Equal Participation of Faith-Based Organizations in the Federal Agencies' Programs and Activities

Citation85 FR 82037
CourtAgency For International Development, Education Department, Justice Department, Labor Department
Publication Date17 Dec 2020
Record Number2020-27084
Federal Register, Volume 85 Issue 243 (Thursday, December 17, 2020)
[Federal Register Volume 85, Number 243 (Thursday, December 17, 2020)]
                [Rules and Regulations]
                [Pages 82037-82148]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-27084]
                [[Page 82035]]
                Vol. 85
                Thursday,
                No. 243
                December 17, 2020
                Part IIDepartment of Education-----------------------------------------------------------------------2 CFR Part 3473
                34 CFR Parts 75 and 76Department of Homeland Security-----------------------------------------------------------------------
                6 CFR Part 19Department of Agriculture-----------------------------------------------------------------------
                7 CFR Part 16Agency for International Development-----------------------------------------------------------------------
                6 CFR Part 19Department of Housing and Urban Development-----------------------------------------------------------------------
                24 CFR Parts 5, 92, et al.Department of Justice-----------------------------------------------------------------------
                28 CFR Part 38
                [[Page 82036]]
                Department of Labor-----------------------------------------------------------------------
                29 CFR Part 2Department of Veterans Affairs-----------------------------------------------------------------------
                38 CFR Parts 50, 61, et al.Department of Health and Human Services-----------------------------------------------------------------------Office of the Secretary
                45 CFR Part 87-----------------------------------------------------------------------Administration for Children and Families
                45 CFR Part 1050-----------------------------------------------------------------------Equal Participation of Faith-Based Organizations in the Federal
                Agencies' Programs and Activities; Final Rule
                Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 /
                Rules and Regulations
                [[Page 82037]]
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                DEPARTMENT OF EDUCATION
                2 CFR Part 3474
                34 CFR Parts 75 and 76
                [ED-2019-OPE-0080]
                RIN 1840-AD 45
                DEPARTMENT OF HOMELAND SECURITY
                6 CFR Part 19
                [DHS-2019-0049]
                RIN 1601-AA93
                DEPARTMENT OF AGRICULTURE
                7 CFR Part 16
                [USDA-2020-0009]
                RIN 0510-AA008
                AGENCY FOR INTERNATIONAL DEVELOPMENT
                22 CFR Part 205
                [AID-2020-0001]
                RIN 0412-AA99
                DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
                24 CFR Parts 5, 92, and 578
                [HUD-2020-0017]
                RIN 2501-AD91
                DEPARTMENT OF JUSTICE
                28 CFR Part 38
                [DOJ-OAG-2020-0001; A.G. Order No. 4925-2020]
                RIN 1105-AB58
                DEPARTMENT OF LABOR
                29 CFR Part 2
                [DOL-2019-0006]
                RIN 1291-AA41
                DEPARTMENT OF VETERANS AFFAIRS
                38 CFR Parts 50, 61, and 62
                [VA-2020-VACO-0003]
                RIN 2900-AQ75
                DEPARTMENT OF HEALTH AND HUMAN SERVICES
                Office of the Secretary
                45 CFR Part 87
                Administration for Children and Families
                45 CFR Part 1050
                [HHS-OS-2020-0001]
                RIN 0991-AC13
                Equal Participation of Faith-Based Organizations in the Federal
                Agencies' Programs and Activities
                AGENCY: Department of Education, Department of Homeland Security,
                Department of Agriculture, Agency for International Development,
                Department of Housing and Urban Development, Department of Justice,
                Department of Labor, Department of Veterans Affairs, Department of
                Health and Human Services.
                ACTION: Final rule.
                -----------------------------------------------------------------------
                SUMMARY: This rule amends the regulations of the agencies listed above
                (``the Agencies'') to implement Executive Order 13831 of May 3, 2018
                (Establishment of a White House Faith and Opportunity Initiative). This
                rule provides clarity about the rights and obligations of faith-based
                organizations participating in the Agencies' Federal financial
                assistance programs and activities. This rulemaking is intended to
                ensure that the Agencies' Federal financial assistance programs and
                activities are implemented in a manner consistent with the requirements
                of Federal law, including the First Amendment to the Constitution and
                the Religious Freedom Restoration Act.
                DATES: This final rule becomes effective on January 19, 2021.
                FOR FURTHER INFORMATION CONTACT: For information regarding each
                Agency's implementation of these final regulations, the contact
                information for that Agency follows. If you use a telecommunications
                device for the deaf (``TDD'') or a text telephone (``TTY''), call the
                Federal Relay Service (``FRS''), toll free, at 800-877-8339:
                 Department of Education: Lynn Mahaffie, Assistant General
                Counsel, Division of Regulatory Services, Office of the General
                Counsel, 202-453-7862, [email protected].
                 Department of Homeland Security: Peter Mina, Deputy
                Officer for Programs and Compliance, Office for Civil Rights and Civil
                Liberties, 202-401-1474 (phone), 202-401-0470 (TTY).
                 Department of Agriculture: Emily Tasman, Assistant General
                Counsel, Office of the General Counsel, 202-720-3351,
                [email protected].
                 Agency for International Development: Brian Klotz, Deputy
                Director, Center for Faith & Opportunity Initiatives, 202-712-0217,
                [email protected].
                 Department of Housing and Urban Development: Richard
                Youngblood, Director, Center for Faith-Based and Neighborhood
                Partnerships, 202-402-5958.
                 Department of Justice: Michael L. Alston, Director, Office
                for Civil Rights, Office of Justice Programs, 202-514-2000,
                [email protected].
                 Department of Labor: Mark Zelden, Director, Centers for
                Faith & Opportunity Initiatives, 202-693-6017, [email protected].
                 Department of Veterans Affairs: Conrad Washington,
                Director, Center for Faith and Opportunity Initiatives, Office of
                Public and Intergovernmental Affairs, 202-461-7865.
                 Department of Health and Human Services: Shannon O. Royce,
                Director, Center for Faith and Opportunity Initiatives, 202-260-6501.
                SUPPLEMENTARY INFORMATION:
                I. Background
                 Shortly after taking office in 2001, President George W. Bush
                signed Executive Order 13199, 66 FR 8499 (Jan. 29, 2001) (Establishment
                of White House Office of Faith-Based and Community Initiatives). 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 an office within the White House, the
                White House Office of Faith-Based and Community Initiatives, with
                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.''
                 On December 12, 2002, President Bush signed Executive Order 13279,
                67 FR 77141 (Dec. 12, 2002) (Equal Protection of the Laws for Faith-
                Based and Community Organizations). 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 to review and evaluate existing policies that
                had implications for faith-based and community organizations relating
                to their eligibility for Federal financial assistance for social
                service programs and, where appropriate, to implement new policies that
                were consistent with and necessary to further the fundamental
                principles and policymaking criteria articulated in the Executive
                Order.
                 In 2004, the Department of Veterans Affairs (``VA'') promulgated
                regulations at 38 CFR part 61 consistent with Executive Order 13279. VA
                Homeless
                [[Page 82038]]
                Providers Grant and Per Diem Program; Religious Organizations, 69 FR
                31883 (June 8, 2004). The Department of Education similarly promulgated
                regulations at 34 CFR parts 74, 75, 76, and 80. Participation in
                Education Department Programs by Religious Organizations; Providing for
                Equal Treatment of All Education Program Participants, 69 FR 31708
                (June 4, 2004). In 2003 and 2004, the Department of Housing and Urban
                Development (``HUD'') promulgated three final rules to implement
                Executive Order 13279. See Providing for Equal Treatment of All Program
                Participants, 69 FR 62164 (Oct. 22, 2004); Equal Participation of
                Faith-Based Organizations, 69 FR 41712 (July 9, 2004); Participation in
                HUD's Native American Programs by Religious Organizations;
                Participation in HUD Programs by Faith-Based Organizations; Providing
                for Equal Treatment of all HUD Program Participants, 68 FR 56396 (Sept.
                30, 2003). In 2004, the Department of Justice (``DOJ''), Department of
                Agriculture (``USDA''), Department of Labor (``DOL''), Department of
                Health and Human Services (``HHS''), and Agency for International
                Development (``USAID'') issued regulations through notice-and-comment
                rulemaking implementing Executive Order 13279. See Participation in
                Justice Department Programs by Religious Organizations; Providing for
                Equal Treatment of All Justice Department Program Participants, 69 FR
                2832 (Jan. 21, 2004); Equal Opportunity for Religious Organizations, 69
                FR 41375 (July 9, 2004); Equal Treatment in Department of Labor
                Programs for Faith-Based and Community Organizations; Protection of
                Religious Liberty of Department of Labor Social Service Providers and
                Beneficiaries, 69 FR 41882 (July 12, 2004); Participation in Department
                of Health and Human Services Programs by Religious Organizations;
                Providing for Equal Treatment of All Department of Health and Human
                Services Program Participants, 69 FR 42586 (July 16, 2004);
                Participation by Religious Organizations in USAID Programs, 69 FR 61716
                (Oct. 20, 2004). DOL subsequently issued guidance detailing the process
                for recipients of financial assistance to obtain exemptions from
                religious nondiscrimination requirements under the Religious Freedom
                Restoration Act (``RFRA''), 42 U.S.C. 2000bb through 2000bb-4.\1\ DHS
                issued a Notice of Proposed Rulemaking (``NPRM'' or ``proposed rule'')
                in 2008, see Nondiscrimination in Matters Pertaining to Faith-Based
                Organizations, 73 FR 2187 (Jan. 14, 2008); however, DHS did not issue a
                final rule related to the participation of faith-based organizations in
                its programs prior to 2016.
                ---------------------------------------------------------------------------
                 \1\ See DOL, Guidance Regarding Federal Grants and Executive
                Order 13798, https://www.dol.gov/agencies/oasam/grants/religious-freedom-restoration-act.
                ---------------------------------------------------------------------------
                 President Obama maintained President Bush's program but modified it
                in certain respects. Shortly after taking office, President Obama
                signed Executive Order 13498, 74 FR 6533 (Feb. 5, 2009) (Amendments to
                Executive Order 13199 and Establishment of the President's Advisory
                Council for Faith-Based and Neighborhood Partnerships). 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 it created the President's Advisory
                Council on Faith-Based and Neighborhood Partnerships, which
                subsequently submitted recommendations regarding the work of the
                Office.
                 On November 17, 2010, President Obama signed Executive Order 13559,
                75 FR 71319 (Nov. 17, 2010) (Fundamental Principles and Policymaking
                Criteria for Partnerships with Faith-Based and Other Neighborhood
                Organizations). Executive Order 13559 made various changes to Executive
                Order 13279, which included: Making minor and substantive textual
                changes to the fundamental principles; adding a provision requiring
                that any religious social service provider refer potential
                beneficiaries to an alternative provider if the beneficiaries objected
                to the first provider's religious character; adding a provision
                requiring that the faith-based provider give notice of potential
                referral to potential beneficiaries; and adding a provision that awards
                must be free of political interference and not be based on religious
                affiliation or lack thereof. An interagency working group was tasked
                with developing model regulatory changes to implement Executive Order
                13279, as amended by Executive Order 13559, including provisions that
                clarified the prohibited uses of direct financial assistance, allowed
                religious social service providers to maintain their religious
                identities, and distinguished between direct and indirect assistance.
                 These efforts eventually resulted in DHS's promulgating regulations
                and the other Agencies promulgating amendments to their regulations. In
                April 2016, the Agencies promulgated a joint final rule through notice-
                and-comment rulemaking to ensure consistency with Executive Order
                13279, as amended by Executive Order 13559. See Federal Agency Final
                Regulations Implementing Executive Order 13559: Fundamental Principles
                and Policymaking Criteria for Partnerships With Faith-Based and Other
                Neighborhood Organizations, 81 FR 19355 (April 4, 2016).
                 The revised regulations defined ``indirect Federal financial
                assistance'' in a way that sought to indicate that the aid must flow to
                a beneficiary from a religious provider only through the genuine and
                independent choice of the beneficiary. See, e.g., 81 FR at 19381
                (describing ``indirect'' assistance programs as those in which the
                benefits under the program are provided as a result of a ``genuine and
                independent choice''); id. at 19406-07 (defining ``indirect Federal
                financial assistance'' in terms of whether, inter alia, the
                ``organization receives the assistance as the result of the decision of
                the beneficiary, not a decision of the government''). The rules also
                provided that aid would be considered ``indirect'' only if
                beneficiaries had at least one secular option as an alternative to the
                faith-based provider. See id. at 19407. Further, the rules not only
                required 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 protections,
                including nondiscrimination based on religion, the requirement that
                participation in any religious activities must be voluntary and that
                they must be provided separately from the federally funded activity,
                and that beneficiaries may report violations. E.g., id. at 19423.
                 President Trump has given new direction to the program established
                by President Bush and continued by President Obama. On May 4, 2017,
                President Trump issued Executive Order 13798, 82 FR 21675 (May 4, 2017)
                (Promoting Free Speech and Religious Liberty). 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.'' Pursuant to this instruction, the
                Attorney General subsequently published guidance in the Federal
                [[Page 82039]]
                Register. See Federal Law Protections for Religious Liberty, 82 FR
                49668 (Oct. 26, 2017) (``the Attorney General's Memorandum'').
                 The Attorney General's Memorandum emphasizes that individuals and
                organizations do not give up religious liberty protections by providing
                government-funded social services, and that ``government 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.'' Id. at 49669.
                 On May 3, 2018, President Trump signed Executive Order 13831, 83 FR
                20715 (May 3, 2018) (Establishment of a White House Faith and
                Opportunity Initiative), amending Executive Order 13279, as amended by
                Executive Order 13559, and other related Executive Orders. 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
                Community Initiatives'' 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.
                 On January 17, 2020, DHS, USDA, USAID, DOJ, DOL, VA, HHS, and ED
                issued NPRMs with proposed regulatory amendments to implement Executive
                Order 13831 and conform more closely to the Supreme Court's current
                First Amendment jurisprudence; relevant Federal statutes such as RFRA;
                Executive Order 13279, as amended by Executive Orders 13559 and 13831;
                and the Attorney General's Memorandum. Equal Participation of Faith-
                Based Organizations in DHS's Programs and Activities: Implementation of
                Executive Order 13831, 85 FR 2889 (Jan. 17, 2020); Equal Opportunity
                for Religious Organizations in U.S. Department of Agriculture Programs:
                Implementation of Executive Order 13831, 85 FR 2897 (Jan. 17, 2020);
                Equal Participation of Faith-Based Organizations in USAID's Programs
                and Activities: Implementation of Executive Order 13831, 85 FR 2916
                (Jan. 17, 2020); Equal Participation of Faith-Based Organizations in
                Department of Justice's Programs and Activities: Implementation of
                Executive Order 13831, 85 FR 2921 (Jan. 17, 2020); Equal Participation
                of Faith-Based Organizations in the Department of Labor's Programs and
                Activities: Implementation of Executive Order 13831, 85 FR 2929 (Jan.
                17, 2020); Equal Participation of Faith-Based Organizations in Veterans
                Affairs Programs: Implementation of Executive Order 13831, 85 FR 2938
                (Jan. 17, 2020); Ensuring Equal Treatment of Faith-Based Organizations,
                85 FR 2974 (Jan. 17, 2020); Uniform Administrative Requirements, Cost
                Principles, and Audit Requirements for Federal Awards, Direct Grant
                Programs, State-Administered Formula Grant Programs, Developing
                Hispanic-Serving Institutions Program, and Strengthening Institutions
                Program, 85 FR 3190 (Jan. 17, 2020). On February 13, 2020, HUD issued a
                parallel NPRM. Equal Participation of Faith-Based Organizations in HUD
                Programs and Activities: Implementation of Executive Order 13831, 85 FR
                8215 (Feb. 13, 2020). These NPRMs proposed to do the following:
                 Remove the notice-and-referral requirements that were
                required of faith-based organizations but were not required of other
                organizations;
                 Require the Agencies' notices or announcements of award
                opportunities and notices of awards or contracts to include language
                clarifying the rights and obligations of faith-based organizations that
                apply for and receive Federal funding. ED, DHS, USDA, DOJ, DOL, HUD,
                VA, and HHS proposed specific language in these notices to clarify
                that, among other things, a faith-based organization may apply for
                awards on the same basis as any other organization, the Agencies will
                not discriminate in selection on the basis of the organization's
                religious exercise or affiliation, a participating faith-based
                organization retains its independence and may carry out its mission
                consistent with--and may be able to seek an accommodation under--
                religious freedom protections in Federal law, and a faith-based
                organization may not discriminate against beneficiaries on certain
                religious bases;
                 Clarify that accommodations are available to faith-based
                organizations under existing Federal law and directly reference the
                definition of ``religious exercise'' from RFRA;
                 Update the prohibitions against the Agencies (and, for
                some Agencies, their intermediaries) discriminating in selection and
                disqualifying an organization, so as to prohibit such conduct on the
                basis of religious exercise and affiliation;
                 Update the definition of ``indirect Federal financial
                assistance'' to align more closely with the Supreme Court's decision in
                Zelman v. Simmons-Harris, 536 U.S. 639 (2002), by removing the
                requirement that beneficiaries have at least one secular option;
                 Clarify the existing provision that a faith-based
                organization participating in an indirect Federal financial assistance
                program or activity need not modify its program to accommodate a
                beneficiary, so that it expressly states that such an organization need
                not modify its policies that require attendance in ``all activities
                that are fundamental to the program;''
                 Clarify that faith-based organizations participating in
                Agency-funded programs shall retain their autonomy, right of
                expression, religious character, and independence;
                 Clarify that none of the guidance documents that the
                Agencies or their intermediaries use in administering the Agencies'
                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 shall apply equally to faith-based and secular organizations;
                 Clarify that faith-based organizations need not remove,
                conceal, or alter any religious symbols or displays;
                 Clarify the standard for permissible discrimination on the
                basis of religion with respect to employment or board membership, as
                relevant;
                 Clarify the methods that can be used to demonstrate
                nonprofit status;
                 Update the terminology to refer to ``faith-based
                organizations,'' not ``religious organizations;'' and
                 Clarify that the Agencies and their intermediaries cannot
                advantage or disadvantage faith-based organizations affiliated with
                historic or well-established religions or sects in comparison with
                other religions or sects.
                 These final regulations are effective on January 19, 2021. In light
                of the public comments and as explained further below, the Agencies are
                making the following changes from the NPRMs:
                 Update the prohibitions against the Agencies (and, for
                some Agencies, their intermediaries) discriminating in selecting and
                disqualifying an organization, so as to prohibit such conduct on the
                basis of religious character and affiliation, and add such a
                prohibition against discrimination on the basis of religious exercise
                with
                [[Page 82040]]
                additional language based on the applicable Free Exercise Clause and
                RFRA standards; and
                 Update the notices in the appendices for ED, DHS, USDA,
                DOJ, DOL, HUD, VA, and HHS to reflect that these prohibitions apply to
                discrimination on the basis of religious character, affiliation, or
                exercise. These Agencies are also updating such notices to indicate
                that the listed Federal laws provide religious freedom ``and
                conscience'' protections.
                 Unless otherwise specified in the discussion below, these final
                regulations amend existing regulations or establish new regulations to
                do the following, consistent with the NPRMs:
                 Remove the notice-and-referral requirements that were
                required of faith-based organizations but were not required of other
                organizations;
                 Require the Agencies' notices or announcements of award
                opportunities and notices of awards or contracts to include language
                clarifying the rights and obligations of faith-based organizations that
                apply for and receive Federal funding. ED, DHS, USDA, DOJ, DOL, HUD,
                VA, and HHS are also including specific language in these notices to
                clarify that, among other things, a faith-based organization may apply
                for awards on the same basis as any other organization; a participating
                faith-based organization retains its independence and may carry out its
                mission consistent with--and may be able to seek an accommodation
                under--religious freedom (and conscience) protections in Federal law;
                \2\ and a faith-based organization may not discriminate against
                beneficiaries on certain religious bases;
                ---------------------------------------------------------------------------
                 \2\ In this rulemaking, the word ``accommodation'' refers both
                to provisions of relief from the burdens that a generally applicable
                law might impose on religious exercise, such as RFRA and the
                Religious Land Use and Institutionalized Persons Act (``RLUIPA,'' 42
                U.S.C. 2000cc et seq.), and to protections of conscience more
                generally, such as the Coats-Snowe Amendment (42 U.S.C. 238n), the
                Weldon Amendment (a rider in HHS's annual appropriation, see, e.g.,
                Further Consolidated Appropriations Act, 2020, Pub. L. 116-94, div.
                A, sec. 507(d), 133 Stat. 2534, 2607 (Dec. 20, 2019)), the Church
                Amendments (42 U.S.C. 300a-7), and 42 U.S.C. 18113.
                ---------------------------------------------------------------------------
                 Clarify that accommodations are available under existing
                Federal law and directly reference the definition of ``religious
                exercise'' from RFRA;
                 Update the definition of ``indirect Federal financial
                assistance'' to align more closely with the Supreme Court's decision in
                Zelman, 536 U.S. at 639, by removing the requirement that beneficiaries
                have at least one secular option;
                 Clarify the existing provision that a faith-based
                organization participating in an indirect Federal financial assistance
                program or activity need not modify its program to accommodate a
                beneficiary, so that it expressly states that such an organization need
                not modify its policies that require attendance in ``all activities
                that are fundamental to the program;''
                 Clarify that faith-based organizations participating in
                Agency-funded programs shall retain their autonomy, right of
                expression, religious character, and independence;
                 Clarify that none of the guidance documents that the
                Agencies or their intermediaries use in administering the Agencies'
                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 shall apply equally to faith-based and secular organizations;
                 Clarify that faith-based organizations need not remove,
                conceal, or alter any religious symbols or displays;
                 Clarify the standard for permissible discrimination on the
                basis of religion with respect to employment or board membership, as
                relevant;
                 Clarify the methods that can be used to demonstrate
                nonprofit status;
                 Update the terminology to refer to ``faith-based
                organizations,'' not ``religious organizations;'' and
                 Clarify that the Agencies and their intermediaries cannot
                advantage or disadvantage faith-based organizations affiliated with
                historic or well-established religions or sects in comparison with
                other religions or sects.
                 Additionally, in its NPRM, ED proposed to add severability clauses
                to each part of its regulations, and it is finalizing those
                severability clauses. USDA, DOL, DOJ, and HHS are also adding a
                severability provision indicating that, to the extent that any
                provision of this regulation is declared invalid by a court of
                competent jurisdiction, the Agency intends for all other provisions
                that are capable of operating in the absence of the specific provision
                that has been invalidated to remain in effect. They are making this
                addition because they conclude that each of the regulations discussed
                in this preamble would serve one or more important, related, but
                distinct purposes, as demonstrated by the extensive discussion of each
                provision below and in the USDA, DOL, DOJ, and HHS NPRMs. This
                provision is not a substantive addition, so the Agencies do not believe
                that notice and comment is required. Even if notice and comment were
                required, the absence of notice and comment for this provision would
                not be prejudicial, as commenters received an opportunity to provide
                their views on all substantive aspects of the rule. Hence, although the
                issue of severability was not raised in the USDA, DOL, DOJ, or HHS
                NPRMs, commenters were able to evaluate the practical impact of each
                facet of the proposed rules, and finalizing the proposed rules with a
                severability provision will not meaningfully alter the rules' impact on
                commenters. The Agencies accordingly have concluded that they will not
                re-notice the rules to raise the issue of severability. See First Am.
                Discount Corp. v. CFTC, 222 F.3d 1008, 1015 (D.C. Cir. 2000) (declining
                to decide whether additional notice was required where petitioner
                suffered no prejudice).
                 The Agencies received over 95,000 comments in response to their
                NPRMs. The major cross-cutting issues raised in those comments are
                discussed in the Joint Preamble (Part II). Many commenters filed
                similar or identical comments with some or all of the Agencies. Thus,
                unless otherwise noted in response to a particular comment, the
                responses in this joint preamble are adopted by all Agencies,
                regardless of whether a particular Agency received a particular
                comment.
                 Within each discussion of a category of comments, there are
                subheadings entitled ``Summary of Comments,'' ``Response,''
                ``Changes,'' and ``Affected Regulations.'' Under the ``Changes''
                subheading, the Agencies describe the types of changes, if any, that
                they are making to the proposed rules as a result of the comments.
                Under the ``Affected Regulations'' subheading, the Agencies list the
                actual sections of the regulations that they have changed.
                 Comments that raised issues specific to an Agency or that required
                an explanation of how a cross-cutting issue affects an Agency are
                addressed in the Agency-Specific Preambles (Part III).
                 Following is the organization of this rulemaking:
                I. Background
                II. Joint Preamble
                 A. General Support and Opposition
                 B. Regulatory History and Legal Background
                 1. Executive Orders 13199 and 13279
                 2. Executive Orders 13498 and 13559
                 3. Executive Orders 13798 and 13831 and the Attorney General's
                Memorandum
                 C. Notice-and-Referral Requirements
                 1. Beneficiary Rights
                 a. Notice and Referral to Alternative Provider
                 b. Other Notices
                 2. Beneficiary Harms
                 a. In General
                [[Page 82041]]
                 b. Specific Examples, Studies, and Hypotheticals
                 3. Tension With the Free Exercise Clause and RFRA
                 a. Unequal Burdens
                 b. Substantial Burdens
                 c. Compelling Interests
                 d. Least Restrictive Means and Appropriate Remedy
                 e. Third-Party Harms
                 D. Indirect Federal Financial Assistance
                 1. Definition of ``Indirect Federal Financial Assistance''
                 a. Consistency With Zelman v. Simmons-Harris
                 b. Rights of Beneficiaries and Providers
                 c. Harms to Beneficiaries and Providers
                 2. Required Attendance at Religious Activities
                 a. Establishment Clause
                 b. Clarification
                 E. Accommodations for Faith-Based Organizations
                 F. Discrimination on the Basis of Religious Character or
                Exercise
                 1. ``Religious Character''
                 2. ``Religious Exercise''
                 a. Scope of ``Religious Exercise''
                 b. Clarified Basis for Protecting ``Religious Exercise''
                 G. Rights of Faith-Based Organizations
                 1. Religious Symbols
                 2. Nonprofit Status
                 3. Notice to Faith-Based Organizations
                 4. Same Requirements for Faith-Based and Secular Organizations
                 5. Religious Autonomy and Expression
                 H. Employment and Board Membership
                 1. Preserving the Section 702 Exemption
                 2. Acceptance of or Adherence to Religious Tenets
                 a. Employment
                 b. Board Membership
                 I. Conflicts With Other Federal Laws, Programs, and Initiatives
                 J. Procedural Requirements
                 1. Comment Period
                 2. Arbitrariness and Capriciousness
                 K. Regulatory Certifications
                 1. Regulatory Impact Analysis (Executive Orders 12866 and 13563)
                 2. Economic Significance Determination (Executive Order 12866)
                 3. Deregulatory Action Determination (Executive Order 13771)
                 4. Federalism (Executive Order 13132)
                 5. Unfunded Mandates Reform Act
                III. Agency-Specific Preambles
                 A. Department of Education
                 1. Comments in Support
                 2. Comments in Opposition
                 a. Concerns Regarding Discrimination and Impact on Programs
                 b. Concerns Regarding Appropriate Use of Taxpayer Dollars
                 c. Concerns Regarding Potential for Religious Compulsion
                 d. Concerns Regarding Modifications
                 e. Severability Clauses
                 B. Department of Homeland Security
                 C. Department of Agriculture
                 D. Agency for International Development
                 1. Notice and Alternative Provider Requirements
                 2. ``Religious Organizations'' to ``Faith-Based Organizations''
                 3. Reasonable Accommodations
                 4. Religious Character and Religious Exercise
                 5. Exemption From Title VII Prohibitions for Qualifying
                Organizations Hiring Based on Acceptance of, or Adherence to,
                Religious Tenets
                 6. Assurances from Religious Organizations With Sincerely Held
                Religious Beliefs
                 7. Findings and Certifications
                 a. Regulatory Flexibility Act
                 b. Paperwork Burden
                 E. Department of Housing and Urban Development
                 1. Other Conflicting Laws
                 2. Conflicting Agency Programs and Policies
                 3. Procedural Issues
                 a. Comment Period
                 b. Rulemaking Authority
                 c. RIA/Administrative Sections
                 F. Department of Justice
                 G. Department of Labor
                 1. Beneficiary Harms
                 2. Notice Requirement
                 3. Deregulatory Action Determination (Executive Order 13771)
                 4. General Comments
                 H. Department of Veterans Affairs
                 I. Department of Health and Human Services
                 1. Nondirective Mandate
                 2. Certain Provisions of the ACA
                 3. Notice Requirements in Other Department Regulations
                 4. Medical Ethics
                 5. Discrimination Against Women, Persons With Disabilities, Low-
                Income Persons, and LGBT Persons
                IV. General Regulatory Certifications
                 A. Regulatory Planning and Review (Executive Order 12866);
                Improving Regulation and Regulatory Review (Executive Order 13563)
                 1. Costs
                 2. Cost Savings
                 3. Benefits
                 B. Regulatory Flexibility Analysis
                 C. Civil Justice Reform (Executive Order 12988)
                 D. Consultation and Coordination With Indian Tribal Governments
                (Executive Order 13175)
                 E. Federalism (Executive Order 13132)
                 F. Reducing Regulation and Controlling Regulatory Costs
                (Executive Order 13771)
                 G. Paperwork Reduction Act
                 H. Unfunded Mandates Reform Act
                V. Final Regulations
                 Department of Education
                 Department of Homeland Security
                 Department of Agriculture
                 Agency for International Development
                 Department of Housing and Urban Development
                 Department of Justice
                 Department of Labor
                 Department of Veterans Affairs
                 Department of Health and Human Services
                II. Joint Preamble
                A. General Support and Opposition
                 Summary of Comments: Several commenters, including Members of
                Congress, agreed with the proposed rules and said that they protect
                religious liberty for faith-based organizations, including as
                guaranteed by the First Amendment to the U.S. Constitution. These
                commenters added that faith-based organizations are allowed to
                participate in Federal funding programs. Some commenters disagreed,
                however, arguing that no Federal funds should be given to faith-based
                organizations, including because such organizations are exempt from
                paying taxes. Some commenters argued that such faith-based
                organizations should be taxed.
                 Several commenters supported the proposed rules because, they said,
                faith-based organizations should be allowed to compete on equal footing
                with secular organizations, without any discriminatory or unfair
                restrictions imposed based on religious character, affiliation, or
                exercise, which would raise constitutional problems. Some of these
                commenters also stated that such equal treatment aligns the proposed
                rules with Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S.
                Ct. 2012 (2017). A common theme among these commenters was that
                organizations should not be forced to check their faith at the door
                when participating in government programs. Other commenters argued,
                however, that faith-based organizations have no entitlement to receive
                discretionary Federal financial assistance from the Agencies. Rather,
                these commenters argued that faith-based organizations need to be made
                aware of their obligations to comply with program requirements and with
                beneficiaries' constitutional protections. Some commenters said that
                faith-based organizations can exercise religion fully with private
                funds but need to serve all if they choose to accept Federal funds. One
                of these commenters stated that the proposed rules presented a solution
                in search of a problem, arguing that there is no indication faith-based
                organizations were harmed under the prior rule.
                 Some commenters supported the proposed rules because they would
                clarify and reinforce existing Federal law regarding faith-based
                organizations' rights to freely exercise their religion and participate
                in civic life. They argued that the proposed rules were not a radical
                shift in policy. Some of these commenters also noted that the proposed
                rules would provide faith-based organizations with clarity regarding
                these rights. These commenters argued that such rights were unclear,
                given what they perceived as conflicts between the prior rule and
                Federal law, including constitutional rights to be free from
                discrimination
                [[Page 82042]]
                based on religious character when participating in the Agencies'
                programs. For example, some commenters noted that the prior rule forced
                only faith-based organizations (and no other organizations) to give
                assurances and notices, which, they argued, was a violation of the Free
                Exercise Clause.
                 Some commenters argued that the proposed rules, by creating greater
                clarity and removing burdens, would enhance faith-based organizations'
                participation in Federal programs, thus expanding the scope of social
                services provided to people in need. Some of these commenters also
                emphasized the role that faith-based organizations play in promoting
                the public good and human flourishing in the public square, including
                teaching, providing medical services, serving underserved communities,
                and participating in the foster care system. One commenter relied on
                data estimating the large dollar amounts--over one trillion dollars in
                total, and billions by specific groups and denominations--that
                religious organizations contribute to the economy annually. One
                commenter to HUD supported the proposed rules because equal
                participation by faith-based organizations is ``essential to
                revitalizing communities,'' including to ``bridge the gap between
                communities and government.''
                 Other commenters argued that the proposed rules would violate the
                Establishment Clause. They argued that the proposed rules could create
                impermissible third-party harms, could lead to religious coercion or
                proselytizing, could result in the use of taxpayer funds to favor
                certain religions over others, could create divisiveness, and could
                further entangle government and religion. Some of these commenters were
                also concerned that the proposed rules would allow the use of taxpayer
                funding for religious exercise or programming, contrary to taxpayers'
                consciences. These commenters argued that such funding would be
                contrary to the views of James Madison, as expressed in the Memorial
                and Remonstrance Against Religious Assessments (``Memorial and
                Remonstrance'') in 1785, and of Thomas Jefferson, as expressed in a
                bill that ultimately became the Virginia Statute for Religious Freedom
                in 1786 (``Bill for Religious Freedom'').\3\
                ---------------------------------------------------------------------------
                 \3\ See James Madison, To the Honorable the General Assembly of
                the Commonwealth of Virginia: A Memorial and Remonstrance (ca. June
                20, 1785), Founders Online, National Archives, https://founders.archives.gov/documents/Madison/01-08-02-0163 (``Memorial
                and Remonstrance''); Thomas Jefferson, A Bill for Establishing
                Religious Freedom (June 18, 1779), Founders Online, National
                Archives, https://founders.archives.gov/documents/Jefferson/01-02-02-0132-0004-0082 (``Bill for Religious Freedom'').
                ---------------------------------------------------------------------------
                 Numerous commenters were concerned that the proposed rules did not
                place enough emphasis on the interests of, and the impact on,
                beneficiaries. Several of these commenters argued that the proposed
                rules would favor faith-based organizations over beneficiaries,
                especially vulnerable beneficiaries. Commenters emphasized that
                beneficiaries are the focus of these government-funded programs and
                deserve consideration equal to, if not greater than, that afforded to
                faith-based organizations.
                 Several of these commenters were concerned that the proposed rules
                could cause harms to beneficiaries, including discrimination and denial
                of services. These commenters were particularly concerned about
                discrimination against groups that these commenters identified as
                vulnerable, marginalized, or underserved, including people from
                minority religions or professing no religion, women, LGBTQ \4\ people,
                people with low incomes, and people with disabilities. Commenters were
                concerned that beneficiaries' access to services would be impacted and
                that providers could impose religious litmus tests. Commenters were
                also concerned about removal of beneficiaries' religious liberty
                protections. One commenter also expressed concern regarding potential
                discrimination against volunteers.
                ---------------------------------------------------------------------------
                 \4\ This rule uses the term ``LGBTQ'' to refer to people
                identifying as lesbian, gay, bisexual, transgender, transsexual,
                queer, questioning, intersex, asexual, allied, pansexual, or
                otherwise, regardless of whether commenters used alternative
                acronyms such as LGBTQ+ or LGBTIA.
                ---------------------------------------------------------------------------
                 Some commenters impugned the motives behind the proposed rules.
                Some commented that the proposed rules were designed--consciously or
                unconsciously--to give preferences, and ensure aid flows, to specific
                officials' religious denominations. One commenter argued that the
                proposed rules were designed to further discrimination under the guise
                of promoting faith-based organizations' religious freedom.
                 Response: The Agencies agree with the comments that said the
                proposed rules (and this final rule) protect the religious liberty of
                faith-based organizations. The First Amendment allows faith-based
                organizations to participate, and compete on equal footing with secular
                organizations, in neutral government funding programs. See, e.g.,
                Espinoza v. Mont. Dep't of Revenue, 140 S. Ct. 2246, 2254 (2020) (``We
                have repeatedly held that the Establishment Clause is not offended when
                religious observers benefit from neutral government programs.''). This
                final rule applies to such neutral Federal financial assistance
                programs and activities, removes burdens that were imposed solely on
                faith-based organizations, prohibits the imposition of additional such
                burdens, and more clearly conforms these regulations with existing
                Federal law, including constitutional law.
                 Contrary to some comments, the tax-exempt status of faith-based
                organizations does not preclude them from participating in Federal
                financial assistance programs and activities. See 26 U.S.C. 501(c)(3).
                The Agencies also note that these programs are open to tax-exempt
                secular organizations and, as discussed in Part III.G.2 below, to
                faith-based organizations that pay taxes.
                 To be sure, the Agencies agree with commenters that faith-based
                organizations, like all other organizations, have no entitlement to
                receive discretionary Federal financial assistance from the Agencies.
                But this final rule does not provide for any such entitlement. This
                final rule merely removes barriers to equal competition. It does not
                require any faith-based organization to be awarded Federal financial
                assistance in any program. Under this final rule, such award decisions
                will be made on neutral terms, consistent with Federal law.
                 The Agencies also agree with the comment that the added
                accommodation language merely clarifies and reinforces Federal law
                regarding faith-based organizations' rights to exercise their religion
                and participate in civic life. Federal law requires or permits certain
                accommodations, see, e.g., 42 U.S.C. 2000bb-1, and this final rule
                merely clarifies the application of this law, as discussed in Part
                II.E. Similarly, the changes discussed in Parts II.D, II.F, II.G, and
                II.H bring these regulations into clearer conformity with existing
                Federal religious liberty law in those areas. The other changes ensure
                that faith-based organizations are eligible on equal terms with other
                organizations, which is consistent with and alleviates tension with the
                First Amendment and RFRA, as discussed in Parts II.C and II.G.
                 The Agencies also agree with the comment that said it is important
                to give faith-based organizations notice of their obligation to comply
                with program requirements and beneficiaries' protections. This final
                rule provides for such notice, as discussed in Parts II.C and II.G.3
                below.
                [[Page 82043]]
                 The Agencies disagree with the comment that said this final rule is
                a solution in search of a problem. Each provision in this final rule is
                being issued to address valid concerns, as discussed throughout this
                preamble. If anything, the alternative provider notice-and-referral
                requirements were solutions in search of a problem because, as
                discussed in Part II.C, there is no indication anyone sought a referral
                under those provisions, and there is no indication anyone has ever
                sought a referral under a separate HHS program where a statute mandates
                reporting of all referral requests.
                 The Agencies disagree with the commenters that said this final rule
                violates the Establishment Clause. As discussed in each relevant
                section below, each change is consistent with the Establishment Clause.
                Third-party harms are discussed extensively in Parts II.C, II.D, and
                II.F, and this final rule retains the prohibition on religious coercion
                and proselytizing. Also, as demonstrated throughout this Joint
                Preamble, there is no indication that this final rule will lead to any
                improper use of taxpayer funds to favor certain religions, to create
                divisiveness, or to entangle government and religion.
                 The Agencies also disagree with the commenters that the proposed
                rule would allow the use of taxpayer funds for religious exercise or
                programming in any improper way. This final rule retains the
                prohibition on explicitly religious activities in programs and
                activities funded with direct Federal financial assistance. Although
                indirect Federal financial assistance may be used for explicitly
                religious activities under this rule, the same was true under the prior
                rule, see, e.g., 81 FR at 19358, 19361-62, 19419. This practice is
                consistent with Federal religious liberty laws, including the Religion
                Clauses of the First Amendment, as discussed in Part II.D.
                 The Agencies' conclusions are not affected by Madison's Memorial
                and Remonstrance or Jefferson's Bill for Religious Freedom. As they
                discuss throughout, this final rule is consistent with the Constitution
                and with governing statutes, as interpreted by the Federal courts. Any
                inconsistency with a pre-constitutional writing or State statute would
                not affect this final rule. Indeed, both documents cited by commenters
                contain several arguments that would not be considered appropriate for
                a government under current constitutional doctrine.\5\
                ---------------------------------------------------------------------------
                 \5\ See, e.g., Memorial and Remonstrance (objecting to bill as
                ``adverse to the diffusion of the light of Christianity'' because it
                should be the ``first wish of those who enjoy this precious gift''
                to be that it ``may be imparted to the whole race of mankind'');
                Bill for Religious Freedom (stating that ``Almighty God hath created
                the mind''); id. (rejecting certain coercive civil actions as ``a
                departure from the plan of the holy author of our religion'').
                ---------------------------------------------------------------------------
                 Regardless, this final rule is consistent with the broader
                principles animating Madison's Memorial and Remonstrance and
                Jefferson's Bill for Religious Freedom. Madison's Memorial and
                Remonstrance criticized a 1784 bill that would have provided for non-
                neutral funding--it mandated a tax to fund Christian teachers, with
                categorical exemptions for specific denominations.\6\ Thus, similar to
                this final rule and current constitutional doctrine, Madison's Memorial
                and Remonstrance did not reflect opposition to faith-based
                organizations receiving neutral government funding on the same terms as
                other organizations.\7\
                ---------------------------------------------------------------------------
                 \6\ Memorial and Remonstrance (charging that the 1784 bill
                ``violates equality by subjecting some to peculiar burdens'' and
                ``by granting to others peculiar exemptions'').
                 \7\ See, e.g., Rosenberger v. Rector and Visitors of Univ. of
                Va., 515 U.S. 819, 854 (1995) (Thomas, J., concurring) (``Madison's
                objection to the assessment bill did not rest on the premise that
                religious entities may never participate on equal terms in neutral
                government programs. . . . Madison's comments are more consistent
                with the neutrality principle[.]'').
                ---------------------------------------------------------------------------
                 Additionally, Jefferson's Bill for Religious Freedom denounced the
                power of the Government--as embodied by the ``magistrate''--to dictate
                permissible religious expression. For example, Jefferson's bill said
                that the civil magistrate cannot be allowed ``to restrain the
                profession or propagation of principles on supposition of their ill
                tendency,'' calling that ``a dangerous fa[l]lacy, which at once
                destroys all religious liberty.'' That sentiment is consistent with the
                added language in this final rule regarding faith-based organizations'
                religious autonomy and expression, as discussed in Part II.G.5.
                 The Agencies agree with the comments that said this final rule
                provides greater clarity regarding faith-based organizations' religious
                liberties within the affected Federal financial assistance programs and
                activities. These rights were unclear under the prior rule, and
                improving clarity will increase participation for beneficiaries,
                including in unserved and underserved communities, as explained in the
                relevant Parts below. The Agencies also agree that these outcomes will
                help satisfy the needs of the beneficiaries of these programs, a
                consideration on which the Agencies place significant emphasis when
                designing and implementing these programs. And the Agencies recognize
                the contributions that both faith-based and secular organizations make
                to such beneficiaries, which contributions warrant allowing such
                organizations to compete on equal terms for Federal financial
                assistance. As discussed in detail throughout this preamble, the
                Agencies disagree that this final rule de-emphasizes, disfavors, or
                harms beneficiaries at the expense of faith-based organizations.
                 There is no indication that any aspect of this final rule will lead
                to the harms asserted by commenters, including discrimination and
                denial of service, as explained in each section below. Because this
                final rule retains the prohibition on faith-based organizations
                discriminating against beneficiaries on religious bases, such
                organizations cannot impose a religious litmus test on beneficiaries.
                Faith-based organizations must comply with any other nondiscrimination
                provisions that apply to each program. This final rule does not change
                that requirement. The only relevant aspect of this final rule is the
                added accommodation language, which merely clarifies that otherwise
                binding Federal law applies. The accommodation language added in this
                final rule does not create any new bases for broader accommodations
                that would authorize discrimination or the denial of service, as
                discussed in Part II.E.
                 Additionally, the treatment of volunteers is beyond the scope of
                this final rule. The prior rule, Executive Order 13831, and the NPRMs
                did not address volunteers. Therefore, the Agencies are not addressing
                volunteers directly in this final rule. To the extent that volunteers
                are impacted indirectly by any provision in this final rule, that
                provision is appropriate for the reasons discussed in the relevant Part
                below.
                 Finally, this final rule is being promulgated for the reasons
                discussed throughout this preamble. The Agencies disagree with the
                comments that question the motivation behind this final rule. Because
                this final rule applies equally to all faith-based organizations, there
                is no basis for the comment that this rule is motivated by the desire
                to favor any specific religious denomination. Similarly, this final
                rule does not permit discrimination by faith-based organizations,
                indicating that a desire to allow for such discrimination was not a
                motive for the rule.
                 Changes: None.
                 Affected Regulations: None.
                B. Regulatory History and Legal Background
                 As explained in the NPRMs, the primary purpose of this final rule
                is to implement Executive Order 13831, the most recent in a series of
                executive
                [[Page 82044]]
                orders that address issues that affect faith-based and community
                organizations. As discussed in Part I above, the NPRMs provided a
                summary of those executive orders, as well as the Attorney General's
                Memorandum that was drafted and published pursuant to Executive Order
                13798. Because many of the commenters who addressed Executive Order
                13798 also referenced the Attorney General's Memorandum, the Agencies
                respond to those comments in the discussion of Executive Order 13798
                below.
                1. Executive Orders 13199 and 13279
                 Summary of Comments: A number of commenters who supported and
                opposed the proposed rules referenced President George W. Bush's
                Executive Orders 13199 and 13279. Some commenters stated that the
                proposed rules were consistent with Executive Order 13279, which helped
                to ensure that faith-based organizations have equal protection and
                opportunity under the law as they work to meet the social needs of
                American communities.
                 Other commenters stated that removing the alternative provider
                requirements would stray greatly from tradition, current practice, and
                consensus in this area. They noted that ``Charitable Choice'' laws,
                which were precursors to the George W. Bush administration's faith-
                based regulations, included alternative provider requirements. See,
                e.g., 42 U.S.C. 290kk-1(f), 300x-65(e), 604a(e). One commenter stated
                that the NPRMs would stray from Executive Orders 13199 and 13279 by
                reducing the efficacy of distributing Federal funding. Another
                commenter stated that repealing or weakening the core beneficiary
                protections in the 2016 final rule is inconsistent with Executive Order
                13279, which continues to bind the Agencies.
                 One commenter objected that these executive orders sidestepped the
                bipartisan process and allowed for government-funded religious
                discrimination. Some commenters also expressed the sentiment that
                Executive Order 13279 and this final rule were contrary to the
                ``separation of church and state.''
                 Response: The Agencies disagree that removing the alternative
                provider notice-and-referral requirements undermines principles of
                equal treatment or strays from tradition. To the contrary, removing
                these requirements serves to remove unnecessary regulatory barriers to
                enable faith-based organizations to compete for, and participate fully
                in, Federal financial assistance without impairing their independence,
                autonomy, expression, or religious character. Additionally, removal of
                the notice-and-referral requirements does not ``stray greatly from
                tradition.'' First, doing so merely reinstates the status quo prior to
                2016. Second, although there may be a pre-2016 practice of requiring
                referrals in the programs to which the Charitable Choice statutes cited
                by the commenters are applicable, the Agencies are not aware that any
                beneficiary has ever sought such a referral under one of those
                statutes, or that any beneficiary ever sought a referral under
                analogous provisions of the prior rule. See Part II.C. The Agencies'
                experience thus demonstrates that maintaining the referral requirements
                is not necessary to avoid harm to beneficiaries.
                 Additionally, the Agencies disagree that these final rules are
                inconsistent with any portions of Executive Orders 13199 and 13279 that
                are currently in effect. Executive Order 13199 was revoked by Executive
                Order 13831 on May 3, 2018. 83 FR at 20717. Even so, this rule would
                have been consistent with Executive Order 13199, which directed the
                predecessor White House Office of Faith-Based and Community Initiatives
                (now replaced by the White House Faith and Opportunity Initiative) ``to
                eliminate unnecessary . . . regulatory[] and other bureaucratic
                barriers that impede effective faith-based and other community efforts
                to solve social problems.'' 66 FR at 8500. This final rule removes
                unnecessary regulatory barriers to enable faith-based organizations to
                compete for, and participate fully in, Federal financial assistance
                programs and activities without impairing their independence, autonomy,
                expression, or religious character.
                 Executive Order 13279 remains in effect, as amended by Executive
                Order 13559 and further amended by Executive Order 13831. Executive
                Order 13279 currently provides that faith-based organizations should be
                eligible to compete for Federal financial assistance used to support
                social service programs and to ``participate fully in [such programs]
                without impairing their independence, autonomy, expression, or
                religious character.'' 67 FR at 77142. This final rule fulfils that
                directive by removing unnecessary regulatory barriers that applied only
                to faith-based organizations that wished to participate in federally
                funded social service programs.
                 The Agencies furthermore do not believe that this final rule will
                reduce the efficacy of awarding Federal funding. Rather, it will enable
                faith-based organizations to participate equally in competing for
                Federal funding with secular organizations. If anything, removal of
                unnecessary administrative burdens will improve the efficiency and
                efficacy of awarding Federal funding. Reduced compliance burdens may
                free more resources for beneficiaries, and the removal of requirements
                that chill faith-based organizations' participation in Federal
                assistance programs may result in a broader, more diverse, and more
                competitive pool of grant recipients. Moreover, this final rule
                provides greater clarity on several issues, as discussed in Parts II.C,
                II.D, II.E, II.G, II.G, and II.H.
                 The Agencies also disagree that Executive Orders 13199 and 13279
                allow for government-funded religious discrimination. The opposite is
                true. Although it is no longer effective, the Agencies note that
                Executive Order 13199 stated that the delivery of social services in
                the United States ``should value the bedrock principles of pluralism,
                nondiscrimination, evenhandedness, and neutrality.'' 66 FR at 8499.
                Similarly, Executive Order 13279 currently provides that all
                organizations that receive Federal financial assistance under social
                services programs should be prohibited ``from discriminating against
                beneficiaries or prospective beneficiaries of the social services
                programs on the basis of religion or religious belief,'' and that such
                organizations, in their service-provision and outreach programs using
                Federal financial assistance, ``should not be allowed to discriminate
                against current or prospective program beneficiaries on the basis of
                religion, a religious belief, a refusal to hold a religious belief, or
                a refusal to actively participate in a religious practice.'' 67 FR at
                77142. This final rule maintains the regulatory prohibition on such
                religious discrimination.
                 The Agencies also do not believe that it is sensible to charge that
                an executive order has sidestepped the bipartisan process. An executive
                order is the President's exercise of constitutional authority, and the
                Agencies have carried out Executive Order 13831 in accordance with
                established rules of administrative process that provide full
                opportunity for input from people of all parties and perspectives. The
                Agencies have carefully reviewed and considered each of the comments
                they have received. In most cases, the Agencies are not even aware of,
                and in all cases are indifferent to, a commenter's partisan
                affiliation. The Agencies have considered each comment based on its
                [[Page 82045]]
                independent merit. Additionally, to the extent the comment about the
                bipartisan process was referring to the 2010 President's Advisory
                Council on Faith-Based and Neighborhood Partnerships, the Agencies
                incorporate their discussion of that process from Part II.C.
                 Finally, the Agencies disagree that these executive orders and this
                final rule are contrary to ``the separation of church and state.'' Some
                of these comments refer to and quote extensively from President Thomas
                Jefferson's letter of January 1, 1802 to the Baptist Association of
                Danbury, Connecticut, which letter described the First Amendment as
                ``building a wall of separation between Church & State.'' Thomas
                Jefferson, Letter for the Danbury Baptist Association (Jan. 1, 1802),
                Founders Online, National Archives, https://founders.archives.gov/documents/Jefferson/01-36-02-0152-0006. The precise meaning and
                usefulness of this metaphor for constitutional adjudication remains
                unclear. As Justice Frankfurter cautioned, ``the mere formulation of a
                relevant Constitutional principle is the beginning of the solution of a
                problem, not its answer. This is so because the meaning of a spacious
                conception like that of separation of Church from State is unfolded as
                appeal is made to the principle from case to case.'' McCollum v. Bd. of
                Educ., 333 U.S. 203, 212-13 (1948) (Frankfurter, J., joined by Jackson,
                Rutledge, and Burton, JJ.). It is thus critical to recognize that, in
                actual cases, the Supreme Court has ``repeatedly held that the
                Establishment Clause is not offended when religious observers and
                organizations benefit from neutral government programs.'' Espinoza, 140
                S. Ct. at 2254. That result is what this final rule achieves, as
                explained throughout this preamble.
                 Allowing for such participation is also consistent with many
                interpretations of Jefferson's letter, including that the wall of
                separation was intended to protect religion from the state, which this
                final rule does.\8\ Furthermore, the relevance of that letter to
                constitutional law jurisprudence has been questioned repeatedly,
                including because President Jefferson at times invoked religion in his
                official actions and approved the use of Federal Government funds for
                religious purposes.\9\ Significantly, and consistent with the Supreme
                Court's statement in Espinoza, then-Justice Rehnquist explained that,
                even when considering Jefferson's wall metaphor, ``[t]he Establishment
                Clause did not . . . prohibit the Federal Government from providing
                nondiscriminatory aid to religion.'' Wallace v. Jaffree, 472 U.S. 92,
                106 (1985) (Rehnquist, J., dissenting). In short, ``[t]he metaphor has
                served as a reminder that the Establishment Clause forbids an
                established church or anything approaching it. But the metaphor itself
                is not a wholly accurate description of the practical aspects of the
                relationship that in fact exists between church and state.'' Lynch v.
                Donnelly, 465 U.S. 668, 673 (1984)).
                ---------------------------------------------------------------------------
                 \8\ See, e.g., Noah Feldman, Divided By God 40 (2007) (arguing
                that the ``Jefferson who drafted the Virginia statute'' was
                ``focus[ed] . . . on protecting religion from government, not the
                other way around'').
                 \9\ See, e.g., Wallace v. Jaffree, 472 U.S. 92, 103 & n.5 (1985)
                (Rehnquist, J., dissenting) (observing that a treaty entered into by
                the Jefferson administration ``provided annual cash support for [a
                Native American tribe's] Roman Catholic priest and church''); Engel
                v. Vitale, 370 U.S. 421, 446-49 & n.3 (1962) (Stewart, J.,
                dissenting); McCollum, 333 U.S. at 245-47 (Reed, J., dissenting);
                see also Daniel L. Dreisbach, Thomas Jefferson and the Wall of
                Separation Between Church and State 21-23 (2003) (noting that,
                although Jefferson declined to issue religious proclamations of
                thanksgiving, nonetheless, ``as the nation's head of state, he
                personally encouraged and symbolically supported religion by
                attending public church services in the Capitol'' and ``attend[ing]
                worship services on government property''); id. at 29-30 (explaining
                the argument that the letter in which Jefferson expressed the wall
                metaphor was a ``political manifesto,'' rather than an attempt to
                define Establishment Clause jurisprudence). See generally Philip
                Hamburger, Separation of Church and State (2002).
                ---------------------------------------------------------------------------
                 Changes: None.
                 Affected Regulations: None.
                2. Executive Orders 13498 and 13559
                 Summary of Comments: A number of commenters--some who supported and
                some who opposed the proposed rules--referenced President Barack
                Obama's Executive Orders 13498 and 13559. Commenters who supported the
                proposed rules stated that the Obama Administration's changes to the
                equal treatment rule had placed extra and unfair burdens on faith-based
                entities, discriminated against such entities (including by allowing
                religious participation in indirect-aid programs only if there was a
                secular alternative without imposing a reverse requirement on secular
                providers), treated such entities as suspect purely because of their
                religious nature, and ignored the gravity of religious complicity-based
                objections, contrary to the First Amendment, RFRA, Supreme Court
                precedent, and binding legal principles described in the Attorney
                General's Memorandum.
                 One commenter also asserted that the notice-and-referral
                requirements established by Executive Order 13559 were unconstitutional
                compelled speech under National Institute of Family Life Advocates v.
                Becerra, 138 S. Ct. 2361 (2018), because they required only faith-based
                organizations to give the scripted disclosure.
                 Commenters who objected to the proposed rules drew attention to
                President Obama's 2016 Executive Order 13559, which they characterized
                as putting significant safeguards for beneficiaries into place based on
                consensus recommendations of the President's Advisory Council on Faith-
                Based and Neighborhood Partnerships, a body composed of religious and
                community leaders from a wide range of faiths and organizations.
                 A commenter from a faith-based organization supported the notice-
                and-referral requirements of Executive Order 13559 as striking the
                right balance between ensuring the continuation of public-private
                partnerships with faith-based organizations to provide social services,
                consistent with the Constitution, RFRA, and Supreme Court precedent,
                and ensuring that millions of beneficiaries of these programs were not
                subject to proselytizing by publicly funded service providers and that
                viable secular alternatives are available and accessible.
                 Finally, one commenter protested that the proposed rules would
                allow organizations that accept ``indirect'' aid to require
                beneficiaries to participate in religious activities, in conflict with
                Executive Order 13559.
                 Response: The Agencies agree with the commenters who stated that
                the notice-and-referral requirements of Executive Order 13559 were in
                tension with Supreme Court precedent, RFRA, and free exercise
                principles, as explained in Part II.C.
                 The Agencies disagree with the suggestions that they must follow
                the recommendations in the Final Report of the President's Advisory
                Council on Faith-Based and Neighborhood Partnerships (``Advisory
                Council Report''), although the Agencies have certainly given those
                recommendations all due consideration. As discussed at greater length
                in Part II.C, those recommendations were just that and are not
                controlling. The Agencies are promulgating this final rule after
                carefully considering over 95,000 public comments from a wide array of
                sources, including private citizens, advocacy groups, religious
                organizations, public policy organizations, State and local
                governments, and Members of Congress. That process reflects a diversity
                of input no less than did the recommendations of the Advisory Council
                comprising ``not more than 25 members appointed by the President'' in
                2009. See 74 FR at 6534.
                [[Page 82046]]
                 Further, the Advisory Council Report cited minimal justification
                for requiring religious organizations to make referrals based on
                objections to the provider's religious character. The Agencies did not
                find this justification persuasive, as discussed in Part II.C below.
                There is also no indication that any beneficiary sought such a
                referral, before or after the referral requirement was imposed in 2016,
                or that any beneficiary would be harmed by removing the referral
                requirement. The Agencies disagree that the referral requirement was a
                critical religious liberty protection and that it must be retained in
                order to put primary emphasis on the needs of beneficiaries.
                 The Agencies respond to the comments regarding RFRA, free exercise,
                and related Supreme Court precedents at length elsewhere in this final
                rule, especially in Parts II.C, II.E, II.F, and II.G. They incorporate
                that analysis by reference here. The Agencies also clarify that they
                are not relying on the Free Speech Clause as a basis for removing the
                notice requirement. The Agencies do not rely on Becerra, 138 S. Ct.
                2361. That case is different for several reasons, including because the
                law in that case did not impose a notice requirement on recipients of
                government funding.
                 Finally, the Agencies disagree that the updated definition of
                ``indirect Federal financial assistance'' in this final rule conflicts
                with Executive Order 13559 because it would permit organizations
                receiving indirect aid, such as vouchers, to require religious
                observance as part of their activities. Indirect Federal financial
                assistance, by definition, permits the beneficiary to choose where to
                use the assistance. Executive Order 13559 recognized ``the distinction
                between `direct' and `indirect' Federal financial assistance,'' 75 FR
                at 71321, and it did not restrict what an organization at which a
                beneficiary chose to use the indirect assistance might require of the
                beneficiary in terms of religious observance. It imposed restrictions
                only on organizations receiving direct assistance, stating that
                organizations that engage in explicitly religious activities must
                perform such activities and offer such services outside of programs
                that are supported with ``direct'' Federal financial assistance; that
                such organizations must do so separately in time or location from any
                such programs or services supported with ``direct'' Federal financial
                assistance; and that participation in any such explicitly religious
                activities must be voluntary for the beneficiaries of the social
                service program supported with ``such'' Federal financial assistance.''
                Id. at 73120. The updated definition of ``indirect Federal financial
                assistance'' is valid for all of the reasons discussed in Part II.D
                below.
                 Changes: None.
                 Affected Regulations: None.
                3. Executive Orders 13798 and 13831 and the Attorney General's
                Memorandum
                 Summary of Comments: A number of commenters--some who supported and
                some who opposed--the proposed rules referenced President Donald
                Trump's Executive Orders 13798 and 13831, as well as the Attorney
                General's Memorandum. Several commenters stated that the proposed rules
                were consistent with the provisions of Executive Orders 13798 and
                13831, the Attorney General's Memorandum, and the Constitution because
                of their equal treatment of religious groups. They said that these
                Executive Orders and the proposed rules restore constitutional
                freedoms, respect the rights of religious taxpayers and beneficiaries,
                and allow religious organizations to further support the community
                rather than focus on additional federally mandated burdens. Several
                commenters expressed their support for Executive Order 13831, including
                one organization that concluded that neutral treatment by government
                not only allows religious organizations to operate in accordance with
                their faith but also promotes the flourishing of the common good.
                 A comment provided jointly by 21 current members of the House of
                Representatives stated that the final rule implementing Executive Order
                13831 ``will restore an environment of religious freedom across the
                country'' because ``an organization's religious affiliation will no
                longer subject individuals to unequal treatment by Federal, state, and
                local governments.''
                 Other commenters contended that the proposed rules were contrary to
                Executive Order 13831 because they exhibited favoritism toward
                religious organizations for purely political reasons. One commenter
                charged that the proposed rules were inconsistent with Executive Order
                13798 because they would limit end-of-life care options for people with
                terminal illnesses.
                 Another commenter said that Executive Order 13831 contradicted
                Executive Order 13798, which 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.
                 One commenter stated that the Agencies' reliance on the Attorney
                General's Memorandum was misplaced, and that the Memorandum violated
                the Establishment Clause, had questionable legal authority, and was an
                expansion of religious freedom exemptions and protections that allowed
                religious institutions to discriminate and harm others. Another
                commenter said that Executive Order 13831 was contrary to the
                separation of church and state.
                 Response: The Agencies agree that this final rule is consistent
                with Executive Order 13798, which states that the Federal Government
                will honor the ``freedom of Americans and their organizations to
                exercise religion and participate fully in civic life without undue
                interference by the Federal Government.'' 82 FR at 21675. The final
                rule fulfills this promise.
                 The Agencies agree that the final rule is consistent with Executive
                Order 13831 as well. Executive Order 13831 charged the White House
                Faith and Opportunity Initiative with identifying ways to reduce
                ``burdens on the exercise of religious convictions and legislative,
                regulatory, and other barriers to the full and active engagement of
                faith-based and community organizations'' in Government-funded
                programs, in accordance ``with Executive Order 13798 and the Attorney
                General's Memorandum.'' 83 FR at 20716.
                 The Agencies disagree that there is any contradiction between
                Executive Orders 13798 and 13831. The Agencies further believe that the
                final rule is consistent with Executive Order 13798 and will not have
                any discernable impact on individuals with terminal illnesses because,
                as explained more fully in Part II.C.2, the rule will not negatively
                impact beneficiaries.
                 The Agencies also agree that this final rule is consistent with the
                Attorney General's Memorandum, which summarizes current jurisprudence
                on religious liberty, including the First Amendment prohibition against
                discrimination based on religious character and RFRA protections. That
                Memorandum accurately canvasses the legal authorities governing
                executive branch agencies' treatment of religion, including the
                Constitution, Supreme Court precedents, Federal statutes (e.g., RFRA,
                Title VII of the Civil Rights Act of 1964, including the religious
                exemption to Title VII, the Religious Land Use and Institutionalized
                Persons Act, and the American Indian Religious Freedom Act), numerous
                executive orders, and the Guidelines on Religious Exercise and
                Religious Expression in the Federal Workplace, which President Clinton
                issued on August 14, 1997. Parts II.C, II.D, II.E, II.G.1, II.G.2, and
                II.J explain how the final rule is consistent with the principles
                articulated in the Attorney General's Memorandum. For
                [[Page 82047]]
                the same reasons, the Agencies do not believe their reliance on the
                Attorney General's Memorandum is misplaced. And because the final rule
                works to re-establish government neutrality toward religion, the
                Agencies do not agree that it favors religious organizations for
                political reasons.
                 Finally, the Agencies disagree that Executive Order 13831 is
                contrary to separation of church and state, for the reasons discussed
                in Part II.B.1 above.
                 Changes: None.
                 Affected Regulations: None.
                C. Notice-and-Referral Requirements
                 All of the Agencies' existing regulations, with the exception of
                USAID's, require each religious organization receiving direct Federal
                financial assistance to give written notice to all beneficiaries that:
                (1) The religious organization could not discriminate against them
                based on religion or religious belief, a refusal to hold a religious
                belief, or a refusal to attend or participate in a religious practice;
                (2) the organization could not require them to participate in
                explicitly religious activities and any such participation had to be
                voluntary; (3) the organization had to separate explicitly religious
                activities from the funded program in time or location; (4)
                beneficiaries could object to the organization's ``religious
                character'' and the organization would then be required to undertake
                reasonable efforts to identify an alternative provider to which they
                did not object, though there was no guarantee such an alternative would
                be available; and (5) beneficiaries could report any violation of these
                protections through a specified process. The regulations of DOJ, USDA,
                DOL, HHS, HUD, ED, VA, and DHS required religious organizations to
                provide this notice to prospective beneficiaries as well. The Agencies
                prescribed the specific wording of this notice on forms attached in
                Appendices to their regulations in the Code of Federal Regulations.
                 If a beneficiary were to object to receiving services or benefits
                from an organization with a religious character, the Agencies'
                regulations required the religious organization to exert reasonable
                efforts to refer them to an alternative provider of comparable services
                to whom they had no objection and to make a record of the referral.
                DOJ, USDA, DOL, HUD, ED, and DHS applied this referral requirement to
                organizations receiving direct Federal financial assistance. HHS and VA
                applied this referral requirement to organizations receiving both
                direct and indirect Federal financial assistance. Secular organizations
                were not subject to any equivalent notice-and-referral requirements.
                 All of the Agencies' NPRMs proposed amending their regulations to
                eliminate the notice-and-referral requirements, as well as the
                prescribed notice text in the corresponding Appendices. Because USAID
                never adopted the notice-and-referral requirements, 81 FR 19384-85, the
                comments in this section do not apply to USAID, unless otherwise noted.
                 Removal of the notice-and-referral requirements was discussed more
                extensively in the comments than any other issue in the Agencies'
                NPRMs. The Agencies, therefore, have decided to describe these comments
                in detail and respond to them at length. Many of the commenters were
                not precise in the scope of their comment, including with respect to
                what aspect or aspects of the notice-and-referral requirement they were
                addressing. The Agencies endeavor to respond to them as best as
                possible.
                1. Beneficiary Rights
                a. Notice and Referral to Alternative Provider
                 Summary of Comments: The majority of comments regarding
                beneficiaries' rights focused on the referral requirement and the
                related aspect of the notice requirement, which are here referred to
                collectively as the ``alternative provider notice-and-referral
                requirements,'' or simply the ``notice-and-referral requirements.''
                Many commenters supported removal of these requirements for the reasons
                discussed in Part II.C.2 below. Multiple commenters argued that the
                existing notice-and-referral requirements struck the appropriate
                balance between religious-freedom interests and the need to fulfil each
                Agency's mission. One commenter said that the requirements struck the
                appropriate balance between beneficiaries' right to access care and
                providers' right to maintain their faith-based principles. Other
                commenters said that the requirements helped maintain a balance between
                protecting beneficiaries' religious freedom and expanding service
                delivery through faith-based organizations. Some commenters also noted
                that the Advisory Council had agreed that the needs of the people
                seeking services must be the primary concern.
                 Several commenters opposed removal of these requirements, arguing
                that they were important, necessary, ``critical,'' and longstanding
                protections for the religious liberties of beneficiaries. Many based
                this argument on the recommendations of the President's Advisory
                Council on Faith-Based and Neighborhood Partnerships' 2010 report. See
                President's Advisory Council on Faith-Based and Neighborhood
                Partnerships, A New Era of Partnerships: Report of Recommendations to
                the President at viii, 140-41 (Mar. 2010), https://obamawhitehouse.archives.gov/sites/default/files/docs/ofbnp-council-final-report.pdf (``2010 Advisory Council Report''). These commenters
                argued--independently and based on the Advisory Council Report--that
                these protections were part of current practice for respecting
                religious liberties, relying on the Charitable Choice statutes that
                govern the Substance Abuse and Mental Health Services Administration
                (``SAMHSA'') and the Temporary Assistance for Needy Families (``TANF'')
                program; the regulations implementing those statutes; proposed
                legislation that contained a referral requirement, including
                ``signature legislation backed by President Bush''; and a statement
                from the Administration of President George W. Bush that the Charitable
                Choice provisions ``protect the religious freedom of beneficiaries.''
                Other commenters reasoned that the referral requirement represents an
                important, though unexplained, principle that should be maintained.
                 Some commenters argued that the alternative provider notice-and-
                referral requirements should be retained in their entirety because they
                were pillars of the ``consensus'' and common-ground religious liberty
                recommendations from the 2010 Advisory Council. See 2010 Advisory
                Council Report at 140-41. They said that retaining these requirements
                would strengthen the partnerships that the Government had formed and
                would help build future consensus that would lead to stronger and more
                enduring rules. They also said that the 2010 Advisory Council Report's
                recommendations should be preserved because that report claimed to
                reflect the first consensus recommendation on these matters from such a
                diverse group of participants. Some commenters expressed concern that
                removing these requirements would negate this consensus. Some
                commenters opined that the Agencies offered no reasonable explanation
                for their decision to abandon this careful, consensus-based effort. The
                Chair of the 2010 Advisory Council (hereinafter the ``Council Chair''),
                who later became the Special Assistant to the President and Executive
                Director of the White House Office of Faith-Based and Neighborhood
                [[Page 82048]]
                Partnerships, and served as the main point of contact for the 2016
                final rule, 81 FR 19355, argued in a comment that this change would
                disserve beneficiaries, induce policy shifts on ``hotly contested''
                issues from administration to administration, and make it harder to
                achieve such diverse consensus in the future. Instead, the Council
                Chair argued that there should be minimal changes. Some commenters
                expressed concern that consensus-based rules were being replaced with
                new rules that they claimed were polarizing and problematic and that
                put ideology above providing services to people in need.
                 Several commenters claimed that the alternative provider referral
                requirement protected beneficiaries' right not to be ``uncomfortable''
                receiving services from religious providers or in religious settings,
                even in programs that complied with secular content requirements.
                Several commenters said that beneficiaries ``might feel unwelcome'' if
                the provider was known to espouse views that characterized the
                beneficiaries as sinful or deviant. Some commenters argued that this
                referral requirement was imposed solely on faith-based organizations to
                protect beneficiaries from risks that do not exist when secular
                providers administer benefits.
                 Some commenters argued that beneficiaries had a right to
                alternative provider notice to make them aware of their ability to
                object when the service provider was religious, had a religious
                affiliation, or exhibited a religious viewpoint. They emphasized the
                importance of alternative provider notice-and-referral requirements
                when the provider worked to promote, or was associated with, a faith
                known to espouse religious views or values contrary to beneficiaries'
                or that deemed beneficiaries as sinful or deviant. They said these
                requirements were also important in cases when certain providers
                alerted beneficiaries that the provider was exempt from certain Federal
                regulations and could not or would not help beneficiaries in some
                situations. They said that these notice-and-referral requirements
                enabled beneficiaries to seek services from providers that they knew
                would be required to adhere to all Federal regulations. One commenter
                said that potential beneficiaries needed the alternative provider
                notice-and-referral requirements to make them aware of alternatives
                when they encountered ``impractical or inconvenient services.''
                 Finally, some commenters questioned the Agencies' bases for
                removing the alternative provider notice-and-referral requirements
                when, according to them, nothing had changed since 2016. Some
                recognized the subsequent decision in Trinity Lutheran but argued that
                it did not change the analysis because of the beneficiary harms
                discussed in Part II.C.2.a.
                 Response: The Agencies work hard to safeguard beneficiaries'
                religious liberties. The Agencies disagree, however, that the
                alternative provider notice-and-referral requirements meaningfully
                protected those rights. The vast majority of commenters did not cite
                any legal basis for their claim, offering only an unexplained
                ``principle.'' Moreover, the 2010 Advisory Council Report and those
                commenters that did cite a legal basis for their claim relied on
                statutes and implementing regulations specific to certain programs,
                such as SAMHSA and TANF, that require government entities to make
                referrals. However, this final rule removes a different notice-and-
                referral requirement from other programs to which those statutes do not
                apply, as the 2016 final rule acknowledged, see 81 FR 19399. The 2010
                Advisory Council Report and these commenters also relied on legislation
                that had been introduced but was never enacted, as well as a generic
                statement from the Administration of President George W. Bush referring
                to religious liberty protections generally. These sources do not
                establish a general right to the alternative provider notice and
                referral.
                 The Agencies also disagree that the alternative provider notice-
                and-referral requirements were ``long-standing.'' Apart from the
                program-specific statutes, these requirements became part of Federal
                law only through the 2016 rulemaking, based on language added to
                Executive Order 13279 by Executive Order 13559 in 2010. In 2018,
                Executive Order 13831 removed that language. The Agencies appreciate
                the hard work, compromise, and consensus-building that went into the
                2010 Advisory Council Report's recommendation and the 2016 final rule.
                The Agencies do not doubt that the 2010 Advisory Council Report's
                recommendation to create notice-and-referral requirements was made in
                good faith. The Agencies disagree, however, with the contention that
                the 2010 Advisory Council Report made a sufficiently persuasive case
                that requiring only faith-based organizations to make such notices and
                referrals was necessary to protect the rights of beneficiaries. Also,
                the Agencies' experience with the alternative provider notice-and-
                referral requirements has led to the conclusion that they were not
                needed and, in fact, raise a number of legal and policy concerns, as
                discussed later in Part II.C.
                 Stakeholders should have flexibility to draw different lines at
                different times based on differing policy priorities, and no governing
                principle limits the Agencies to only minimal changes. The Agencies
                trust that diverse stakeholders will work on any future rulemakings in
                good faith, just as they have in commenting on this proposed rule and
                in countless other contexts. If anything, the changes from the 2016
                final rule to this final rule should narrow the scope of hotly
                contested issues in this area. The Agencies, of course, are retaining
                several of the 2010 Advisory Council Report's recommendations that were
                incorporated into the 2016 final rule, including those recommendations
                concerning nondiscrimination and explicitly religious activities. See
                2010 Advisory Council Report at 129-33.
                 Accommodating objections to a provider's ``religious character''
                did not and does not fit well within existing legal frameworks for
                beneficiaries' rights under provisions such as the Establishment
                Clause, the Free Exercise Clause, and RFRA. Beneficiaries have no
                Establishment Clause right to a referral if they object to a provider's
                religious character. Rather, the Supreme Court has ``repeatedly held
                that the Establishment Clause'' allows faith-based providers to receive
                and use Federal funding on neutral terms. Espinoza, 140 S. Ct. at 2254
                (citing Locke v. Davey, 540 U.S. 712, 719 (2004); Rosenberger v. Rector
                and Visitors of Univ. of Va., 515 U.S. 819, 839 (1995)). It did not
                condition these holdings on a requirement that the faith-based provider
                in a government-funded program refer a beneficiary to another provider
                in the event that the beneficiary objects to the provider's religious
                character. Moreover, the Agencies did not base these requirements on
                the Establishment Clause when they initially imposed them in 2016.
                 The alternative provider notice-and-referral requirements also did
                not vindicate beneficiaries' rights under the Free Exercise Clause and
                RFRA, except perhaps in exceptional circumstances better addressed if
                and when they arise. Instead, they privileged mere discomfort with a
                provider's general religious character, irrespective of the
                beneficiary's religious status or exercise. The requirement to make a
                referral extended to objections with no basis in religious status or
                exercise, such as objections based on raw anti-religious animus. For
                example, a beneficiary could have objected to being served by a Muslim
                organization based on a biased
                [[Page 82049]]
                and secular view that Islam was to blame for terrorism. There is no
                Free Exercise Clause or RFRA right to be referred to another provider
                based on such an objection.
                 At the same time, the referral requirement ignored a religious
                beneficiary's objection to receiving federally funded social services
                from a secular provider when the beneficiary was uncomfortable with the
                secular environment. From the beneficiary's perspective, such
                discomfort is no less a concern. In both cases, the discomfort is based
                on receiving services from an entity that does not share the
                beneficiary's religious beliefs. No interpretation of the Free Exercise
                Clause or RFRA requires that a beneficiary's objection to a provider's
                religious character should have greater salience than a beneficiary's
                objections to a provider's non-religious character. Furthermore, many
                citizens routinely accept burdensome conditions so that the Government
                can protect others' First Amendment rights. Although the Agencies want
                all beneficiaries to be comfortable, they do not believe potential
                discomfort over the identity of a provider is of sufficient magnitude
                to warrant blanket application of the alternative provider referral
                requirement. And with no right to referral, there is also no right to
                notice of a referral right.
                 It is also not clear to what extent the referral requirement
                actually reduced the discomfort an objecting beneficiary might feel. To
                obtain a referral, the objecting beneficiary (if indeed there were any)
                had to disclose the objection to someone affiliated with the same
                religious organization the beneficiary considered objectionable.
                Moreover, in order for the provider to successfully refer the
                beneficiary to a provider to which the beneficiary had no objection,
                the objecting beneficiary likely needed to inform the objectionable
                organization of the nature of the objection and the scope of the needed
                services. Commenters provided the example of an unmarried pregnant
                woman who might not seek services from a religious provider that
                disapproves of sexual relations outside of marriage. Under the 2016
                final rule, this provider could not have provided an appropriate
                referral unless the beneficiary disclosed that she was seeking
                pregnancy services and needed a referral to another provider that did
                not disapprove of women having children outside of marriage. It is not
                clear that a beneficiary would feel more comfortable making such a
                disclosure than receiving the service from the religious provider or
                finding an alternative provider through independent means.
                 There is an even greater disconnect reflected in one commenter's
                claim that the referral requirement was warranted to protect
                beneficiaries who encountered ``impractical or inconvenient services.''
                Those objections have nothing to do with the religious character of the
                provider, and they apply equally to nonreligious providers, which have
                never had a referral obligation towards people who found their services
                impractical or inconvenient. The referral requirement simply was not
                designed to address those kinds of objections.
                 The Agencies disagree that the alternative provider notice-and-
                referral requirements were necessary to warn beneficiaries that the
                religious provider might be exempt from Federal regulations and to
                enable the beneficiary to seek services from another provider that
                adhered to all Federal regulations. The Federal regulations themselves
                provided no such notice and did not reference exemptions from Federal
                program requirements. Indeed, the 2016 final rule explicitly rejected
                calls to include information on ``any services or information that the
                provider refuses to provide due to religious or moral objections.'' 81
                FR 19363; see also id. at 19365. If anything, such notice could have
                been misleading because it would have listed requirements without
                indicating any possibility of exceptions, even though faith-based
                organizations could have sought accommodations from those requirements
                under the First Amendment, RFRA, and Uniform Administrative
                Requirements, Cost Principles, and Audit Requirements that all the
                Agencies have adopted. See 2 CFR 200.102 (Office of Management and
                Budget (``OMB'') guidance permitting the issuance of exceptions from
                grant requirements); see also, e.g., 2 CFR 2800.101 (DOJ). If it is
                appropriate for an exempt organization to provide notice and referrals,
                that requirement can be attached to an exemption, offering a more
                tailored solution that does not require all faith-based providers--
                including those that adhere to all Federal regulations--to give notice
                and referrals to all beneficiaries.
                 The Agencies also do not believe it generally appropriate to
                require notice or referrals merely because a beneficiary might disagree
                with the religious beliefs of the service provider or its affiliates.
                Under such a rule, a beneficiary could object, for example, to
                receiving services from nuns--providing purely secular services and
                taking no position on the objectionable issues--solely because those
                nuns were affiliated with a church that took positions to which the
                beneficiary objected. Beneficiaries are free to reject services from a
                provider because of that objection, but they do not have a right to
                demand that the provider assist in finding an alternative provider.
                 For all of these reasons, the Agencies reach different conclusions
                about the alternative provider notice-and-referral requirement than
                they did in 2016. Their experiences with the 2016 final rule, their
                desire to avoid legal concerns over the alternative provider notice-
                and-referral requirement created by recent Supreme Court cases, see
                Part II.C.2, and their skepticism about the wisdom of imposing
                categorical requirements in this area all factor into this decision.
                Removing the alternative provider notice-and-referral requirements is
                the appropriate legal and policy choice.
                 Changes: None.
                 Affected Regulations: None.
                b. Other Notices
                 Summary of Comments: Several commenters also addressed the other
                notices, namely, notice of the prohibition on certain religion-based
                discrimination, of the restrictions on explicitly religious activity,
                and of the opportunity to report violations of these provisions.
                Several commenters argued that these other notices should not be
                removed because they were necessary to make beneficiaries, especially
                vulnerable beneficiaries, aware of their rights and able to exercise or
                seek enforcement of those rights. Commenters said that such notices
                were part of beneficiaries' underlying rights to be free from
                discrimination based on religion and to receive services separate from
                explicitly religious activities. Some of these commenters also argued
                that nothing had changed since the Agencies' determination in 2016, 81
                FR 19365, that beneficiaries needed notice of these other ``valuable
                protections.''
                 Regarding the need for the other notices, commenters disagreed
                about whether faith-based organizations were as likely as other
                organizations to follow the law. Some commenters agreed with the
                Agencies that such notices imposed unjustified additional
                administrative burdens that singled out faith-based providers. These
                commenters agreed with the explanation--in the NPRMs of DOJ, DOL, HHS,
                HUD, ED, VA, and DHS--that beneficiaries do not need ``prophylactic
                protections that create administrative burdens on faith-based providers
                and that are not imposed on other providers.'' 85 FR 2891 (DHS), 2924
                (DOJ), 2932 (DOL), 2941 (VA), 2977 (HHS) 3195 (ED), 8219 (HUD). Other
                commenters argued, however,
                [[Page 82050]]
                that this rationale did not support the wholesale repeal of the other
                notice requirements. One commenter claimed that these notices were
                valuable to reassure qualified beneficiaries that the religious
                organization would follow the law. The commenter provided the
                hypothetical example of qualified beneficiaries who had had negative
                encounters with religious organizations and who would be inclined to
                refuse services from a faith-based organization but might overcome that
                reluctance due to the assurances in the notice.
                 Several commenters also charged that the Agencies had conceded the
                importance of these other notices by proposing to provide notices to
                faith-based organizations of their eligibility to seek and receive
                Federal funds. They said that beneficiaries should receive the same
                courtesy as potential applicants. Similarly, one commenter argued that
                Federal agencies had recognized the importance of notices in
                implementation of civil rights laws, pointing to HHS regulations
                regarding notice in 45 CFR 80.6(d), which have remained unchanged since
                their issuance in 1964 and are accompanied by model notice documents on
                the HHS website.
                 Response: The Agencies understand that illegal discrimination can
                be harmful to beneficiaries and can result in their forgoing services.
                The Agencies are committed to fighting illegal discrimination and
                ensuring that all beneficiaries have equitable access to the benefits
                provided by the federally funded programs and services governed by this
                final rule. This final rule reaffirms each Agency's regulatory
                provisions prohibiting providers--faith-based or secular, recipients of
                direct or indirect aid--from discriminating against beneficiaries based
                on religion. Additionally, for direct aid programs, this final rule
                retains the provisions prohibiting use of funds for explicitly
                religious activity and requiring any beneficiary's participation in
                explicitly religious activity to be voluntary.
                 The Agencies do not agree, however, that the other notices were
                vital to make beneficiaries aware of, and able to protect or seek
                enforcement of, these protections. No law mandates that beneficiaries
                receive such notice, and none was cited by the 2010 Advisory Council
                Report, the 2016 final rule, or the commenters on these proposed rules.
                As discussed in Part II.C.3.c, the Agencies believe the substantive
                provisions are adequate to protect beneficiaries' rights.
                 The Agencies also disagree that it is justified to require only
                faith-based organizations receiving direct Federal financial assistance
                to provide notice of the other protections. Any provider--faith-based
                or secular--is capable of discriminating on the basis of religion or of
                incorporating religious elements into its programs, such as the 12-step
                addiction recovery program that commenters cited as explicitly
                religious and that is discussed in Part II.C.2.b. (Many government-
                issued manuals promote 12-step programs, and many secular organizations
                conduct them as well.) Yet none of the secular providers were required
                to provide notices of these other protections. None of USAID's program
                participants--faith-based or secular--was required to provide such
                notices under the 2016 rule. And no provider in USDA's Child Nutrition
                Programs, including its school lunch program, was required to provide
                such notices.\10\ The Agencies thus have already recognized that many
                beneficiaries do not need the other notices, in order to be aware of,
                and able to exercise, their corresponding rights.
                ---------------------------------------------------------------------------
                 \10\ The 2016 rule deemed the Child Nutrition programs indirect
                aid for purposes of exempting them from the notice (and referral)
                requirements, even though these programs otherwise meet the
                definition of ``direct Federal financial assistance.'' 81 FR at
                19381; see also id. at 19413-14 (Sec. 16.4(a), (g), (h)).
                ---------------------------------------------------------------------------
                 The Agencies furthermore disagree that the other notice
                requirements can be justified as a measure to allay the fears of
                beneficiaries who might have had bad experiences with religious
                organizations. Beneficiaries might have had similar bad experiences
                with secular providers. Because the other notice requirements applied
                solely to religious organizations, they stigmatized religious
                organizations and risked stoking unnecessary fears by suggesting that
                religious organizations were more prone to violate program obligations
                that apply to all providers. A beneficiary who received the notices
                from a faith-based provider but not a secular provider of similar
                services might assume that the former was a serial violator, or that
                the latter was not subject, for example, to the nondiscrimination
                obligations. Additionally, research cited by some commenters found that
                people with an expectation of rejection or discrimination would feel
                that way ``whatever others profess'' to the contrary.\11\ That research
                undermines the supposition that a form notice required by the
                Government would meaningfully allay beneficiaries' fears that they
                would be subject to discrimination.
                ---------------------------------------------------------------------------
                 \11\ Ilan H. Meyer, Prejudice, Social Stress, and Mental Health
                in Lesbian, Gay, and Bisexual Populations: Conceptual Issues and
                Research Evidence, 129(5) Psychol. Bull. 674, (Sept. 2003), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2072932/.
                ---------------------------------------------------------------------------
                 Similarly, notice requirements that apply to other programs do not
                demonstrate that the Agencies should retain the notice requirement from
                the 2016 final rule. Commenters pointed to the notice in the HHS
                regulation at 45 CFR 80.6(d). That provision mandates that ``[e]ach
                recipient'' of funding ``shall make available to participants,
                beneficiaries, and other interested persons'' information regarding
                regulations effectuating Title VI of the Civil Rights Act of 1964 that
                bar discrimination based on race, color, or national origin. 45 CFR
                80.1, 80.2, 80.3, 80.6(d). The HHS notice applies comprehensively to
                all recipients and was designed to help eradicate racial discrimination
                by any provider. This stands in contrast to the notice requirement from
                the 2016 final rule, which compelled only faith-based organizations to
                provide notice of certain beneficiary protections without evidence that
                faith-based organizations violated those protections more regularly
                than other providers, if at all. This final rule is meant to enable
                faith-based organizations to participate equally in the Agencies'
                federally funded programs. Removing the notice requirement takes one
                step toward achieving that purpose. This analysis is further bolstered
                by HHS's response in Part III.I regarding the distinctions between this
                final rule and HHS's recent final rule, Protecting Statutory Conscience
                Rights in Health Care, 84 FR 23170 (May 21, 2019).
                 Ultimately, the justification for imposing these notice
                requirements solely on faith-based providers participating in certain
                direct aid programs was prophylactic, perhaps based on the assumption
                that these providers were less likely to follow the law. But there is
                no basis on which to presume that faith-based providers are less likely
                than other providers to comply with their legal obligations. And any
                narrative to the contrary smacks of the now-repudiated Establishment
                Clause doctrine stating that ``pervasively sectarian'' institutions
                could not receive government funds, even for secular purposes, because
                they could not be trusted to prevent the diversion of government funds
                to religious uses. Cf. Agostini v. Felton, 521 U.S. 203, 224 (1997)
                (noting the Supreme Court's rejection of the idea that ``solely because
                of her presence on private school property, a public employee will be
                presumed to inculcate religion in the students''). Because, among other
                things, the Agencies now recognize that any such prophylactic concerns
                were
                [[Page 82051]]
                exaggerated as well as selectively applied, the Agencies are changing
                the 2016 final rule.
                 As discussed in Part II.G.3, the Agencies will provide notice to
                potential applicants and awardees of their obligations under federally
                funded social service programs, including notice of the prohibitions on
                religion-based discrimination and explicitly religious activities.
                Those notices will ensure that the underlying requirements are
                incorporated into organizations' applications and compliance programs.
                Those notices are also consistent with Trinity Lutheran and RFRA, and
                they ensure that organizations are aware of their obligations under
                law--and of the Agencies' commitment to enforcement of these
                obligations--before applying for and accepting an award. Requiring
                these notices to faith-based providers does not conflict with removing
                the requirement to provide the other notices to beneficiaries. This
                final rule requires the Agencies and intermediaries to integrate such
                notices to faith-based organizations into the comprehensive program
                requirement materials already distributed to providers. This practice
                is materially different--for reasons discussed throughout Parts II.C
                and II.G.3--from requiring only faith-based providers to give the other
                notices to beneficiaries, especially notices that stigmatized faith-
                based providers by implying that they were more likely than their
                secular peers to violate the law. Additionally, beneficiaries who
                received the other notices would already have been communicating with
                the faith-based provider, and they could have asked the provider
                questions to ensure their eligibility and understand the scope of
                available benefits. The other notices thus provided little marginal
                utility to beneficiaries. Rather, notices to providers are a more
                appropriate way to achieve compliance with legal obligations,
                consistent with the constitutional and other concerns discussed
                throughout Part II.C that the Agencies are seeking to avoid.
                 Changes: None.
                 Affected Regulations: None.
                2. Beneficiary Harms
                a. In General
                 Summary of Comments: Several commenters claimed that removing all
                of the notice requirements, as well as the referral requirement, would
                cause various harms, burdens, and costs to beneficiaries. Some said
                that beneficiaries would no longer be aware of, and able to avail
                themselves of, the underlying religious liberty protections. Many
                claimed that removing the notice requirements would especially affect
                groups that commenters characterized as disadvantaged, including women,
                religious minorities, people of color, LGBTQ people, people with lower
                incomes, people with disabilities, and people in rural communities.
                Additionally, some commenters argued that the Agencies had not
                attempted to quantify the costs to beneficiaries associated with
                removal of these requirements.
                 Several commenters were concerned that removing the all of the
                notice requirements and the referral requirement would expose
                beneficiaries to increased religious discrimination, denial of
                services, proselytization, bias, or coercion. Several commenters,
                including advocacy organizations and Members of Congress, anticipated
                that these harms would increase because beneficiaries would no longer
                be aware of, and able to safeguard, their rights. Some commenters added
                concerns that beneficiaries might be more vulnerable to efforts to
                coerce them to participate in religious activities if they mistakenly
                believed such activities were necessary to access support. Other
                commenters were concerned about impacts on vulnerable groups, such as
                women, adherents of minority faiths, and LGBTQ people. And some local
                governments claimed that certain faith-based providers openly
                discriminate on the basis of gender identity or sexual orientation.
                 Some commenters argued that the Agencies had not adequately
                examined whether removing the notice would increase discrimination.
                They said the Agencies needed to provide evidence of other reliable,
                systematic ways to notify beneficiaries of these protections. Without
                such efforts, commenters claimed, these vulnerable beneficiaries--
                including refugees, human trafficking victims, and homeless youth--
                would be cut off from the one guaranteed way to ensure they know about
                these key protections.
                 Multiple commenters claimed that removing the alternative provider
                notice-and-referral requirements would harm beneficiaries by requiring
                them to take on the burden of identifying alternatives. These
                commenters noted that DOJ, DOL, HHS, HUD, VA, DHS, and USDA had
                acknowledged in their NPRMs that there could be a cost to objecting
                beneficiaries from having to locate alternative providers on their own.
                85 FR 2894 (DHS), 2903 (USDA), 2926 (DOJ), 2935 (DOL), 2944 (VA), 2983
                (HHS), 8221 (HUD). Commenters argued that beneficiaries would
                ``potentially'' have to miss work, find childcare, pay for
                transportation, and visit various other organizations to find
                alternative options, which would be ``extremely taxing'' or
                ``insensitive'' to the people the organizations are meant to support.
                And some commenters were concerned that objecting beneficiaries might
                not be aware that alternative services exist or be able to identify
                those alternatives.
                 Some commenters argued that the Agencies did not explain why low-
                income program participants would be better positioned than provider
                grantees to identify alternatives. These commenters argued that the
                Agencies' proposals to remove the alternative provider notice-and-
                referral requirements were inconsistent with their determination in the
                2016 final rule that faith-based providers would ``generally be in the
                best position to identify alternative providers in reasonable
                geographic proximity and to make a successful referral of objecting
                beneficiaries to those alternative providers.'' 81 FR 19366.
                Additionally, some commenters disagreed with placing the burdens of
                investigation on vulnerable beneficiaries, arguing that vulnerable
                beneficiaries were less likely to understand their rights than faith-
                based organizations were to understand their rights to seek and receive
                Federal funding.
                 Some commenters argued that the Agencies could not assume that any
                faith-based providers would make referrals if the requirements were
                removed. The Council Chair suggested that such an assumption is
                comparable to the assumption that the religious freedom of faith-based
                organizations would be protected. Two umbrella groups of faith-based
                organizations who otherwise opposed removal of the referral requirement
                commented that group members were ``willing and able'' to provide
                referrals upon request; others believed they had a ``moral obligation''
                to make referrals to alternative providers upon request.
                 Some commenters argued that, even if referrals were rare, the
                alternative provider notice-and-referral requirements should still be
                maintained to prevent harm to objecting beneficiaries. They argued that
                placing a burden on even one beneficiary would be significant.
                 One comment asserted that beneficiaries who have objected to faith-
                based providers in specific circumstances have sought referrals to
                alternative providers from organizations that share the beneficiaries'
                values rather than from the objected-to providers. As relevant here,
                the comment posited that beneficiaries may be less likely to seek
                alternatives--even
                [[Page 82052]]
                from these sources outside the prescribed process--if the alternative
                provider notice-and-referral requirements were eliminated. The comment
                also suggested that religious people might desire referrals to like-
                minded organizations but lack the resources to find them. As a result,
                they might be forced to endure violations of their religious freedoms
                or forgo essential social services.
                 Several commenters were concerned that, without the notice-and-
                referral requirements, beneficiaries would be forced to compromise
                their religious rights and identities. Some described this as a choice
                between accepting objectionable services and forgoing benefits. Others
                described it as a choice between accessing needed services and
                retaining religious freedom protections. Two umbrella groups of faith-
                based organizations expressed concern that members of minority
                religions seeking services from federally funded faith-based
                organizations of other religions could have their critical safety net
                benefits effectively conditioned on religious beliefs. Some of these
                commenters provided examples; one noted that veterans may be ``forced''
                to accept ministry services from a religious group that they
                ``revile.'' Other examples are outlined in detail in the discussion of
                the comments in Part II.C.2.b and include harms to beneficiaries
                seeking opioid use disorder treatment, domestic violence shelters, and
                veteran job training services.
                 Some commenters claimed that beneficiaries would be blindsided by
                the provider's religious character in the absence of notice that the
                provider was religious, religiously affiliated, or promoted religious
                values, which would violate the constitutional principle that American
                government must remain secular. Another commenter suggested, however,
                that notice was not necessary because beneficiaries often know about a
                provider's religious character from the organization's title and can
                pursue a secular provider if they are uncomfortable with the provider's
                religious character.
                 Numerous commenters were concerned that beneficiaries, especially
                vulnerable beneficiaries, would lose access to benefits or forgo
                services without the benefits of notice and referral; some
                characterized the lack of notice and referral as a potentially
                insurmountable hurdle to beneficiaries' obtaining the help they need.
                They claimed that this would constitute a follow-on effect from all of
                the other harms discussed above, especially increased discrimination,
                lack of notice that discrimination based on religion is prohibited,
                absence of referrals, difficulty identifying alternatives, and lack of
                notice regarding alternatives and referrals. Some commenters were
                concerned that removing notice of the prohibition on discrimination
                would prevent beneficiaries afraid of such discrimination from seeking
                needed services. Other commenters were particularly concerned that
                shifting the burden of investigating alternatives onto beneficiaries
                with limited resources would leave them with no services or no ability
                to access services. One of these commenters claimed that ``millions of
                Americans'' might forgo vital services if they were unable to locate
                alternative providers. Multiple commenters emphasized that these
                protections were being denied to some of society's most vulnerable and
                marginalized, who have no choice but to use government-funded social
                services and may find it harder without the notice and referral to get
                the services they need. Some commenters characterized the Agencies'
                proposals to remove the requirements as ``unconscionable and
                unethical,'' ``indefensible,'' and ``hurtful and discriminatory.''
                Commenters also argued that removing the notice-and-referral
                requirements would undermine the goals of reducing poverty, empowering
                low-income populations, and providing services to all who need them in
                the most effective and efficient manner possible, as articulated in
                existing Federal laws, regulations, and Executive Orders, including
                Executive Order 13279.
                 Some commenters focused on the final rule's combined effect of
                removing the notice requirement, removing the referral requirement, and
                allowing for religious accommodations. They were concerned that such
                changes would permit or increase the risk of discrimination or denial
                of service based on beneficiaries' protected statuses, such as sex,
                sexual orientation, gender identity, religion, and race. Some
                commenters said that this rule would roll back Federal protections
                against religious discrimination and thereby embolden, rather than
                deter, such discrimination. A few commenters were concerned that these
                changes would increase the need for referral, such as if a faith-based
                provider denied services to an eligible beneficiary, at the same time
                that these changes made referrals optional and, therefore, less likely
                to occur. Some argued that there would be increased costs to State
                regulatory agencies from an increase in complaints alleging
                discrimination in the provision of social services and medical care.
                That comment also referenced State nondiscrimination laws.
                 Similarly, other commenters claimed that the notice-and-referral
                requirements were even more critical because the Agencies proposed to
                expand religious exemptions and alter the requirements for faith-based
                recipients of indirect aid.
                 Response: For the reasons that follow, the Agencies disagree with
                the view that removal of the notice-and-referral requirements will
                cause the harms alleged, including discrimination, proselytization,
                bias, and coercion; burdens of investigating alternatives; choice
                between protecting religious liberties and accepting services; forgoing
                services altogether; and difficulty reporting violations of the
                provisions regarding discrimination and explicitly religious
                activities.
                 First, the public comments do not point to a single actual instance
                of past harm or negative consequence--with no evidence to support
                claims of discrimination, proselytizing, bias, coercion, or other
                harm--that occurred in these programs before the introduction of the
                alternative provider notice-and-referral requirements in 2016 and
                attributable to the absence of those requirements. That is addressed in
                greater detail in Part II.C.2.b. Indeed, the prohibition on explicitly
                (or inherently) religious activities in directly funded social service
                programs has existed in some form since Executive Order 13279 was
                issued in 2002, and commenters did not point to any actual harms from
                beneficiaries' lack of notice for the 14 years from 2002 through the
                issuance of the 2016 final rule.
                 Additionally, the notice-and-referral requirements never applied to
                any USAID program or to USDA's Child Nutrition Programs, including the
                school lunch program, which USDA deemed indirect aid for purposes of
                exempting them from those requirements. 81 FR 19381, 19384-85. Yet
                numerous comments catalogued hypothetical harms to beneficiaries that
                would occur if the notice or referral requirements were removed from
                USAID's programs and USDA's school lunch program. No comment to USAID
                or USDA cited an instance of actual harm that occurred over the past
                four years in the absence of these requirements in USAID or USDA
                programs. Despite their failure to point to concrete examples of harm,
                some of the same commenters still presented the same parade of
                horribles that would befall beneficiaries if the Agencies eliminated
                their nonexistent notice-and-referral requirements. The Agencies do not
                find this speculation persuasive.
                [[Page 82053]]
                 Second, the Agencies believe that removing the notice-and-referral
                requirements will cause negligible, if any, risk of harm. Secular
                organizations use Federal funds to provide social services to the same
                needy and vulnerable beneficiaries as their faith-based counterparts,
                beneficiaries who are just as likely to be unaware of their rights or
                afraid of discrimination. Commenters do not claim any harm, however,
                from the absence of notice and referral by secular providers. The
                Agencies correctly determined in 2016 that secular organizations did
                not need to provide these notices in order to protect beneficiaries
                from any serious risk of harm. Now, they extend that same determination
                to faith-based organizations. Beneficiaries in all programs will be
                equally well aware of their rights and equally well positioned to
                protect and safeguard those rights, including by reporting any
                violations.
                 Third, the allegations that removing the referral requirement will
                harm beneficiaries are undermined by the Agencies' experience;
                referrals were rarely, if ever, sought under the prior rule. In fact,
                the Agencies are not aware of any actual instance of a request for a
                referral under the 2016 final rule or under SAMHSA programs, as
                discussed in Part II.C.3.c, and commenters did not cite any instance of
                a beneficiary who had sought such a referral. Removing the referral
                requirement also does not mean that a provider will refuse to make a
                referral if a beneficiary requests one. Service providers remain free
                to continue to make voluntary referrals to other providers. Indeed,
                some faith-based providers said they were willing and able to provide
                alternative-provider referrals, including one comment with over 7,000
                signatures professing a ``moral obligation'' to do so. Other publicly
                available resources and mechanisms for referral also exist, including
                like-minded organizations, locators, and hotlines. These resources and
                mechanisms are discussed in the following paragraphs.
                 Fourth, the Agencies disagree that beneficiaries face any serious
                risk of harm from the process of finding alternatives themselves--
                either from any search costs or from choosing to forgo services
                completely. No evidence supports the speculative assertion that
                beneficiaries would need to miss work, obtain childcare, pay
                transportation costs, or visit various organizations in-person to find
                an alternative provider. Beneficiaries can learn about alternative
                providers from numerous sources, including through the internet or
                telephone, providers' marketing, and government outreach programs. The
                Agencies, State and local governments, advocacy groups, and service
                providers offer hotlines and online locators for many of these
                services; these tools can be found quickly with rudimentary online
                searches. The Agencies' websites provide easy means to locate
                providers, including providers of the services listed in the
                commenters' hypothetical examples (some of which may not be subject to
                this final rule): Opioid use disorder treatment (https://findtreatment.samhsa.gov/), domestic violence shelters, (https://www.justice.gov/ovw/local-resources), and veteran job-training services
                (https://www.dol.gov/veterans/ findajob/). See also https://www.hud.gov/findshelter (homeless assistance and shelter locator);
                https://www.acf.hhs.gov/otip/victim-assistance/national-human-trafficking-hotline (human trafficking hotline and referral directory).
                 The Agencies also provide broader resources for beneficiaries and
                potential beneficiaries, including resources available on their main
                websites. For example, DOL's main website, https://www.dol.gov, has
                easy-to-find links to a wide variety of programs, a toll-free contact
                line at 866-4-USA-DOL (866-487-2365), and a general contact page at
                https://www.dol.gov/general/contact.
                 As ED explained in its NPRM: ``Beneficiaries need not rely on
                providers for information about other secular or faith-based
                organizations that provide social services. Beneficiaries are consumers
                of public information and are capable of researching available
                providers and making informed decisions about whether to choose to
                receive social services from secular or faith-based organizations.'' 85
                FR 3194. Providers and advocacy groups create numerous materials that
                contain information regarding alternative providers. One commenter
                submitted an attachment authored by Justice in Aging that listed
                organizations willing to provide referrals to local advocates for
                individuals who may face bias or discrimination in a nursing home or
                assisted living facility.\12\
                ---------------------------------------------------------------------------
                 \12\ Justice in Aging, LGBT Older Adults in Long-Term Care
                Facilities: Stories from the Field 28 (updated June 2015),
                www.justiceinaging.org.customers.tigertech.net/wp-content/uploads/2015/06/Stories-from-the-Field.pdf.
                ---------------------------------------------------------------------------
                 The Agencies thus no longer believe, as they did in 2016, that
                faith-based providers are ``generally . . . in the best position to
                identify alternative providers in reasonable geographic proximity and
                to make a successful referral of objecting beneficiaries to those
                alternative providers.'' 81 FR 19366. That position is not consistent
                with the Agencies' experience, which reveals that beneficiaries rarely
                invoke the referral requirement and that the resources to locate
                alternatives are readily available to beneficiaries. Additionally,
                beneficiaries know the scope of their needs and the sorts of
                organizations from which they may object to receiving services.
                Consequently, they will often be in the best position to find a
                suitable provider.
                 Fifth, the Agencies disagree that they need to conduct further
                analysis to better understand the costs to beneficiaries to
                independently locate acceptable alternative providers. It is difficult
                to quantify these potential costs with any precision, but the
                information the Agencies have available suggests that any costs would
                be minimal and no greater than any parallel costs already borne by
                beneficiaries of program providers that are not required to provide
                referrals. Additionally, the Agencies invited commenters to provide
                data and suggest further ways to assess any ``potential cost'' of the
                change, see 85 FR 2894 (DHS), 2935 (DOL), 2944 (VA); see also 2903
                (USDA), 2926 (DOJ), 2983-84 (HHS). None of the over 95,000 comments
                received by the Agencies provided any data or insights on assessment
                methodologies that would meaningfully supplement the information the
                Agencies already have or demonstrate that costs would be more than
                minimal. The issue of costs and benefits is addressed in more detail in
                Part II.K.1.
                 Sixth, the Agencies disagree that, without the notice requirement,
                beneficiaries will be blindsided by the religious nature of the
                Government-funded services they may receive from program providers. In
                2016 as today, all federally funded services offered by the programs
                must be secular. Beneficiaries do not need a warning of the religious
                nature of federally funded services when religious federally funded
                services are specifically prohibited.
                 Seventh, the Agencies disagree that removing the requirement of the
                notices (regarding nondiscrimination rights and the like) would inhibit
                beneficiaries from reporting violations. As discussed, there is no
                indication that beneficiaries need notice of how to report violations
                of these rights. In fact, as discussed, beneficiaries have not received
                such notice from many other providers. Rather than relying on
                beneficiaries to safeguard their own rights, the Agencies prefer to put
                the onus on the providers, by giving them express notice of their
                obligations and making clear that the Agencies will enforce those
                obligations.
                [[Page 82054]]
                 Eighth, the Agencies disagree that the referral requirement should
                be retained because the need for referrals will increase due to
                provisions in this final rule that allow for certain accommodations to
                faith-based organizations. Any request for an accommodation will be
                assessed based on a context-specific analysis that will balance all of
                the relevant considerations, including whether the particular provider
                receiving the accommodation will be required to provide notice and
                referrals. For example, if a Sabbath-observant food pantry sought an
                accommodation to participate in a food pantry program while remaining
                closed on its Sabbath, the Agency would consider--as part of its
                inquiry into the burden on the food pantry weighed against the
                Government's justification and ability to accomplish its goals through
                means less restrictive of religious exercise--whether the pantry should
                give notice of this practice and should make referrals to ensure that
                beneficiaries can receive services on the pantry's Sabbath. The
                Agencies believe this case-by-case approach will better serve both
                providers and beneficiaries.
                 Finally, the Agencies understand that invidious discrimination can
                be harmful to beneficiaries and can result in their forgoing services.
                The Agencies are committed to fighting such illegal discrimination and
                ensuring that all beneficiaries have equitable access to benefits from
                the federally funded programs and services governed by this final rule.
                This final rule reaffirms each Agency's rule prohibiting providers from
                discriminating against beneficiaries based on religion.
                 However, the Agencies disagree that eliminating the notice
                requirements as well as the referral requirement threatens to increase
                discrimination based on sex, sexual orientation, gender identity, and
                race. This final rule does not roll back any such existing protections
                or allow faith-based organizations receiving direct aid to condition
                the receipt of benefits on acceptance of their religious beliefs.
                Moreover, other laws will continue to dictate the balance between
                providers' rights and beneficiaries' rights, including the right to be
                free from discrimination on the basis of sex.\13\ For example, in
                USDA's program to fund facilities for public use, regulations prohibit
                grant recipients from discriminating against beneficiaries on several
                grounds, including on the basis of sex. See, e.g., 7 CFR 1942.17(e),
                3570.61(f), 3575.20(e).
                ---------------------------------------------------------------------------
                 \13\ See, e.g., Bostock v. Clayton Cty., 140 S. Ct. 1731, 1753-
                54 (2020) (acknowledging the potential applications of the ``express
                statutory exception for religious organizations'' in Title VII; of
                the First Amendment, which ``can bar the application of employment
                discrimination laws'' in certain cases; and of RFRA, ``a kind of
                super statute,'' which ``might supersede Title VII's commands in
                appropriate cases,'' and noting that ``how these doctrines
                protecting religious liberty interact with Title VII are questions
                for future cases too''); Masterpiece Cakeshop, Ltd. v. Colo. Civil
                Rights Comm'n, 138 S. Ct. 1719, 1732 (2018) (recognizing that many
                such disputes ``await further elaboration in the courts'').
                ---------------------------------------------------------------------------
                 The prior rule did not touch on those issues at all. It did not
                require informing beneficiaries that they could not be subject to
                discrimination based on sex, nationality, or any other protected
                classification. If anything, singling out religious discrimination in
                the notice could have implied that beneficiaries would not receive
                protection from other forms of discrimination. This final rule will
                touch on such issues only when a provider seeks a religious
                accommodation under the First Amendment or RFRA, in which case the
                Agencies will carefully review and balance the competing claims and
                apply relevant law, as discussed in Parts II.C.2, II.E, and II.F. This
                is the appropriate legal and policy choice to ensure that these rights
                are appropriately balanced and that religious liberty protections are
                not swept away by categorical rules. The Agencies have no reason to
                believe the notice requirements are necessary to promote the goals of
                reducing poverty, empowering low-income populations, and providing
                services to all who need them.
                 Changes: None.
                 Affected Regulations: None.
                b. Specific Examples, Studies, and Hypotheticals
                 Summary of Comments: Commenters offered a number of examples in an
                effort to show the harms discussed in Part II.C.2.a, based on court
                cases, surveys, studies, and personal experiences--either by the
                commenter or reported directly to the commenter. Although most of the
                examples cited by commenters were hypothetical, some relied on actual
                instances or studies. The most significant actual instances were
                provided in a comment by a national legal organization that represents
                LGBTQ people in litigation, policy advocacy, and public education. It
                cited actual instances of LGBTQ people experiencing discrimination or
                denial of service when ``accessing services of the sort provided by
                federally funded social service programs.'' It cited one of its
                transgender clients who was scheduled for a hysterectomy at a religious
                hospital but had the procedure cancelled due to the hospital's
                religious objection. It also described actual instances of
                beneficiaries feeling uncomfortable receiving services from faith-based
                organizations. Many of this commenter's examples involved religious
                individuals with no indication that they were affiliated with any
                faith-based organizations, much less a faith-based organization
                receiving Federal funding. This commenter's examples, amicus briefs,
                and studies also cited comparable examples of discrimination by secular
                organizations, without indicating which secular organizations may have
                received Federal funding.
                 Another commenter cited court cases involving concrete examples of
                discrimination or denial of service that transgender people have faced
                in programs that offer alternatives to incarceration, such as
                probation. The commenter cited an example where, as part of a guilty
                plea, a transgender person was placed in a residential substance abuse
                treatment program; the person believed they were placed with the wrong
                sex and were ultimately transferred out of the program. As a result,
                this person failed to meet the terms of the plea agreement and was
                sentenced to another two and a half years in prison. See Wilson v.
                Phoenix House, No. 10-cv-7364, 2011 WL 3273179 (S.D.N.Y. Aug. 1, 2011);
                Wilson v. Phoenix House, 978 N.Y.S.2d 748 (Sup. Ct. 2013). The
                commenter also cited the case of a person who was denied eligibility by
                a halfway house in 2010 due to transgender status. Kaeo-Tomaselli v.
                Butts, No. 11-cv-00670, 2012 WL 5996436 (D. Haw. Nov. 30, 2012).
                Without citation, another commenter claimed actual instances of
                transgender people being sent back to prison when re-entry programs
                refused to serve them.
                 Some commenters cited surveys and studies chronicling actual
                instances of discrimination against specific vulnerable groups. Several
                commenters relied on a 2015 survey of transgender people in the United
                States, conducted by the National Center for Transgender Equality.\14\
                Commenters relied on this 2015 survey's examples of actual claimed
                instances of transgender people being misgendered intentionally, made
                to feel unsafe, and made to forgo further medical care. Commenters
                added that one transgender person who had been sexually assaulted
                reported in the 2015
                [[Page 82055]]
                survey that their case was not investigated; they were denied a rape
                kit; and authorities, including a university, threatened them with
                punishment for reporting the assault, which caused them to live in
                fear. Commenters highlighted that some of the survey respondents stated
                that they were admonished that they deserved to be raped or should
                return to their birth gender to receive services. One commenter also
                noted the 2015 survey's finding that, of transgender people who had
                visited a public assistance or government benefits office in the past
                year, 11 percent reported being denied equal treatment or service and 9
                percent reported being verbally harassed.
                ---------------------------------------------------------------------------
                 \14\ Sandy E. James, et al., National Center for Transgender
                Equality, The Report of the 2015 U.S. Transgender Survey (Dec.
                2016), https://transequality.org/sites/default/files/docs/usts/USTS-Full-Report-Dec17.pdf.
                ---------------------------------------------------------------------------
                 One commenter also provided specific reports that it collected of
                medical errors and misdiagnoses due to transgender status,
                transgendered people being turned away by doctors who claimed religious
                reasons, or being treated in a ``hateful'' way that included
                embarrassing the person in front of others due to transgender status.
                The commenter relayed other reports of medical mistreatment, including
                medical examinations halted in the middle when transgender status was
                revealed and hospitals placing transgender people in isolation. The
                commenter also described an older transgender adult who reported to a
                social worker having experienced sexual abuse and verbal harassment
                from nurse aides but did not want to report the incidents out of fear
                of retaliation and disclosure of transgender status to the patient's
                family.
                 Some commenters cited surveys and studies indicating that
                experience with discrimination leads to other harms. One commenter said
                that HHS had identified discrimination against beneficiaries as harmful
                to the health of vulnerable populations, citing a study entitled
                Healthy People 2020.\15\ Others applied this general point to the LGBTQ
                community, noting that LGBTQ people report being or feeling unwelcome
                at social service providers, being subjected to discrimination, and
                forgoing care and services as a result. One of these comments pointed
                to a Center for American Progress national survey of LGBTQ adults
                published in 2017 that found 17 percent of respondents who had
                experienced anti-LGBTQ discrimination in the past year reported
                avoiding getting services that they or their family needed out of fear
                of facing further discrimination.\16\ By removing the requirement that
                providers take reasonable steps to refer beneficiaries to alternative
                providers, the commenters argued, this final rule would expose many
                LGBTQ people who use human services programs to discrimination and
                apprehension of discrimination, which will in turn lead to many
                forgoing care and services for which they are qualified. Other
                commenters made the similar point--based on experience rather than
                studies--that the LGBTQ community has faced a history of
                discrimination, denial of service, harassment, and pressure to
                compromise their authentic selves in order to receive equal access to
                social programs. Without a proactive referral requirement, they argued,
                this community would rely on its past experience to inform the
                relationship with service providers.
                ---------------------------------------------------------------------------
                 \15\ Office of Disease Prevention and Health Promotion, Healthy
                People 2020 (last updated Oct. 8, 2020), https://www.healthypeople.gov/2020/topics-objectives/topic/social-determinants-health/interventions-resources/discrimination.
                 \16\ Sejal Singh and Laura E. Durso, Center for American
                Progress, Widespread Discrimination Continues to Shape LGBT People's
                Lives in Both Subtle and Significant Ways (May 2, 2017), https://www.americanprogress.org/issues/lgbtq-rights/news/2017/05/02/429529/widespread-discrimination-continues-shape-lgbt-peoples-lives-subtle-significant-ways/.
                ---------------------------------------------------------------------------
                 Some of these commenters cited studies showing people had negative
                experiences in certain sectors or with certain categories of service
                providers. A commenter cited a then-unpublished 2019 American Atheists
                national survey of 34,000 nonreligious individuals, many of whom
                reported ``negative experiences'' due to their secular or nonreligious
                beliefs within the previous three years: 17.7 percent reported such
                negative experiences when receiving mental health services, 15.2
                percent in substance abuse services, 10.7 percent in other health
                services, 6.2 percent in public benefits, and 4.5 percent in
                housing.\17\
                ---------------------------------------------------------------------------
                 \17\ American Atheists, Reality Check: Being Nonreligious in
                America 23-24 & fig.14 (2019), https://static1.squarespace.com/static/5d824da4727dfb5bd9e59d0c/t/5ec6d6d8e8da850b30521353/1590089442015/Reality+Check+-+Being+Nonreligious+in+America.
                ---------------------------------------------------------------------------
                 Several commenters cited studies showing LGBTQ people had
                difficulty finding medical care providers. A commenter pointed to a
                2018 Center for American Progress Survey (``2018 CAP Survey'') that, it
                asserted, demonstrated the difficulties LGBTQ individuals face in
                receiving services, including 17 percent of respondents (and 31 percent
                of non-metro respondents) saying it would be ``very difficult'' or
                ``not possible'' to find the same type of service they were seeking
                from a different community health center or clinic at a different
                provider.\18\ Another commenter relayed reports of one transgender
                person's taking years to find a primary care physician willing to treat
                them and another transgender person's residing in a rural and lower-
                income area, struggling to attain basic healthcare.
                ---------------------------------------------------------------------------
                 \18\ Shabab Ahmed Mirza and Caitlin Rooney, Center for American
                Progress, Discrimination Prevents LGBTQ People from Accessing
                Healthcare (Jan. 18, 2018), https://www.americanprogress.org/issues/lgbt/news/2018/01/18/445130/discrimination-prevents-lgbtq-people-accessing-health-care/.
                ---------------------------------------------------------------------------
                 Some commenters cited studies showing certain groups experience
                increased negative health outcomes that, these commenters claimed,
                would be exacerbated by removing the notice requirements and the
                referral requirement while providing for religious accommodations. A
                commenter cited studies indicating that LGBTQ individuals have negative
                health outcomes that have been termed ``minority stress.'' This
                commenter relied on studies indicating that gender-based discrimination
                against transgender people, especially in health care settings, is
                associated with increased rates of negative health outcomes, including
                depression, attempted suicide, and substance use. This commenter then
                argued that removing the notice and referral protections (as well as
                providing new accommodations) could contribute to significant health
                costs based on the direct medical and mental health impacts of
                discrimination alone. Similarly, another commenter claimed that older
                LGBTQ adults face pronounced health disparities and higher poverty
                rates compared to their peers, due in large part to historical and
                ongoing discrimination.\19\
                ---------------------------------------------------------------------------
                 \19\ See Karen Fredriksen-Goldsen et al., The Aging and Health
                Report: Disparities and Resilience Among Lesbian, Gay, Bisexual, and
                Transgender Older Adults (November 2011), www.lgbtagingcenter.org/resources/resource.cfm?r=419.
                ---------------------------------------------------------------------------
                 A commenter focused on medical care for Bhutanese Hindu refugees.
                This commenter said that people in this group have already suffered
                immense trauma from forcible eviction from their home country due to
                their culture and religion, and they have experienced particular
                difficulty retaining their cultural and religious identity in the
                United States. The commenter claimed that removal of the notice-and-
                referral requirements would strip this vulnerable group of protections
                against discrimination, proselytization, or religious coercion in
                government-funded social services. The commenter claimed that Bhutanese
                Hindu refugees have a particular need to know their rights fully and to
                access health services, including mental health
                [[Page 82056]]
                services, because their rates of suicide and mental health conditions
                are higher than those of the rest of the population. Additionally,
                without being informed of their rights, the commenter expressed concern
                that these refugees may feel pressured to convert to Christianity or
                attend Christian religious services because they incorrectly believe
                those actions are required to continue receiving services. The
                commenter claimed that these outcomes would risk exacerbating the group
                members' already-concerning health trends.
                 Some of these commenters cited studies indicating that certain
                groups are more likely to receive government services, from which the
                commenters inferred that these groups are more likely to be harmed by
                removal of the notice-and-referral requirements. One commenter cited
                the 2018 CAP Survey to demonstrate that LGBTQ people are more likely to
                participate in a wide range of public programs. That commenter claimed
                this 2018 CAP Survey found that LGBTQ people with disabilities were
                especially likely to rely on government benefit programs, such as
                Supplemental Nutrition Assistance Program (``SNAP''), Medicaid,
                unemployment, and housing assistance. As a result, this commenter
                argued that ensuring access to federally funded social services
                programs by mandating referrals to alternative providers is vital for
                members of this vulnerable population. Another commenter stated that
                LGBTQ youth are at a higher risk of homelessness, citing Chapin Hall,
                Missed Opportunities: Youth Homelessness in America (2017), which
                reported LGBTQ youth at a 120 percent higher risk of homelessness than
                other young adults.
                 Other commenters made similar statistical claims without providing
                the basis for their claims. Commenters claimed that 20-40 percent of
                homeless youth are ``LGBT-identified'' and that LGBT youth
                disproportionately represent 40 percent of the homeless youth
                population in New York City. One of these commenters also said that
                most homeless families are headed by unmarried women and that these
                families are not well situated to absorb the burdens from the changes
                in this final rule. Another commenter claimed that people with
                disabilities and their families face a national shortage of accessible
                and affordable housing, particularly the lowest-income people with
                disabilities, and that removing these requirements could impose another
                barrier to housing programs for this population, such as Section 811
                Supportive Housing for Persons with Disabilities.
                 One commenter argued that LGBTQ senior citizens have a particular
                need for the notice-and-referral requirements to access long-term
                services and supports because they do not have traditional support
                systems in place and are therefore more likely to rely on personal care
                aides or enter care facilities.\20\ This commenter also conducted a
                survey that found LGBT older adults experienced discrimination in long-
                term care facilities ranging from verbal and physical harassment, to
                visiting restrictions and isolation, to denial of basic care such as a
                shower or being discharged or refused admission. They also cited
                examples of LGBT older adults being ``prayed over'' without their
                consent or being told they would go to hell. This commenter attached
                its report to the comment.\21\ This commenter was concerned that
                eliminating the notice-and-referral requirements would make these types
                of discriminatory actions more common and make it harder for victims to
                seek recourse.
                ---------------------------------------------------------------------------
                 \20\ See SAGE and Movement Advancement Project, Improving the
                Lives of LGBT Older Adults (March 2010), https://www.lgbtmap.org/file/improving-the-lives-of-lgbt-older-adults.pdf.
                 \21\ Justice in Aging, LGBT Older Adults in Long-Term Care
                Facilities: Stories from the Field (updated June 2015),
                www.justiceinaging.org.customers.tigertech.net/wp-content/uploads/2015/06/Stories-from-the-Field.pdf.
                ---------------------------------------------------------------------------
                 Additionally, a retired physician commented that she had experience
                with end-of-life issues and that patients and families who do not wish
                to receive ``futile or heroic treatments'' from religious doctors
                should be referred for another opinion.
                 Numerous commenters provided hypothetical examples of the harms
                they claimed would befall beneficiaries following removal of these
                notice-and-referral requirements. For example, two commenters to ED
                cited their extensive experience representing students in Federal court
                cases and administrative cases but claimed only that removing the
                notice-and-referral requirements ``would likely make it harder for
                beneficiaries to access programs serving marginalized young people,''
                without citing any actual instances.
                 The Council Chair insisted that the alternative-provider referral
                requirement was essential. She asked the Agencies to ``imagine'' a
                victim of human trafficking who does not speak English, is in an
                unfamiliar location, is a single parent, and does not have reliable
                internet, yet has to research an alternative provider while working and
                caring for young children. This commenter claimed it is ``insufficient
                to assume'' that this beneficiary would be given assistance, just as,
                the commenter claimed, it is insufficient to assume that the rights of
                faith-based organizations would be protected.
                 Some of these commenters claimed removing the notice-and-referral
                requirements would especially harm beneficiaries in medical contexts.
                Multiple commenters expressed concern that critical care, including
                medical care, would be delayed or denied without a referral upon
                request. Commenters argued that removal of the referral requirement
                would impede access to medical care for beneficiaries who do not feel
                comfortable obtaining care from religious providers in rural areas that
                have medical care shortages and that often require farther travel, on
                poorer roads, with less access to public transportation than in urban
                areas. Commenters also highlighted concerns for children in the foster
                care, child welfare, and juvenile justice systems.
                 Commenters highlighted other social service areas as well, as
                outlined in the bullet points below. One commenter argued that
                discrimination in access to social services would reduce timely access
                to critical social services. It provided the hypothetical example of
                discrimination that delays shelter for someone experiencing
                homelessness or housing insecurity, which would cause prolonged
                homelessness, poor health, victimization, and negative interactions
                with law enforcement. The commenter noted that a day in a shelter costs
                less than a day in jail or an emergency room visit, citing a study on
                the costs of homelessness.
                 Some of these commenters claimed removing the alternative provider
                notice-and-referral requirements would harm beneficiaries from specific
                groups, which the commenters identified as vulnerable populations.
                Commenters argued that removing referrals would limit access and would
                disproportionately affect low-income communities, themselves already
                disproportionately made up of women, immigrants and refugees, LGBTQ
                people, and people with disabilities. These commenters argued that
                access is particularly important for these groups, which benefit from
                programs that help increase employment, alleviate poverty, and
                alleviate homelessness. According to these commenters, removing the
                referral requirement will only increase the likelihood of negative
                outcomes for these groups and will perpetuate the cycle that ties
                discrimination to an increased likelihood of unemployment and poverty.
                 Many commenters claimed that removal of the referral requirement
                [[Page 82057]]
                would particularly burden LGBTQ beneficiaries. Some of these commenters
                claimed that referrals are ``vital'' for LGBTQ beneficiaries because
                they have unique difficulty obtaining secular or welcoming alternative
                service providers. Some of these commenters also argued that LGBTQ
                people may not be comfortable fully accessing the services they need in
                a religious environment. A comment on behalf of a local government
                suggested that LBGTQ people who already have concerns about their
                physical and emotional safety in accessing services--even in relatively
                welcoming communities, like San Francisco--will face further inequities
                because, the commenter believes, the proposed rules will encourage
                discrimination against LGBTQ people. Another commenter suggested that
                ``a job-training organization could refuse to assist a transgender
                individual with resume editing or professional wardrobe development
                consistent with their gender identity.'' That commenter argued that
                removing the notice and referral protections would empower
                organizations operating critical social services to refuse to fully
                serve LGBTQ people if those providers believe that recognizing an
                individual's gender identity or same-sex relationship violates their
                religious belief. That commenter also argued that people in the LGBTQ
                community have faced a history of discrimination and, without proactive
                notice of their rights, they would rely on their past experience to
                inform relationships with service providers. This commenter added that
                unwillingness of an organization to recognize and respect LGBTQ
                identities is tantamount to a denial of care altogether, with the same
                negative outcomes.
                 Commenters also argued that eliminating the notice-and-referral
                requirements would especially burden beneficiaries with disabilities
                who rely on service providers such as a case manager to coordinate
                necessary services, a transportation provider to attend appointments,
                and a personal care attendant to help with medications and managing
                daily activities. These commenters were concerned that such
                beneficiaries' access to services would be eliminated if such providers
                refused to provide a service and then refused to provide a referral for
                the beneficiary to obtain the service. These commenters were also
                concerned that beneficiaries with disabilities who are also in other
                historically disadvantaged groups were most likely to be refused
                service and would face greater challenges to receive accommodations.
                 Some commenters hypothesized that faith-based organizations could
                deny services outright based on sex; could claim religious
                interpretations to avoid providing services based on prejudice, bias,
                or stigma (a point addressed in Part II.E); and could delay or deny
                services during emergencies. Others crafted more specific hypothetical
                examples:
                 LGBTQ individuals might not have the same opportunities to
                return to their communities if they are denied access to a Second
                Chance Reentry Initiative program due to their sexual orientation or
                gender identity, and they might not be given referrals to alternative
                providers.
                 A same-sex couple could be refused family housing in the
                wake of a natural disaster, or a transgender shelter seeker could be
                refused gender appropriate housing by a FEMA grantee. The shelter could
                also be empowered to refuse access to medically necessary care.
                 A FEMA grantee could claim a right to refuse to assist a
                same-sex couple in requesting Federal disaster-relief benefits.
                 A transgender woman could risk being turned away from a
                woman's emergency shelter or a same-sex couple could be refused family
                housing at a HUD-funded provider.
                 People seeking treatment for opioid use disorder might be
                prevented from receiving such treatment.
                 A woman seeking safety for herself and her family from
                domestic violence could be prevented from finding a shelter.
                 A veteran re-entering the civilian workforce could be
                prevented from receiving job training.
                 A woman could be denied benefits based on a provider's
                religious belief that women should not work outside the home.
                 LGBTQ homeless teenagers might not seek housing, food, or
                counseling services they need, including from a facility funded with
                HUD's Emergency Shelter Grant (``ESG'') program, because they know the
                religion of the faith-based provider condemns them for being gay.
                 A single mother or same-sex couple could be turned away
                from assistance with buying their first home or preventing foreclosure.
                 A pregnant or parenting teenager who is unmarried or
                divorced might avoid a faith-based provider or leave a faith-based
                group home that she thinks will condemn her or because she is
                uncomfortable in the religious setting.
                 Muslim people might forgo affordable housing funded by
                HUD's Housing Opportunities for Persons with AIDS (``HOPWA'') program
                because they feel uncomfortable at a facility with Christian
                iconography throughout, even though receipt of HOPWA funds requires
                that program content be secular.
                 A ``kid'' or ``young adult'' seeking HHS's Transitional
                Living for Homeless Youth program services like a bed, educational
                opportunities, or job training might be forced to receive services from
                a faith-based provider and have no way to access an alternative
                provider.
                 Unaccompanied minors might have no recourse to seek an
                alternative provider if they were denied services because of the
                provider's opposition to those services on religious grounds, such as
                denial of transportation or interpretation services to attend a medical
                appointment contrary to the provider's religious beliefs.
                 A nonreligious veteran at risk of homelessness seeking
                help with case management who also wants services, including education,
                crisis intervention, and counseling might feel ``very uncomfortable''
                at a faith-based provider and not be aware of alternatives.
                 A homeless veteran seeking job training to gain employment
                might be forced to receive those services from a faith-based provider
                but feel uncomfortable because the program takes place in a room
                adorned with religious banners, Bible verses, and religious symbols.
                 Victims of human trafficking seeking vital services to
                build lives away from their traffickers, like housing or financial
                assistance, might feel uncomfortable getting services from a faith-
                based provider and drop out of the program, putting their safety at
                risk.
                 An older LGBTQ person receiving food packages under the
                USDA Commodity Supplemental Food Program could be forced to pick them
                up in a church that he knows labels him as a sinner, when LGBTQ seniors
                already struggle to access culturally-competent support services.
                 A student who identifies as LGBTQ or who is a child of
                LGBTQ parents might be confronted with open anti-LGBTQ hostility by an
                ED-funded social service program partnering with their public school to
                provide healthcare screening, transportation, shelter, clothing, or new
                immigrant services.
                 Local food distribution agencies, such as food pantries or
                soup kitchens, might seek to deny services to vulnerable populations,
                including atheists, transgender people, single mothers and their
                children, and immigrants.
                [[Page 82058]]
                 An atheist required to attend a substance use disorder
                program might be compelled to attend a 12-step program that requires
                the recognition of a higher power and, without notice of her rights,
                might attend the program unsuccessfully, or forgo services, because she
                thinks all programs will require adherence to a higher power.
                 Response: The Agencies believe that all people should be treated
                with dignity and respect and should be given every protection afforded
                by the Constitution and the laws passed by Congress. The Agencies do
                not condone the unjustified denial of needed medical care or social
                services, and they are committed to fully and vigorously enforcing all
                of the nondiscrimination statutes for which Congress has granted them
                jurisdiction. The Agencies take seriously the examples commenters have
                cited, both real and hypothetical, as well as the studies commenters
                referenced.
                 The Agencies, however, disagree that harms discussed in these
                examples and studies overcome the reasons not to retain the notice
                requirements and the referral requirement. None of these harms, actual
                or hypothetical, arose in circumstances where those requirements would
                necessarily have had, or did necessarily have, any effect. The examples
                fail to show that these harms, if and when they occur, will necessarily
                increase in the absence of, or have been appreciably reduced because
                of, the notices and referrals required by the 2016 final rule. It will
                always be possible to imagine a circumstance where these requirements
                might have an effect, but the empirical data do not demonstrate that
                the requirements had any measurable impact in actual cases in which
                beneficiaries sought federally funded social services from religious
                providers.
                 Commenters' most direct examples came from the national legal
                organization that cited its clients and several studies. But even those
                cases and studies do not involve the precise issues here. They do not
                show harm unique to faith-based organizations receiving direct Federal
                financial assistance attributable to beneficiaries' (1) not receiving
                notice of a prohibition on discrimination based on religion (nor on
                other grounds), (2) not receiving notice regarding explicitly religious
                activities, (3) not receiving notice regarding referrals based on
                objections to the provider's religious character, or (4) not receiving
                a referral from the faith-based organization if the beneficiaries
                object to the organization's religious character. The vast majority of
                commenters' examples did not even involve faith-based organizations
                providing services in connection with direct Federal financial
                assistance. The cited harms are far beyond the scope of this final rule
                and would not have been prevented by the notice requirements and the
                referral requirement. Also, to the extent that these examples raise
                conflicts between beneficiaries' rights and the religious liberties of
                faith-based providers, resolution will depend on context-specific
                analyses of those underlying rights, as discussed in Parts II.C.3,
                II.E, and II.F.
                 For example, the national legal organization cited a case in which
                one of its transgender clients was scheduled for a hysterectomy at a
                religious hospital but had the procedure cancelled due to the
                hospital's religious objection. The client did not allege that the
                surgery was going to be provided through a Federal financial assistance
                program or activity, did not allege that the hospital had used direct
                Federal financial assistance for any explicitly religious activity, and
                did not allege anything else that would have been covered by the notice
                requirement. Complaint, Conforti v. St. Joseph's Healthcare Sys., No.
                17-cv-50 (D.N.J. Jan. 5, 2017), ECF No. 1. Moreover, this client raised
                the alleged discrimination with the commenting legal organization,
                which filed a complaint with HHS's Office for Civil Rights within six
                months. Id. ]] 8, 80. Also, this client alleged a desire to have the
                surgery at the religious hospital where the client had received
                previous care, without indicating any objection to the hospital's
                religious character, id. ]] 49-50, 58-72. It is thus unclear how the
                alternative-provider notice-and-referral requirements would have
                assisted this client.
                 The court cases cited by another commenter involving discrimination
                and denial of service in the criminal-justice system are even less
                persuasive. There is no indication that the treatment provider in
                either case was a faith-based organization or that the potential
                beneficiary objected based on the religious character of the treatment
                provider. Additionally, the conduct in those cases would not have been
                covered by the other aspects of the notice because those cases did not
                allege a claim of discrimination based on religion or a claim related
                to explicitly religious activities. In Wilson v. Phoenix House, a
                defendant supervisor in New York's Drug Treatment Alternative to Prison
                program had denied a transgender client access to a support group. 2011
                WL 3273179, at *1 (S.D.N.Y. Aug. 1, 2011). In Kaeo-Tomaselli v. Butts,
                a librarian at the women's correctional center sought a halfway house
                for a transgender prisoner who had not yet been released from prison,
                and the defendants had refused the librarian's request. 2013 WL
                5295710, at *1 (D. Haw. Sept. 17, 2013). Again, it is unclear how the
                notice-and-referral requirements would have helped these individuals.
                 The example of Bhutanese Hindu refugees is especially telling. The
                Agencies recognize the challenges faced by many immigrant and minority-
                faith communities, including Bhutanese Hindu refugees. The Agencies are
                concerned about the statistics and health risks cited by the commenter,
                and the Agencies are proud that their programs serve this vulnerable
                population. But this group, like all others, continues to be protected
                from religious discrimination \22\ and, in direct Federal financial
                assistance programs and activities, from being required to participate
                in explicitly religious activities.
                ---------------------------------------------------------------------------
                 \22\ See, e.g., 8 U.S.C. 1522(a)(5) (expressly requiring States
                to provide assistance and services to refugees without regard to
                religion, race, or nationality in domestic resettlement programs).
                ---------------------------------------------------------------------------
                 The Agencies are not aware of any causal connection between this
                group's negative health outcomes and the notice or referral
                requirements. In fact, several studies have analyzed the causes of this
                group's increased risks and none attributed them to faith-based service
                providers, lack of notice of religious liberty protections, or the
                absence of a referral from a religious organization to a provider that
                the beneficiary (or the commenter) deemed unobjectionable.\23\ The
                concerns for Bhutanese Hindu refugees raised by these studies are
                beyond the scope of this final rule, and the Agencies have already
                begun to address them in other appropriate ways. For example, the
                Refugee Health Technical Assistance Center--funded by HHS's Office of
                Refugee Resettlement--
                [[Page 82059]]
                responds to the tragedy of suicide within refugee communities through
                both prevention and targeted intervention, with resources dedicated to
                Bhutanese refugees.\24\ And current research that proposes models to
                address these issues suggests that religious connection is beneficial
                but does not suggest that notice of religious liberty protections in
                federally funded programs would have any impact on suicide rates.\25\
                The Agencies, therefore, have determined that removing the notice
                requirement will not harm this community and may assist this community
                by reducing barriers to entry into programs that address the causes of
                negative health impacts identified in the studies, including financial
                stresses, gender-based violence, mental health, alcohol abuse, and
                other vulnerabilities.
                ---------------------------------------------------------------------------
                 \23\ See, e.g., Trong Ao et al., Suicidal Ideation and Mental
                Health of Bhutanese Refugees in the United States, 18(4) J. Immig. &
                Minor. Health, 828 (Aug. 2016), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4905789/; Ashley K. Hagaman et al., An Investigation
                into Suicides Among Bhutanese Refugees Resettled in the United
                States Between 2008 and 2011, 18(4) J. Immigr. Minor. Health 819
                (Jan. 2016), https://www.researchgate.net/publication/290197605_An_Investigation_into_Suicides_Among_Bhutanese_Refugees_Resettled_in_the_United_States_Between_2008_and_2011; Jennifer Cochran
                et al., Suicide and Suicidal Ideation Among Bhutanese Refugees--
                United States, 2009-2012, 62(26) Morbidity & Mortality Weekly Rep.
                533 (July 5, 2013), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4604782/; International Organization for Migration, Who Am I?
                Assessment of Psychosocial Needs and Suicide Risk Factors Among
                Bhutanese Refugees in Nepal and After Third Country Resettlement
                (2011), https://www.iom.int/sites/default/files/our_work/DMM/Migration-Health/MP_infosheets/Bhutanese-Mental-Health-Assessment-Nepal-23-March_0.pdf.
                 \24\ See Refugee Health Technical Assistance Center, Suicide
                Prevention, https://refugeehealthta.org/physical-mental-health/mental-health/suicide/suicide-prevention/; see also Prangkush Subedi
                et al., Mental Health First Aid Training for the Bhutanese Refugee
                Community in the United States, Int'l J. Mental Health Sys. 9:20
                (2015), https://ijmhs.biomedcentral.com/track/pdf/10.1186/s13033-015-0012-z; Suicide Prevention Resources Center, Bhutanese Community
                Leaders Work to Prevent Suicide Among Refugees in New Hampshire (May
                16, 2014), http://www.sprc.org/news/bhutanese-community-leaders-work-prevent-suicide-among-refugees-new-hampshire (describing
                targeted programming based on a survey of Bhutanese refugees living
                in that community).
                 \25\ Jonah Meyerhoff et al., Suicide and Suicide-Related
                Behavior Among Bhutanese Refugees Resettled in the United States,
                9(4) Asian Am. J. Psychol. 270 (Dec. 2018), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6980157/.
                ---------------------------------------------------------------------------
                 Some of the studies and reports cited by commenters claimed to
                demonstrate that LGBTQ beneficiaries have unique needs for which it is
                difficult to find alternative medical providers. If that is so, then
                notice and referrals are correspondingly less likely to be effective.
                Indeed, the cited studies identified the likely causes of these issues
                and prescribed solutions, but those studies did not mention notice of
                religious liberty protections or mandatory referrals by faith-based
                organizations as part of the problem or solution.\26\
                ---------------------------------------------------------------------------
                 \26\ See, e.g., Jaclyn M. White Hughto et al., Transgender
                Stigma and Health: A Critical Review of Stigma Determinants,
                Mechanisms, and Interventions, HHS Public Access, Author Manuscript
                at 5 (published in final edited form at 147 Soc. Sci. Med. 222 (Dec.
                2015)), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4689648/pdf/nihms739646.pdf (study cited by commenters, attributing the limited
                availability of appropriate transgender medical care primarily to
                lack of trained healthcare providers); id. at 11-12 (prescribing
                education and inter-group contact for providers).
                ---------------------------------------------------------------------------
                 The American Atheists Survey is even less relevant.\27\ In addition
                to the general points that apply to many studies, that study analyzed
                self-reported ``negative experiences'' in specific ``locations''
                without any indication that the negative experience was caused by the
                service provider. Additionally, while the study showed that between 4.5
                percent and 17.7 percent of atheists have negative experiences in
                certain service locations, 54.5 percent of those same respondents
                indicated such negative experiences when interacting with their own
                families and 19.1 percent of the respondents reported negative
                experiences when accessing ``private businesses.'' This survey does not
                demonstrate any harm that would result from removal of the notice-and-
                referral requirements. To the extent this survey identifies a broader
                societal problem, the solution is beyond the scope of this final rule.
                ---------------------------------------------------------------------------
                 \27\ See American Atheists, Reality Check: Being Nonreligious in
                America (2020), https://static1.squarespace.com/static/5d824da4727dfb5bd9e59d0c/t/5ec6d6d8e8da850b30521353/1590089442015/Reality+Check+-+Being+Nonreligious+in+America (referenced in the
                comments as unpublished and reviewed by the Agencies subsequent to
                publication).
                ---------------------------------------------------------------------------
                 Similarly, some of these comments focused on the challenges of
                service availability in rural areas, based on the 2018 CAP Survey and
                other commenters' reports. The lower demand and fewer resources in
                rural areas can lead to provider shortages that result in beneficiaries
                having to travel farther, on poorer roads, with limited access to
                public transportation. The Agencies agree that obtaining services from
                an alternative provider can be more difficult in rural areas than in
                urban areas, and the relevant Agencies are working to address those
                concerns with rules, programs, and services apart from this final rule.
                But these challenges predated both the 2016 final rule and this final
                rule, and the Agencies disagree that the notice requirements and the
                referral requirement addressed these challenges in any meaningful way.
                Indeed, the preamble to the 2016 final rule recognized that it may be
                ``impossible'' to guarantee an alternative provider for services
                provided in a ``remote location.'' 81 FR 19364; see also id. at 19368
                (``The Agencies believe that, in some cases, due to the location of the
                organization, availability of resources, the nature of the program, or
                other factors, a referral option may not be available.''). As a result,
                the referral requirement might be even less valuable to beneficiaries
                in rural areas. Whatever marginal value it might afford would not
                outweigh the other reasons given for eliminating the referral
                requirement.
                 Many of the studies did not analyze the critical issues necessary
                to draw relevant conclusions regarding the alternative provider notice-
                and-referral requirements. Those studies did not involve or
                specifically address federally funded programs, and the statistics
                cited by commenters differ from Federal data reported by grantees.\28\
                The studies did not analyze the incidents of harms by faith-based
                providers as opposed to other providers. Also, they did not identify
                problems attributable to the absence of, or that would be remedied by,
                the notice-and-referral requirements. Instead, many of these studies
                raise broader concerns regarding issues that are beyond the scope of
                this final rule, such as discrimination and the balance between LGBTQ
                rights and religious liberties. Finally, many of the studies have
                methodological limitations, recognized the possibility that other
                factors could account for the observed behaviors, and called for
                further research.\29\
                ---------------------------------------------------------------------------
                 \28\ For example, with regard to youth homelessness, one percent
                of unaccompanied youth self-identified as LGBT nationwide. HUD
                Exchange, HUD, PIT and HIC Data Since 2007 (Jan. 2020), https://www.hudexchange.info/resource/3031/pit-and-hic-data-since-2007.
                Also, a runaway and homeless youth site in New York reported 23.3
                percent of the youth homeless population it served to be LGBT.
                Administration for Children and Families, HHS, Final Report--Street
                Outreach Program Data Collection Study (Apr. 12, 2016), https://www.acf.hhs.gov/archive/fysb/resource/street-outreach-program-data-collection-study.
                 \29\ See, e.g., American Atheists, Reality Check: Being
                Nonreligious in America (2020), https://static1.squarespace.com/static/5d824da4727dfb5bd9e59d0c/t/5ec6d6d8e8da850b30521353/1590089442015/Reality+Check+-+Being+Nonreligious+in+America
                (published after submission of comments); Office of Disease
                Prevention and Health Promotion, Healthy People 2020 (last updated
                Oct. 8, 2020), https://www.healthypeople.gov/2020/topics-objectives/topic/social-determinants-health/interventions-resources/discrimination; Caitlin Rooney et al., Center for American Progress,
                Protecting Basic Living Standards for LGBTQ People (2018) https://www.americanprogress.org/issues/lgbt/reports/2018/08/13/454592/protecting-basic-living-standards-lgbtq-people/; Sejal Singh
                andLaura E. Durso, Center for American Progress, Widespread
                Discrimination Continues to Shape LGBT People's Lives in Both Subtle
                and Significant Ways (May 2, 2017), https://www.americanprogress.org/issues/lgbtq-rights/news/2017/05/02/429529/widespread-discrimination-continues-shape-lgbt-peoples-lives-subtle-significant-ways/; Chapin Hall, Missed Opportunities: Youth
                Homelessness in America 10 (2017), https://voicesofyouthcount.org/wp-content/uploads/2017/11/VoYC-National-Estimates-Brief-Chapin-Hall-2017.pdf (mentioning the need to identify at-risk youth and
                initiate ``service referrals'' to an initial provider, with no
                mention of faith-based providers or objections to any provider);
                Sandy E. James et al., National Center for Transgender Equality, The
                Report of the 2015 U.S. Transgender Survey (Dec. 2016), https://transequality.org/sites/default/files/docs/usts/USTS-Full-Report-Dec17.pdf; Jaclyn M. White Hughto et al., Transgender Stigma and
                Health: A Critical Review of Stigma Determinants, Mechanisms, and
                Interventions, 147 Soc. Sci. Med. 222 (Dec. 2015), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4689648/pdf/nihms739646.pdf;
                Justice in Aging, LGBT Older Adults in Long-Term Care Facilities:
                Stories from the Field 11 (updated June 2015),
                www.justiceinaging.org.customers.tigertech.net/wp-content/uploads/2015/06/Stories-from-the-Field.pdf (citing examples of patients
                being ``prayed over'' or told they would go to hell but without
                referencing key factors, including whether the provider was faith-
                based (or whether it was a religiously motivated staff person who
                caused the issue)); Karen Fredriksen-Goldsen et al., The Aging and
                Health Report: Disparities and Resilience Among Lesbian, Gay,
                Bisexual, and Transgender Older Adults 17-18, 38, 47 (Nov. 2011),
                https://www.lgbtagingcenter.org/resources/pdfs/LGBT%20Aging%20and%20Health%20Report_final.pdf (noting that 38
                percent of respondents ``currently attend spiritual or religious
                services or activities at least once a month''--and identifying
                ``referral services'' as a needed service, apparently referencing
                initial provider referrals--and making no mention of objections);
                SAGE and Movement Advancement Project, Improving the Lives of LGBT
                Older Adults 52, 60 (Mar. 2010), https://www.lgbtmap.org/file/improving-the-lives-of-lgbt-older-adults.pdf (indicating that LGBT
                advocates should provide information and referrals, including to
                ``local LGBT-friendly experts'').
                ---------------------------------------------------------------------------
                [[Page 82060]]
                 Similarly, the example of end-of-life issues is not relevant. End-
                of-life issues and the balance of rights between patients, healthcare
                employees, and affiliated organizations are governed by a complex set
                of statutes and regulations that fall outside the scope of this
                rulemaking. There is no reason to believe that the notice-and-referral
                requirements would affect the situation raised by the comment about
                disagreements over when it is appropriate to end aggressive treatments
                for a patient. The 2016 final rule did not require the notice to
                describe the religious character or tenets of the provider, such as a
                hospital's connection to the Roman Catholic Church or its adherence to
                ethical directives of the Catholic Church. The notice would not have
                conveyed in any helpful detail how a particular physician or treatment
                facility would approach an end-of-life scenario. That information is
                more likely to be discernible from the provider's name, especially when
                combined with the information on the provider's website, and other
                informational materials unaffected by this final rule.
                 The Agencies also disagree that various groups' prevalent use of
                federally funded programs would translate into disproportionate harms
                to those groups from removal of the notice-and-referral requirements.
                The Agencies are proud that these comments, including ones supported by
                research, demonstrate that people with unique needs and challenges
                benefit from the Agencies' programs and services. The Agencies will
                continue to support appropriate programming for all communities in
                need. But for the reasons discussed in Part II.C, a community's
                widespread participation in federally funded programming does not show
                that the removal of the notice-and-referral requirements would increase
                the likelihood of negative outcomes, such as increased poverty and
                unemployment, among this population. None of the surveys or reports
                discussed in comments makes such a showing. Moreover, these surveys
                rely on programs not directly relevant here. For example, commenters
                relied on the portion of the 2018 CAP Survey that cited instances in
                indirect-aid programs, such as SNAP and some housing assistance
                programs, that were never subject to the notice-and-referral
                requirement. 81 FR 19363, 19386, 19414. As such, these sources cannot
                support the contention that the notice-and-referral requirements
                alleviated instances of alleged harm--or that the removal of such
                requirements would increase the risk of instances of such harm.
                 All of these responses apply with equal or greater force to the
                commenters' hypothetical claims of harms. Many of the programs cited by
                the commenters operate in contexts that further minimize the risk of
                harm to beneficiaries. For example, several commenters claimed there
                were unique needs for objections to religious character by victims and
                survivors of human trafficking. As suggested by the Council Chair, the
                Agencies can certainly imagine a victim of human trafficking who does
                not speak English, is in an unfamiliar location, is a single parent and
                does not have reliable internet; who has to research an alternative
                provider while working and caring for young children; and who needs
                guaranteed assistance finding an alternative provider. The relevant
                Agencies are working very hard to support and provide services for
                victims of human trafficking, including those with any of the listed
                characteristics. Research shows that human trafficking victims and
                survivors face many substantial and documented hurdles to receiving
                care, especially those victims and survivors residing in regions that
                have limited resources. However, and even though many studies have
                included faith-based service providers, the Agencies are not aware of
                any research indicating that objections to the religious character of
                the provider is a hurdle for potential beneficiaries at all, let alone
                a substantial hurdle.\30\ Instead of addressing hypothetical harms that
                seem to arise infrequently at best, the Agencies and experts in the
                field are moving toward incorporating first-person victim experiences
                into trafficking policy, programs, research, evaluation, and responses,
                with safeguards to minimize re-victimization or re-traumatization.\31\
                These data, in short, do not indicate a need for the notice
                requirements or the referral requirement.
                ---------------------------------------------------------------------------
                 \30\ See, e.g., U.S. Department of State, Trafficking in Persons
                Report 20-21, 28-33 (20th ed. June 2020), https://www.state.gov/wp-content/uploads/2020/06/2020-TIP-Report-Complete-062420-FINAL.pdf
                (describing the challenges of ``trauma bonding,'' extraterritorial
                abuse and exploitation, the many ways providers need to
                ``reengineer[ ]'' health care for survivors, and the intersection
                between trafficking and addiction); Elzbieta Gozdziak and Lindsay
                Lowell, After Rescue: Evaluation of Strategies to Stabilize and
                Integrate Adult Survivors of Human Trafficking to the United States
                5, 10-29 (Apr. 2016), https://www.ncjrs.gov/pdffiles1/nij/grants/249672.pdf (describing the challenges of survivors' needs and
                survivor stabilization facing programs, including ones run by faith-
                based organizations before the referral requirement was
                promulgated); Laura Simich et al., Improving Human Trafficking
                Victim Identification--Validation and Dissemination of a Screening
                Tool 12, 184-87 (June 2014), https://www.ncjrs.gov/pdffiles1/nij/grants/246712.pdf (describing many of the challenges of meeting the
                needs of human trafficking victims and survivors in a study that
                worked with faith-based providers).
                 \31\ See, e.g., National Institute of Justice, Expert Working
                Group on Trafficking in Persons Research Meeting 13-17 (Apr. 24-25,
                2014), https://www.ncjrs.gov/pdffiles1/nij/249914.pdf.
                ---------------------------------------------------------------------------
                 The Agencies, moreover, recognize that faith-based providers have
                been integral to the national and international efforts to address
                human trafficking and to respond to the needs of victims and
                survivors.\32\ There is no suggestion that these faith-based
                organizations, which are committed to the fight against human
                trafficking and the care of trafficking victims and survivors, would
                further traumatize those individuals by seeking to convert them. The
                Agencies also recognize that some studies indicate that alternatives to
                traditional therapies, including ``offering organized religious or
                spiritual activities to help victims connect to something that will
                last beyond the program timeframe,'' are ``considered important adjunct
                therapies for this population.'' \33\ Human trafficking victims often
                interact with multiple agencies, including law enforcement agencies,
                that can provide referrals to alternative providers if the
                [[Page 82061]]
                victim would like one. Also, human trafficking service providers
                commonly have informational materials available in multiple languages,
                which reference national and regional hotlines that can otherwise
                provide referrals to any beneficiary who cannot undertake research or
                labor-intensive efforts to locate a provider. The Agencies determine,
                in their policy discretion, that it is appropriate to direct their
                funding and related requirements toward meeting the documented needs of
                human trafficking victims and survivors rather than an undocumented
                need to address objections to providers' religious character.
                ---------------------------------------------------------------------------
                 \32\ See, e.g., U.S. Department of State, Trafficking in Persons
                Report 24-25 (20th ed. June 2020), https://www.state.gov/wp-content/uploads/2020/06/2020-TIP-Report-Complete-062420-FINAL.pdf
                (describing faith-based organizations' efforts to combat human
                trafficking and the reasons such organizations ``are powerful and
                necessary forces in the fight against human trafficking'').
                 \33\ Heather Clawson et al., Treating the Hidden Wounds: Trauma
                Treatment and Mental Health Recovery for Victims of Human
                Trafficking 7 (Mar. 15, 2008) (describing the many challenges of
                treating human trafficking victims), https://aspe.hhs.gov/system/files/pdf/75356/ib.pdf.
                ---------------------------------------------------------------------------
                 Commenters' hypothetical example of a faith-based organization
                acting with open hostility toward an LGBTQ public school student is
                similarly inapt. There is no basis to conclude that faith-based
                providers would show such anti-LGBTQ hostility in an ED-funded program
                run through a public school. Yet even so, it is unclear how the notice-
                and-referral requirements would have helped the student. Students
                subjected to such hostility would most likely seek redress or referral
                to an alternative provider through their public school, not from the
                provider.
                 The hypotheticals, provided in the comments, also relied on claims
                of discrimination on bases other than religion in reentry programs,
                disaster relief programs, food pantries, substance use disorder
                programs, medical care programs, women's emergency shelters, and HUD
                housing programs, without explaining how those harms were connected to,
                or were addressed by, the notice-and-referral requirements. The same is
                true for the hypotheticals suggesting that providers would deny
                services based on sex; delay or deny services during emergencies; deny
                services to unaccompanied minors; make beneficiaries uncomfortable; or
                claim religious interpretations to avoid providing services based on
                prejudice, bias, or stigma. For example, many domestic violence
                shelters admit women with male children only below a certain age to
                protect victims and minimize re-traumatization. Other laws and policies
                determine whether and when such a shelter must admit a transgender
                person. These policies are unrelated to the alternative provider
                notice-and-referral requirements. Nonetheless, for completeness, the
                Agencies note that, if such admission were required contrary to a
                faith-based provider's sincerely held religious beliefs, it could seek
                an accommodation under this final rule, which would be handled in a
                context-specific analysis that is explained in Part II.E. Otherwise,
                however, this issue is beyond the scope of this final rule regarding
                equal participation of faith-based organizations and, in all events,
                was not addressed by the notice-and-referral requirements.
                 Many of these examples raise forms of discrimination or other
                conduct that are prohibited by other provisions within the Agencies'
                regulations but were not addressed by the notice-and-referral
                requirements. For instance, commenters' examples include a hypothetical
                beneficiary who seeks to participate in the Second Chance Act Reentry
                Initiative administered by DOJ's Office of Justice Programs but is
                excluded based on sexual orientation or gender identity. Like all DOJ
                grants, providers in this program must comply with several
                nondiscrimination provisions, including the prohibition on
                discrimination on the basis of sex under section 901 of Title IX of the
                Education Amendments of 1972.\34\ How those requirements would apply is
                beyond the scope of the final rule and entirely unaffected by removal
                of the notice-and-referral requirements. To the extent these commenters
                raise concerns about the use of religion as a pretext for unlawful
                discrimination, the Agencies address these concerns in Part II.E.
                ---------------------------------------------------------------------------
                 \34\ See, e.g., Office of Justice Programs, Department of
                Justice Grants and Cooperative Agreements: Statutes and Regulations
                Related to Civil Rights and Nondiscrimination (updated Mar. 2018),
                https://www.ojp.gov/program/civil-rights/statutes-regulations.
                ---------------------------------------------------------------------------
                 For all of these reasons, the Agencies determine that removing the
                notice requirements and the referral requirement will not unduly harm
                beneficiaries, including beneficiaries from the populations identified
                by commenters, and will not make it more likely that such vulnerable
                groups do not receive needed services. Removing these requirements is
                also appropriate to address the tension with the Free Exercise Clause
                and with RFRA, discussed next. To the extent any of these hypotheticals
                demonstrate that broader substantive protections are necessary, they
                should apply to non-faith-based providers as well as faith-based
                providers, and they are therefore beyond the scope of this final rule.
                 Changes: None.
                 Affected Regulations: None.
                3. Tension With the Free Exercise Clause and RFRA
                a. Unequal Burdens
                 Summary of Comments: Several commenters said that, under the Free
                Exercise Clause, strict scrutiny applies to government funding programs
                that discriminate against, or impose special burdens on, faith-based
                organizations because of their religious character or status, as
                outlined in Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S.
                Ct. 2012 (2017); Church of the Lukumi Babalu Aye, Inc. v. City of
                Hialeah, 508 U.S. 520 (1993); Executive Order 13831; and the Attorney
                General's Memorandum. These commenters, including 21 current members of
                the House of Representatives and a State attorney general, argued that
                the notice-and-referral requirements should be removed because they
                imposed unfair and discriminatory burdens on faith-based organizations
                that either violated or were in tension with this Free Exercise Clause
                standard.
                 Some commenters argued that the holding in Trinity Lutheran did not
                provide a sufficient justification for the removal of the notice-and-
                referral requirements due to the dissimilarities discussed throughout
                this section that commenters perceived between the prior rule and
                issues presented in Trinity Lutheran--namely, that the notice-and-
                referral requirements did not exclude faith-based organizations from
                participation in federally funded government programs; that the
                requirements were justified on the basis of religious activity, not
                religious character; and that the holding in Trinity Lutheran was not
                applicable, given its perceived limitation to the facts before the
                Court.
                 Some commenters argued that the alternative provider notice-and-
                referral requirements violated Trinity Lutheran's holding by facially
                discriminating on the basis of religious character. These commenters
                reasoned that the notice-and-referral requirements applied explicitly
                based on the providers' ``religious character.'' In one public comment,
                the Council Chair--who opposed removal of these requirements--agreed
                that these requirements applied only to religious organizations because
                they were based on ``a beneficiary's objection to an organization's
                `religious character.' '' And the other aspects of the notice
                requirement applied solely to faith-based organizations based on that
                status.
                 Some commenters argued that strict scrutiny would apply to the
                notice-and-referral requirements under Trinity Lutheran--both as
                unequal treatment and as special burdens--because those requirements
                were imposed on faith-based, but not secular, organizations. Some of
                these commenters added that this unequal treatment stigmatized faith-
                based providers as inferior, offensive, or ``second class citizens.''
                Another commenter added that these
                [[Page 82062]]
                requirements created the impression that the Government considers
                religious people inherently suspect because of their faith, suggesting
                that the Government believes Americans are more likely to find
                religious providers objectionable than secular providers.
                 Some of these commenters supported removal of these requirements to
                create a level playing field for faith-based and secular organizations,
                consistent with Trinity Lutheran. Some added that removing the
                requirements would restore an environment of religious freedom across
                the country and ensure that faith-based organizations are free to offer
                services, help their communities, and follow their missions unhindered
                by burdensome government regulations.
                 Several commenters, however, argued that the Free Exercise Clause
                requirement to treat secular and religious organizations equally only
                applies when a rule ``categorically exclude[s]'' religious
                organizations from receiving grants or other benefits ``solely''
                because of their religious character. Some of these commenters argued
                that Trinity Lutheran and McDaniel v. Paty, 435 U.S. 618 (1978)
                (plurality opinion), apply only when the benefit at issue was denied in
                its entirety, or the organization was deemed ineligible solely because
                of its religious character. These commenters argued that this standard
                does not apply to laws that allow faith-based organizations to
                participate in a program with safeguards to protect beneficiaries'
                religious liberty. A few advocacy organizations argued that Locke v.
                Davey, 540 U.S. 712 (2004), allows exclusions based on factors other
                than the religious character of an organization or program. They
                pointed to Locke's upholding a law barring state funding, even in an
                otherwise neutral indirect-aid program, for an ``essentially religious
                endeavor.'' In contrast, they said, Trinity Lutheran only applies to
                exclusions based solely on religious character.
                 These commenters argued that the notice-and-referral requirements
                did not violate this standard because faith-based organizations were
                still allowed to compete to participate in the Agencies' programs as
                providers. They characterized the notice-and-referral requirements as
                appropriate safeguards balanced to protect the competing interests of
                providers and beneficiaries. Some said the requirements were applied
                only to faith-based providers to protect the religious rights of the
                people they serve, not to disfavor those providers for their religious
                character. Some commenters also claimed that the requirements did not
                create constitutional problems because, as they saw it, the 2016 final
                rule generally allowed faith-based organizations to receive grants on
                ``the same basis as'' secular organizations. See 81 FR at 19358
                (describing this requirement).
                 Several commenters argued that the notice-and-referral requirements
                had the effect of excluding faith-based organizations only if they
                declined to provide the required notice or referral, not because of
                their religious character. These commenters added that no Agency had
                pointed to evidence that any faith-based organization had actually been
                excluded because it had run afoul of these requirements. Some also
                noted that the 2016 final rule expressly stated that providers could
                not be excluded from participation in programs because of their
                religious character. Commenters added that, if an agency excluded a
                faith-based organization for refusing to comply with the rule, the
                Agencies could make clear that the exclusion was because of the
                organization's religious activity, not its religious character.
                 One commenter argued that the notice-and-referral requirements were
                ``simply one practical way to ensure that rules are understood and
                respected'' and that similar notices were required by the Fair Labor
                Standards Act (FLSA), 29 CFR 516.4; the Equal Employment Opportunity
                Act (EEOA), 29 CFR 1601.30; and the Family Medical Leave Act (FMLA), 29
                CFR 825.300(a). Another commenter made the same point based on a poster
                requirement that applies to ``all persons subject to section 804'' of
                the National Housing Act, 24 CFR 110.10.
                 Several commenters asserted that Trinity Lutheran's holding applies
                only to the specific facts of that case--``discrimination based on
                religious identity with respect to playground resurfacing''--because of
                a footnote in the plurality portion of the opinion. 137 S. Ct. at 2024
                n.3. These commenters relied on the footnote's statement that the
                decision did not ``address religious uses of funding or other forms of
                discrimination.'' Id. Some added that cases decided by the U.S. Court
                of Appeals for the Third Circuit and District of Maine--Real
                Alternatives v. Sec'y HHS, 867 F.3d 338, 361 n.29 (3d Cir. 2017), and
                Carson v. Makin, 401 F. Supp. 3d 207, 211 (D. Me. 2019)--interpreted
                this footnote as limiting Trinity Lutheran to its facts. Several
                commenters argued that excluding a faith-based organization from a
                program to fund resurfacing material for playgrounds is very different
                from requiring a faith-based organization to comply with the notice-
                and-referral requirements.
                 Finally, one commenter cited Employment Division, Department of
                Human Resources of Oregon v. Smith, 494 U.S. 872, 878-79, 885 (1990),
                to argue that the notice-and-referral requirements were
                constitutionally permissible because the First Amendment does not
                provide individuals with an unconditional right to act in accordance
                with their religion.
                 Response: The Agencies agree with the commenters who argued that
                the notice-and-referral requirements were in tension with the Supreme
                Court's subsequent decisions in Trinity Lutheran Church of Columbia,
                Inc. v. Comer, 137 S. Ct. 2012 (2017), and Espinoza v. Montana
                Department of Revenue, 140 S. Ct. 2246, 2255-26 (2020). Under Trinity
                Lutheran, government-funded programs that ``single out the religious
                for disfavored treatment'' are subject to the ``strictest'' or ``most
                exacting scrutiny.'' 137 S. Ct. at 2019, 2021. This standard ``protects
                religious observers against unequal treatment'' and from ``laws that
                target the religious for `special disabilities' based on their
                `religious status,''' id. at 2019, and is echoed in Executive Order
                13831 and the Attorney General's Memorandum. The Supreme Court recently
                reaffirmed the central holding of Trinity Lutheran and made clear that
                the decision is not limited to the facts of that case but more broadly
                addressed discrimination on the basis of religious status. Espinoza,
                140 S. Ct. at 2255-56 (quoting Trinity Lutheran and citing cases).
                 It is unclear whether the holdings in these cases are limited to
                categorical exclusion from government-funded programs or benefits on
                account of religious character. To be sure, the facts of Espinoza and
                Trinity Lutheran involved such exclusions.\35\ But the Supreme Court
                also stated that a law may not ``regulate or outlaw conduct because it
                is religiously motivated'' or `` `impose[ ] special disabilities on the
                basis of religious status.' '' Trinity Lutheran, 137 S. Ct. at 2021
                (emphasis added) (quoting Lukumi, 508 U.S. at 533). Trinity Lutheran
                described ``the `injury in fact' '' in such cases as ``the inability to
                compete on an equal footing in the bidding process, not the loss of a
                contract.'' Id. at 2022 (quoting Ne. Fla. Chapter, Associated Gen.
                Contractors of Am. v. Jacksonville, 508 U.S. 656, 666 (1993)). In
                Espinoza, after repeating that
                [[Page 82063]]
                ``status-based discrimination is subject to the `strictest scrutiny,'
                '' the Court hastened to add that ``[n]one of this is meant to suggest
                . . . that some lesser degree of scrutiny applies to discrimination
                against religious uses of government aid,'' an issue the Court declined
                to reach in that case. 140 S. Ct. at 2257 (quoting Trinity Lutheran,
                137 S. Ct. at 2022).\36\ Most recently, in Roman Catholic Diocese of
                Brooklyn v. Cuomo, 590 U.S. __, No. 20A87, 2020 WL 6948354 (Nov. 25,
                2020) (per curiam), the Supreme Court granted an application for
                preliminary injunctive relief from a governor's COVID-19 order that
                applied stricter limits in certain zones on the numbers of people who
                could gather in ``houses of worship'' than on the numbers who could
                gather in ``essential'' businesses. See id. at *3 (``Because the
                challenged restrictions are not `neutral' and of `general
                applicability' they must satisfy `strict scrutiny' . . . .'').
                ---------------------------------------------------------------------------
                 \35\ See, e.g., Espinoza, 140 S. Ct. at 2260 (``When otherwise
                eligible recipients are disqualified from a public benefit `solely
                because of their religious character,' we must apply strict
                scrutiny.'') (quoting Trinity Lutheran, 137 S. Ct. at 2021).
                 \36\ See also Central Rabbinical Congress of the U.S. & Can. v.
                N.Y. City Dep't of Health & Mental Hygiene, 763 F.3d 183, 194-95 (2d
                Cir. 2014) (applying strict scrutiny to law that singled out
                specific religious conduct performed by a particular religious
                group).
                ---------------------------------------------------------------------------
                 Because these Supreme Court decisions suggest that the forbidden
                discrimination covers more than just categorical exclusions, the
                Agencies conclude that the notice-and-referral requirements are at
                least in tension with the Supreme Court's subsequent decisions in
                Trinity Lutheran and Espinoza. As the Council Chair acknowledged, these
                requirements applied solely to religious organizations, and the
                organizations' obligation to make a referral was triggered solely by
                beneficiaries' objections to their ``religious character.'' See
                Espinoza, 140 S. Ct. at 2255-56 (holding the provision at issue was
                based on religious character because it applied ``solely by reference
                to religious status''). The notice requirement applied to ``religious
                organizations,'' ``faith-based organization[s],'' or all ``religious
                organizations, regardless of beliefs or conduct.'' \37\ The referral
                requirement was triggered by objections to the organization's
                ``religious character.'' \38\
                ---------------------------------------------------------------------------
                 \37\ 81 FR at 19406-09 (ED, Sec. Sec. 3474.15(c)(1), 75.712,
                76.712)); id. at 19411 (DHS, Sec. 19.6(a)); id. at 19414 (USDA,
                Sec. 16.4(f)); id. at 19417 (HUD, Sec. 5.109(g)); id. at 19420
                (DOJ, Sec. 38.6(c)); id. at 19423 (DOL, 29 CFR 2.34(a)); id. at
                19425 (VA, Sec. 50.2(a); id. at 19428 (HHS, Sec. 87.3(i)(1)); see
                also 81 FR at 19406-09 (ED, Sec. Sec. 3474.15(c)(1), 75.713, 76.713
                (applying referral requirement to only ``a faith-based
                organization'')).
                 \38\ 81 FR at 19407-09 (ED, Sec. Sec. 75.713(b)(1),
                76.713(b)(1)); id. at 19412 (DHS, Sec. 19.7(b)); id. at 19414
                (USDA, Sec. 16.4(g)(1)); id. at 19417 (HUD, Sec. 5.109(g)(3)(ii));
                id. at 19421 (DOJ, Sec. 38.6(d)(2)); id. at 19423 (DOL, Sec.
                2.35(b)); id. at 19425 (VA, Sec. 50.3(b)); id. at 19428 (HHS, Sec.
                87.3(j)).
                ---------------------------------------------------------------------------
                 The Agencies also disagree that Locke necessarily implies that the
                notice-and-referral requirements were permissible regulations of
                religious activity. The challenged law in Locke prohibited the use of
                State scholarship funds for ``religious training'' in ``devotional
                theology.'' 540 U.S. at 719-21. The program denied funds to a recipient
                because of what the recipient ``proposed to do--use the funds to
                prepare for the ministry.'' Trinity Lutheran, 137 S. Ct. at 2023-24;
                see also Espinoza, 140 S. Ct. at 2257 (distinguishing Locke). The Court
                in Locke drew a distinction based on conduct--the ``essentially
                religious endeavor'' of ``[t]raining someone to lead a congregation.''
                540 U.S. at 721. In contrast, the notice-and-referral requirements were
                triggered by an organization's religious character alone, not its
                religious conduct, and applied to a use of funds that is required by
                the rule to be secular.
                 Moreover, the Agencies disagree that notice-and-referral
                obligations borne solely by faith-based organizations cannot ever rise
                to the level of discrimination or impose special burdens. To be sure,
                the costs of compliance may have been minimal, particularly in view of
                the Agencies' experience that beneficiaries have almost never--and
                perhaps have never--sought to invoke the referral option. But the
                imposition of the notice-and-referral requirements arguably denied
                faith-based organizations the opportunity ``to compete with secular
                organizations'' on a level playing field, Trinity Lutheran, 137 S. Ct.
                at 2022, and may have cast doubt on the suitability of religious
                organizations to provide the social service in question. The
                requirements gave the impression that such religious providers were not
                favored or trusted to provide the particular social service in
                accordance with the general requirements of the law, were more likely
                to discriminate, or were more likely to be objectionable. The Agencies,
                therefore, disagree that the required notice and concomitant referral
                obligation could not have the effect of denigrating or casting a
                negative light on faith-based providers.
                 The Agencies further disagree with commenters' suggestions that
                these negative implications were tempered in any meaningful way by the
                general assurances in the rule that religious organizations could
                compete ``on the same basis as'' secular organizations and would not be
                subject to discrimination based on their religious character. Those
                general statements did not change the specific terms and effects of the
                notice-and-referral requirements. The fact still remained that only
                religious organizations bore those burdens.
                 The Agencies acknowledge that the notice-and-referral requirements
                were not meant to denigrate or punish religious organizations but to
                protect beneficiaries. The holdings in Trinity Lutheran and Espinoza,
                however, did not turn on the intent of the Government. Because of the
                uncertainty expressed above about what, if any, benefit the notice-and-
                referral requirements provided beneficiaries, the Agencies are not
                confident that the requirements would always survive the ``strictest''
                or ``most exacting scrutiny'' as applied to particular cases. The
                Agencies, therefore, conclude that prudential considerations justify
                the rescission of these requirements.
                 The notice-and-referral requirements in the 2016 final rule were
                materially different from the notices required by laws such as the
                FMLA, EEOA, FLSA, and National Housing Act. Those laws required all
                covered employers to provide comprehensive notice of employees' rights
                irrespective of religious character. See, e.g., 29 CFR 516.4 (FLSA),
                1601.30 (EEOA), 825.300(a) (FMLA); 24 CFR 110.10 (National Housing
                Act). Employees receive those standard notices from every employer, and
                the content of the notices provides no reason to believe that their
                employer could be viewed with suspicion, or may be in some way
                objectionable, on account of any unique status.
                 The Agencies also disagree with the comments that interpreted the
                plurality's footnote 3 to limit Trinity Lutheran's holding to the facts
                of that case--viz., playground resurfacing. As mentioned above, the
                Supreme Court recently confirmed in Espinoza that the `` `strictest
                scrutiny' '' applies to status-based discrimination on the basis of
                religion in the context of a different government benefit--tax credits
                for donations to organizations awarding scholarships.\39\ Nothing in
                the logic or discussion of Trinity Lutheran or Espinoza suggests that
                the nondiscrimination principle was limited to the facts of either
                case.
                ---------------------------------------------------------------------------
                 \39\ Espinoza, 140 S. Ct. at 2257 (citing Trinity Lutheran, 137
                S. Ct. at 2021); see also id. at 2254 (``The Free Exercise Clause .
                . . protects religious observers against unequal treatment and
                against laws that impose special disabilities on the basis of
                religious status'').
                ---------------------------------------------------------------------------
                 This is consistent with the Agencies' understanding of Trinity
                Lutheran. The Court's discussion of the principles it articulated
                pointed to applicability beyond the facts immediately before it. See,
                e.g., 137 S. Ct. at 2022 (``[T]he Free Exercise Clause protects against
                indirect
                [[Page 82064]]
                coercion or penalties on the free exercise of religion, not just
                outright prohibitions.'' (citing Lyng, 485 U.S. at 450)); id. at 2026
                n.3 (Gorsuch, J., concurring, joined by Thomas, J.) (``I worry that
                some might mistakenly read [footnote 3] to suggest that only
                `playground resurfacing' cases, or only those with some association
                with children's safety or health, or perhaps some other social good we
                find sufficiently worthy, are governed by the legal rules recounted in
                and faithfully applied by the Court's opinion.''). The lower court
                cases that the commenters cited reaching contrary conclusions--Real
                Alternatives and Carson--pre-date Espinoza and no longer have
                persuasive value with respect to the meaning of footnote 3.
                 The Agencies also disagree that the Supreme Court's decision in
                Employment Division v. Smith insulated the notice-and-referral
                requirements from Free Exercise Clause concern. The notice-and-referral
                requirements were neither generally applicable (since they applied only
                to religious organizations) nor religion-neutral (since they required
                referrals based on objections to religious character, but not other
                characteristics of the provider). See Part II.F.2 (discussing the
                standard in Lukumi, which clarifies the meaning of Smith); see also
                Roman Catholic Diocese, 2020 WL 694354, at *2 (``Because the challenged
                restrictions are not `neutral' and of `general applicability,' they
                must satisfy `strict scrutiny,' and this means that they must be
                `narrowly tailored' to serve a `compelling' state interest.'' (quoting
                Lukumi, 508 U.S. at 546)).
                 In sum, the Agencies' position in this rulemaking is an exercise of
                discretion and prudence, informed by principles of constitutional
                avoidance. Cf. Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. &
                Constr. Trades Council, 485 U.S. 568, 575 (1988). The Agencies have
                discretion under their authorizing statutes to remove the notice-and-
                referral requirements to avoid the constitutional issues raised by the
                tension between those requirements and the Free Exercise Clause.
                Espinoza left open additional issues, including ``whether there is a
                meaningful distinction between discrimination based on use or conduct
                and that based on status.'' 140 S. Ct. at 2257. The Agencies make the
                reasonable decision, within their discretion, to eliminate this tension
                and avoid the burdens and uncertainty of litigating these unresolved
                issues. In so doing, the Agencies do not believe they have triggered
                any countervailing Establishment Clause concerns. The Supreme Court has
                ``repeatedly held that the Establishment Clause is not offended when
                religious observers and organizations benefit from neutral government
                programs.'' Id. at 2254 (citing Locke, 540 U.S. at 719, and Rosenberger
                v. Rector and Visitors of Univ. of Va., 515 U.S. 819, 839 (1995)).
                Indeed, while upholding the prohibition on use of scholarships for
                training to become clergy in Locke, the Supreme Court emphasized that
                the Government could also have funded allowed such uses, consistent
                with the Establishment Clause. 540 U.S. at 719 (``[T]here is no doubt
                that the State could, consistent with the Federal Constitution, permit
                . . . [students funded by the program] to pursue a degree in devotional
                theology.'').
                 For all of these reasons, the Agencies disagree with the commenters
                who suggest that relying on constitutional concerns potentially raised
                by Trinity Lutheran and Espinoza as one of the justifications for
                eliminating the notice-and-referral requirements is arbitrary and
                capricious.
                 Changes: None.
                 Affected Regulations: None.
                b. Substantial Burdens
                 Summary of Comments: Some commenters argued that the notice-and-
                referral requirements imposed, or could impose, substantial burdens on
                faith-based organizations' religious exercise under RFRA. These
                commenters argued that faith-based organizations could have complicity-
                based objections to providing such notice and referral, and that those
                objections should be respected, as were the complicity-based objections
                in Burwell v. Hobby Lobby, 573 U.S. 682 (2014). One religious
                organization commented that many religions prohibit complicity in sin
                and argued that the previous administration mistakenly had tried to
                downplay the gravity of such religious objections. Another commenter
                said that, by singling out faith-based providers, the notice-and-
                referral requirements were in tension with RFRA and the related
                principles in the Attorney General's Memorandum. Some commenters
                contended that it was irrelevant to the substantial burden analysis
                whether an organization could exercise its religious beliefs in other
                ways.
                 Several commenters argued that the Agencies could not rely on RFRA
                because they had not actually asserted that, or adequately explained
                how, notice-and-referral requirements imposed a substantial burden
                under RFRA. They charged that the Agencies were unable to point to any
                specific situation where these requirements had imposed substantial
                burdens on providers, including any situation where a faith-based
                organization claimed that the requirements compelled it to violate its
                sincerely held beliefs. As a result, some of these commenters argued
                that the Agencies' analysis was inadequate to support removal of these
                requirements based on RFRA.
                 Some commenters relied on a court of appeals decision holding that
                a substantial burden requires `` `substantial pressure on an adherent
                to modify his behavior and to violate [their] beliefs.' '' Kaemmerling
                v. Lappin, 553 F.3d 669, 678 (D.C. Cir. 2008) (quoting Thomas v. Review
                Bd., 450 U.S. 707, 718 (1981)). Others cited language from a different
                court of appeals that a substantial burden ``is one that forces the
                adherents of a religion to refrain from religiously motivated conduct,
                inhibits or constrains conduct or expression that manifests a central
                tenet of a person's religious beliefs, or compels conduct or expression
                that is contrary to those beliefs.'' Civil Liberties for Urban
                Believers v. City of Chi., 342 F.3d 752, 761 (7th Cir. 2003)
                (``C.L.U.B.'') (citation omitted); see also id. (holding that a law
                ``that imposes a substantial burden on religious exercise is one that
                necessarily bears direct, primary and fundamental responsibility for
                rendering religious exercise . . . effectively impracticable'').
                 Many commenters argued that the burdens imposed by the notice-and-
                referral requirements did not meet these legal standards. Some
                commenters argued that the notice-and-referral requirements could not
                have imposed a substantial burden because the burden of compliance was
                ``de minimis,'' imposed only ``minor costs,'' or was only a ``minimal
                imposition.'' They reasoned that faith-based organizations only had to
                provide a notice, reproduce language provided by the Agencies, exert
                ``reasonable'' efforts to find an alternative provider when requested,
                and notify the awarding agency if they were unable to find an
                alternative. Some argued that there was no substantial burden because
                the costs of compliance were offset by the Government's funding that
                the religious service providers had accepted. Others argued that
                participation in government-funded programs was voluntary, so faith-
                based organizations could decline the funding and avoid the associated
                requirements. Multiple commenters argued that the Agencies' position
                that the referral requirement was rarely invoked is at odds with the
                position that it imposed a substantial burden.
                [[Page 82065]]
                 Several commenters cited RFRA cases to discredit the notion that
                the notice-and-referral requirements could raise complicity-based
                objections. Some distinguished Hobby Lobby because it did not involve a
                referral requirement or because it concerned a privately held
                corporation whose employees were not obligated to work. According to
                these commenters, faith-based organizations freely choose to seek
                Federal funding for the programs governed by this rule and understand
                that they serve a ``captive audience'' whose religious liberty must be
                protected by the Constitution. Another commenter argued that the act of
                referral cannot create a substantial burden because the organization is
                actually objecting to ``what follows from'' the referral, meaning the
                conduct that the beneficiary might engage in with the alternate
                provider. The commenter argued that two appellate decisions \40\
                involving objections to what is colloquially referred to as the
                contraceptive mandate demonstrate that faith based organizations ``have
                no recourse'' for such an objection. Some commenters argued that any
                faith-based organization refusing to provide a referral to an
                alternative provider was not truly religious, was not being faithful to
                its religious beliefs, or was not ``truly Christian.''
                ---------------------------------------------------------------------------
                 \40\ See California v. U.S. Dep't of Health & Human Servs., 941
                F.3d 410 (9th Cir. 2019), vacated by Dep't of Health & Human Servs.
                v. California, No. 19-1038, 2020 WL 3865243 (July 9, 2020);
                Pennsylvania v. Trump, 930 F.3d 543, 573 (3d Cir. 2019), rev'd by
                Little Sisters of the Poor Saints Peter & Paul Home v. Pennsylvania,
                140 S. Ct. 2367 (July 8, 2020) (``Little Sisters'').
                ---------------------------------------------------------------------------
                 Some organizations argued that the notice-and-referral requirements
                did not impose a substantial burden because of countervailing
                interests. For example, a faith-based organization argued that referral
                requirements did not ``substantially burden'' the ``religious
                exercise'' of faith-based organizations because the requirements were
                ``clearly tied'' to the objectives of a government service that the
                organization voluntarily provides. Similarly, other commenters pointed
                to a passage from the preamble to the 2016 final rule that the required
                notice language ``does not place an undue burden on recipients of
                Federal financial assistance, particularly when balanced against the
                notice's benefit--informing beneficiaries of valuable protections of
                their religious liberty.'' Some commenters relied on Locke v. Davey,
                which found that a condition on funding imposed a ``relatively minor
                burden.'' 540 U.S. at 725 (2004).
                 Response: The Agencies disagree with any contention that the
                notice-and-referral requirements categorically did or did not impose a
                substantial burden. Rather, the Agencies take the position that these
                requirements were in tension with RFRA because they could have imposed
                a substantial burden in certain circumstances, as the Agencies
                explained in the NPRMs.
                 A regulation imposes a substantial burden when it (1) requires a
                person to take, or abstain from, an action contrary to the person's
                sincerely held religious exercise (2) under substantial pressure to
                comply. Hobby Lobby, 573 U.S. at 720-24; Sherbert, 374 U.S. at 405-06.
                For the first element, the believer's sincerely held religious
                understanding determines the scope of the religious exercise and
                whether compliance violates that exercise. This applies with full force
                to compliance that would make an organization complicit in the activity
                of others that it believes would violate its religious exercise, just
                as it would apply to compliance that would make the organization
                undertake such action directly. Little Sisters of the Poor Saints Peter
                & Paul Home, 140 S. Ct. 2367, 2383-84 (2020) (``Little Sisters'');
                Hobby Lobby, 573 U.S. at 723-25. A Catholic women's shelter, for
                example, might sincerely believe that referring a prospective client to
                another organization that provides birth control or abortions would
                render the Catholic shelter complicit in grave sin.
                 The Agencies thus disagree with the commenters who relied on the
                contrary attenuation theory. Under that theory, a religious believer or
                organization cannot be substantially burdened by ``what follows from''
                the required conduct, including when the organization's action triggers
                activity by others that ultimately violates the organization's
                religious exercise. The Supreme Court has repeatedly rejected this
                view. In Little Sisters, the Supreme Court said that Federal agencies
                ``must accept the sincerely held complicity-based objections of
                religious entities.'' 140 S. Ct. at 2383. In Hobby Lobby, the Supreme
                Court rejected the argument that a complicity-based objection was
                ``simply too attenuated.'' 573 U.S. at 723. The Supreme Court stated
                that ``federal courts have no business addressing whether the religious
                belief asserted in a RFRA case is reasonable.'' Id. at 724.\41\ ``Where
                to draw the line in a chain of causation that leads to objectionable
                conduct is a difficult moral question, and our cases have made it clear
                that courts cannot override the sincere religious beliefs of an
                objecting party on that question.'' Little Sisters, 140 S. Ct. at 2391
                (Alito, J., concurring).
                ---------------------------------------------------------------------------
                 \41\ See also Thomas, 450 U.S. at 715 (crediting Jehovah's
                Witness who objected that making tank turrets would be participating
                in war in violation of his sincere religious exercise, even though
                he was willing to make raw materials for the tanks).
                ---------------------------------------------------------------------------
                 Although the Agencies do not identify here any religion with such a
                complicity-based objection to the notice-and-referral requirements, the
                Agencies cannot rule out the possibility. Many religions sincerely
                believe that complicity in certain actions they consider immoral is
                similar (morally speaking) to committing the underlying action itself.
                The Agencies cannot agree with comments that a complicity-based
                objection to a referral is not ``truly'' religious, or that such an
                objection cannot be sincerely held.\42\ No principle articulated in
                Little Sisters, Hobby Lobby, Thomas or any other relevant Supreme Court
                decision precludes the possibility that the notice-and-referral
                requirements could on this basis give rise to a substantial burden on
                the exercise of religion.
                ---------------------------------------------------------------------------
                 \42\ See, e.g., United States v. Ballard, 322 U.S. 78, 87 (1944)
                (Under the Constitution, ``[m]an's relation to his God was made no
                concern of the state. He was granted the right to worship as he
                pleased and to answer to no man for the verity of his religious
                views.'').
                ---------------------------------------------------------------------------
                 For the second element of what constitutes a ``substantial
                burden,'' there are myriad ways that a law could exert substantial
                pressure for a person or organization to abandon its religious beliefs.
                As relevant here, it could constitute substantial pressure when the
                Government conditions an organization's receipt of Federal funds to
                administer a social service on taking actions that would contravene the
                organization's religious beliefs. Such a condition would force the
                organization ``to choose between the exercise of a First Amendment
                right and participation in an otherwise available public program.''
                \43\ In 1963, the Supreme Court held it was ``too late in the day to
                doubt'' that this kind of conditional government benefit could
                constitute a substantial burden on religious exercise.\44\ Thus, the
                [[Page 82066]]
                Department of Justice determined that RFRA was reasonably construed to
                require an exemption from a requirement not to discriminate on the
                basis of religion in employment under a Department-funded social
                service program when the grantee sincerely believed that employment of
                people who did not adhere to its core beliefs would undermine its
                religious mission. See 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'').
                ---------------------------------------------------------------------------
                 \43\ Thomas, 450 U.S. at 716; see also id. at 717-18 (``Where
                the state conditions receipt of an important benefit upon conduct
                proscribed by a religious faith, or where it denies such a benefit
                because of conduct mandated by religious belief, thereby putting
                substantial pressure on an adherent to modify his behavior and to
                violate his beliefs, a burden upon religion exists. While the
                compulsion may be indirect, the infringement upon free exercise is
                nonetheless substantial.'').
                 \44\ Sherbert v. Verner, 374 U.S. 398, 404 (1963); see 42 U.S.C.
                2000bb(b) (``The purposes of this [Act] are--(1) to restore the
                compelling interest test as set forth in Sherbert v. Verner, 374
                U.S. 398 (1963) and Wisconsin v. Yoder, 406 U.S. 205 (1972) and to
                guarantee its application in all cases where free exercise of
                religion is substantially burdened; and (2) to provide a claim or
                defense to persons whose religious exercise is substantially
                burdened by government.'').
                ---------------------------------------------------------------------------
                 As mentioned above, some commenters argued that the notice-and-
                referral requirements did not rise to the level of ``substantial
                pressure on an adherent to modify his behavior and to violate [his]
                beliefs,'' Kaemmerling, 553 F.3d at 678, or could not be said to
                ``bear[ ] direct, primary and fundamental responsibility for rendering
                religious exercise effectively impracticable,'' C.L.U.B., 342 F.3d at
                761. The burden, they contended, was at best de minimis. In Kaemmerling
                and C.L.U.B., however, the conditions for participating in a government
                benefit program were not at issue. C.L.U.B. arose in the land-use
                context. Further, C.L.U.B. required the land-use regulation to burden
                ``a central tenet'' of the believer's faith, 342 F.3d at 761, which is
                contrary to the definition of ``religious exercise'' in both RLUIPA and
                RFRA, see 42 U.S.C. 2000cc-5(7)(A); id. 2000bb-2(4). The Seventh
                Circuit has also abandoned the ``effectively impracticable'' standard
                from C.L.U.B., recognizing that Hobby Lobby and a more recent RLUIPA
                case, Holt v. Hobbs, 574 U.S. 352 (2015), ``articulate[d] a standard
                much easier to satisfy'' than the ``effectively impracticable''
                standard. Jones v. Carter, 915 F.3d 1147, 1149 (7th Cir. 2019)
                (citation omitted).
                 The notice-and-referral requirements, imposed as conditions for
                receiving grants to carry out social services, could place substantial
                pressure on faith-based organizations to abandon or modify their
                beliefs. The grants under the programs covered by the rule were
                otherwise generally available on a religion-neutral basis to qualifying
                entities. It does not matter whether the organization could choose not
                to accept the grant.\45\ What would make the burden on religious
                exercise ``substantial'' is the pressure from the inability to acquire
                that Federal funding. An organization might in those circumstances feel
                compelled either to bend its beliefs or forgo the Federal funding
                altogether. It is irrelevant that the organization might be able to
                practice its religion in other ways. See, e.g., Holt, 574 U.S. at 361-
                62 (rejecting the argument that alternative forms of religious exercise
                are relevant to the substantial burden analysis); see also Attorney
                General Memorandum, Principles 4 and 10.
                ---------------------------------------------------------------------------
                 \45\ Thomas, 450 U.S. at 716 (``[A] person may not be compelled
                to choose between the exercise of a First Amendment right and
                participation in an otherwise available public program.'');
                Sherbert, 374 U.S. at 412 (Douglas, J., concurring) (This inquiry
                ``turns not on the degree of injury, which may indeed be nonexistent
                by ordinary standards. The harm is the interference with the
                individual's scruples or conscience--an important area of privacy
                which the First Amendment fences off from government.'').
                ---------------------------------------------------------------------------
                 The Agencies also disagree with the commenters who contended that
                countervailing interests, such as the benefit of providing notices and
                referrals to beneficiaries of the social service program, would
                ameliorate any substantial burden imposed by those requirements on an
                organization's religious exercise. Countervailing interests are
                relevant to the next stage of the inquiry: Whether the Government has a
                compelling interest that might justify the imposition of a substantial
                burden on the recipient of a grant. See, e.g., United States v. Lee,
                455 U.S. 252, 257-58 (1982) (finding a burden sufficient to reach
                strict scrutiny and only then considering the impact on third parties).
                 For all of these reasons, the Agencies recognize the possibility
                that the alternative provider notice-and-referral requirements would
                impose a substantial burden on faith-based organizations with sincerely
                held complicity-based objections to those requirements. The Agencies
                are obligated to ``overtly consider'' this possibility when
                promulgating rules that raise concerns regarding ``the sincerely held
                complicity-based objections of religious entities.'' Little Sisters,
                140 S. Ct. at 2383. Failure to consider it could make the Agencies
                ``susceptible to claims that the rules were arbitrary and capricious
                for failing to consider an important aspect of the problem.'' Id. at
                2384. Supreme Court precedent does not require the Agencies to
                determine conclusively that a regulation would always impose a
                substantial burden in order for the Agencies to address such concerns
                proactively, as explained further in Part II.C.3.d. It is consistent
                with--though not required by--the fact- and context-specific nature of
                RFRA for the Agencies to decline to state definitively whether the
                notice-and-referral requirements constitute a substantial burden in
                this context, and instead to promulgate a prophylactic rule that avoids
                the imposition of any burden that, for reasons discussed in the next
                section, do not seem justified by a compelling interest.
                 Changes: None.
                 Affected Regulations: None.
                c. Compelling Interests
                 Summary of Comments: Some commenters agreed with the Agencies that
                the lack of evidence of actual instances of a beneficiary's seeking a
                referral under the 2016 rule undermined any compelling interest--under
                both the Free Exercise Clause and RFRA--in imposing the notice-and-
                referral requirements. See 85 FR at 2891 (DHS); id. at 2900 (USDA); id.
                at 2923 (DOJ); id.at 2931 (DOL); id. at 2940 (VA); id. at 2977 (HHS);
                id. at 3194 (ED). A national religious organization confirmed that it
                was also not aware of any instance of a referral request. Other
                commenters, however, argued that the Agencies did not have adequate
                documentation to prove that beneficiaries were not seeking referrals
                because the Agencies were not tracking successful referral requests.
                They claimed that the Agencies' inadequate documentation could not
                prove that the Government lacked a compelling interest and thus did not
                meet the Agencies' burden to justify removing the notice-and-referral
                requirements, making this proposed rule arbitrary and capricious. Other
                commenters similarly argued that the Agencies had not conducted a
                thorough analysis of the frequency with which beneficiaries requested
                referrals.
                 One organization claimed that, under the existing regulations, it
                and similar organizations had received complaints from nonreligious
                beneficiaries claiming that religious providers were denying them
                services or violating their religious freedom. In its comment to HUD,
                this commenter said it had found an alternative provider for a
                beneficiary who had contacted the organization to find an alternative
                to a 12-step program in a Medicaid-funded emergency shelter
                administered by a faith-based organization. The commenter argued that
                such programs were pervasively religious, based on Inouye v. Kemna, 504
                F.3d 705 (9th Cir. 2007), and Hazle v. Crofoot, 727 F.3d 983 (9th Cir.
                2013), and claimed that another secular organization had regularly
                received similar complaints from shelter residents.
                 One commenter also argued that HHS and the other Agencies were not
                entitled to remove the notice-and-referral requirements based on HHS's
                experience with the notice-and-referral
                [[Page 82067]]
                requirement in the SAMHSA programs. Under those requirements,
                participating faith-based organizations must report all referrals, see
                85 FR 2984, but to date the Agency has received no such report. The
                commenter stated that the Agencies should not generalize from this
                experience to all of the programs affected by this final rule without
                conducting a rigorous statistical analysis of the Agencies' programs
                more broadly. Additionally, some commenters argued that there was
                tension in claiming that the notice-and-referral requirements imposed a
                substantial burden while denying that a compelling interest exists due
                to the absence of beneficiaries seeking referrals.
                 Some commenters contended that the notice-and-referral requirements
                would survive strict scrutiny because they furthered some combination
                of the compelling government interests in (1) protecting third-party
                beneficiaries' religious liberty and (2) providing critical services
                effectively to millions of vulnerable people. The commenters argued
                that these interests outweighed the burdens on faith-based
                organizations.
                 Regarding the first putative interest, commenters argued that the
                notice-and-referral requirements served a compelling interest in
                protecting beneficiaries' fundamental religious liberty. They contended
                that this interest outweighed any burden on faith-based organizations,
                which as previously noted they variously characterized as ``de
                minimis,'' as imposing only ``minor costs,'' or as only a ``minimal
                imposition.'' See Part II.K.1 (Regulatory Impact Analysis). They
                reasoned that the burden imposed on faith-based organizations to comply
                with these requirements was not ``undue'' when weighed against the
                benefit of informing beneficiaries of their religious rights, as the
                2016 final rule concluded. They also said the cost to providers of
                notice and referral was minimal compared to the cost to beneficiaries
                of seeking out alternative service providers. See id.
                 The second interest was presented with some variations. Some
                commenters said the interest was in ensuring that federally funded
                social-services programs effectively serve the vulnerable populations
                that the programs were created to help. Others said the interest was in
                ensuring that no unnecessary obstacles would prevent beneficiaries from
                receiving needed services.
                 Response: Although they do not dismiss the argument out of hand,
                the Agencies do not believe it to be clear that the notice-and-referral
                requirements would serve any compelling interest, let alone that they
                would do so in the particularized way required by RFRA. Under that
                statute, the burden is not on the Government to disprove the existence
                of a compelling interest. Rather, assuming that a social service
                provider could show that the notice-and-referral requirements imposed a
                substantial burden on its religious exercise, the burden would shift to
                the Government to prove that a compelling interest exists. ``Only the
                gravest abuses, endangering paramount interests'' could ``give
                occasion'' to satisfy this test. Sherbert, 374 U.S. at 406; see also
                Yoder, 406 U.S. at 215 (``[O]nly those interests of the highest order
                and those not otherwise served can overbalance legitimate claims to the
                free exercise of religion.''). Additionally, to demonstrate a
                compelling interest under RFRA, the Agencies would need to show that
                their interest was compelling with regard to the application of these
                requirements ``to the person'' affected. 42 U.S.C. 2000bb-1(b). This
                ``rigorous standard'' requires a particularized showing. See, e.g.,
                Holt, 574 U.S. at 363-64; Gonzales v. O Centro Espirita Beneficente
                Uniao Do Vegetal, 546 U.S. 418, 431-32 (2006). For example, Congress's
                determination that an illegal hallucinogen was exceptionally dangerous
                with no medical use and a high risk of abuse was not sufficient to show
                a compelling interest in applying that ban to a specific religious use
                in Gonzales. 546 U.S. at 432-34. It is not clear that either putative
                compelling interest cited by commenters could meet these standards.
                 While the Agencies recognize that protecting the religious liberty
                of third-party beneficiaries can be compelling, they do not believe it
                is clear that the notice-and-referral requirements were always
                protecting beneficiaries' religious liberties. See Part II.C.1. The
                referral requirement enabled objections based on feelings of
                discomfort, dislike, and even rank prejudice against particular
                religious groups for providing social services that the rule required,
                and will still require, to be free of any religious content.
                Furthermore, the rule required, and still requires, a social service
                provider to keep any religious activities that it conducts with its own
                funds separate in time or place from the Government-funded program, and
                to ensure that beneficiary participation in such activities is
                voluntary. If, in a particular case, the environment in which a
                religious provider delivered a federally funded social service was so
                overwhelming as to actually infringe on a beneficiary's religious
                liberty, the Agency or its intermediary could be required by RFRA to
                make an appropriate accommodation, which might include referring the
                beneficiary elsewhere. As discussed more below, the Agencies believe
                from their experience that this circumstance is sufficiently rare that
                it does not warrant imposing a potentially burdensome, possibly
                stigmatizing, across-the-board rule on all religious providers. It is
                within the Agencies' legal and policy discretion to address any such
                concern as the case arises.
                 For at least three reasons, it is not clear that the notice-and-
                referral requirements furthered a compelling interest in providing
                services effectively to vulnerable beneficiaries. First, the notice-
                and-referral requirements addressed a problem that rarely arises.
                Second, the notice-and-referral requirements did not apply to many
                organizations. Third, with occasional exceptions for specific programs,
                Congress itself has not applied these requirements to the Agencies.
                 Under the prior rule, religious social service providers were
                permitted to fulfill their referral obligation by making referrals to
                non-federally funded providers, which the Government could not have
                ensured were providing the services in a manner as effective as the
                programs it was funding. And, as discussed above and in the paragraphs
                that follow, there is no indication that any individual beneficiary
                actually sought a referral. To be compelling, an interest must have a
                ``high degree of necessity,'' Brown v. Entm't Merchs. Ass'n, 564 U.S.
                786, 804 (2011), which means there must be ``an `actual problem' in
                need of solving, and the curtailment of [the right] must be actually
                necessary to the solution.'' Id. at 799 (citation omitted); Korte v.
                Sebelius, 735 F.3d 654, 685 (7th Cir. 2013) (applying this test to
                RFRA); see also Sherbert, 374 U.S. at 403 (the regulated conduct must
                ``pose[ ] some substantial threat to public safety, peace[,] or
                order''). The same is true with regard to the First Amendment, to the
                extent strict scrutiny applies, as discussed in Part II.F below.
                 Seven of the eight Agencies said in their 2020 NPRMs that they were
                not aware of any circumstance in which a beneficiary ``actually sought
                an alternative provider'' since the requirement went into effect in
                2016. See 85 FR at 2891 (DHS); id. at 2900 (USDA); id. at 2923 (DOJ);
                id. at 2931 (DOL); id. at 2940 (VA); id. at 2977 (HHS); id. at 3194
                (ED). All eight Agencies now confirm that they are not aware of any
                such referrals, based on their experiences while the notice-and-
                [[Page 82068]]
                referral requirements were in effect. The Agencies' employees who have
                administered and provided legal support to the relevant programs
                throughout this time period confirmed that they were not aware of any
                such referral requests. For example, VA's Supportive Services for
                Veteran Families program has not received a single request or concern
                from a beneficiary of any provider--faith-based or not--seeking an
                alternative provider. And, in VA's review of records, it found no
                record of a single report or referral indicating that any beneficiary
                requested a referral under the prior rule. Cf. 81 FR 19368 (discussing
                recordkeeping and reporting requirements). Similarly, while preparing
                this final rule, HUD confirmed that it was not aware of any faith-based
                organization that had reported a request for a referral.
                 The Agencies' experience is consistent with SAMHSA's. As the
                Agencies recognized when promulgating the 2016 final rule, that program
                requires all referrals to be reported. The Agencies said that HHS had
                received no reports of referrals in the SAMHSA programs, so ``the
                Agencies believe[d] that the number of requests for referrals [would]
                be minimal.'' 81 FR 19366. In its January 2020 NPRM, HHS reaffirmed
                that no referrals had been reported for the SAMHSA programs and that
                ``few if any referrals have been requested'' in the other programs to
                which the 2016 rule applied. 85 FR at 2984. HHS reaffirms that there
                have been no reported referral requests in the SAMHSA programs. As they
                did in 2016, the Agencies believe that the SAMHSA experience is
                relevant. It is a helpful data point because all referrals must be
                reported, and those regulations have been in place since 2003.
                 Furthermore, although the Agencies have said multiple times in the
                public record--in the 2016 final rule and the 2020 NPRMs--that
                referrals were rarely or never used, not one comment (among the more
                than 95,000 public comments received) cited or described an actual
                instance of a referral requested under the rule. In fact, the only
                comment on actual practice connected to the prior rule was from a
                national faith-based organization that said it had not experienced any
                such referral request. Another commenter referred to a practice of
                beneficiaries' calling like-minded organizations for referrals, but
                these referrals seem to have occurred outside the context of the
                referral requirement at issue here. There is no indication that the
                beneficiaries seeking these referrals had previously sought services
                from a faith-based provider receiving direct Federal financial
                assistance or that they had sought referrals from such providers. If
                anything, the comment demonstrated that unofficial or non-government-
                imposed processes were sufficient for beneficiaries to obtain
                referrals, without the need to impose the burden on faith-based
                organizations. As discussed in Part II.C, it also makes sense that
                beneficiaries who will not accept benefits from a faith-based
                organization would seek a referral from an organization that they do
                not find objectionable, rather than the one to which they objected.
                 For all of these reasons, the Agencies have a sufficient basis to
                conclude that referrals were rarely (if ever) sought under the notice-
                and-referral requirements. That conclusion diminishes the Government's
                interest in these requirements because it shows that, in practice,
                these requirements have turned out to be merely symbolic, which would
                mean they ``cannot suffice to abrogate'' religious liberty. Smith, 494
                U.S. at 911 (Blackmun, J., dissenting) (applying the standard that was
                restored by RFRA).
                 The Agencies disagree that this conclusion is in tension with their
                finding that complying with the notice-and-referral requirements could
                impose a substantial burden. To be clear, the Agencies are not saying
                that the notice-and-referral requirements always and in every case
                posed a substantial burden on the religious exercise of faith-based
                organizations or categorically violated RFRA. As explained in Part
                II.C.3.b, conditioning a benefit on a faith-based organization's
                willingness to give a notice or a referral could exert substantial
                pressure to forgo complicity-based beliefs. That is true even if no
                beneficiary ultimately seeks a referral, but the Agencies recognize
                that not all faith-based organizations necessarily share such beliefs
                or face that difficult choice. The Agencies nevertheless do not see the
                need to create even the prospect of such a choice, and force potential
                applicants to rely on obtaining case-specific exemptions under RFRA,
                given that the need for imposing the notice-and-referral requirements
                is slight. Some otherwise-qualified organizations might simply decline
                to apply for a grant, for fear that the Government would not grant them
                the exemption when the need arises. The Agencies wish to avoid that
                chilling effect.
                 Additionally, secular organizations were exempt from the notice-
                and-referral requirements despite similar risks of harm to the
                allegedly compelling interests in protecting beneficiaries from
                discrimination and receiving a social service in an environment that
                made them uncomfortable. The notice-and-referral requirements also did
                not apply to any USAID programs, or to USDA's school lunch program,
                even though that program otherwise met the definition of ``direct
                Federal financial assistance.'' 81 FR at 19381; see also id. at 19413-
                14 (sections 16.4(a), (g), (h)). The notice requirement did not apply
                to any faith-based organizations receiving indirect Federal financial
                assistance, nor did the referral requirement, except for organizations
                receiving indirect aid from VA or HHS. As discussed in Part II.C, those
                providers posed the same supposed risks of harm to beneficiaries'
                religious liberty protections and receipt of services. See Espinoza,
                140 S. Ct. at 2261 (proffered interest in promoting public schools was
                undermined because secular private schools would have the same impact,
                yet could receive funding). A law does not serve a compelling interest
                when it exempts conduct that would serve the ``supposedly vital
                interest.'' Lukumi, 508 U.S. at 547 (citation omitted); Gonzales, 546
                U.S. at 433 (citation omitted).
                 Moreover, Congress itself did not see fit to impose notice-and-
                referral requirements in most of the social service programs covered by
                this rule, whereas it did in the Charitable Choice statutes that apply
                to the SAMHSA and TANF programs. See 42 U.S.C. 290kk-1(f)(1); id.
                604a(e); id. 300x-65(e)(1). As the 2016 final rule recognized, the
                applicable Charitable Choice statutes ``govern[ ]'' and ``take
                precedence over these regulations,'' and ``the Government will continue
                to bear the full burden of making referrals as specified in those
                statutes.'' 81 FR at 19366. That remains true today and will continue
                to remain true after this final rule takes effect. Congress's decision
                to impose the referral requirement only in the Charitable Choice
                statutes undercuts the interest in imposing the referral requirements
                on faith-based organizations in the programs governed by this final
                rule. ``[I]t was Congress, not the Departments, that declined to
                expressly require'' notice and referral here and ``that has failed to
                provide the protection'' that the commenters seek. Little Sisters, 140
                S. Ct. at 2382.
                 In short, the Agencies conclude that they have insufficient
                evidence to determine that imposing the notice-and-referral
                requirements on all religious social service providers would in all
                cases serve a compelling government interest.
                 Changes: None.
                [[Page 82069]]
                 Affected Regulations: None.
                d. Least Restrictive Means and Appropriate Remedy
                 Summary of Comments: Some commenters argued that striking the
                notice-and-referral requirements was the appropriate remedy for the
                tension with the Free Exercise Clause and RFRA, including because there
                was little indication that these requirements would be necessary for
                either faith-based or secular providers. For example, an organization
                representing over 720 schools commented that barriers to participation,
                like referral requirements, should be removed for all providers. That
                commenter added that removing this requirement was ``crucial'' to
                protect religious freedom and ensure that religious organizations could
                continue working to improve society.
                 Some commenters argued, however, that the notice-and-referral
                requirements should not be altered because they were narrowly tailored
                to the interests discussed in Part II.C.3.c above. They said that the
                requirements were narrowly tailored because they imposed minimal costs
                and required only ``reasonable efforts'' to find another provider for a
                beneficiary who requested one.
                 Some commenters argued generally that the Agencies should provide
                substitute mechanisms to ensure that beneficiaries are aware of their
                rights and can receive services from a nonreligious provider.
                Commenters also argued that the Agencies should provide evidence about
                what alternative, reliable mechanisms exist. Several commenters argued
                that the Agencies were instead required by RFRA to conduct a fact-
                specific inquiry on a case-by-case basis and not to impose broader
                exemptions or changes of policy. These commenters relied on California,
                941 F.3d at 427-28; Real Alternatives, Inc. v. Sec'y of Health & Human
                Servs., 867 F.3d 338, 358 & n.23 (3d Cir. 2017); and EEOC v. R.G. &
                G.R. Harris Funeral Homes, Inc., 884 F.3d 560, 588 (6th Cir. 2018),
                aff'd on other grounds, Bostock v. Clayton Cty., 140 S. Ct. 1731
                (2020).
                 Commenters suggested four potential regulatory alternatives that
                they believed would be less restrictive than removing the requirements
                altogether. First, several commenters argued that it would be less
                restrictive for the Agencies to expand these notice-and-referral
                requirements to secular providers. Some argued that this
                ``modification'' would achieve equal treatment of religious and secular
                organizations, including to remove any stigma, without eliminating the
                beneficiary protections. Some commenters noted that HHS's NPRM said
                this was the ``clearest alternative approach.'' 85 FR at 2984. These
                commenters stated that notice-and-referral requirements could properly
                be developed and tailored for the parallel issues that beneficiaries
                would likely encounter with secular providers. Some of these commenters
                argued that secular organizations already receiving Federal funding
                could easily absorb the de minimis burden of such notice-and-referral
                requirements. Another commenter, however, said that expanding these
                requirements to secular organizations would be ``on its face . . .
                ridiculous'' because these measures were meant to prevent religious
                coercion and, by definition, such organizations would be incapable of
                religious coercion.
                 Second, multiple commenters suggested that it would be less
                restrictive for the Government or an intermediary to provide the notice
                and make the referrals, which would remove the burden from faith-based
                organizations while preserving the benefit for beneficiaries.
                Commenters added that this would be consistent with the Charitable
                Choice statutes and how such provisions operated before the 2016 rule.
                Multiple commenters contended that Government control would improve
                administration and safeguards of stakeholders' rights and that the
                Agencies would have superior knowledge of which other providers in the
                area were also being funded and would be able to provide the services
                being sought. Commenters also contended that, because the Agencies
                asserted that few referrals had been requested to date, there would be
                minimal burden on the Government to respond to such referrals.
                 Third, multiple commenters suggested combining the first two
                alternatives by having the Government provide the notice and referral
                for all providers. These commenters argued that this alternative would
                eliminate the alleged status-based discrimination while expanding the
                supposed benefits of the rule.
                 Fourth, an advocacy organization suggested that the Agencies could
                also consider allowing individual requests for exemptions to the
                notice-and-referral requirements.
                 Response: The Agencies agree with the commenters who said that the
                Agencies can and should remedy the tension with Trinity Lutheran and
                RFRA by striking the notice-and-referral requirements. If there is no
                compelling interest, then there is also no need to analyze the least
                restrictive means to achieve that interest.\46\ Even assuming the
                notice-and-referral requirements served a compelling government
                interest, it is not clear that any of the alternatives proposed by
                commenters would qualify as the least restrictive means of furthering
                any of the interests discussed above. ``An infringement of First
                Amendment rights,'' assuming there is one, ``cannot be justified by a
                State's alternative view that the infringement advances religious
                liberty.'' Espinoza, 140 S. Ct. at 2260. The Supreme Court has held
                that the least restrictive means is an ``exceptionally demanding''
                standard. Hobby Lobby, 573 U.S. at 728. To meet this standard, an
                agency must ``sho[w] that it lacks other means of achieving its desired
                goal without imposing a substantial burden on the exercise of
                religion.'' Id. But an alternative is less restrictive only when it
                would both further the compelling interest as effectively as the
                existing requirement and alleviate the burden that triggered strict
                scrutiny.\47\
                ---------------------------------------------------------------------------
                 \46\ See, e.g., Gonzales, 546 U.S. at 429 (``[T]he Government
                failed on the first prong of the compelling interest test, and did
                not reach the least restrictive means prong.''); see also World
                Vision, 31 Op. O.L.C. at 184 (not addressing least restrictive means
                because compelling interest was not satisfied).
                 \47\ See, e.g., Hobby Lobby, 573 U.S. at 731 (holding the
                accommodation was a less restrictive means for those plaintiffs
                because ``it does not impinge on the plaintiffs' religious belief
                that providing insurance coverage for the contraceptives at issue
                here violates their religion, and it serves HHS's stated interests
                equally well'').
                ---------------------------------------------------------------------------
                 First, it is unclear that extending the notice-and-referral
                requirements to secular providers would be a less restrictive means.
                The Agencies agree that this may be the clearest way to achieve equal
                treatment under Trinity Lutheran and that costs to individual secular
                providers would likely be minimal, as they are for individual faith-
                based providers. But it would not alleviate the tension with RFRA. See,
                e.g., Hobby Lobby, 573 U.S. at 728 (a less restrictive means achieves
                the compelling interest ``without imposing a substantial burden'').
                Applying these requirements to all providers would extend any potential
                substantial burden to faith-based organizations that were exempt from
                these requirements under the 2016 final rule. Additionally, as
                explained in ED's NPRM, the Agencies do not want to affect
                beneficiaries' receipt of secular services when no religious
                alternative is available and do not want to impose burdens on any
                secular organizations that oppose referrals to religious alternatives.
                85 FR 3194. Also, beneficiaries have access to public information
                regarding potential
                [[Page 82070]]
                secular or religious alternatives. Id.; see also Part II.C.2.a
                (describing and citing examples of public information).
                 Second, it is not clear that it is a less restrictive means for the
                Agencies or their intermediaries to assume responsibility to provide
                the notices and referrals. The Agencies agree that this might alleviate
                the potential substantial burden under RFRA--assuming the faith-based
                provider was not involved in a way that raised complicity-based
                objections--while preserving whatever benefit inures to beneficiaries.
                But it would retain the tension with Trinity Lutheran because these
                requirements would continue applying solely to faith-based
                organizations based on their religious character. Additionally,
                requiring Government entities to handle such referrals raises
                additional problems, such as assessing the religious character of the
                alternatives in order to make appropriate referrals. It is also unclear
                that the Agencies would have uniquely helpful information to make
                referrals. Many of the Agencies' programs have thousands of
                participants that are funded by intermediaries. The Agencies will not
                necessarily know what providers are funded in any given area. For other
                programs, the Agencies or other stakeholders have helpful publicly
                available resources that list the alternative providers and are easily
                accessible to beneficiaries, as discussed in Part II.C.2.a above.
                Although few or no referrals have been requested under the prior rule,
                the Agencies would still bear burdens to implement across all of these
                programs notice and referral systems that would be accessible and
                available to all in compliance with all other applicable Federal laws.
                 Third, the Agencies recognize that the combined alternative
                proposal--extending these notice-and-referral requirements to secular
                organizations and requiring the Government or its intermediary to
                assume the responsibility to carry them out--could alleviate the
                tension with both Trinity Lutheran and RFRA. But it would have to avoid
                involving faith-based organizations in ways that would elicit
                complicity-based objections, which it is not clear can be accomplished.
                Even if that could be accomplished, the Agencies would still exercise
                their discretion not to impose that combined alternative proposal for
                all of the other reasons discussed regarding the individual proposals.
                 Fourth, the Agencies do not believe it is a less restrictive means
                to retain a rarely invoked rule and require objecting faith-based
                organizations instead to make individual requests for exemptions under
                RFRA. Such a regime still shifts the burden to the organization to
                demonstrate that the possibility of having to make a referral would
                affect its religious exercise. The remedy of requiring all faith-based
                organizations to follow the rule and request individualized exemptions
                when necessary would not be narrowly tailored to serve a government
                interest that is speculative at best.
                 In any event, the Agencies elect to exercise their discretion to
                remove the notice-and-referral requirements rather than implement these
                alternatives, for all of the reasons discussed throughout this section.
                The Agencies have discretion to determine how to alleviate the tension
                with the Free Exercise Clause. Removing these requirements is well
                within the Agencies' discretion of ``room for play in the joints'' to
                decide how to fashion appropriate religious accommodations and
                exemptions. Walz v. Tax Comm'n of City of New York, 397 U.S. 664, 669
                (1970); Texas Monthly, Inc. v. Bullock, 489 U.S. 1, 18 n.8 (1989)
                (Establishment Clause allows regulatory exemptions beyond those
                required by Free Exercise Clause). This is especially so given
                uncertainty about whether the Government even has a compelling interest
                in applying the notice-and-referral requirements. And it is also within
                the Agencies' discretion to avoid serious constitutional issues and the
                burdens of related litigation. Cf. DeBartolo, 485 U.S. at 575.
                 The Agencies have similar discretion under RFRA and disagree with
                the comments that RFRA does not allow them to change a regulation to
                eliminate a requirement that potentially burdens the exercise of
                religion. See Little Sisters, 140 S. Ct. at 2383-84. Instead, the
                Agencies believe that they have discretion to determine how to avoid
                potential or actual RFRA violations, including discretion to determine
                whether to impose a categorical rule or address concerns on a case-by-
                case basis. RFRA directs the ``[g]overnment'' to comply with its terms,
                42 U.S.C. 2000bb-1(a) to (b), with regard to ``the implementation'' of
                ``all Federal law.'' 42 U.S.C. 2000bb-2(a). When an Agency determines
                that its mode of implementing Federal law might in certain cases burden
                an organization's exercise of religion, the Agency has discretion to
                modify its implementation to avoid any violations of RFRA. That is
                consistent with the executive branch's responsibility to ``take
                [c]are'' that the [l]aws be faithfully executed.'' U.S. Const. art. II,
                sec. 3.
                 That is also consistent with the most recent Supreme Court
                decisions on these issues. In Little Sisters, the Court held that
                agencies must consider sincere complicity-based objections when
                promulgating rules and that failure to do so can make the rule
                arbitrary and capricious. 140 S. Ct. at 2383-84. Several Justices
                separately ``appear[ed] to agree'' that a regulatory agency has
                ``authority under RFRA to `cure' any RFRA violations caused by its
                regulations.'' Id. at 2382 n.11.\48\ Indeed, Justice Ginsburg
                recognized that ``[n]o party argues that agencies can act to cure
                violations of RFRA only after a court has found a RFRA violation, and
                this opinion does not adopt any such view.'' Id. at 2407 n.17
                (Ginsburg, J., dissenting).
                ---------------------------------------------------------------------------
                 \48\ See also id. at 2395 (Alito, J., concurring) (``Once it is
                recognized that the prior accommodation violated RFRA in some of its
                applications, it was incumbent on the Departments to eliminate those
                violations, and they had discretion in crafting what they regarded
                as the best solution.''); id. at 2400 (Kagan, J., concurring in the
                judgment) (those agencies ``have wide latitude over exemptions, so
                long as they satisfy the requirements of reasoned decisionmaking'');
                id. at 2407 (Ginsburg, J., dissenting) (``The parties here agree
                that federal agencies may craft accommodations and exemptions to
                cure violations of RFRA.'' (citations and footnote omitted)).
                ---------------------------------------------------------------------------
                 RFRA would be unworkable if it did not permit accommodations beyond
                what it affirmatively required. Under such a rule, the Agencies would
                have to guess the exact accommodation that courts would approve. A
                little less accommodation than necessary would violate RFRA. A little
                more accommodation than necessary would exceed the Agency's authority.
                That cannot be the standard, especially when the Government has
                traditionally been granted ``room for play in the joints'' to decide
                the scope of religious accommodations under both the First Amendment
                and RFRA. Walz, 397 U.S. at 669.\49\ That would also be inconsistent
                with the Supreme Court's recent reaffirmation that ``RFRA `provide[s]
                very broad protection for religious liberty,' '' Little Sisters, 140 S.
                Ct. at 2483 (quoting Hobby Lobby, 573 U.S. at 693 (alteration in
                original)), and with the definition of ``religious exercise'' in RFRA
                and RLUIPA that Congress mandated ``be construed in favor of a broad
                protection of religious exercise, to the maximum extent permitted by
                the terms of this chapter and the Constitution.'' 42 U.S.C. 2000cc-3(g)
                (RLUIPA); id. 2000bb-2(4) (RFRA); Hobby Lobby, 573 U.S. at 696 & n.5.
                RFRA empowers courts to provide relief when the Government has exceeded
                RFRA's bounds. 42 U.S.C. 2000bb-1(c). But nothing in RFRA requires the
                Government to implement
                [[Page 82071]]
                or maintain regulations that go right up to the line of what courts
                would find acceptable.
                ---------------------------------------------------------------------------
                 \49\ See also World Vision, 31 Op. O.LC. at 168; Texas Monthly,
                489 U.S. at 18 n.8 (Establishment Clause allows regulatory
                exemptions beyond those required by the Free Exercise Clause).
                ---------------------------------------------------------------------------
                 Moreover, RFRA and the Agencies' organic statutes do not
                ``prescribe the remedy by which the government must eliminate'' a
                substantial burden. 83 FR 57545. The Agencies' choice to remove the
                notice-and-referral requirements is reasonable given the legal
                uncertainty as to whether those requirements might in some cases
                violate RFRA.\50\ When it has found that a regulation violated RFRA,
                the Supreme Court has let the regulatory agency determine the correct
                remedy.\51\ The same should be true for potential violations. As a
                result, the Agencies have discretion to determine the appropriate
                accommodation. As Justice Alito recently explained, RFRA ``does not
                require . . . that an accommodation of religious belief be narrowly
                tailored to further a compelling interest. . . . Nothing in RFRA
                requires that a violation be remedied by the narrowest permissible
                corrective.'' Little Sisters, 140 S. Ct. at 2396 (Alito, J.,
                concurring).
                ---------------------------------------------------------------------------
                 \50\ Cf. Ricci v. DeStefano, 557 U.S. 557, 585 (2009) (holding
                an employer need only have a strong basis to believe that an
                employment practice violates Title VII's disparate impact ban in
                order to take certain types of remedial action that would otherwise
                violate Title VII's disparate-treatment ban).
                 \51\ See, e.g., Hobby Lobby, 573 U.S. at 726, 731, 736; 79 FR at
                51118 (2014) (proposed modification in light of Hobby Lobby); 80 FR
                41324 (final rule explaining that ``[t]he Departments believe that
                the definition adopted in these regulations complies with and goes
                beyond what is required by RFRA and Hobby Lobby'').
                ---------------------------------------------------------------------------
                 Commenters rely on contrary cases from the United States Courts of
                Appeals that preceded Little Sisters. But those cases cannot override
                the rule in Little Sisters that the Agencies should consider potential
                complicity-based objections. Indeed, one of those cases, the Ninth
                Circuit's California v. Trump decision, was expressly vacated and
                remanded in light of Little Sisters. See 140 S. Ct. 2367. The Third
                Circuit's Real Alternatives decision did not address the scope of any
                agency's regulatory discretion under RFRA, 867 F.3d 338, 358 & n.23,
                and its reasoning was essential to Pennsylvania v. Trump, 930 F.3dat
                573 & n.30, which Little Sisters reversed and remanded. Accordingly, in
                light of Little Sisters, the Agencies do not believe that those cases
                remain good law.
                 Additionally, the Agencies question the continued vitality of the
                Sixth Circuit's decision regarding RFRA in Harris Funeral Homes. Most
                significantly, the substantial-burden reasoning in Harris Funeral
                Homes, which was relied on by some commenters, was based on the
                attenuation theory from HHS Mandate cases, including Michigan Catholic
                Conference. Harris Funeral Homes, 884 F.3d at 589-90, aff'd on other
                grounds, Bostock v. Clayton Cnty., 140 S. Ct. 1731 (2020). As discussed
                in Part II.C.3.b, the Supreme Court has expressly rejected that theory
                as contrary to RFRA. Little Sisters, 140 S. Ct. at 2383; Hobby Lobby,
                573 U.S. at 723-25; see also Little Sisters, 140 S. Ct. at 2389-91
                (Alito, J., concurring). Removing the notice-and-referral requirements
                is justified more directly by Little Sisters, Hobby Lobby, and the
                other Supreme Court cases on which they rely. See also Part II.E
                (further discussing Harris Funeral Homes).
                 In sum, the Agencies exercise their discretion to remove notice-
                and-referral requirements because it is their position that doing so is
                the appropriate administrative response to the Free Exercise Clause and
                RFRA issues that those requirements created. In the Agencies' view,
                eliminating these requirements is a more effective means of alleviating
                the tension with the First Amendment and RFRA than the alternatives
                proposed by commenters. This view is informed by the Agencies'
                experience that they are not aware of any actual referral requests
                under the prior rule. Also, eliminating the notice-and-referral
                requirements avoids the potential for litigation that could burden and
                delay the issuance of grants to eligible organizations. Moreover, the
                Agencies are acting within their discretion because, as discussed in
                Part II.C.1, ``it was Congress, not the Departments, that declined to
                expressly require'' notice and referral in the vast majority of program
                statutes that govern the Agencies here, and ``that has failed to
                provide the protection'' for beneficiary objections to a provider's
                religious exercise that the commenters seek. Little Sisters, 140 S. Ct.
                at 2382.
                 Finally, the Agencies may provide information voluntarily to
                beneficiaries as they deem appropriate within existing frameworks. For
                example, DOL and VA noted in their NPRMs that they ``could supply
                information to beneficiaries seeking an alternate provider'' when they
                ``make[ ] publicly available information about grant recipients that
                provide benefits under its programs.'' 85 FR at 2931 (DOL), 2940 (VA).
                The other Agencies agree that this is a possibility for some of the
                programs that they fund. Under this final rule, the provision of such
                information remains, as it has always been, an option but not a
                requirement.
                 Changes: None.
                 Affected Regulations: None.
                e. Third-Party Harms
                 Summary of Comments: Several commenters argued that the Free
                Exercise Clause and RFRA cannot justify removing the notice-and-
                referral requirements because of the potential impacts on
                beneficiaries. These commenters argued that this change fails to
                protect beneficiaries' interests based on a number of cases--Bd. of Ed.
                of Kiryas Joel Village Sch. Dist. v. Grumet, 512 U.S. 687 (1994);
                Estate of Thornton v. Caldor, 472 U.S. 703 (1985); Texas Monthly; Hobby
                Lobby; and Cutter v. Wilkinson, 544 U.S. 709 (2005)--which held that
                religious exemptions that can harm third parties implicate the
                Establishment Clause. Some of these commenters argued that Hobby Lobby
                assumed no burden on third parties and that any third-party harm
                precludes a Government accommodation under the Free Exercise Clause or
                RFRA. The Agencies incorporate the summary of such comments from Part
                II.E.
                 These commenters argued that beneficiaries would be subject to the
                third-party harms discussed in the comments summarized in Part II.C.2.
                For example, some said that beneficiaries would not be able to make
                informed decisions without knowledge of the religious character of the
                service provider. Some claimed that removing the notice-and-referral
                requirements would impose ``significant'' hardships on beneficiaries--
                specifically, the costs of searching for alternative providers,
                including ``potentially missing work, finding childcare, paying for
                transportation, and visiting various other organizations.'' Commenters
                also expressed concern that these burdens may be especially harmful to
                the beneficiaries of programs designed to help those with limited
                resources and facing poverty or other deprivations.
                 Finally, one commenter argued that this change in the final rule
                would treat faith-based and secular organizations equally, which,
                according to this commenter, violates the Establishment Clause.
                 Response: The Agencies disagree that removing the notice-and-
                referral requirements will unlawfully or inappropriately burden third
                parties.
                 Third-party burdens are part of the Establishment Clause analysis
                but do not preclude accommodations or removal of beneficiary
                protections. This is true even when the Free Exercise Clause does not
                require the accommodation or exemption.\52\ Under
                [[Page 82072]]
                controlling Supreme Court precedent, the Establishment Clause allows
                accommodations that remove a burden of government rules from religious
                organizations, reduce the chilling effect on religious conduct, or
                reduce government entanglement. See Corp. of Presiding Bishop of the
                Church of Jesus Christ of Latter-day Saints v. Amos, 483 U.S. 327, 334-
                39 (1987). Any third-party burdens that might result from such
                accommodations are attributable to the organization that benefits from
                the accommodation, not to the Government, and, as a result, do not
                violate the Establishment Clause. Id. at 337 n.15. In the Sherbert line
                of Free Exercise Clause cases that later became the basis of RFRA,
                dissents and concurrences routinely pointed to such burdens on third
                parties but did not persuade the majorities of any Establishment Clause
                violation.\53\
                ---------------------------------------------------------------------------
                 \52\ See, e.g., Texas Monthly, 489 U.S. at 18 n.8; see also
                Cutter, 544 U.S. at 713 (``[T]here is room for play in the joints
                between the Free Exercise and Establishment Clauses, allowing the
                government to accommodate religion beyond free exercise
                requirements, without offense to the Establishment Clause.''
                (internal quotation omitted)).
                 \53\ See, e.g., Thomas, 450 U.S. at 723 n.1 (Rehnquist, J.,
                dissenting) (citing several burdens on the system and other
                beneficiaries, including that ``[w]e could surely expect the State's
                limited funds allotted for unemployment insurance to be quickly
                depleted''); Yoder, 406 U.S. at 240 (White, J., concurring)
                (outlining the State's legitimate interest in educating Amish
                children, especially those who leave their community, but finding
                the evidence of harm insufficient); id. at 245 (Douglas, J.,
                dissenting) (arguing that the decision ``imperiled'' the ``future''
                of the Amish children, not their parents).
                ---------------------------------------------------------------------------
                 The Supreme Court has applied this principle to allow
                accommodations that litigants claimed caused significant third-party
                harms. For example, the Supreme Court upheld the Title VII exemption
                for religious employers--discussed in Part II.H--despite the alleged
                significant harms of expressly permitting discrimination against
                employees on the basis of religion. See Texas Monthly, 489 U.S. at 18
                n.8 (citing Amos, 483 U.S. at 327).\54\ This is consistent with Hobby
                Lobby, which expressly held that a burden lawfully may be removed from
                a religious organization even if it allows such a religious objector to
                withhold a benefit from third parties. Ultimately, government action
                that removes such a benefit merely leaves the third party in the same
                position in which it would have been had the Government not regulated
                the religious objector in the first place. Otherwise, any accommodation
                could be framed as burdening a third party. That would ``render[ ] RFRA
                meaningless.'' Hobby Lobby, 573 U.S. at 729 n.37. ``[F]or example, the
                Government could decide that all supermarkets must sell alcohol for the
                convenience of customers (and thereby exclude Muslims with religious
                objections from owning supermarkets), or it could decide that all
                restaurants must remain open on Saturdays to give employees an
                opportunity to earn tips (and thereby exclude Jews with religious
                objections from owning restaurants).'' Id.; see also Attorney General's
                Memorandum, Principle 15, 82 FR at 49670.
                ---------------------------------------------------------------------------
                 \54\ Hobby Lobby, 573 U.S. at 729 n.37 (``Nothing in the text of
                RFRA or its basic purposes supports giving the Government an
                entirely free hand to impose burdens on religious exercise so long
                as those burdens confer a benefit on other individuals.'').
                ---------------------------------------------------------------------------
                 The Agencies are acting consistently with these principles here.
                Removing the notice-and-referral requirements will not impose greater
                burdens on third parties than the Title VII exemption that was upheld
                in Amos.\55\ A beneficiary who does not receive notice or referral from
                a faith-based direct aid recipient ``is not the victim of a burden
                imposed by the rule''; rather, that person ``is simply not the
                beneficiary of something that federal law does not provide.'' Little
                Sisters, 140 S. Ct. at 2396 (Alito, J., concurring). The Agencies are
                merely returning to a status quo that existed until 2016, that remains
                for USAID funding recipients, and that has always existed for most
                Agencies' indirect funding recipients. The Agencies have reasonably
                concluded that removing the notice-and-referral requirements will not
                unlawfully burden third parties.
                ---------------------------------------------------------------------------
                 \55\ See Amos, 483 U.S. at 337 n.15 (``Undoubtedly [the
                employee's] freedom of choice in religious matters was impinged
                upon'' by the church gymnasium's exemption from the religious
                nondiscrimination requirement in Title VII'').
                ---------------------------------------------------------------------------
                 The other cases cited by commenters do not warrant a different
                result. In those cases, the Supreme Court found Establishment Clause
                violations because the law at issue both singled out a specific
                religious practice or sect for special treatment and imposed
                obligations without considering the impacts on third parties.\56\ But
                the Agencies have assessed the burdens on third parties here, and the
                Establishment Clause permits the Government to alleviate government-
                imposed burdens on religious exercise through accommodations available
                to all religions equally.\57\ As in Amos, this final rule alleviates
                the Government-imposed burdens of the notice-and-referral requirements
                and applies equally to all religious organizations. Indeed, removal of
                the notice-and-referral requirements does not go as far as Amos did
                when it provided an exemption to religious organizations from an
                otherwise generally applicable law. Rather, the change in this final
                rule ensures equal treatment of faith-based and secular organizations,
                and it does not obligate or enable any grantee under the rule to impose
                burdens on beneficiaries that did not exist before with respect to the
                social service program in question.
                ---------------------------------------------------------------------------
                 \56\ Kiryas Joel, 512 U.S. at 706-07; Estate of Thornton, 472
                U.S. at 709-10; see also Cutter, 544 U.S. at 722 (explaining that
                the Court in Estate of Thornton ``struck down'' the statute at issue
                ``because it `unyieldingly weighted' the interests of Sabbatarians
                `over all other interests' '' and required employers to privilege
                employee requests for Sabbath accommodations (alterations omitted)).
                 \57\ See, e.g., Amos, 483 U.S. at 334-39; id. at 337 n.15
                (distinguishing Estate of Thornton); cf. Hobbie v. Unemployment
                Appeals Comm'n of Fla., 480 U.S.136, 145 n.11 (1987) (distinguishing
                Estate of Thornton because the provision of unemployment benefits to
                people fired for any religious reason ``does not single out a
                particular class of such persons for favorable treatment and thereby
                have the effect of implicitly endorsing a particular religion'');
                see also Cutter, 544 U.S. at 720, 722, 724 (upholding RLUIPA under
                the Establishment Clause despite alleged burdens).
                ---------------------------------------------------------------------------
                 Finally, the Agencies disagree that treating faith-based and
                secular organizations on the same terms could violate the Establishment
                Clause. To the contrary, the Supreme Court has ``repeatedly held that
                the Establishment Clause is not offended when religious observers and
                organizations benefit from neutral government programs.'' Espinoza, 140
                S. Ct. at 2254 (citing Locke, 540 U.S. at 719, and Rosenberger, 515
                U.S. at 839). Treating faith-based and secular organizations equally
                under this rule does not violate the Establishment Clause.
                 Changes: None.
                 Affected Regulations: None.
                D. Indirect Federal Financial Assistance
                1. Definition of ``Indirect Federal Financial Assistance''
                 Existing regulations included in their definition of ``indirect
                Federal financial assistance'' a requirement that beneficiaries have at
                least one adequate secular option for use of the Federal financial
                assistance. The notices of proposed rulemaking proposed to amend those
                regulations to eliminate this secular alternative requirement.
                a. Consistency With Zelman v. Simmons-Harris
                 Summary of Comments: Several commenters contended that eliminating
                the secular alternative requirement would be inconsistent with the
                Supreme Court's decision in Zelman v. Simmons-Harris, 536 U.S. 639
                (2002). These commenters argued that Zelman and its predecessor cases
                interpreted the Establishment Clause to require that voucher programs
                include a secular option. Without secular options, these
                [[Page 82073]]
                commenters argued, beneficiaries cannot make a genuine and independent
                private choice of a religious provider. According to these commenters,
                that interpretation did not change in subsequent cases. Other
                commenters contended that certain factors emphasized in the Zelman
                decision do not make sense unless there exists at least one adequate
                secular option. These commenters contended that, for the programs at
                issue here, the proposed change will not guarantee that secular options
                exist, unlike in Zelman where public school options were mandated.
                 Some commenters claimed that eliminating the alternative provider
                requirement would undercut Zelman. These commenters also argued that--
                combined with elimination of the written notice requirement, which,
                according to these commenters, would allow religious service providers
                to ``hide their religious character''--such a change would render
                beneficiaries unable to ``engage in `true private choice' when the very
                nature of that choice is hidden from them.''
                 Some of these commenters characterized the proposed change as
                contrary to Zelman's requirement that indirect aid be neutral toward
                religion. These commenters claimed that the proposed change would
                effectively design programs in such a way that only religious providers
                are available as options, and thus it would be the Government, not the
                beneficiary, that is determining that the government aid reaches
                inherently religious programs.
                 Other commenters questioned Zelman itself. Some commenters
                contended that the Zelman decision was not unanimous and that it
                conflicted with earlier Supreme Court precedent. Some characterized
                Zelman as an ``already questionable rule.''
                 Other commenters, however, opined that eliminating the secular
                alternative requirement would align with Zelman. Some of these
                commenters observed that Zelman upheld the tuition-assistance program
                that it reviewed because the program conferred assistance on a broad
                class of individuals without reference to religion, and the Court
                rejected an argument that the program was unconstitutional simply
                because religiously affiliated schools received a majority of the
                vouchers. These commenters further argued that, under Zelman, the
                constitutionality of an indirect-aid program cannot turn on whether a
                secular provider chooses to establish a location within the geographic
                area of religious providers.
                 Response: The Agencies agree with commenters who observed that the
                proposed elimination of the secular alternative requirement would be
                consistent with Supreme Court precedent, and the Agencies disagree with
                commenters who argued otherwise.
                 In Zelman, the Supreme Court rejected an Establishment Clause
                challenge to a tuition-assistance program in which a large majority of
                the participating schools were religious, and nearly all of the
                beneficiaries chose to expend the aid on tuition at religious schools.
                The Court observed that ``[a]ny private school, whether religious or
                nonreligious,'' could participate in the program provided that it met
                the program's religion-neutral criteria, 536 U.S. at 645, and it was
                undisputed that the program ``was enacted for the valid secular purpose
                of providing educational assistance to poor children in a demonstrably
                failing public school system,'' id. at 649. The Court then summarized
                its decisions as having held that ``where a government aid program is
                neutral with respect to religion, and provides assistance directly to a
                broad class of citizens who, in turn, direct government aid to
                religious [providers] wholly as a result of their own genuine and
                independent private choice, the program is not readily subject to
                challenge under the Establishment Clause.'' Id. at 652.
                 The Court upheld the tuition-assistance program at issue in Zelman
                because it was ``neutral in all respects toward religion''; it
                ``confer[red] educational assistance directly to a broad class of
                individuals defined without reference to religion'' (i.e., parents of
                schoolchildren); it ``permit[ted] the participation of all schools
                within the district, religious or nonreligious''; and the Government
                did nothing to ``skew the program toward religious schools'' because
                the aid was ``allocated on the basis of neutral, secular criteria that
                neither favor nor disfavor religion'' and was ``made available to both
                religious and secular beneficiaries on a nondiscriminatory basis.'' Id.
                at 653-54 (emphasis in original, internal quotation marks and
                alteration omitted). The Supreme Court further reasoned that ``[a]ny
                objective observer familiar with the full history and context of the .
                . . program would reasonably view it as one aspect of a broader
                undertaking to assist poor children in failed schools, not as an
                endorsement of religious schooling in general.'' Id. at 655.
                 The indirect-aid programs covered by the modified definition in
                this rulemaking will share these characteristics. They will be neutral
                in all respects toward religion. They will allow organizations--both
                faith-based and secular--to participate as service providers, so long
                as they meet the programs' religion-neutral criteria. And they will
                make aid available on the basis of secular, nondiscriminatory criteria
                to religious and non-religious beneficiaries alike. Thus, the statutory
                programs that meet the definition of ``indirect Federal financial
                assistance'' as modified by this rulemaking will do nothing to skew the
                programs toward religious providers or services toward religious
                beneficiaries. To the extent the endorsement test still applies as it
                did in Zelman, any reasonable observer familiar with such programs
                would reasonably view them as efforts to provide assistance to the
                program's beneficiaries, rather than as endorsements of religion. In
                sum, the terms of the modified definition are consistent with, and do
                not move these programs out of compliance with, Zelman.
                 Although the Zelman Court did note the availability of secular
                schools in the program that it reviewed, id. at 655, it did not say
                that secular options must be available in a given geographic area in
                order for an indirect-aid program to satisfy the Establishment Clause.
                Indeed, the Court specifically declined to rest its holding on the
                geographically varying distribution of religious and secular schools.
                As the Court explained, the distribution of religious and non-religious
                schools ``did not arise as a result of the program,'' and resting its
                holding on that distribution ``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 656-57. ``The constitutionality
                of a neutral . . . aid program simply does not turn on whether and why,
                in a particular area, at a particular time, most private [providers]
                are run by religious organizations, or most recipients choose to use
                the aid at a religious [provider].'' Id. at 658. Because the secular
                alternative requirement made the definition of ``indirect Federal
                financial assistance'' hinge on the geographically varying availability
                of secular providers, it went beyond what the Establishment Clause
                requires and actually created the result that the Zelman Court deemed
                ``absurd.''
                 The Agencies also disagree with commenters who contended that, in a
                geographic area lacking a secular provider, a choice to expend aid on a
                faith-based provider cannot be a genuine and independent choice of
                private individuals under Zelman. As the Zelman Court summarized, the
                mechanism by which indirect aid reaches religious programs--``numerous
                [[Page 82074]]
                private choices, rather than the single choice of a government,'' id.
                at 652-53 (internal quotation marks omitted)--drives the Establishment
                Clause analysis. Under this final rule, private choices will continue
                to be the mechanism by which aid reaches religious programs. The
                programs covered by the modified definition of indirect aid will be
                open to administration by secular and faith-based providers alike.
                Moreover, beneficiaries participating in a program in one geographic
                area may spur new alternatives to serve that area and, as the
                experience of the COVID-19 pandemic has evidenced, many services can be
                obtained remotely from other geographic areas. Therefore, it cannot be
                said that a single government choice determines the distribution of aid
                in the programs.
                 The Agencies likewise disagree with a commenter's suggestion that
                elimination of the written notice requirement will preclude the
                programs at issue in this rulemaking from qualifying as indirect-aid
                programs. Nowhere in Zelman, or in the cases on which Zelman relied,
                did the Supreme Court suggest, much less hold, that indirect-aid
                programs must require providers to post or provide notices regarding
                their religious character and the availability of other providers. See
                Zelman, 536 U.S. 639; see also Zobrest v. Catalina Foothills Sch.
                Dist., 509 U.S. 1 (1993); Witters v. Wash. Dep't of Servs. for the
                Blind, 474 U.S. 481 (1986); Mueller v. Allen, 463 U.S. 388 (1983).
                 One commenter suggested that Zelman is distinguishable because it
                arose in the education context (where certain public school options had
                to exist by law). The Agencies are unpersuaded that the distinction
                amounts to a difference. As already explained, Zelman summarized the
                Establishment Clause inquiry as whether it is ``numerous private
                choices, rather than the single choice of a government,'' that
                determines the flow of aid to religious providers. 536 U.S. at 652-53.
                Under the definition the Agencies adopt today, beneficiary and provider
                choices, rather than a single government choice, will determine the
                flow of indirect aid.
                 Changes: None.
                 Affected Regulations: None.
                b. Rights of Beneficiaries and Providers
                 Summary of Comments: The Agencies received both supportive and
                opposing comments regarding the impacts of the proposal to eliminate
                the secular alternative requirement on the rights of beneficiaries and
                providers. Some commenters argued that elimination of the requirement
                would violate the constitutional rights of some beneficiaries by
                leaving them with no choice but to attend a program that includes
                explicitly religious content, or by effectively adding a religious test
                for receipt of government services. Similarly, others contended that
                elimination of the secular alternative requirement would put certain
                religious beneficiaries to the choice of adhering to their faith while
                refusing benefits or participating in religious activities against
                their faith to obtain the benefits.
                 On the other hand, one commenter opined that eliminating the
                secular alternative requirement was necessary to bring the Agencies'
                regulations into compliance with Trinity Lutheran, RFRA, and the
                Attorney General's Memorandum. Specifically, the commenter argued that
                by precluding religious beneficiaries in certain geographic areas from
                expending indirect aid on religious service providers of their choice,
                the requirement imposed an impermissible burden on those beneficiaries
                in violation of Trinity Lutheran and RFRA.
                 Other commenters, including groups representing minority religions,
                supported the proposal and pointed to a perception of disfavored
                treatment of faith-based providers in the existing definition of
                indirect Federal financial assistance. These commenters observed that,
                under the 2016 rule, secular providers could be considered indirect-aid
                recipients where beneficiaries lacked an adequate religious
                alternative, but faith-based providers could not be considered
                indirect-aid recipients where beneficiaries lacked an adequate secular
                alternative.
                 Response: The Agencies again do not agree that eliminating the
                secular alternative requirement would preclude genuine and independent
                choices of private individuals under Zelman or would result in
                involuntary or compulsory participation in religious activities. As
                already explained, beneficiaries' use of indirect aid to participate in
                programs with religious content will remain a function of private
                choice. Any participation requirements that a faith-based provider
                might impose on a beneficiary who chooses to expend indirect aid on
                that provider's program would result from private choice rather than
                government action and, therefore, would not implicate the beneficiary's
                constitutional rights.\58\
                ---------------------------------------------------------------------------
                 \58\ Cf. Manhattan Cmty. Access Corp. v. Halleck, 139 S. Ct.
                1921, 1928 (2019) (``In accord with the text and structure of the
                Constitution, this Court's state-action doctrine distinguishes the
                government from individuals and private entities.'').
                ---------------------------------------------------------------------------
                 The Agencies agree with the commenters who argued that, at least
                under some circumstances, the secular alternative requirement was in
                tension with providers' and beneficiaries' rights under the Free
                Exercise Clause of the First Amendment. Under Trinity Lutheran and
                Espinoza, disparate treatment of secular and faith-based providers is
                in tension with the Free Exercise Clause. In Espinoza, the Supreme
                Court reaffirmed its holding in Trinity Lutheran that ``disqualifying
                otherwise eligible recipients from a public benefit solely because of
                their religious character imposes a penalty on the free exercise of
                religion that triggers the most exacting scrutiny.'' Espinoza, 140 S.
                Ct. at 2255 (quoting Trinity Lutheran, 137 S. Ct. at 2021 (internal
                quotation marks omitted)).
                 The secular alternative requirement resulted in some level of
                distinction between secular and religious providers based solely on
                religious character. When a secular provider option was not present,
                this requirement precluded ``otherwise eligible recipients''--the
                beneficiaries and the providers--from accessing a public benefit
                ``solely because of'' the provider's ``religious character.'' A secular
                organization in the same position, where it was the only provider,
                would still be eligible to provide services. The validity of such a
                distinction has been called into question by Trinity Lutheran and
                Espinoza. Furthermore, the secular alternative requirement may burden
                the free exercise rights of both beneficiaries and providers. In
                Espinoza, the Supreme Court addressed claims brought by the parents of
                school-aged children, who were the beneficiaries. 140 S. Ct. at 2251-
                52. The opinion, however, addressed not only the parents' liberty
                interests, but also those of the religious schools, which were the
                providers. The Court found that excluding religious provider options
                from the State-run program ``burdens not only religious schools but
                also the families whose children attend or hope to attend them.'' Id.
                at 2261.
                 For these reasons, the Agencies have concluded that the secular
                alternative requirement was in tension with Trinity Lutheran and
                Espinoza and may burden the free exercise rights of beneficiaries and
                providers under the First Amendment and RFRA. See Attorney General's
                Memorandum, 82 FR at 49674.
                 Changes: None.
                 Affected Regulations: None.
                c. Harms to Beneficiaries and Providers
                 Summary of Comments: Some commenters argued that the proposed
                [[Page 82075]]
                new definition of ``indirect Federal financial assistance'' would harm
                beneficiaries in various ways. They argued that it would leave some
                beneficiaries with only programs that include explicitly religious
                content and program requirements; force some beneficiaries to
                participate in, or be subjected to, religious activities that make them
                uncomfortable or that violate their own religious beliefs; and subject
                beneficiaries to discrimination or bias, including on the basis of
                religion. Commenters argued that these consequences would be
                experienced by religious minorities, by female-led households, by
                racial minorities, by individuals who identify as transgender, and by
                individuals who are lesbian, gay, or bisexual.
                 Response: The Agencies do not agree that the new definition of
                ``indirect Federal financial assistance'' will adversely impact
                beneficiaries who are religious minorities, racial minorities, lesbian,
                gay, bisexual, transgender, or in female-led households. The comments
                predicting mistreatment of, or discrimination against, beneficiaries
                lacked supporting evidence, anecdotal or otherwise. Moreover, faith-
                based providers, like other providers, will be required to follow the
                requirements and conditions applicable to the grants and contracts they
                receive and will be forbidden to deny services in violation of these
                requirements. There is no basis on which to presume that faith-based
                providers are less likely than other providers to comply with their
                obligations. See Mitchell v. Helms, 530 U.S. 793, 856-57 (2000)
                (O'Connor, J., concurring in the judgment). And in any event, the
                distinction between direct and indirect aid has no bearing on the scope
                and substance of programs' nondiscrimination requirements; rather, the
                distinction governs whether faith-based providers may use Federal
                financial assistance to engage in, and may require beneficiaries to
                participate in, explicitly religious activities or, instead, must
                separate their explicitly religious activities from the supported
                programs.
                 In this rulemaking, the Agencies have sought to retain all
                necessary protections for beneficiaries while removing barriers to the
                full and equal participation of faith-based organizations in federally
                supported programs. In so doing, the Agencies recognize that, for many
                faith-based organizations, the provision of services to those in need
                is an exercise of their religious beliefs, and many faith-based
                organizations therefore view their explicitly religious activities as
                integral parts of the programs and services that they provide. The
                Agencies also are mindful that an unduly restrictive definition of
                indirect Federal financial assistance--the definition that controls
                whether and when federally supported programs may incorporate
                explicitly religious activities--could discourage such faith-based
                organizations from participating in federally supported programs. This
                result would harm not only faith-based organizations whose religious
                activities are fundamental to their programs and services, but also
                beneficiaries by discouraging such faith-based organizations from
                operating in unserved and underserved communities.
                 Indeed, elimination of the secular alternative requirement will
                make a difference only in circumstances where there is no adequate
                secular provider in a geographic area. It is better, in the Agencies'
                view, for beneficiaries in such unserved or underserved communities to
                have a faith-based option to receive indirect-aid services--even one
                that incorporates explicitly religious activities in which the
                beneficiaries otherwise might prefer not to participate--than to have
                no option at all. At the same time, the Agencies recognize that some
                beneficiaries may wish not to participate in explicitly religious
                activities that make them uncomfortable or that are inconsistent with
                their own religious beliefs. The Agencies, however, believe that this
                interest is served by this final rule, which will place the choice of
                service provider in the hands of beneficiaries and will not require
                them to accept the services of faith-based providers. Although the
                Agencies recognize that, in unserved or underserved communities,
                beneficiaries' needs for services may motivate them to choose service
                providers that they otherwise might not prefer, the Agencies believe
                they are better served by having an option, rather than having no
                option at all. It will still be their choice, not the Government's, to
                accept services from the faith-based provider.
                 This conclusion is consistent with the Court's reasoning in
                Espinoza, which rejected the argument that the ``no-aid provision'' at
                issue ``actually promotes religious freedom'' by ``keeping the
                government out of [religious organizations'] operations.'' 140 S. Ct.
                at 2260 (emphasis in original). That some potential recipients might
                decline to participate does not justify ``eliminating any option to
                participate in the first place,'' id. at 2261, and certainly does not
                provide support for ``disqualifying otherwise eligible recipients from
                a public benefit solely because of their religious character,'' id. at
                2255 (internal quotation marks omitted), as some commenters would have
                the Agencies do.
                 Moreover, the purposes of this final rule include ensuring that
                otherwise eligible faith-based providers can participate on equal terms
                as secular providers and are not deterred from applying due to
                unnecessary or unclear rules, including fear of litigation. Faith-based
                providers might not have participated in indirect-aid programs because
                they were unaware of existing secular alternative providers or were
                unsure whether the existing secular providers would be deemed
                ``adequate.'' Although these instances and harms are difficult to
                quantify, beneficiaries in unserved and underserved areas would have
                been harmed by the absence of any federally funded programming.
                 In sum, the Agencies are exercising their discretion to finalize
                this amended definition of ``indirect Federal financial assistance,''
                in order to avoid potential constitutional problems and to achieve the
                policy goals of expanding the availability of federally funded services
                to beneficiaries and of limiting obstacles to the equal participation
                of religious providers in those programs.
                 Changes: None.
                 Affected Regulations: None.
                2. Required Attendance at Religious Activities
                 Under eight of the Agencies' current regulations, a religious
                organization ``that participates in a program funded by indirect
                financial assistance need not modify its program activities to
                accommodate a beneficiary who chooses to expend the indirect aid on the
                organization's program.'' E.g., 28 CFR 38.5(c). HUD's current
                regulations have slightly different wording, stating that ``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.'' 24 CFR 5.109(h).
                 The NPRMs proposed amending this language to clarify that this
                extends to an organization's attendance policies, where such policies
                require attendance at ``all activities that are fundamental to the
                program.'' HUD proposed to keep its unique language and to add the new
                language at the end of the provision.
                a. Establishment Clause
                 Summary of Comments: Some comments opposed the proposed change on
                the ground that allowing any providers in an indirect-aid program to
                include required religious elements in their programs violates the
                [[Page 82076]]
                Establishment Clause. Other comments supported the change and viewed
                the change as consistent with established precedent.
                 Some commenters argued that this proposal violates the
                Establishment Clause when considered alongside the proposed elimination
                of the adequate secular alternative requirement from the definition of
                ``indirect Federal financial assistance.'' As the commenters
                characterized this interplay, the changes taken together would have the
                effect of allowing providers to impose religious exercise on
                beneficiaries in circumstances in which no adequate secular alternative
                is available, effectively conditioning government aid on participation
                in a religious activity and, thereby advancing religion. A commenter
                cited Corporation of Presiding Bishop of Church of Jesus Christ of
                Latter-Day Saints v. Amos, 483 U.S. 327, 334-35 (1987), as support for
                this position.
                 Response: The Agencies disagree with the commenters who argued that
                allowing providers to require attendance at all activities that are
                fundamental to an indirect-aid program violates the Establishment
                Clause. The Supreme Court has repeatedly upheld government programs in
                which aid, directed by private choice, is used by the beneficiary to
                attend programs with a required religious element.\59\ The Court upheld
                the use of government funds in these programs because the ``link
                between government and religion [was] attenuated by private choices.''
                Espinoza, 140 S. Ct. at 2261. The beneficiary's voluntary use of such
                aid is not ``state action sponsoring or subsidizing religion.''
                Witters, 474 U.S. at 488 (emphasis in original). ``Nor does the mere
                circumstance that [a beneficiary] has chosen to use neutrally available
                state aid'' for a religious program ``confer any message of state
                endorsement of religion.'' Id. at 488-89. Allowing beneficiaries in an
                indirect-aid program to choose to use aid on programs that may require
                attendance at religious ``activities that are fundamental to the
                program'' thus does not contravene the Establishment Clause.
                ---------------------------------------------------------------------------
                 \59\ See, e.g., Zelman, 536 U.S. 639; Zobrest, 509 U.S. 1
                (holding that the Establishment Clause did not bar a public school
                district from providing an interpreter to a deaf student attending
                Catholic high school); Witters, 474 U.S. 481 (finding no bar to
                State rehabilitation program used to assist blind man to train for
                ministry); Mueller, 463 U.S. 388 (finding no bar to State tax
                deduction for education expenses incurred by parents of children
                attending parochial schools).
                ---------------------------------------------------------------------------
                 The Agencies also disagree with commenters who argue that the
                interplay between the new definition of indirect aid and the prospect
                that a program at which the beneficiary uses indirect aid will require
                participation at religious activities creates an Establishment Clause
                problem. As discussed in the preceding paragraphs, under the Supreme
                Court's indirect-aid cases, allowing beneficiaries in an indirect-aid
                program to choose to use aid on programs that may require attendance at
                religious ``activities that are fundamental to the program'' does not
                conflict with the Establishment Clause because there is no government
                endorsement of religion, much less coercion. And, as explained in Part
                II.D.1, use of indirect aid by programs with required religious
                participation will remain a function of private choice, no matter what
                alternatives might be available. In an area where the only provider of
                a certain social service happens to be a faith-based organization that
                requires participation in religious activities, it would make no sense
                to deny the availability of the Federal aid altogether, instead of at
                least giving beneficiaries in the area the choice whether to use it at
                that organization. The result of such a rule would be to discriminate
                in the availability of indirect Federal assistance along regional
                lines. See Zelman, 536 U.S. at 657-58. Absent the Government endorsing
                or coercing beneficiaries to accept the social service in question, the
                Agencies do not believe that the two provisions, taken together, give
                rise to Establishment Clause violations.
                 Amos lends no support to the commenters' position. In the passage
                the commenters cited, the Supreme Court noted that accommodation of
                religion ``may devolve into an unlawful fostering of religion.'' 483
                U.S. at 334-35 (internal quotation marks omitted). But, according to
                the Supreme Court in Amos, for a government accommodation to have such
                ``forbidden `effects,' . . . it must be fair to say that the government
                itself has advanced religion through its own activities and
                influence.'' Id. at 337 (emphasis in original). As discussed in Part
                II.D.1.a, such is not the case with indirect Federal financial
                assistance, which is not so much a religious accommodation as an
                allowance for participation by all qualified providers. Any religious
                or non-religious use of the funds is attributable to the beneficiary's
                choice--not the Government's. The same analysis holds true with respect
                to the presence or the absence of providers in a locale, for the
                reasons given in Part II.D.1.b and the previous paragraph. Therefore,
                the Agencies do not believe there is any conflict with the
                Establishment Clause.
                 Finally, for consistency and uniformity, HUD finalizes its
                regulation with language similar to what the other Agencies are using:
                ``an organization that participates in a program funded by indirect
                Federal financial assistance need not modify its program or activities
                to accommodate a beneficiary who chooses to expend the indirect aid on
                the organization's program and may require attendance at all activities
                that are fundamental to the program.'' HUD notes that it did not
                receive any comments regarding its language.
                 Changes: HUD is adopting language consistent with that used by the
                other Agencies.
                 Affected Regulations: 24 CFR 5.109(g).
                b. Clarification
                 Summary of Comments: Some commenters praised the proposals in the
                NPRMs--including this proposed change--that remove incentives for
                religious organizations to modify the degree of their religious
                expression, reducing burdens on the free exercise of religion. Some
                also highlighted the religious liberty interests a beneficiary may have
                in choosing to participate in a program that includes required
                religious activities that are fundamental to the program. Other
                commenters argued that the changes are not necessary to promote
                religious liberty.
                 Some commenters argued that the proposed clarifying language
                contravened the nondiscrimination requirements of Executive Order
                13559, which applied to providers of both direct and indirect Federal
                financial assistance. One commenter supported this argument by
                referencing the 2016 final rule in which the Agencies chose not to
                include language similar to the current proposal because Executive
                Order 13559 purportedly prohibited it.
                 Response: The Agencies agree with the comments suggesting that
                restricting beneficiaries from accessing, or providers from
                maintaining, indirect-aid programs that include religious activities
                may burden the free exercise rights of both beneficiaries and faith-
                based providers. Since Sherbert v. Verner, 374 U.S. 398 (1963), the
                Supreme Court has held that conditioning neutrally available benefits
                on action contrary to religious exercise can place a substantial burden
                on a person's free exercise rights.\60\ Although
                [[Page 82077]]
                the Supreme Court subsequently curtailed the application of these cases
                for Free Exercise Clause purposes in Employment Division v. Smith, 494
                U.S. 872, Congress chose in RFRA to impose the same protections in
                Federal programs. See Attorney General's Memorandum, 82 FR at 49674.
                Conditioning a religious organization's ability to participate in an
                indirect-aid program on its willingness to modify attendance
                requirements for activities fundamental to the program may, in similar
                fashion, impose a ``unique disability upon those who exhibit a defined
                level of intensity or involvement in protected religious activity.''
                McDaniel, 435 U.S. at 632 (Brennan, J., concurring in the judgment). It
                would also deprive beneficiaries who would otherwise choose to
                participate in a program with religious activities of that option. As
                previously discussed in Part II.D, whether beneficiaries in a given
                locality have available the full range of potential options, secular or
                religious, should not be reason to deprive beneficiaries of the choice
                offered even in cases where the menu of options might be more limited.
                In the Agencies' view, some choice will be better than none.
                ---------------------------------------------------------------------------
                 \60\ See Sherbert, 374 U.S. at 404-06 (``It is too late in the
                day to doubt that the liberties of religion and expression may be
                infringed by the denial of or placing of conditions upon a benefit
                or privilege.''); see also Hobbie, 480 U.S. at 141 (`` `Where the
                state conditions receipt of an important benefit upon conduct
                proscribed by a religious faith, or where it denies such a benefit
                because of conduct mandated by religious belief, thereby putting
                substantial pressure on an adherent to modify his behavior and to
                violate his beliefs, a burden upon religion exists. While the
                compulsion may be indirect, the infringement upon free exercise is
                nonetheless substantial.' '' (quoting Thomas, 450 U.S. at 717-18
                (emphasis omitted))).
                ---------------------------------------------------------------------------
                 The Agencies do not interpret the current regulations to require an
                organization at which beneficiaries choose to use their indirect aid to
                modify its programs to eliminate required participation in explicitly
                religious activities. As the preamble to the 2016 final rule makes
                clear, Executive Order 13559 provided that organizations receiving
                Federal financial assistance ``shall not, in providing services or in
                outreach activities related to such services, discriminate against a
                program beneficiary or prospective program beneficiary on the basis of
                religion, a religious belief, a refusal to hold a religious belief, or
                a refusal to attend or participate in a religious practice.'' 81 FR at
                19361. At the same time, the 2016 rule added that ``an organization
                that participates in a program funded by indirect financial assistance
                need not modify its program activities to accommodate a beneficiary who
                chooses to expend the indirect aid on the organization's program.'' Id.
                Using a 12-step program as an example, the 2016 preamble explained that
                a program funded through indirect aid that ``includes religious content
                that is integral to the program would not be required to alter its
                program to accommodate an objector who pays for the program with
                indirect aid.'' Id. (emphasis added). Requiring that such programs
                include the ability to opt out of religious activity does not make
                sense given their inherently religious character and the fact that the
                beneficiaries will have freely chosen the program with that religious
                content. The Agencies did not believe that an organization declining to
                undertake such a modification would have violated the nondiscrimination
                provisions of Executive Order 13559 or those of the Agencies' rule in
                2016. The Agencies view the issue the same way today.
                 However, given the comments received arguing that the prior
                regulations required such an organization to undertake such a
                modification, the Agencies believe it appropriate to include language
                clarifying this issue in the final rule. The final rule includes
                language to eliminate any uncertainty over this issue in the future.
                Religious providers at which beneficiaries choose to use indirect aid
                will not be required to alter any fundamental program elements that
                require participation in religious activities.
                 Changes: None.
                 Affected Regulations: None.
                E. Accommodations for Faith-Based Organizations
                 DHS's existing regulations provided that ``[n]othing in this part
                shall be construed to preclude DHS or any of its components from
                accommodating religious organizations and persons to the fullest extent
                consistent with the Constitution and laws of the United States.'' 6 CFR
                19.3(d). Additionally, DOL's existing regulations specified that its
                provision prohibiting religion-based discrimination against
                beneficiaries did not ``preclude'' DOL or its intermediaries ``from
                accommodating religion in a manner consistent with the Establishment
                Clause of the First Amendment to the Constitution.'' 29 CFR 2.33(a).
                The other Agencies' existing regulations did not contain parallel
                provisions that explicitly addressed religious accommodations for
                faith-based organizations.
                 All of the Agencies proposed to add express language regarding
                accommodations. When providing that faith-based organizations are
                eligible on the same basis as any other organization, they all proposed
                adding that eligibility is subject to the Agencies' ``considering''
                accommodations. All eight of the Agencies that proposed specific text
                for notices to faith-based organizations--DHS, DOJ, DOL, ED, HHS, HUD,
                VA, and USDA--also proposed to include specific language in those
                notices indicating that religious accommodations may also be sought
                under many of the listed Federal laws. Additionally, when providing
                that all organizations are required to carry out all eligible
                activities in accordance with all program requirements, DHS, DOJ, DOL,
                ED, HHS, HUD, and VA proposed to add that this is ``subject to'' any
                accommodations. USDA proposed to add more generally that ``[t]he
                requirements established in this part do not prevent a USDA awarding
                agency or any State or local government or other intermediary from
                accommodating religion in a manner consistent with [F]ederal law and
                the Religion Clauses of the First Amendment to the U.S. Constitution.''
                 Within these provisions, DHS, DOJ, ED, HHS, USAID, and USDA
                proposed that such accommodations be ``appropriate under'' or
                ``consistent with'' the U.S. Constitution and Federal laws. HUD
                proposed to expressly reference RFRA.
                 Summary of Comments: To the extent that the comments regarding the
                scope and application of RFRA discussed in Parts II.C and II.F are
                relevant to the added accommodation language discussed in this section,
                the Agencies incorporate those comments and responses from Parts II.C
                and II.F. Similarly, some of the examples and hypotheticals discussed
                in Part II.C were repeated by other commenters, or could be construed
                broadly, as comments on the proposed accommodation language discussed
                in this section. Therefore, the Agencies incorporate any such relevant
                examples here.
                 Several commenters supported the accommodation language in the
                proposed rules because it provides expressly for accommodations that
                the Agencies were already required or permitted to grant under existing
                Federal law, including RFRA. Most of these commenters explained that
                adding this language was important to make clear--to faith-based
                organizations, the Agencies, State and local governments, and any other
                intermediaries--that faith-based providers do not lose their rights to
                seek such accommodations in the Federal funding process. One of these
                commenters added that this accommodation language recognizes and
                clarifies that existing law protects religious exercise, not just
                religious identity. One of these commenters also outlined specific
                principles from RFRA
                [[Page 82078]]
                and Free Exercise Clause cases that should guide the accommodation
                inquiry, and these principles are listed in the response section below.
                 The Agencies solicited comments on whether to define the terms that
                they each proposed to describe such accommodations. Some commenters
                stated that the Agencies should not define the term because there is an
                accepted legal usage of ``accommodation'' that would be difficult to
                capture in a single definition. Certain national religious medical
                organizations proposed that the Agencies define an accommodation as ``a
                provision made by the [F]ederal government for the free exercise of
                religion of a [F]ederal-funded recipient, who collaborates with the
                [F]ederal government in meeting the health or social service needs of a
                specific population, but the intent for which [F]ederal dollars are not
                explicitly allocated and expended.''
                 Several other commenters argued that the terms used by the Agencies
                to describe accommodations were vague and would only create confusion,
                including because the Agencies did not provide any explanation of the
                meaning of those terms. Some of these commenters argued that this
                accommodation language would create confusion because there are no
                clear lines in this area and because the Agencies do not identify any
                real-world or hypothetical examples of an accommodation that would be
                granted. One of these commenters noted that Congress has used the term
                ``reasonable accommodation'' differently in various statutes but it has
                almost always been accompanied by the express or implicit requirement
                that it not impose an ``undue hardship'' on others, citing 42 U.S.C.
                2000e, 42 U.S.C. 12112(b)(5)(A), and Shapiro v. Cadman Towers, Inc., 51
                F.3d 328, 334-35 (2d Cir. 1995).
                 Some of these commenters argued that the accommodation language
                would create confusion by suggesting that faith-based organizations
                could seek accommodations from program requirements, including to
                refuse to provide the program's services to eligible beneficiaries.
                They were particularly concerned about accommodations from requirements
                that are very important to any government-funded program. Some of these
                commenters also argued that the proposed references to accommodations
                in multiple sections of the proposed rules would create additional
                confusion for providers and beneficiaries. One of these commenters
                argued that the Agencies had not identified any evidence or analysis
                for why this vague new language is needed at this time.
                 Several commenters argued that the Agencies were creating new
                accommodations where none should be granted. Some of these commenters
                argued that such accommodations would be contrary to, or not required
                by, Trinity Lutheran because they would give faith-based organizations
                exemptions and preferential treatment, whereas Trinity Lutheran
                requires a level playing field. One of these commenters added that this
                accommodation language was not required by operative--though uncited--
                legal authority and should be rejected.
                 Some of these commenters argued that the accommodation language
                contradicted other aspects of this final rule. They argued that it was
                internally contradictory for the Agencies to provide that faith-based
                organizations are eligible ``on the same basis as any other
                organization'' while adding ``subject to'' accommodations that give
                preferential exemptions from rules. One of these commenters argued that
                applying these accommodation standards solely to faith-based
                organizations contradicted the Agencies' assertion that they removed
                ``certain standards'' because those standards applied solely to faith-
                based organizations. One of these commenters added that allowing
                accommodations for faith-based organizations was contrary to the
                provision in this final rule that an organization receiving indirect
                Federal financial assistance does not need to modify its program or
                activities to accommodate a beneficiary.
                 Multiple commenters opposed any exemption of faith-based
                organizations from laws and regulations that otherwise apply
                universally. Some of these commenters argued that accommodations are
                not permitted from generally applicable laws that prohibit
                discrimination because religiously motivated conduct does not receive
                special protection from general, neutrally applied legal requirements
                under Fulton v. City of Philadelphia, 922 F.3d 140, 159 (3d Cir. 2019),
                cert. granted, 140 S. Ct. 1104 (U.S. Feb. 24, 2019). Similarly, other
                commenters argued that the Supreme Court had either rejected or had not
                adopted a general rule that faith-based organizations could deny
                individuals service under a public accommodations law in Masterpiece
                Cakeshop, Ltd. v. Colorado Civil Rights Commission, 138 S. Ct. 1719
                (2018).
                 One commenter argued that religious accommodations are unnecessary
                because providing the federally funded services is not a
                ``fundamental'' or ``central'' religious activity and faith-based
                organizations are not obligated to participate in Federal programs or
                funding. Several commenters argued that faith-based organizations
                should either comply with nondiscrimination laws or forgo taxpayer
                money.
                 Several commenters argued that the added accommodation language
                would grant new or expanded accommodations from program requirements
                that would be inappropriate. Some of these commenters argued that
                exempting grantees from program requirements would be contrary to
                Congressional intent in establishing these programs because the
                legislation under which these programs are authorized does not allow
                discriminatory denial of service by the entities receiving funding.
                Similarly, multiple commenters argued that providing accommodations
                from program requirements would undermine the central goal of these
                programs, which is to provide people with the services they need.
                 Some commenters argued that the Agencies had not adequately
                accounted for the costs of accommodations that beneficiaries would
                bear. They argued that the NPRMs did not discuss the need to protect
                the program beneficiaries' religious freedom or their access to
                services, especially beneficiaries for whom these services may be a
                matter of life and death. These commenters were concerned that
                additional accommodations would further threaten the health and well-
                being of individuals across the country because faith-based
                organizations could flout established applicable guidelines, bypass
                standards of care, discriminate against clients or potential clients,
                or deny evidence-based services or treatments. Some commenters also
                argued that beneficiaries could be uncomfortable or forgo services, as
                discussed in Part II.C. Some of these commenters also argued that a
                faith-based organization's religious beliefs should not be the basis to
                deny needed services to beneficiaries.
                 Some of these commenters argued that any such third-party harms
                should preclude accommodations under the Establishment Clause, citing
                Hobby Lobby, Cutter, Texas Monthly, Kiryas Joel, Amos, and Estate of
                Thornton. They argued that Hobby Lobby was premised on the
                accommodation's imposing no third-party harms. Other commenters argued
                that third-party harms implicate, but do not categorically violate, the
                Establishment Clause under the cases cited above. One of these
                commenters also disagreed with the statement in the Attorney General's
                [[Page 82079]]
                Memorandum that ``the fact that an exemption would deprive a third
                party of a benefit does not categorically render an exemption
                unavailable.'' 82 FR at 49670.
                 Some of these commenters argued that the accommodation language
                does not acknowledge the constitutional limits on such exemptions when
                they cause harm to others. One of these commenters claimed that the
                accommodation language puts the interests of faith-based providers
                above those of the program beneficiaries whose rights and access to
                needed program services will be put at risk. Another commenter argued
                that such explanation was absent from the proposed regulatory text but
                acknowledged that the Agencies had recognized these limits on
                accommodations in the NPRMs.
                 Some of these commenters also argued that the Agencies do not
                explain why they are providing express accommodations for faith-based
                organizations, but not for beneficiaries. These commenters argued that
                it is just as legitimate to accommodate beneficiaries as faith-based
                providers. Another commenter argued that it was arbitrary to claim that
                accommodations for faith-based organizations are warranted because
                ``few will need them,'' while claiming accommodations for
                beneficiaries' religious freedom are not warranted because ``few will
                need them.''
                 Several commenters argued that expanded accommodations from program
                requirements would allow faith-based providers to seek accommodations
                to discriminate against beneficiaries or refuse to provide services
                that are otherwise required. Some of these commenters argued
                categorically that faith-based organizations should not be able to
                obtain accommodations or exemptions from nondiscrimination laws. One of
                these commenters argued that courts have long rejected arguments that
                faith-based organizations can be exempt from antidiscrimination
                requirements, citing Bob Jones University v. United States, 461 U.S.
                574 (1983), Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400
                (1968), Dole v. Shenandoah Baptist Church, 899 F.2d 1389 (4th Cir.
                1990), and Hamilton v. Southland Christian School, Inc., 680 F.3d 1316
                (11th Cir. 2012). These commenters were concerned that faith-based
                providers would seek and obtain such accommodations more often than
                they had before.
                 Some of these commenters argued that providing services without
                discrimination is key to an organization's ability to effectively carry
                out the Agencies' objectives. Some of these commenters pointed to other
                areas where the Agencies had recognized the existence of, and harm
                from, discrimination. One of these commenters argued that denial of
                service or care in healthcare settings can be deadly.
                 A few commenters argued that the added accommodation language would
                enable faith-based providers to limit their services to co-religionists
                or those who share the organizations' beliefs. Some commenters argued
                that the Agencies had not adequately explained the reason for creating
                what they described as vast new exemptions that may allow religious
                providers to avoid providing the services for which they are accepting
                taxpayer funds. A commenter argued that, to the extent these
                accommodations would allow organizations to discriminate on the basis
                of a beneficiary's religious belief or practice, or lack thereof, it
                would conflict with the prohibition on such discrimination in Executive
                Order 13279.
                 Some commenters were concerned that faith-based organizations would
                use religion as a pretext to discriminate against beneficiaries. These
                commenters argued that the Government should not endorse and fund such
                discrimination against religious minorities, LGBTQ people, and others
                who do not act in accordance with the organization's religious beliefs,
                such as not attending religious services, marrying a person of the same
                sex, getting divorced, using birth control, or engaging in sexual
                relations when unmarried. One of the commenters opposing this language
                recognized that RFRA sometimes allows the denial of services but this
                commenter considered that to be improper discrimination. Some
                commenters argued categorically that requiring compliance with Federal
                civil rights laws does not infringe anyone's freedom of conscience or
                demand anyone change their religious beliefs.
                 Some commenters argued that faith-based organizations could not
                satisfy the RFRA standard to warrant an accommodation that would allow
                discrimination. Some commenters argued that there is no RFRA
                substantial burden for being required to serve LGBTQ people because the
                Sixth Circuit held that mere toleration of transgender characteristics
                is not tantamount to official endorsement or support of those traits,
                which would be necessary to establish a substantial burden. Harris
                Funeral Homes, 884 F.3d at 587-88. These commenters also argued that
                the Agencies would be able to satisfy strict scrutiny for prohibitions
                on such discrimination based on Harris Funeral Homes, Fulton, and
                Norwood v. Harrison, 413 U.S. 455 (1973). According to these
                commenters, these cases held that eradicating and prohibiting
                discrimination are compelling interests and that mandating compliance
                with nondiscrimination laws is the least restrictive means of pursuing
                such interests.
                 Several commenters argued that allowing discrimination in taxpayer-
                funded programs would violate other principles. Some of these
                commenters were concerned that allowing such discrimination would
                violate the Establishment Clause by providing direct financial support
                for religion. One of these commenters argued that this would amount to
                giving faith-based organizations ``the right to use taxpayer money to
                impose [their beliefs] on others,'' quoting ACLU of Massachusetts v.
                Sebelius, 821 F. Supp. 2d 474 (D. Mass. 2012), which is discussed in
                Part II.F.2.a. Another commenter argued that the U.S. Constitution bars
                the Government from directly funding or providing aid to private
                institutions that engage in discrimination, citing Norwood, 413 U.S. at
                465-66. See also Christian Legal Soc. v. Martinez, 561 U.S. 661, 682
                (2010). Some individual commenters argued that it would violate their
                religious liberties if they were forced to fund--through taxpayer
                dollars--organizations that discriminate in the provision of federally
                funded services.
                 Other commenters were worried that the accommodation language was
                based on the Attorney General's Memorandum. These commenters argued
                that the Attorney General's Memorandum potentially violated the
                Establishment Clause because it did not put any checks on religious
                exercise, seemed to elevate the right to religious exemptions above
                other legal and constitutional rights, and said that organizations, not
                just people, have religious freedom. These commenters argued that the
                added accommodation language based on the Attorney General's Memorandum
                dangerously expands the ability for religious entities to request
                special treatment that may enable discrimination against beneficiaries.
                 Several commenters were particularly concerned, including based on
                their experiences, that the accommodation language could allow entities
                to discriminate against or deny service to traditionally marginalized
                groups and underserved communities, including women (especially women
                of color), persons with disabilities, LGBTQ
                [[Page 82080]]
                persons, and those living in rural communities. These commenters were
                concerned that denial of care could exacerbate existing disparities for
                these groups. Some of these commenters were also concerned that these
                communities could face added barriers to accessing services in
                religious spaces, which would cause further harm.
                 Some commenters pointed to past examples to support or oppose this
                accommodation language. One commenter pointed to a court's granting a
                religious exemption to a faith-based shelter for homeless women when a
                city tried to force it to comply with a local public accommodation law
                that was contrary to the shelter's religious mission and message. See
                Downtown Soup Kitchen v. Municipality of Anchorage, 406 F. Supp. 3d 776
                (D. Alaska 2019). This commenter argued that the accommodations
                language in the rule would make clear that faith-based organizations
                could be protected from such requirements in federally funded programs.
                 Another commenter pointed to an example where HHS granted an
                exemption to allow a Protestant child welfare agency that received
                Federal funding to deny services to women from other religions.\61\
                This commenter argued that the exemption for the provider's ``religious
                identity'' was used to rob the women of their religious freedom, deny
                them the ability to become foster parents, and dictate that a group of
                children from all backgrounds be placed exclusively in Protestant
                homes.
                ---------------------------------------------------------------------------
                 \61\ See Frank J. Bewkes et al., Center for American Progress,
                Welcoming All Families (Nov. 20, 2018) https://www.americanprogress.org/issues/lgbtq-rights/reports/2018/11/20/461199/welcoming-all-families.
                ---------------------------------------------------------------------------
                 Other commenters relied on hypothetical examples, including many of
                the ones listed in Part II.C. Additionally, some commenters were
                concerned that faith-based organizations could deny reproductive health
                access for women and girls, including contraception for unwed
                adolescent girls. They were similarly concerned about denials of
                condoms to men who have sex with men and to transgender individuals in
                HIV treatment and prevention programs, which would undermine the
                overall program goals. Another commenter, however, said it would be
                appropriate, for example, to exempt a Muslim food kitchen from
                providing pork on its menu.
                 A commenter argued that the Agencies had considered RFRA when
                adopting the 2016 final rule and presented no reasoned analysis for
                discarding those conclusions now.
                 Some commenters argued that the accommodation language, in
                combination with the provisions that permit religious organizations to
                maintain their religious character and expression, could result in
                faith-based organizations proselytizing or expressing religious views
                in connection with providing federally funded services. One of these
                commenters speculated that such activities could discourage LGBTQ
                individuals from seeking critical services and could create unnecessary
                discomfort for beneficiaries who disagree.
                 Another commenter was also concerned that the accommodation
                language--combined with the other changes addressed in Parts II.F and
                II.G--would increase preferential treatment for religious
                organizations.
                 Finally, some commenters argued that the accommodation language was
                unwarranted, arbitrary, and capricious.
                 Response: The Agencies agree with the comments that supported the
                accommodation language. The constitutional and statutory accommodations
                addressed by this language were required or permitted under the prior
                rule. The same is true for the other Federal laws that require
                accommodations or that prohibit discrimination based on conscience,
                including 42 U.S.C. 238n, 42 U.S.C. 300a-7, 42 U.S.C. 2000e-1(a) and
                2000e-2(e), 42 U.S.C. 12113(d), 42 U.S.C. 18113, and the Weldon
                Amendment, see, e.g., Further Consolidated Appropriations Act, 2020,
                Public Law 116-94, div. A, sec. 507(d), 133 Stat. 2534, 2607 (Dec. 20,
                2019). Protections under these constitutional and statutory provisions
                were available under the 2016 final rule and continue to be available.
                Also, the Agencies were always obligated to consider the RFRA
                implications of their program requirements, as discussed in Part II.C.
                See, e.g., Little Sisters, 140 S. Ct. at 2383-84 (failure to consider
                such RFRA rights could make the Agencies ``susceptible to claims that
                the rules were arbitrary and capricious for failing to consider an
                important aspect of the problem''). The accommodation language in this
                final rule merely recognizes that governing law; it is not a
                ``substantive change,'' as HHS explained in its NPRM. 85 FR at 2979,
                2981.
                 The Agencies determine that it is important to add clarifying
                language to ensure that this existing law is clear to faith-based
                organizations, the Agencies, State and local governments, any other
                intermediaries, and any potential challengers to faith-based
                organizations' participation. Based on various Agencies' experience and
                research, faith-based organizations with accommodation needs have been
                deterred from participating, sued when they participated, and denied
                participation in Federal financial assistance programs or activities.
                See, e.g., Franciscan Alliance, Inc. v. Burwell, 227 F. Supp. 3d 660,
                691-93 (N.D. Tex. 2016) (holding in the alternative that faith-based
                health care providers were likely to succeed on the merits of their
                claim to a RFRA accommodation to refuse to perform, refer for, or cover
                gender reassignment surgeries or abortions that had been required by a
                nondiscrimination provision connected to receipt of Federal financial
                assistance); cf. Exclusion of Religiously Affiliated Schools from
                Charter-School Grant Program, 44 Op. O.L.C. ___, *6 (Feb. 18, 2020),
                https://www.justice.gov/olc/file/1330966/download (``Forbidding charter
                schools under the program from affiliating with religious organizations
                discriminates on the basis of religious status.''); Religious
                Restrictions on Capital Financing for Historically Black Colleges and
                Universities, 43 Op. O.L.C. ___, *9 (Aug. 15, 2019), https://www.justice.gov/olc/file/1200986/download (``Religious Restrictions'')
                (``The Establishment Clause permits the Government to include religious
                institutions, along with secular ones, in a generally available aid
                program that is secular in content.'').
                 Also, some have challenged the premise that the Agencies may
                proactively grant accommodations to religious providers. The
                persistence of such arguments was demonstrated by the public comments
                on this final rule and by litigation on the issue, including Little
                Sisters. Although substantive disagreements regarding the scope of such
                accommodations will continue, the Agencies determine to add express
                accommodation language at this time to ensure that faith-based
                organizations know their religious exercise can, in appropriate
                circumstances, be protected and accommodated in federally funded
                programs, to ensure that such accommodations are proactively requested
                and considered in the application process, and to help eliminate
                disputes regarding the availability of such accommodations. The
                Agencies agree with commenters that faith-based organizations are more
                likely to seek such accommodations under this final rule.
                 The Agencies determine that this clarity is also appropriate
                because of how some accommodations have been handled recently by State
                and local
                [[Page 82081]]
                governments where RFRA and other Federal protections do not apply. In
                an example cited by commenters, the City of Philadelphia cancelled a
                contract with a faith-based foster care agency that could not certify
                same-sex couples consistent with its religious beliefs. The faith-based
                organization was willing to refer any same-sex couple to one of the
                many other agencies in the city. The city has argued that it ``has no
                authority to grant exemptions to the contract's nondiscrimination
                requirement.'' Br. for City Respondents at 35, Fulton v. City of
                Philadelphia, No. 19-123 (U.S. Aug. 1, 2020). This final rule makes
                clear that, when it comes to Federal financial assistance programs and
                activities, the Agencies and their intermediaries do have such
                authority where permitted by existing Federal laws. The Agencies also
                note that the Fulton case is pending at the U.S. Supreme Court, see 140
                S. Ct. 1104, and any relevant decision will be incorporated into the
                accommodation analysis going forward.
                 One commenter gave the example of an HHS exemption involving a
                Protestant child welfare agency. But HHS granted that exemption to the
                State of South Carolina, to be applied with respect to certain
                similarly situated faith-based providers, and not directly to the
                faith-based provider itself. It was also based on a provision that
                applies equally to requests for deviations or exceptions by secular
                organizations; \62\ and it was based on an appropriate context-specific
                analysis of the religious freedom rights of faith-based providers under
                RFRA. In addition, that exemption did not deny anyone the ability to
                become a foster parent, and did not dictate that children be placed in
                Protestant homes. Indeed, the exempt agency (or another similarly
                situated agency) was required to refer prospective foster parents with
                whom it could not work to another child placement agency or to the
                State program. This example thus demonstrates the reasonable outcomes
                from applying the appropriate accommodation analysis, as discussed in
                Part II.C. The accommodation language in this final rule makes clear
                that such accommodations are available but does not change the
                substance of that accommodation analysis. For these reasons, the
                Agencies are adding this accommodation language now, although they
                chose not to include such language in the 2016 final rule. See 81 FR at
                19370-71 (concluding that a RFRA-based process for employment
                exemptions was beyond the scope of the 2016 final rule).
                ---------------------------------------------------------------------------
                 \62\ See 2 CFR 200.102 (OMB uniform guidance for executive
                branch agencies).
                ---------------------------------------------------------------------------
                 The Agencies agree with the comments that said the Agencies should
                not further define the terms regarding these accommodations. As
                demonstrated by the proposed definition submitted by a commenter and by
                the list of principles in the next paragraph, it is difficult to fully
                capture all of the nuances in a single definition. It would also be
                difficult for any single definition to capture the nuances among the
                available types of accommodations, as well as the full current case
                law, let alone retain flexibility to incorporate future developments in
                Federal statutes and case law.
                 Many of the comments that opposed the accommodation language did so
                based on incorrect or inapplicable legal standards. This language is
                not being added based on Trinity Lutheran. That case reaffirmed that
                faith-based organizations cannot be disfavored based on religious
                character. That is a basis for the aspects of this final rule that
                provide for equal treatment, as discussed in Parts II.C, II.D, II.F,
                and II.G. But other First Amendment principles and Federal statutes
                mandate or permit accommodations that enable faith-based organizations
                to act in accordance with their religious beliefs and consciences. For
                example, the Federal Government can permit such organizations to
                participate in federally funded programs without substantial burdens to
                their religious exercise. The accommodation language incorporates those
                legal principles. As a result, there is no contradiction between
                mandating eligibility ``on the same basis as any other organization''
                consistent with Trinity Lutheran, while also providing that this is
                ``subject to'' accommodations consistent with the other binding legal
                principles. For the same reasons, it is not internally inconsistent to
                remove the alternative provider notice-and-referral requirements that
                applied solely to faith-based organizations, in tension with Trinity
                Lutheran and RFRA, while also providing expressly for accommodations
                that are required or mandated by existing Federal law, including RFRA.
                 Commenters also mistakenly argued that accommodations are not
                available from neutral laws of general applicability. This final rule
                applies to Federal financial assistance programs that are governed by
                RFRA and other existing Federal laws that require or permit certain
                accommodations even from neutral laws of general applicability. These
                commenters relied on Fulton and Masterpiece Cakeshop, but those cases
                involved State and local governments that were not subject to RFRA or
                the other Federal laws addressed here. And, as discussed elsewhere,
                current Free Exercise Clause and Establishment Clause jurisprudence
                does not preclude permissive accommodations.
                 Additionally, future RFRA accommodations are not precluded by the
                Sixth Circuit's decision in the Harris Funeral Homes case cited by
                commenters. That case applied a substantial burden standard that is
                arguably inconsistent with Hobby Lobby and prior cases, as discussed in
                Part II.C.3.d. See, e.g., Hobby Lobby, 573 U.S. at 723-25; see also
                Little Sisters, 140 S. Ct. at 2383 (explaining that, in Hobby Lobby,
                ``we made it abundantly clear that, under RFRA, the Departments must
                accept the sincerely held complicity-based objections of religious
                entities''). Moreover, Harris Funeral Homes must be considered
                alongside the Supreme Court's opinion in Bostock. In that case, the
                Court acknowledged the potential application of Title VII's ``express
                statutory exception for religious organizations''; of the First
                Amendment, which ``can bar the application of employment discrimination
                laws'' in certain cases; and of RFRA, ``a kind of super statute'' which
                ``might supersede Title VII's commands in appropriate cases.'' 140 S.
                Ct. at 1754 (noting that ``how these doctrines protecting religious
                liberty interact with Title VII are questions for future cases too'').
                 Commenters also mistakenly argued that accommodations are
                foreclosed because participation in these Federal financial assistance
                programs and activities is not ``fundamental'' or ``central'' to any
                religious activity or obligation. None of the applicable accommodation
                statutes requires the religious activity or obligation to be central or
                fundamental. Doing so would put the Government in the difficult
                position of making inherently religious judgments. See, e.g., Emp't
                Div., Dep't of Human Res. of Ore. v. Smith, 494 U.S. 872, 887 (1990)
                (``Judging the centrality of different religious practices is akin to
                the unacceptable business of evaluating the relative merits of
                differing religious claims.'' (internal quotation marks omitted)). The
                definition of ``religious exercise'' that applies to RLUIPA and RFRA
                ``includes any exercise of religion, whether or not compelled by, or
                central to, a system of religious belief.'' 42 U.S.C. 2000cc-5(7)(A)
                (RLUIPA); 42 U.S.C. 2000bb-2(4) (RFRA incorporating the definition from
                RLUIPA). And RFRA accommodations are available whether or not
                participation is fundamental or central,
                [[Page 82082]]
                even if the conduct is voluntary, as discussed in Parts II.C and II.F.
                 Contrary to commenters' assertions, any accommodation analyses
                conducted in connection with the requirements of this final rule will
                consider all relevant Establishment Clause principles and any relevant
                impact on taxpayers' religious liberties. There is no basis to claim
                that the Agencies and their intermediaries will not follow Federal law,
                including the Establishment Clause. Indeed, DHS, DOJ, ED, HHS, HUD,
                USAID, and USDA are all adding regulatory text in these provisions with
                express references to constitutional limits, RFRA, and other Federal
                laws. Additionally, the eight Agencies with prescribed text for notices
                to faith-based organizations all expressly reference these Federal
                laws, as discussed in Part II.G.3. Also, as discussed in Part II.F.2.a,
                the Agencies disagree with the commenter that relied on ACLU of
                Massachusetts v. Sebelius, which is distinguishable on legal and
                factual grounds but does show how a faith-based organization can
                receive an appropriate accommodation as the highest ranking applicant
                under one version of a program but not receive an accommodation under
                another version where other providers rank higher. See ACLU of Mass. v.
                U.S. Conference of Catholic Bishops, 705 F.3d 44, 49-51 (1st Cir. 2013)
                (summarizing facts).
                 For similar reasons, the Agencies disagree that these
                accommodations should not be based on the Attorney General's
                Memorandum. The Attorney General's Memorandum accurately describes
                existing Federal law, including the relevant Establishment Clause
                principles and the checks on religious exercise. Contrary to these
                commenters' claims, it is well established that faith-based
                organizations, not just individuals, are entitled to religious freedom.
                See, e.g., Hobby Lobby, 573 U.S. at 707-09 (recognizing that
                corporations can exercise religion under the Free Exercise Clause and
                RFRA).
                 Commenters also mistakenly argued that the accommodation language
                is foreclosed by third-party harms. As discussed in Part II.C.3.e,
                third-party burdens do not categorically preclude accommodations under
                RFRA. Indeed, Hobby Lobby rejected this argument. 573 U.S. at 729 n.37.
                That case was the basis for the statement in the Attorney General's
                Memorandum that ``the fact that an exemption would deprive a third
                party of a benefit does not categorically render an exemption
                unavailable.'' 82 FR at 49670, 49675 (citing Hobby Lobby).
                 The Agencies also disagree that the addition of accommodation
                language to this final rule will create any third-party burdens beyond
                what current law, as discussed above, already allows and, in some
                cases, mandates. To the extent that third-party burdens are relevant to
                a specific accommodation determination, the Agencies and their
                intermediaries will consider such burdens. The Agencies and their
                intermediaries will consider, for example, the impact on the health and
                well-being of beneficiaries when determining whether there is a
                compelling interest in a particular program requirement and whether
                less restrictive means are available. The Agencies also incorporate
                their discussions of these issues in Parts II.C and II.F.
                 The Agencies disagree that nondiscrimination laws categorically bar
                accommodations. Rather, like any other accommodation, they are
                available in particular cases, based on context and applicable Federal
                law. See, e.g., Hobby Lobby, 573 U.S. at 729 n.37; World Vision, 31 Op.
                O.L.C. 162 (concluding that RFRA was reasonably construed to require
                that an organization be exempt from a statute's religious
                nondiscrimination provision).
                 The Agencies oppose discrimination and seek to protect
                beneficiaries from it. The Agencies reiterate that this final rule
                continues to expressly prohibit discrimination against beneficiaries on
                the basis of religion, a religious belief, a refusal to hold a
                religious belief, or a refusal to attend or participate in a religious
                practice. The Agencies' other program requirements bar discrimination
                on other protected bases. If an accommodation were sought from those
                requirements based on a sincerely held religious belief, the Agencies
                and their intermediaries would evaluate it appropriately under existing
                law, including without ``religious hostility.'' Masterpiece Cakeshop,
                138 S. Ct. at 1724, 1729-31.
                 Although evaluation of accommodation requests is context-dependent,
                the Agencies cannot conceive of granting such an accommodation to
                discriminate based on race. As the Supreme Court has recognized, there
                is a compelling interest in eradicating racial discrimination, and the
                Court has frequently upheld outright prohibitions on such
                discrimination. Bob Jones Univ., 461 U.S. 574; see also Newman, 390
                U.S. 400 (private lawsuit to enjoin racial discrimination at
                restaurants was ``vindicating a policy that Congress considered of the
                highest priority''). The Agencies recognize that ``[r]acial bias is
                distinct.'' Pena-Rodriguez v. Colorado, 137 S. Ct. 855, 868 (2017).
                Indeed, a long history of the Supreme Court's ``decisions demonstrate
                that racial bias implicates unique historical, constitutional, and
                institutional concerns.'' Id.
                 The Agencies will evaluate any other accommodation request under
                the applicable law and will not prejudge the outcome of that context-
                specific analysis. Accommodations are available from certain
                nondiscrimination provisions in certain contexts, as the World Vision
                opinion explained. See Part II.C. Under RFRA, for example, it is
                possible that there is no compelling governmental interest in imposing
                the burden at issue, that a general compelling interest is not
                compelling ``to the person,'' or that there is a less restrictive means
                of furthering the interest. The Agencies and their intermediaries will
                consider all of these factors and the impact of any accommodation, as
                appropriate under existing law.
                 For context, the Agencies have considered the example of a Jewish
                ritual bath, known as a ``mikveh.'' In addition to the ritual aspects
                of the mikveh, it provides a unique setting for a trusted female
                community member to identify signs of domestic violence and medical
                conditions, including cancers, on religious women who often dress in
                religiously modest clothing at all other times. See, e.g., Anna
                Behrmann, I Spotted a Lump when Preparing for My Ritual Bath, BBC News,
                July 2, 2019, https://www.bbc.com/news/world-middle-east-47734665.
                However, a mikveh will often exclude some people based on the
                sponsoring organization's sincerely held religious beliefs, such as
                serving only co-religionists.
                 Like all faith-based organizations, the added accommodation
                language tells an organization that runs such a mikveh that it can
                apply for Federal financial assistance related to identifying domestic
                violence or cancer, even if its religious exercise did not permit
                compliance with all program requirements. The relevant Agency would
                then consider the accommodation request in the context of that program,
                as required or permitted under existing Federal accommodation laws.
                Whether the Agency grants the accommodation will depend on the facts
                and circumstances. Whether the mikveh organization receives the award
                will ultimately depend on even more facts and circumstances, including
                the quality and impact of the proposed use of funds. But refusal to
                consider such a request--as some commenters would have the Agencies
                do--would be
                [[Page 82083]]
                contrary to Federal law. The accommodation language in this final rule
                follows existing law in allowing context-specific determinations.
                 The accommodation language is consistent with the other cases cited
                by commenters. Commenters mistakenly rely on Christian Legal Society v.
                Martinez, 561 U.S. 661, for the principle that the U.S. Constitution
                bars the Government from directly funding or providing aid to private
                institutions that engage in discrimination. Martinez held only that the
                First Amendment does not preclude a State university from applying an
                ``accept-all-comers'' policy to any group seeking access to a limited
                public forum, including a religious group. Id. at 667-69, 675-90. It
                did not hold that the First Amendment precluded the State university
                from granting an accommodation to a religious group, and it did not
                address the application of an accommodation statute such as RFRA. See
                id. at 697 n.27 (explaining that the student group's Free Exercise
                Clause claim was unsuccessful under Smith).
                 Commenters also relied on Norwood v. Harrison, which did not
                involve any claim for religious accommodation. 413 U.S. at 464-66. The
                Supreme Court recognized in Norwood that its analysis regarding
                providing textbooks to non-sectarian private schools that racially
                discriminate was different from the applicable analysis for providing
                textbooks or funding to religious schools. Id. at 468-70. As the Court
                recognized, when it comes to assisting religious schools, ``our
                constitutional scheme leaves room for `play in the joints,' '' meaning
                the Government often has discretion to provide assistance to religious
                entities that is neither required by the Free Exercise Clause nor
                prohibited by the Establishment Clause. Id. at 469. The Court concluded
                that religious beliefs are afforded protections not afforded to bias on
                other grounds. Id. at 470. That is consistent with the accommodation
                language in this final rule.
                 Commenters also relied on Dole v. Shenandoah Baptist Church, 899
                F.2d at 1392, which further demonstrates the need for context-specific
                analyses. In that case, a religious school argued that it was entitled
                to an accommodation--applying the free exercise test prevailing at the
                time, which is now incorporated into RFRA--that would allow the school
                to pay male teachers more than female teachers, rather than comply with
                the FLSA. Id. at 1397. The court evaluated the contours of the
                articulated religious beliefs, but found that they would be minimally
                burdened by complying with the FLSA, found a compelling governmental
                interest in that context, found that granting an exemption would be
                contrary to that compelling interest, and found that compliance with
                the FLSA was the least restrictive means of achieving the Government's
                aims. Id. at 1397-99. That reinforces the appropriateness of the
                context-specific analyses that the Agencies and their intermediaries
                will conduct under this final rule, which they were required to conduct
                under existing Federal law even without the accommodation language.
                 The Agencies also note that the analysis in Dole pre-dated RFRA, so
                some of the specific considerations may no longer apply. For example,
                it is not appropriate under RFRA to require that the challenged
                requirement ``cut to the heart of [the organization's] beliefs.'' Id.
                at 1397. The Agencies further note that Dole applied the ministerial
                exception in 1990, id. at 1396-97, without the benefit of recent
                Supreme Court cases, which could affect the analysis. See Our Lady of
                Guadalupe Sch. v. Morrissey-Berru, 140 S. Ct. 2049 (2020); Hosanna-
                Tabor Evangelical Lutheran Church & Sch. v. EEOC, 565 U.S. 171 (2012).
                Moreover, the Dole case recognized that accommodations and exemptions--
                such as the ones referenced in this final rule--can be
                ``constitutionally permissible.'' 899 F.2d at 1396 (citing cases).
                 The Agencies disagree that the accommodation language will allow
                faith-based organizations to use religious faith as a pretext for
                discrimination. Existing accommodation principles appropriately screen
                for pretext while balancing respect for religious autonomy. For
                example, commenters relied on Hamilton v. Southland Christian School,
                Inc., 680 F.3d 1316 (11th Cir. 2012), in which the appeal hinged on
                whether the teacher had been fired because she had premarital sexual
                relations or because of her pregnancy. Id. at 1319-21. The court found
                a genuine issue of fact on that issue and remanded the case for further
                proceedings. Also, the Supreme Court has explained that the compelling
                interest test prevents discrimination on the basis of race in hiring
                from being ``cloaked as religious practice to escape legal sanction.''
                Hobby Lobby, 573 U.S. at 733.
                 The Agencies note that, in rare but appropriate cases, pretext can
                be screened by challenging the religiosity or sincerity of a claimed
                religious exercise.\63\ To be sure, such challenges should be narrow,
                rare, and subject to all of the other protections of the Religion
                Clauses and RFRA, including that the Government cannot question the
                truth or reasonableness of the believer's line-drawing. See, e.g.,
                United States v. Ballard, 322 U.S. 78, 86-88 (1944) (observing that the
                First Amendment prohibits evaluating ``the truth or falsity of the
                religious beliefs or doctrines''); Attorney General's Memorandum, 82 FR
                at 49674 (citing cases).
                ---------------------------------------------------------------------------
                 \63\ See, e.g., Ballard, 322 U.S. at 79-83 (affirming jury
                instruction asking whether fraud defendants ``honestly and in good
                faith believe[d]'' that they were ``divine messengers'' who could
                heal ailments and diseases and had done so hundreds of times);
                United States v. Quaintance, 608 F.3d 717, 721-23 (10th Cir. 2010)
                (Gorsuch, J.) (explaining that extensive evidence showed criminal
                defendants who sold large quantities of marijuana ``were motivated
                by commercial or secular motives rather than sincere religious
                conviction,'' including inducting a co-conspirator into the religion
                which they founded in order to ``insulate their drug transactions
                from confiscation'').
                ---------------------------------------------------------------------------
                 Contrary to certain comments, the Agencies cannot conclude that
                compliance with nondiscrimination laws will never substantially burden
                a faith-based organization's sincerely held religious beliefs. The
                World Vision opinion (discussed above and in Part II.C) and the
                examples discussed above demonstrate that nondiscrimination laws can
                impose such burdens. The Agencies cannot dismiss requests for
                accommodations from nondiscrimination laws categorically. See, e.g.,
                Thomas v. Review Bd. of Indiana Employment Sec. Div., 450 U.S. 707,
                713-16 (1981).
                 Some commenters criticized potential accommodations that would
                exempt faith-based providers from various laws in various contexts,
                including reproductive health requirements. Such requirements tend to
                arise in the context of programs funded or administered by HHS, many
                under the Public Health Service Act, 42 U.S.C. 201 et seq. There are
                Federal conscience protection statutes, for example, specific to the
                recipients of funds under the Public Health Service Act, or to programs
                administered by the Secretary of HHS, that bar discrimination against
                health care entities or personnel that refuse to participate in certain
                health services or research activities on the basis of religious belief
                or moral conviction.\64\
                [[Page 82084]]
                Because of the applicable prohibitions, these Federal conscience
                provisions may effectively require religious or moral accommodations
                with respect to reproductive health requirements in certain
                circumstances. The Agencies also note that accommodations from such
                reproductive health requirements are discussed further in Part II.F.2.a
                below.
                ---------------------------------------------------------------------------
                 \64\ For example, the Church Amendments, 42 U.S.C. 300a-7, apply
                to entities funded under the Public Health Service Act and two other
                laws administered by HHS and protect the conscience rights of
                individuals and entities that object to performing or assisting in
                the performance of abortion or sterilization procedures if doing so
                would be contrary to the provider's religious beliefs or moral
                convictions. The Church Amendments also prohibit (1) recipients of
                HHS funds for biomedical or behavioral research from discriminating
                against health care personnel who refuse to perform or assist in the
                performance of any health care service or research activity on the
                grounds that their performance or assistance in the performance of
                such service or activity would be contrary to their religious
                beliefs or moral convictions, and (2) individuals from being
                required to perform or assist in the performance of any part of a
                health service program or research activity funded in whole or in
                part under a program administered by HHS if their performance or
                assistance in the performance of such part of such program or
                activity would be contrary to their religious beliefs or moral
                convictions.
                 Section 245 of the Public Health Service Act, 42 U.S.C. 238n,
                prohibits the Federal Government and any State or local government
                receiving Federal financial assistance from discriminating against
                any health care entity (which includes both individuals and
                institutions) on the basis that the entity (1) refuses to undergo
                training in the performance of induced abortions, to require or
                provide such training, to perform such abortions, or to provide
                referrals for such training or such abortions; (2) refuses to make
                arrangements for such activities; or (3) attends (or attended) a
                post-graduate physician training program, or any other program of
                training in the health professions, that does not (or did not)
                perform induced abortions or require, provide, or refer for training
                in the performance of induced abortions, or make arrangements for
                the provision of such training.
                 The Weldon Amendment, a rider in HHS's annual appropriation,
                provides that ``[n]one of the funds made available in this Act may
                be made available to a Federal agency or program, or to a State or
                local government, if such agency, program, or government subjects
                any institutional or individual health care entity to discrimination
                on the basis that the health care entity does not provide, pay for,
                provide coverage of, or refer for abortions.'' E.g., Further
                Consolidated Appropriations Act, 2020, Public Law 116-94, div. A,
                sec. 507(d), 133 Stat. 2534, 2607 (Dec. 20, 2019).
                 Section 1303(b)(4) of the Affordable Care Act, 42 U.S.C.
                18023(b)(4), provides that ``[n]o qualified health plan offered
                through an Exchange may discriminate against any individual health
                care provider or health care facility because of its unwillingness
                to provide, pay for, provide coverage of, or refer for abortions.''
                Section 1553(a) of that Act, 42 U.S.C. 18113(a), provides that
                ``[t]he Federal Government, and any State or local government or
                health care provider that receives Federal financial assistance
                under this Act (or under an amendment made by this Act) or any
                health plan created under this Act (or under an amendment made by
                this Act), may not subject an individual or institutional health
                care entity to discrimination on the basis that the entity does not
                provide any health care item or service furnished for the purpose of
                causing, or for the purpose of assisting in causing, the death of
                any individual, such as by assisted suicide, euthanasia, or mercy
                killing.''
                ---------------------------------------------------------------------------
                 Other accommodation statutes require context-specific analysis.
                Under RFRA, for example, the Agencies and intermediaries would consider
                the sincerity of the professed belief, the pressure to compromise that
                belief posed by conditioning the Federal financial assistance on
                compliance with the program requirement, the scope of the program
                requirement, the Government's interest in that requirement, any
                exemptions or accommodations that would make the interest less
                compelling, and the availability of less restrictive means to achieve
                that interest. Based on that analysis, they will determine whether a
                faith-based organization must comply with the requirement as written,
                can comply in a different way, must provide a referral if appropriate,
                or must take some other action in order to justify the accommodation.
                Where there is no compelling interest in the service or program
                requirement, the faith-based organization may be able to deny the
                service or provide the service without that requirement. Where there is
                a compelling interest in the service or program requirement, the Agency
                or intermediary will ensure that the compelling interest is satisfied,
                either through the faith-based organization or some other less
                restrictive means. Some accommodation requests will have to be denied.
                That is how RFRA has always worked. This final rule does not change
                that analysis or prejudge the outcome in any case.
                 The Agencies disagree that their accommodation language is vague or
                creates confusion. Consistent with the legal standards discussed above
                and in Parts II.C and II.F, the Agencies are ensuring that context-
                specific considerations, including countervailing considerations, are
                analyzed whenever determining whether to grant any accommodations. As
                part of this analysis, the Agencies will consider ``undue hardship''
                whenever it is relevant. This final rule mentions some potential
                accommodations but does not contain specific examples due to the
                context-specific nature of that analysis.
                 Additionally, the Agencies disagree that they created confusion by
                adding two references to religious accommodations. This language is
                being added in the two places where it applies: (1) Eligibility and (2)
                compliance. Rather than creating confusion, this wording creates
                greater clarity. This added language provides expressly that
                accommodations are available to alleviate burdens on faith-based
                providers from program requirements, where warranted under existing
                Federal law. As explained, all of the commenters' concerns regarding
                such accommodations--including discrimination, denial of service,
                discomfort, importance of the requirement to the government program,
                and compelling interest--will be considered and addressed when the
                Agencies and intermediaries determine whether to grant an
                accommodation. With regard to very important program requirements, a
                faith-based organization may be less likely to receive an
                accommodation, but circumstances may still warrant one, as discussed
                above and in Parts II.C and II.F. Such accommodations are not contrary
                to Congressional intent. For example, RFRA ``operates as a kind of
                super statute, displacing the normal operation of other Federal laws,''
                Bostock, 140 S. Ct. at 1754, unless Congress expressly provides
                otherwise.
                 The Agencies are committed to protecting the religious liberty of
                faith-based organizations and beneficiaries equally. But express
                accommodations for beneficiaries are beyond the scope of this final
                rule. This final rule addresses accommodations that relieve government-
                imposed burdens on faith-based organizations. For reasons discussed
                elsewhere, the Agencies do not believe that this final rule is likely
                to impose substantial burdens on beneficiaries, see Parts II.C.1,
                II.C.2, and II.C.3.e, particularly in the context of indirect Federal
                financial assistance, see Part II.D, although the Agencies do not rule
                out that possibility in any particular case. Also, the Agencies did not
                claim that beneficiary accommodations were not warranted because ``few
                will need them.'' They expressly disavow such reasoning. Beneficiaries
                are entitled to accommodations, where appropriate, from government-
                imposed burdens.
                 Only DOL and DHS addressed accommodations in the 2016 final rule.
                They did so in a manner consistent with this final rule. DOL retained a
                provision that provided for accommodations consistent with the
                Constitution, which ``means that otherwise valid religious
                accommodations do not violate the religious nondiscrimination
                requirement in this regulation.'' 81 FR at 19393; id. at 19422 (DOL, 29
                CFR 2.33(a)). DHS added a similar provision in the 2016 final rule. Id.
                at 19411 (DHS, 6 CFR 19.3(d)); see also 80 FR 47284, 47297 (Aug. 6,
                2015) (proposing such language); 73 FR 2187, 2189 (Jan. 14, 2008)
                (proposing such language initially). No commenter has pointed to any
                issues or harms due to those provisions.
                 The Agencies also disagree that the accommodation language in this
                final rule, in combination with provisions that permit religious
                organizations to maintain their religious character and expression,
                will necessarily result in faith-based organizations' improperly
                proselytizing or expressing religious views while providing federally
                funded
                [[Page 82085]]
                services. Each Agency has retained its prohibition on proselytizing in
                direct Federal financial assistance programs and activities, and the
                Agencies do not foresee granting accommodations that would exempt
                faith-based organizations from that prohibition. As discussed in Part
                II.D, recipients of indirect Federal financial assistance are permitted
                to engage in explicitly religious activities, including
                proselytization, within such programs, as they were under the 2016
                final rule. Also, faith-based recipients of both direct and indirect
                programs retain their rights of expression, including to express
                religious views, as discussed in Part II.G.5. The accommodation
                language does not change these aspects of the Agencies' rules.
                 The Agencies also disagree that the accommodation language--
                combined with the other changes addressed in Parts II.F and II.G--will
                increase preferential treatment for religious organizations. As
                explained, the accommodation language merely clarifies existing law.
                Whatever preferential treatment might result would have resulted anyway
                under existing law.
                 For all of these reasons, the Agencies' addition of the
                accommodation language is reasonable and not unwarranted, arbitrary, or
                capricious.
                 Changes: None.
                 Affected Regulations: None.
                F. Discrimination on the Basis of Religious Character or Exercise
                 Existing regulations required eight of the Agencies and their
                intermediaries not to discriminate in selection of service providers
                based on ``religious character'' or ``affiliation.'' VA's existing
                parallel provision barred discrimination based on ``religion or
                religious belief or lack thereof.'' 38 CFR 50.4. Existing regulations
                for DHS, USAID, DOJ, DOL, and HHS also required any grant, document,
                agreement, covenant, memorandum of understanding, policy, or regulation
                used by the Agencies (and, for some Agencies, their intermediaries) not
                to ``disqualify'' any organization based on its ``religious character''
                or ``affiliation.'' USDA, VA, ED, and HUD did not have such an existing
                provision on disqualification.
                 In the NPRMs, all Agencies proposed changes relating to such
                provisions. With regard to discrimination, DHS and HUD proposed to
                include prohibitions when based on religious ``character,''
                ``affiliation,'' or ``exercise,'' while the other Agencies proposed to
                include a prohibition when based on religious ``exercise'' or
                ``affiliation'' but not religious ``character.'' With regard to
                disqualification, eight Agencies proposed to include prohibitions when
                based on ``religious exercise'' or ``affiliation,'' USDA omitted that
                language from its proposal, and no Agency proposed a prohibition when
                based on ``religious character.'' Eight Agencies proposed to add that
                ``religious exercise'' for multiple provisions, including these
                provisions, incorporates the statutory definition from RLUIPA that also
                applies to RFRA.
                 HHS's NPRM provided the most extensive explanation for these
                proposed changes. It explained that it was proposing to delete
                ``religious character'' from these provisions because there was not a
                body of law providing legal guidance on that standard and because the
                phrases ``religious character'' and religious ``affiliation'' created
                confusion. 85 FR at 2979. HHS explained that it was proposing to change
                the language to ``religious exercise'' because that phrase is defined
                by Congress in RLUIPA and used in RFRA and RLUIPA, and because there is
                an ``extensive legal framework'' and ``body of law'' providing legal
                guidance on that standard. Id. HHS also expressed concern that the
                phrase ``religious character'' created confusion because the phrase
                would presumably have a different meaning than ``religious
                affiliation'' or ``exercise,'' but ``it is unclear what that
                distinction would be.'' Id.
                1. ``Religious Character''
                 Summary of Comments: Several commenters stated that these
                provisions should continue to prohibit discrimination and
                disqualification based on ``religious character,'' which is the
                standard in Trinity Lutheran. They explained that Trinity Lutheran
                outlined the Free Exercise Clause's ``blanket ban'' on discrimination
                based on ``religious character.''
                 With respect to HHS's explanation, some commenters responded that
                there is a well-established body of law regarding the definition of
                ``religious character,'' including that this term was a central focus
                of Trinity Lutheran. Commenters also stated that the terms religious
                ``character'' and ``exercise'' have unique meanings, as articulated in
                Trinity Lutheran and other First Amendment cases. They then pointed to
                the language in Trinity Lutheran that the bright-line bar applies to
                laws that ``single out the religious for disfavored treatment,'' 137 S.
                Ct. at 2021, which the commenters interpreted to mean discrimination
                based on religious character.
                 Response: The Agencies agree that Trinity Lutheran subjects
                discrimination based on ``religious character'' to the ``most exacting
                scrutiny.'' 137 S. Ct. at 2021. After the comment period closed, the
                Supreme Court reaffirmed that holding in Espinoza, 140 S. Ct. at 2255.
                The body of law confirming this First Amendment principle has thus
                developed even further. The Agencies also note that DHS and HUD had
                proposed to keep the phrase ``religious character'' in their
                nondiscrimination provisions. 85 FR at 2896 (DHS, 19.3(b)); id. at 8223
                (HUD, 5.109(c)).
                 Nevertheless, the Agencies continue to be concerned that the term
                ``religious character'' may not be entirely clear. The Supreme Court
                has not defined ``religious character.'' It has held, however, that
                discrimination against ``any [grant] applicant owned or controlled by a
                church, sect, or denomination of religion,'' Trinity Lutheran, 137 S.
                Ct. at 2017, 2021, or any school ``owned or controlled in whole or in
                part by any church, sect, or denomination,'' Espinoza, 140 S. Ct. at
                2252, 2255, constitutes discrimination on the basis of ``religious
                character.'' In some cases, the Court has also appeared to equate
                ``religious character'' and ``religious status,'' without explaining
                whether there are any differences between the two concepts. Espinoza,
                140 S. Ct. at 2255, 2260 (``character''); id. at 2254-57, 2262
                (``status''); Trinity Lutheran, 137 S. Ct. at 2021, 2022, 2024
                (``character''); id. at 2019, 2020, 2021 (``status''). The Court has
                contrasted those terms with religious ``use,'' which is a similarly
                undefined reference to religious conduct. Espinoza, 140 S. Ct. at 2255-
                57. Also, some Justices have questioned the ability of courts--let
                alone regulatory agencies and their intermediaries--to apply the
                distinction between ``religious character'' and ``religious use.'' \65\
                ---------------------------------------------------------------------------
                 \65\ See Espinoza, 140 S. Ct. at 2257; id. at 2275-78 (Gorsuch,
                J., concurring); Trinity Lutheran, 137 S. Ct. at 2025-26 (Gorsuch,
                J., concurring in part, joined by Thomas, J.) (questioning ``the
                stability of such a line'').
                ---------------------------------------------------------------------------
                 Despite these concerns, the Agencies agree with the commenters that
                there is a body of case law protecting against discrimination based on
                ``religious character.'' To avoid tension with this case law, all of
                the Agencies finalize these provisions to include the phrase
                ``religious character.'' For purposes of these provisions, the Agencies
                interpret discrimination based on ``religious character'' to mean
                distinctions based on the organization's religious status, including as
                a church, sect, denomination, or comparable classification of any
                religion; the organization's control by a church, sect, or
                denomination; the organization's identification as religious; or the
                [[Page 82086]]
                organization's operation based on religious principles. An agency would
                violate these provisions if it used an applicant's religious character
                as a basis to deny the application for Federal financial assistance
                entirely, or to penalize the applicant by, for example, awarding it
                fewer points in scoring that might be part of determining who will
                receive the assistance.
                 The Agencies also include the word ``affiliation'' in their final
                rules, prohibiting discrimination based on an organization's
                affiliation with--even if it is not controlled by--a religious
                denomination, sect, umbrella organization, or other faith-based
                organization. See Attorney General's Memorandum, Principles 6, 8.
                Certain organizations might not describe themselves as religious but
                still could be affiliated with a religious entity. Discrimination
                against such organizations on the basis of their affiliation raises
                many of the same concerns and issues raised by discrimination against
                the religious affiliates directly. See Exclusion of Religiously
                Affiliated Schools from Charter-School Grant Program, 44 Op. O.L.C. __,
                *3 (Feb. 18, 2020) (``The religious-affiliation restriction in [20
                U.S.C. 7221i(2)(E)] broadly prohibits charter schools in the program
                from associating with religious organizations. . . . That is
                discrimination on the basis of religious status.''). By prohibiting
                discrimination based on both religious ``character'' and
                ``affiliation,'' the Agencies create consistency across their final
                rules.
                 The Agencies disagree, however, that Trinity Lutheran imposes a
                ``blanket ban'' that is qualitatively different from other Free
                Exercise Clause and RFRA standards that trigger strict scrutiny. The
                Supreme Court left open in Trinity Lutheran whether discrimination on
                the basis of religious character amounted to discrimination on the
                basis of religious belief, which `` `is never permissible.' '' 137 S.
                Ct. at 2024 n.4 (quoting Lukumi, 508 U.S. at 533); see also Masterpiece
                Cakeshop, Ltd. v. Colo. Civil Rights Comm'n, 138 S. Ct. 1719, 1731-32
                (2018) (government ``cannot impose regulations that are hostile to the
                religious beliefs of affected citizens''). Instead, as noted, the Court
                applied the ``most rigorous scrutiny,'' Trinity Lutheran, 137 S. Ct. at
                2024 (internal quotation marks omitted), and determined that the
                discrimination in that case could not ``survive strict scrutiny in any
                event,'' id. at 2024 n.4. See also Espinoza, 140 S. Ct. at 2260 (``When
                otherwise eligible recipients are disqualified from a public benefit
                `solely because of their religious character,' we must apply strict
                scrutiny.'') (quoting Trinity Lutheran, 137 S. Ct. at 2021). The
                Agencies do not in this final rule take a position on whether the First
                Amendment categorically prohibits discrimination against religious
                character.
                 Finally, for consistency and completeness, any Agency that requires
                notice of these provisions using prescribed text whose terms were
                included in an Appendix to the regulatory text in the Code of Federal
                Regulations is also adding ``religious character'' to that notice.
                 Changes: All Agencies include ``religious character'' in these
                substantive provisions in this final rule, as DHS and HUD had proposed
                regarding discrimination, and in any applicable notice. USDA also
                includes religious ``affiliation'' in its substantive provision
                prohibiting disqualification.
                 Affected Regulations: 2 CFR 3474.15(b)(2), (b)(4), 34 CFR
                75.52(a)(2), (a)(4), 76.52(a)(2), (a)(4), 34 CFR part 75 Appendix A
                (ED); 6 CFR 19.3(e), 19.4(c), 6 CFR part 19 Appendix A (DHS); 7 CFR
                16.3(a), (d)(3), 7 CFR part 16 Appendix A (USDA); 22 CFR 205.1(a), (f)
                (USAID); 24 CFR 5.109(h), 24 CFR part 5 Appendix A (HUD); 28 CFR
                38.4(a), 38.5(d), 28 CFR part 38 Appendix A (DOJ); 29 CFR 2.32(a), (c),
                29 CFR part 2 Appendix A (DOL); 38 CFR 50.2(a), (e), 38 CFR part 50
                Appendix A (VA); 45 CFR 87.3(a), (e), 45 CFR part 87 Appendix A (HHS).
                2. ``Religious Exercise''
                a. Scope of ``Religious Exercise''
                 Summary of Comments: The Agencies received a variety of comments on
                the proposal to prohibit discrimination in selection and
                disqualification on the basis of ``religious exercise.'' Several
                commenters argued that these provisions should not use the phrase
                ``religious exercise'' from RFRA because some discrimination is
                permitted based on ``religious exercise.'' They reasoned that RFRA
                applies a case-specific test that allows awarding agencies to
                discriminate based on ``religious exercise,'' when there is no
                substantial burden or when the law satisfies strict scrutiny. They
                argued that the bright-line nondiscrimination rule from Trinity
                Lutheran should not apply to ``religious exercise'' without RFRA's
                fact-specific inquiry.
                 Some commenters recognized the body of case law regarding the
                definition of ``religious exercise,'' which HHS referenced in its
                preamble, but argued that using ``religious exercise'' for a blanket
                ban on discrimination here does not ``reflect'' that body of law. Some
                commented that there was no confusion in the provisions because
                ``religious exercise'' and ``character'' have distinct meanings, as
                articulated in Trinity Lutheran and other First Amendment cases. They
                then pointed to the language in Trinity Lutheran, 137 S. Ct. at 2021,
                that distinguished neutral laws of general applicability that implicate
                ``religious exercise''--which commenters said can take many forms and
                against which discrimination may be allowed--from laws that
                discriminate based on religious character. Such neutral laws of general
                applicability that burden ``religious exercise'' are subject to the
                fact-sensitive test from RFRA that, commenters said, can be difficult
                to apply and requires consideration of the burden on the religious
                entity, of the Government's interest, and of available alternative
                means.
                 Some commenters argued that these provisions barring discrimination
                in selection of service providers for Agency programs can use
                ``religious exercise'' only if they have RFRA-related limiting
                language. Without such limiting language, commenters claimed that these
                provisions would lead to blanket exemptions that are not required by
                the Free Exercise Clause or RFRA. Commenters expressed concern that
                such exemptions would tilt the balance ``far too heavily in the
                direction of catering to religious service providers rather than to
                program beneficiaries,'' which would be contrary to these programs'
                central goal of providing services to people in need. A few commenters
                argued that this change to ``religious exercise'' would likely infringe
                on the religious-freedom rights and well-being of program
                beneficiaries, with some adding that government programs can be a
                matter of life and death for some beneficiaries. Other commenters were
                concerned that the use of ``religious exercise'' without any limiting
                language would enable faith-based organizations to receive Federal
                funding even if they are unwilling to abide by any program requirement,
                no matter how essential it is to furthering a compelling governmental
                interest and no matter how narrowly tailored. Multiple commenters said,
                for example, that organizations could opt out of providing services to
                individuals who do not adhere to the provider's religious beliefs,
                including denying access to condoms in an HIV-prevention program to
                people whose relationships the provider deems sinful, or might make
                non-religious beneficiaries ``uncomfortable'' accessing the federally
                funded services. Another commenter argued that it is not discrimination
                to
                [[Page 82087]]
                exclude faith-based organizations whose religious exercise precludes
                fulfilling program requirements to an extent that would harm
                beneficiaries, just as the Agencies can exclude any non-religious
                providers that will not fulfill such program requirements.
                 Several commenters were concerned that this change would impose
                burdens on third parties contrary to RFRA and the Establishment Clause.
                Some of these commenters argued that religious exemptions and
                accommodations are not permitted when they harm third parties--citing
                Hobby Lobby, 573 U.S. 682, Justice Kennedy's concurrence in Hobby
                Lobby, 573 U.S. at 736, Justice Ginsburg's concurrence in Holt v.
                Hobbs, 574 U.S. at 370, and Estate of Thornton, 472 U.S. 703--and
                added, without citation, that this is ``all the more true where the
                harm is government funded.'' Others added that Hobby Lobby emphasized
                that accommodation was appropriate where beneficiaries continued
                receiving the benefits and faced minimal hurdles, whereas an exemption
                from a program requirement may be inappropriate if it failed to protect
                beneficiaries as effectively as non-accommodation. One commenter added
                that the Agencies must not create exemptions that give grantees the
                right to decline to provide services, which amounts to giving them
                ``the right to use taxpayer money to impose [their beliefs] on
                others,'' quoting ACLU of Massachusetts v. Sebelius, 821 F. Supp. 2d
                474, 488 n.26 (D. Mass. 2012), vacated as moot, ACLU of Mass. v. U.S.
                Conference of Catholic Bishops, 705 F.3d 44 (1st Cir. 2013). Some
                commenters argued that such exemptions would violate the Establishment
                Clause by ``devolv[ing] into something unlawful'' under Corporation of
                Presiding Bishop, 483 U.S. 327, ``overrid[ing] other significant
                interests,'' or ``impos[ing] unjustified burdens on other[s]'' under
                Cutter, 544 U.S. at 722, 726. Some also commented that the Agencies
                failed to acknowledge or address the economic and non-economic costs
                this change would create for beneficiaries and taxpayers.
                 For these reasons, some of these commenters added that using the
                RFRA phrase ``religious exercise'' in this context fosters confusion
                and is vague.
                 Several other commenters supported the change. These commenters
                agreed with using the definition of ``religious exercise'' from RFRA
                and RLUIPA. Some of these commenters argued that adding the phrase
                ``religious exercise'' emphasizes the important place that RFRA
                continues to occupy in protecting claims of religious infringement,
                including because it applies to ``any exercise of religion, whether or
                not compelled by, or central to, a system of religious belief.'' 42
                U.S.C. 2000cc-5(7)(A) (definition of ``religious exercise'' in RLUIPA,
                incorporated by reference into definition of ``exercise of religion''
                in RFRA, 42 U.S.C. 2000bb-2(4)). One of these commenters argued that
                this change (along with others) ``send[s] a strong message . . . and
                will enhance the participation of faith-based entities in administering
                Federal programs, thereby providing more assistance to more needy
                Americans.'' Another commenter argued that ``religious exercise'' adds
                protection for the ``public dimension of religious activity'' whereas
                ``religious character'' applies only to the ``private dimension.''
                 Response: The Agencies agree that their regulations should be
                updated to protect faith-based organizations from improper
                discrimination based on their ``religious exercise,'' including to
                protect the public dimension of religious activity. But they also agree
                with the commenters that additional language is appropriate to clarify
                the scope of this prohibition, tether it more closely to the applicable
                Religion Clauses and RFRA standards, and ensure that this provision
                only creates exemptions from program requirements based on RFRA when
                there is proper case-specific balancing.
                 By ``discriminate'' in the selection process on the basis of an
                organization's religious ``exercise'' and by ``disqualify'' faith-based
                or religious organizations because of their religious ``exercise,'' the
                Agencies' NPRMs intended to capture forms of discrimination that may be
                more subtle than outright rejection of an organization because of its
                religious character. The Supreme Court has long held that ``a law
                targeting religious beliefs as such is never permissible'' and that
                ``if the object of a law is to infringe upon or restrain practices
                because of their religious motivation,'' the law is subject to the most
                rigorous form of scrutiny. Lukumi, 508 U.S. at 533. The Court has also
                recognized that governmental hostility toward religion can be ``masked
                as well as overt,'' and has thus instructed courts to survey
                meticulously laws that burden religious exercise to determine whether
                they are neutral and generally applicable. Id. at 534. ``Neutrality and
                general applicability are interrelated, and . . . failure to satisfy
                one requirement is a likely indication that the other has not been
                satisfied.'' Id. at 531. Failure to satisfy either requirement triggers
                strict scrutiny. Id. at 546; see also Central Rabbinical Congress, 763
                F.3d at 194-95 (holding that strict scrutiny must be applied to law
                that singled out specific religious conduct). A law is not neutral if
                it singles out particular religious conduct for adverse treatment;
                treats the same conduct as lawful when undertaken for secular reasons
                but unlawful when undertaken for religious reasons; visits ``gratuitous
                restrictions on religious conduct;'' or ``accomplishes . . . a
                `religious gerrymander,' an impermissible attempt to target [certain
                individuals] and their religious practices.'' Lukumi, 508 U.S. at 535,
                538 (citation omitted); see Smith, 494 U.S. at 878. A law is not
                generally applicable if, ``in a selective manner [it] impose[s] burdens
                only on conduct motivated by religious belief,'' including by
                ``fail[ing] to prohibit nonreligious conduct that endangers [its]
                interest in a similar or greater degree than . . . does'' the
                prohibited conduct. Lukumi, 508 U.S. at 543. Even a neutral law of
                general applicability can run afoul of the First Amendment if the
                Government interprets or applies the law in a manner that discriminates
                against religious exercise. See Lukumi, 508 U.S. at 537; Fowler v.
                Rhode Island, 345 U.S. 67, 69-70 (1953) (government discriminatorily
                enforced ordinance prohibiting meetings in public parks against a
                religious group). In recognition of this case law and as the
                appropriate policy choice, the Agencies expressly prohibit
                discrimination and disqualification based on ``religious exercise.''
                The Agencies do not believe that they have any legitimate interest in
                disqualifying or discriminating against an organization for engaging in
                conduct for religious reasons that the Agencies would tolerate if
                engaged in for secular reasons.
                 Independently, the Agencies' NPRMs also intended that these
                provisions apply so as to avoid RFRA issues. RFRA applies to these
                regulations. See Parts II.C and II.E; World Vision, 31 Op. O.L.C. 162.
                Discrimination against an organization at the selection phase, or
                disqualification of an organization from a federally funded social
                service program, based on conditions of participation that conflict
                with an organization's sincerely held religious beliefs, may constitute
                a substantial burden under RFRA by placing substantial pressure on the
                organization to abandon those beliefs. Then, as with the First
                Amendment standards discussed above, RFRA would trigger strict
                scrutiny. Where religious conduct can be accommodated such that the
                organization can meet the program requirements in a way that is
                appropriate under the circumstances, the Agencies do not believe that
                they will have a compelling governmental
                [[Page 82088]]
                interest in refusing to consider potential accommodations as part of
                their grant application process. RFRA thus supports this provision.
                 To delineate the scope of protected religious conduct, the Agencies
                agree with the comments that supported adopting the definition of
                ``religious exercise'' that applies to RFRA and RLUIPA. This definition
                of ``religious exercise'' is set out clearly in RLUIPA, 42 U.S.C.
                2000cc-5(7)(A), and incorporated by reference into RFRA, 42 U.S.C.
                2000bb-2(4). This definition has been applied in an extensive body of
                cases and is appropriate to complement the protections for religious
                ``character'' and ``affiliation.'' See Part II.F.1. Although the
                Agencies recognize that the Supreme Court has tried to distinguish
                between religious ``character'' and ``use,'' including in Trinity
                Lutheran, 137 S. Ct. at 2021-24, they observe that the Court has also,
                as noted above, recognized protection for religious exercise apart from
                restrictions that burden religious character. See Lukumi, 508 U.S. at
                533-34, 537, 543. The definition also reflects that RFRA provides
                broader protection for religious exercise than the Supreme Court's
                current Free Exercise Clause doctrine.
                 But the Agencies also recognize that many commenters apparently
                interpreted the proposed addition of ``religious exercise'' more
                broadly than intended. The Agencies did not intend in their NPRMs to
                suggest that faith-based organizations must be deemed eligible for
                grants when they are unable or unwilling to meet a particular program's
                requirements under the circumstances, even with an appropriate
                accommodation. Thus, a grant-awarding agency may decide, for example,
                to disqualify a faith-based organization that, taking into account any
                appropriate accommodation, cannot meet the program's requirements. By
                the same token, it is not discrimination in favor of religious exercise
                to grant an appropriate accommodation; the effect is to allow both
                religious and secular organizations to participate as service providers
                on terms that advance the purposes of the program. Moreover, as
                discussed in greater detail in Parts II.C.3 and II.E, an appropriate
                accommodation of religious exercise does not violate the Establishment
                Clause, see, e.g., Cutter, 544 U.S. at 713-14, 719-24; Amos, 483 U.S.
                at 334-34, and the Agencies exercise their discretion to include
                accommodations in these provisions. The Agencies apply the same
                analysis and discretion to their provisions that prohibit disqualifying
                faith-based organizations because of their religious exercise.
                 The Agencies view appropriate accommodations to include any that
                would be required by RFRA or other law, as well as any that would be
                permitted by law and not be significantly burdensome for beneficiaries
                and the Agency. The Agencies determine that there is no compelling
                interest in denying such accommodations. By including express language
                regarding such accommodations, the Agencies further their policy
                determination to prohibit disqualification and discrimination in the
                selection of providers based on religious exercise. The Agencies have
                discretion to adopt this approach to avoid potential RFRA issues, as
                discussed in greater detail in Parts II.C.3 and II.E above (discussing
                Little Sisters and other authority). Moreover, as outlined below, the
                Agencies expressly limit these provisions to accommodations that are
                consistent with the Religion Clauses. The Agencies use the term
                ``appropriate accommodation'' to be clear that they do not incorporate
                the standards for reasonable accommodations of disabilities or for
                workplace accommodation of religion, such as the no-more-than-de-
                minimis standard.
                 The Agencies also clarify that these provisions prohibit
                discrimination in selection and disqualification from participation in
                programs, but do not mandate that any faith-based organization receive
                a grant, which would depend on all of the other relevant factors. The
                Agencies provide for appropriate accommodation because they have
                concluded that it is possible, and indeed beneficial, for a program to
                afford such accommodations where appropriate in light of all the
                circumstances. But the Agencies do not intend to create blanket
                exemptions that could improperly favor faith-based organizations.
                Accommodations should be granted only after case-specific analysis and
                balancing.
                 In sum, the Agencies add language to these provisions in this final
                rule to make clear that these nondiscrimination and non-
                disqualification provisions prohibit discrimination against an
                organization on the basis of religious exercise, which means
                disfavoring an organization, including by failing to select an
                organization, disqualifying an organization, or imposing any condition
                or selection criterion that otherwise disfavors or penalizes an
                organization in the selection process or has such an effect: (i)
                Because of conduct that would not be considered grounds to disfavor a
                secular organization, (ii) because of conduct that must or could be
                granted an appropriate accommodation in a manner consistent with RFRA
                or the Religion Clauses of the First Amendment to the Constitution, or
                (iii) because of the actual or suspected religious motivation of the
                organization's religious exercise. See Attorney General's Memorandum,
                Principles 5, 7. That additional language is supported by the Free
                Exercise Clause and RFRA, and it ensures that the nondiscrimination
                provisions do not unreasonably supplant program requirements that apply
                equally to faith-based and non-faith-based organizations. Just like
                with ``religious character,'' this language ensures that the
                prohibitions on discrimination and disqualification apply where strict
                scrutiny would otherwise apply, and the Government has determined that
                this scrutiny standard would not be met. For all of these reasons, the
                Agencies conclude that prohibiting such discrimination and
                disqualification does not improperly turn a case-specific standard into
                a blanket exemption.
                 The Agencies believe that this additional language also addresses
                the commenters' concerns regarding harms to beneficiaries' religious
                liberty and well-being, including the concerns about third-party harms.
                The Agencies disagree with the comments that religious exemptions and
                accommodations are prohibited categorically when they impose any
                burdens on third parties. Third-party burdens are relevant to
                evaluating the least restrictive means under the First Amendment and
                RFRA, and such burdens can be relevant to the Establishment Clause
                analysis. But third-party burdens are not an automatic bar to
                accommodations and exemptions, as Hobby Lobby held explicitly. 573 U.S.
                at 729 n.37 (discussed in greater detail in Part II.C.3.e above).
                 The Agencies also disagree, as a factual matter, that these changes
                would create cognizable economic or non-economic burdens on third
                parties. Beneficiaries have no right to demand that the Government work
                with any particular applicant for a grant, and certainly have no right
                to demand that the Government discriminate against any applicant on the
                basis of religion or religious exercise. Subsections (i) and (iii) of
                these provisions, based on free exercise principles, merely prohibit
                discrimination in selection or disqualification that involves targeting
                or singling out religious exercise for disparate treatment from
                comparable secular conduct. Such mandated equal treatment does not
                impose impermissible burdens on third parties. Similarly, subsection
                (ii) of these provisions, based on RFRA, merely
                [[Page 82089]]
                prohibits discrimination in selection or disqualification when there is
                an appropriate accommodation, which, as discussed above, necessarily
                addresses these concerns. The Agencies note that these provisions are
                parallel to the provisions that prohibited discrimination based on
                religious character, which did not impose burdens on third parties, and
                which no commenter claimed had imposed such burdens. And the Agencies
                determine that these provisions are the appropriate policy choice.
                 For the same reasons, the Agencies conclude that these provisions
                are consistent with the Establishment Clause. Additionally, subsections
                (i) and (iii) add standards for ``religious exercise'' that are
                supported by the Free Exercise Clause and that alleviate burdens on
                religious exercise, without burdening third parties to a degree that
                counsels against providing the exemptions. See Part II.C.3 and II.E.
                Subsection (ii) likewise alleviates burdens on religious exercise
                consistent with the authority found in RFRA and expressly incorporates
                the limits imposed by the Religion Clauses, which includes the
                Establishment Clause. That language also resolves any comments that
                opposed the proposed rules based on Establishment Clause and RFRA cases
                regarding third-party burdens. Additionally, the Agencies have
                maintained other limits addressing Establishment Clause concerns,
                including limits on direct Federal funding of explicitly religious
                activities. Based on their experience administering grant programs and
                the comments received on this rulemaking, the Agencies do not believe
                that these changes will create any third-party burdens that would
                warrant further limiting such accommodations.
                 Based on their experience, the Agencies also disagree with comments
                that these changes would permit grantees inappropriately to withhold
                services or impose their religious beliefs on others. The Agencies have
                been subject to RFRA since 1993. In that time, there is no indication
                that any accommodation adopted under that statute resulted in such
                harms, and no commenter has pointed to any instance of such actual
                harms, as discussed in greater detail in Parts II.C and II.E. HHS, for
                example, has responded to numerous accommodation requests in that time
                and is not aware of any actual instance of these hypothetical issues
                described by commenters. The ACLU of Massachusetts case cited by
                commenters, which challenged an HHS contract to a faith-based
                organization, does not demonstrate any such harms, is distinguishable
                on many legal and factual grounds, and shows how a faith-based
                organization can receive an appropriate accommodation as the highest
                ranking applicant under one version of a program but not receive one
                under another version where other providers rank higher. See 705 F.3d
                at 49-51. The Agencies conclude that these provisions ensure equal
                treatment for faith-based organizations in the selection and
                disqualification processes for participation in federally funded
                programs. And these provisions prohibit discrimination or
                disqualification where ``appropriate accommodations'' are available.
                Such accommodations would not allow organizations to inappropriately
                withhold services or impose their religious beliefs on others. These
                organizations, if selected, will also be bound to comply with the
                applicable prohibitions of discrimination against a beneficiary on the
                basis of religion and of engaging in explicitly religious activities.
                See, e.g., 2 CFR 3474.15(f); 34 CFR 75.532(a)(1), 76.532(a)(1).
                 A commenter's example of denying access to condoms in an HIV-
                prevention program is instructive. A program that required grantees to
                provide condoms as part of the funded services would violate this final
                rule if--on its face or as implemented--it disqualified or
                discriminated against a grantee based on its religious character or
                affiliation, it allowed secular but not religious grantees to opt out
                of that program requirement, or it disqualified or discriminated
                against a grantee based on its religious motivations for objecting to
                that requirement. If the requirement did not violate those principles,
                however, then the requirement to provide condoms could be imposed on
                all organizations, unless it was determined that there was an
                appropriate accommodation for a faith-based organization to decline to
                provide such condoms. That determination would hinge on a fact-specific
                inquiry into the relevant factors, such as the burden on the faith-
                based organization's religious exercise from distributing the condoms,
                the importance of condoms to the Government and the government program,
                the demand for the faith-based organization to provide condoms contrary
                to its religious exercise, the availability of condoms from other
                sources, and the availability of alternatives to meet the program's
                goals that would not violate the faith-based organization's religious
                beliefs (e.g., other HIV-prevention methods or referral to entities
                that will provide condoms). RFRA already requires the Agencies and
                their intermediaries to engage in such analysis. These provisions in
                this final rule merely reiterate that requirement. These provisions
                also establish that the Agencies and their intermediaries must grant
                both required and permissible accommodations, as appropriate.
                 In addition to all of the other reasons outlined in this section,
                the Agencies determine that these provisions will benefit program
                beneficiaries by removing eligibility barriers for qualified faith-
                based organizations. In the Agencies' experience, some faith-based
                organizations do not apply for grants when their eligibility is
                unclear, both to avoid wasting time on applications when the grants at
                issue could be denied for reasons related to their religion and to
                avoid litigation regarding any grant they are awarded. These provisions
                help to make such faith-based organizations' eligibility clearer.
                 Together, all of these changes strike the proper balance between
                protecting faith-based organizations against discrimination or
                disqualification based on established First Amendment and RFRA case
                law, protecting beneficiaries, and ensuring that program requirements
                are met with appropriate accommodations that are consistent with the
                First Amendment and RFRA. Additionally, the Agencies define their terms
                and explain how these standards complement each other. As a result,
                these changes also address the commenters' concerns regarding vagueness
                and confusion. Recognizing this protection for religious exercise also
                ensures that there is no confusion for the Agencies, States, local
                governments, other pass-through entities, applicants, grantees, or
                beneficiaries.
                 Finally, because these standards align with constitutional and
                statutory requirements that already applied to the prior provisions,
                the Agencies determine that they would impose negligible additional
                costs to beneficiaries and taxpayers. If anything, these changes will
                save beneficiaries and taxpayers the costs of litigation and confusion
                from the prior provisions' omission of the constitutional and RFRA
                standards. And beneficiaries will benefit from the services that faith-
                based organizations can provide without threat of unconstitutional
                discrimination or disqualification. Even if these changes would impose
                additional costs on beneficiaries and taxpayers, the Agencies would
                still exercise their discretion to make these changes because this is
                the appropriate policy choice.
                [[Page 82090]]
                 Changes: All Agencies have added regulatory language to clarify
                that these discrimination and disqualification provisions prohibit
                discrimination on the basis of the organization's religious exercise,
                which means to disfavor an organization, including by failing to select
                an organization, disqualifying an organization, or imposing any
                condition or selection criterion that otherwise disfavors or penalizes
                an organization in the selection process or has such an effect: (i)
                Because of conduct that would not be considered grounds to disfavor a
                secular organization, (ii) because of conduct that must or could be
                granted an appropriate accommodation in a manner consistent with RFRA
                or the Religion Clauses of the First Amendment to the Constitution, or
                (iii) because of the actual or suspected religious motivation of the
                organization's religious exercise.
                 Affected Regulations: 2 CFR 3474.15(b)(2), (b)(4), 34 CFR
                75.52(a)(2), (a)(4), (c)(3); 34 CFR 76.52(a)(2), (a)(4), (c)(3) (ED); 6
                CFR 19.3(b), (e), 19.4(c) (DHS); 7 CFR 16.2, 16.3(a), (d)(3) (USDA); 22
                CFR 205.1(a), (f) (USAID); 24 CFR 5.109(c), (h) (HUD); 28 CFR 38.4(a),
                38.5(d) (DOJ); 29 CFR 2.32(a), (c), (d) (DOL); 38 CFR 50.2(a), (e)
                (VA); 45 CFR 87.3(a), (e) (HHS).
                b. Clarified Basis for Protecting ``Religious Exercise''
                 Summary of Comments: One commenter criticized multiple Agencies for
                justifying the Agencies' proposals to protect faith-based organizations
                from disqualification or discrimination on the basis of ``religious
                exercise'' by reference to Trinity Lutheran. The commenter asserted
                that Trinity Lutheran provided no justification for such protections
                because it barred only discrimination based on ``religious character,''
                not ``religious exercise.'' This commenter cited the preamble sections
                that described the changes to the discrimination and disqualification
                provisions.
                 Response: While the Agencies believe that their changes in this
                regard are consistent with Trinity Lutheran, the Agencies did not
                intend to suggest that the changes were necessarily required by that
                decision. See 85 FR 2893 (DHS, Sec. 19.3(e)); id. at 2901 (USDA, Sec.
                16.3(a)); id. at 2918 (USAID, Sec. 205.1(a)); id. at 2925 (DOJ, Sec.
                38.4(a)); id. at 2933 (DOL, Sec. 2.32(a)); id. at 2942 (VA, Sec.
                50.2(a)); id. at 2979 (HHS, Sec. 87.3(a)); id. at 8220 (HUD, Sec.
                5.109(c)). Rather, the changes are warranted to alleviate tension with
                the First Amendment and RFRA principles outlined in Part II.F.2.a
                above, as well as tension with the related Principles 6, 8, 10-15, and
                20 in the Attorney General's Memorandum. See 85 FR 2892-93 (DHS, Sec.
                19.3(b), Sec. 19.4(c)); id. at 2901 (USDA, Sec. 16.3(d)); id. at 2925
                (DOJ Sec. 38.5(d)); id. at 2918 (USAID, Sec. 205.1(f)); id. at 2933
                (DOL, Sec. 2.32(c)); id. at 2942 (VA, Sec. 50.2(e)); id. at 2981
                (HHS, Sec. 87.3(e)); id. at 3201 (ED, Sec. 3474.15(b)(2), (b)(4));
                id. at 3203-04 (ED, Sec. 75.52(a)(2), (a)(4), Sec. 76.52(a)(2),
                (a)(4)); id. at 8220 (HUD, Sec. 5.109(h)).
                 Changes: None.
                 Affected Regulations: None.
                G. Rights of Faith-Based Organizations
                1. Religious Symbols
                 For both direct and indirect Federal financial assistance, existing
                regulations expressly allowed faith-based organizations to use space in
                their facilities to provide federally funded social services without
                removing religious art, icons, scriptures, or other religious symbols
                from those facilities. DOL and ED regulations also provided that such
                symbols need not be ``alter[ed],'' and DHS regulations provided that
                the symbols need not be ``conceal[ed].'' In the NPRMs, all Agencies
                proposed changes to adopt a uniform standard and clarify that faith-
                based organizations may use space in their facilities to provide
                federally funded social services without removing, altering, or
                concealing religious symbols.
                 Summary of Comments: Several commenters stated that the display of
                religious symbols could make some beneficiaries feel uncomfortable, and
                that this might lead those beneficiaries to forgo needed social
                services. In particular, commenters suggested that religious
                minorities, non-believers, or LGBT individuals might feel unwelcome in
                the presence of certain art, iconography, or scripture, including
                symbols or messages that might be interpreted as critical of their
                beliefs or conduct. Some commenters also argued that the presence of
                religious symbols would convey a message of government endorsement of
                religion, in violation of the Constitution's Establishment Clause. One
                commenter argued that Trinity Lutheran was already satisfied by the
                regulations and that requiring beneficiaries to receive federally
                funded services in a place with religious iconography is a ``far cry''
                from the playground resurfacing in Trinity Lutheran.
                 Other commenters supported the Agencies' changes. One commenter
                stated that the changes helpfully clarify that faith-based
                organizations are protected against not only the removal of religious
                symbols, but also their alteration or concealment. Another commenter
                noted that many Americans find comfort in religious artifacts and
                suggested that the presence of such symbols could be part of a holistic
                approach to meeting the social service needs of vulnerable populations.
                 Response: Although the Agencies wish for each beneficiary to be
                comfortable receiving social services, they disagree that the proposed
                changes to these provisions would appreciably add to any beneficiary
                discomfort or cause government endorsement of religion, to the extent
                endorsement remains a measure of a government establishment of
                religion. Instead, this final rule merely fleshes out the existing
                regulatory principle that faith-based organizations are permitted to
                use their facilities to provide Agency-funded social services even
                though their facilities display religious art, icons, scriptures, or
                other religious symbols. The Agencies generally do not limit other
                displays by other organizations receiving Federal funding.
                 The Agencies' regulations already allowed displays of religious
                symbols, consistent with existing Federal statutes and regulations. In
                accord with Executive Order 13279, and Federal statutes such as 42
                U.S.C. 290kk-1(d)(2)(B), all Agencies already had regulations that
                expressly permitted faith-based organizations to provide services
                without removing religious symbols. Some Agencies also expressly
                permitted the display of religious symbols without their alteration or
                concealment. None of the Agencies' regulations required the removal,
                alteration, or concealment of religious symbols. As noted in the 2016
                final rule, such a requirement would be inconsistent with ``the general
                practice of Agencies that do not otherwise limit art or symbols that
                recipients of Federal financial assistance may display in the
                structures where agency-funded activities are conducted.'' 81 FR at
                19372. The Agencies' proposed changes thus helpfully clarify the rights
                of faith-based organizations without imposing meaningfully greater
                burdens on beneficiaries and bring the Agencies' treatment of faith-
                based organizations' displays into line with their treatment of secular
                organizations' displays.
                 The Agencies disagree with the commenters who said that this change
                would be improper because religious symbols might make some
                beneficiaries feel uncomfortable. As a factual matter, in the Agencies'
                experience, discomfort with religious symbols has not been a
                significant issue for beneficiaries. For example, the Agencies are not
                aware of any beneficiaries that availed themselves of the alternative
                provider
                [[Page 82091]]
                referral requirement on that basis. See Part II.C.3.c. Moreover, even
                if the commenters could show that some beneficiaries would be
                uncomfortable with religious symbols, the commenters do not identify
                any authority supporting a constitutional or other legal right to be
                free from such discomfort. Indeed, it is unclear whether any
                beneficiary would even have grounds to challenge such a display based
                on such offense, objection, or disagreement, no matter how `` `sharp
                and acrimonious it may be.' '' Am. Legion v. Am. Humanist Ass'n, 139 S.
                Ct. 2067, 2098 (2019) (Gorsuch, J., concurring in judgment) (quoting
                Diamond v. Charles, 476 U.S. 54, 62 (1986)); see Valley Forge Christian
                Coll. v. Ams. United for Separation of Church & State, Inc., 454 U.S.
                464, 485 (1982).
                 Furthermore, in addition to breaking with longstanding practice,
                singling out religious providers for censorship of art or symbols would
                be in tension with First Amendment principles, RFRA, the binding legal
                principles summarized in the Attorney General's Memorandum and
                Executive Order 13559. See, e.g., E.O. 13559, 75 FR at 71320 (``Among
                other things, faith-based organizations that receive Federal financial
                assistance may use their facilities to provide social services
                supported with Federal financial assistance, without removing or
                altering religious art, icons, scriptures, or other symbols from these
                facilities.''). Such targeted censoring of faith-based organizations
                would risk imposing ``special disabilities'' on religious groups based
                purely on their religious status and imposing a substantial burden on
                such groups' religious exercise. Trinity Lutheran, 137 S. Ct. at 2019;
                42 U.S.C. 2000bb-1; Attorney General's Memorandum, Principle 6, 82 FR
                at 49669. As explained in Part II.C.3.a, the Supreme Court has made
                clear in Espinoza that the First Amendment prohibition of
                discrimination on the basis of religious character from Trinity
                Lutheran is a general principle not limited to grants for playground
                resurfacing.
                 Even if some beneficiaries might theoretically prefer not to
                encounter religious art or symbols, the same issue may arise with
                respect to certain non-religious art or symbols. For example, a
                beneficiary may be uncomfortable receiving services in a facility
                adorned with secular art or symbols that reflect values inconsistent
                with his or her moral, political, or religious beliefs. A blanket ban
                on all symbols that cause discomfort would be beyond the scope of the
                final rules, has not been suggested by any commenter, and would have
                additional First Amendment implications. Permitting the display of
                religious symbols is therefore consistent with the Agencies' practices,
                with the principle of freedom of speech, and with the principle of
                government neutrality toward religion. Even if the Agencies' clarifying
                amendments could impose some additional burdens on beneficiaries, the
                Agencies would still exercise their discretion to make these changes
                because they believe the burden would be slight compared to the burden
                a contrary rule would impose on religious organizations.
                 Moreover, the Agencies have concluded that allowing religious
                displays can benefit both beneficiaries and providers. As one commenter
                noted (and as with non-religious symbols), many Americans find comfort
                in religious artifacts and the presence of such symbols could be part
                of a holistic approach to meeting the social services needs of
                vulnerable populations. Others certainly might have different feelings,
                but going so far as to order the removal, alteration, and concealment
                of a religious group's cherished symbols may well lead to that
                religious group feeling uncomfortable or unwelcome at the hands of the
                Government. As the Supreme Court recently observed, eliminating
                religious symbols (or requiring their alteration or concealment) may
                appear ``hostile to religion'' rather than ``neutral.'' Am. Legion, 139
                S. Ct. at 2084-85. There is a particular risk of the Agencies
                displaying such hostility if they required such elimination,
                alteration, or concealment here because they do not generally restrict
                parallel secular displays, no matter how offensive to certain
                beneficiaries.
                 The Agencies disagree that the display of religious symbols by
                faith-based organizations constitutes a government endorsement of
                religion in violation of the Establishment Clause. As an initial
                matter, the Supreme Court has declined to apply the ``endorsement''
                test in recent Establishment Clause cases, and several Justices have
                questioned its vitality, including in cases challenging official
                displays of religious symbols. See, e.g., Am. Legion, 139 S. Ct. at
                2080-82 (plurality); id. at 2092 (Kavanaugh, J., concurring); id. at
                2100-02 (Gorsuch, J., concurring); Van Orden v. Perry, 545 U.S. 677,
                698-705 (Breyer, J., concurring in judgment). Instead, the Court has
                interpreted the Establishment Clause ``by reference to historical
                practices and understandings.'' Town of Greece v. Galloway, 572 U.S.
                565, 576 (2014) (internal quotation marks omitted).\66\ The Agencies
                are not aware of any history or tradition of prohibiting religious
                displays by private faith-based organizations that receive Federal
                funding, and no commenter pointed to any.
                ---------------------------------------------------------------------------
                 \66\ See also Am. Legion, 139 S. Ct. at 2087 (same) (plurality);
                id. at 2090-91 (Breyer, J., concurring) (stating that ``I have long
                maintained that there is no single formula for resolving
                Establishment Clause challenges,'' and``[t]he Court appropriately
                looks to history for guidance'') (internal quotation marks omitted);
                id. at 2092 (Kavanaugh, J., concurring) (``Consistent with the
                Court's case law, the Court today applies a history and tradition
                test.''); id. at 2094 (Kagan, J., concurring in part) (``I agree
                that rigid application of the Lemon test does not solve every
                Establishment Clause problem[.] . . . I too look to history for
                guidance.'') (alteration and internal quotation marks omitted); id.
                at 2096 (Thomas, J., concurring in judgment) (``[T]he plaintiff must
                demonstrate that he was actually coerced by government conduct that
                shares the characteristics of an establishment as understood at the
                founding.''); id. at 2101 (Gorsuch, J., concurring in judgment)
                (``[W]hat matters . . . is whether the challenged practice fits
                within the tradition of this country.'') (internal quotation marks
                omitted).
                ---------------------------------------------------------------------------
                 To the extent that the ``endorsement'' test survives, moreover,
                there is no reason to think it would require the removal, alteration,
                or concealment of religious symbols in this context. Unlike in a
                typical Establishment Clause case that involves a religious display on
                government property, see, e.g., Cty. of Allegheny v. ACLU Greater
                Pittsburgh Chapter, 492 U.S. 573, 579 (1989) (barring cr[egrave]che in
                the ``most public'' part of a county courthouse), the provisions at
                issue here concern the display of religious symbols by private
                organizations on private property. A reasonable observer would
                understand that such a display--considered alongside the displays, both
                religious and secular, by all the other private organizations that help
                to administer Federal social service programs--does not convey a
                message of endorsement by the Federal Government. In this context,
                where the Government is not sponsoring the display and the Government-
                funded programs are open to a variety of religious and non-religious
                participants, a ban on the display of religious symbols might even
                constitute an impermissible viewpoint-based regulation of private
                religious expression. Cf. Capitol Square Review & Advisory Bd. v.
                Pinette, 515 U.S. 753, 759-63 (1995). The government does not endorse
                religion in general, or a faith in particular, by allowing a faith-
                based organization to participate equally in delivering federally
                funded services and to maintain a display that reflect its religious
                identity, especially when a secular organization does not need to
                remove a comparable display.
                 Changes: None.
                [[Page 82092]]
                 Affected Regulations: None.
                2. Nonprofit Status
                 Existing regulations for DOJ, DOL, ED, HHS, and USAID provided
                that, where eligibility for funding is limited to nonprofit
                organizations, nonprofit status can be demonstrated by several means:
                (1) Proof that the IRS 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
                taxing body or the State secretary of state certifying that the
                organization is a nonprofit organization operating within the State and
                that no part of its net earnings may lawfully benefit any private
                shareholder or individual; (3) a certified copy of the applicants'
                certificate of incorporation or similar document that clearly
                establishes the nonprofit status of the applicant; or (4) any of the
                foregoing methods of proof if applicable 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.
                 Under the proposed rules, DHS, HUD, and VA would adopt the same
                four provisions. Also, DHS, DOJ, DOL, ED, HHS, HUD, and VA would add a
                fifth provision stating that, if an entity has a sincerely held
                religious belief that it cannot apply for a determination as tax-exempt
                under section 501(c)(3), the entity may demonstrate nonprofit status by
                submitting ``evidence sufficient to establish that the entity would
                otherwise qualify as a nonprofit organization'' under the four
                provisions. Because USAID and USDA did not propose any changes to their
                existing regulations regarding determination of nonprofit status, the
                discussion below does not apply to them, unless otherwise noted.
                 Summary of Comments: A few commenters criticized the Agencies'
                proposed changes. One commenter to ED and HHS characterized the changes
                as allowing faith-based organizations to ``self-certify their nonprofit
                status,'' whereas in the commenter's view, a ``formal determination of
                tax-exempt status'' promotes greater accountability by ensuring the
                record-keeping and transparency needed to monitor grant compliance. The
                same commenter suggested that alternative pathways for demonstrating
                nonprofit status are unnecessary because, in the commenter's view,
                requiring 501(c)(3) status imposes no substantial burden on religion.
                The commenter cited for support Locke v. Davey, 540 U.S. 712, which the
                commenter characterized as holding that denying government funding for
                ``religious activity'' does not infringe religious freedom. Finally,
                this commenter asserted that there is ``no evidence that the current
                requirement is burdensome'' to faith-based organizations that receive
                Federal financial assistance to provide social services.
                 Another commenter asserted in cursory fashion that the proposed
                accommodation ``means that anything goes for a religious
                organization,'' that it constitutes ``special treatment,'' and that it
                amounts to an unconstitutional ``establishment of religion.''
                 One commenter supported the Agencies' changes, stated that the
                changes provide ``an accommodation for those religious nonprofits whose
                sincerely held religious beliefs impede or bar their application'' for
                501(c)(3) status, and stated that this clarification is appropriate and
                commendable.
                 Response: The Agencies disagree that the addition of language
                providing alternative means for demonstrating nonprofit status would
                reduce transparency and accountability. The Agencies' grants and
                programs have appropriate record-keeping requirements and mechanisms
                for monitoring compliance that apply regardless of 501(c)(3) status.
                Moreover, in the Agencies' experience, formal determination of tax-
                exempt status is of little relevance in facilitating grant transparency
                and accountability. Indeed, many faith-based 501(c)(3) organizations
                are exempt from those record keeping requirements. For example, the
                Agencies issue grants to 501(c)(3) entities that are exempt from filing
                Form 990s, such as churches, integrated auxiliaries, and certain
                schools affiliated with churches. 26 CFR 1.6033-2(g). Five of the
                Agencies already allowed three of these alternatives for demonstrating
                nonprofit status--(2), (3), and (4) listed above--without any evidence
                of transparency or accountability issues. And the new fifth alternative
                requires evidence sufficient to establish one of the other
                alternatives, so it should not lower the bar. Additionally, the
                organizations that meet these alternatives may be subject to State or
                other oversight that imposes further transparency and accountability.
                 The Agencies also disagree with the comment regarding entities
                self-certifying their nonprofit status. This comment appears to
                misunderstand the proposed changes. None of the Agencies proposes to
                allow faith-based organizations to ``self-certify'' their nonprofit
                status. Rather, an organization can submit formal documentation of its
                own State nonprofit status, its incorporation, or its parent
                organization's national or State nonprofit status. Again, five of the
                Agencies already allowed those methods of proof. Additionally, for
                seven Agencies, this final rule adds an option permitting a faith-based
                organization with a sincere religious belief that prevents it from
                obtaining tax-exempt status under section 501(c)(3) of the Internal
                Revenue Code to submit other documentary evidence that ``is sufficient
                to establish'' that the organization operates as a nonprofit. This is
                not a mere self-certification.
                 The Agencies also disagree with the commenter's suggestion that the
                alternative pathways are unnecessary because obtaining 501(c)(3) status
                does not impose a substantial burden on religion. As a preliminary
                matter, the Agencies exercise their discretion to allow alternative
                ways to show that an organization is a nonprofit because that is the
                appropriate policy decision for the reasons discussed in the NPRMs and
                throughout this section. They do not need to show a substantial burden
                to do so.
                 The commenter's reliance on Locke v. Davey is misplaced. Locke held
                only that, in the unique context of the historically sensitive issue of
                government funding for the training of clergy, the Free Exercise Clause
                did not compel a State to include funding for theology degrees in a
                scholarship aid program. See 540 U.S. at 725. The Court did not hold
                that denying funding to religious organizations can never infringe
                religious liberty or that funding of religious organizations can be
                justified only to relieve them of a substantial burden. In fact, the
                Court held expressly that the Government has discretion to fund
                religious organizations in many programs, including in the unique
                context of training for clergy, where funding is not constitutionally
                required. See id. at 718-19; see also Part II.C.3.a (discussing Locke).
                 Furthermore, the Agencies agree with the commenter that said faith-
                based organizations may have sincere religious beliefs that prevent
                them from meeting certain prerequisites for 501(c)(3) status. For these
                organizations, requiring a formal determination of 501(c)(3) status
                could impose a meaningful burden. Accordingly, in the Agencies'
                judgment, adding an alternative for such organizations, while requiring
                evidence sufficient to meet one of the other alternatives, will promote
                consistency with the principles of religious liberty set forth in RFRA,
                Supreme Court precedent, and the Attorney General's Memorandum.
                [[Page 82093]]
                 As one commenter pointed out, existing regulations for several
                Agencies, including ED and HHS, already provided alternatives to
                501(c)(3) registration for demonstrating nonprofit status. The Agencies
                agree that those provisions are helpful, so DHS, HUD, and VA are
                adopting them. DHS, HUD, VA, DOJ, DOL, ED, and HHS are also adding the
                alternative mechanism for entities with specific sincerely held
                religious objections to ensure that such objections do not prevent them
                from otherwise demonstrating nonprofit status. Additionally, in the
                Agencies' experience, faith-based organizations may be reluctant to
                apply for grants when it is unclear whether they are eligible or when
                there is a risk that they could be subject to litigation if awarded the
                grant. The Agencies believe that the additional provision may be
                helpful in eliminating any potential doubt that alternative methods of
                proof are available when eligibility to apply for a grant is limited to
                (or includes) nonprofit organizations, including organizations whose
                objection to 501(c)(3) registration is grounded in sincere religious
                belief. This additional provision also clarifies that evidence that
                would otherwise be used to demonstrate nonprofit status as part of the
                501(c)(3) registration process may be sufficient to demonstrate
                nonprofit status for purposes of the grant application.
                 Finally, the Agencies disagree with the assertion that the proposed
                changes constitute special treatment for religious organizations or
                violate the Establishment Clause. Under the final rule, any
                organization with a sincerely held religious belief that it cannot
                apply for 501(c)(3) status, faith-based or secular, may demonstrate
                nonprofit status by methods other than providing proof of 501(c)(3)
                status. The changes are consistent with most Agencies' existing
                regulations, and simply help to ensure equal treatment of faith-based
                organizations with sincere religious beliefs that may warrant an
                accommodation. Moreover, the final subsection does not relieve faith-
                based organizations of the obligation to demonstrate nonprofit status;
                rather, it clarifies the type of evidence required to establish such
                status. No commenter has even attempted to explain how this modest
                accommodation could amount to an unconstitutional establishment of
                religion, and the Agencies do not believe there is any plausible
                doctrinal basis for such a claim.
                 Changes: None.
                 Affected Regulations: None.
                3. Notice to Faith-Based Organizations
                 Existing regulations did not require specific notice to faith-based
                organizations regarding their eligibility to participate on equal terms
                in the programs governed by these regulations and regarding their
                obligations to beneficiaries.
                 All of the Agencies proposed to require such notice. In its notices
                or announcements of award opportunities, USAID proposed to require
                notice indicating that faith-based organizations are eligible on the
                same basis as any other organization, subject to the protections and
                requirements of Federal law. In their notices or announcements of award
                opportunities, the other eight Agencies proposed to require notice
                ``substantially similar'' to the language in a relevant Appendix A,
                which explained that: (1) Faith-based organizations may apply on the
                same basis as any other organization as set forth in each Agency's
                section of these regulations and in RFRA; (2) the Agency will not
                discriminate in selection on the basis of religious exercise or
                affiliation; (3) a faith-based organization that participates in the
                program will retain its independence from the Government and may
                continue to carry out its mission consistent with the religious freedom
                protections in Federal laws, including the Free Speech Clause, the Free
                Exercise Clause, RFRA, and other statutes; (4) religious accommodations
                ``may also be sought'' under many of these religious freedom protection
                laws; (5) faith-based organizations may not use direct Federal
                financial assistance to support or engage in any explicitly religious
                activities, except when consistent with the Establishment Clause and
                any other applicable requirements; and (6) a faith-based organization
                may not, in providing services funded by the Agencies, discriminate
                against a program beneficiary or prospective beneficiary on the basis
                of religion, a religious belief, a refusal to hold a religious belief,
                or a refusal to attend or participate in a religious practice. In their
                notices of award or contract, seven Agencies--not including USAID and
                HUD--proposed notices ``substantially similar'' to the language in an
                Appendix B, which was the same as items 3 through 6 from Appendix A.
                 Summary of Comments: The Agencies incorporate the comments
                addressed in Parts II.C.1 and II.E that are relevant to the importance
                of notice to faith-based organizations compared to notice to
                beneficiaries.
                 Some commenters said that the proposed notice for faith-based
                organizations embeds equality in these programs and clarifies that the
                Agencies will not discriminate against faith-based organizations.
                Multiple commenters recognized that notice to faith-based organizations
                of the prohibition against discrimination based on religious character,
                exercise, and affiliation is consistent with the First Amendment rights
                discussed in Part II.F.
                 Some commenters, including 34 Members of Congress, generally
                opposed providing special notices for faith-based organizations that
                invite accommodation requests, including from generally applicable
                civil rights laws. Most of these commenters argued that this notice of
                the availability of accommodations will encourage or pave the way for
                providers to refuse to provide key services and to discriminate in
                taxpayer-funded programs, as discussed in Part II.E. One of these
                commenters disagreed that this final rule adds clarity, arguing that
                this notice's reference to accommodations eliminates clear lines by
                suggesting that faith-based providers can be excused from rules that
                apply to other providers. Commenters also argued that such notice of
                the availability of accommodations puts the interests of faith-based
                organizations over the needs of people who depend on the services.
                 A commenter argued that the Agencies acknowledged the limits on the
                duty to accommodate but failed to reflect those limits in their
                proposed new notices.
                 One commenter argued that the proposal to give notice that faith-
                based organizations retain independence from the Government is
                inconsistent with the Religion Clauses and Article IV, Section 4 of the
                U.S. Constitution because, in this commenter's view, faith-based
                organizations should be treated differently than, and essentially worse
                than, secular organizations. This commenter argued that the First
                Amendment mandates that `` `Faith Based' entities are not the same as
                secular entities and are not to be treated the same for fear that they
                would create the problems they have created throughout history.'' This
                commenter reasoned that the First Amendment's references to religion
                implied that equal treatment was not intended.
                 This commenter also argued, regarding notice of faith-based
                organizations retaining their independence consistent with the Free
                Speech Clause, that Free Speech is not an absolute right. This
                commenter added that the Government and ``government surrogates''
                cannot minister to recipients, so faith-based organizations' Free
                Speech rights should
                [[Page 82094]]
                not include ministering to beneficiaries when performing a government
                function.
                 Response: The Agencies incorporate the discussion of the notice and
                accommodation requirements in Parts II.C.1 and II.E above.
                Additionally, the Agencies agree with comments that this notice helps
                effectuate the religious liberty protections for beneficiaries in these
                programs and clarifies that the Agencies and their intermediaries will
                not discriminate against faith-based organizations based on religious
                character, affiliation, or exercise. The nondiscrimination provision is
                consistent with the First Amendment and RFRA, as discussed in Part
                II.F.
                 The Agencies disagree that this notice to faith-based organizations
                will invite any improper denials of service or discrimination. As
                discussed in Parts II.C, II.E, and II.F, the Free Exercise Clause and
                other Federal laws, including RFRA, required or permitted certain
                accommodations under the 2016 final rule. The notice provided for in
                this final rule does not change that substantive law regarding
                accommodations. This notice merely ensures that faith-based
                organizations, the Agencies, intermediaries, and advocacy organizations
                are aware of that governing Federal law regarding accommodations. To
                the extent that the Agencies accommodate a faith-based organization
                with regard to a generally applicable requirement, including allowing
                the faith-based organization to engage in conduct that might otherwise
                be considered discrimination or denial of service, that accommodation
                would be governed by the Free Exercise Clause and other Federal laws,
                including RFRA, not by this notice requirement. The comments that
                disagree with this notice appear to disagree with the underlying
                Federal law regarding accommodations. The Agencies exercise their
                discretion to notify faith-based providers (and others, including the
                Agencies' intermediaries) of that governing Federal law regarding
                accommodations to protect those rights, ensure that the Agencies and
                their intermediaries recognize and protect those rights, minimize
                erroneous lawsuits challenging whether those rights apply in these
                programs, and eliminate the confusion created by the absence of any
                such reference in the 2016 final rule.
                 The Agencies also disagree with the commenter that claimed these
                notices do not reference the limitations on accommodations. In fact,
                all of the prescribed notice texts expressly refer to the
                constitutional and statutory bases for these accommodations, each of
                which contain their own limits.
                 Additionally, the Agencies believe a commenter was mistaken to
                argue, in essence, that the Religion Clauses and Article IV, Section 4
                of the U.S. Constitution require faith-based organizations to be
                treated worse than secular entities and thus that providing notice of
                rights and obligations to faith-based organizations would be
                unconstitutional. To the contrary, as discussed throughout this
                preamble, the Establishment Clause permits, and the Free Exercise
                Clause and RFRA sometimes require, and other times permit, the
                Government to provide special accommodations for religious exercise.
                Moreover, Article IV, Section 4 of the U.S. Constitution guarantees to
                every State a ``Republican Form of Government,'' protection against
                ``Invasion,'' and, on application, protection against ``domestic
                Violence.'' The Agencies do not see how this constitutional provision
                is implicated by providing notices to faith-based organizations.
                 The Agencies agree that the Free Speech Clause is not absolute and
                that there are circumstances in which funding explicitly religious
                activities is prohibited as part of direct Federal financial assistance
                programs and activities. But this final rule requires notice of such
                limitations on speech, including limitations on explicitly religious
                activities, in addition to notice that faith-based organizations retain
                their free speech rights. Also, the notice of the right to expression
                merely clarifies that such existing rights are retained, not expanded,
                as discussed in Part II.G.5 below. The Agencies have determined in
                their discretion that such a comprehensive notice appropriately
                balances the rights of beneficiaries and faith-based organizations.
                 In addition to all of the other reasons outlined in this section
                and in Parts II.C, II.E, and II.F, this additional notice to faith-
                based organizations will maximize the services available to
                beneficiaries. For example, this notice will ensure that faith-based
                organizations are aware that they can apply to participate in these
                programs on neutral terms and should not face lawsuits challenging such
                awards. At the same time, these notices make clear to faith-based
                organizations--when applying for and accepting an award--that they
                cannot discriminate against beneficiaries based on religion and that
                they cannot incorporate explicitly religious activities into the funded
                programs, unless consistent with the Establishment Clause. Moreover,
                these notices will be provided by the Agencies or intermediaries, as
                part of notices that were already being sent and that already describe
                other eligibility and program requirements. And, these notices are
                appropriate to clarify the law in light of the confusion--including
                confusion by intermediaries and pass-through entities--created by the
                2016 final rule. Indeed, the 2016 final rule did not provide for
                accommodations for faith-based organizations, even though the First
                Amendment and RFRA permitted certain accommodations when that rule
                applied. The Agencies have determined in their discretion that this is
                the appropriate means to protect faith-based organizations and
                beneficiaries, as well as to maximize the availability of appropriate
                federally funded services.
                 Finally, ED, DHS, USDA, HUD, DOJ, DOL, VA, and HHS are adding
                clarifying language to these notices regarding conscience protections.
                The notices refer to the listed ``protections in Federal law'' as
                ``religious freedom protections.'' To ensure there is no confusion
                regarding the listed conscience clauses--such as the Coats-Snowe
                Amendment (42 U.S.C. 238n), the Weldon Amendment, and 42 U.S.C. 18113,
                some of which might not be viewed as religious freedom protections
                only--the Agencies are adding clarifying language to indicate that
                these are both ``religious freedom and conscience protections in
                Federal law.'' This does not change the substance or scope of the
                notices. This does not apply to USAID, which is not providing an
                Appendix with language for its notice.
                 Changes: ED, DHS, USDA, HUD, DOJ, DOL, VA, and HHS include ``and
                conscience'' protections in their notices. See also Part II.F.1
                (discussing these Agencies' addition of ``religious character'').
                 Affected Regulations: 34 CFR part 75 Appendices A & B (ED); 6 CFR
                part 19 Appendices A & B (DHS); 7 CFR part 16 Appendices A & B (USDA);
                24 CFR part 5 Appendix A (HUD); 28 CFR part 38 Appendices A & B (DOJ);
                29 CFR part 2 Appendices A & B (DOL); 38 CFR part 50 Appendices A & B
                (VA); 45 CFR part 87 Appendices A & B (HHS). See also Part II.F.1
                above.
                4. Same Requirements for Faith-Based and Secular Organizations
                 Existing regulations for DOJ, DOL, HHS, and USAID provided that no
                grant document, agreement, covenant, memorandum of understanding,
                policy, or regulation that these Agencies or their intermediaries used
                to administer financial assistance from these Agencies shall require
                only faith-based organizations to provide certain
                [[Page 82095]]
                assurances that they would not use funding for explicitly religious
                activities. DHS, ED, HUD, USDA, and VA did not have specific parallel
                requirements.
                 All of the Agencies proposed to modify their existing provision or
                to add language to provide that none of the documents listed above
                shall require faith-based organizations to provide any assurances or
                notices where such assurances or notices are not required of non-
                religious organizations.
                 Summary of Comments: Some commenters, including a State attorney
                general, agreed with the Agencies' addition of the provision barring
                any required additional assurances from faith-based organizations that
                are not required from secular organizations. These commenters explained
                that this provision is consistent with the Religion Clauses, including
                under Trinity Lutheran; ensures faith-based organizations can receive
                Federal funding on the same footing as other organizations; and
                eliminates confusion.
                 One commenter argued to multiple Agencies, however, that the
                provision barring additional assurances or notices from faith-based
                organizations that are not required from secular organizations violates
                the First Amendment's Free Exercise and Establishment Clauses, as well
                as Article IV, Section 4 of the U.S. Constitution.
                 Another commenter to USAID argued that prohibiting such unique
                assurances, in combination with the changes discussed in Part II.F,
                threatens the rights of marginalized populations.
                 Another commenter to HUD argued that additional assurances may be
                necessary to ensure that the faith-based provider can offer the
                services required under the program. This commenter provided the
                hypothetical example of an organization affiliated with a religion
                that, according to the commenter, has a history of ``anti-LGBTQ''
                sentiment and action being required to provide additional assurances of
                nondiscrimination based on sexual orientation or that its physical
                space would be welcoming to LGBTQ individuals.
                 Response: The Agencies agree that this modified or added
                prohibition is consistent with the Religion Clauses, including under
                Trinity Lutheran; ensures faith-based organizations can receive Federal
                funding on the same footing as other organizations; and eliminates
                confusion. The Agencies do not see any reason to preserve the language
                that limited this prohibition to explicitly religious activities when
                all of the other substantive provisions apply equally to faith-based
                and non-faith-based providers within each program. If notice or
                assurance is warranted to ensure services are provided under a program,
                such notice or assurance should be equally warranted for all providers
                that are subject to the underlying requirement, as explained in detail
                in Part II.C. There is no indication that barring the requirement of
                such unique assurances from faith-based organizations would threaten
                the rights of any beneficiaries.
                 This conclusion is bolstered by the commenter's hypothetical
                example of a specific faith-based organization with a history of what
                the commenter called ``anti-LGBTQ'' sentiment. The Agencies could
                require any participant with a history of anti-beneficiary sentiment to
                provide additional assurances. This final rule would permit such a
                requirement, if applied neutrally to all providers without engaging in
                viewpoint discrimination. But there is no reason to require such
                assurances only from religious organizations without requiring the same
                from similarly situated secular organizations. This change in the final
                rule provides merely that such assurance and notice requirements be
                applied neutrally, which ensures that these requirements are imposed to
                protect beneficiaries, not to discriminate against or stigmatize faith-
                based organizations. Similarly, there is no indication that there would
                be any harm from combining this provision with the provisions
                prohibiting discrimination against faith-based organizations that were
                discussed in II.F.
                 Finally, as discussed in Part II.G.3, the Agencies disagree with
                commenters who contended that equal treatment of faith-based and non-
                faith-based organizations is inconsistent with the Religion Clauses and
                Article IV, Section 4 of the U.S. Constitution.
                 Changes: None.
                 Affected Regulations: None.
                5. Religious Autonomy and Expression
                 ED's existing regulations provided that a faith-based organization
                participating in its programs ``may retain its independence, autonomy,
                right of expression, religious character, and authority over its
                governance.'' 2 CFR 3474.15(e)(1); 34 CFR 75.52(d)(1), 76.52(d)(1).
                Existing regulations applicable to the other Agencies provided that a
                religious organization participating in a Federal financial assistance
                program or activity will retain its independence, and ``may continue to
                carry out its mission, including the definition, development, practice,
                and expression of its religious beliefs.'' Additionally, the existing
                regulations for DOJ, DOL, and HHS provided that a faith-based
                organization retains such ``independence from Federal, State, and local
                governments.''
                 DHS, DOJ, DOL, HHS, HUD, USDA, and VA proposed to amend the rights
                retained by a participant in such programs to be consistent with ED,
                such that a faith-based organization retains its ``autonomy; right of
                expression; religious character;'' and ``independence,'' and may
                continue to carry out its mission, including the expression of its
                religious beliefs. Additionally, DHS, USDA, and VA proposed to add
                language clarifying that a faith-based organization retains such
                independence ``from Federal, State, and local governments,'' which DOJ,
                DOL, and HHS proposed to retain. USAID proposed to add language that a
                faith-based organization retains its ``autonomy, religious character,
                and independence'' and may continue to carry out its mission
                ``consistent with religious freedom protections in Federal law,''
                including expression of its religious beliefs.
                 Summary of Comments: Several commenters supported these changes to
                clarify that faith-based organizations retain these rights, including
                multiple commenters who opposed other provisions of this final rule.
                One commenter specified that this clarification describes the First
                Amendment's broad protections for the freedom to exercise religion, for
                the sphere of religious autonomy in which government cannot interfere,
                and from government entanglement with religion.
                 Many of these commenters stated that this clarification was
                important to ensure faith-based providers can participate in these
                programs without fear of having to abandon their autonomy and rights
                that are protected by other Federal laws and that should not be checked
                at the door when interacting with the Government. One commenter argued
                that faith-based organizations' autonomy and expression are interests
                of the highest order. Some commenters argued that this is one of the
                changes in this final rule that will help restore an environment of
                religious freedom across the country.
                 Some commenters opposed this clarification for varying reasons.
                Some commenters argued generally that this clarification was
                problematic and would endanger beneficiaries' rights. One commenter
                recognized that faith-based organizations should be able to retain
                their autonomy, right of expression, religious character, and
                independence but argued that, if they accepted government contracts or
                financing, those organizations should not be able
                [[Page 82096]]
                to force their opinions or choices on beneficiaries. One commenter
                expressed concern that Federal funding suggests government support of
                the funding recipient's message.
                 One commenter argued that the wording being added by DHS, USDA, and
                VA that faith-based organizations retain their ``independence from
                Federal, State, and local governments'' is irrational because everyone
                is bound by the Governments' laws, with the commenter listing specific
                criminal laws of murder, fraud, trespass, and theft.
                 One commenter argued that adding the language that a faith-based
                organization may carry out its mission, including the ``definition,
                development, practice, and expression of its religious beliefs'' would
                expand the ability of federally funded organizations to attack the
                rights of their beneficiaries. This commenter provided the example of
                an organization receiving HIV prevention funding claiming that anti-
                LGBTQ activities were an expression of religious beliefs, which could
                undermine the organization's ability to become a trusted service
                provider within the community.
                 One commenter to HHS cited survey respondents that claimed negative
                experiences with health professionals who expressed religiously
                grounded bias toward LGBT patients, which was discussed in detail in
                Part II.C.2.b.
                 Response: The Agencies agree with the comments that this added
                autonomy language clarifies the rights retained by faith-based
                organizations. This language expressly does not create any new rights,
                it merely clarifies that these pre-existing religious liberties are not
                waived by participation in these Federal financial assistance programs
                or activities. This approach is appropriate because these are existing
                core religious liberties that faith-based organizations should not have
                to, and should not be asked to, waive in order to participate in
                Federal financial assistance programs or activities. The Agencies agree
                that this clarification will help restore an environment of religious
                freedom.
                 The Agencies disagree that this added autonomy language will be
                problematic or endanger beneficiaries. Faith-based organizations will
                still have to comply with the other requirements in this final rule,
                including prohibitions against explicitly religious activities, which
                expressly include proselytizing. Also, as discussed throughout this
                final rule, the Agencies are not supporting the message of any
                organization that participates in these Federal financial assistance
                programs or activities. If they were, the Agencies would also need to
                regulate the autonomy and expression of secular organizations.
                 The addition by DHS, USDA, and VA that the retained independence is
                ``from Federal, State and local governments,'' is rational. This
                language does not create any new independence. It merely clarifies that
                faith-based organizations' independence is not sacrificed merely by
                participating in a Federal financial assistance program or activities.
                Civil and criminal laws still apply to the extent they did before.
                Additionally, this provision makes the language used by DHS, USDA, and
                VA consistent with the language used by DOJ, DOL, and HHS. 81 FR at
                19419 (DOJ, 28 CFR 38.5(b)); id. at 19422 (DOL, 29 CFR 2.32(b)); id. at
                19427 (HHS, 45 CFR 87.3(c)). And no commenter pointed to any issue
                created by this language in the regulations of DOJ, DOL, or HHS.
                 The prior rule contained the language that carrying out a faith-
                based organization's mission includes the ``definition, development,
                practice, and expression of its religious beliefs.'' 81 FR at 19406
                (ED, 2 CFR 3474.15(e)(2)(ii)); id. at 19412 (DHS, 6 CFR 19.8(a)); id.
                at 19415 (USAID, 22 CFR 205.1(c)); id. at 19416 (HUD, 24 CFR
                5.109(d)(1)); id. at 19419 (DOJ, 28 CFR 38.2(a), 38.5(b)); id. at 19422
                (DOL, 29 CFR 2.32(b)); id. at 19424 (VA, 38 CFR 50.1(a)); see also id.
                at 19413 (USDA, 7 CFR 16.3(b)); id. at 19427 (HHS, 45 CFR 87.3(c)).
                Thus, contrary to the understanding of the commenter that opposed the
                addition of this language, the Agencies are not adding this language in
                this final rule. The Agencies are merely retaining it from the 2016
                final rule. Moreover, this language is an appropriate description of
                what it means for a faith-based organization to carry out its mission.
                 Also, contrary to this commenter's claim, this final rule is not
                the appropriate mechanism for ensuring that each provider becomes a
                trusted service provider within the community. Any such concern should
                also apply equally to all providers. Any organization's expression
                could alienate, or cause negative experiences for, beneficiaries by
                taking a position on any controversial issue.
                 Additionally, this analysis is not affected by the study that a
                commenter cited regarding negative experiences. The Agencies
                incorporate the discussion of that study from Part II.C.2.b, including
                that it did not show harms specific to faith-based organizations
                receiving Federal financial assistance. And the added language
                discussed in this section does not affect the scope of permissible
                religious expression, so any negative experiences will be attributable
                to the existing protections of such expression.
                 Changes: None.
                 Affected Regulations: None.
                H. Employment and Board Membership
                 Existing regulations for eight of the Agencies provided that, by
                receiving Federal financial assistance, a religious organization did
                not forfeit its protection under section 702 of the Civil Rights Act of
                1964 (``section 702 exemption''), which allowed it to hire persons ``of
                a particular religion'' to carry out work connected with the
                organization. VA was the only Agency that did not have any language
                specifically addressing the section 702 exemption in its existing
                regulation. VA's regulation simply stated that faith-based
                organizations participating in a social service program supported with
                Federal financial assistance retained their independence and could
                continue to carry out their missions. 38 CFR 50.1(a).
                 VA proposed to join the other Agencies by adding explicit language
                stating that the section 702 exemption continues to apply when a
                religious organization receives Federal financial assistance. ED, HHS,
                HUD, DOL, USAID, and VA proposed adding language to clarify that
                allowing the hiring of persons on the basis that they are ``of a
                particular religion'' under section 702 includes allowing hiring of
                persons on the basis of their acceptance of or adherence to particular
                religious tenets.
                 Similarly, existing regulations for DHS, HUD, DOJ, and other
                Agencies provided that a religious organization receiving Federal
                funding retained its right to select its board members ``on a religious
                basis.'' See, e.g., 28 CFR 38.5(b) (DOJ). DHS, HUD, and DOJ proposed
                clarifying that choosing board members of the organization based on
                religion allowed selecting members based on their acceptance of or
                adherence to particular religious tenets.
                1. Preserving the Section 702 Exemption
                 Summary of Comments: Many comments opposed allowing employers that
                receive Federal funding to invoke the section 702 exemption at all.
                Some stated that allowing an organization receiving Federal funding to
                claim the section 702 exemption violates the Constitution's
                Establishment Clause. Others expressed concern that this provision
                disadvantages religious minorities and the nonreligious. Some
                commenters expressed concern that this provision would lead to a
                decrease in available jobs and would harm the economy and called for
                this economic
                [[Page 82097]]
                effect to be considered in the cost-benefit analysis of the rules.
                 Many other commenters supported VA's proposed addition and the
                other Agencies' existing rules that specified that the section 702
                exemption is preserved when religious organizations accept Federal
                funding. They stated that these provisions help preserve the autonomy
                and identities of religious organizations. Some commenters stressed
                that this is particularly important for minority religious
                organizations seeking to preserve their identities, in light of the
                fact that the broader labor pool is overwhelmingly not of the same
                faith as the minority religious organizations.
                 Response: The Agencies disagree that the Establishment Clause
                prohibits religious organizations from claiming the section 702
                exemption when providing federally funded services. That argument has
                been rejected expressly. See, e.g., Lown v. Salvation Army, Inc., 393
                F. Supp. 2d 223, 249 (S.D.N.Y. 2005) (``[T]he notion that the
                Constitution would compel a religious organization contracting with the
                state to secularize its ranks is untenable in light of the Supreme
                Court's recognition that the government may contract with religious
                organizations for the provision of social services.'' (citing Bowen v.
                Kendrick, 487 U.S. 589, 609 (1988))). Moreover, to force faith-based
                charities to forgo their statutory right under Title VII to hire
                coreligionists because they accept Federal funding for part of their
                operations would effectively exclude many religious organizations from
                providing federally supported services. This would undermine the
                purpose of these rules to allow religious organizations to participate
                on an equal footing with nonreligious organizations in the provision of
                needed social services. It also might violate RFRA to deny certain
                recipients the ability to claim the exemption as a condition of
                receiving Federal funds, as explained in the World Vision opinion.
                 The section 702 exemption is critical to preserve faith-based
                organizations' religious autonomy and identities, and the comments
                showed that this is particularly true for minority religions and
                denominations. Section 702 is a long-standing statutory exemption, so
                any impact on employees or potential employees was caused by that
                statute, not by regulations making clear that this statutory right is
                preserved. The Agencies thus agree with those commenters who said that
                it is important to preserve the section 702 exemption that Congress
                provided to religious organizations, whether or not they participate in
                the provision of federally funded services.
                 The Agencies disagree with the comments that said this provision
                would harm the economy by reducing the number of jobs. At most, this
                provision presents a question of the distribution of jobs and who will
                provide federally funded services. This provision would not reduce the
                net number of jobs or the amount of federally funded services. The
                reduction of barriers to faith-based organizations participating in
                providing federally funded services may in fact increase overall the
                national capacity for provision of services and thus the total number
                of jobs. See Part II.K.
                 Changes: None.
                 Affected Regulations: None.
                2. Acceptance of or Adherence to Religious Tenets
                a. Employment \67\
                ---------------------------------------------------------------------------
                 \67\ The discussion in Part III.H.2.a is solely on behalf of the
                six Agencies--ED, HHS, HUD, DOL, USAID, and VA--that proposed to
                explicate the section 702 exemption in this way.
                ---------------------------------------------------------------------------
                 Summary of Comments: Many commenters opposed the proposals of six
                Agencies to specify that, for purposes of section 702, hiring
                ``individuals of a particular religion'' allows for requiring
                ``acceptance of or adherence to the religious tenets of the
                organization.'' Many expressed fear that this change could lead to
                discrimination based on race, sex (including pregnancy), sexual
                orientation, or transgender status. Some said it conflicted with the
                Equal Employment Opportunity Commission (``EEOC'') Compliance Manual.
                Some commenters inferred from the contrast between the Americans with
                Disabilities Act, which specifies that employees may be required to
                ``conform to the religious tenets'' of a religious organization, 42
                U.S.C. 12113(d)(2), and section 702, which does not have such express
                language, that Title VII was not intended to permit religious employers
                to discriminate on the basis of adherence to their religious tenets.
                 Other commenters supported this change, saying it would make clear
                that religious organizations have the ability to preserve their
                identities and autonomy. A State attorney general added that this
                change would ensure that the people who carry out a faith-based
                organization's programs (employees) will share the organization's
                faith.
                 Response: The ordinary meaning of the phrase ``of a particular
                religion'' in the section 702 exemption encompasses the language that
                these six Agencies proposed, ``acceptance of or adherence to religious
                tenets.'' Religion as ordinarily understood is more than a label people
                use to self-identify or which others may use to identify them or their
                backgrounds. It encompasses profound beliefs about the nature of all
                things and about how one should live based on those beliefs. See, e.g.,
                EEOC v. Abercrombie & Fitch Stores, Inc., 135 S. Ct. 2028, 2033 (2015)
                (``Congress defined `religion,' for Title VII's purposes, as
                `includ[ing] all aspects of religious observance and practice, as well
                as belief.''' (quoting 42 U.S.C. 2000e(j)); Burwell v. Hobby Lobby
                Stores, Inc., 573 U.S. 682, 710 (2014) (``exercise of religion involves
                not only belief and profession but the performance of (or abstention
                from) physical acts that are engaged in for religious reasons''
                (internal quotations omitted)); Widmar v. Vincent, 454 U.S. 263, 272
                n.11 (1981) (``many and various beliefs meet the constitutional
                definition of religion'' (internal quotation omitted)). Adherence to or
                acceptance of a set of religious beliefs is encompassed within the
                phrase ``of a particular religion'' and is thus a natural application
                of the statutory term.
                 Accordingly, courts have consistently interpreted ``of a particular
                religion'' in Title VII to encompass adherence to or acceptance of
                particular religious beliefs. See, e.g., Hall v. Baptist Mem'l Health
                Care Corp., 215 F.3d 618, 624 (6th Cir. 2000) (``The decision to employ
                individuals `of a particular religion' . . . has been interpreted to
                include the decision to terminate an employee whose conduct or
                religious beliefs are inconsistent with those of its employer.'');
                Little v. Wuerl, 929 F.2d 944, 951 (3d Cir. 1991) (upholding
                termination of employee for violations of ``Cardinal's Clause,'' which
                included ``entry by a teacher into a marriage which is not recognized
                by the Catholic Church''); Maguire v. Marquette Univ., 627 F. Supp.
                1499, 1503 (E.D. Wis. 1986), aff'd in part and vacated in part, 814
                F.2d 1213 (7th Cir. 1987) (professor who was Catholic but was fired for
                views on abortion barred by section 702 exemption from bringing
                religious discrimination claim because ``[s]uch an inquiry would
                require the Court to immerse itself not only in the procedures and
                hiring practices of the theology department of a Catholic University
                but, further, into definitions of what it is to be a Catholic''). The
                Agencies' determination that ``of a particular religion'' encompasses
                adherence to or acceptance of a set of religious beliefs is, thus,
                supported by
                [[Page 82098]]
                the case law in addition to the ordinary meaning of the words.
                 The Agencies agree with commenters that this change makes clear
                that faith-based organizations can preserve their autonomy and
                identities when participating in federally funded programs. Religious
                organizations function through their employees, and the purpose of the
                1972 revision of the section 702 exemption was to respect the
                organizations' religious autonomy and identities with regard to all
                employees. Indeed, when upholding that 1972 amendment, the Supreme
                Court expressly referenced the impact of ``religious tenets'' on faith-
                based organizations' ``religious mission.'' Amos, 483 U.S. at 336.
                Faith-based organizations' religious autonomy and identities would be
                diminished substantially if those organizations could not ensure that
                their staffs accepted and adhered to their religious tenets. The
                Agencies thus agree with the State attorney general's comment that this
                change ensures that the people who carry out programs (employees) will
                share the organization's faith.
                 The Agencies disagree with comments that said this provision
                permits discrimination on grounds other than religion, such as race,
                sex, or sexual orientation. Existing protections for non-religious
                classes remain in force. For example, where a tenet of a religious
                organization forbids engaging in sexual conduct outside of marriage,
                the section 702 exemption permits dismissing employees who violate this
                tenet, but it would prohibit discharging only women who had engaged in
                such conduct and not men. See Cline v. Catholic Diocese of Toledo, 206
                F.3d 651, 658 (6th Cir. 2000) (``[C]ourts have made clear that if the
                school's purported `discrimination' is based on a policy of preventing
                nonmarital sexual activity which emanates from the religious and moral
                precepts of the school, and if that policy is applied equally to its
                male and female employees, then the school has not discriminated based
                on pregnancy in violation of Title VII.''); Redhead v. Conference of
                Seventh-Day Adventists, 440 F. Supp. 2d 211, 223 (E.D.N.Y. 2006)
                (``[W]here religious school employers have asserted fornication as a
                reason for terminating a pregnant unmarried woman, courts have held
                that an employer enforcing such a policy unevenly--e.g., only against
                women or only by observing or having knowledge of a woman's pregnancy--
                is evidence of pretext.''). Additionally, the Agencies incorporate
                their discussions from Parts II.C and II.E of the context-specific
                analysis and the unique treatment of discrimination on the basis of
                race.
                 Commenters who said that the proposed rules conflicted with the
                EEOC Compliance Manual are mistaken. That manual merely says that the
                section 702 exemption does not provide an exemption from prohibitions
                against other forms of discrimination, such as race or sex
                discrimination. That is completely consistent with the Agencies'
                interpretation of the rule, as explained above.
                 The Agencies also disagree with drawing inferences from the fact
                that Title VII does not specifically include the ``tenets'' language,
                while the Americans with Disabilities Act (``ADA'') does. The section
                702 exemption was enacted in 1964. The ADA was enacted in 1990 and
                included a provision that tracked the Title VII ``individuals of a
                particular religion'' language, 42 U.S.C. 12113(d)(1), and then added a
                provision clarifying that ``[u]nder this subchapter, a religious
                organization may require that all applicants and employees conform to
                the religious tenets of such organization,'' id. 12113(d)(2). That
                Congress added this language is no less evidence that ``individuals of
                a particular religion'' meant something different 26 years earlier in
                Title VII than that Congress wished to confirm its understanding of
                what the phrase already meant. See, e.g., Jackson v. Birmingham Bd. of
                Educ., 544 U.S. 167, 175-77 (2005) (not drawing negative inference from
                fact that Title IX prohibition of sex discrimination did not include an
                express prohibition of retaliation for complaint of sex discrimination,
                whereas Title VII prohibition of sex discrimination did). If anything,
                the clarifying language here is consistent with the ADA clarifying
                language.
                 Changes: None.
                 Affected Regulations: None.
                b. Board Membership \68\
                ---------------------------------------------------------------------------
                 \68\ The discussion in Part II.H.2.b is solely on behalf of the
                three Agencies: DHS, DOJ, and HUD.
                ---------------------------------------------------------------------------
                 As noted, DHS, DOJ, and HUD proposed to make clear that a faith-
                based organization participating in a federally funded social service
                program could, as part of retaining its independence and consistent
                with the prohibition on using direct Federal financial assistance to
                engage in explicitly religious activities, continue to hire its board
                members on the basis of acceptance of or adherence to the religious
                tenets of the organization.
                 Summary of Comments: Some commenters raised the same concerns
                discussed in Part II.H.2.a with regard to this proposal. Other
                commenters supported this proposal, saying it would enable religious
                organizations to preserve their identities and autonomy. A State
                attorney general observed that this proposal was beneficial in ensuring
                that the leaders of the organization would actually advance its
                religious mission.
                 Response: These three Agencies determine that the added
                ``acceptance of or adherence to'' language is appropriate for board
                members. The comments that expressed the same concerns discussed in
                Part II.H.2.a miss the mark here because, while the revisions discussed
                in Part II.H.2.a interpreted the Title VII exemption for faith-based
                organizations ``with respect to employment of individuals of a
                particular religion,'' the changes made by these three Agencies do not
                purport to comment on the applicability of employment nondiscrimination
                provisions. Instead, they clarify that part of faith-based
                organizations' maintaining their independence when accepting Federal
                assistance is that, in general and subject to nondiscrimination
                requirements in program statutes for which the First Amendment and RFRA
                do not provide an exception, those organizations may continue to select
                their board members consistent with the organizations' religious views.
                Ensuring that the board members of a religious organization heed its
                ``religious tenets and sense of mission,'' Amos, 483 U.S. at 336, is
                particularly significant because board members shape the policy and
                governance of the organization. It would be catastrophic if a faith-
                based organization that was organized, for example, to put its
                religious beliefs on abortion--pro or con--into effect could not
                exclude board members who did not adhere to such beliefs. Appointing
                leaders who would undercut the organization's essential religious
                charter is tantamount to institutional apostasy. The Agencies thus
                agree with the State attorney general that this clarification is
                important.
                 Changes: None.
                 Affected Regulations: None.
                I. Conflicts With Other Federal Laws, Programs, and Initiatives
                 Summary of Comments: Multiple comments claimed that the NPRMs could
                create inconsistency with numerous Federal statutes. They also charged,
                without any additional specifics or elaboration, that the NPRMs failed
                ``to consider conflicts with applicable nondiscrimination statutes,
                including Titles VI and VII of the 1964 Civil Rights Act, the Americans
                with
                [[Page 82099]]
                Disabilities Act, Section 504 of the Rehabilitation Act, Title IX of
                the Education Amendments of 1972, Section 1557 of the Affordable Care
                Act, the Fair Housing Act, the Violence Against Women Act, the Victims
                of Crime Act, the Omnibus Crime Control and Safe Streets Act, the
                Family Violence Prevention Services Act, and Executive Order 11246.''
                 One commenter claimed that the NPRMs were improper because they
                violated the Treasury and General Government Appropriations Act of
                1999, Public Law 105-277, div. A, 101(h) [title VI, 654], codified at 5
                U.S.C. 601 note, by failing to include a Family Policymaking
                Assessment, which, in certain circumstances, requires agencies to
                assess the impact of proposed agency actions on family well-being. The
                commenter critiqued the NPRMs because the Agencies failed to determine
                whether a proposed regulatory action ``strengthens or erodes the
                stability or safety of the family'' or ``increases or decreases
                disposable income or poverty of families and children.''
                 A commenter stated that the NPRMs would burden the constitutional
                rights to privacy that extend to sexual and reproductive choices as
                enshrined in Lawrence v. Texas, 539 U.S. 558 (2003), Griswold v.
                Connecticut, 381 U.S. 479 (1965), and Roe v. Wade, 410 U.S. 113 (1973).
                 The Agencies received comments that the NPRMs would create
                inconsistencies with numerous major interagency and government-wide
                initiatives, including Federal strategies to promote the health of the
                nation and address homelessness, HIV, opioid abuse, and related
                illnesses and deaths.
                 Response: The Agencies disagree with the comments that this final
                rule creates inconsistency with any Federal statutes, much less the
                nondiscrimination statutes identified by commenters. To the contrary,
                as stated in the NPRMs, one of the purposes of this final rule is to
                align the Federal regulations governing several executive branch
                agencies more closely with Federal statutes (e.g., RFRA, 42 U.S.C.
                2000bb et seq., and RLUIPA, 42 U.S.C. 2000cc et seq.). The Agencies
                believe that, if anything, the rule makes existing regulations more
                consistent with statutes such as the Family Violence Prevention
                Services Act, which contains an express statutory prohibition on
                discrimination on the basis of religion. 42 U.S.C. 10406(c)(2)(B)(i).
                Further, the Agencies drafted the NPRMs in part to alleviate tension
                with the Free Exercise Clause's prohibition on discrimination against
                religious organizations by removing requirements that were not imposed
                equally on secular organizations. Additionally, as discussed in Parts
                II.C, II.E, and II.G, this final rule does not affect the applicability
                of those other nondiscrimination laws. Therefore, the contention that
                this final rule conflicts with any Federal nondiscrimination statute is
                facially unconvincing. Moreover, as discussed in Part II.H, the
                Agencies making each change in that section believe that this final
                rule is consistent with Title VII.
                 Section 5(b) of Executive Order 13831 clearly requires that the
                order be ``implemented consistent with applicable law.'' The Agencies
                have been mindful of this requirement in drafting the NPRMs, in
                evaluating the thousands of public comments received, and in drafting
                this final rule. It is the position of the Agencies that this final
                rule satisfies that requirement. The Agencies note that the argument
                that the NPRMs violated a number of statutes consists predominantly of
                merely identifying statutes by title without specific legal analysis as
                to which sections have been allegedly violated, which specific
                provisions of the NPRMs are involved, and what the nature of the
                violations might be.
                 The Agencies disagree that the NPRMs violated 5 U.S.C. 601 note in
                failing to conduct a Family Policymaking Assessment. Such assessments
                are only required prior to an agency's implementation of ``policies and
                regulations that may affect family well-being.'' 5 U.S.C. 601 note.
                Under that provision, the term ``family'' is defined as ``a group of
                individuals related by blood, marriage, adoption, or other legal
                custody who live together as a single household'' and ``any individual
                who is not a member of such group, but who is related by blood,
                marriage, or adoption to a member of such group, and over half of whose
                support in a calendar year is received from such group.'' Id. The
                Agencies have determined that this Assessment does not apply to this
                final rule because it does not focus on a ``family,'' and indeed makes
                no reference to such.
                 The Agencies disagree that this final rule will harm privacy and
                reproductive rights as protected by Roe v. Wade and other Supreme Court
                jurisprudence. This final rule does not change the scope of any such
                rights or jurisprudence, and commenters did not identify any such harm.
                 The Agencies have considered the comment that the NPRMs would
                create inconsistencies with numerous major interagency and government-
                wide initiatives, including Federal strategies to promote the health of
                the nation and address homelessness, opioid abuse and related illnesses
                and deaths, and HIV infection. The Agencies conclude that the opposite
                is true. This final rule will benefit those important Federal
                initiatives, in addition to others. Indeed, for each initiative, the
                commenters simply speculate that there would be a conflict. But that
                speculation is incorrect because, as discussed in Parts II.C, II.D,
                II.E, II.F, and II.G, this final rule alleviates burdens placed on
                faith-based organizations that hindered them from applying for, or
                participating in, these federally funded programs. Moreover, each of
                the programs discussed by this comment actually cited the benefits of
                participation by faith-based organizations, so it is unclear how
                expanding eligibility of faith-based organizations would be contrary to
                those programs. When more organizations are eligible to compete for
                Federal funds, the Agencies believe that the quality of the resulting
                recipients and the services provided increases.
                 Regarding homelessness, the comment was made that the NPRMs would
                conflict with the objectives of a 2018 report \69\ adopted by the U.S.
                Interagency Council on Homelessness (``USICH''), of which most of the
                Agencies are members. But the very 2018 report cited by the commenter
                consistently relied on the proposition that faith-based organizations
                play an important role in helping the nation alleviate homelessness.
                ---------------------------------------------------------------------------
                 \69\ United States Interagency Council on Homelessness, Home,
                Together: The Federal Strategic Plan to Prevent and End Homelessness
                (2018), https://www.usich.gov/resources/uploads/asset_library/Home-Together-Federal-Strategic-Plan-to-Prevent-and-End-Homelessness.pdf.
                ---------------------------------------------------------------------------
                 The commenter cited this report ten separate times, each time
                omitting the references to the role of the faith community in
                addressing homelessness. The report stated that social services to
                address homelessness ``and other federal, state, and local programs,
                must be well-coordinated among themselves, and with the business,
                philanthropic, and faith communities that can supplement and enhance
                them.'' Id. at 3 (emphasis added).
                 Objective 1.1 in that report was to ``collaboratively build lasting
                systems that end homelessness.'' Id. at 11. To achieve that objective,
                the report recommended that ``leaders from all levels of government and
                the private, nonprofit, and faith sectors can come together to'' make
                critical advancements, including building momentum behind a common
                vision, understanding the scope of the problem, gathering relevant
                data, and
                [[Page 82100]]
                implementing solutions. Id. at 11-12 (emphasis added).
                 Objective 1.2 was to ``increase capacity and strengthen practices
                to prevent housing crises and homelessness.'' Id. at 12. To achieve
                that objective, the report noted the importance of targeted assistance,
                which it said ``may include a combination of financial assistance,
                mediation and diversion, housing location, legal assistance, employment
                services, or other supports--many of which can be provided by public,
                nonprofit, faith-based, and philanthropic programs within the
                community.'' Id. at 13 (emphasis added).
                 The report highlighted the important role that faith-based service
                providers play for those in need who reject other sources of help. It
                stated:
                 Many individuals experiencing homelessness are disengaged from--
                and may be distrustful of--public and private programs, agencies,
                and systems, and they may be reluctant to seek assistance. Helping
                individuals to overcome these barriers often requires significant
                outreach time and effort, and can take months or even years of
                proactive and creative engagement to build trust. In order to
                comprehensively identify and engage all people experiencing
                homelessness, partnerships across multiple systems and sectors are
                critically important, particularly among homelessness service
                systems and health and behavioral health care providers, schools,
                early childhood care providers and other educators--including higher
                education institutions--child welfare agencies, TANF agencies, law
                enforcement, criminal justice system stakeholders, workforce
                systems, faith-based organizations, and other community-based
                partners.'' Id. at 16 (emphasis added).
                 Objective 2.3 of the report was to ``implement coordinated entry to
                standardize assessment and prioritization processes and streamline
                connections to housing and services.'' Id. at 19. In support of that
                objective, the report stated, ``[c]oordinated entry systems also create
                the opportunity to bring non-traditional partners and resources to the
                table as part of a broad and collaborative community effort that
                engages other public programs and community- and faith-based
                organizations in preventing and ending homelessness.'' Id. (emphasis
                added).
                 It might also be noted that the 2015 report by the USICH \70\
                placed even greater emphasis on the role of faith-based organizations
                in addressing homelessness in America. The very first recommendation
                made in the report was to increase leadership, collaboration, and civic
                engagement. One of the key strategies the report identified for this
                recommendation was to ``[i]nclude people with firsthand experience with
                homelessness, businesses, nonprofits, faith-based organizations,
                foundations, and volunteers.'' Id. at 33 (emphasis added). The report
                also stated:
                ---------------------------------------------------------------------------
                 \70\ USICH, Opening Doors: Federal Strategic Plan to Prevent and
                End Homelessness, https://www.usich.gov/resources/uploads/asset_library/USICH_OpeningDoors_Amendment2015_FINAL.pdf.
                ---------------------------------------------------------------------------
                 The homeless assistance system alone cannot address the
                nation's critical shortage of affordable housing for people who live in
                poverty. With 7.7 million low-income households experiencing ``worst
                case housing needs,'' it is inevitable that many of these households
                will experience housing crises, and will turn to family, friends,
                faith-based and community organizations, and government programs for
                assistance. Id. at 30 (emphasis added).
                 Throughout the nation, collaborations involving VA Medical
                Centers, public housing agencies, housing providers, faith-based and
                community organizations, local governments, the private sector, and
                other partners have come together in organized efforts to reach and
                engage Veterans and the most vulnerable and unsheltered people
                experiencing homelessness to link them to permanent housing with needed
                supports. Id. at 15 (emphasis added).
                 Successful implementation occurs when there is broad
                support for the strategies--this is evidenced by the involvement of
                business and civic leadership, local public officials, faith-based
                volunteers, and mainstream systems that provide housing, human
                services, and health care. Id. at 32 (emphasis added).
                 Working together, we will continue to harness public and
                private resources--consistent with principles of ``value for money''--
                to finish the effort started by mayors, governors, legislatures,
                nonprofits, faith-based and community organizations, and business
                leaders across our country to end homelessness. Id. at 60 (emphasis
                added).
                 The revised Federal strategic plan published by the USICH in 2020
                continues to support engagement with faith-based and community partners
                as part of the whole-of-government response to homelessness.\71\
                ---------------------------------------------------------------------------
                 \71\ USICH, Expanding the Toolbox: The Whole-of-Government
                Response to Homelessness 19 (Oct. 2020), https://www.usich.gov/resources/uploads/asset_library/USICH-Expanding-the-Toolbox.pdf; see
                also Administration for Children and Families, HHS, 2019 ACF
                Regional Listening Sessions on Family Homelessness (Feb. 2020),
                https://www.acf.hhs.gov/fysb/resource/2019-acf-regional-listening-sessions-on-family-homelessness (``We will continue to work across
                ACF programs and with other federal agencies and faith-based and
                community partners to strengthen our efforts to address family and
                youth homelessness.'' (emphasis added)).
                ---------------------------------------------------------------------------
                 Regarding opioid abuse, a comment noted that the NPRMs ``could''
                conflict with the objectives of HHS's recent Strategy to Combat Opioid
                Abuse, Misuse, and Overdose (2017), https://www.hhs.gov/opioids/sites/default/files/2018/09/opioid-fivepoint-strategy-20180917/508compliant.pdf (``HHS Strategy''). However, the very HHS Strategy
                cited by the commenter provided direct support for the important role
                that faith-based organizations play in helping the nation address abuse
                of opioids and other drugs. The first strategy presented by HHS was to
                ``[i]mprove access to prevention, treatment, and recovery support
                services to prevent the health, social, and economic consequences
                associated with opioid misuse and addiction, and to enable individuals
                to achieve long-term recovery.'' Id. at 3. The HHS Strategy's
                implementation relied on faith-based organizations for prevention,
                treatment of addiction to opioids and other drugs, and recovery, making
                a recommendation to ``[e]ngage community and faith-based organizations
                to use evidence-based messages on prevention, treatment, and
                recovery.'' Id. (emphasis added). It also added this component
                regarding recovery from abuse of opioids and other drugs: ``[e]nhance
                discharge coordination for people leaving inpatient treatment
                facilities who require linkages to home and community-based services
                and social supports, including case management, housing, employment,
                food assistance, transportation, medical and behavioral health
                services, faith-based organizations, and sober/transitional living
                facilities.'' Id. at 5 (emphasis added).
                 Regarding HIV, a comment said that ``[w]eakening beneficiary
                protections could create inconsistency with the President's Ending the
                HIV Epidemic: A Plan for America initiative (``EHE Initiative''), which
                seeks to reduce new HIV infections by 75% in five years and by 90% in
                ten years.'' \72\ The same web page announcing the EHE Initiative
                declares the importance of faith-based organizations in reducing HIV
                infections nationwide. It states:
                ---------------------------------------------------------------------------
                 \72\ HHS, Overview, About Ending the HIV Epidemic: Plan for
                America, https://www.hiv.gov/federal-response/ending-the-hiv-epidemic/overview.
                 Achieving EHE's goals will require a whole-of-society effort. In
                addition to the coordination across federal agencies, the success of
                this initiative will also depend on
                [[Page 82101]]
                dedicated partners working at all sectors of society, including
                people with HIV or at risk for HIV; city, county, tribal, and state
                health departments and other agencies; local clinics and healthcare
                facilities; healthcare providers; providers of medication-assisted
                treatment for opioid use disorder; professional associations;
                advocates; community- and faith-based organizations; and academic
                and research institutions, among others. Engagement of community in
                developing and implementing jurisdictional EHE plans as well as in
                the planning, design, and delivery of local HIV prevention and care
                ---------------------------------------------------------------------------
                services are vital to the initiative's success.
                (Emphasis added.)
                 When the Agency programs highlight the benefits of participation by
                faith-based organizations, it is hard to see how it is contrary to
                those programs to ensure that such organizations are eligible to
                participate in those programs on equal terms with secular organizations
                and subject to accommodations provided for in existing Federal laws.
                The objectives of these programs are consistent with this final rule
                and could not override the First Amendment and RFRA concerns that are
                part of the basis for this final rule. And to be clear, in the event of
                any unanticipated conflict between the final rule and an applicable
                program statute for which the First Amendment, RFRA, or another Federal
                law do not provide an exception, the Agencies will follow the
                requirements of the program statute.
                 Changes: None.
                 Affected Regulations: None.
                J. Procedural Requirements
                1. Comment Period
                 HUD provided a 60-day comment period for its NPRM. The eight other
                Agencies provided a 30-day comment period.
                 Summary of Comments: Some commenters argued that the other
                Agencies' comment periods should have been longer because the proposed
                rules were complex, pointing out that OMB designated this coordinated
                rulemaking a significant regulatory action. Some comments asserted that
                the APA, 5 U.S.C. 551 et seq.; Executive Order 12866 of September 30,
                1993, Regulatory Planning and Review, 58 FR 51735, and Executive Order
                13563 of January 18, 2011, Improving Regulation and Regulatory Review,
                76 FR 3821; and ``agency precedents'' provide that comment periods
                should generally be at least 60 days, and courts hold that a shorter
                period must be justified by the ``good cause'' exception in the APA.
                Some comments also cited Housing Study Group v. Kemp, 736 F. Supp. 321,
                334 (D.D.C. 1990). Some comments asserted that the Agencies had worked
                on the proposals for ``many months,'' so the public should have more
                than 30 days to respond. Some comments pointed out that HUD allowed 60
                days for comments, so the other Agencies also should have provided that
                many days, or should at least consider the comments made to HUD.
                 Response: The APA does not specify a minimum public comment period.
                See 5 U.S.C. 553(b). Executive Orders 12866 and 13563 encourage
                agencies to provide comment periods of at least 60 days, but do not
                mandate this. And, aside from HUD, no ``agency precedents'' bind the
                Agencies to 60-day comment periods. In contrast, HUD, pursuant to its
                unique rule on rulemaking at 24 CFR 10.1, requires a 60-day comment
                period. And HUD complied with that requirement here.
                 The Agencies disagree that Housing Study Group applies here. That
                case addressed an interim final rule that was promulgated after a 30-
                day notice-and-comment period. 736 F. Supp. at 334. But the court
                recognized later in the same case that the 60-day requirement is based
                on HUD's unique regulations. See Housing Study Group v. Kemp, 739 F.
                Supp. 633, 635 n.6 (D.D.C. 1990) (citing 24 CFR 10.1).
                 The eight other Agencies that selected a 30-day comment period
                provided sufficient opportunity for interested persons to meaningfully
                review the proposed rules and provide informed comment. The large
                number of comments received, many of which were substantive and
                detailed, show that the comment period was adequate.\73\ Moreover, the
                existing regulations are not lengthy or complex. For example, DOJ's
                regulations in 28 CFR part 38 (including the two short appendices)
                consist of a few pages of text. Also, the NPRMs are not lengthy and are
                mostly repetitive. For example, the NPRMs for DHS, USDA, USAID, DOJ,
                DOL, VA, HHS, and HUD are each between 6 and 14 pages, with the
                regulatory text appearing on 2 to 4 pages. To be sure, ED's NPRM is
                longer, but it also separated out the unique aspects of its proposed
                rules into a separate final rule that has already been promulgated.
                Direct Grant Programs, State-Administered Formula Grant Programs, Non
                Discrimination on the Basis of Sex in Education Programs or Activities
                Receiving Federal Financial Assistance, Developing Hispanic-Serving
                Institutions Program, Strengthening Institutions Program, Strengthening
                Historically Black Colleges and Universities Program, and Strengthening
                Historically Black Graduate Institutions Program, 85 FR 59916 (Sept.
                23, 2020).
                ---------------------------------------------------------------------------
                 \73\ Cf. Nat'l Lifeline Ass'n v. FCC, 921 F.3d 1102, 1117 (D.C.
                Cir. 2019) (``When substantial rule changes are proposed, a 30-day
                comment period is generally the shortest time period sufficient for
                interested persons to meaningfully review a proposed rule and
                provide informed comment.'' (citations omitted)).
                ---------------------------------------------------------------------------
                 Although OMB designated the proposed rules as significant
                regulatory actions, such a designation, in itself, is not necessarily
                indicative of how much time is needed to review and comment on that
                rule. See E.O. 12866, sec. 3(f) (setting out a variety of factors for
                designation). Similarly, the length of time an agency works on a
                proposed rule does not necessarily correspond to the length of time an
                agency should allow for comment. Here, the coordination prior to
                publication resulted in a rule coordinated (and generally consistent)
                across several Agencies, thus reducing complexity for commenters. The
                Agencies considered all comments submitted in response to the
                concurrent rulemaking, including those submitted to HUD during its 60-
                day comment period, as commenters recommended. In fact, most of the
                comments on the HUD version overlap with those submitted to DOJ,
                suggesting that additional time was not required for robust review and
                comment.
                 Changes: None.
                 Affected Regulations: None.
                2. Arbitrariness and Capriciousness
                 Summary of Comments: Some commenters, including a local government
                and advocacy organizations, asserted that the proposed rules violated
                the APA because the proposed changes were ``arbitrary and capricious.''
                They reasoned that the Agencies did not establish a ``rational
                connection'' between the underlying facts and their policy choices and
                did not offer a ``reasoned explanation'' for their changes to existing
                requirements, citing Motor Vehicle Manufacturers Ass'n of the United
                States v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 43
                (1983). Some advocacy organizations stated that the proposed rules were
                contrary to the APA because the Agencies ``failed to consider an
                important aspect of the problem'' when they issued the proposed rules.
                Id. A few advocacy organizations warned that agency actions based on
                arguments ``counter to the evidence'' do not meet the requirements of
                the APA. Id.
                 Similarly, another organization criticized the Agencies for
                offering little explanation or the required rational connection for
                changes that could adversely affect individuals. One organization
                asserted that the Agencies
                [[Page 82102]]
                did not fulfill their obligations under the APA to support each
                proposed change from the status quo with a ``reasoned analysis,'' Motor
                Vehicle Mfrs., 463 U.S. at 42; Washington v. Azar, 376 F. Supp. 3d
                1119, 1131 (E.D. Wash. 2019), vacated and remanded sub nom. Becerra v.
                Azar, 950 F.3d 1067 (9th Cir. 2020), that addresses the facts and
                arguments underlying the existing provision, Encino Motorcars, LLC v.
                Navarro, 136 S. Ct. 2117, 2125-26 (2017); FCC v. Fox Television
                Stations, Inc., 556 U.S. 502, 515 (2009), and clearly justifies the
                reversal. The commenter described a presumption against changes lacking
                support in the rulemaking record, Motor Vehicle Mfrs., 463 U.S. at 42,
                and warned that, although Executive Order 13831 overturned the
                Government-wide notice-and-referral requirements of Executive Order
                13279, as amended, the Agencies must still justify the corresponding
                changes to the regulations. The commenter stated that the Agencies
                offered ``no evidence'' in the proposed rules that the provisions were
                not functioning and required replacement. A different organization
                argued that when agencies propose material changes in policy, adherence
                to APA requirements is of greater significance because of the potential
                harm to ``serious reliance interests,'' Fox Television Stations, 556
                U.S. at 515, and commented that failure to explain a departure from
                standing policy could constitute ``an arbitrary and capricious change
                from agency practice,'' Nat'l Cable & Telecomms. Ass'n v. Brand X
                Internet Servs., 545 U.S. 967, 981 (2005). The commenter also stated
                that, because the Agencies did not scrutinize the proposed rules'
                effect on beneficiaries or employees, the proposed rules did not meet
                the reasoned analysis standard under the APA.
                 Some advocacy organizations criticized the rationales provided for
                the proposed revisions as inadequate. One organization commented that
                the Agencies neglected to identify what problems of administration the
                proposed rules were meant to correct and lacked support for the claim
                that the notice-and-referral requirements burdened providers.
                Additionally, the commenter argued that the Agencies failed to justify
                the expansion of religious exemptions for providers and did not account
                for how coercion or lack of alternatives would affect beneficiaries. A
                different organization, citing the Agencies' statements in the NPRMs
                that they could not quantify the cost of the referral requirement and
                welcomed data that would aid in developing such estimates, concluded
                that the Agencies could not provide an adequate basis for rescinding
                the requirement. The commenter criticized the Agencies' reliance on
                RFRA and Trinity Lutheran for support as ``cursory and flawed,'' and
                maintained that the Agencies had not met their burden under the APA to
                offer a reasoned explanation for the change, citing Fox Television
                Stations, 556 U.S. at 515. Addressing other proposed revisions, the
                commenter stated that the proposals to broaden religious exemptions and
                redefine indirect assistance also lacked sufficient rationales as the
                Agencies' arguments concerning alignment with the First Amendment and
                RFRA were inadequate.
                 Response: The Agencies disagree with comments that suggested the
                proposed rulemaking was ``arbitrary and capricious'' in violation of
                the APA because it ``failed to present a reasoned analysis'' for a
                substantial change in policy and ``failed to articulate a rational
                connection between the facts found and the choices made.'' Under the
                APA, courts review the Agencies' exercise of discretion under the
                deferential ``arbitrary and capricious'' standard. See 5 U.S.C.
                706(2)(A). The court's review is ``narrow,'' and the court may review
                the Agencies' exercise of discretion only to determine if the Agencies
                ``examined `the relevant data' and articulated `a satisfactory
                explanation' for [the] decision, including a rational connection
                between the facts found and the choice made.'' Dep't of Commerce v. New
                York, 139 S. Ct. 2551, 2569 (2019) (citations omitted). Courts may not
                substitute their judgments for the Agencies', ``but instead must
                confine [them]selves to ensuring that [the Agencies] remained `within
                the bounds of reasoned decision-making.' '' Id. (citation omitted).
                 The Supreme Court has recognized that agencies may change policy
                when such changes are ``permissible under the statute, . . . there are
                good reasons for [them], and . . . the agency believes [them] to be
                better'' than prior policies. Fox Television Stations, 556 U.S. at 515.
                Courts also have noted that agencies are not bound by prior policies or
                interpretations of their statutory authority.\74\ In addition, an
                agency need not prove that the new interpretation is the best
                interpretation but should acknowledge that it is making a change,
                provide a reasoned explanation for the change, and indicate why it
                believes the new interpretation of its authority is better. See
                generally Fox Television Stations, 556 U.S. 502.
                ---------------------------------------------------------------------------
                 \74\ See, e.g., Rust v. Sullivan, 500 U.S. 173, 186-87 (1991)
                (acknowledging that changed circumstances and policy revision may
                serve as a valid basis for changes in agency interpretations of
                statutes); Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc.,
                467 U.S. 837, 863-64 (1984) (``The fact that the agency has from
                time to time changed its interpretation of the term `source' does
                not, as respondents argue, lead us to conclude that no deference
                should be accorded the agency's interpretation of the statute. An
                initial agency interpretation is not instantly carved in stone. On
                the contrary, the agency, to engage in informed rulemaking, must
                consider varying interpretations and the wisdom of its policy on a
                continuing basis.''); Motor Vehicle Mfrs., 463 U.S. at 42 (agencies
                ``must be given ample latitude to `adapt their rules and policies to
                the demands of changing circumstances' '' (quoting Permian Basin
                Area Rate Cases, 390 U.S. 747, 784 (1968))).
                ---------------------------------------------------------------------------
                 The Agencies easily meet these requirements of the APA by providing
                detailed and reasoned explanations for their proposed changes. As the
                Agencies explained in proposing the amendments, the proposed changes
                implement Executive Order 13831 and conform the regulations more
                closely to the Supreme Court's current First Amendment jurisprudence;
                relevant Federal statutes such as RFRA; Executive Order 13279, as
                amended by Executive Orders 13559 and 13831; and the Attorney General's
                Memorandum.
                 The NPRMs explained that, in order to be consistent with these
                authorities, the proposed rules would conform to Executive Order 13279,
                as amended, by deleting the requirement that faith-based social service
                providers refer beneficiaries objecting to receiving services from them
                to an alternative provider and the requirement that faith-based
                organizations provide notices that are not required of secular
                organizations. As the NPRMs also explained, President Obama's Executive
                Order 13559 imposed notice and referral burdens on faith-based
                organizations that are not imposed on secular organizations. Section
                1(b) of Executive Order 13559 had amended section 2 of Executive Order
                13279 in pertinent part by adding a new subsection (h) to section 2. As
                amended, section 2(h)(i) provided that if a beneficiary or a
                prospective beneficiary of a social service program supported by
                Federal financial assistance objected to the religious character of an
                organization that provided services under the program, that
                organization was required, within a reasonable time after the date of
                the objection, to refer the beneficiary to an alternative provider.
                Section 2(h)(ii) directed the Agencies to establish policies and
                procedures to ensure that referrals would be timely and would follow
                privacy laws and regulations; that providers notify the Agencies of and
                track referrals; and that
                [[Page 82103]]
                each beneficiary ``receive [] written notice of the protections set
                forth in this subsection prior to enrolling in or receiving services
                from such program.'' The reference to ``this subsection'' rather than
                to ``this section'' indicated that the notice requirement of section
                2(h)(ii) was referring only to the alternative provider provisions in
                subsection (h), not all of the protections in section 2.
                 When revising their regulations in 2016, the Agencies explained
                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. The Agencies also previously took the position that the
                alternative provider provisions would protect religious liberties of
                social service beneficiaries. But such methods of protecting those
                rights were not required by the Constitution or any applicable law.
                Indeed, the selected methods were in tension with more recent Supreme
                Court precedent--including Espinoza and Trinity Lutheran--regarding
                nondiscrimination against religious organizations, with the binding
                legal principles discussed in the Attorney General's Memorandum, and
                with RFRA, as explained in the NPRMs and in detail in Part II.C. The
                Agencies also now disagree that these requirements meaningfully
                protected any beneficiary's religious liberties, as discussed in Part
                II.C.1. And the Agencies incorporate their analysis of the costs and
                benefits from Part IV below.
                 Executive Order 13831 chose to eliminate the alternative provider
                requirement for good reason. This decision avoids tension with the
                nondiscrimination principles articulated in Trinity Lutheran and
                summarized in the Attorney General's Memorandum, avoids problems that
                may arise under RFRA, and fits within the Administration's broader
                deregulatory agenda. Moreover, as explained in detail in Part II.C, the
                Agencies exercise their discretion to remove the alternative provider
                requirement because that is the appropriate legal and policy choice.
                 Similarly, the Agencies have provided reasoned explanations
                throughout this preamble for all of the other clarifications,
                additions, and changes in this final rule, which they incorporate here.
                 Thus, the Agencies disagree that this rulemaking is ``arbitrary and
                capricious,'' has not been explained or adequately supported, or
                otherwise has violated the requirements of the APA.
                 Changes: None.
                 Affected Regulations: None.
                K. Regulatory Certifications
                1. Regulatory Impact Analysis (Executive Orders 12866 and 13563)
                 Summary of Comments: Commenters argued that the proposed rules did
                not adequately or accurately assess all costs and benefits associated
                with the proposed rules. A few advocacy organizations commented that
                ``reasonable regulation ordinarily requires paying attention to the
                advantages and the disadvantages of agency decisions,'' citing Michigan
                v. EPA, 576 U.S. 743, 753 (2015). Another commenter relied on the
                principles that, to achieve compliance with the APA, an agency ``must
                examine the relevant data and articulate a satisfactory explanation,''
                and that agency action may be arbitrary and capricious if it ``failed
                to consider an important aspect of the problem.'' Motor Vehicle Mfrs.,
                463 U.S. at 43. Commenters added that Executive Orders 12866 and 13563
                require the Agencies to accurately assess the costs and benefits of a
                proposed rule--both quantifiable and unquantifiable--and then make a
                reasoned determination that the benefits justify the costs and that the
                regulation is tailored ``to impose the least burden on society.''
                Additionally, commenters emphasized that Executive Order 12866 requires
                agencies to ``assess all costs and benefits'' and to ``select those
                approaches that maximize net benefits.''
                 Applying these standards, commenters argued that the Agencies did
                not adequately address the costs to beneficiaries and employees from
                the regulatory changes. Some commenters argued that the Agencies had
                not recognized non-quantifiable benefits (avoided costs or burdens) for
                beneficiaries from the prior rule. Multiple commenters argued that the
                Agencies failed to quantify the costs of removing the notice-and-
                referral requirements, including failing to consider all relevant
                economic and non-economic costs, failing to substantiate the claimed
                cost savings with data, and asserting without support that removing a
                protection would benefit beneficiaries.
                 One commenter listed categories of potential costs to beneficiaries
                from removing the notice-and-referral requirements that, this commenter
                claimed, the Agencies had not addressed. Specifically, these potential
                costs included: Experiencing discrimination and barriers to access;
                health costs due to discrimination; health costs from the stigmatizing
                message of rules that permit discrimination; cost shifting to other
                service agencies; increased confusion, familiarization, administrative,
                and legal costs; and decreased fairness, dignity, and respect for the
                religious freedom and constitutional rights of beneficiaries. This
                commenter argued that the Agencies should use available data and
                research on the costs of discrimination and the benefits of
                nondiscrimination protections to try to quantify the true impacts. The
                commenter claimed that depression is associated with the stress of
                having faced discrimination and cited research purporting to show that
                reducing the disparity in incidents of depression among LGBTQ adults by
                25 percent could yield cost savings in Michigan, Arizona, Florida, and
                Texas of between $78 million and $290 million annually, each.\75\ The
                commenter argued that the Agencies' economic analyses were
                ``fundamentally flawed'' due to their failure to take into account
                these costs.
                ---------------------------------------------------------------------------
                 \75\ Christy Mallory et al., The Impact of Stigma and
                Discrimination Against LGBT People in Michigan 66 (Williams
                Institute 2019) (``Michigan Study''), https://williamsinstitute.law.ucla.edu/wp-content/uploads/Michigan-Economic-Impact-May-2019.pdf; Christy Mallory et al., The Impact of Stigma
                and Discrimination Against LGBT People in Arizona 63 (Williams
                Institute 2018) (``Arizona Study''), https://williamsinstitute.law.ucla.edu/wp-content//Arizona-Impact-Discrimination-March-2018.pdf; Christy Mallory et al., The Impact of
                Stigma and Discrimination Against LGBT People in Florida 64
                (Williams Institute 2017) (``Florida Study''), https:/
                /.law.ucla.edu//impact-lgbt-discrimination/; Christy Mallory et al.,
                The Impact of Stigma and Discrimination Against LGBT People in Texas
                67 (Williams Institute 2017)) (``Texas Study''), https://williamsinstitute.law.ucla.edu/wp-content//Impact-of-Stigma-and-Discrimination-Report-April-2017.pdf.
                ---------------------------------------------------------------------------
                 Commenters also argued that the Agencies only acknowledged, but did
                not attempt to quantify, the discrete costs to objecting beneficiaries
                that need to identify alternative providers due to removal of the
                referral requirement. This commenter urged the Agencies to consider all
                of the costs and benefits of the proposed rules, as well as the
                possibility that the costs would outweigh the benefits.
                 One of these commenters argued that the Agencies had also failed to
                quantify the costs of the employment law changes discussed in Part
                II.H.
                 Additionally, one commenter asserted that the Agencies relied on
                ``increased clarity'' as a benefit of the proposed rules but had not
                recognized that beneficiaries would not benefit from such ``increased
                clarity.'' 85 FR at 2935.
                 Commenters also discussed the benefits to faith-based organizations
                from this final rule. Several commenters argued that faith-based
                organizations
                [[Page 82104]]
                were not harmed by the notice-and-referral requirements. Some of these
                commenters argued that the Agencies did not present sufficient
                evidence--beyond assumptions or ``vague references'' to administrative
                burden and costs--that the notice-and-referral requirements had unduly
                burdened religious service providers either economically or in their
                practical ability to provide help for the needy in accord with their
                faiths. Some of these commenters argued that the Agencies had not
                presented any actual or even hypothetical examples of how this
                requirement meaningfully burdened faith-based organizations or
                interfered with their abilities to service program beneficiaries.
                Another commenter said that the regulations were working well and that
                the Agencies had not provided any supported reason for their changes.
                 Some commenters argued that there was no burden to religious
                service providers because providing referrals should have been seen as
                part of the services for which such providers were receiving taxpayer
                funds. Another commenter claimed that the notice requirement imposed no
                burden at all on faith-based providers because they were being funded
                by taxpayer dollars to serve the beneficiaries.
                 Several commenters argued that the notice-and-referral requirements
                imposed only minimal burdens on faith-based providers. Some of these
                commenters emphasized that the Agencies had indicated that the costs of
                the referral requirement were minimal, nonexistent, or unquantifiable.
                Multiple commenters emphasized that the cost of notice was minimal
                because each Agency estimated such cost to be no more than $200 per
                religious organization, with some estimating the costs to be lower, in
                the 2016 or 2020 rulemakings. For all of these reasons, these
                commenters concluded that removal of the notice requirement would not
                result in substantial savings for faith-based organizations.
                 Some of these commenters disagreed with the Agencies' claims that
                removing the notice-and-referral requirements could create cost savings
                that faith-based providers could re-allocate to increase services or
                that could incentivize them to increase their participation in
                federally funded programs. These commenters argued that, because
                compliance required minor efforts and costs, removing these
                requirements would neither make significant extra resources available
                nor result in significant additional providers. Some of these
                commenters claimed that the Agencies had not demonstrated that any
                religious organization was not participating in these programs because
                of these requirements, or that there were insufficient providers to
                meet the programs' needs. Some commenters also argued that it was
                contradictory or inconsistent for the Agencies to claim that the cost
                savings from removing the notice-and-referral requirements could
                trigger a noticeable increase in services, see, e.g., 85 FR at 2935,
                8221-22, but then to claim that beneficiaries did not use referrals.
                 For these reasons, commenters argued that cost savings to faith-
                based organizations cannot justify removal of the notice-and-referral
                requirements. One commenter to multiple Agencies, however, explained
                that removal of the notice-and-referral requirements would enable
                religious organizations to continue working towards strengthening
                society.
                 Commenters also compared the benefits and burdens to beneficiaries
                against the benefits and burdens to faith-based organizations. Several
                commenters argued that any burdens on faith-based organizations imposed
                by the notice-and-referral requirements were outweighed by the benefits
                they provided to beneficiaries. Relying on the discussions in this
                section and in Part II.C, these commenters compared the various
                described burdens to faith-based organizations, which they claimed were
                minimal or non-existent, to the various claimed benefits to
                beneficiaries, which they claimed were significant. Some of these
                commenters stated that the unquantified costs to beneficiaries
                associated with removal of the notice-and-referral requirements could
                offset or exceed any savings for providers. One commenter argued that
                the Agencies provided ``no evidence'' that any of the changes to
                beneficiaries' protections would result in net benefits because of the
                high costs to beneficiaries and society.
                 Some commenters expressed concern that the Agencies appeared to
                value the religious liberty of providers above that of beneficiaries
                and urged the Agencies to evaluate them equally. These commenters
                criticized the Agencies for proposing several measures to remove ``any
                possible burden'' or lack of clarity for providers while eliminating
                ``the only means'' for beneficiaries to receive notice of their rights
                as well as the requirement to be given a referral upon request.
                 Some commenters argued that nothing had changed since 2016 to
                justify the Agencies' changed positions regarding the balance of
                benefits and burdens. In 2016, the Agencies concluded that the notice
                requirement was ``designed to limit the burden on'' providers while
                being ``justified by the value to beneficiaries'' (i.e., ``valuable
                protections of their religious liberty''). 81 FR at 19365.
                Additionally, in 2016, the Agencies determined that there was no
                ``undue burden'' from requiring notice of such ``valuable protections''
                of beneficiaries' ``religious liberty.'' Id. These commenters argued
                that it was ``contradictory'' to claim now that the burdens of these
                requirements justify their removal and that the Agencies had dismissed
                these conclusions without evidence or reasoned analysis.
                 Other commenters pointed to the 2010 Advisory Council Report that,
                they claimed, had recognized the notice-and-referral requirements could
                impose significant monetary costs on providers but still concluded that
                those costs were necessary to adequately protect beneficiaries'
                unquantifiable fundamental religious liberties. Advisory Council Report
                at 141.
                 Finally, a commenter argued that the reasoned explanation standard
                was not met when eight of the Agencies (all except HHS) stated that
                they based removal of the notice-and-referral requirements (and other
                regulatory provisions) on a ``reasoned determination'' that the
                proposal would significantly decrease costs for providers, citing 85 FR
                at 2894 (DHS); id. at 2902-03 (USDA); id. at 2919 (USAID); id. at 2925-
                26 (DOJ); id. at 2935 (DOL); id. at 2944 (VA); id. at 3215, 3219 (ED);
                id. at 8221-22 (HUD).
                 Response: In this final rule, the Agencies adequately and
                appropriately consider the costs and benefits of this final rule, as
                well as the balance between them, to select the approaches that
                maximize net benefits and that impose the smallest burdens on society.
                The Agencies disagree with the comments to the contrary.
                 In the relevant sections above for each regulatory provision, the
                Agencies have addressed the specific comments regarding the potential
                impact on beneficiaries or employees that were raised in the comments,
                including by explaining the Agencies' experiences over the past four
                years, where relevant. Most of these comments focus on removal of the
                notice-and-referral requirements. The Agencies have considered the
                alleged harms to beneficiaries from removing these requirements as
                described in great detail in Part II.C, including detailed analyses of
                commenters' actual examples, studies, surveys, and hypothetical
                examples. For all of the reasons discussed there, the Agencies disagree
                that removing the notice-and-referral requirements will cause the harms
                [[Page 82105]]
                claimed by commenters. Indeed, as discussed, there is no indication by
                any Agency or commenter that anyone actually sought a referral at any
                time during the last four years.
                 Part II.C addresses in detail the reasons that removal of the
                notice-and-referral requirements will not lead to increased
                discrimination against any beneficiaries. Additionally, the studies
                cited by a commenter regarding the impact of reducing LGBTQ depression
                do not indicate that there will be any increase in discrimination or
                depression due to removal of the notice-and-referral requirements, that
                faith-based providers have higher incidents of discrimination, or that
                any discrimination or depression would be prevented or reduced by
                notice and referral. For example, those surveys point to the prevalence
                of LGBT people using Federal programs, such as SNAP, but do not point
                to prevalent discrimination in those programs, let alone discrimination
                particular to faith-based providers in such programs.\76\ Moreover,
                those studies specifically did not discuss Federal protections in the
                programs governed by this final rule that prohibit discrimination based
                on sex, including under Title VII, because that was ``outside the scope
                of'' each study.\77\ The Agencies have, thus, considered these costs
                and reasonably determined that specific calculations are not warranted.
                ---------------------------------------------------------------------------
                 \76\ Michigan Study at 41-42; Arizona Study at 36-37; Florida
                Study at 40-41; Texas Study at 39-40.
                 \77\ Michigan Study at 16 n.67; Arizona Study at 12 n.47;
                Florida Study at 13 n.43; Texas Study at 13 n.50.
                ---------------------------------------------------------------------------
                 As a result, and as discussed in Part II.C, the Agencies determine
                that removal of these notice-and-referral requirements will not cause
                the harms to beneficiaries cited by commenters. Because removing these
                requirements will not increase discrimination, there will not be
                increased costs to beneficiaries from experiencing discrimination and
                barriers to access, health costs due to discrimination, health costs
                from the stigmatizing message of rules that permit discrimination, or
                cost shifting to other service agencies. Additionally, there is no
                reason to believe that beneficiaries will experience increased
                confusion, familiarization costs, administrative costs, or legal costs,
                just as there is no reason to believe that they have experienced such
                costs when receiving services from the providers that were exempt from
                these requirements. And there is no reason to believe that removal will
                cause decreased fairness, dignity, and respect for the religious
                freedom and constitutional rights of beneficiaries, which are not
                affected by this rule change, as discussed in Part II.C. Also, as
                discussed in Parts II.C, II.E, II.F, and II.G.3, the Agencies address
                any such burdens within their notices to faith-based organizations of
                the applicable beneficiary protections and within the context-specific
                accommodation analyses under other existing Federal laws that are
                explicitly recognized in this final rule.
                 Moreover, beneficiaries may benefit from removal of these notice-
                and-referral requirements. As discussed in Part II.C, this final rule
                removes the various confusing aspects of these requirements, including
                the implications that they applied only to faith-based organizations,
                that accommodations were not available, contrary to the Free Exercise
                Clause and RFRA (which overrode any such implication in the
                regulations), and that discrimination on grounds other than religion
                was not prohibited. At the very least, these beneficiaries will be in
                the same position as beneficiaries of providers that were never subject
                to these requirements.
                 The Agencies have also considered the costs for beneficiaries, if
                they object based on religious character, to identify an alternative
                provider. The Agencies incorporate their discussion of this alleged
                burden from Part II.C, including that they have no indication that
                anyone sought a referral under the prior rule and that there are
                readily available ways for any such beneficiary to locate a substitute,
                to the extent one is available. Additionally, the Agencies expressly
                invited comments on any data by which they could calculate such costs,
                see, e.g., 85 FR at 2926 (DOJ), but no commenter provided any such
                information. The Agencies invited similar information regarding how
                they could better assess other actual costs and benefits of the prior
                rule but did not receive any responses that provided a reliable
                methodology for such assessments. The Agencies have considered these
                issues and reasonably determine that further calculations are not
                warranted.
                 In contrast, the Agencies conclude that the notice-and-referral
                requirements imposed substantial non-monetary burdens on faith-based
                organizations due to unequal treatment, in tension with the Free
                Exercise Clause and RFRA, and concerns that could have deterred faith-
                based organizations from applying to participate in such grant
                programs, as discussed in Part II.C. Additionally, the notice
                requirement created confusion because it omitted any discussion of
                accommodations, was inconsistent with the provisions in four Agencies'
                regulations that no additional assurance or notice be required from
                faith-based organizations regarding explicitly religious activities as
                discussed in Part II.G.4, and was in tension with each Agency's general
                provision in the rule promising that faith-based organizations retained
                their independence. In combination with all of the other changes in
                this final rule, removing the notice-and-referral requirements provides
                much-needed clarity that faith-based organizations can participate in
                these programs on equal terms with secular organizations, consistent
                with the Religion Clauses and RFRA. And, as discussed in Parts II.E and
                II.F above, otherwise eligible faith-based organizations have been
                abstaining from applying for these programs, have been excluded from
                these programs, or have been challenged for participating in these
                programs due to the lack of clarity in the 2016 rule. As discussed in
                Part II.C, these notice-and-referral requirements stigmatized faith-
                based organizations as most likely to be objectionable or to violate
                beneficiaries' rights. Although the Agencies agree that they cannot
                quantify these burdens, they do not agree that these unquantifiable
                burdens are insufficient bases for rule changes. Also, the supportive
                comments demonstrate that some faith-based providers were burdened by
                the notice-and-referral requirements, including the stigmatization that
                such requirements caused.
                 The Agencies disagree with the contention that mandatory referrals
                by only specific faith-based organizations should be seen as part of
                the federally funded service. The Federal financial assistance is for
                the provision of services, whereas referral was the non-provision of
                services. To assert that mandatory referrals constituted a part of the
                federally funded service misunderstands the nature of Federal funding,
                where a Federal grant award supports particular enumerated activities
                to be undertaken by a recipient. Commenters making this claim did not
                provide any indication that such mandatory referrals were included as
                an enumerated activity to be undertaken by any Agency with Federal
                funding. Further, referral as part of the service is hard to reconcile
                with the referral requirement's function of allowing objecting
                beneficiaries to avoid receiving any services from a provider. If the
                referral were part of the provider's service, then the referral would
                undermine the claimed protection and could make the referral itself
                objectionable. Under this final rule, religious organizations remain
                free to
                [[Page 82106]]
                make such referrals if they choose, and some commenters indicated that
                they will continue to do so.
                 Similarly, the Agencies disagree that there can be no burden on the
                faith-based providers because they were receiving taxpayer funding and
                must adhere to religious freedom safeguards. Receipt of taxpayer
                funding does not cause faith-based organizations to waive their
                constitutional and statutory religious liberties, just as it does not
                waive such rights for beneficiaries. These comments directly contradict
                Espinoza, Trinity Lutheran, many applications of RFRA, and countless
                other Supreme Court cases that allowed faith-based providers to
                participate in government-funded programs without surrendering their
                religious character or liberty. Additionally, the Agencies determine
                that the notice-and-referral requirements did not safeguard
                beneficiaries' religious freedoms, as discussed in Part II.C.
                 The Agencies agree with the comments that said the notice-and-
                referral requirements likely imposed minimal monetary costs on faith-
                based organizations and that removal will not create significant
                financial savings for faith-based organizations. Neither notices nor
                referrals were particularly expensive, as the Agencies noted in the
                2016 rule and in their 2020 NPRMs. Also, there is no indication anyone
                actually requested a referral under the prior rule, as discussed in
                Part II.C.3.c. Nevertheless, based on their experiences and the
                comments they received, the Agencies have re-evaluated the number of
                known faith-based organizations receiving their grants and estimated
                the cost savings for those providers from removal of the notice-and-
                referral requirements. An updated analysis of these costs and benefits
                is set out below in the Regulatory Certifications section addressing
                Executive Orders 12866 and 13563.
                 The Agencies expressly conclude that those cost savings will not be
                substantial and are not the basis for removal of the notice-and-
                referral requirements in this final rule. Although the cost savings
                from removing the notice requirement are not significant and will not
                make available significant funding for significant increases in
                services, the Agencies also exercise their discretion to allow faith-
                based providers, like other providers, to save those costs and be able
                to allocate any savings toward providing additional services to
                beneficiaries. It is consistent to conclude that these savings are
                minimal and that they can be allocated toward providing services to
                beneficiaries.
                 Additionally, the Agencies disagree that their conclusion here
                regarding the burden of referrals is inconsistent with their conclusion
                that beneficiaries rarely or never sought referrals. For both, the
                Agencies conclude that referrals were rarely or never sought. As
                discussed above, the Agencies are not claiming substantial savings to
                faith-based providers from removing the referral requirement, including
                because there were few, if any, requests for such referrals. But that
                does not diminish the constitutional and other non-quantified burdens
                on faith-based organizations that are the bases for removing the
                referral requirement. Moreover, faith-based service providers that are
                subject to these regulations will save costs as a result of removing
                the notice requirement.
                 The Agencies conclude that removing the notice-and-referral
                requirements reaches the appropriate balance between benefits and
                burdens for all stakeholders and society, for all of the reasons
                discussed throughout this final rule, including in this section. As
                discussed above, the Agencies conclude that such removal will
                substantially benefit faith-based organizations, may benefit
                beneficiaries, and will not harm beneficiaries. Additionally, the
                Agencies are further accounting for beneficiaries' rights by separately
                giving express notice to faith-based providers that they must comply
                with the applicable beneficiary protections and providing for context-
                specific accommodations that further balance stakeholder interests,
                which may result in targeted and appropriate notices and referrals.
                That is the appropriate policy choice for all of the reasons discussed
                throughout Parts II.C, II.E, and II.G.3.
                 Since 2016, the Agencies have re-evaluated their analyses on this
                balancing of interests with respect to the notice-and-referral
                requirements for all of the reasons explained throughout this section
                and Part II.C, including their experiences of no known actual instances
                of referrals (and, thus, the lack of need for such requirement) and the
                developments in First Amendment and RFRA case law, such as the Supreme
                Court's decisions in Little Sisters, Espinoza, and Trinity Lutheran.
                Additionally, this final rule is a deregulatory action under Executive
                Order 13771 of January 30, 2017, Reducing Regulation and Controlling
                Regulatory Costs, 82 FR 9339, with the cost savings of this rulemaking
                at $190,409 (in 2016 dollars) when annualized over a perpetual time
                horizon at a 7 percent discount rate.
                 The Agencies note that a commenter misquoted the Advisory Council
                Report. The commenter claimed that the Advisory Council Report
                acknowledged there would be significant monetary costs to ``providers''
                from such notice-and-referral requirements. However, the cited page of
                the Advisory Council Report actually said there would be significant
                monetary costs to the Government. Advisory Council Report at 141. The
                Agencies acknowledge that they have absorbed costs due to those
                recommendations. But, as discussed above, the Agencies do not find, and
                do not base this final rule on, substantial costs to providers (or to
                themselves) from these requirements.
                 Even if the burdens on beneficiaries from removing the notice-and-
                referral requirements were to outweigh the benefits to faith-based
                organizations, the Agencies find ample bases to exercise their
                discretion to remove these requirements for all of the other reasons
                discussed in Part II.C, especially to alleviate the tension with the
                Free Exercise Clause and with RFRA. Those bases do not improperly
                prioritize faith-based organizations over beneficiaries. Even the 2010
                Advisory Council recommended that Executive Order 13279 be amended ``to
                make it clear that fidelity to constitutional principles is an
                objective that is as important as the goal of distributing Federal
                financial assistance in the most effective and efficient manner
                possible.'' Advisory Council Report at 127 (Recommendation 4). The
                Agencies agree. Serving beneficiaries is an important goal of these
                programs, but the programs serving beneficiaries must be operated
                consistent with constitutional principles, including protection of the
                religious liberty of organizations that implement them.
                 The Agencies have also considered the costs and benefits of the
                other changes in this final rule. The Agencies do not anticipate harm
                to beneficiaries from the modifications to indirect Federal financial
                assistance for the reasons discussed in Part II.D. Beneficiaries select
                those providers through genuine independent choice, beneficiaries are
                free to decide whether or not to accept such services from faith-based
                organizations, and other protections continue to apply. The minimal or
                nonexistent harms to beneficiaries are justified by the benefits of
                this final rule, as described in Part II.D, including the non-
                quantifiable qualitative benefits of reconciling the tension between
                this provision and the constitutional standard, ensuring that faith-
                based organizations are not discouraged from participating in Federal
                financial assistance programs and activities, and ensuring that
                [[Page 82107]]
                services are available in unserved and underserved communities.
                Additionally, as discussed in Part II.D, this provision is the
                appropriate policy choice, including because the Agencies prioritize
                making services available in unserved and underserved communities.
                 Similarly, the benefits and burdens of the other changes are
                addressed above in Parts II.E, II.F, II.G, and II.H. As discussed in
                Parts II.E and II.F, the Agencies are retaining the constitutional and
                statutory accommodation and nondiscrimination standards, which do not
                cause any new burden to beneficiaries. Any burden caused by each
                standard would exist whether or not that standard is expressly
                incorporated into this final rule. Also, those existing standards
                incorporate context-specific balancing that evaluates the costs and
                benefits as appropriate. As discussed in Part II.F, the Agencies have
                also considered the comments regarding burdens on beneficiaries due to
                the proposed language in the NPRMs for the RFRA standard and have
                modified the regulatory text to ensure the appropriate balance with
                regard to prohibiting discrimination based on religious exercise. The
                benefits of clearly applying these standards and ensuring faith-based
                providers can participate on equal terms justify the potential burdens.
                 For similar reasons and as discussed in Part II.G, the benefits
                justify the potential burdens--and the Agencies do not anticipate
                burdens--from clarifying the scope of allowed religious displays,
                clarifying how an organization can demonstrate nonprofit status, giving
                notice to faith-based organizations, barring unique assurances or
                notices solely from faith-based organizations, and clarifying that
                faith-based organizations retain their autonomy and expression rights.
                Indeed, those clarifications will protect both faith-based
                organizations and beneficiaries from uncertainty. And the notice to
                faith-based organizations will make clear their obligations to protect
                beneficiaries' rights, as discussed in Parts II.C and II.G.3.
                 Finally, and as explained in Part II.H, ED, HHS, HUD, DOL, USAID,
                and VA conclude that the benefits justify any burdens from clarifying
                that faith-based organizations retain their Title VII exemption
                regarding acceptance of and adherence to religious tenets. This well-
                established Title VII standard was subsumed within the prior rule. This
                final rule merely adds clarity, ensures faith-based organizations can
                preserve their autonomy and identities, and does not alter protections
                against discrimination on other bases, as discussed in II.H.2.a.
                Additionally, DHS, DOJ, and HUD conclude that the benefits of
                clarifying that faith-based organizations' independence generally
                allows them to select board members based on acceptance of or adherence
                to religious tenets justifies any costs that such change might cause,
                as discussed in II.H.2.b.
                 For all of these reasons, the Agencies' NPRMs and this final rule
                reasonably assess the costs and benefits associated with this rule, pay
                attention to the advantages and disadvantages of this rule, examine the
                relevant data and articulate a satisfactory explanation, and consider
                the important aspects of the problem. The Agencies have considered all
                comments submitted, including those addressing costs and benefits, in
                publishing this final rule.
                 Changes: None.
                 Affected Regulations: None.
                2. Economic Significance Determination (Executive Order 12866)
                 Summary of Comments: A commenter asserted that the proposed rules
                would be economically significant under Executive Order 12866, both
                because the costs would total over $100 million per year, and because
                it ``may . . . adversely affect in a material way . . . public health
                or safety, or State, local, or tribal governments or communities.''
                This commenter argued that the Agencies' cost analyses were too narrow,
                excluding potentially significant costs to third parties (e.g.,
                beneficiaries, communities, and funded organizations) because of the
                scale of programs affected by the proposed rules.
                 Response: The Office of Information and Regulatory Affairs
                (``OIRA'') within OMB determined that this final rule is a significant,
                but not an economically significant, regulatory action subject to
                review by OMB under section 3(f) of Executive Order 12866. As discussed
                in the updated Regulatory Impact Analysis in Part IV below and in Parts
                II.C and II.K.1 above, this final rule will not create new marginal
                costs from the status quo, even though the underlying programs involve
                government spending. In fact, this final rule will result in de minimis
                cost savings, and it is deregulatory because it reduces qualitative
                burdens. Consequently, it does not approach the threshold for being an
                economically significant rule (annual effect of $100 million or more)
                under Executive Order 12866, nor, for the reasons set out in detail in
                the other sections, does it adversely affect in a material way the
                other items listed in section 3(f)(1) of that order.
                 Changes: None.
                 Affected Regulations: None.
                3. Deregulatory Action Determination (Executive Order 13771)
                 Summary of Comments: A commenter criticized multiple Agencies for
                concluding that removal of the notice-and-referral requirements
                promotes the Administration's deregulatory agenda. The commenter argued
                that doing so privileges policy goals above religious freedom.
                 Response: Removing the notice-and-referral requirements promotes
                the Administration's deregulatory agenda, which is a desirable policy
                outcome for the Agencies. But that is not the primary basis for
                removing them. The Agencies base the removal of the notice-and-referral
                requirements on all of the reasons discussed throughout Parts II.C and
                II.K.1 above, including that those requirements were imposed solely on
                faith-based organizations, creating tension with the Free Exercise
                Clause and RFRA, and that there was no evidence anybody had actually
                sought a referral in one of the programs covered by the rule.
                 Changes: None.
                 Affected Regulations: None.
                4. Federalism (Executive Order 13132)
                 Summary of Comments: A commenter criticized multiple Agencies'
                federalism analyses as flawed, arguing that because the proposed rules
                introduced loopholes and overturned the existing regulatory regime,
                State and local jurisdictions would have a harder time protecting their
                workers and enforcing nondiscrimination laws of general applicability.
                Additionally, the commenter asserted that the proposed rules would
                burden State governments by increasing unemployment and, therefore, the
                need for State-funded welfare benefits, because more people will be
                turned down for employment. Similarly, the commenter maintained that
                both State and local governments would face higher demands for the
                social services they fund because beneficiaries will experience
                barriers to access in programs funded by the Agencies. The commenter
                warned that the proposed rules violated the APA because the Agencies'
                determinations regarding federalism implications were not based on a
                reasoned analysis.
                 Response: Executive Order 13132 of August 4, 1999, Federalism, 64
                FR 43255, 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, and that is not
                [[Page 82108]]
                required by statute, or any regulation that preempts State law, unless
                the agency meets the consultation and funding requirements of section 6
                of the Executive Order. None of the changes made by this rule has
                federalism implications as defined in the Executive Order, nor imposes
                direct compliance costs on State and local governments. None of the
                changes made by this rule preempts State or local law within the
                meaning of the Executive Order, as stated expressly regarding Executive
                Orders 12988 and 13132. See Part IV below (regarding both Executive
                Orders); 85 FR at 2895 (DHS); id. at 2904 (USDA); id. at 2920 (USAID);
                id. at 2927 (DOJ); id. at 2935-36 (DOL); id. at 2944 (VA); id. at 2985
                (HHS); id. at 8222 (HUD). The Agencies do not expect that this rule
                will increase unemployment or unlawful discrimination in any way (see
                the detailed analysis in Parts II.C, II.E, and II.H), and thus the
                commenter's hypothesized effects on State welfare benefits and social
                services are unlikely to materialize.
                 Moreover, it is not clear that any of the costs cited in the
                comments would qualify as ``direct'' under Executive Order 13132. The
                express terms of this final rule do not require State or local
                governments to pay any costs to comply. Rather, the comments pointed to
                indirect costs from theoretical alleged consequences of this final
                rule. Consequently, although Executive Order 13132 does not create any
                privately enforceable rights, the Agencies conclude that this final
                rule does not violate provisions in that Executive Order.
                 Changes: None.
                 Affected Regulations: None.
                5. Unfunded Mandates Reform Act
                 Summary of Comments: Some commenters asserted that the Agencies
                incorrectly claimed an exemption from the requirement, in the Unfunded
                Mandates Reform Act of 1995 (``UMRA''), to assess a proposal's costs
                and benefits for States and local governments and the private sector,
                arguing that Trinity Lutheran and RFRA do not enforce statutory rights
                prohibiting discrimination. Some of these commenters added that Trinity
                Lutheran does not meet this standard because it is merely case law and
                that RFRA does not meet this standard because it permits individuals to
                seek relief from burdens on religious exercise but does not establish a
                categorical right against religious discrimination. One commenter urged
                multiple Agencies to conduct an UMRA analysis before issuing a final
                rule.
                 Response: Section 4 of UMRA, 2 U.S.C. 1503(1)-(2), excludes from
                coverage under that Act any proposed or final Federal regulation that
                ``enforces constitutional rights'' or ``establishes or enforces any
                statutory rights that prohibit discrimination on the basis of race,
                color, religion, sex, national origin, age, handicap, or disability.''
                The provisions of the proposed rule, and of this final rule, are
                designed in substantial part to maintain a full protection of the
                constitutional and statutory rights to be free from discrimination on
                the basis of religion--set forth in the First Amendment to the U.S.
                Constitution, and numerous other statutes, including 42 U.S.C. 2000bb
                et seq., 42 U.S.C. 18113, 42 U.S.C. 2000e-1(a) and 2000e-2(e), and 42
                U.S.C. 12113(d). For example, the core protection of this rule, which
                has been in place since 2004, is that Agencies may not discriminate for
                or against an organization on the basis of its religious character or
                affiliation. The Supreme Court has since confirmed, in its 2017
                decision in Trinity Lutheran and its 2020 decision in Espinoza, that
                this nondiscrimination right is grounded in the Free Exercise Clause.
                The clarifications that the Agencies provide to protect organizations
                from certain forms of discrimination on the basis of ``religious
                exercise'' are designed to give full effect to this protection and to
                the protections of RFRA that, as the Supreme Court has made clear in
                its 2014 decision in Hobby Lobby and in its 2020 decision in Little
                Sisters, extend to organizations as well as individuals. And the
                clarifications that certain of the Agencies have provided regarding the
                scope of the Title VII exemption is designed to enforce that statute.
                 Furthermore, this final rule does not impose any Federal mandate
                that will result in the expenditure of funds by State, local, or tribal
                governments, in the aggregate, or by the private sector, of $100
                million or more in any one year. Most, if not all, expenditures by such
                governments--for example, as primary recipients of Federal financial
                assistance--will be directly funded by the Federal program and will be
                mandated by the underlying program, not this final rule.
                 For the foregoing reasons, the Agencies disagree that they are
                required to take any action under the provisions of UMRA.
                 Changes: None.
                 Affected Regulations: None.
                III. Agency-Specific Preambles
                A. Department of Education 78
                ---------------------------------------------------------------------------
                 \78\ The remainder of the proposed provisions in the Department
                of Education's NPRM, including proposed changes to 34 CFR 75.500, 34
                CFR 75.700, 34 CFR 76.500, 34 CFR 76.700, 34 CFR 106.12(c), 34 CFR
                606.10, 34 CFR 607.10, 34 CFR 608.10, and 34 CFR 609.10 as well as
                the addition of a severability clause in 34 CFR 75.684, 34 CFR
                75.741, 34 CFR 76.684, 34 CFR 76.784, 34 CFR 606.11, 34 CFR 607.11,
                34 CFR 608.12, 34 CFR 609.12, already have been promulgated through
                a different rulemaking. Office of Postsecondary Education, U.S.
                Department of Education, Direct Grant Programs, State-Administered
                Formula Grant Programs, Non-Discrimination on the Basis of Sex in
                Education Programs or Activities Receiving Federal Financial
                Assistance, Developing Hispanic-Serving Institutions Program,
                Strengthening Institutions Program, Strengthening Historically Black
                Colleges and Universities Program, and Strengthening Historically
                Black Graduate Institutions Program, 85 FR 59,916-82 (Sept. 23,
                2020) (``Religious Liberty and Free Inquiry Final Rule''). To the
                extent that any comments such as comments about the length of the
                public comment period and requests for extension of the public
                comment period included in the Religious Liberty and Free Inquiry
                Final Rule concern the regulations in this final rule, the
                Department of Education refers to those comments and its responses
                to those comments in the Religious Liberty and Free Inquiry Final
                Rule. Id.
                ---------------------------------------------------------------------------
                1. Comments in Support
                 Summary of Comments: Commenters noted that the proposed rule would
                reinforce Americans' religious liberties and the rule of law. Some
                commenters argued that the proposed rule appropriately eliminates
                potentially unequal treatment of religious institutions when applying
                for Department grants and restores fairness.
                 One commenter emphasized that First Amendment religious freedom
                rights for faith-based institutions and for students are essential to
                the operation and success of America's rich and diverse educational
                system. This commenter also asserted that faith-based organizations and
                faith-based schools may offer meaningful services to those in need.
                 Another commenter acknowledged that some may believe the proposed
                rule would have the effect of permitting schools to discriminate
                against the LGBTQ community, women, and pregnant students. However,
                this commenter emphasized that to categorically prohibit Federal
                funding to religiously affiliated organizations and schools would
                unfairly marginalize them. The commenter suggested that such
                organizations and schools can effectively serve marginalized groups.
                 Response: The Department appreciates the comments in support of the
                proposed rule. We agree that the proposed rule would appropriately
                protect religious liberty and prevent discrimination against faith-
                based
                [[Page 82109]]
                organizations. Furthermore, we acknowledge that faith-based
                organizations and schools make meaningful contributions to the richness
                and diversity of our Nation's educational system. And such entities
                also provide critical services to vulnerable populations and those in
                need.
                 We wish to emphasize that it is certainly not the intent of the
                Department to encourage discrimination, including against the LGBTQ
                community, women, or pregnant students, and we do not believe that
                these final regulations do so. Grantees provide secular services to all
                persons and are precluded from discriminating against beneficiaries on
                the basis of religion or religious belief, a refusal to hold a
                religious belief, or refusal to attend or participate in a religious
                practice.\79\ We also agree with the commenter that faith-based
                organizations may effectively serve diverse groups of people, including
                marginalized groups. As one commenter correctly observed, the proposed
                rule was aimed at redressing the unfair treatment of faith-based
                organizations. In short, the final rule will have the effect of
                leveling the playing field such that faith-based organizations and
                religious individuals would not be treated any differently than other
                organizations or individuals.
                ---------------------------------------------------------------------------
                 \79\ 2 CFR 3474.15(f); 34 CFR 75.52(e); 34 CFR 76.52(e).
                ---------------------------------------------------------------------------
                 Changes: None.
                 Affected Regulations: None.
                2. Comments in Opposition
                a. Concerns Regarding Discrimination and Impact on Programs
                 Summary of Comments: Many commenters expressed concern that the
                proposed rule would unfairly eliminate religious freedom protections in
                college preparatory and work-study programs intended to help low-income
                high school students prepare for college. One commenter clarified a
                concern that the proposed rule would eliminate religious freedom
                protections for non-religious participants in those programs.
                 Commenters also warned that the proposed rule may negatively impact
                federally funded afterschool and summer learning programs for students
                in high-poverty and low-performing schools. Some commenters argued that
                the proposed rule would undermine access to critical services for youth
                such as school lunch programs, 4-H development, youth mentoring
                programs, youth career development, and employment opportunity
                programs.
                 Commenters asserted that, in America, no individual's ability to
                receive an education should depend on whether he or she shares the
                religious beliefs of government-funded organizations.
                 Several commenters believed the proposed rule would result in
                unfair discrimination and expressed a concern that the separation of
                church and state would be undermined by the proposed rule.
                 One commenter, a veteran, wrote that he completed a Department-
                funded program called Veteran's Upward Bound to complete his GED and
                college preparation. This commenter noted that, with the services he
                received that were delivered without regard for religion or involving
                religious organizations, including the ``old G.I. bill'' and Pell
                grants, he was able to earn his undergraduate and graduate degrees. The
                commenter asserted that, had these programs engaged in discrimination,
                then he may not have been able to continue his education.
                 One commenter stated that, under the proposed rule, an unmarried
                pregnant student might be refused services by a government-funded
                social service agency partnering with a public school to provide
                healthcare screening, transportation, or other services. Similarly,
                another commenter believed that under the proposed rule an LGBTQ
                student or child of LGBTQ parents could be confronted with open anti-
                LGBTQ hostility by a Department-funded social service program
                partnering with their public school to provide important services such
                as healthcare screening, transportation, shelter, clothing, or new
                immigrant services.
                 One commenter argued that a fundamental responsibility of the
                Department is to provide equal access to all people and freedom from
                discrimination. This commenter suggested that no taxpayer money go to
                schools that discriminate, including those that discriminate out of
                sincerely held religious beliefs.
                 Another commenter stated that the proposed rule would allow
                providers to discriminate on the basis of religion. For example, this
                commenter claimed a Jewish or Muslim student might be turned away from
                a 21st Century Community Learning Center but may not be aware of
                alternative providers.
                 Response: The Department disagrees with commenters who suggest that
                the rule will eliminate religious freedom protections for non-religious
                participants in college preparatory and work-study programs intended to
                help low-income high school students. The regulation expressly
                prohibits all organizations (including faith-based organizations who
                are grantees or who contract with grantees or subgrantees) from
                discriminating against beneficiaries on the basis of religion or
                religious belief, a refusal to hold a religious belief, or a refusal to
                attend or participate in a religious practice.\80\ Neither will the new
                regulations allow providers administering the Veteran's Upward Bound
                program to discriminate against beneficiaries based on religion; such
                discrimination would violate the conditions of the organization's
                Federal grant. Further, under the proposed rules, any faith-based
                organization that provides such social services must offer its
                religious activities separately in time or location from any programs
                or services funded by the Department, and any attendance or
                participation in such explicitly religious activities by beneficiaries
                supported by the programs must be voluntary.\81\
                ---------------------------------------------------------------------------
                 \80\ 2 CFR 3474.15(f); 34 CFR 75.52(e); 34 CFR 76.52(e).
                 \81\ 2 CFR 3474.15(d)(1); 2 CFR 75.52(c)(1); 2 CFR 76.52(c)(1).
                ---------------------------------------------------------------------------
                 The Department notes that commenters arguing that the new
                regulations will have a detrimental impact on critical youth services
                do not explain how the new regulations will harm school lunch programs,
                4-H development, youth mentoring programs, youth career development,
                employment opportunity programs, after school programs, and summer
                learning programs. To the contrary, these regulations provide stringent
                religious liberty protections for their beneficiaries. Indeed, as
                previously discussed, providers may not discriminate against
                beneficiaries on the basis of religion, and their federally funded
                services may not contain religious programming or activities.
                 The Department emphasizes that the final regulations' restriction
                against discriminating on the basis of religion or religious belief
                applies equally to faith-based organizations and secular organizations.
                Thus, no individual's ability to receive an education depends on
                whether they share the religious beliefs of the Government-funded
                organization, and access to government services is broadened, not
                undermined. On the other hand, to deny Federal funding to faith-based
                organizations because they hold sincerely held religious beliefs is
                unconstitutional under the Supreme Court's decision in Trinity Lutheran
                Church of Columbia, Inc. v. Comer.\82\ A beneficiary will never
                [[Page 82110]]
                be required to attend a religious activity in direct aid programs, and
                a beneficiary through a genuine, independent choice may use a voucher,
                certificate, or other means of government-funded payment, which is
                considered ``Indirect Federal financial assistance,'' for a private
                organization that may require attendance or participation in a
                religious activity.\83\ This latter result would only happen because of
                the independent choice of the beneficiary, not coercion or pressure
                from the Department.
                ---------------------------------------------------------------------------
                 \82\ 137 S. Ct. 2012, 2019 (2017) (internal quotation marks
                omitted) (``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.'').
                 \83\ See 34 CFR 75.52(c)(3)(ii) and 34 CFR 76.52(c)(3)(ii).
                ---------------------------------------------------------------------------
                 The Department notes that a government-funded social service agency
                partnering with a public school may not refuse services to an unmarried
                pregnant student. In fact, such a student at a public school receives
                express protections under Title IX.\84\ The changes under the new
                regulations will not impact any student seeking social services from a
                social service agency partnering with a public school. Under the new
                regulations, a private organization that contracts with a grantee or
                subgrantee, including a State, may not discriminate against any student
                on the basis of religion or religious belief.\85\
                ---------------------------------------------------------------------------
                 \84\ See, e.g., 34 CFR 106.21(c); 34 CFR 106.40; 34 CFR 106.51;
                34 CFR 106.57.
                 \85\ 2 CFR 3474.15(f); 34 CFR 75.52(e); 34 CFR 76.52(e).
                ---------------------------------------------------------------------------
                 The Department reiterates that, under the new regulations, no
                providers receiving Federal funds may discriminate on the basis of
                religion. A federally funded learning center that turns away a Jewish
                or Muslim student because of his or her sincerely held religious
                beliefs, as described in the commenter's hypothetical, would be in
                violation of a material condition of its grant and risks consequences
                as a result of such a material breach.\86\
                ---------------------------------------------------------------------------
                 \86\ Id.
                ---------------------------------------------------------------------------
                 Lastly, no wall of separation between church and state is offended
                by the new regulations. Rather, preventing faith-based institutions
                from receiving grant money based on their religious nature would
                violate the Constitution, as discussed elsewhere in this preamble and
                in the preamble of the Department's NPRM.\87\ The Supreme Court has
                explained that the Constitution does not ``require complete separation
                of church and state; it affirmatively mandates accommodation, not
                merely tolerance, of all religions, and forbids hostility toward any.''
                \88\ Indeed, this ``metaphor has served as a reminder that the
                Establishment Clause forbids an established church or anything
                approaching it.'' \89\ The Department is not making any revisions to 34
                CFR 75.532 and 34 CFR 76.532, which prohibit the use of a grant to pay
                for religious worship, religious instruction, or proselytization, and
                also prohibit the use of a grant to pay for any equipment or supplies
                to be used for such activities. The new regulations do not establish a
                church or anything approaching it; instead, they require faith-based
                institutions to keep their religious activities separate from any
                federally funded programs and mandate equal treatment of faith-based
                and secular institutions.
                ---------------------------------------------------------------------------
                 \87\ 85 FR 3190, 3191-96, 3200-10.
                 \88\ Lynch v. Donnelly, 465 U.S. 668, 673 (1984).
                 \89\ Id.
                ---------------------------------------------------------------------------
                 Changes: None.
                 Affected Regulations: None.
                b. Concerns Regarding Appropriate Use of Taxpayer Dollars
                 Summary of Comments: One commenter asserted that Department grant
                programs should be implemented no differently than Federal funding for
                other industries under contracts that require non-discriminatory
                practices as a condition of receiving those funds.
                 Several commenters expressed opposition to the idea of using
                taxpayer funds to support religious or private schools, such as through
                school vouchers. Commenters believed that taxpayer money should only go
                to public schools. One commenter asserted that funding for public
                schools should increase so public school teachers earn incomes
                comparable with faculty at institutions of higher education.
                 The commenter also believed that all schools providing accredited
                degrees or diplomas should be required to follow a base curriculum of
                non-negotiable lessons provided by the Department. Another commenter
                expressed opposition to taxpayer dollars going to charter schools and
                argued that charter schools are often intertwined with the religious
                community and tend to prioritize religious dogma in their instruction
                over scientific evidence.
                 Response: The Department responds that its grant programs already
                require adherence to principles of nondiscrimination, subject to
                exemptions rooted in countervailing constitutional considerations.
                Indeed, several provisions of the new regulations condition the award
                of Federal funds on public institutions not engaging in discrimination.
                For example, faith-based organizations are eligible to contract with
                grantees and subgrantees, including States, on the same basis as any
                other private organization, with respect to contracts for which such
                other organizations are eligible, and considering any permissible
                accommodation.\90\ And, as discussed at length previously, all
                organizations--public, charter, private, and/or faith-based--are
                required to refrain from discrimination on the basis of religion in
                offering social services. These provisions are intended to prevent
                institutions that receive Federal funds from engaging in
                discrimination. This also means that the Department may lawfully
                provide Federal funds to charter schools, regardless of these
                organizations' ties to the religious community, on the condition that
                those schools do not use the funds for explicitly religious
                purposes.\91\
                ---------------------------------------------------------------------------
                 \90\ 2 CFR 3474.15(b).
                 \91\ See, e.g., 34 CFR 75.532; 34 CFR 76.532.
                ---------------------------------------------------------------------------
                 The Department reiterates that denying religious schools public
                benefits afforded to public schools because of their religious status,
                as one commenter suggested, is a violation of the Free Exercise Clause
                and Supreme Court precedent in Trinity Lutheran.\92\ With respect to
                vouchers, the Supreme Court has supported their application to
                religious institutions, reasoning that ``where a government aid program
                is neutral with respect to religion, and provides assistance directly
                to a broad class of citizens who, in turn, direct government aid to
                religious schools wholly as a result of their own genuine and
                independent private choice, the program is not readily subject to
                challenge under the Establishment Clause.'' \93\
                ---------------------------------------------------------------------------
                 \92\ 137 S. Ct. 2021-25.
                 \93\ Zelman v. Simmons-Harris, 536 U.S. 639, 652 (2002).
                ---------------------------------------------------------------------------
                 The Department further responds that it is not within the authority
                of the Department to establish a national curriculum or regulate
                teacher incomes. Indeed, in creating the Department of Education,
                Congress specified that:
                 No provision of a program administered by the Secretary or by
                any other officer of the Department shall be construed to authorize
                the Secretary or any such officer to exercise any direction,
                supervision, or control over the curriculum, program of instruction,
                administration, or personnel of any educational institution, school,
                or school system, over any accrediting agency or association, or
                over the selection or content of library resources, textbooks, or
                other instructional materials by any educational institution or
                school system, except to the extent authorized by law.\94\
                ---------------------------------------------------------------------------
                 \94\ Public Law 96-88, sec. 103(b), 93 Stat. 668, 670-71 (1979).
                [[Page 82111]]
                ---------------------------------------------------------------------------
                Curricula and setting teacher salaries are responsibilities handled by
                the various States and districts as well as by public and private
                organizations of all kinds, not by the Department.
                 Changes: None.
                 Affected Regulations: None.
                c. Concerns Regarding Potential for Religious Compulsion
                 Summary of Comments: One commenter expressed concern that, under
                the proposed rule, a low-income student participating in an Upward
                Bound program may be forced to accept services from a faith-based
                service provider that repeatedly invites them to participate in
                additional religious activities. This commenter noted the student may
                find such pressure uncomfortable but would not know that they can
                access an alternative provider nor how to find one.
                 Another commenter asserted that, under the proposed rule, an LGBTQ
                student participating in an Upward Bound college preparation program
                may be forced to select a faith-based provider who forces the student
                to participate in religious programming that may be hostile to the
                LGBTQ community. And one commenter expressed concern that the proposed
                rule would undermine important safeguards for beneficiaries of voucher
                programs and explicitly allow service providers to require individuals
                in voucher programs to participate in religious activities. The
                commenter explained that religious minorities who have to use a voucher
                to obtain services and have no available secular option to choose from
                may effectively be coerced into participating in religious activities.
                For example, a Hindu American who is forced to utilize a voucher for a
                religious school may be forced into taking part in Christian religious
                services and face pressure to compromise or hide his own religious
                beliefs. The commenter concluded that a voucher program that offers no
                genuine and independent private choices that are secular would violate
                basic constitutional protections against the establishment of religion
                and the Government funding of religious programs.
                 Response: The Department clarifies that Upward Bound programming is
                prohibited from containing religious content or religious activities,
                even if the Upward Bound programming is provided by a faith-based
                provider. Indeed, faith-based providers are required to hold their
                religious activities separately in time or location from activities or
                services associated with the Upward Bound project, and the providers
                may not force or pressure beneficiaries to participate in these
                religious activities. The secular content of Upward Bound programming,
                which does not include religious programming or activities of any kind,
                is codified at 34 CFR 645.11
                 It is possible that a faith-based organization may be the only
                servicer providing an Upward Bound program to a geographic region of
                beneficiaries, but this faith-based organization would be providing
                only secular content. Moreover, the Department has received no
                complaints regarding a situation in which this has occurred. In any
                event, as discussed, that faith-based provider is required to keep its
                Upward Bound programming independent from its religious activities, is
                prohibited from pressuring students to engage in religious programming,
                and must also refrain from discriminating against any beneficiaries on
                the basis of religion or religious belief. Additionally, a beneficiary
                may research available providers and make an informed decision about
                whether to choose to receive social services from a secular or faith-
                based organization.
                 With respect to vouchers, which are a form of indirect Federal
                financial assistance, the Department has received no complaints about
                any voucher programs in which there are no secular alternatives, nor
                did the commenter who expressed concern about this refer to any
                existing voucher program in which this is presently occurring. The
                Department reiterates that it cannot force beneficiaries to engage in
                religious activities or coerce beneficiaries to choose the services of
                a faith-based organization, nor do these final regulations do so.
                 Changes: None.
                 Affected Regulations: None.
                d. Concerns Regarding Modifications
                 Summary of Comments: One commenter requested that the Department
                amend 2 CFR 3474.15(a) such that ``contractors'' would replace
                ``subgrantees.'' This commenter believed that, despite clearly
                established law, public institutions of higher education continue to
                violate the First Amendment rights of students and professors, and
                often by targeting minority viewpoints for discriminatory treatment.
                The commenter did not further clarify why this change should be made.
                Another commenter expressed a general concern that the proposed rule
                may not go far enough to protect the deferment of loan payments when a
                former student is engaged in religious activities with a nonprofit
                religious organization.
                 Response: The commenter who suggested that 2 CFR 3474.15(a) be
                amended to reinforce First Amendment rights may have misunderstood the
                proposed rules. The provisions of the proposed rules that relate to the
                First Amendment and free inquiry matters are contained in Sec. Sec.
                75.500, 75.700, 76.500, and 76.700 of title 34 of the Code of Federal
                Regulations, which were promulgated through a different rulemaking. It
                is unclear how amending the proposed rule's language as suggested by
                the commenter would affect free speech rights. Changing ``subgrantees''
                to ``contractors'' would not affect the entity that must comply with 2
                CFR 3474.15(a). The Department also wishes to clarify that loan
                deferment is outside the scope of the proposed rule. Indeed, the
                Department specifically addressed the loan deferment matters that the
                commenter raised in a separate rulemaking.\95\
                ---------------------------------------------------------------------------
                 \95\ Office of Postsecondary Education, U.S. Department of
                Education, Notice of Proposed Rulemaking, 84 FR 67778 (Dec. 11,
                2019).
                ---------------------------------------------------------------------------
                 Changes: None.
                 Affected Regulations: None.
                e. Severability Clauses
                 Summary of Comments: None.
                 Response: The Department proposed adding severability clauses in 2
                CFR 3474.21, 34 CFR 75.63, 34 CFR 76.53, 34 CFR 75.741, and 34 CFR
                76.784, in the NPRM.\96\ We believe that each of the regulations
                discussed in this final rule would serve one or more important and
                related but distinct purposes. Each provision would provide a distinct
                value to the Department, grantees, subgrantees, recipients, students,
                beneficiaries, the public, taxpayers, the Federal Government, and
                institutions of higher education separate from, and in addition to, the
                value provided by the other provisions. To best serve these purposes,
                we included this administrative provision in the final regulations to
                make clear that the regulations are designed to operate independently
                of each other and to convey the Department's intent that the potential
                invalidity of one provision should not affect the remainder of the
                provisions. Similarly, the validity of any of the regulations, which
                were proposed in ``Part 1--Religious Liberty'' of the NPRM, should not
                affect the validity of any of the regulations, which were proposed in
                ``Part 2--Free Inquiry'' of the NPRM.
                ---------------------------------------------------------------------------
                 \96\ 85 FR 3201, 3204, 3205.
                ---------------------------------------------------------------------------
                 As the Department already promulgated the severability clauses in
                34 CFR 76.784 and 34 CFR 75.741 through a different rulemaking that
                also finalizes the remainder of the regulations proposed in the NPRM,
                the
                [[Page 82112]]
                Department does not include those severability clauses in this
                rulemaking. Nonetheless, those severability clauses apply to the
                relevant final regulations in this rulemaking.
                 Changes: None.
                 Affected Regulations: None.
                B. Department of Homeland Security
                 DHS did not identify any comments or issues unique to the
                Department; accordingly, DHS is making no further changes to its
                regulations beyond those explained above.
                C. Department of Agriculture
                 USDA did not identify any comments or issues unique to the
                Department; accordingly, USDA is making no further changes to its
                regulations beyond those explained above.
                D. Agency for International Development
                 USAID received a total of 28,518 comments on its January 17, 2020
                NPRM, and did not consider any comments received after that comment end
                date of February 18, 2020. Of the comments received, 28,044 were
                identical or nearly identical to other comments received, leaving 474
                comments that were unique or representative of a group of substantially
                similar comments. In addition, many of those comments were identical to
                comments provided to the other Agencies and addressed above in the
                Joint Preamble, and most of these cross-cutting comments did not
                directly apply, or did not apply in the same way, to USAID. Some of
                those cross-cutting comments included additional remarks or references
                specific to USAID's proposed rule.
                 As reflected below, unless otherwise specified, for those comments
                received by USAID that are addressed fully in the Joint Preamble, USAID
                adopts those responses to the extent applicable to USAID's regulations.
                We address in this Part III.D of the preamble the USAID-specific
                comments not addressed elsewhere in the preamble and provide the USAID-
                specific findings and certifications.
                 Some of the cross-cutting comments addressed in the Joint Preamble
                were not received by USAID, but are nevertheless applicable to the
                USAID regulations. Unless noted either in the Joint Preamble or this
                agency-specific Part III.D, we concur in the resolution of the issues
                in that part of the preamble.
                1. Notice and Alternative Provider Requirements
                 USAID does not adopt the discussion of the cross-cutting comments
                related to the notice and alternative provider requirements in Part
                II.C. Instead, USAID addresses the comments it received on that topic
                in the following discussion.
                 Summary of Comments: USAID received comments both criticizing and
                supporting the elimination of provisions (a) requiring service
                providers to provide written notice of beneficiary protections, and (b)
                requiring referrals to alternative providers for beneficiaries who
                object to the religious character of a service provider. USAID did not
                receive any comments on these issues that were different from or more
                specific than the applicable cross-cutting comments that are summarized
                in Section 3 of this preamble.
                 Response: Unlike various domestic agencies, USAID never adopted
                notice and alternative provider requirements in response to Executive
                Order 13559. The reasons for this, many of which relate to the
                international context in which USAID operates, are detailed in the 2016
                joint final rule (81 FR 19,355). Accordingly, the comments regarding
                the elimination of those requirements are not applicable to USAID.
                 Changes: None.
                 Affected Regulations: None.
                2. ``Religious Organizations'' to ``Faith-Based Organizations''
                 Summary of Comments: USAID received comments about its change of
                the term ``Religious Organizations'' in certain instances to ``Faith-
                Based Organizations,'' expressing concern that the change could result
                in a broader pool of organizations that are eligible to participate in
                USAID programs, or that may be entitled to the exemptions and
                protections listed in the rule.
                 Response: USAID makes the regulatory changes noted below to make
                the terminology in its regulation consistent with that in Executive
                Order 13831. Because USAID does not recognize a qualitative difference
                between the terms, USAID does not believe that choosing one term over
                the other will change the pool of organizations that are eligible to
                participate in USAID programs, or that may be entitled to the
                exemptions and protections listed in the rule.
                 Changes: Revise 22 CFR 205.1(a), (c), and (f) to replace the term
                ``religious organizations'' with ``faith-based organizations.''
                 Affected Regulations: 22 CFR 205.1(a), (c), and (f).
                3. Reasonable Accommodations
                 Summary of Comments: USAID did not receive any comments on the
                issue of reasonable accommodations that were different from or more
                specific than the applicable cross-cutting comments that are summarized
                in Part II.E.
                 Response: USAID makes the regulatory changes noted below,
                consistent with the explanation provided in the applicable cross-
                cutting comments that are summarized in Part II.E.
                 Changes: Revise 22 CFR 205.1(a) to clarify the text by stating
                explicitly the applicability of the First Amendment and the Religious
                Freedom Restoration Act, under which accommodations for faith-based
                organizations could be available.
                 Affected Regulations: 22 CFR 205.1(a).
                4. Religious Character and Religious Exercise
                 Summary of Comments: USAID did not receive any comments regarding
                the change from ``religious character'' to ``religious exercise'' that
                were different from or more specific than the applicable cross-cutting
                comments that are summarized in Part II.F.
                 Response: USAID makes the regulatory changes noted below,
                consistent with the explanation provided in the applicable cross-
                cutting comments that are summarized in Part II.F.
                 Changes: Revise 22 CFR 205.1(a) and (f) to note that USAID and/or
                USAID grantees will not discriminate against potential service
                providers on the basis of their ``religious exercise'', rather than
                their ``religious character,'' as previously stated.
                 Affected Regulations: 22 CFR 205.1(a) and (f).
                5. Exemption From Title VII Prohibitions for Qualifying Organizations
                Hiring Based on Acceptance of, or Adherence to, Religious Tenets
                 Summary of Comments: USAID did not receive any comments regarding
                the religious employment exemption that were different from or more
                specific than the applicable cross-cutting comments that are summarized
                in Part II.H.
                 Response: USAID makes the regulatory changes noted below,
                consistent with the explanation provided in the applicable cross-
                cutting comments that are summarized in Part II.H.
                 Changes: Revise 22 CFR 205.1(g) to state that an organization that
                qualifies for an exemption from discriminatory hiring practices based
                on religion may select its employees on the basis of their acceptance
                of, and/or adherence to, the religious tenets of the organization.
                 Affected Regulations: 22 CFR 205.1(g).
                [[Page 82113]]
                6. Assurances From Religious Organizations With Sincerely Held
                Religious Beliefs
                 Summary of Comments: One commenter proposed that religious
                organizations partnering with USAID that take anti-LGBTI stances should
                be required to provide assurances that they will provide services
                without prejudice and do so in conditions that respect the privacy and
                dignity of all individuals. The commenter expressed that this proposed
                action is necessary because of a heightened potential for religious
                organizations to discriminate against potential LGBTI beneficiaries,
                caused by the inclusion of language regarding ``reasonable
                accommodation'' and the change in certain instances of the term
                ``religious character'' to ``religious exercise.''
                 Response: Regarding the assertion that the addition of the phrase
                ``reasonable accommodation'' and the substitutions of certain instances
                of the term ``religious character'' with ``religious exercise'' could
                allow religious organizations to discriminate against any
                beneficiaries, USAID adopts the explanation provided in Parts II.E and
                II.F in response to the cross-cutting comments of this nature.
                Regarding the proposal to require certain assurances from religious
                organizations, USAID notes that, consistent with the First Amendment
                and the Religious Freedom Restoration Act, USAID's rule emphasizes that
                notices and assurances shall not be required by faith-based
                organizations if they are not also required of secular organizations.
                Accordingly, any proposed assurances could not be limited to faith-
                based organizations. Nor does the concern raised--the impact of
                sincerely held religious beliefs on an organization's ability to serve
                beneficiaries--appear to be one that is necessarily specific to
                religious organizations. Therefore, USAID does not view this rule as
                the appropriate vehicle through which to address the proposal.
                 USAID is committed to ensuring that all beneficiaries have
                equitable access to the benefits of development assistance. USAID's
                rule requires that all organizations that participate in USAID programs
                must carry out eligible activities in accordance with all program
                requirements and other applicable requirements that govern the conduct
                of USAID-funded activities. Agency policy further requires that grant
                recipients not discriminate against any beneficiaries in the
                implementation of their awards, including on the basis of sex. These
                requirements are included as standard provisions in all of USAID's
                grants to NGOs, and must be flowed down to any sub-recipients.
                 Changes: None.
                 Affected Regulations: None.
                7. Findings and Certifications
                a. Regulatory Flexibility Act
                 Pursuant to requirements set forth in the Regulatory Flexibility
                Act (RFA) (5 U.S.C. 601 et seq.), USAID has considered the economic
                impact of the regulations. USAID certifies that the regulations will
                not have a significant economic impact on a substantial number of small
                entities.
                b. Paperwork Burden
                 These regulations do not impose any new recordkeeping requirements,
                nor do they change or modify an existing information collection
                activity. Thus, the Paperwork Reduction Act does not apply to these
                final regulations.
                E. Department of Housing and Urban Development
                1. Other Conflicting Laws
                 Summary of Comments: One commenter stated that the proposed rule's
                removal of the written notice-and-referral requirements conflicts with
                HUD's obligation to comply with the Fair Housing Act by prohibiting
                discrimination in sale, rental, or financing housing based on race,
                color, religion, sex, disability, familial status, or national origin.
                The commenter also stated that the references to definitions of
                ``religious exercise'' and ``indirect Federal financial assistance''
                violate the Fair Housing Act and go beyond Congressional Authority
                without explanation, statutory basis, or compelling reason.
                 Another commenter stated the proposed rule suggests that religious
                accommodations could be made that would exempt faith-based
                organizations from generally applicable laws and regulations
                prohibiting discrimination, including the Fair Housing Act of 1968 and
                its regulations. The commenter stated that the proposed rule completely
                dismantles the protections in the Fair Housing Act and the 2012 and
                2016 Equal Access Rules that currently protect LGBTQ individuals. It
                would be discriminatory and harmful to allow programs to opt out of
                these provisions based on the religious beliefs of the housing or
                homeless services provider. For example, the 2012 Equal Access Rule
                defines a family regardless of gender identity or sexual orientation of
                the family members. A religious exemption from this definition of
                family by a provider who objects to same-sex marriage would result in
                otherwise impermissible discrimination.
                 Response: HUD does not agree that this rule conflicts with the Fair
                Housing Act. Removing the written notice requirement does not affect an
                individual's ability to file a complaint with HUD under the Fair
                Housing Act, nor will it affect HUD's administration of such
                complaints. A complaint of discrimination based on religion or any
                other protected characteristic may be investigated and enforced under
                the Fair Housing Act. Complaints can be filed online through HUD's
                Office of Fair Housing and Equal Opportunity (``FHEO'').\97\ HUD also
                disagrees that references to definitions of ``religious exercise'' and
                ``indirect Federal financial assistance'' violate the Fair Housing Act.
                These references ensure that HUD's programs and activities are
                consistent with the First Amendment to the Constitution and the
                requirements of Federal law, including the Religious Freedom
                Restoration Act.
                ---------------------------------------------------------------------------
                 \97\ U.S. Department of Housing and Urban Development, File a
                Complaint, https://www.hud.gov/program_offices/fair_housing_equal_opp/online-complaint. Additionally, FHEO intake
                specialists can be reached by calling 800-669-9777 or 800-877-8339.
                ---------------------------------------------------------------------------
                 More specifically, the rule is designed to treat religious
                organizations the same as non-religious organizations by subjecting all
                organizations to the same requirements. As made clear in the proposed
                rule, HUD will not, in the selection of recipients, discriminate
                against an organization based on the organization's religious exercise
                or affiliation. Furthermore, religious freedom protections make clear
                that a faith-based organization retains its independence from the
                Government and may continue to carry out its mission even when it
                participates in a Federal program, including a HUD program.
                Nevertheless, alleged cases of discrimination, including discrimination
                on the basis of ``sex,'' are evaluated based on current law and court
                interpretation and discrimination on the basis of gender identity or
                sexual orientation would be evaluated under HUD's program specific
                requirements.
                 Changes: None.
                 Affected Regulations: None.
                2. Conflicting Agency Programs and Policies
                 Summary of Comments: One commenter stated the proposed rule would
                be contrary to HUD's mission of ``ensuring access to housing for all
                Americans.'' Another commenter also said HUD should not be responsible
                for upholding this executive order as it is outside the scope of HUD's
                programs.
                [[Page 82114]]
                The commenter stated that this program will in no way be of any use to
                HUD and should not be implemented because it is not providing any type
                of relief or assistance and that if there are disputes over religious
                bias, it should be taken up with the courts, not dictated by a US
                Federal department that does not normally deal with religion.
                 Commenters also stated that HUD money should not be funding
                religion because it is not HUD's purpose, nor does it have to do with
                HUD's activities, while another commenter said they were opposed to
                religious interference in the implementation of HUD procedures. Some
                commenters said HUD social services programs affected by the Proposed
                Rule would include, but not be limited to, housing counseling grants,
                continuum of care programs, supportive housing for the elderly and
                persons with disabilities, emergency shelters, CDBG, and housing
                opportunities for persons with HIV (HOPWA), and the proposed rule runs
                counter to these programs' intended purpose by increasing the
                likelihood of inefficiencies, exposing beneficiaries to potential
                harms, and hindering access to vital government services.
                 According to one commenter, the Proposed Rule is wholly
                inconsistent with HUD's core mission and preventing discrimination
                because it authorizes faith-based organizations to obtain religious
                accommodations that could lead to such federally funded providers
                discriminating against, or electing not to assist, LGBTQ individuals--
                or other individuals with whom they might disagree--based on asserted
                religious grounds.
                 Response: HUD believes that this rule is consistent with HUD's
                mission to ensure housing for all Americans. As stated in this
                preamble, the purpose of the rule is to treat religious organizations
                equally with non-religious organizations by subjecting all
                organizations to the same requirements. HUD believes that in doing so,
                it is further strengthening its mission by ensuring that religious
                organizations can participate in HUD's program. This rule guarantees
                that these organizations will maintain their liberty protections found
                in the Constitution and Federal law and eliminate the fear that they
                will compromise their sincerely held religious beliefs or will lose
                their independence.
                 Furthermore, HUD does not agree that allowing religious
                organizations to maintain their independence as dictated by the
                Constitution and Federal statutes amounts to funding religion, nor does
                HUD believe that religious organizations participating in a HUD program
                or religious organizations receiving Federal funds for non-religious
                activities amounts to HUD adopting, supporting, or otherwise promoting
                the religious beliefs of the participating organization.
                 The purpose of the proposed rule is to ensure that HUD's programs
                and activities are consistent with the First Amendment to the
                Constitution and the requirements of Federal law, including the
                Religious Freedom Restoration Act. In order for HUD's programs and
                activities to be consistent, HUD will not, in the selection of
                recipients, discriminate against an organization based on the
                organization's religious exercise or affiliation. HUD does not believe
                this rule will interfere with the implementation of HUD programs nor
                will it increase inefficiencies, create potential harms, or create a
                hinderance to access HUD programs as suggested by the commenter. The
                rule will actually provide more opportunities for participation by
                faith-based organizations, provide religious organizations the ability
                to participate on equal footing with other organizations, and will
                allow more participation and therefore greater availability of
                services.
                 Moreover, the rule does not affect an individual's ability to file
                a complaint with HUD alleging discrimination under the Fair Housing
                Act, nor will it affect HUD's administration of such complaint. Cases
                of discrimination are evaluated based on current law and court
                interpretation. Therefore, HUD believes that it is appropriate to issue
                regulations that guarantee religious protections across HUD's programs.
                 Changes: None.
                 Affected Regulations: None.
                3. Procedural Issues
                a. Comment Period
                 Summary of Comments: Some commenters requested the comment period
                on this proposed rule be extended beyond the COVID-19 emergency prior
                to any effort to proceed with this proposed rule. Commenters wrote to
                Secretary Carson to request that all rulemakings unrelated to response
                to the COVID19 emergency or other critical health, safety, and security
                matters be halted. Halting such rulemakings will permit HUD staff to
                focus on America's response to the coronavirus's health and economic
                effects. Doing so also would permit the public adequate time to provide
                meaningful comments on proposals that effect important functions of our
                government. Interested organizations and individual members of the
                public should not be deprived of the opportunity to comment on these
                matters as they struggle to cope with the effects of a pandemic on our
                society.
                 Response: HUD's Federal rulemaking policies and procedures are
                described in 24 CFR part 10. According to the regulation, it is HUD's
                policy that its notices of proposed rulemaking generally afford the
                public not less than 60 days for submission of comments (24 CFR 10.1).
                These notice and comment procedures, including the time period, are
                consistent with Executive Order 12866, and the APA (5 U.S.C. 553).
                Pursuant to these policies, HUD published a notice on February 13,
                2020, ``Equal Participation of Faith-Based Organizations in HUD
                Programs and Activities: Implementation of Executive Order 13831'' (FR-
                6130-P-01). That notice provided for 60 days of public comment, which
                ended on April 13, 2020. HUD received over 2,495 comments in response
                to the proposed rule. HUD's provision of 60 days for submission of
                comments is adequate. HUD notes that public comments can be, and
                usually are, submitted electronically at www.regulations.gov. In view
                of the comment period beginning 30 days before the President's March
                13, 2020 Declaration of a National Emergency and the public's continued
                ability to comment electronically, HUD determined that the public had
                adequate time to comment.
                 Changes: None.
                 Affected Regulations: None.
                b. Rulemaking Authority
                 Summary of Comments: Commenters stated that the language ``in the
                event of any conflict, will control over any HUD guidance document''
                should not be adopted because it is an indication that HUD is
                overreaching and attempting to act beyond its authority. The commenters
                also stated that the language ``intended to be consistent with E.O.
                13891, Oct. 9, 2019, which provides guidance documents lack force of
                law, except as authorized by law or as incorporated into a contract''
                should not be adopted because it is government overreach without
                explanation of how the change relates to HUD's congressional purpose or
                any statutory objective related to housing. The commenters stated that
                the entire proposed rule is an abuse of discretion by HUD, should be
                viewed with scrutiny, and should not be adopted.
                 Response: The language to which the commenters referred was located
                in the proposed rule's preamble, not within the proposed regulatory
                text. This language will not be codified in the final regulation, but
                rather explained the proposed rule's relationship with guidance
                documents and Executive
                [[Page 82115]]
                Order 13891. The language, however, is consistent with the APA, 5
                U.S.C. 551, et seq., and Executive Order 13891. HUD believes that the
                proposed rule was promulgated under proper authority.
                 Changes: None.
                 Affected Regulations: None.
                c. RIA/Administrative Sections
                 Summary of Comments: According to commenters, HUD failed to meet
                its burden under the APA because it did not explain why the Proposed
                Rule was necessary, nor did it consider the burden on beneficiaries.
                The commenters stated regulations based on Executive Order 13559 have
                been working well since 2016, and HUD has not provided any reason for
                the Proposed Rule except that it assumes, without evidence, that there
                is a significant burden to religious organizations. The commenters
                referenced that HUD previously estimated a cost to providers ``of no
                more than 2 burden hours and $100 annual materials cost for notices and
                2 burden hours per referral'' in the 2016 final rule. HUD now concedes
                that the burden per notice is no more than 2 minutes. According to the
                commenters, while HUD estimates a cost savings of $656,128 for the
                elimination of these vital protections, it provides no analysis on how
                much was actually spent on notice-and-referral requirements, nor does
                it provide reasoning for its inflated estimate. The commenters said HUD
                recognizes that the removal of the notice-and-referral requirements
                could impose some costs on beneficiaries who will now need to find
                alternative providers on their own if they object to the religious
                character of a potential provider. The commenters argued HUD's baseless
                estimates of cost savings do not justify the increased burden on
                beneficiaries nor the risk to their vital constitutional protections.
                 The commenters continued that employment discrimination has
                numerous costs for workers and society, including lost wages and
                benefits, lost productivity, and negative impacts on mental and
                physical health. According to the commenters, HUD fails to acknowledge
                the potential costs the proposed rule could generate, and this is a
                case law manipulation to allow organizations to discriminate under
                false pretenses and deny access to reproductive health care. The
                commenters argued HUD fails to account for economic and noneconomic
                costs to employees in the form of lost wages and benefits, out of
                pocket medical expenses, costs associated with job searches, and costs
                related to negative mental and physical health consequences of
                discrimination.
                 Response: As HUD explained in the proposed rule, Executive Order
                13831 eliminated the alternative provider referral requirement and
                requirement of notice established in Executive Order 13559. In
                addition, HUD cited recent Supreme Court decisions that addressed
                freedom and anti-discrimination protections that must be afforded
                religious organizations and individuals under the U.S. Constitution and
                Federal law since the current regulations implementing Executive Order
                13559 were promulgated. HUD removed the alternative provider referral
                requirement and notice requirement because it placed a burden on
                religious organizations, whereas there was no corresponding burden on
                non-religious organizations.
                 As for the commenters' concerns regarding beneficiaries' burden,
                HUD considered the cost to potential beneficiaries to be minimal and
                such cost and benefits are discussed above in the joint-agency
                response. Beneficiaries prior to the 2016 rule and after this rule will
                continue to seek alternative providers for many different reasons and
                requests for such alternatives from HUD offices and grantees can
                continue without placing a specific burden on religious organizations.
                As for costs, this rule removes the requirement that all faith-based
                organizations under the 2016 rule were required to provide notices to
                every beneficiary which is a determinable cost for which HUD can
                estimate burden reduction. HUD also incorporates the discussion of
                costs and benefits from Part II.K.1 above.
                 As for the concern regarding employment discrimination, HUD is not
                making any changes to its regulation concerning the exemption for Title
                VII employment discrimination requirements that was in this prior to
                the 2016 regulation at 24 CFR 5.109(i).
                 Changes: None.
                 Affected Regulations: None.
                F. Department of Justice
                 DOJ did not identify any comments or issues unique to the
                Department; accordingly, DOJ is making no further changes to its
                regulations beyond those explained above.
                G. Department of Labor
                1. Beneficiary Harms
                 Summary of Comments: One commenter to the Department of Labor's
                proposed rule addressed underlying disparities in the need for social
                services that would make transgender people more vulnerable to
                discrimination following the removal of certain beneficiary
                protections. More specifically, the commenter addressed disparities in
                the following areas that are relevant to Department programs:
                Unemployment and employment opportunities (Employment and Training
                Administration programs); disability-related needs (Employment and
                Training Administration programs); incarceration and re-entry supports
                (Reentry Employment Opportunities program); and veterans assistance
                (Homeless Veterans' Reintegration Program). In addition, some faith-
                based advocacy organizations warned that the proposed rule would
                disserve a wide range of Federal programs, including the Department's
                Senior Community Service Employment Program and Homeless Veterans'
                Reintegration Program.
                 Response: While these commenters focused on specific Department of
                Labor programs, the assertion that the removal of beneficiary
                protections would be harmful or would disserve beneficiaries was also
                raised by commenters on proposed rules other than the Department of
                Labor's and was addressed previously at Parts II.C.2.a, II.C.2.b, and
                II.C.3.e. The Department of Labor does not believe that removing the
                alternative provider notice-and-referral requirements unlawfully or
                inappropriately burdens third parties as the Department maintains that
                the final rule does not change any existing requirements regarding the
                services provided to beneficiaries.
                 Changes: None.
                 Affected Regulations: None.
                2. Notice Requirement
                 Summary of Comments: An advocacy organization commented that the
                Department's rationale that faith-based organizations are not less
                likely than other providers to follow the law did not justify the
                repeal of the notice requirement. This advocacy organization referred
                to the inconsistency among Federal Agencies' citation of alignment with
                RFRA in repealing notice requirements.
                 In addition, an individual commenter requested that the Department
                provide evidence about alternative, reliable mechanisms to ensure that
                beneficiaries are aware of their rights. The Council Chair also
                commented that the Department, in the present rulemaking, had not
                considered alternative methods of ensuring that beneficiaries receive
                notice of their rights or referrals to alternative providers, such as
                requiring governmental bodies to provide such notice and make referrals
                upon request.
                [[Page 82116]]
                 Response: The first comment assumes that the Department is
                obligated to justify the removal of a burden on religious persons. But
                RFRA provides just the opposite: ``Government shall not substantially
                burden a person's exercise of religion'' unless it can justify imposing
                the burden. 42 U.S.C.2000bb-1(a) (emphasis added). Even absent RFRA,
                the Department sees no reason to continue imposing additional
                requirements solely on religious groups without evidence that they are
                different, such as by being more prone to violate the law--for which
                the Department has no evidence. As previously discussed in Part II.C,
                the prior regulations singled out religious groups, placing burdens on
                them that were not otherwise placed on non-religious groups. This final
                rule eliminates extraneous burdens on faith-based organizations and
                will ensure that federally funded social service programs are
                implemented in a manner that is consistent with the requirements of
                Federal law.
                 As previously discussed in Part II.C.3.d, the Department is within
                its discretion to resolve the tension between rights here, especially
                in light of the uncertainty about whether there is a compelling
                interest in applying the alternative provider notice-and-referral
                requirements solely to religious organizations. And it is also within
                the Agencies' discretion to avoid serious constitutional issues and the
                burdens of related litigation. While it remains questionable what
                rights beneficiaries have to a secular provider under the Zelman v.
                Simmons-Harris standard, in any event, however, the Department's Civil
                Rights Center continues to enforce civil rights protections for
                applicants, participants, and beneficiaries of programs and activities
                that receive Federal financial assistance from the Department, as well
                as programs and activities funded or otherwise financially assisted
                under Title I of the Workforce Innovation and Opportunity Act.
                 Alternative notice arrangements were previously discussed in Part
                II.C.3.d. In addition, the Department did not propose imposing such
                requirements on governmental bodies, but it did note that ``the
                Department could supply information to beneficiaries seeking an
                alternate provider'' when it ``makes publicly available information
                about grant recipients that provide benefits under its programs.'' 85
                FR 2931. Imposing notice-and-referral requirements on governmental
                bodies when faith-based organizations provide services would conflict
                with the nondiscrimination principle articulated in Trinity Lutheran
                and the Attorney General's Memorandum and, moreover, would be
                inconsistent with the Administration's broader deregulatory agenda.
                Under the final rule, the provision of such information remains an
                option but not a requirement.
                 Changes: None.
                 Affected Regulations: None.
                3. Deregulatory Action Determination (Executive Order 13771)
                 Summary of Comments: The Council Chair objected to the Department's
                conclusion that notice-and-referral requirements conflict with the
                administration's deregulatory agenda, because doing so privileges
                policy goals above religious freedom.
                 Response: The Department disagrees that removing the notice-and-
                referral requirements privileges policy goals above religious freedom.
                On the contrary, the removal of those requirements is intended to
                protect and enhance religious liberty, see Burwell v. Hobby Lobby
                Stores, Inc., 573 U.S. 682, 709 (2014) (furthering organizations'
                ``religious freedom also furthers individual religious freedom''
                (quotation marks omitted)), consistent with the Administration's policy
                goals. With regard to the E.O. 13771 determination, deregulatory
                actions are measured by the presence or absence of government mandates.
                The final rule will relieve faith-based organizations in the private
                sector of the regulatory mandates of notice and referral, thereby
                reducing government-imposed requirements placed on the private sector.
                It is therefore deregulatory.
                 Changes: None.
                 Affected Regulations: None.
                4. General Comments
                 Summary of Comments: An individual commented that the Department's
                goal in issuing the proposed rule appeared to be using faith-based
                organizations to privatize government services. Another individual
                commenter suggested that organizations with interests that go against
                U.S. foreign policy objectives, domestic policy agendas, agencies, or
                regulations should be ineligible to apply. Finally, an anonymous
                commenter asked how the proposal would affect the quantity and quality
                of government services, what data collection measures would be used to
                independently monitor and assess the changes, and where the public
                could find annual reports on how well the proposed changes worked.
                 Response: The Department's purpose in promulgating this rule is not
                to privatize services. It is to implement the nondiscrimination
                principle articulated in Trinity Lutheran and the Attorney General's
                Memorandum--that is, to level the playing field, not to favor or
                disfavor faith-based organizations. Any concern about ``privatization''
                of government services could apply equally to any government grant
                where a private, non-government entity, regardless of its religious
                character, offers services to the public using grant funding. In
                addition, neither the proposal nor the final rule would change the
                extent of so-called privatization or the amount or allocation of
                grants. The rule is aimed only at clarifying faith-based organizations'
                ability to participate equally in the Department's programs and
                activities. It does not change eligibility criteria for grants or
                disfavor applicants of particular agendas.
                 Unless the quantity of grants changes, the Department does not
                expect the final rule to change the overall quantity or quality of
                services offered. However, the Department does expect an increase in
                the capacity of faith-based providers to provide services, both because
                these providers will be able to shift resources otherwise spent
                fulfilling the notice-and-referral requirements to providing services
                and because more faith-based social service providers may participate
                in the marketplace under these streamlined regulations. It is entirely
                possible that the participation by additional organizations may enhance
                competition to provide services to the public and that this could
                result in higher quality government services, but the Department is not
                claiming that such a result will necessarily result from this change to
                reduce the unequal burden on faith-based providers. No mechanisms for
                data collection, monitoring, or reporting were proposed or are included
                in the final rule. However, recipients of financial assistance from the
                Department remain subject to financial and performance reporting
                requirements and audit requirements to ensure proper grants management
                practices. See, e.g., 2 CFR parts 200, 2900. In addition, recipients of
                financial assistance under WIOA Title I must collect and maintain data
                and information related to nondiscrimination. See 29 CFR 38.41 through
                38.45.
                 Changes: None.
                 Affected Regulations: None.
                H. Department of Veterans Affairs
                 Summary of Comments: VA received a comment seeking clarification on
                who will benefit from the new rule and what motivated the new rule. Two
                commenters asked how the new rule will affect the quality or quantity
                of
                [[Page 82117]]
                government services and whether government services will improve.
                Another commenter asked whether data collection measures will be used
                to independently monitor and assess the changes and if the public will
                have access to annual reports on how well the proposed change worked.
                 Response: Faith-based organizations will likely benefit from the
                new rule because it provides clarity about the rights and obligations
                of faith-based organizations participating in the Department's social
                services programs and removes burdensome requirements only imposed on
                faith-based organizations. It will promote fairness and wider
                participation in VA programs by ensuring that faith-based organizations
                can participate on an equal footing with other entities. To the extent
                that the removal of this burden encourages faith-based organizations to
                apply to participate in the Department's programs, it may encourage
                participation in those programs, leading to improved quality or
                quantity of services provided. Notwithstanding the removal of the
                burdensome requirements on faith-based organizations, grantees will
                still assist Veterans in accessing needed services either from within
                the current provider or through referrals to an alternative provider as
                needed.
                 In addition, VA does not anticipate the need for monitoring the
                changes or compiling annual reports. Grantees will still be bound by
                the rules and policies of the grant program. Any issues or questions
                about the changes will be addressed by the relevant program office as
                they arise.
                 Changes: VA has revised the final regulatory text for clarity and
                accuracy. The final regulatory text will state ``VA program'' instead
                of ``VA awarding agency''.
                 Affected Regulations: 38 CFR 50.2(a), (b), (c), (e), (f), (g), (h),
                (j), 61.64(a), (d), (e), 62.62(e).
                I. Department of Health and Human Services
                1. Nondirective Mandate
                 Summary of Comments: One commenter said that the Proposed Rule
                violates Congress's nondirective mandate in the Title X program. The
                commenter stated that, in appropriations bills since 1996, Congress has
                mandated that ``all pregnancy counseling'' in Title X family planning
                projects ``shall be nondirective.'' The commenter argued that, when
                faith-based organizations provide or offer referrals for certain
                services but not others--like abortion or to obtain contraception--the
                omission of medical options flies in the face of the nondirective
                mandate.
                 Response: HHS disagrees that the final rule conflicts with the non-
                directive pregnancy counseling rider applicable to the Title X program,
                which provides funding for preconception family planning services. The
                Title X program has its own regulations at 42 CFR part 59, and certain
                provisions of that rule specifically govern certain types of referrals
                and their relation to the non-directive pregnancy counseling rider. To
                that extent, the Title X regulations would apply to how that program
                handles those referral matters. This final rule does not change how the
                provisions of the Title X regulation govern matters concerning the non-
                directive pregnancy counseling rider and referrals in the Title X
                program, especially since the Title X regulations do not identify part
                87 as applicable to Title X grants. See 42 CFR 59.10 (identifying the
                ``other HHS regulations [that] apply to grants under this subpart'').
                 HHS also disagrees with the commenter's view concerning the non-
                directive pregnancy counseling rider for Title X. The commenter
                contends the rider requires Title X grantees to make referrals for all
                post-conception treatment options. But the rider only requires that if
                pregnancy counseling is provided, it shall be non-directive. Thus,
                contrary to the commenter's suggestion, the nondirective pregnancy
                counseling rider only applies to post-conception counseling; it does
                not apply to post-conception referrals. It is important to note that in
                the Title X program, post-conception referrals are referrals out of the
                Title X program for health care services that are not provided under
                the Title X program; in contrast, the referrals required by the 2016
                rule which are being eliminated by this final rule are referrals from
                one service provider to another service provider within the same
                program. Furthermore, as the en banc court of appeals for the Ninth
                Circuit recently stated in upholding the Title X rule, non-directive
                only means options must be provided in a neutral manner, not that all
                conceivable options must be presented. California v. Azar, 950 F.3d
                1067 (9th Cir. 2020). Thus, even if these equal treatment regulations
                were applicable to the Title X program, there is no tension between the
                Title X non-directive pregnancy counseling rider and this final rule.
                 Changes: None.
                 Affected Regulations: None.
                2. Certain Provisions of the ACA
                 Summary of Comments: A few commenters said that the final rule will
                clash with several provisions of the Patient Protection and Affordable
                Care Act (ACA), because it will allow entities to decline to provide
                information and referrals. Commenters argued that the rule violates
                section 1554 of the ACA, which prohibits the Secretary of HHS from
                creating barriers to healthcare, and section 1557, which prohibits
                discrimination in health programs or activities. Another commenter said
                that the final rule transforms the Department's role from an agency
                focused on ensuring nondiscriminatory provision of health care to one
                that facilitates refusals of care. The commenter said that giving
                health care providers enhanced powers to refuse patient care in the
                name of ``conscience'' should be reconciled with the protections for
                patients under the ACA and other statutes.
                 Response: HHS disagrees with commenters' characterization of the
                final rule. The rule merely ensures that HHS's programs are implemented
                in a manner consistent with Federal law, by ensuring that faith-based
                organizations may participate in social service programs funded by HHS
                on an equal basis with secular service providers, consistent with the
                law. Nothing in the rule addresses the provision of health care per se
                by health care providers, or provides health care providers with
                enhanced powers to refuse patient care. In addition, the equal
                treatment regulations only apply to ``HHS social service programs''
                under Sec. 87.2, which the final rule does not modify. Many of the
                instances of which commenters are concerned may not be encompassed by
                the final rule.
                 Section 1554 of the ACA, 42 U.S.C. 18114, provides that,
                ``[n]otwithstanding any other provision of this Act [the ACA],'' the
                Secretary of Health and Human Services shall not promulgate any
                regulation that creates any unreasonable barriers to the ability of
                individuals to obtain appropriate medical care, impedes timely access
                to health care services, interferes with communications regarding a
                full range of treatment options between the patient and the provider,
                restricts the ability of health care providers to provide full
                disclosure of all relevant information to patients making health care
                decisions, violates the principles of informed consent and the ethical
                standards of health care professionals, or limits the availability of
                health care treatment for the full duration of a patient's medical
                needs. The clear meaning of
                [[Page 82118]]
                ``[n]otwithstanding any other provision of this Act,'' is that--to the
                extent that section 1554 contains enforceable limitations on the
                Secretary's regulatory authority \98\--the provision limits the
                Secretary's regulatory authority under the ACA, not with respect to any
                other regulatory authorities possessed by the Secretary.\99\
                ---------------------------------------------------------------------------
                 \98\ Section 1554's subsections are open-ended. Nothing in the
                statute specifies, for example, what constitutes an ``unreasonable
                barrier[ ],'' ``appropriate medical care[,]'' ``all relevant
                information[,]'' or ``the ethical standards of health care
                professionals[.]'' 42 U.S.C. 18114. And there is nothing in the
                ACA's legislative history that sheds light on the provision. Under
                these circumstances, it is a substantial question whether section
                1554 claims are reviewable under the APA at all. See Citizens to
                Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420 (1971)
                (explaining that the APA bars judicial review of agency decision
                where, among other circumstances, ``statutes are drawn in such broad
                terms that in a given case there is no law to apply'' (citation
                omitted)).
                 \99\ See, e.g., California by & through Becerra v. Azar, 927
                F.3d 1068, 1079 (9th Cir.), reh'g en banc granted sub nom. State by
                & through Becerra v. Azar, 927 F.3d 1045 (9th Cir. 2019) (``The
                preamble to Sec. 1554 also suggests that this section was not
                intended to restrict HHS interpretations of provisions outside the
                ACA. If Congress intended Sec. 1554 to have sweeping effects on all
                HHS regulations, even those unrelated to the ACA, it would have
                stated that Sec. 1554 applies `notwithstanding any other provision
                of law,' rather than `[n]otwithstanding any other provision of this
                Act.'''); id. (``[T]he phrase `notwithstanding any other provision
                of law' in 8 U.S.C. 1252(f)(2) meant that the provision `trumps any
                contrary provision elsewhere in the law''' (quoting Andreiu v.
                Ashcroft, 253 F.3d 477, 482 (9th Cir. 2001)).
                ---------------------------------------------------------------------------
                 A reconsideration and elimination of certain regulatory provisions,
                particularly regulations not promulgated under the ACA, neither creates
                unreasonable regulatory barriers nor impedes timely access to health
                care. If it were otherwise, section 1554 would essentially serve as a
                one-way ratchet, preventing HHS from ever reconsidering any regulation
                that could be characterized as improving access to healthcare in some
                sense, regardless of the other burdens such regulation may impose on
                access to health care. HHS's approach in this final rule is consistent
                with the Ninth Circuit's recent interpretation of section 1554: ``The
                most natural reading of Section 1554 is that Congress intended to
                ensure that HHS, in implementing the broad authority provided by the
                ACA, does not improperly impose regulatory burdens on doctors and
                patients.'' California v. Azar, No. 19-15974, 2020 WL 878528, at 18
                (9th Cir. Feb. 24, 2020) (en banc). As explained throughout the
                preamble, the final rule avoids precisely such burdens by removing
                notice-and-referral requirements that imposed burdens on faith-based
                organizations without burdening similarly situated secular
                organizations. In addition, this final rule is not promulgated under
                any provision of the ACA. Rather, it amends HHS's equal treatment for
                faith-based organizations regulations (45 CFR part 87) (``equal
                treatment regulations'') in order to implement Executive Order 13831,
                on the Establishment of a White House Faith and Opportunity Initiative.
                80 FR 47271. Executive Order 13831 requires removal of the alternative
                provider notice-and-referral requirements, which eliminates the burdens
                that the regulations promulgated in 2016, pursuant to Executive Order
                13559, imposed exclusively on faith-based organizations. The removal of
                the alternative provider provisions places faith-based organizations on
                a level playing field with secular organizations, while alleviating the
                tension with recent Supreme Court precedent regarding nondiscrimination
                against religious organizations, the Attorney General's Memorandum, and
                RFRA, 42 U.S.C. 2000bb et seq. Additionally, the final rule does not
                create barriers for individuals to obtain appropriate medical care.
                Faith-based providers of social services, like other providers of
                social services, are required to follow the law and the requirements
                and conditions applicable to the grants and contracts they receive.
                There is no basis on which to presume that they are less likely than
                secular social service providers to follow the law. There is,
                therefore, no need for preventive or prophylactic protections that
                create administrative burdens on faith-based providers that are not
                imposed on similarly situated secular providers.
                 HHS also disagrees with the comment alleging that the elimination
                of the alternative provider requirements conflict with ACA section
                1557, 42 U.S.C. 18116. Section 1557 generally provides that an
                individual shall not be excluded from participation in, be denied
                benefits of, or be subjected to discrimination under any health program
                or activity that receives Federal financial assistance, including
                credits, subsidies, or contracts of insurance, or under any program or
                activity that is administered by HHS or any entity established under
                Title I of the ACA. 42 U.S.C. 18116(a). Section 1557 prohibits
                discrimination on the basis of certain protected classes in the cited
                civil rights laws, namely race, color, national origin, sex, age, or
                disability. Section 1557 applies, to such health programs or
                activities, the long-standing and familiar Federal civil rights laws:
                Title VI of the Civil Rights Act of 1964, Title IX of the Education
                Amendments of 1972, section 504 of the Rehabilitation Act of 1973 and
                the Age Discrimination Act of 1975. Section 1557 applies exclusively to
                health programs or activities receiving Federal financial assistance or
                to entities created under Title I of the ACA. As noted above, this rule
                only applies to ``HHS social service programs'' under Sec. 87.2, which
                the final rule does not modify. Many of the instances of which
                commenters are concerned under section 1557 of the ACA may not be
                encompassed by the final rule. The elimination of the alternative
                provider notice-and-referral requirements merely places faith-based
                organizations on an even-playing field with secular organizations.
                Faith-based providers of social services, like other social service
                providers, must still adhere to the requirements of other applicable
                laws, which may (or may not) include section 1557.
                 Changes: None.
                 Affected Regulations: None.
                3. Notice Requirements in Other Department Regulations
                 Summary of Comments: One commenter said that Federal agencies have
                routinely included notice requirements for individual program
                beneficiaries in other nondiscrimination regulations, and in voluntary
                resolution agreements, including for large entities where the
                administrative effort involved may be significant. The commenter stated
                that removing the alternative provider requirements contrasts to the
                approach taken by HHS in a recent final rule, Protecting Statutory
                Conscience Rights in Health Care, which included a provision that ``OCR
                will consider an entity's voluntary posting of a notice of
                nondiscrimination as non-dispositive evidence of compliance.''
                Protecting Statutory Conscience Rights in Health Care; Delegations of
                Authority, 84 FR 23170 (May 21, 2019) (vacated, see, e.g., New York v.
                United States Department of Health and Human Services, 414 F. Supp. 3d
                475 (S.D.N.Y. 2019)).
                 Response: HHS disagrees that the approach of the proposed rule and
                this final rule with respect to notice is inconsistent with the
                approach to notice taken in the recent final rule, Protecting Statutory
                Conscience Rights in Health Care, 84 FR 23170 (May 21, 2019) (2019
                Conscience Rule), or in voluntary resolution agreements. The
                commenter's example of notice requirements in the context of voluntary
                resolution agreements is not analogous to the alternative provider
                requirements being eliminated in this final rule. Voluntary resolution
                agreements are used when there has been a finding of a violation of
                Federal laws. And the provision in
                [[Page 82119]]
                the Department's 2019 Conscience Rule (vacated, see, e.g., New York v.
                United States Department of Health and Human Services, 414 F.Supp.3d
                475 (S.D.N.Y. 2019)), refers to a situation where HHS's Office for
                Civil Rights (OCR) may be undertaking a compliance review or
                investigating a covered entity which is in alleged violation of Federal
                laws. That rule merely states that ``OCR will consider an entity's
                voluntary posting of a notice of nondiscrimination as non-dispositive
                evidence of compliance with the applicable substantive provisions of
                this part, to the extent such notices are provided according to the
                provisions of this section and are relevant to the particular
                investigation or compliance review.'' Id. at 23270. In that context,
                the voluntary notice would state that the entity complies with
                applicable Federal conscience and nondiscrimination laws and that
                individuals may have the right under Federal law to decline to perform,
                assist in the performance of, refer for, undergo, or pay for certain
                health care-related treatments, research, or services that violate the
                individual's conscience. The 2019 Conscience Rule, which would apply to
                all entities to which the Federal conscience laws apply, provides, with
                respect to all such entities, that the voluntary posting of such a
                nondiscrimination notice establishes non-dispositive evidence of
                compliance with the 2019 Conscience Rule. In contrast, the current
                regulation requires a subset of the recipients of HHS-funded social
                services grants--namely, faith-based organizations that receive funds
                from the HHS--to provide, to each beneficiary whom they would serve,
                notice of the beneficiary's right to receive services from a secular
                service provider. HHS, thus, disagrees with the commenter that this
                alternative provider notice requirement placed solely on faith-based
                organizations is, in any way, analogous to the voluntary
                nondiscrimination notices contemplated by the 2019 Conscience Rule.
                 The alternative provider requirements, moreover, raise serious
                concerns under the First Amendment and RFRA. As the Supreme Court
                clarified in Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S.
                Ct. 2012, 2019 (2017) (quoting Church of Lukumi Babalu Aye, Inc. v.
                Hialeah, 508 U.S. 520, 533 (1993) (alteration in original)): ``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.'
                '' 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, 628 (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.'').
                Additionally, the Attorney General's Memorandum noted that ``Government
                may not target religious individuals or entities for special
                disabilities based on their religion.'' Principle 6 of the Attorney
                General's Memorandum, 82 FR 49668 (October 26, 2017). Applying the
                alternative provider requirements categorically to all faith-based
                providers, but not to other, secular providers, of federally funded
                social services, is thus in tension with the nondiscrimination
                principle articulated in Trinity Lutheran and the Attorney General's
                Memorandum.
                 In addition, the alternative provider requirements could in certain
                circumstances run afoul of the protections established by RFRA. Under
                RFRA, where the Federal Government substantially burdens an entity's
                exercise of religion, the Federal 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).
                Most faith-based organizations engaged in the provision of social
                services do so as part of their religious mission--because their
                religious beliefs compel them to serve their fellow human beings. In
                such circumstances, the alternative service provider notice requirement
                may substantially burden the religious exercise of those recipients.
                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 notice
                requirement could impose this 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 violates the organization's religious tenets. See, e.g.,
                Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682, 720-26 (2014).
                 Changes: None.
                 Affected Regulations: None.
                4. Medical Ethics
                 Summary of Comments: One commenter said that eliminating the
                alternative provider requirements will place nurses in burdensome
                ethical dilemmas. The commenter explained that, to the extent that a
                nurse is employed by a provider whose service offerings may be limited
                by moral or religious objections, the Code of Ethics for Nurses
                requires that nurses with conscientious objections to certain medical
                procedures must communicate their objection as soon as possible, in
                advance and in time for alternative arrangements to be made for patient
                care.
                 Response: HHS disagrees that removing the alternative provider
                notice-and-referral requirements will place nurses in burdensome
                ethical dilemmas. First, the final rule only applies to ``HHS social
                service programs'' under Sec. 87.2. Therefore, many instances
                commenters are concerned about regarding nurses may not be encompassed
                by this rule. Second, the final rule does not prohibit organizations or
                individuals from informing beneficiaries that they can receive services
                from a secular provider or from voluntarily referring beneficiaries to
                some other provider. Rather, it merely removes the alternative provider
                notice-and-referral requirements that were placed solely on faith-based
                organizations and not on similarly situated secular organizations.
                Thus, to the extent that an organization or individual believes that
                its or his/her ethical obligations require the provision of notice to
                beneficiaries of alternative providers of social services, such
                organization or individual remains free to provide such notice.
                 HHS notes, however, that if it were not to remove the current
                alternative provider notice-and-referral requirements, the exact
                concern raised by the commenter could occur: Nurses and faith-based
                providers could foreseeably be placed in burdensome ethical dilemmas
                under the current notice-and-referral requirements. For example, either
                a faith-based organization or an individual nurse may hold a religious
                objection to referring a beneficiary to an alternative provider that
                provides services in a manner that violates the organization's or
                nurse's religious tenets. See, e.g., Burwell v. Hobby Lobby Stores,
                Inc., 573 U.S. 682, 720-26 (2014). When a faith-based 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
                [[Page 82120]]
                religious exercise of that 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).
                 Changes: None.
                 Affected Regulations: None.
                5. Discrimination Against Women, Persons With Disabilities, Low-Income
                Persons, and LGBT Persons
                 Summary of Comments: Several commenters stated that removing the
                notice-and-referral requirements will adversely impact women, LGBT,
                persons with disabilities, or low-income persons. Two commenters stated
                that women of color in many States disproportionately receive their
                care at Catholic-affiliated hospitals, which often follow an ethical
                directive that prohibits the hospital from providing emergency
                contraception, sterilization, abortion, fertility services, and some
                treatments for ectopic pregnancies. Accordingly, commenters expressed
                concern that, if the final rule is implemented, more women,
                particularly women of color, will be put in situations where they will
                either lack access to certain reproductive health care services or be
                required to find another provider willing to provide comprehensive
                reproductive health services, if such services are available in their
                communities.
                 Other commenters said that the final rule would permit
                discrimination against LGBT parents and children in adoption, foster
                care, and child welfare services. Commenters stated that the proposed
                rule would result in more children remaining in foster and congregate
                care by allowing religious providers to discriminate against LGBT
                people seeking to adopt. Commenters also said that the final rule would
                allow faith-based providers to discriminate against LGBT children
                trying to access services. Other commenters voiced concern that the
                final rule would cause a public health crisis for LGBT persons who may
                be left without knowledge of alternative providers to faith-based
                health care providers in emergency situations. Another commenter stated
                that the rule would contribute to significant health costs from the
                medical and mental health impacts of discrimination, citing a study
                that found that experiencing discrimination in health care, among other
                sectors, is associated with higher prevalence of suicidal thoughts and
                attempts among individuals who identify as transgender. Commenters
                noted that, because no other agency in the Government offers more
                grants than HHS, HHS's changes to the alternative provider requirement
                will create the highest incidence of discrimination because of the very
                scale at which the agency operates.
                 Numerous commenters also stated that the final rule would allow
                people in faith-based organizations to use their religion to spread
                hatred and cause harm to anyone with whom the faith-based provider
                disagrees. These commenters said that the final rule returns the
                Department to a time when American citizens can be denied any and all
                services as long as the refuser says that the denial is due to the
                provider's religious beliefs. Other commenters said that they support
                the participation of faith-based organizations in federally funded
                service programs. These commenters opined that religious providers are
                the backbone of America, and that no organization should be
                discriminated against because of its religious or moral beliefs.
                Commenters stated that, as long as faith-based service providers can
                meet the necessary eligibility requirements to participate in service
                programs, commenters saw no downside to allowing such groups to
                participate, because such participation would create the provision of
                more services in communities, especially in communities that face
                greater obstacles in obtaining services. Other commenters stated that
                faith-based organizations bring large numbers of people who provide
                services as an outgrowth of their religious beliefs and because of
                their love for the people in their communities. Some commenters noted
                that religious persons comprise the most prolific pool of adoptive
                families in the nation. Commenters also said that they support the
                final rule because it clarifies that faith-based providers, including
                hospitals, homeless shelters, and adoption and foster care providers
                among others, may operate according to their religious beliefs and
                still participate in Federal service programs.
                 Response: HHS believes that all people should be treated with
                dignity and respect, especially in its programs, and that they should
                be given every protection afforded by the Constitution and the laws
                passed by Congress. HHS does not condone the unjustified denial of
                needed medical care or social services to anyone. And it is committed
                to fully and vigorously enforcing all of the nondiscrimination statutes
                entrusted to it by Congress. HHS does not agree with commenters who
                claim that the final rule will create a high incidence of
                discrimination, raise the costs of health care, cause harm, spread
                hatred, keep more children in foster and congregate care, or adversely
                impact women, persons with disabilities, low-income, or self-
                identifying LGBT persons. HHS is not aware of an instance in which a
                beneficiary has sought a referral for an alternative provider.
                Commenters who voiced concern about HHS's removal of the alternative
                provider requirements generally did not provide evidence, anecdotal or
                otherwise, that beneficiaries sought referrals required under those
                provisions. Thus, removing the alternative provider requirements would
                likely not raise health care costs, jeopardize benefits, or cause a
                public health crisis for beneficiaries. HHS beneficiaries, even in
                times of emergencies, are capable of obtaining services, and have
                obtained such services, without requiring HHS to place requirements on
                faith-based providers that it did not place on similarly situated
                secular providers. HHS also notes that this final rule applies to
                certain social services programs under Sec. 87.2. Therefore, many of
                the situations that commenters are concerned about regarding nurses may
                not be encompassed by this rule.
                 In response to commenters who expressed concerns about the ability
                of faith-based providers to adequately serve the general public, HHS
                notes, first, that faith-based organizations have a long history of
                providing social services, independently and as part of programs funded
                by HHS.\100\ Despite that long history, HHS is not aware of evidence
                that faith-based organizations would, as a result of their religious
                beliefs, be unable to provide services to the general public or to
                specific vulnerable populations. Faith-based providers, like other
                providers, are required to follow the requirements and conditions of
                their Federal grants and contracts and may not violate those
                requirements. HHS finds no basis on which to presume that faith-based
                providers are less likely than other providers to follow the law. See
                Mitchell v. Helms, 530 U.S. 856-57 (2000) (O'Connor, J., concurring in
                judgment). Thus, religious providers cannot deny ``any and all services
                as long as the refuser says that the denial is due to the
                [[Page 82121]]
                provider's religious belief,'' as some commenters claimed.
                ---------------------------------------------------------------------------
                 \100\ See, e.g., Lisa McCracken, Faith and the Not-For-Profit
                Provider, Ziegler Investment Banking, Aug. 25, 2014, http://image.exct.net/lib/ff021271746401/d/4/zNews_Featured_082514.pdf;
                Byron Johnson et al., Assessing the Faith-Based Response to
                Homelessness in America: Findings from Eleven Cities, Baylor
                Institute for Studies of Religion (2017), http://www.baylorisr.org/wp-content/uploads/ISR-Homeless-FINAL-01092017-web.pdf; Catholic
                Health Association of the United States, Catholic Health Care in the
                United States (last updated Jan. 2017), https://www.chausa.org/about/about/facts-statistics.
                ---------------------------------------------------------------------------
                 Second, HHS recognizes, as noted in Executive Orders 13279 and
                13831, the important work that faith-based providers perform for
                communities in need of services. Executive Order 13279 identifies that
                faith-based providers participating in social service programs, as
                defined by the Executive Order, work to reduce poverty, improve
                opportunities for low-income children, revitalize low-income
                communities, empower low-income families and individuals to become
                self-sufficient, and otherwise help people in need. E.O. 13279, 67 FR
                77141 (2002). Similarly, as Executive Order 13831 observed, faith-based
                organizations have a special ability to provide services to
                individuals, families, and communities through means that are
                ``different from those of government and with capacity that often
                exceeds that of government.'' E.O. 13831, 83 FR 20715 (2018). The
                Executive Order further states that faith-based providers ``lift people
                up, keep families strong, and solve problems at the local level.'' Id.
                And several commenters opined that faith-based providers and the
                individuals who work for them are motivated by a desire to serve and
                help the people in their communities. Commenters also noted that
                religious beneficiaries comprise the most prolific pool of adoptive
                families in the nation, which helps remove children from foster and
                congregate care and place them in permanent homes with forever
                families.
                 In addition, HHS does not agree with commenters who predict that
                the final rule will result in beneficiaries losing access to services,
                because the participation of faith-based providers will generally
                increase the amount of services available to all beneficiaries,
                including religious minorities, women, women of color, low-income, and
                LGBT persons, and persons with disabilities. Allowing a broader
                spectrum of providers increases the possibility for all beneficiaries,
                including vulnerable populations, religious minorities, or persons with
                disabilities, to be able to locate providers whose goals and values
                more closely align with their own values. Furthermore, HHS funds
                several resource centers, hotlines and helplines to provide
                beneficiaries referrals to a diversity of social service providers
                which include secular and faith-based organizations.\101\
                ---------------------------------------------------------------------------
                 \101\ See, e.g., 42 U.S.C. 10410 (Family Violence Prevention
                Services Act national resource centers); Administration for Children
                and Families, HHS, ACF Hotlines/Helplines, https://www.acf.hhs.gov/acf-hotlines-helplines (domestic violence, runaway and homeless
                youth, and human trafficking hotlines and referral directories).
                ---------------------------------------------------------------------------
                 Commenters who voiced concerns about women, including women of
                color, accessing reproductive services such as abortion, contraception,
                sterilization, and certain infertility treatments, should note that,
                for the last 50 years, Congress has protected providers and other
                health care entities from being forced by public authorities (or by the
                recipients of certain HHS funds) to perform certain health care
                procedures to which they object. First, Congress enacted the Church
                Amendments in the 1970s to ensure, among other things, that the
                judicially recognized right to abortions, sterilizations, or related
                practices would not lead to a requirement that individuals or entities
                receiving certain HHS health service and research grants must
                participate in activities to which they have religious or moral
                objections. 42 U.S.C. 300a-7. Second, Congress passed in 1996 the
                Coats-Snowe Amendment, which prohibits Federal, State, or local
                governments from discriminating against any health care entity that
                refuses to provide, require, or undergo training in performing
                abortions, referring beneficiaries for abortions or abortion training,
                or making arrangements for any of those activities. 42 U.S.C.
                238n(a)(1)-(2). And third, Congress passed the Weldon Amendment in 2004
                and readopted (or incorporated by reference) the amendment in each
                subsequent appropriations act for the Departments of Labor, Health and
                Human Services, and Education. See, e.g., Further Consolidated
                Appropriations Act, 2020, Public Law 116-94, div. A, sec. 507(d), 133
                Stat. 2534, 2607 (Dec. 20, 2019). The Weldon Amendment provides that
                none of the funds made available in the applicable Labor, HHS, and
                Education appropriations act may be made available to a Federal agency
                or program, or to a State or local government, if such agency, program,
                or government subjects any institutional or individual health care
                entity to discrimination on the basis that the health care entity does
                not provide, pay for, provide coverage of, or refer for abortions. The
                alternative provider notice-and-referral requirements did not alter
                these protections adopted by Congress, and removing such requirements
                does not change these protections.
                 Finally, the Government may not compel faith-based providers to
                change their religious identity or mission as a result of accepting
                direct Federal financial assistance. Individuals and organizations do
                not give up religious liberty protections because they provide
                government-funded social services. The ``government 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.'' Principle 6 of the Attorney General's
                Memorandum, 82 FR 49668 (October 26, 2017). Accordingly, religious
                organizations may retain their autonomy, right of expression, and
                religious character in the provision of public services. HHS recognizes
                that for many faith-based organizations, the provision of services to
                those in need is an exercise of religion, and many faith-based
                organizations view their explicitly religious activities as integral
                parts of the programs and services that they provide.
                 Changes: None.
                 Affected Regulations: None.
                IV. General Regulatory Certifications
                A. Regulatory Planning and Review (Executive Order 12866); Improving
                Regulation and Regulatory Review (Executive Order 13563)
                 This final rule was drafted in conformity with Executive Order
                12866 and Executive Order 13563.
                 Executive Order 12866 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, OIRA must determine whether this
                regulatory action is ``significant'' and, therefore, subject to the
                requirements of the executive order and subject to review by OMB.
                 OIRA has determined that this final rule 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 final rule. Pursuant to the Congressional Review Act, 5
                U.S.C. 801 et seq., OIRA
                [[Page 82122]]
                designated this rule as not a major rule, as defined by 5 U.S.C.
                804(2).
                 The Agencies have 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 engage in a cost-benefit
                analysis. 76 FR at 3821. 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, OMB M-11-10, Re:
                Executive Order 13563, ``Improving Regulation and Regulatory Review''
                at 1 (Feb. 2, 2011), https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/2011/m11-10.pdf.
                 The Agencies are issuing these final rules upon a reasoned
                determination that their benefits justify their costs. In choosing
                among alternative regulatory approaches, the Agencies selected those
                approaches that maximize net benefits. Based on the analysis that
                follows, the Agencies believe that these final rules are consistent
                with the principles in Executive Order 13563. It is the reasoned
                determination of the Agencies that these final rules 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
                on those organizations.
                 The Agencies also have 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, the Agencies
                have assessed the potential costs, cost savings, and benefits, both
                quantitative and qualitative, of this regulatory action.
                1. Costs
                 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 social service provider. The Agencies invited comments on any
                information that they could use to quantify this potential cost, but
                did not receive any comments that specifically addressed the cost of
                compliance. Although the Agencies cannot quantify this cost with a
                reasonable degree of confidence, we expect this cost to be de minimis.
                The number of beneficiaries who will be denied services and therefore
                would incur costs to identify an alternative provider would likely be
                very small since this rule makes it clear that such organizations are
                not permitted to discriminate in the provision of services.
                2. Cost Savings
                 The potential cost savings associated with this regulatory action
                are those resulting from the removal of the notice requirements and the
                referral requirement, and those determined to be necessary for
                administering the Agencies' programs and activities.
                 DOL previously estimated the cost of imposing the notice
                requirements at no more than $200 per organization per year (in 2013
                dollars). 81 FR at 19395. This cost estimate was based on the
                expectation that it would take no more than two minutes for a provider
                to print, duplicate, and distribute an adequate number of disclosure
                notices for potential beneficiaries and $100 material costs annually.
                Id. The Agencies have adjusted that amount to $220 (in 2020 dollars)
                using the consumer price index (``CPI'').\102\ The Agencies solicited
                comments on the compliance costs associated with the notice
                requirements but received no comments.
                ---------------------------------------------------------------------------
                 \102\ Bureau of Labor Statistics CPI data published on June 10,
                2020, https://www.bls.gov/news.release/cpi.htm.
                 \103\ Number of faith-based organizations that are DOL grant
                recipients in FY2019.
                 \104\ Average number of faith-based organizations that are HHS
                grant recipients in FY2019 and FY2020.
                 \105\ Number of faith-based organizations that are USCIS grant
                recipients as of June 30, 2020.
                 \106\ Number of faith-based organizations that are USDA grant
                recipients in FY2019.
                 \107\ Number of faith-based organizations that are DOJ grant
                recipients in FY2019.
                 \108\ HUD reported no faith-based organizations affected by this
                final rule.
                 \109\ USAID did not have the notice and referral requirements
                previously, so this final rule change would not reduce any costs to
                faith-based organizations that are USAID grant recipients.
                 \110\ VA identified 34 out of 257 Supportive Services for
                Veteran Families grantees that appear to be faith-based.
                 \111\ A total of 904 institutions of higher education were
                reported as having a religious affiliation in the Integrated
                Postsecondary Education Data System in academic years 2018-2019.
                ---------------------------------------------------------------------------
                 As shown in Table 1, the Agencies estimated the annual cost savings
                resulting from the removal of the notice requirements by multiplying
                the number of faith-based organizations affected by the annual
                compliance cost of the notice requirements ($220).
                 Table 1--The Annual Cost-Savings of the Removal of the Notice Requirements by Agency
                ----------------------------------------------------------------------------------------------------------------
                 Number of Cost-savings
                 Agencies faith-based per Annual cost-
                 organizations organization savings
                 (A) (B) (C = A x B)
                ----------------------------------------------------------------------------------------------------------------
                DOL............................................................. \103\ 14 $220 $3,080
                HHS............................................................. \104\ 119 220 26,180
                DHS............................................................. \105\ 30 220 6,600
                USDA............................................................ \106\ 16 220 3,520
                DOJ............................................................. \107\ 67 220 14,740
                HUD............................................................. \108\ 0 220 0
                USAID........................................................... \109\ 0 220 0
                VA.............................................................. \110\ 34 220 7,480
                ED.............................................................. \111\ 904 220 198,880
                 -----------------------------------------------
                 Total....................................................... .............. .............. 260,480
                ----------------------------------------------------------------------------------------------------------------
                [[Page 82123]]
                 In the 2016 final rule, the Agencies were previously unable to
                quantify the cost of the referral requirement. 81 FR at 19395. However,
                DOL estimated that each referral request would require no more than two
                hours of a Training and Development Specialist's time to process. The
                Agencies invited comment or any data by which they could assess the
                actual implementation costs of the referral requirements. Although
                commenters did not provide specific data regarding the burdens of the
                referral requirement, several commenters did indicate that referral to
                a new provider might result in some additional burdens for program
                beneficiaries as they attempted to familiarize themselves with new
                providers. The Agencies agree that this is a possible burden that
                program beneficiaries may face but cannot effectively quantify it. The
                Agencies assume that these burdens would be higher in situations where
                new providers had dramatically different policies and procedures than
                previous providers and would be relatively small in situations where
                old and new providers have highly similar practices. Given that all
                such providers would be operating Federal programs governed by the same
                set of regulations and statutes, the Agencies believe the total amount
                of potential differentiation among providers would likely be relatively
                limited.
                 Although the Agencies do not have any way to accurately determine
                the number of referrals that will occur in any one year, they do not
                expect this number will be significant or that referral costs will be
                appreciable for small service providers. Based on the Agencies'
                records, referral requests are rare, and the Agencies are not aware of
                any beneficiary who sought a referral under the prior requirement. See
                Part III.C.
                 Table 2 shows the total annualized cost savings at a 7 percent
                discounting by Agency for the removal of notification.\112\ For
                example, the annualized cost savings for DOL-regulated entities is
                $3,080 at a 7 percent discounting. Under Executive Order 13771 when
                annualized over a perpetual time horizon at a 7 percent discount rate,
                the cost savings of this rulemaking for DOL is $2,251 (in 2016
                dollars).\113\
                ---------------------------------------------------------------------------
                 \112\ Since the annual cost savings by each Agency remain
                constant over time, the total annual cost savings and the total
                annualized cost savings at a 3 percent and a 7 percent are the same.
                 \113\ To comply with Executive Order 13771 accounting, the
                Agencies multiplied the annual cost-savings ($3,080) for DOL by the
                GDP deflator (0.9582) to convert the cost savings to 2016 dollars
                ($2,951). Assuming the rule takes effect in 2020, we divided $2,951
                by (1.07)\4\, which equals $2,251. The Agencies used this result to
                determine the perpetual annualized cost ($2,251) at a 7 percent
                discount rate in 2016 dollars.
                 Table 2--The Cost Savings of the Removal of the Notice Requirements by Agency
                ----------------------------------------------------------------------------------------------------------------
                 Perpetual
                 Annual cost Total annualized
                 savings of the annualized cost savings
                 Agency removal of the cost savings at a 7 percent
                 notice at a 7 percent discounting
                 requirements discounting (in 2016
                 (C) dollars)
                ----------------------------------------------------------------------------------------------------------------
                DOL............................................................. $3,080 $3,080 $2,251
                HHS............................................................. 26,180 26,180 19,137
                DHS............................................................. 6,600 6,600 4,824
                USDA............................................................ 3,520 3,520 2,573
                DOJ............................................................. 14,740 14,740 10,775
                HUD............................................................. 0 0 0
                USAID........................................................... 0 0 0
                VA.............................................................. 7,480 7,480 5,467
                ED.............................................................. 198,880 198,880 145,382
                 -----------------------------------------------
                 Total....................................................... .............. 260,480 190,409
                ----------------------------------------------------------------------------------------------------------------
                3. Benefits
                 In terms of benefits, the Agencies recognize a non-quantified
                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. The
                Agencies also recognize a non-quantified benefit to grant recipients
                and beneficiaries alike that comes from increased clarity in the
                regulatory requirements that apply to faith-based organizations
                operating social service programs 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--even if only minimal--
                otherwise spent fulfilling the notice-and-referral requirements to
                provision of services, and because more faith-based social service
                providers may participate in Federal programs under these regulations.
                B. Regulatory Flexibility Analysis
                 The Regulatory Flexibility Act of 1980 (``RFA''), 5 U.S.C. 601 et
                seq., as amended by the Small Business Regulatory Enforcement Fairness
                Act of 1996, Public Law 104-121, tit. II, 110 Stat. 847, 857, requires
                Federal agencies engaged in rulemaking to consider the impact of their
                proposals on small entities, consider alternatives to minimize that
                impact, and solicit public comment on their analyses. The RFA requires
                the assessment of the impact of a regulation on a wide range of small
                entities, including small businesses, not-for-profit organizations, and
                small governmental jurisdictions. Agencies must perform a review to
                determine whether a proposed or final rule would have a significant
                economic impact on a substantial number of small entities. 5 U.S.C.
                603-05.
                 The Agencies believe that the estimated cost savings of $220 per
                provider per year is far less than one percent of annual revenue of
                even the smallest faith-based organizations. The Agencies therefore
                certify that this final rule will not have a significant economic
                impact on a substantial number of small entities.
                [[Page 82124]]
                C. Civil Justice Reform (Executive Order 12988)
                 This final rule has been reviewed in accordance with Executive
                Order 12988 of February 5, 1996, Civil Justice Reform, 61 FR 4729. The
                provisions of this rule will not have preemptive effect with respect to
                any State or local laws, regulations, or policies that conflict with
                such provisions or which otherwise impede their full implementation.
                The rule will not have retroactive effect.
                D. Consultation and Coordination With Indian Tribal Governments
                (Executive Order 13175)
                 In accordance with Executive Order 13175 of November 6, 2000,
                Consultation and Coordination With Indian Tribal Governments, 65 FR
                67249, HUD consulted with representatives of tribal governments
                concerning the subject of this rule. HUD, through a letter dated July
                16, 2019, provided Indian tribes and Alaska Native Villages the
                opportunity to comment on the substance of the regulatory changes
                during the development of the proposed rule. HUD received one comment
                in response to those letters, regarding the ability of faith-based
                organizations to access funds designated for Indian tribes under the
                Indian Community Development Block Grant program. Additionally, the
                February 13, 2020, proposed rule provided Indian tribes with an
                additional opportunity to comment on the proposed regulatory changes.
                 The other Agencies have assessed the impact of their provisions in
                this rule on Indian tribes and determined that those provision do not,
                to their knowledge, have tribal implications that require tribal
                consultation under Executive Order 13175.
                E. Federalism (Executive Order 13132)
                 Executive Order 13132 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, and 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 in this rule does not have federalism
                implications as defined in the Executive Order, does not impose direct
                compliance costs on State and local governments, and does not preempt
                State law within the meaning of the Executive Order, the Agencies have
                concluded that compliance with the requirements of section 6 is not
                necessary.
                F. Reducing Regulation and Controlling Regulatory Costs (Executive
                Order 13771)
                 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 rule is considered
                to be a deregulatory action under that order.
                G. Paperwork Reduction Act
                 This rule does not contain any new or revised ``collection[s] of
                information'' as defined by the Paperwork Reduction Act of 1995, 44
                U.S.C. 3501 et seq.
                H. Unfunded Mandates Reform Act
                 Section 4(1) and (2) of UMRA, 2 U.S.C. 1503(1)-(2), excludes from
                coverage under that Act any proposed or final Federal regulation that
                ``enforces constitutional rights'' or ``establishes or enforces any
                statutory rights that prohibit discrimination on the basis of race,
                color, religion, sex, national origin, age, handicap, or disability.''
                Alternatively, this final rule would not qualify as an ``unfunded''
                mandate because the requirements in this final rule apply exclusively
                in the context of Federal financial assistance, so most, if not all,
                mandates are funded. The rule in any event will not require
                expenditures by State, local, or tribal governments of $100 million or
                more per year. Accordingly, this rulemaking is not subject to the
                provisions of UMRA.
                Final Regulations
                List of Subjects
                2 CFR Part 3474
                 Accounting, Administrative practice and procedure, Adult education,
                Aged, Agriculture, American Samoa, Bilingual education, Blind, Business
                and industry, Civil rights, Colleges and universities, Communications,
                Community development, Community facilities, Copyright, Credit,
                Cultural exchange programs, Educational facilities, Educational
                research, Education, Education of disadvantaged, Education of
                individuals with disabilities, Educational study programs, Electric
                power, Electric power rates, Electric utilities, Elementary and
                secondary education, Energy conservation, Equal educational
                opportunity, federally affected areas, Government contracts, Grant
                programs, Grant programs--agriculture, Grant programs--business and
                industry, Grant programs--communications, Grant programs--education,
                Grant programs--energy, Grant programs--health, Grant programs--housing
                and community development, Grant programs--social programs, Grant
                administration, Guam, Home improvement, Homeless, Hospitals, Housing,
                Human research subjects, Indians, Indians--education, Infants and
                children, Insurance, Intergovernmental relations, International
                organizations, Inventions and patents, Loan programs, Loan programs--
                social programs, Loan programs--agriculture, Loan programs--business
                and industry, Loan programs--communications, Loan programs--energy,
                Loan programs--health, Loan programs--housing and community
                development, Manpower training programs, Migrant labor, Mortgage
                insurance, Nonprofit organizations, Northern Mariana Islands, Pacific
                Islands Trust Territories, Privacy, Renewable Energy, Reporting and
                recordkeeping requirements, Rural areas, Scholarships and fellowships,
                School construction, Schools, Science and technology, Securities, Small
                businesses, State and local governments, Student aid, Teachers,
                Telecommunications, Telephone, Urban areas, Veterans, Virgin Islands,
                Vocational education, Vocational rehabilitation, Waste treatment and
                disposal, Water pollution control, Water resources, Water supply,
                Watersheds, Women.
                6 CFR Part 19
                 Civil rights, Government contracts, Grant programs, Nonprofit
                organizations, Reporting and recordkeeping requirements.
                7 CFR Part 16
                 Administrative practice and procedure, Grant programs.
                22 CFR Part 205
                 Foreign aid, Grant programs, Nonprofit organizations.
                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
                [[Page 82125]]
                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, 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 578
                 Community facilities, Continuum of Care, Emergency solutions
                grants, Grant programs--housing and community development, Grant
                programs--social programs, Homeless, Rural housing, Reporting and
                recordkeeping requirements, Supportive housing programs--housing and
                community development, Supportive services.
                28 CFR Part 38
                 Administrative practice and procedure, Grant programs, Reporting
                and recordkeeping requirements, Nonprofit organizations.
                29 CFR Part 2
                 Administrative practice and procedure, Claims, Courts, Government
                employees, Religious discrimination.
                34 CFR Part 75
                 Accounting, Copyright, Education, Grant programs--education,
                Inventions and patents, Private schools, Reporting and recordkeeping
                requirements.
                34 CFR Part 76
                 Accounting, Administrative practice and procedure, American Samoa,
                Education, Grant programs--education, Guam, Northern Mariana Islands,
                Pacific Islands Trust Territory, Prisons, Private schools, Reporting
                and recordkeeping requirements, Virgin Islands.
                38 CFR Part 50
                 Administrative practice and procedure, Alcohol abuse, Alcoholism,
                Day care, Dental health, Drug abuse, Government contracts, Grant
                programs--health, Grant programs--veterans, Health care, Health
                facilities, Health professions, Health records, Homeless, Mental health
                programs, Per-diem program, Reporting and recordkeeping requirements,
                Travel and transportation expenses, Veterans.
                38 CFR Part 61
                 Administrative practice and procedure, Alcohol abuse, Alcoholism,
                Day care, Dental health, Drug abuse, Government contracts, Grant
                programs--health, Grant programs--veterans, Health care, Health
                facilities, Health professions, Health records, Homeless, Mental health
                programs, Reporting and recordkeeping requirements, Travel and
                transportation expenses, Veterans.
                38 CFR Part 62
                 Administrative practice and procedure, Day care, Disability
                benefits, Government contracts, Grant programs--health, Grant
                programs--housing and community development, Grant programs--Veterans,
                Health care, Homeless, Housing, Indians--lands, Individuals with
                disabilities, Low and moderate income housing, Manpower training
                programs, Medicaid, Medicare, Public assistance programs, Public
                housing, Relocation assistance, Rent subsidies, Reporting and
                recordkeeping requirements, Rural areas, Social security, Supplemental
                Security Income (SSI), Travel and transportation expenses, Unemployment
                compensation.
                45 CFR Part 87
                 Administrative practice and procedure, Grant programs--social
                programs, Nonprofit organizations, Public assistance programs.
                45 CFR Part 1050
                 Grant programs--social programs.
                DEPARTMENT OF EDUCATION
                 For the reasons discussed in the preamble, the Secretary of
                Education amends part 3474 of title 2 of the Code of Federal
                Regulations (CFR) and parts 75 and 76 of title 34 of the CFR,
                respectively, as follows:
                Title II--Grants and Agreements
                PART 3474--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
                AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
                0
                1. The authority citation for part 3474 is revised to read as follows:
                 Authority: 20 U.S.C. 1221e-3, 3474; 42 U.S.C. 2000bb et seq.;
                and 2 CFR part 200, unless otherwise noted.
                0
                2. Section 3474.15 is revised to read as follows:
                Sec. 3474.15 Contracting with faith-based organizations and
                nondiscrimination.
                 (a) This section establishes responsibilities that grantees and
                subgrantees have in selecting contractors to provide direct Federal
                services under a program of the Department. Grantees and subgrantees
                must ensure compliance by their subgrantees with the provisions of this
                section and any implementing regulations or guidance.
                 (b)(1) A faith-based organization is eligible to contract with
                grantees and subgrantees, including States, on the same basis as any
                other private organization, with respect to contracts for which such
                organizations are eligible and considering any permissible
                accommodation.
                 (2) In selecting providers of goods and services, grantees and
                subgrantees, including States, must not discriminate for or against a
                private organization on the basis of the organization's religious
                character, affiliation, or exercise, as defined in 34 CFR 75.52(c)(3)
                and 76.52(c)(3), and must ensure that the award of contracts is free
                from political interference, or even the appearance of such
                interference, and is done on the basis of merit, not on the basis of
                religion or religious belief, or lack thereof. Notices or announcements
                of award opportunities and notices of award or contracts shall include
                language substantially similar to that in appendices A and B,
                respectively, to 34 CFR part 75.
                 (3) No grant document, agreement, covenant, memorandum of
                understanding, policy, or regulation that is used by a grantee or
                subgrantee in administering Federal financial services from the
                Department shall require faith-based organizations to provide
                assurances or notices where they are not required of non-faith-based
                organizations. Any restrictions on the use of grant funds shall apply
                equally to faith-based and non-faith-based organizations. All
                organizations that participate in Department programs or services,
                including organizations with religious character or affiliation, must
                carry out eligible activities in accordance with all program
                requirements, subject to any required or appropriate religious
                accommodation, and other applicable requirements governing the conduct
                of Department-funded activities, including those prohibiting the use of
                direct financial assistance to engage in explicitly religious
                activities.
                [[Page 82126]]
                 (4) No grant document, agreement, covenant, memorandum of
                understanding, policy, or regulation that is used by a grantee or
                subgrantee shall disqualify faith-based organizations from
                participating in Department-funded programs or services because such
                organizations are motivated or influenced by religious faith to provide
                social services, or because of their religious character or
                affiliation, or on grounds that discriminate against organizations on
                the basis of the organizations' religious exercise, as defined in 34
                CFR 75.52(c)(3) and 76.52(c)(3).
                 (c)(1) The provisions of 34 CFR 75.532 and 76.532 that apply to a
                faith-based organization that is a grantee or subgrantee also apply to
                a faith-based organization that contracts with a grantee or subgrantee,
                including a State.
                 (2) The requirements referenced under paragraph (c)(1) of this
                section do not apply to a faith-based organization that provides goods
                or services to a beneficiary under a program supported only by indirect
                Federal financial assistance, as defined in 34 CFR 75.52(c)(3) and
                76.52(c)(3).
                 (d)(1) A private organization that provides direct Federal services
                under a program of the Department and engages in explicitly religious
                activities, such as worship, religious instruction, or proselytization,
                must offer those activities separately in time or location from any
                programs or services funded by the Department through a contract with a
                grantee or subgrantee, including a State. Attendance or participation
                in any such explicitly religious activities by beneficiaries of the
                programs and services supported by the contract must be voluntary.
                 (2) The limitations on explicitly religious activities under
                paragraph (d)(1) of this section do not apply to a faith-based
                organization that provides services to a beneficiary under a program
                supported only by indirect Federal financial assistance, as defined in
                34 CFR 75.52(c)(3) and 76.52(c)(3).
                 (e)(1) A faith-based organization that contracts with a grantee or
                subgrantee, including a State, will retain its independence, autonomy,
                right of expression, religious character, and authority over its
                governance. A faith-based organization that receives Federal financial
                assistance from the Department does not lose the protections of law.
                 Note 1 to paragraph (e)(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).
                 (2) A faith-based organization that contracts with a grantee or
                subgrantee, including a State, may, among other things--
                 (i) Retain religious terms in its name;
                 (ii) Continue to carry out its mission, including the definition,
                development, practice, and expression of its religious beliefs;
                 (iii) Use its facilities to provide services without concealing,
                removing, or altering religious art, icons, scriptures, or other
                symbols from these facilities;
                 (iv) Select its board members on the basis of their acceptance of
                or adherence to the religious tenets of the organization; and
                 (v) Include religious references in its mission statement and other
                chartering or governing documents.
                 (f) A private organization that contracts with a grantee or
                subgrantee, including a State, may not discriminate against a
                beneficiary or prospective beneficiary in the provision of program
                goods or services on the basis of religion or religious belief, a
                refusal to hold a religious belief, or refusal to attend or participate
                in a religious practice. However, an organization that participates in
                a program funded by indirect financial assistance need not modify its
                program activities to accommodate a beneficiary who chooses to expend
                the indirect aid on the organization's program and may require
                attendance at all activities that are fundamental to the program.
                 (g) A religious organization's exemption from the Federal
                prohibition on employment discrimination on the basis of religion, in
                section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1(a),
                is not forfeited when the organization contracts with a grantee or
                subgrantee. An organization qualifying for such an exemption may select
                its employees on the basis of their acceptance of or adherence to the
                religious tenets of the organization.
                 (h) No grantee or subgrantee receiving funds under any Department
                program or service 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. Section 3474.21 is added to read as follows:
                Sec. 3474.21 Severability.
                 If any provision of this part or its application to any person,
                act, or practice is held invalid, the remainder of the part or the
                application of its provisions to any person, act, or practice shall not
                be affected thereby.
                Title 34--Education
                PART 75--DIRECT GRANT PROGRAMS
                0
                4. The authority citation for part 75 continues to read as follows:
                 Authority: 20 U.S.C. 1221e-3 and 3474, unless otherwise noted.
                0
                5. Section 75.51 is amended by revising paragraphs (b)(3) and (4),
                adding paragraph (b)(5), and removing the parenthetical authority
                citation at the end of the section to read as follows:
                Sec. 75.51 How to prove nonprofit status.
                * * * * *
                 (b) * * *
                 (3) A certified copy of the applicant's certificate of
                incorporation or similar document if it clearly establishes the
                nonprofit status of the applicant;
                 (4) Any item described in paragraphs (b)(1) through (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 (b)(1) through (4) of this
                section.
                0
                6. Section 75.52 is revised to read as follows:
                Sec. 75.52 Eligibility of faith-based organizations for a grant and
                nondiscrimination against those organizations.
                 (a)(1) A faith-based organization is eligible to apply for and to
                receive a grant under a program of the Department on the same basis as
                any other organization, with respect to programs for which such other
                organizations are eligible and considering any permissible
                accommodation. The Department shall provide such religious
                accommodation as is consistent with Federal law, the Attorney General's
                Memorandum of October 6, 2017 (Federal Law Protections for Religious
                Liberty), and the Religion Clauses of the First Amendment to the U.S.
                Constitution.
                 (2) In the selection of grantees, the Department may not
                discriminate for or against a private organization on the basis of the
                organization's religious character, affiliation, or exercise and must
                ensure that all decisions about grant awards are free from political
                interference, or even the appearance of
                [[Page 82127]]
                such interference, and are made on the basis of merit, not on the basis
                of religion or religious belief, or the lack thereof. Notices or
                announcements of award opportunities and notices of award or contracts
                shall include language substantially similar to that in appendices A
                and B, respectively, to this part.
                 (3) No grant document, agreement, covenant, memorandum of
                understanding, policy, or regulation that is used by the Department
                shall require faith-based organizations to provide assurances or
                notices where they are not required of non-faith-based organizations.
                Any restrictions on the use of grant funds shall apply equally to
                faith-based and non-faith-based organizations. All organizations that
                receive grants under a program of the Department, including
                organizations with religious character or affiliation, must carry out
                eligible activities in accordance with all program requirements,
                subject to any required or appropriate religious accommodation, and
                other applicable requirements governing the conduct of Department-
                funded activities, including those prohibiting the use of direct
                financial assistance to engage in explicitly religious activities.
                 (4) No grant document, agreement, covenant, memorandum of
                understanding, policy, or regulation that is used by the Department
                shall disqualify faith-based organizations from applying for or
                receiving grants under a program of the Department because such
                organizations are motivated or influenced by religious faith to provide
                social services, or because of their religious character or
                affiliation, or on grounds that discriminate against organizations on
                the basis of the organizations' religious exercise.
                 (b) The provisions of Sec. 75.532 apply to a faith-based
                organization that receives a grant under a program of the Department.
                 (c)(1) A private organization that applies for and receives a grant
                under a program of the Department and engages in explicitly religious
                activities, such as worship, religious instruction, or proselytization,
                must offer those activities separately in time or location from any
                programs or services funded by a grant from the Department. Attendance
                or participation in any such explicitly religious activities by
                beneficiaries of the programs and services funded by the grant must be
                voluntary.
                 (2) The limitations on explicitly religious activities under
                paragraph (c)(1) of this section do not apply to a faith-based
                organization that provides services to a beneficiary under a program
                supported only by ``indirect Federal financial assistance.''
                 (3) For purposes of 2 CFR 3474.15, this section, Sec. 75.714, and
                appendices A and B to this part, the following definitions apply:
                 (i) Direct Federal financial assistance means financial assistance
                received by an entity selected by the Government or a pass-through
                entity (under this part) to carry out a service (e.g., by contract,
                grant, or cooperative agreement). References to Federal financial
                assistance will be deemed to be references to direct Federal financial
                assistance, unless the referenced assistance meets the definition of
                indirect Federal financial assistance.
                 (ii) Indirect Federal financial assistance means financial
                assistance received by a service provider when the service provider is
                paid for services rendered by means of a voucher, certificate, or other
                similar means of government-funded payment provided to a beneficiary
                who is able to make a choice of a service provider. Federal financial
                assistance provided to an organization is indirect under this
                definition if--
                 (A) The government program through which the beneficiary receives
                the voucher, certificate, or other similar means of government-funded
                payment is neutral toward religion; and
                 (B) The organization receives the assistance as the result of the
                genuine, independent choice of the beneficiary.
                 (iii) Federal financial assistance does not include a tax credit,
                deduction, exemption, guaranty contract, or the use of any assistance
                by any individual who is the ultimate beneficiary under any such
                program.
                 (iv) Pass-through entity means an entity, including a nonprofit or
                nongovernmental organization, acting under a contract, grant, or other
                agreement with the Federal Government or with a State or local
                government, such as a State administering agency, that accepts direct
                Federal financial assistance as a primary recipient or grantee and
                distributes that assistance to other organizations that, in turn,
                provide government-funded social services.
                 (v) Religious exercise has the meaning given to the term in 42
                U.S.C. 2000cc-5(7)(A).
                 (vi) Discriminate against an organization on the basis of the
                organization's religious exercise means to disfavor an organization,
                including by failing to select an organization, disqualifying an
                organization, or imposing any condition or selection criterion that
                otherwise disfavors or penalizes an organization in the selection
                process or has such an effect because of:
                 (A) Conduct that would not be considered grounds to disfavor a
                secular organization,
                 (B) Conduct that must or could be granted an appropriate
                accommodation in a manner consistent with RFRA (42 U.S.C. 2000bb
                through 2000bb-4) or the Religion Clauses of the First Amendment to the
                Constitution, or
                 (C) The actual or suspected religious motivation of the
                organization's religious exercise.
                 Note 1 to paragraph (c)(3): The definitions of direct Federal
                financial assistance and indirect Federal financial assistance do
                not change the extent to which an organization is considered a
                recipient of Federal financial assistance as those terms are defined
                under 34 CFR parts 100, 104, 106, and 110.
                 (d)(1) A faith-based organization that applies for or receives a
                grant under a program of the Department will retain its independence,
                autonomy, right of expression, religious character, and authority over
                its governance. A faith-based organization that receives Federal
                financial assistance from the Department 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).
                 (2) A faith-based organization that applies for or receives a grant
                under a program of the Department may, among other things--
                 (i) Retain religious terms in its name;
                 (ii) Continue to carry out its mission, including the definition,
                development, practice, and expression of its religious beliefs;
                 (iii) Use its facilities to provide services without concealing,
                removing, or altering religious art, icons, scriptures, or other
                symbols from these facilities;
                 (iv) Select its board members and employees on the basis of their
                acceptance of or adherence to the religious tenets of the organization;
                and
                 (v) Include religious references in its mission statement and other
                chartering or governing documents.
                 (e) An organization that receives any Federal financial assistance
                under a program of the Department shall not discriminate against a
                beneficiary or prospective beneficiary in the provision of program
                services or in outreach activities on the basis of religion or
                religious belief, a refusal to hold a
                [[Page 82128]]
                religious belief, or refusal to attend or participate in a religious
                practice. However, an organization that participates in a program
                funded by indirect Federal financial assistance need not modify its
                program activities to accommodate a beneficiary who chooses to expend
                the indirect aid on the organization's program and may require
                attendance at all activities that are fundamental to the program.
                 (f) If a grantee contributes its own funds in excess of those funds
                required by a matching or grant agreement to supplement federally
                funded activities, the grantee has the option to segregate those
                additional funds or commingle them with the funds required by the
                matching requirements or grant agreement. However, if the additional
                funds are commingled, this section applies to all of the commingled
                funds.
                 (g) A religious organization's exemption from the Federal
                prohibition on employment discrimination on the basis of religion, in
                section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is
                not forfeited when the organization receives financial assistance from
                the Department. An organization qualifying for such exemption may
                select its employees on the basis of their acceptance of or adherence
                to the religious tenets of the organization.
                 (h) The Department shall not 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
                7. Section 75.63 is added to read as follows:
                Sec. 75.63 Severability.
                 If any provision of this subpart or its application to any person,
                act, or practice is held invalid, the remainder of the subpart or the
                application of its provisions to any person, act, or practice shall not
                be affected thereby.
                Sec. 75.712 [Removed and Reserved]
                0
                8. Section 75.712 is removed and reserved.
                Sec. 75.713 [Removed and Reserved]
                0
                9. Section 75.713 is removed and reserved.
                0
                10. Section 75.714 is revised to read as follows:
                Sec. 75.714 Subgrants, contracts, and other agreements with faith-
                based organizations.
                 If a grantee under a discretionary grant program of the Department
                has the authority under the grant to select a private organization to
                provide services supported by direct Federal financial assistance under
                the program by subgrant, contract, or other agreement, the grantee must
                ensure compliance with applicable Federal requirements governing
                contracts, grants, and other agreements with faith-based organizations,
                including, as applicable, Sec. Sec. 75.52 and 75.532, appendices A and
                B to this part, and 2 CFR 3474.15. If the pass-through entity is a
                nongovernmental organization, it retains all other rights of a
                nongovernmental organization under the program's statutory and
                regulatory provisions.
                0
                11. Appendix A to part 75 is revised to read as follows:
                Appendix A to Part 75--Notice or Announcement of Award Opportunities
                 (a) 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, this part and 42 U.S.C.
                2000bb et seq. The Department will not, in the selection of
                recipients, discriminate against an organization on the basis of the
                organization's religious character, affiliation, or exercise.
                 (b) A faith-based organization that participates in this program
                will retain its independence from the Government and may continue to
                carry out its mission consistent with religious freedom and
                conscience protections in Federal law, including the Free Speech and
                Free Exercise Clauses of the Constitution, 42 U.S.C. 2000bb et seq.,
                238n, 18113, 2000e-1(a) and 2000e-2(e), and 12113(d), and the Weldon
                Amendment, among others. Religious accommodations may also be sought
                under many of these religious freedom and conscience protection
                laws.
                 (c) A faith-based organization may not use direct financial
                assistance from the Department in contravention of the Establishment
                Clause or any other applicable requirements. Such an organization
                also may not, in providing services funded by the Department,
                discriminate against a program beneficiary or prospective program
                beneficiary on the basis of religion, a religious belief, a refusal
                to hold a religious belief, or a refusal to attend or participate in
                a religious practice.
                0
                12. Appendix B to part 75 is added to read as follows:
                Appendix B to Part 75--Notice of Award or Contract
                 (a) A faith-based organization that participates in this program
                retains its independence from the Government and may continue to
                carry out its mission consistent with religious freedom and
                conscience protections in Federal law, including the Free Speech and
                Free Exercise Clauses of the Constitution, 42 U.S.C. 2000bb et seq.,
                238n, 18113, 2000e-1(a) and 2000e-2(e), and 12113(d), and the Weldon
                Amendment, among others. Religious accommodations may also be sought
                under many of these religious freedom and conscience protection
                laws.
                 (b) A faith-based organization may not use direct financial
                assistance from the Department in contravention of the Establishment
                Clause or any other applicable requirements. Such an organization
                also may not, in providing services funded by the Department,
                discriminate against a program beneficiary or prospective program
                beneficiary on the basis of religion, a religious belief, a refusal
                to hold a religious belief, or a refusal to attend or participate in
                a religious practice.
                PART 76--STATE-ADMINISTERED FORMULA GRANT PROGRAMS
                0
                13. The authority citation for part 76 continues to read as follows:
                 Authority: 20 U.S.C. 1221e-3 and 3474, unless otherwise noted.
                0
                14. Section 76.52 is revised to read as follows:
                Sec. 76.52 Eligibility of faith-based organizations for a subgrant
                and nondiscrimination against those organizations.
                 (a)(1) A faith-based organization is eligible to apply for and to
                receive a subgrant under a program of the Department on the same basis
                as any other private organization, with respect to programs for which
                such other organizations are eligible and considering any permissible
                accommodation. A State pass-through entity shall provide such religious
                accommodation as would be required to a recipient under Federal law,
                the Attorney General's Memorandum of October 6, 2017 (Federal Law
                Protections for Religious Liberty), and the Religion Clauses of the
                First Amendment to the U.S. Constitution.
                 (2) In the selection of subgrantees and contractors, States may not
                discriminate for or against a private organization on the basis of the
                organization's religious character, affiliation, or exercise and must
                ensure that all decisions about subgrants are free from political
                interference, or even the appearance of such interference, and are made
                on the basis of merit, not on the basis of religion or religious
                belief, or a lack thereof. Notices or announcements of award
                opportunities and notices of award or contracts shall include language
                substantially similar to that in appendices A and B, respectively, to
                34 CFR part 75.
                 (3) No grant document, agreement, covenant, memorandum of
                understanding, policy, or regulation that is used by States in
                administering a program of the Department shall require faith-based
                organizations to provide assurances or notices where they are not
                required of non-faith-based organizations. Any restrictions on the
                [[Page 82129]]
                use of subgrant funds shall apply equally to faith-based and non-faith-
                based organizations. All organizations that receive a subgrant from a
                State under a State-Administered Formula Grant program of the
                Department, including organizations with religious character or
                affiliation, must carry out eligible activities in accordance with all
                program requirements, subject to any required or appropriate religious
                accommodation, and other applicable requirements governing the conduct
                of Department-funded activities, including those prohibiting the use of
                direct financial assistance in contravention of the Establishment
                Clause.
                 (4) No grant document, agreement, covenant, memorandum of
                understanding, policy, or regulation that is used by States shall
                disqualify faith-based organizations from applying for or receiving
                subgrants under a State-Administered Formula Grant program of the
                Department because such organizations are motivated or influenced by
                religious faith to provide social services, or because of their
                religious character or affiliation, or on grounds that discriminate
                against organizations on the basis of the organizations' religious
                exercise.
                 (b) The provisions of Sec. 76.532 apply to a faith-based
                organization that receives a subgrant from a State under a State-
                Administered Formula Grant program of the Department.
                 (c)(1) A private organization that applies for and receives a
                subgrant under a program of the Department and engages in explicitly
                religious activities, such as worship, religious instruction, or
                proselytization, must offer those activities separately in time or
                location from any programs or services funded by a subgrant from a
                State under a State-Administered Formula Grant program of the
                Department. Attendance or participation in any such explicitly
                religious activities by beneficiaries of the programs and services
                supported by the subgrant must be voluntary.
                 (2) The limitations on explicitly religious activities under
                paragraph (c)(1) of this section do not apply to a faith-based
                organization that provides services to a beneficiary under a program
                supported only by ``indirect Federal financial assistance.''
                 (3) For purposes of 2 CFR 3474.15, this section, and Sec. 76.714,
                the following definitions apply:
                 (i) Direct Federal financial assistance means financial assistance
                received by an entity selected by the Government or a pass-through
                entity (under this part) to carry out a service (e.g., by contract,
                grant, or cooperative agreement). References to ``Federal financial
                assistance'' will be deemed to be references to direct Federal
                financial assistance, unless the referenced assistance meets the
                definition of ``indirect Federal financial assistance.''
                 (ii) Indirect Federal financial assistance means financial
                assistance received by a service provider when the service provider is
                paid for services rendered by means of a voucher, certificate, or other
                means of government-funded payment provided to a beneficiary who is
                able to make a choice of service provider. Federal financial assistance
                provided to an organization is indirect under this definition if--
                 (A) The government program through which the beneficiary receives
                the voucher, certificate, or other similar means of government-funded
                payment is neutral toward religion; and
                 (B) The organization receives the assistance as the result of the
                genuine, independent choice of the beneficiary.
                 (iii) Federal financial assistance does not include a tax credit,
                deduction, exemption, guaranty contract, or the use of any assistance
                by any individual who is the ultimate beneficiary under any such
                program.
                 (iv) Pass-through entity means an entity, including a nonprofit or
                nongovernmental organization, acting under a contract, grant, or other
                agreement with the Federal Government or with a State or local
                government, such as a State administering agency, that accepts direct
                Federal financial assistance as a primary recipient or grantee and
                distributes that assistance to other organizations that, in turn,
                provide government-funded social services.
                 (v) Religious exercise has the meaning given to the term in 42
                U.S.C. 2000cc-5(7)(A).
                 (vi) Discriminate against an organization on the basis of the
                organization's religious exercise means to disfavor an organization,
                including by failing to select an organization, disqualifying an
                organization, or imposing any condition or selection criterion that
                otherwise disfavors or penalizes an organization in the selection
                process or has such an effect because of:
                 (A) Conduct that would not be considered grounds to disfavor a
                secular organization,
                 (B) Conduct that must or could be granted an appropriate
                accommodation in a manner consistent with RFRA (42 U.S.C. 2000bb
                through 2000bb-4) or the Religion Clauses of the First Amendment to the
                Constitution, or
                 (C) The actual or suspected religious motivation of the
                organization's religious exercise.
                 Note 1 to paragraph (c)(3): The definitions of direct Federal
                financial assistance and indirect Federal financial assistance do
                not change the extent to which an organization is considered a
                recipient of Federal financial assistance as those terms are defined
                under 34 CFR parts 100, 104, 106, and 110.
                 (d)(1) A faith-based organization that applies for or receives a
                subgrant from a State under a State-Administered Formula Grant program
                of the Department will retain its independence, autonomy, right of
                expression, religious character, and authority over its governance. A
                faith-based organization that receives Federal financial assistance
                from the Department does not lose the protection 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).
                 (2) A faith-based organization that applies for or receives a
                subgrant from a State under a State-Administered Formula Grant program
                of the Department may, among other things--
                 (i) Retain religious terms in its name;
                 (ii) Continue to carry out its mission, including the definition,
                development, practice, and expression of its religious beliefs;
                 (iii) Use its facilities to provide services without concealing,
                removing, or altering religious art, icons, scriptures, or other
                symbols from these facilities;
                 (iv) Select its board members and employees on the basis of their
                acceptance of or adherence to the religious tenets of the organization;
                and
                 (v) Include religious references in its mission statement and other
                chartering or governing documents.
                 (e) An organization that receives any Federal financial assistance
                under a program of the Department shall not discriminate against a
                beneficiary or prospective beneficiary in the provision of program
                services or in outreach activities on the basis of religion or
                religious belief, a refusal to hold a religious belief, or refusal to
                attend or participate in a religious practice. However, an organization
                that participates in a program funded by indirect financial assistance
                need not modify its program activities to accommodate a beneficiary who
                chooses to expend the indirect aid on the organization's program and
                may require attendance at all activities that are fundamental to the
                program.
                [[Page 82130]]
                 (f) If a State or subgrantee contributes its own funds in excess of
                those funds required by a matching or grant agreement to supplement
                federally funded activities, the State or subgrantee has the option to
                segregate those additional funds or commingle them with the funds
                required by the matching requirements or grant agreement. However, if
                the additional funds are commingled, this section applies to all of the
                commingled funds.
                 (g) A religious organization's exemption from the Federal
                prohibition on employment discrimination on the basis of religion, in
                section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is
                not forfeited when the organization receives Federal financial
                assistance from the Department. An organization qualifying for such
                exemption may select its employees on the basis of their acceptance of
                or adherence to the religious tenets of the organization.
                 (h) The Department shall not 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
                15. Section 76.53 is added to subpart A to read as follows:
                Sec. 76.53 Severability.
                 If any provision of this subpart or its application to any person,
                act, or practice is held invalid, the remainder of the subpart or the
                application of its provisions to any person, act, or practice shall not
                be affected thereby.
                Sec. 76.712 [Removed and Reserved]
                0
                16. Section 76.712 is removed and reserved.
                Sec. 76.713 [Removed and Reserved]
                0
                17. Section 76.713 is removed and reserved.
                0
                18. Section 76.714 is revised to read as follows:
                Sec. 76.714 Subgrants, contracts, and other agreements with faith-
                based organizations.
                 If a grantee under a State-Administered Formula Grant program of
                the Department has the authority under the grant or subgrant to select
                a private organization to provide services supported by direct Federal
                financial assistance under the program by subgrant, contract, or other
                agreement, the grantee must ensure compliance with applicable Federal
                requirements governing contracts, grants, and other agreements with
                faith-based organizations, including, as applicable, Sec. Sec. 76.52
                and 76.532 and 2 CFR 3474.15. If the pass-through entity is a
                nongovernmental organization, it retains all other rights of a
                nongovernmental organization under the program's statutory and
                regulatory provisions.
                Department of Homeland Security
                 For the reasons set forth in the preamble, DHS amends part 19 of
                title 6 of the CFR as follows:
                PART 19--NONDISCRIMINATION IN MATTERS PERTAINING TO FAITH-BASED
                ORGANIZATIONS
                0
                19. The authority citation for part 19 is revised to read as follows:
                 Authority: 5 U.S.C. 301; Pub. L. 107-296, 116 Stat. 2135 (6
                U.S.C. 101 et seq.); E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p.
                258; E.O. 13403, 71 FR 28543, 3 CFR, 2006 Comp., p. 228; E.O. 13498,
                74 FR 6533, 3 CFR, 2009 Comp., p. 219; E.O. 13559, 75 FR 71319, 3
                CFR, 2010 Comp., p. 273; and E.O. 13831, 83 FR 20715, 3 CFR, 2018
                Comp., p. 806; 42 U.S.C. 2000bb et seq.
                0
                20. Amend Sec. 19.2 by:
                0
                a. Revising the definition of ``Direct Federal financial assistance or
                Federal financial assistance provided directly'';
                0
                b. In the definition of ``Financial assistance,'' adding a sentence to
                the end;
                0
                c. Revising the definition of ``Indirect Federal financial assistance
                or Federal financial assistance provided indirectly''; and
                0
                d. Adding a definition for ``Religious exercise'' in alphabetical
                order.
                 The revisions and addition read as follows:
                Sec. 19.2 Definitions.
                * * * * *
                 Direct Federal financial assistance or Federal financial assistance
                provided directly means financial assistance received by an entity
                selected by the Government or an intermediary (under this part) to
                carry out a service (e.g., by contract, grant, or cooperative
                agreement). References to ``Federal financial assistance'' will be
                deemed to be references to direct Federal financial assistance, unless
                the referenced assistance meets the definition of ``indirect Federal
                financial assistance'' or ``Federal financial assistance provided
                indirectly''.
                * * * * *
                 Financial assistance * * * Financial assistance does not include a
                tax credit, deduction, exemption, guaranty contract, or the use of any
                assistance by any individual who is the ultimate beneficiary under any
                such program.
                 Indirect Federal financial assistance or Federal financial
                assistance provided indirectly means financial assistance received by a
                service provider when the service provider is paid for services
                rendered by means of a voucher, certificate, or other means of
                government-funded payment provided to a beneficiary who is able to make
                a choice of a service provider. Federal financial assistance provided
                to an organization is considered ``indirect'' when:
                 (1) The government program through which the beneficiary receives
                the voucher, certificate, or other similar means of government-funded
                payment is neutral toward religion; and
                 (2) 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).
                * * * * *
                0
                21. Amend Sec. 19.3 by revising paragraphs (a), (b), and (e) and
                adding paragraph (f) to read as follows:
                Sec. 19.3 Equal ability for faith-based organizations to seek and
                receive financial assistance through DHS social service programs.
                 (a) Faith-based organizations are eligible, on the same basis as
                any other organization and considering any 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, to seek and receive direct
                financial assistance from DHS for social service programs or to
                participate in social service programs administered or financed by DHS.
                 (b) Neither DHS, nor a State or local government, nor any other
                entity that administers any social service program supported by direct
                financial assistance from DHS, shall discriminate for or against an
                organization on the basis of the organization's religious motivation,
                character, affiliation, or exercise. For purposes of this part, to
                discriminate against an organization on the basis of the organization's
                religious exercise means to disfavor an organization, including by
                failing to select an organization, disqualifying an organization, or
                imposing any condition or selection criterion that otherwise disfavors
                or penalizes an organization in the selection process or has such an
                effect:
                 (1) Because of conduct that would not be considered grounds to
                disfavor a secular organization,
                [[Page 82131]]
                 (2) Because of conduct that must or could be granted an appropriate
                accommodation in a manner consistent with RFRA (42 U.S.C. 2000bb
                through 2000bb-4) or the Religion Clauses of the First Amendment to the
                Constitution; or
                 (3) Because of the actual or suspected religious motivation of the
                organization's religious exercise.
                * * * * *
                 (e) All organizations that participate in DHS social service
                programs, including faith-based organizations, must carry out eligible
                activities in accordance with all program requirements, subject to any
                reasonable religious accommodation, and other applicable requirements
                governing the conduct of DHS-funded activities, including those
                prohibiting the use of direct financial assistance from DHS to engage
                in explicitly religious activities. No grant document, agreement,
                covenant, memorandum of understanding, policy, or regulation that is
                used by DHS or an intermediary in administering financial assistance
                from DHS shall disqualify a faith-based organization from participating
                in DHS's social service programs because such organization is motivated
                or influenced by religious faith to provide social services or because
                of its religious character or affiliation, or on grounds that
                discriminate against an organization on the basis of the organization's
                religious exercise, as defined in this part.
                 (f) No grant document, agreement, covenant, memorandum of
                understanding, policy, or regulation used by DHS or an intermediary in
                administering financial assistance from DHS shall require faith-based
                organizations to provide assurances or notices where they are not
                required of non-faith-based organizations. Any restrictions on the use
                of grant funds shall apply equally to faith-based and non-faith-based
                organizations.
                0
                22. Amend Sec. 19.4 by revising paragraphs (b) and (c) to read as
                follows:
                Sec. 19.4 Explicitly religious activities.
                * * * * *
                 (b) Organizations receiving direct financial assistance from DHS
                for social service programs are free to engage in explicitly religious
                activities, but such activities must be offered separately, in time or
                location, from the programs or services funded with direct financial
                assistance from DHS, and participation must be voluntary for
                beneficiaries of the programs or services funded with such assistance.
                 (c) All organizations that participate in DHS social service
                programs, including faith-based organizations, must carry out eligible
                activities in accordance with all program requirements, subject to any
                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, and in
                accordance with all other applicable requirements governing the conduct
                of DHS-funded activities, including those prohibiting the use of direct
                financial assistance from DHS to engage in explicitly religious
                activities. No grant document, agreement, covenant, memorandum of
                understanding, policy, or regulation that is used by DHS or a State or
                local government in administering financial assistance from DHS shall
                disqualify a faith-based organization from participating in DHS's
                social service programs because such organization is motivated or
                influenced by religious faith to provide social services or because of
                its religious character or affiliation, or on grounds that discriminate
                against an organization on the basis of the organization's religious
                exercise, as defined in this part.
                * * * * *
                Sec. 19.5 [Amended]
                0
                23. Amend Sec. 19.5 in the last sentence by removing ``organization's
                program'' and adding in its place ``organization's program and may
                require attendance at all activities that are fundamental to the
                program''.
                0
                24. Revise Sec. 19.6 to read as follows:
                Sec. 19.6 How to prove nonprofit status.
                 In general, DHS 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
                DHS social service programs. Many grant programs, however, do require
                an organization to be a nonprofit organization in order to be eligible
                for funding. Funding announcements and other grant application
                solicitations for social service programs that require organizations to
                have nonprofit status will specifically so indicate in the eligibility
                section of the solicitation. In addition, any solicitation for social
                service programs that requires an organization to maintain tax-exempt
                status will expressly state the statutory authority for requiring such
                status. Recipients should consult with the appropriate DHS program
                office to determine the scope of any applicable requirements. In DHS
                social service programs in which an applicant for funding must show
                that it is a nonprofit organization, the applicant may do so by any of
                the following means:
                 (a) 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;
                 (b) A statement from a State or other governmental taxing body or
                the State secretary of State certifying that:
                 (1) The organization is a nonprofit organization operating within
                the State; and
                 (2) No part of its net earnings may benefit any private shareholder
                or individual;
                 (c) A certified copy of the applicant's certificate of
                incorporation or similar document that clearly establishes the
                nonprofit status of the applicant;
                 (d) Any item described in paragraphs (a) through (c) 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
                 (e) 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 (a) through (d) of this
                section.
                Sec. 19.7 [Removed and Reserved]
                0
                25. Remove and reserve Sec. 19.7.
                0
                26. Revise Sec. 19.8 to read as follows:
                Sec. 19.8 Independence of faith-based organizations.
                 (a) A faith-based organization that applies for, or participates
                in, a social service program supported with Federal financial
                assistance will retain its autonomy; right of expression; religious
                character; authority over its governance; and independence from
                Federal, State, and local governments; and may continue to carry out
                its mission, including the definition, development, practice, and
                expression of its religious beliefs, provided that it does not use
                direct Federal financial assistance contrary to Sec. 19.4.
                 (b) Faith-based organizations may use space in their facilities to
                provide social services using financial assistance from DHS without
                removing, concealing, or altering religious articles, texts, art, or
                symbols.
                 (c) A faith-based organization using financial assistance from DHS
                for social
                [[Page 82132]]
                service programs retains its authority over its internal governance,
                and it may retain religious terms in its organization's name, select
                its board members 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.
                0
                27. Add Sec. 19.11 to read as follows:
                Sec. 19.11 Nondiscrimination among faith-based organizations.
                 Neither DHS nor any State or local government or other intermediary
                receiving funds under any DHS social service program 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
                28. Revise appendix A to part 19 to read as follows:
                Appendix A to Part 19--Notice or Announcement of Award Opportunities
                 (a) 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 this part and 42 U.S.C. 2000bb
                et seq. DHS will not, in the selection of recipients, discriminate
                against an organization on the basis of the organization's religious
                character, affiliation, or exercise.
                 (b) A faith-based organization that participates in this program
                will retain its independence from the Government and may continue to
                carry out its mission consistent with religious freedom and
                conscience 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 and conscience protection laws.
                 (c) A faith-based organization may not use direct financial
                assistance from DHS 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 DHS, discriminate against a
                program beneficiary or prospective program beneficiary on the basis
                of religion, a religious belief, a refusal to hold a religious
                belief, or a refusal to attend or participate in a religious
                practice.
                0
                29. Add appendix B to part 19 to read as follows:
                Appendix B to Part 19: Notice of Award or Contract
                 (a) A faith-based organization that participates in this program
                retains its independence from the Government and may continue to
                carry out its mission consistent with religious freedom and
                conscience 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 and conscience protection laws.
                 (b) A faith-based organization may not use direct financial
                assistance from DHS to support or engage in any explicitly religious
                activities except when consistent with the Establishment Clause and
                any other applicable requirements. Such an organization also may
                not, in providing services funded by DHS, discriminate against a
                program beneficiary or prospective program beneficiary on the basis
                of religion, a religious belief, a refusal to hold a religious
                belief, or a refusal to attend or participate in a religious
                practice.
                Department of Agriculture
                 For the reasons set forth in the preamble, USDA amends part 16 of
                title 7 of the CFR as follows:
                PART 16--EQUAL OPPORTUNITY FOR RELIGIOUS ORGANIZATIONS
                0
                30. The authority citation for part 16 is revised to read as follows:
                 Authority: 5 U.S.C. 301; E.O. 13279, 67 FR 77141, 3 CFR, 2002
                Comp., p. 258; E.O. 13280, 67 FR 77145, 3 CFR, 2002 Comp., p. 262;
                E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273; E.O. 13831, 83
                FR 20715, 3 CFR, 2018 Comp., p. 806; 42 U.S.C. 2000bb et seq.
                0
                31. Amend Sec. 16.1 by redesignating paragraph (b) as paragraph (c)
                and adding a new paragraph (b) to read as follows:
                Sec. 16.1 Purpose and applicability.
                * * * * *
                 (b) The requirements established in this part do not prevent a USDA
                awarding agency or any State or local government or other intermediary
                from accommodating religion in a manner consistent with Federal law and
                the Religion Clauses of the First Amendment to the U.S. Constitution.
                * * * * *
                0
                32. Revise Sec. 16.2 to read as follows:
                Sec. 16.2 Definitions.
                 As used in this part:
                 Direct Federal financial assistance, Federal financial assistance
                provided directly, Direct funding, or Directly funded means financial
                assistance received by an entity selected by the Government or
                intermediary (under this part) to carry out a service (e.g., by
                contract, grant, loan agreement, or cooperative agreement). References
                to Federal financial assistance will be deemed to be references to
                direct Federal financial assistance, unless the referenced assistance
                meets the definition of indirect Federal financial assistance or
                Federal financial assistance provided indirectly. Except as otherwise
                provided by USDA regulation, the recipients of sub-grants that receive
                Federal financial assistance through State-administered programs (e.g.,
                flow-through programs such as the National School Lunch Program
                authorized under the Richard B. Russell National School Lunch Act, 42
                U.S.C. 1751 et seq.) are not considered recipients of USDA indirect
                assistance. These recipients of sub-awards are considered recipients of
                USDA direct financial assistance.
                 Discriminate against an organization on the basis of the
                organization's religious exercise means to disfavor an organization,
                including by failing to select an organization, disqualifying an
                organization, or imposing any condition or selection criterion that
                otherwise disfavors or penalizes an organization in the selection
                process or has such an effect:
                 (1) Because of conduct that would not be considered grounds to
                disfavor a secular organization;
                 (2) Because of conduct that must or could be granted an appropriate
                accommodation in a manner consistent with RFRA (42 U.S.C. 2000bb
                through 2000bb-4) or the Religion Clauses of the First Amendment to the
                Constitution; or
                 (3) Because of the actual or suspected religious motivation of the
                organization's religious exercise.
                 Explicitly religious activities include activities that involve
                overt religious content such as worship, religious instruction, or
                proselytization. Any such activities must be offered separately, in
                time or location, from the programs or services funded under the
                agency's grant or cooperative agreement, and participation must be
                voluntary for beneficiaries of the agency grant or cooperative
                agreement-funded programs and services.
                 Federal financial assistance does not include a guarantee or
                insurance, regulated programs, licenses, procurement contracts at
                market value, or programs that provide direct benefits.
                 Indirect Federal financial assistance or Federal financial
                assistance provided indirectly refers to situations where the choice of
                the service 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
                [[Page 82133]]
                in accordance with the First Amendment of the U.S. Constitution.
                 Intermediary means an entity, including a non-governmental
                organization, acting under a contract, grant, or other agreement with
                the Federal Government or with a State or local government that accepts
                USDA direct assistance and distributes that assistance to other
                organizations that, in turn, provide government-funded services. If an
                intermediary, acting under a contract, grant, or other agreement with
                the Federal Government or with a State or local government that is
                administering a program supported by Federal financial assistance, is
                given the authority under the contract, grant, or agreement to select
                non-governmental organizations to provide services funded by the
                Federal Government, the intermediary must ensure compliance by the
                recipient of a contract, grant, or agreement with this part and any
                implementing rules or guidance. If the intermediary is a non-
                governmental organization, it retains all other rights of a non-
                governmental organization under the program's statutory and regulatory
                provisions.
                 Religious exercise has the meaning given to the term in 42 U.S.C.
                2000cc-5(7)(A).
                0
                33. Revise Sec. 16.3 to read as follows:
                Sec. 16.3 Faith-Based Organizations and Federal Financial
                Assistance.
                 (a)(1) A faith-based or religious organization is eligible, on the
                same basis as any other organization, and considering a religious
                accommodation, to access and participate in any USDA assistance
                programs for which it is otherwise eligible. Neither the USDA awarding
                agency nor any State or local government or other intermediary
                receiving funds under any USDA awarding agency program or service
                shall, in the selection of service providers, discriminate against an
                organization on the basis of the organization's religious character,
                affiliation, or exercise.
                 (2) Additionally, decisions about awards of USDA direct assistance
                or USDA indirect assistance must be free from political interference
                and must be made on the basis of merit, not on the basis of the
                religious affiliation of a recipient organization or lack thereof.
                Notices or announcements of award opportunities and notices of award or
                contracts shall include language substantially similar to that in
                appendices A and B to this part.
                 (b) A faith-based or religious organization that participates in
                USDA assistance programs will retain its autonomy; right of expression;
                religious character; authority over its governance; and independence
                from Federal, State, and local governments, and may continue to carry
                out its mission, including the definition, development, practice, and
                expression of its religious beliefs, provided that it does not use USDA
                direct assistance to support any ineligible purposes, including
                explicitly religious activities that involve overt religious content
                such as worship, religious instruction, or proselytization. A faith-
                based or religious organization may:
                 (1) Use its facilities to provide services and programs funded with
                financial assistance from USDA awarding agency without concealing,
                altering, or removing religious art, icons, scriptures, or other
                religious symbols,
                 (2) Retain religious terms in its organization's name,
                 (3) Select its board members and otherwise govern itself on a
                religious basis, and
                 (4) Include religious references in its mission statements and
                other governing documents.
                 (c) In addition, a religious organization's exemption from the
                Federal prohibition on employment discrimination on the basis of
                religion, set forth in section 702(a) of the Civil Rights Act of 1964,
                42 U.S.C. 2000e-1, is not forfeited when an organization participates
                in a USDA assistance program.
                 (d) A faith-based or religious organization is eligible to access
                and participate in USDA assistance programs on the same basis as any
                other organization. No grant document, agreement, covenant, memorandum
                of understanding, policy, or regulation that is used by a USDA awarding
                agency or a State or local government in administering Federal
                financial assistance from the USDA awarding agency shall require faith-
                based or religious organizations to provide assurances or notices where
                they are not required of non-religious organizations.
                 (1) Any restrictions on the use of grant funds shall apply equally
                to religious and non-religious organizations.
                 (2) All organizations that participate in USDA awarding agency
                programs or services, including organizations with religious character
                or affiliations, must carry out eligible activities in accordance with
                all program requirements and other applicable requirements governing
                the conduct of USDA awarding agency-funded activities, including those
                prohibiting the use of direct financial assistance to engage in
                explicitly religious activities.
                 (3) No grant or agreement, document, loan agreement, covenant,
                memorandum of understanding, policy or regulation that is used by the
                USDA awarding agency or a State or local government in administering
                financial assistance from the USDA awarding agency shall disqualify
                faith-based or religious organizations from participating in the USDA
                awarding agency's programs or services because such organizations are
                motivated by or influenced by religious faith, or because of their
                religious character or affiliation, or on grounds that discriminate
                against organizations on the basis of the organizations' religious
                exercise, as defined in this part.
                 (e) If an intermediary, acting under a contract, grant, or other
                agreement with the Federal Government or with a State or local
                government that is administering a program supported by Federal
                financial assistance, is delegated the authority under the contract,
                grant, or agreement to select non-governmental organizations to provide
                services funded by the Federal Government, the intermediary must ensure
                compliance by the subrecipient with the provisions of this part and any
                implementing regulations or guidance. If the intermediary is a non-
                governmental organization, it retains all other rights of a non-
                governmental organization under the program's statutory and regulatory
                provisions.
                 (f)(1) USDA direct financial assistance may be used for the
                acquisition, construction, or rehabilitation of structures to the
                extent authorized by the applicable program statutes and regulations.
                USDA direct assistance may not be used for the acquisition,
                construction, or rehabilitation of structures to the extent that those
                structures are used by the USDA funding recipients for explicitly
                religious activities. Where a structure is used for both eligible and
                ineligible purposes, USDA direct financial assistance may not exceed
                the cost of those portions of the acquisition, construction, or
                rehabilitation that are attributable to eligible activities in
                accordance with the cost accounting requirements applicable to USDA
                funds. Sanctuaries, chapels, or other rooms that an organization
                receiving direct assistance from USDA uses as its principal place of
                worship, however, are ineligible for USDA-funded improvements.
                Disposition of real property after the term of the grant or any change
                in use of the property during the term of the grant is subject to
                government-wide regulations governing real property disposition (see 2
                CFR part 400).
                 (2) Any use of USDA direct financial assistance for equipment,
                supplies,
                [[Page 82134]]
                labor, indirect costs, and the like shall be prorated between the USDA
                program or activity and any ineligible purposes by the religious
                organization in accordance with applicable laws, regulations, and
                guidance.
                 (3) Nothing in this section shall be construed to prevent the
                residents of housing who are receiving USDA direct assistance funds
                from engaging in religious exercise within such housing.
                 (g) If a recipient contributes its own funds in excess of those
                funds required by a matching or grant agreement to supplement USDA
                awarding agency supported activities, the recipient has the option to
                segregate those additional funds or commingle them with the Federal
                award funds. If the funds are commingled, the provisions of this
                section shall apply to all of the commingled funds in the same manner,
                and to the same extent, as the provisions apply to the Federal funds.
                With respect to the matching funds, the provisions of this section
                apply irrespective of whether such funds are commingled with Federal
                funds or segregated.
                0
                34. Revise Sec. 16.4 to read as follows:
                Sec. 16.4 Responsibilities of participating organizations.
                 (a) Any organization that receives direct or indirect Federal
                financial assistance shall not, with respect to services, or, in the
                case of direct Federal financial assistance, outreach activities funded
                by such financial assistance, discriminate against a current or
                prospective program 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, an organization that
                participates in a program funded by indirect financial assistance need
                not modify its program activities to accommodate a beneficiary who
                chooses to expend the indirect aid on the organization's program and
                may require attendance at all activities that are fundamental to the
                program.
                 (b) Organizations that receive USDA direct assistance under any
                USDA program may not engage in explicitly religious activities,
                including activities that involve overt religious content such as
                worship, religious instruction, or proselytization, as part of the
                programs or services funded by USDA direct assistance. If an
                organization conducts such activities, the activities must be offered
                separately, in time or location, from the programs or services
                supported with USDA direct assistance, and participation must be
                voluntary for beneficiaries of the programs or services supported with
                such USDA direct assistance. The use of indirect Federal financial
                assistance is not subject to this restriction. Nothing in this part
                restricts the Department's authority under applicable Federal law to
                fund activities that can be directly funded by the Government
                consistent with the Establishment Clause.
                 (c) Nothing in paragraph (a) or (b) of this section shall be
                construed to prevent faith-based organizations that receive USDA
                assistance under the Richard B. Russell National School Lunch Act, 42
                U.S.C. 1751 et seq., the Child Nutrition Act of 1966, 42 U.S.C. 1771 et
                seq., or USDA international school feeding programs from considering
                religion in their admissions practices or from imposing religious
                attendance or curricular requirements at their schools.
                0
                35. Revise Sec. 16.5 to read as follows:
                Sec. 16.5 Severability.
                 To the extent that any provision of this regulation is declared
                invalid by a court of competent jurisdiction, USDA intends for all
                other provisions that are capable of operating in the absence of the
                specific provision that has been invalidated to remain in effect.
                Sec. 16.6 [Removed]
                0
                36. Remove Sec. 16.6.
                0
                37. Revise appendix A to part 16 to read as follows:
                Appendix A to Part 16--Notice or Announcement of Award Opportunities
                 (a) 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 this part and 42 U.S.C.
                2000bb et seq., USDA will not, in the selection of recipients,
                discriminate against an organization on the basis of the
                organization's religious character, affiliation, or exercise.
                 (b) A faith-based organization that participates in this program
                will retain its independence from the Government and may continue to
                carry out its mission consistent with religious freedom and
                conscience protections in the U.S. Constitution and Federal law,
                including 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 and conscience
                protection laws.
                 (c) A faith-based organization may not use direct financial
                assistance from USDA 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 USDA, discriminate
                against a program beneficiary or prospective program beneficiary on
                the basis of religion, a religious belief, a refusal to hold a
                religious belief, or a refusal to attend or participate in a
                religious practice.
                0
                38. Add appendix B to part 16 to read as follows:
                Appendix B to Part 16--Notice of Award or Contract
                 (a) A faith-based organization that participates in this program
                retains its independence from the Government and may continue to
                carry out its mission consistent with religious freedom and
                conscience protections in the U.S. Constitution and Federal law,
                including 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 and conscience
                protection laws.
                 (b) A faith-based organization may not use direct financial
                assistance from USDA to support or engage in any explicitly
                religious activities except when consistent with the Establishment
                Clause and any other applicable requirements. Such an organization
                also may not, in providing services funded by USDA, discriminate
                against a program beneficiary or prospective program beneficiary on
                the basis of religion, a religious belief, a refusal to hold a
                religious belief, or a refusal to attend or participate in a
                religious practice.
                Agency for International Development
                 For the reasons set forth in the preamble, USAID amends part 205 of
                title 22 of the CFR as follows:
                PART 205--PARTICIPATION BY RELIGIOUS ORGANIZATIONS IN USAID
                PROGRAMS
                0
                39. The authority citation for part 205 continues to read as follows:
                 Authority: 22 U.S.C. 2381(a).
                0
                40. In Sec. 205.1, revise paragraphs (a), (c), (f), (g) and add
                paragraph (l) to read as follows:
                Sec. 205.1 Grants and cooperative agreements.
                 (a) Faith-based organizations are eligible, on the same basis as
                any other organization and considering any reasonable accommodation, as
                is consistent with Federal law, the Attorney General's Memorandum of
                October 6, 2018 (Federal Law Protections for Religious Liberty), and
                the Religion Clauses of the First Amendment to the U.S. Constitution,
                to participate in any USAID program for which they are otherwise
                eligible. In the selection of service-providers, neither USAID nor
                entities that make and administer sub-awards of USAID funds shall
                discriminate for, or against, an organization on the basis of the
                organization's religious character,
                [[Page 82135]]
                affiliation, or exercise. For purposes of this part, to discriminate
                against an organization on the basis of the organization's religious
                exercise means to disfavor an organization, including by failing to
                select an organization, disqualifying an organization, or imposing any
                condition or selection criterion that otherwise disfavors or penalizes
                an organization in the selection process or has such an effect:
                 (1) Because of conduct that would not be considered grounds to
                disfavor a secular organization;
                 (2) Because of conduct that must or could be granted an appropriate
                accommodation in a manner consistent with RFRA (42 U.S.C. 2000bb
                through 2000bb-4) or the Religion Clauses of the First Amendment to the
                Constitution; or
                 (3) Because of the actual or suspected religious motivation of the
                organization's religious exercise.
                 (4) Notices or announcements of award opportunities shall include
                language to indicate that faith-based organizations are eligible on the
                same basis as any other organization and subject to the protections and
                requirements of Federal law. As used in this section, the term
                ``program'' refers to federally funded USAID grants and cooperative
                agreements, including subgrants and sub-agreements. The term also
                includes grants awarded under contracts. As used in this section, the
                term ``grantee'' includes a recipient of a grant or a signatory to a
                cooperative agreement, as well as sub-recipients of USAID assistance
                under grants, cooperative agreements, and contracts.
                * * * * *
                 (c) A faith-based organization that applies for, or participates
                in, USAID-funded programs or services (including through a prime award
                or sub-award) will retain its autonomy, religious character, and
                independence, and may continue to carry out its mission consistent with
                religious freedom protections in Federal law, including the definition,
                development, practice, and expression of its religious beliefs,
                provided that it does not use direct financial assistance from USAID
                (including through a prime award or sub-award) to support or engage in
                any explicitly religious activities (including activities that involve
                overt religious content such as worship, religious instruction, or
                proselytization), or in any other manner prohibited by law. Among other
                things, a faith-based organization that receives financial assistance
                from USAID may use space in its facilities, without concealing,
                altering, or removing religious art, icons, scriptures, or other
                religious symbols. In addition, a faith-based organization that
                receives financial assistance from USAID retains its authority over its
                internal governance, and it may retain religious terms in its
                organization's name, select its board members on a religious basis, and
                include religious references in its organization's mission statements
                and other governing documents.
                * * * * *
                 (f) No grant document, contract, agreement, covenant, memorandum of
                understanding, policy, or regulation used by USAID shall require faith-
                based organizations to provide assurances or notices where the Agency
                does not require them of non-faith-based organizations. Any
                restrictions on the use of grant funds shall apply equally to faith-
                based and non-faith-based organizations. All organizations that
                participate in USAID's programs (including through a prime award or
                sub-award), including faith-based ones, must carry out eligible
                activities in accordance with all program requirements and other
                applicable requirements that govern the conduct of USAID-funded
                activities, including those that prohibit the use of direct financial
                assistance from USAID to engage in explicitly religious activities. No
                grant document, contract, agreement, covenant, memorandum of
                understanding, policy, or regulation used by USAID shall disqualify
                faith-based organizations from participating in USAID's programs
                because such organizations are motivated or influenced by religious
                faith to provide social services or other assistance, or because of
                their religious character or affiliation, or on grounds that
                discriminate against organizations on the basis of the organizations'
                religious exercise, as defined in this part.
                 (g) A religious organization does not forfeit its exemption from
                the Federal prohibition on employment discrimination on the basis of
                religion, set forth in section 702(a) of the Civil Rights Act of 1964,
                42 U.S.C. 2000e-1, when the organization receives financial assistance
                from USAID. An organization that qualifies for such exemption may
                select its employees on the basis of their acceptance of, and/or
                adherence to, the religious tenets of the organization.
                * * * * *
                 (l) Nothing in this section shall be construed 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.
                Department of Housing and Urban Development
                 For the reasons set forth in the preamble, HUD amends parts 5, 92,
                and 578 of title 24 of the CFR as follows:
                PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS
                0
                41. 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. 2396; Sec. 607,
                Pub. L. 109-162, 119 Stat. 3051 (42 U.S.C. 14043e et seq.); E.O.
                13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; E.O. 13559, 75 FR
                71319, 3 CFR, 2010 Comp., p. 273; E.O 13831, 83 FR 20715, 3 CFR,
                2018 Comp., p. 806; 42 U.S.C. 2000bb et seq.
                0
                42. Amend Sec. 5.109 by:
                0
                a. Revising paragraph (a);
                0
                b. In paragraph (b), revising the definition of ``Indirect Federal
                financial assistance'' and adding a definition for ``Religious
                exercise'' in alphabetical order;
                0
                c. Revising paragraphs (c) and (d);
                0
                d. Adding a sentence to the end of paragraph (e);
                0
                e. Removing paragraph (g);
                0
                f. Redesignating paragraph (h) as paragraph (g) and revising it; and
                0
                g. Adding a new paragraph (h) and paragraphs (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
                [[Page 82136]]
                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 on the basis of the
                organization's religious exercise. For purposes of this part, to
                discriminate against an organization on the basis of the organization's
                religious exercise means to disfavor an organization, including by
                failing to select an organization, disqualifying an organization, or
                imposing any condition or selection criterion that otherwise disfavors
                or penalizes an organization in the selection process or has such an
                effect:
                 (1) Because of conduct that would not be considered grounds to
                disfavor a secular organization;
                 (2) Because of conduct that must or could be granted an appropriate
                accommodation in a manner consistent with RFRA (42 U.S.C. 2000bb
                through 2000bb-4) or the Religion Clauses of the First Amendment to the
                Constitution; or
                 (3) Because of the actual or suspected religious motivation of the
                organization's religious exercise.
                 (4) 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 based on the organization's religious 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
                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).
                 (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 consistent with paragraph
                (i) of this section), 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, an organization that participates in a
                program funded by indirect Federal financial assistance need not modify
                its program or activities to accommodate a beneficiary who chooses to
                expend the indirect aid on the organization's program and may require
                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. Absent regulatory or
                statutory authority, 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 character or affiliation, or on grounds that discriminate
                against an organization on the basis of the
                [[Page 82137]]
                organization's religious exercise, as defined in this part.
                * * * * *
                 (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 (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 (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
                43. 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
                 (a) 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 character,
                affiliation, or exercise.
                 (b) 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 and conscience 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 and conscience protection laws, particularly under the
                Religious Freedom Restoration Act.
                 (c) 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
                beneficiary or prospective program 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.
                PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM
                0
                44. 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
                45. Amend Sec. 92.508 by removing paragraph (a)(2)(xiii).
                Department of Justice
                0
                For the reasons set forth in the preamble, DOJ revises part 38 of title
                28 of the CFR to read as follows:
                PART 38--PARTNERSHIPS WITH FAITH-BASED AND OTHER NEIGHBORHOOD
                ORGANIZATIONS
                Sec.
                38.1 Purpose.
                38.2 Applicability and scope.
                38.3 Definitions.
                38.4 Policy.
                38.5 Responsibilities.
                38.6 Procedures.
                38.7 Assurances.
                38.8 Enforcement.
                Appendix A to Part 38--Notice or Announcement of Award Opportunities
                Appendix B to Part 38--Notice of Award or Contract
                 Authority: 28 U.S.C. 509; 5 U.S.C. 301; E.O. 13279, 67 FR
                77141, 3 CFR, 2002 Comp., p. 258; 18 U.S.C. 4001, 4042, 5040; 21
                U.S.C. 871; 25 U.S.C. 3681; Pub. L. 107-273, 116 Stat. 1758; Pub. L.
                109-162, 119 Stat. 2960; 34 U.S.C. 10152, 10154, 10172, 10221,
                10382, 10388, 10444, 10446, 10448, 10473, 10614, 10631, 11111,
                11182, 20110, 20125; E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., p.
                273; E.O. 13831, 83 FR 20715, 3 CFR, 2018 Comp., p. 806; 42 U.S.C.
                2000bb et seq.
                Sec. 38.1 Purpose.
                 The purpose of this part is to implement Executive Order 13279,
                Executive Order 13559, and Executive Order 13831.
                Sec. 38.2 Applicability and scope.
                 (a) A faith-based organization that applies for, or participates
                in, a social service program supported with Federal financial
                assistance may retain its independence and may continue to carry out
                its mission, including the definition, development, practice, and
                expression of its religious beliefs, provided that it does not use
                direct Federal financial assistance, whether received through a prime
                award or sub-award, to support or engage in any explicitly religious
                activities, including activities that involve overt religious content
                such as worship, religious instruction, or proselytization.
                 (b) The use of indirect Federal financial assistance is not subject
                to this restriction.
                 (c) Nothing in this part restricts the Department's authority under
                applicable Federal law to fund activities, such as the provision of
                chaplaincy services, that can be directly funded by the Government
                consistent with the Establishment Clause.
                 (d) To the extent that any provision of this regulation is declared
                invalid by a court of competent jurisdiction, the Department intends
                for all other provisions that are capable of operating in the absence
                of the specific provision that has been invalidated to remain in
                effect.
                Sec. 38.3 Definitions.
                 As used in this part:
                 (a)(1) ``Direct Federal financial assistance'' or ``Federal
                financial
                [[Page 82138]]
                assistance provided directly'' refers to situations where the
                Government or an intermediary (under this part) selects the provider
                and either purchases services from that provider (e.g., via a contract)
                or awards funds to that provider to carry out a service (e.g., via a
                grant or cooperative agreement). In general, and except as provided in
                paragraph (a)(2) of this section, Federal financial assistance shall be
                treated as direct, unless it meets the definition of ``indirect Federal
                financial assistance'' or ``Federal financial assistance provided
                indirectly.''
                 (2) Recipients of sub-grants that receive Federal financial
                assistance through State administering agencies or State-administered
                programs are recipients of ``direct Federal financial assistance'' (or
                recipients of ``Federal financial assistance provided directly'').
                 (b) ``Indirect Federal financial assistance'' or ``Federal
                financial assistance provided indirectly'' refers to situations where
                the choice of the service 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 is considered ``indirect'' when:
                 (1) The government program through which the beneficiary receives
                the voucher, certificate, or other similar means of government-funded
                payment is neutral toward religion and
                 (2) The service provider receives the assistance as a result of an
                independent choice of the beneficiary, not a choice of the Government.
                 (c)(1) ``Intermediary'' or ``pass-through entity'' means an entity,
                including a nonprofit or nongovernmental organization, acting under a
                contract, grant, or other agreement with the Federal Government or with
                a State or local government, such as a State administering agency, that
                accepts Federal financial assistance as a primary recipient or grantee
                and distributes that assistance to other organizations that, in turn,
                provide government-funded social services.
                 (2) When an intermediary, such as a State administering agency,
                distributes Federal financial assistance to other organizations, it
                replaces the Department as the awarding entity. The intermediary
                remains accountable for the Federal financial assistance it disburses
                and, accordingly, must ensure that any providers to which it disburses
                Federal financial assistance also comply with this part.
                 (d) ``Department program'' refers to a grant, contract, or
                cooperative agreement funded by a discretionary, formula, or block
                grant program administered by or from the Department.
                 (e) ``Grantee'' includes a recipient of a grant, a signatory to a
                cooperative agreement, or a contracting party.
                 (f) The ``Office for Civil Rights'' refers to the Office for Civil
                Rights in the Department's Office of Justice Programs.
                 (g) ``Religious exercise'' has the meaning given to the term in 42
                U.S.C. 2000cc-5(7)(A).
                Sec. 38.4 Policy.
                 (a) Grants (formula and discretionary), contracts, and cooperative
                agreements. Faith-based organizations are eligible, on the same basis
                as any other organization and considering any 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. 38n,
                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, to participate in any Department
                program for which they are otherwise eligible. Neither the Department
                nor any State or local government receiving funds under any Department
                program shall, in the selection of service providers, discriminate for
                or against an organization on the basis of the organization's religious
                character or affiliation, or lack thereof, or on the basis of the
                organization's religious exercise. For purposes of this part, to
                discriminate against an organization on the basis of the organization's
                religious exercise means to disfavor an organization, including by
                failing to select an organization, disqualifying an organization, or
                imposing any condition or selection criterion that otherwise disfavors
                or penalizes an organization in the selection process or has such an
                effect:
                 (1) Because of conduct that would not be considered grounds to
                disfavor a secular organization;
                 (2) Because of conduct that must or could be granted an appropriate
                accommodation in a manner consistent with the Religious Freedom
                Restoration Act (42 U.S.C. 2000bb et seq.) or the Religion Clauses of
                the First Amendment to the Constitution; or
                 (3) Because of the actual or suspected religious motivation of the
                organization's religious exercise.
                 (b) Political or religious affiliation. Decisions about awards of
                Federal financial assistance must be free from political interference
                or even the appearance of such interference and must be made on the
                basis of merit, not on the basis of religion, religious belief, or lack
                thereof.
                Sec. 38.5 Responsibilities.
                 (a) Organizations that receive direct Federal financial assistance
                from the Department may not engage in explicitly religious activities,
                including activities that involve overt religious content such as
                worship, religious instruction, or proselytization, as part of the
                programs or services funded with direct Federal financial assistance
                from the Department. If an organization conducts such explicitly
                religious activities, the activities must be offered separately, in
                time or location, from the programs or services funded with direct
                Federal financial assistance from the Department, and participation
                must be voluntary for beneficiaries of the programs or services funded
                with such assistance.
                 (b) A faith-based organization that participates in Department-
                funded programs or services shall retain its autonomy; right of
                expression; religious character; and independence from Federal, State,
                and local governments, and may continue to carry out its mission,
                including the definition, practice, and expression of its religious
                beliefs, provided that it does not use direct Federal financial
                assistance from the Department to fund any explicitly religious
                activities, including activities that involve overt religious content
                such as worship, religious instruction, or proselytization. Among other
                things, a faith-based organization that receives Federal financial
                assistance from the Department may use space in its facilities without
                concealing, altering, or removing religious art, icons, messages,
                scriptures, or symbols. In addition, a faith-based organization that
                receives Federal financial assistance from the Department retains its
                authority over its internal governance, and it may retain religious
                terms in its name, select its board members on the basis of their
                acceptance of or adherence to the religious tenets of the organization,
                and include religious references in its mission statements and other
                governing documents.
                 (c) Any organization that participates in programs funded by
                Federal financial assistance from the Department shall not, in
                providing services, discriminate against a program beneficiary or
                prospective program beneficiary on the basis of religion, a religious
                belief, a refusal to hold a religious belief, or a refusal to attend or
                participate in a religious practice. However, an organization that
                participates in a program funded by indirect Federal financial
                assistance need not modify its
                [[Page 82139]]
                program activities to accommodate a beneficiary who chooses to expend
                the indirect aid on the organization's program and may require
                attendance at all activities that are fundamental to the program.
                 (d) No grant document, agreement, covenant, memorandum of
                understanding, policy, or regulation that the Department or a State or
                local government uses in administering Federal financial assistance
                from the Department shall require faith-based or religious
                organizations to provide assurances or notices where they are not
                required of non-faith-based organizations. Any restrictions on the use
                of grant funds shall apply equally to faith-based and non-faith-based
                organizations. All organizations, including religious ones, that
                participate in Department programs must carry out all eligible
                activities in accordance with all program requirements, subject to any
                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, and other
                applicable requirements governing the conduct of Department-funded
                activities, including those prohibiting the use of direct Federal
                financial assistance from the Department to engage in explicitly
                religious activities. No grant, document, agreement, covenant,
                memorandum of understanding, policy, or regulation that is used by the
                Department or a State or local government in administering Federal
                financial assistance from the Department shall disqualify faith-based
                or religious organizations from participating in the Department's
                programs because such organizations are motivated or influenced by
                religious faith to provide social services, or because of their
                religious character or affiliation, or on grounds that discriminate
                against organizations on the basis of the organizations' religious
                exercise, as defined in this part.
                 (e) A faith-based organization's exemption from the Federal
                prohibition on employment discrimination on the basis of religion, set
                forth in section 702(a) of the Civil Rights Act of 1964, 42 U.S.C.
                2000e-1(a), is not forfeited when the organization receives direct or
                indirect Federal financial assistance from the Department. Some
                Department programs, however, contain independent statutory provisions
                requiring that all grantees agree not to discriminate in employment on
                the basis of religion. Accordingly, grantees should consult with the
                appropriate Department program office to determine the scope of any
                applicable requirements.
                 (f) If an intermediary, acting under a contract, grant, or other
                agreement with the Federal Government or with a State or local
                government that is administering a program supported by Federal
                financial assistance, is given the authority under the contract, grant,
                or agreement to select organizations to provide services funded by the
                Federal Government, the intermediary must ensure the compliance of the
                recipient of a contract, grant, or agreement with the provisions of
                Executive Order 13279, as amended by Executive Order 13559 and further
                amended by Executive Order 13831, and any implementing rules or
                guidance. If the intermediary is a nongovernmental organization, it
                retains all other rights of a nongovernmental organization under the
                program's statutory and regulatory provisions.
                 (g) In general, the Department does not require that a grantee,
                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 Department programs. Many grant programs, however, do
                require an organization to be a ``nonprofit organization'' in order to
                be eligible for funding. Individual solicitations that require
                organizations to have nonprofit status will specifically so indicate in
                the eligibility sections of the solicitations. In addition, any
                solicitation that requires an organization to maintain tax-exempt
                status shall expressly state the statutory authority for requiring such
                status. Grantees should consult with the appropriate Department program
                office to determine the scope of any applicable requirements. In
                Department programs in which an applicant must show that it is a
                nonprofit organization, 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 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 lawfully 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 (g)(1) through (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 (g)(1) through (4) of this
                section.
                 (h) Grantees should consult with the appropriate Department program
                office to determine the applicability of this part in foreign countries
                or sovereign lands.
                 (i) Neither the Department nor any State or local government or
                other pass-through entity receiving funds under any Department program
                or service 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.
                Sec. 38.6 Procedures.
                 (a) Effect on State and local funds. If a State or local government
                voluntarily contributes its own funds to supplement activities carried
                out under the applicable programs, the State or local government has
                the option to separate out the Federal funds or commingle them. If the
                funds are commingled, the provisions of this section shall apply to all
                of the commingled funds in the same manner, and to the same extent, as
                the provisions apply to the Federal funds.
                 (b) Notices or announcements. Notices or announcements of award
                opportunities and notices of award or contracts shall include language
                substantially similar to that in appendices A and B, respectively, to
                this part.
                Sec. 38.7 Assurances.
                 (a) Every application submitted to the Department for direct
                Federal financial assistance subject to this part must contain, as a
                condition of its approval and the extension of any such assistance, or
                be accompanied by, an assurance or statement that the program is or
                will be conducted in compliance with this part.
                 (b) Every intermediary must provide for such methods of
                administration as are required by the Office for Civil Rights to give
                reasonable assurance that
                [[Page 82140]]
                the intermediary will comply with this part and effectively monitor the
                actions of its recipients.
                Sec. 38.8 Enforcement.
                 (a) The Office for Civil Rights is responsible for reviewing the
                practices of recipients of Federal financial assistance to determine
                whether they are in compliance with this part.
                 (b) The Office for Civil Rights is responsible for investigating
                any allegations of noncompliance with this part.
                 (c) Recipients of Federal financial assistance determined to be in
                violation of any provisions of this part are subject to the enforcement
                procedures and sanctions, up to and including suspension and
                termination of funds, authorized by applicable laws.
                 (d) An allegation of any violation or discrimination by an
                organization, based on this regulation, may be filed with the Office
                for Civil Rights or the intermediary that awarded the funds to the
                organization.
                Appendix A to Part 38--Notice or Announcement of Award Opportunities
                 (a) 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 this part and 42 U.S.C.
                2000bb et seq. The Department of Justice will not, in the selection
                of recipients, discriminate against an organization on the basis of
                the organization's religious character, exercise or affiliation.
                 (b) A faith-based organization that participates in this program
                will retain its independence from the Government and may continue to
                carry out its mission consistent with religious freedom and
                conscience protections in Federal law, including the Free Speech and
                Free Exercise Clauses of the First Amendment, 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 and conscience protection laws.
                 (c) A faith-based organization may not use direct Federal
                financial assistance from the Department of Justice to support or
                engage in any explicitly religious activities except where
                consistent with the Establishment Clause and any other applicable
                requirements. An organization receiving direct Federal financial
                assistance also may not, in providing services funded by the
                Department of Justice, discriminate against a program beneficiary or
                prospective program beneficiary on the basis of religion, a
                religious belief, a refusal to hold a religious belief, or a refusal
                to attend or participate in a religious practice.
                Appendix B to Part 38--Notice of Award or Contract
                 (a) A faith-based organization that participates in this program
                retains its independence from the Government and may continue to
                carry out its mission consistent with religious freedom and
                conscience 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 and conscience protection laws.
                 (b) A faith-based organization may not use direct Federal
                financial assistance from the Department of Justice to support or
                engage in any explicitly religious activities except when consistent
                with the Establishment Clause of the First Amendment and any other
                applicable requirements. An organization receiving direct Federal
                financial assistance also may not, in providing services funded by
                the Department of Justice, discriminate against a program
                beneficiary or prospective program beneficiary on the basis of
                religion, a religious belief, a refusal to hold a religious belief,
                or a refusal to attend or participate in a religious practice.
                DEPARTMENT OF LABOR
                 For the reasons set forth in the preamble, DOL amends part 2 of
                title 29 of the Code of Federal Regulations as follows:
                PART 2--GENERAL REGULATIONS
                0
                46. The authority citation for part 2 is revised to read as follows:
                 Authority: 5 U.S.C. 301; E.O. 13198, 66 FR 8497, 3 CFR, 2001
                Comp., p. 750; E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258;
                E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273; E.O. 13831, 83
                FR 20715, 3 CFR, 2018 Comp., p. 806; 42 U.S.C. 2000bb et seq.
                Subpart D--Equal Treatment in Department of Labor Programs for
                Faith-Based and Community Organizations; Protection of Religious
                Liberty of Department of Labor Social Service Providers and
                Beneficiaries
                0
                47. Amend Sec. 2.31 by revising paragraphs (a) introductory text and
                (a)(2) and adding paragraph (h) to read as follows:
                Sec. 2.31 Definitions.
                * * * * *
                 (a) The term Federal financial assistance means assistance that
                non-Federal entities (including State and local governments) receive or
                administer in the form of grants, contracts, loans, loan guarantees,
                property, cooperative agreements, direct appropriations, or other
                direct or indirect assistance, but does not include a tax credit,
                deduction, or exemption, nor the use by a private participant of
                assistance obtained through direct benefit programs (such as
                Supplemental Nutrition Assistance Program, social security, pensions).
                Federal financial assistance may be direct or indirect.
                * * * * *
                 (2) The term indirect Federal financial assistance or Federal
                financial assistance provided indirectly means that the choice of the
                service 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:
                 (i) The Government program through which the beneficiary receives
                the voucher, certificate, or other similar means of Government-funded
                payment is neutral toward religion; and
                 (ii) The organization receives the assistance as a result of a
                genuine, independent choice of the beneficiary.
                * * * * *
                 (h) The term religious exercise has the meaning given to the term
                in 42 U.S.C. 2000cc-5(7)(A).
                0
                48. Revise Sec. 2.32 to read as follows:
                Sec. 2.32 Equal participation of faith-based organizations.
                 (a) Faith-based organizations must be eligible, on the same basis
                as any other organization and considering any reasonable accommodation,
                to seek DOL support or participate in DOL programs for which they are
                otherwise eligible. DOL and DOL social service intermediary providers,
                as well as State and local governments administering DOL support, must
                not discriminate for or against an organization on the basis of the
                organization's religious character, affiliation, or exercise, although
                this requirement does not preclude DOL, DOL social service providers,
                or State or local governments administering DOL support from
                accommodating religion in a manner consistent with the Religion Clauses
                of the First Amendment to the Constitution. In addition, because this
                rule does not affect existing constitutional requirements, DOL, DOL
                social service providers (insofar as they may otherwise be subject to
                any constitutional requirements), and State and local governments
                administering DOL support must continue to comply with otherwise
                applicable constitutional principles, including, among others, those
                articulated in the Establishment, Free Speech, and Free Exercise
                Clauses of the First Amendment to the
                [[Page 82141]]
                Constitution. Notices and announcements of award opportunities and
                notices of award and contracts shall include language substantially
                similar to that in appendices A and B, respectively, to this part.
                 (b) A faith-based organization that is a DOL social service
                provider retains its autonomy; right of expression; religious
                character; and independence from Federal, State, and local governments
                and must be permitted to continue to carry out its mission, including
                the definition, development, practice, and expression of its religious
                beliefs. Among other things, such a faith-based organization must be
                permitted to:
                 (1) Use its facilities to provide DOL-supported social services
                without concealing, removing, or altering religious art, icons,
                scriptures, or other religious symbols from those facilities; and
                 (2) Retain its authority over its internal governance, including
                retaining religious terms in its name, selecting its board members and
                employees on the basis of their acceptance of or adherence to the
                religious requirements or standards of the organization, and including
                religious references in its mission statements and other governing
                documents.
                 (c) A grant document, contract or other agreement, covenant,
                memorandum of understanding, policy, or regulation that is used by DOL,
                a State or local government administering DOL support, or a DOL social
                service intermediary provider must not require faith-based
                organizations to provide assurances or notices where they are not
                required of non-faith-based organizations. Any restrictions on the use
                of financial assistance under a grant shall apply equally to faith-
                based and non-faith-based organizations. All organizations, including
                religious ones that are DOL social service providers, must carry out
                DOL-supported activities, subject to any required or appropriate
                religious accommodation, in accordance with all program requirements,
                including those prohibiting the use of direct DOL support for
                explicitly religious activities (including worship, religious
                instruction, or proselytization). A grant document, contract or other
                agreement, covenant, memorandum of understanding, policy, or regulation
                that is used by DOL, a State or local government, or a DOL social
                service intermediary provider in administering a DOL social service
                program must not disqualify organizations from receiving DOL support or
                participating in DOL programs because such organizations are motivated
                or influenced by religious faith to provide social services, or because
                of their religious character or affiliation, or lack thereof, on
                grounds that discriminate against organizations on the basis of the
                organizations' religious exercise.
                 (d) For purposes of this subpart, to discriminate against an
                organization on the basis of the organization's religious exercise
                means to disfavor an organization, including by failing to select an
                organization, disqualifying an organization, or imposing any condition
                or selection criterion that otherwise disfavors or penali