to the Award of a Grant Pursuant to a Juvenile Justice and Delinquency
Prevention Act, 31 O.L.C. 162, 169-71 (June 29, 2007).
Requiring faith-based organizations to comply with certain
conditions in receiving social service grants may substantially burden
their religious exercise. Id. at 174-83. When imposing the alternative
provider requirement in 2016, the agencies asserted an interest in
informing beneficiaries of protections of their religious liberty. 81
FR 19353, 19365. In addition, the alternative provider requirement
could in certain circumstances raise concerns under RFRA. Under RFRA,
where the Government substantially burdens an entity's exercise of
religion, the Government must prove that the burden is in furtherance
of a compelling government interest and is the least restrictive means
of furthering that interest. 42 U.S.C. 2000bb-1(b). When a faith-based
grant recipient carries out its social service programs, it may engage
in an exercise of religion protected by RFRA and certain conditions on
receiving those grants may substantially burden the religious exercise
of the recipient. See Application of the Religious Freedom Restoration
Act to the Award of a Grant Pursuant to a Juvenile Justice and
Delinquency Prevention Act, 31 O.L.C. 162, 169-71, 174-83 (June 29,
2007). Requiring faith-based organizations to comply with the
alternative provider requirement could impose such a burden, such as in
a case in which a faith-based organization has a religious objection to
referring the beneficiary to an alternative provider that provided
services in a manner that violated the organization's religious tenets.
See Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682, 720-26 (2014).
And it is far from clear that this requirement would meet the strict
scrutiny that RFRA requires of laws that substantially burden religious
practice.
With adoption of this rule, HUD would no longer require its program
participants to identify or refer beneficiaries to alternate providers.
In addition, the absence of a secular alternate provider will no longer
be a block to the application, eligibility, or participation by faith-
based entities in any HUD program or activity.
Executive Order 13831 chose to eliminate the alternative provider
requirement for good reason. This decision avoids tension with the
nondiscrimination principle articulated in Trinity Lutheran and the
Attorney General's Memorandum on Religious Liberty, avoids problems
with RFRA that may arise, and fits within the Administration's broader
deregulatory agenda.
C. Other Notice Requirements
As noted above, Executive Order 13559 amended Executive Order 13279
by adding a right to an alternative provider and notice of this right.
While Executive Order 13559's requirement of notice to beneficiaries
was limited to notice of alternative providers, 24 CFR part 5 as
recently amended goes further than Executive Order 13559 by requiring
that faith-based social service providers that carry out programs and
activities with direct Federal financial assistance from HUD provide a
much broader notice to beneficiaries and potential beneficiaries. This
requirement applies only to faith-based providers and not to other
providers. In addition to the notice of the right to an alternative
provider, the rule requires notice of nondiscrimination based on
religion; that participation in religious activities must be voluntary
and separate in time or space from activities funded with direct
Federal funds; and that beneficiaries or potential beneficiaries may
report violations.
Separate and apart from these notice requirements, Executive Order
13279, as amended, clearly set forth the underlying requirements of
nondiscrimination, voluntariness, and the holding of religious
activities separate in time or place from any federally funded
activity. Faith-based providers of social services, like other
providers of social services, are required to follow the law and the
requirements of awards they receive. (See, e.g., 2 CFR part 200). There
is no basis on which to presume that they are less likely than other
social service providers to follow the law. See Mitchell, 530 U.S. at
856-57 (O'Connor, J., concurring in judgment) (noting that in Tilton v.
Richardson, 403 U.S. 672 (1971), the Court's upholding of grants to
universities for construction of buildings with the limitation that
they only be used for secular educational purposes ``demonstrate[d] our
willingness to presume that the university would abide by the secular
content restriction.''). There is thus no need for prophylactic
protections that create administrative burdens on faith-based providers
and that are not imposed on other providers.
D. Definition of Indirect Federal Financial Assistance
Executive Order 13559 directed its Interagency Working Group on
Faith-Based and Other Neighborhood Partnerships (Working Group) to
propose model regulations and guidance documents regarding, among other
things, ``the distinction between `direct' and `indirect' Federal
financial assistance[.]'' 75 FR 71319, 71321 (2010). Following issuance
of the Working Group's report, the 2016 joint final rule amended
existing regulations to make that distinction, and to clarify that
``organizations that participate in programs funded by indirect
financial assistance need not modify their program activities to
accommodate beneficiaries who choose to expend the indirect aid on
those organizations' programs,'' need not provide notices or referrals
to beneficiaries, and need not separate their religious activities from
supported programs. 81 FR 19355, 19358 (2016). In so doing, the final
rule attempted to capture the definition of ``indirect'' aid that the
U.S. Supreme Court employed in Zelman v. Simmons-Harris, 536 U.S. 639
(2002). See 81 FR 19355, 19361-62 (2016).
In Zelman, the Court emphasized that the government may provide
indirect aid to a faith-based where the aid reaches the faith-based
entity by way of ``true private choice,'' with ``no evidence that the
State deliberately skewed incentives'' to faith-based service
providers. The Court upheld the challenged school-choice program
because it conferred assistance ``directly to a broad class of
individuals defined without reference to religion'' (i.e., parents of
schoolchildren); it permitted participation by both religious and
nonreligious educational providers; it allocated aid ``on the basis of
neutral, secular criteria that neither favor nor disfavor religion'';
and it made aid available ``to both religious and secular beneficiaries
on a nondiscriminatory basis.'' Id. at 653-54 (quotation marks and
citations omitted). While the Court noted the availability of secular
providers, it specifically declined to make its definition of indirect
aid hinge on the ``preponderance of religiously affiliated private''
providers in the city, as that preponderance arose apart from the
program; doing otherwise, the Court concluded, ``would lead to the
absurd result that a neutral school-choice program might be permissible
in some parts of Ohio, . . . but not in'' others. Id. at 656-58. The
Court found that ``[t]he constitutionality of a neutral . . . aid
program simply does not turn on whether and why, in a particular area,
at a particular time, most [providers] are run by religious
organizations, or most recipients choose to use the aid at a religious
[provider].'' Id. at 658.
The final rule issued after the Working Group's report included
among its criteria for indirect Federal financial assistance a
requirement that
[[Page 8220]]
beneficiaries have ``at least one adequate secular option'' for use of
the Federal financial assistance. See 81 FR 19355, 19407-19426 (2016).
In other words, the rule amended regulations to make the definition of
``indirect'' aid hinge on the availability of secular providers. A
regulation defining ``indirect Federal financial assistance'' to
require the actual availability of ``one adequate secular option'' is
in tension with the Supreme Court's choice not to make the definition
of indirect aid hinge on the geographically varying availability of
secular providers. Thus, it is appropriate to amend existing
regulations to bring the definition of ``indirect'' aid more closely
into line with the Supreme Court's definition in Zelman.
Explanations for the Proposed Amendments
HUD proposes to revise Sec. [thinsp]5.109 entitled, ``Equal
participation of faith-based organizations in HUD programs and
activities,'' consistent with Executive Order 13831, 83 Fed. 20715 (May
8, 2018). Specifically, the definition in Sec. [thinsp]5.109(b) of
``Indirect Federal financial assistance'' is proposed to be changed in
order to align the text more closely with the First Amendment as
described in II(D) above. See, e.g., Zelman v. Simmons-Harris, 536 U.S.
639 (2002); Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S.
Ct. 2012 (2017).
Section 5.109(b) would also be revised to add a definition of
``Religious exercise'' in order to align the text more closely with the
definitions used in the Religious Freedom Restoration Act of 1993
(RFRA), 42 U.S.C. 2000bb et seq., and with the Religious Land Use and
Individualized Persons Act of 2000 (RLUIPA), 42 U.S.C. 2000cc-5(7)(A).
See, e.g., principles 10-15 of the Attorney General's Memorandum on
Religious Liberty, 82 FR 49668 (October 26, 2017).
Section 5.109(c) would also be revised by adding clarifying
language and to align it more closely with RFRA. The language would
clarify that religious organizations may be eligible for religious
accommodations appropriate under the Constitution or other provisions
of federal law, including but not limited to 42 U.S.C. 2000bb et seq.,
42 U.S.C. 238n, 42 U.S.C. 18113, 42 U.S.C. 2000e-1(a) and 2000e-2(e),
42 U.S.C. 12113(d), and the Weldon Amendment. It would also require
notices of funding availability, grant agreements, and cooperative
agreements to include Appendix A, which clarifies the rights of
religious applicants. See, e.g., principles 6, 10-15, and 20 of the
Attorney General's Memorandum on Religious Liberty, 82 FR 49668
(October 26, 2017); Application of the Religious Freedom Restoration
Act to the Award of a Grant Pursuant to the Juvenile Justice and
Delinquency Prevention Act, 31 Op. O.L.C. 162 (2007) (World Vision
Opinion).
Appendix A adds language to all Notices of Funding Availability
that clarifies the rights of faith-based organizations applying for the
relevant award, including rights that spring from the First Amendment
and RFRA See, e.g., Zelman v. Simmons-Harris, 536 U.S. 639 (2002);
Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S. Ct. 2012
(2017); principles 2, 3, 6-7, 9-17, 19, and 20 of the Attorney
General's Memorandum on Religious Liberty, 82 FR 49668 (October 26,
2017); Exec. Order No. 13279, 67 FR 77141 (December 12, 2002), as
amended by Exec. Order No. 13559, 75 FR 71319 (November 17, 2010), and
Exec. Order No. 13831, 83 FR 20715 (May 8, 2018).
HUD also proposes to revise Sec. 5.109(d) to eliminate extraneous
language relating to direct Federal financial assistance that is
covered in Sec. 5.109(e) and provide language to align it more closely
with the First Amendment and with RFRA. This language clarifies the
scope of the independence that faith-based organizations receive when
they apply for or participate in a HUD program, and that they do not
lose any protections of law highlighted by the Attorney General's
Memorandum on Religious Liberty merely by applying for or participating
in such programs. See, e.g., Exec. Order No. 13279, 67 FR 77141
(December 12, 2002), as amended by Exec. Order No. 13831, 83 FR 20715
(May 8, 2018); principles 9-15, 19, and 20 of the Attorney General's
Memorandum on Religious Liberty, 82 FR 49668 (October 26, 2017).
Section 5.109(e) would be revised to bring consistency with
Executive Order No. 13559, 75 FR 71319 (November 22, 2010), by further
clarifying that the restrictions in Sec. 5.109(e) do not apply to the
use of indirect Federal financial assistance.
As discussed in II(B)-(C) above, Sec. 5.109(g) would be deleted in
accordance with Executive Order 13831. These changes would also align
the text more closely with the First Amendment and with RFRA. See,
e.g., Zelman v. Simmons-Harris, 536 U.S. 639 (2002), Trinity Lutheran
Church of Columbia, Inc. v. Comer, 137 S. Ct. 2012 (2017); principles
2, 3, 6-7, 9-17, 19, and 20 of the Attorney General's Memorandum on
Religious Liberty, 82 FR 49668 (October 26, 2017); Exec. Order No.
13279, 67 FR 77141 (December 12, 2002), as amended by Exec. Order No.
13559, 75 FR 71319 (November 17, 2010), and Exec. Order No. 13831, 83
FR 20715 (May 8, 2018).
Section 5.109(g) ``Nondiscrimination requirements,'' as
redesignated, is proposed to be changed in order to align the text more
closely with the First Amendment and with RFRA by clarifying that
organizations receiving indirect financial aid may require attendance
to fundamentally important programmatic activities. This follows the
definition of indirect financial assistance as discussed in II(D)
above. See, e.g., Zelman v. Simmons-Harris, 536 U.S. 639 (2002));
principles 10-15 of the Attorney General's Memorandum on Religious
Liberty, 82 FR 49668 (October 26, 2017).
HUD proposes to add a new Sec. 5.109(h) in order to clarify the
text and align it more closely with the First Amendment and with RFRA.
This section prevents HUD or intermediaries from targeting faith-based
organizations by asking them to provide additional assurances that
similarly situated secular organizations do not have to provide. See,
e.g., Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S. Ct.
2012 (2017)); principles 6, 7, and 10-15 of the Attorney General's
Memorandum on Religious Liberty, 82 FR 49668 (October 26, 2017).
Section 5.109(l) is proposed to be added in order to align more
closely with RFRA. This clarifies HUD's treatment of tax-exempt
organizations including for entities that sincerely believe that they
cannot register for tax exemption. See, e.g., principles 10-15 of the
Attorney General's Memorandum on Religious Liberty, 82 FR 49668
(October 26, 2017).
Section 5.109(m) is proposed to be added in order to align the text
more closely with the First Amendment by providing a rule of
construction to interpret these provisions in a way that does not favor
or disfavor religious organizations. See, e.g., Larson v. Valente, 456
U.S. 228 (1982)); principle 8 of the Attorney General's Memorandum on
Religious Liberty, 82 FR 49668 (October 26, 2017).
III. Tribal Consultation
HUD's policy is to consult with Indian tribes early in the process
on matters that have tribal implications. Accordingly, on July 16,
2019, HUD sent letters to all tribal leaders participating in HUD
programs, informing them of the nature of this forthcoming rulemaking.
HUD received one comment in response to those letters, regarding the
ability of faith-based organizations to access funds designated for
Indian tribes under
[[Page 8221]]
the Indian Community Development Block Grant program. Tribal leaders
are welcome to provide public comments on this proposed rule.
IV. Findings and Certifications
Executive Order 12866 and 13563--Regulatory Planning and Review
This proposed rule has been drafted in accordance with Executive
Order 13563, ``Improving Regulation and Regulatory Review,'' of January
18, 2011, 76 FR 3821, and Executive Order 12866, ``Regulatory Planning
and Review,'' of September 30, 1993, 58 FR 51735. Executive Order 13563
directs agencies, to the extent permitted by law, to propose or adopt a
regulation only upon a reasoned determination that its benefits justify
its costs; tailor the regulation to impose the least burden on society,
consistent with obtaining the regulatory objectives; and, in choosing
among alternative regulatory approaches, select those approaches that
maximize net benefits. Executive Order 13563 recognizes that some
benefits and costs are difficult to quantify and provides that, where
appropriate and permitted by law, agencies may consider and discuss
qualitatively values that are difficult or impossible to quantify,
including equity, human dignity, fairness, and distributive impacts.
Under Executive Order 12866, the Office of Information and
Regulatory Affairs (OIRA) must determine whether this regulatory action
is ``significant'' and, therefore, subject to the requirements of the
Executive Order and subject to review by the Office of Management and
Budget (OMB). Section 3(f) of Executive Order 12866 defines a
``significant regulatory action'' as an action likely to result in a
regulation that may (1) have an annual effect on the economy of $100
million or more or adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities (also referred to as an ``economically
significant'' regulation); (2) create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) materially alter the budgetary impacts of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles stated in
Executive Order 12866. OIRA has determined that this proposed
regulatory action is a significant, but not economically significant,
regulatory action subject to review by OMB under section 3(f) of
Executive Order 12866. Accordingly, OMB has reviewed this rule.
HUD has also reviewed these regulations under Executive Order
13563, which supplements and reaffirms the principles, structures, and
definitions governing regulatory review established in Executive Order
12866. To the extent permitted by law, section 1(b) of Executive Order
13563 requires that an agency: (1) Propose or adopt regulations only
upon a reasoned determination that their benefits justify their costs
(recognizing that some benefits and costs are difficult to quantify);
(2) tailor its regulations to impose the least burden on society,
consistent with obtaining regulatory objectives, and taking into
account--among other things and to the extent practicable--the costs of
cumulative regulations; (3) in choosing among alternative regulatory
approaches, select those approaches that maximize net benefits
(including potential economic, environmental, public health and safety,
and other advantages; distributive impacts; and equity); (4) to the
extent feasible, specify performance objectives, rather than the
behavior or manner of compliance that regulated entities must adopt;
and (5) identify and assess available alternatives to direct
regulation, including providing economic incentives--such as user fees
or marketable permits--to encourage the desired behavior, or providing
information that enables the public to make choices. 76 FR 3821, 3821
(Jan. 21, 2011). Section 1(c) of Executive Order 13563 also requires an
agency ``to use the best available techniques to quantify anticipated
present and future benefits and costs as accurately as possible.'' Id.
OIRA has emphasized that these techniques may include ``identifying
changing future compliance costs that might result from technological
innovation or anticipated behavioral changes.'' Memorandum for the
Heads of Executive Departments and Agencies, and of Independent
Regulatory Agencies, from Cass R. Sunstein, Administrator, Office of
Information and Regulatory Affairs, Re: Executive Order 13563,
``Improving Regulation and Regulatory Review'', at 1 (Feb. 2, 2011),
available at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/2011/m11-10.pdf.
HUD is issuing these proposed regulations upon a reasoned
determination that their benefits justify their costs. In choosing
among alternative regulatory approaches, HUD selected those approaches
that maximize net benefits. Based on the analysis that follows, HUD
believes that this proposed regulation is consistent with the
principles in Executive Order 13563. It is the reasoned determination
of HUD that this proposed action would, to a significant degree,
eliminate costs that have been incurred by faith-based organizations as
they complied with the requirements of section 2(b) of Executive Order
13559, while not adding any other requirements for those organizations.
HUD also has determined that this regulatory action does not unduly
interfere with State, local, or tribal governments in the exercise of
their governmental functions.
In accordance with Executive Orders 12866 and 13563, HUD has
assessed the potential costs and benefits, both quantitative and
qualitative, of this regulatory action. The potential costs and cost
savings associated with this regulatory action are those resulting from
the removal of the notification and referral requirements of Executive
Order 13279, as amended by Executive Order 13559 and further amended by
Executive Order 13831. HUD recognizes that the removal of the notice
and referral requirements could impose some costs on beneficiaries who
may now need to investigate alternative providers on their own if they
object to the religious character of a potential provider. HUD invites
comment on any information that it could use to quantify this potential
cost. HUD also notes a quantifiable cost savings of the removal of the
notice requirements. HUD estimates this cost savings as $656,128. HUD
invites comment on any data by which it could assess the actual
implementation costs of the notice and referral requirement--including
any estimates of staff time spent on compliance with the requirement,
in addition to the printing costs for the notices referenced above--and
thereby accurately quantify the cost savings of removing these
requirements.
In terms of benefits, HUD recognizes a benefit to religious liberty
that comes from removing requirements imposed solely on faith-based
organizations in tension with the principles of free exercise
articulated in Trinity Lutheran. HUD also recognizes a benefit to grant
recipients and beneficiaries alike that comes from increased clarity in
the regulatory requirements that apply to faith-based organizations'
operating programs and activities funded by the Federal Government.
Beneficiaries will also benefit from the increased capacity of faith-
based social-service providers to provide services, both because these
providers will be able to shift resources
[[Page 8222]]
otherwise spent fulfilling the notice and referral requirements to
provision of services, and because more faith-based social service
providers may participate in the marketplace once reassured that the
government will not impose burdensome obligations based on their
religious character.
Executive Order 13771, Reducing Regulation and Controlling Regulatory
Costs
Executive Order 13771, entitled ``Reducing Regulation and
Controlling Regulatory Costs,'' was issued on January 30, 2017 (82 FR
9339, February 3, 2017). Section 2(a) of Executive Order 13771 requires
an agency, unless prohibited by law, to identify at least two existing
regulations to be repealed when the agency publicly proposes for notice
and comment, or otherwise promulgates, a new regulation. In furtherance
of this requirement, section 2(c) of Executive Order 13771 requires
that the 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 two prior regulations. This
proposed rule is expected to be an E.O. 13771 deregulatory action.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by
the Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA), generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to the notice and comment
rulemaking requirements under the Administrative Procedure Act (5
U.S.C. 553) or any other statute, unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. HUD has determined that this rule will not
have a significant economic impact on a substantial number of small
entities. Consequently, HUD has not prepared a regulatory flexibility
analysis.
Executive Order 12988: Civil Justice Reform
This proposed rule has been reviewed in accordance with Executive
Order 12988, ``Civil Justice Reform'' (61 FR 4729, February 6, 1996).
The provisions of this proposed rule will not have preemptive effect
with respect to any State or local laws, regulations, or policies that
conflict with such provision or which otherwise impede their full
implementation. The rule will not have retroactive effect.
Executive Order 13132: Federalism
Executive Order 13132 (64 FR 43255, August 4, 1999) directs that,
to the extent practicable and permitted by law, an agency shall not
promulgate any regulation that has federalism implications, that
imposes substantial direct compliance costs on State and local
governments, that is not required by statute, or that preempts State
law, unless the agency meets the consultation and funding requirements
of section 6 of the Executive Order. Because each change proposed by
this rule does not have federalism implications as defined in the
Executive Order, does not impose direct compliance costs on State and
local governments, is required by statute, and does not preempt State
law within the meaning of the Executive Order, HUD has concluded that
compliance with the requirements of section 6 is not necessary.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act, an agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information, unless the collection displays a currently
valid OMB control number. The current collection for this rule is
approved as OMB control number 2535-0122. HUD previously estimated a
cost of no more than 2 burden hours and $100 annual materials cost for
the notices and 2 burden hours per referral. 81 FR 19389. The overall
reporting and recordkeeping burden will be removed if this rule is
finalized as proposed and the hours reduced by 25,620 and costs of
$656,128. The change to the information collection will be as follows:
----------------------------------------------------------------------------------------------------------------
Frequency of
Information collection Number of response per Burden hour Annual burden New burden
respondents annum per response hours hours
----------------------------------------------------------------------------------------------------------------
5.109(g) (Written Notice of 726,053 1 .0333 24,178 0
Rights)........................
5.109(g) (Referral)............. 726 1 2 1,452 0
-------------------------------------------------------------------------------
Total Savings............... .............. .............. .............. 25,620 0
----------------------------------------------------------------------------------------------------------------
In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments
from members of the public and affected agencies concerning the
information collection requirements in the proposed rule regarding:
(1) Whether the proposed collection of information is necessary for
the proper performance of the functions of the agency, including
whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the
proposed collection of information;
(3) Whether the proposed collection of information enhances the
quality, utility, and clarity of the information to be collected; and
(4) Whether the proposed information collection minimizes the
burden of the collection of information on those who are to respond;
including through the use of appropriate automated collection
techniques or other forms of information technology (e.g., permitting
electronic submission of responses).
Interested persons are invited to submit comments regarding the
information collection requirements in this rule. The proposed
information collection requirements in this rule have been submitted to
OMB for review under section 3507(d) of the Paperwork Reduction Act.
Under the provisions of 5 CFR part 1320, OMB is required to make a
decision concerning this collection of information between 30 and 60
days after the publication date. Therefore, a comment on the
information collection requirements is best assured of having its full
effect if OMB receives the comment within 30 days of the publication.
This time frame does not affect the deadline for comments to the agency
on the proposed rule, however. Comments must refer to the proposed rule
by name and docket number (FR-6085) and must be sent to:
HUD Desk Officer, Office of Management and Budget, New Executive Office
Building, Washington, DC 20503, Fax number: 202-395-6947.
and
Colette Pollard, HUD Reports Liaison Officer, Department of Housing and
Urban Development, 451 7th Street SW, Room 2204, Washington, DC 20410.
[[Page 8223]]
Interested persons may submit comments regarding the information
collection requirements electronically through the Federal eRulemaking
Portal at http://www.regulations.gov. HUD strongly encourages
commenters to submit comments electronically. Electronic submission of
comments allows the commenter maximum time to prepare and submit a
comment, ensures timely receipt by HUD, and enables HUD to make them
immediately available to the public. Comments submitted electronically
through the http://www.regulations.gov website can be viewed by other
commenters and interested members of the public. Commenters should
follow the instructions provided on that site to submit comments
electronically.
Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
(UMRA) establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and on the private sector. This proposed rule does not
impose a Federal mandate on any state, local, or tribal government, or
on the private sector, within the meaning of UMRA.
List of Subjects
24 CFR Part 5
Administrative practice and procedure, Aged, Claims, Crime,
Government contracts, Grant programs-housing and community development,
Individuals with disabilities, Intergovernmental relations, Loan
programs-housing and community development, Low and moderate income
housing, Mortgage insurance, Penalties, Pets, Public housing, Rent
subsidies, Reporting and recordkeeping requirements, Social security,
Unemployment compensation, Wages.
24 CFR Part 92
Administrative practice and procedure, Low and moderate income
housing, Manufactured homes, Rent subsidies, Reporting and
recordkeeping requirements.
24 CFR Part 578
Community development, Community facilities, Grant programs-housing
and community development, Grant programs-social programs, Homeless,
Reporting and recordkeeping requirements.
Accordingly, for the reasons set forth in the preamble, parts 5,
and 92 of Title 24 of the Code of Federal Regulations is proposed to be
amended as follows:
PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS
0
1. The authority citation for part 5 is revised to read as follows:
Authority: 12 U.S.C. 1701x; 42 U.S.C. 1437a, 1437c, 1437f,
1437n, 3535(d); Sec. 327, Pub. L. 109-115, 119 Stat. 2936; Sec. 607,
Pub. L. 109-162, 119 Stat. 3051 (42 U.S.C. 14043e et seq.); E.O.
13279, 67 FR 77141; E.O. 13559, 75 FR 71319; E.O 13831, 83 FR 20715.
0
2. Amend Sec. 5.109 by:
0
a. Revising paragraphs (a);
0
b. In paragraph (b), revising the definition ``Indirect Federal
financial assistance'' and adding the definition ``Religious exercise''
in alphabetical order;
0
c. Revising paragraphs (c) and (d);
0
d. In paragraph (e), adding a sentence at the end of the paragraph;
0
e. Removing paragraph (g);
0
f. Redesignating paragraph (h) as paragraph (g) and revising newly
redesignated paragraph (g)''; and
0
g. Adding paragraphs (h), (l), and (m).
The revisions and additions read as follows:
Sec. 5.109 Equal participation of faith-based organizations in HUD
programs and activities.
(a) Purpose. Consistent with Executive Order 13279, entitled
``Equal Protection of the Laws for Faith-Based and Community
Organizations,'' as amended by Executive Order 13559, entitled
``Fundamental Principles and Policymaking Criteria for Partnerships
With Faith-Based and Other Neighborhood Organizations,'' and as amended
by Executive Order 13831, entitled ``Establishment of a White House
Faith and Opportunity Initiative,'' this section describes requirements
for ensuring the equal participation of faith-based organizations in
HUD programs and activities. These requirements apply to all HUD
programs and activities, including all of HUD's Native American
Programs, except as may be otherwise noted in the respective program
regulations in title 24 of the Code of Federal Regulations (CFR), or
unless inconsistent with certain HUD program authorizing statutes.
* * *
(b) * * *
Indirect Federal financial assistance means Federal financial
assistance provided when the choice of the provider is placed in the
hands of the beneficiary, and the cost of that service is paid through
a voucher, certificate, or other similar means of Government-funded
payment. Federal financial assistance provided to an organization is
considered indirect when the Government program through which the
beneficiary receives the voucher, certificate, or other similar means
of Government-funded payment is neutral toward religion meaning that it
is available to providers without regard to the religious or non-
religious nature of the institution and there are no program incentives
that deliberately skew for or against religious or secular providers;
and the organization receives the assistance as a result of a genuine,
independent choice of the beneficiary.
* * * * *
Religious exercise has the meaning given to the term in 42 U.S.C.
2000cc-5(7)(A).
(c) Equal participation of faith-based organizations in HUD
programs and activities. Faith-based organizations are eligible, on the
same basis as any other organization, to participate in any HUD program
or activity, considering any permissible accommodations, particularly
under the Religious Freedom Restoration Act. Neither the Federal
Government, nor a State, tribal or local government, nor any other
entity that administers any HUD program or activity, shall discriminate
against an organization on the basis of the organization's religious
character, affiliation, or lack thereof, or exercise. In addition,
decisions about awards of Federal financial assistance must be free
from political interference or even the appearance of such interference
and must be made on the basis of merit, not based on the organization's
religious character, affiliation, or lack thereof, or exercise. Notices
of funding availability, grant agreements, and cooperative agreements
shall include language substantially similar to that in Appendix A to
this subpart, where faith-based organizations are statutorily eligible
for such opportunities.
(d) Independence and Identity of Faith-Based Organizations. (1) A
faith-based organization that applies for, or participates in, a HUD
program or activity supported with Federal financial assistance retains
its autonomy, right of expression, religious character, authority over
its governance, and independence, and may continue to carry out its
mission, including the definition, development, practice, and
expression of its religious beliefs. A faith-based organization that
receives Federal financial assistance from HUD does not lose the
protections of law.
Note 1 to paragraph (d)(1): Memorandum for All Executive
Departments and Agencies, From the Attorney General, ``Federal Law
Protections for Religious Liberty'' (Oct. 6, 2017) (describing
federal law protections for religious liberty).
[[Page 8224]]
(2) A faith-based organization that receives direct Federal
financial assistance may use space (including a sanctuary, chapel,
prayer hall, or other space) in its facilities (including a temple,
synagogue, church, mosque, or other place of worship) to carry out
activities under a HUD program without concealing, altering, or
removing religious art, icons, scriptures, or other religious symbols.
In addition, a faith-based organization participating in a HUD program
or activity retains its authority over its internal governance, and may
retain religious terms in its organization's name, select its board
members and employees on the basis of their acceptance of or adherence
to the religious tenets of the organization, and include religious
references in its organization's mission statements and other governing
documents.
(e) * * * The use of indirect Federal financial assistance is not
subject to this restriction. Nothing in this part restricts HUD's
authority under applicable Federal law to fund activities, that can be
directly funded by the Government consistent with the Establishment
Clause of the U.S. Constitution.
* * * * *
(g) Nondiscrimination requirements. Any organization that receives
Federal financial assistance under a HUD program or activity shall not,
in providing services with such assistance or carrying out activities
with such assistance, discriminate against a beneficiary or prospective
beneficiary on the basis of religion, religious belief, a refusal to
hold a religious belief, or a refusal to attend or participate in a
religious practice. However, this section does not require any
organization that only receives indirect Federal financial assistance
to modify its program or activities to accommodate a beneficiary that
selects the organization to receive indirect aid or prohibit such
organization from requiring attendance at all activities that are
fundamental to the program.
(h) No additional assurances from faith-based organizations. A
faith-based organization is not rendered ineligible by its religious
nature to access and participate in HUD programs. No notice of funding
availability, grant agreement, cooperative agreement, covenant,
memorandum of understanding, policy, or regulation that is used by HUD
or a recipient or intermediary in administering Federal financial
assistance from HUD shall require otherwise eligible faith-based
organizations to provide assurances or notices where they are not
required of similarly situated secular organizations. All organizations
that participate in HUD programs or activities, including organizations
with religious character or affiliations, must carry out eligible
activities in accordance with all program requirements, subject to any
required or appropriate accommodation, particularly under the Religious
Freedom Restoration Act, and other applicable requirements governing
the conduct of HUD-funded activities, including those prohibiting the
use of direct financial assistance to engage in explicitly religious
activities. No notice of funding availability, grant agreement,
cooperative agreement, covenant, memorandum of understanding, policy,
or regulation that is used by HUD or a recipient or intermediary in
administering financial assistance from HUD shall disqualify otherwise
eligible faith-based organizations from participating in HUD's programs
or activities because such organization is motivated or influenced by
religious faith to provide such programs and activities, or because of
its religious exercise or affiliation.
* * * * *
(l) Tax exempt organizations. In general, HUD does not require that
a recipient, including a faith-based organization, obtain tax-exempt
status under section 501(c)(3) of the Internal Revenue Code to be
eligible for funding under HUD programs. Many grant programs, however,
do require an organization to be a nonprofit organization in order to
be eligible for funding. Notices of funding availability that require
organizations to have nonprofit status will specifically so indicate in
the eligibility section of the notice of funding availability. In
addition, if any notice of funding availability requires an
organization to maintain tax-exempt status, it will expressly state the
statutory authority for requiring such status. Applicants should
consult with the appropriate HUD program office to determine the scope
of any applicable requirements. In HUD programs in which an applicant
must show that it is a nonprofit organization but this is not
statutorily defined, the applicant may do so by any of the following
means:
(1) Proof that the Internal Revenue Service currently recognizes
the applicant as an organization to which contributions are tax
deductible under section 501(c)(3) of the Internal Revenue Code;
(2) A statement from a State or other governmental taxing body or
the State secretary of State certifying that--
(i) The organization is a nonprofit organization operating within
the State; and
(ii) No part of its net earnings may benefit any private
shareholder or individual;
(3) A certified copy of the applicant's certificate of
incorporation or similar document that clearly establishes the
nonprofit status of the applicant;
(4) Any item described in paragraphs (l)(1) through (l)(3) of this
section, if that item applies to a State or national parent
organization, together with a statement by the state or parent
organization that the applicant is a local nonprofit affiliate; or
(5) For an entity that holds a sincerely-held religious belief that
it cannot apply for a determination as an entity that is tax-exempt
under section 501(c)(3) of the Internal Revenue Code, evidence
sufficient to establish that the entity would otherwise qualify as a
nonprofit organization under paragraphs (l)(1) through (l)(4) of this
section.
(m) Rule of construction. Neither HUD nor any recipient or other
intermediary receiving funds under any HUD program or activity shall
construe these provisions in such a way as to advantage or disadvantage
faith-based organizations affiliated with historic or well-established
religions or sects in comparison with other religions or sects.
0
3. Add Appendix A to Subpart A of Part 5 to read as follows:
Appendix A to Subpart A of Part 5--Notice of Funding Availability
Faith-based organizations may apply for this award on the same
basis as any other organization, as set forth at, and subject to the
protections and requirements of 42 U.S.C. 2000bb et seq., HUD will
not, in the selection of recipients, discriminate against an
organization on the basis of the organization's religious exercise
or affiliation.
A faith-based organization that participates in this program
will retain its independence, and may continue to carry out its
mission consistent with religious freedom protections in Federal
law, including the Free Speech and Free Exercise clauses of the
Constitution, 42 U.S.C. 2000bb et seq., 42 U.S.C. 238n, 42 U.S.C.
18113, 42 U.S.C. 2000e-1(a) and 2000e-2(e), 42 U.S.C. 12113(d), and
the Weldon Amendment, among others. Religious accommodations may
also be sought under many of these religious freedom protection
laws, particularly under the Religious Freedom Restoration Act.
A faith-based organization may not use direct financial
assistance from HUD to support or engage in any explicitly religious
activities except where consistent with the Establishment Clause and
any other applicable requirements. Such an organization also may
not, in providing services funded by HUD, discriminate against a
program beneficiary or prospective program
[[Page 8225]]
beneficiary on the basis of a refusal to hold a religious belief, or
a refusal to attend or participate in a religious practice.
PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM
0
4. The authority citation for part 92 continues to read as follows:
Authority: 42 U.S.C. 3535(d), 12 U.S.C. 1701x and 4568.
Sec. 92.508 [Amended]
0
5. Amend Sec. 92.508 by removing paragraph (a)(2)(xiii).
Dated: January 2, 2020.
Benjamin S. Carson, Sr.,
Secretary.
[FR Doc. 2020-02495 Filed 2-12-20; 8:45 am]
BILLING CODE 4210-67-P
