Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82037 

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, 

Lynn.Mahaffie@ed.gov. 

• 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, emily.tasman@usda.gov. 

• Agency for International 

Development: Brian Klotz, Deputy 

Director, Center for Faith & Opportunity 

Initiatives, 202–712–0217, bklotz@

usaid.gov. 

• 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, EO_13831@ojp.usdoj.gov. 

• Department of Labor: Mark Zelden, 

Director, Centers for Faith & 

Opportunity Initiatives, 202–693–6017, 

Zelden.Mark.A@dol.gov. 

• 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 faithbased 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 

82038 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

1See DOL, Guidance Regarding Federal Grants 

and Executive Order 13798, https://www.dol.gov/ 

agencies/oasam/grants/religious-freedomrestoration-act. 

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-andcomment 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. 

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-andcomment 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 FaithBased Organizations, 85 FR 2974 (Jan. 

17, 2020); Uniform Administrative 

Requirements, Cost Principles, and 

Audit Requirements for Federal Awards, 

Direct Grant Programs, StateAdministered 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 faithbased 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 faithbased 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 Agencyfunded 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 wellestablished 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 

82040 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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. 

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 faithbased 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 faithbased organization may not discriminate 

against beneficiaries on certain religious 

bases; 

• 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 Agencyfunded 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 wellestablished 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 renotice 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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. SimmonsHarris 

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 ‘‘FaithBased 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 faithbased 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 faithbased organizations should be taxed. 

Several commenters supported the 

proposed rules because, they said, faithbased 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 faithbased 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 faithbased 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 faithbased 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 

82042 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

3See 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’’). 

4This 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. 

based on religious character when 

participating in the Agencies’ programs. 

For example, some commenters noted 

that the prior rule forced only faithbased 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

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. 

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 taxexempt 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 taxexempt secular organizations and, as 

discussed in Part III.G.2 below, to faithbased 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. 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82043 

5See, 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’’). 

6 Memorial and Remonstrance (charging that the 

1784 bill ‘‘violates equality by subjecting some to 

peculiar burdens’’ and ‘‘by granting to others 

peculiar exemptions’’). 

7See, 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[.]’’). 

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

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

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 faithbased 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 deemphasizes, disfavors, or harms 

beneficiaries at the expense of faithbased 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 faithbased 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 

82044 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 faithbased 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 faithbased 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 faithbased 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82045 

8See, 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’’). 

9See, 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). 

independent merit. Additionally, to the 

extent the comment about the bipartisan 

process was referring to the 2010 

President’s Advisory Council on FaithBased 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)). 

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 faithbased 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 FaithBased 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-andreferral requirements of Executive Order 

13559 as striking the right balance 

between ensuring the continuation of 

public-private partnerships with faithbased 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. 

82046 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 reestablish 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-andreferral 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 ‘‘noticeand-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 faithbased 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-finalreport.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 

82048 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 noticeand-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 faithbased 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 faithbased 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-andreferral 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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-andreferral 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, 

82050 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

10The 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 (§ 16.4(a), 

(g), (h)). 

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/. 

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 faithbased 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—faithbased 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—faithbased 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. 

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 faithbased 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. 

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 faithbased 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 religionbased 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 faithbased 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 lowincome 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 faithbased 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 faithbased 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 

82052 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 likeminded 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 faithbased 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-andreferral 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-andreferral requirements. The Agencies do 

not find this speculation persuasive. 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82053 

12 Justice in Aging, LGBT Older Adults in LongTerm Care Facilities: Stories from the Field 28 

(updated June 2015), 

www.justiceinaging.org.customers.tigertech.net/wpcontent/uploads/2015/06/Stories-from-theField.pdf. 

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 faithbased 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 faithbased 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 inperson 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

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 Governmentfunded 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. 

82054 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

13See, 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’’). 

14Sandy 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. 

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). 

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. KaeoTomaselli 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82055 

15Office 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. 

16Sejal 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/widespreaddiscrimination-continues-shape-lgbt-peoples-livessubtle-significant-ways/. 17American Atheists, Reality Check: Being 

Nonreligious in America 23–24 & fig.14 (2019), 

https://static1.squarespace.com/static/ 

5d824da4727dfb5bd9e59d0c/t/5ec6d6d8e8da850b

30521353/1590089442015/Reality+Check+-+Being+

Nonreligious+in+America. 

18Shabab 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-accessinghealth-care/. 

19See 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. 

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. 

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. 

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

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. 

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 genderbased 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

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 governmentfunded 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 

82056 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

20See 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 LongTerm Care Facilities: Stories from the Field 

(updated June 2015), 

www.justiceinaging.org.customers.tigertech.net/wpcontent/uploads/2015/06/Stories-from-theField.pdf. 

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. 

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-andreferral 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 culturallycompetent support services. 

• A student who identifies as LGBTQ 

or who is a child of LGBTQ parents 

might be confronted with open antiLGBTQ 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. 

82058 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

22See, 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). 

23See, 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/BhutaneseMental-Health-Assessment-Nepal-23-March_0.pdf. 

• 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 criminaljustice 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 KaeoTomaselli 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-andreferral 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. 

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— 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82059 

24See Refugee Health Technical Assistance 

Center, Suicide Prevention, https://

refugeehealthta.org/physical-mental-health/mentalhealth/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-preventsuicide-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 SuicideRelated 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/. 

26See, 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). 

27See American Atheists, Reality Check: Being 

Nonreligious in America (2020), https://

static1.squarespace.com/static/5d824da4727

dfb5bd9e59d0c/t/5ec6d6d8e8da850b30521353/ 

1590089442015/Reality+Check+-+Being+

Nonreligious+in+America (referenced in the 

comments as unpublished and reviewed by the 

Agencies subsequent to publication). 

28For 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/pitand-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. 

29See, e.g., American Atheists, Reality Check: 

Being Nonreligious in America (2020), https://

static1.squarespace.com/static/5d824da4727

dfb5bd9e59d0c/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/interventionsresources/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-livingstandards-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/widespreaddiscrimination-continues-shape-lgbt-peoples-livessubtle-significant-ways/; Chapin Hall, Missed 

Opportunities: Youth Homelessness in America 10 

(2017), https://voicesofyouthcount.org/wp-content/ 

uploads/2017/11/VoYC-National-Estimates-BriefChapin-Hall-2017.pdf (mentioning the need to 

identify at-risk youth and initiate ‘‘service referrals’’ 

to an initial provider, with no mention of faithbased 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/ 

Continued 

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. 

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

The American Atheists Survey is even 

less relevant.27 In addition to the 

general points that apply to many 

studies, that study analyzed selfreported ‘‘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. 

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

82060 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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/wpcontent/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-lgbtolder-adults.pdf (indicating that LGBT advocates 

should provide information and referrals, including 

to ‘‘local LGBT-friendly experts’’). 

30See, 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). 

31See, 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. 

32See, 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’’). 

33Heather 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. 

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 noticeand-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 noticeand-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 indirectaid 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 noticeand-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 firstperson 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. 

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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82061 

34See, 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. 

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. 

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-andreferral 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. 

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 nonfaith-based providers as well as faithbased 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 noticeand-referral requirements should be 

removed because they imposed unfair 

and discriminatory burdens on faithbased 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 noticeand-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 faithbased organizations based on that status. 

Some commenters argued that strict 

scrutiny would apply to the notice-andreferral requirements under Trinity 

Lutheran—both as unequal treatment 

and as special burdens—because those 

requirements were imposed on faithbased, but not secular, organizations. 

Some of these commenters added that 

this unequal treatment stigmatized faithbased providers as inferior, offensive, or 

‘‘second class citizens.’’ Another 

commenter added that these 

82062 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

35See, 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). 

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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82063 

36See 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). 37 81 FR at 19406–09 (ED, §§ 3474.15(c)(1), 

75.712, 76.712)); id. at 19411 (DHS, § 19.6(a)); id. at 

19414 (USDA, § 16.4(f)); id. at 19417 (HUD, 

§ 5.109(g)); id. at 19420 (DOJ, § 38.6(c)); id. at 19423 

(DOL, 29 CFR 2.34(a)); id. at 19425 (VA, § 50.2(a); 

id. at 19428 (HHS, § 87.3(i)(1)); see also 81 FR at 

19406–09 (ED, §§ 3474.15(c)(1), 75.713, 76.713 

(applying referral requirement to only ‘‘a faithbased organization’’)). 

38 81 FR at 19407–09 (ED, §§ 75.713(b)(1), 

76.713(b)(1)); id. at 19412 (DHS, § 19.7(b)); id. at 

19414 (USDA, § 16.4(g)(1)); id. at 19417 (HUD, 

§ 5.109(g)(3)(ii)); id. at 19421 (DOJ, § 38.6(d)(2)); id. 

at 19423 (DOL, § 2.35(b)); id. at 19425 (VA, 

§ 50.3(b)); id. at 19428 (HHS, § 87.3(j)). 

39Espinoza, 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’’). 

‘‘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’ . . . .’’). 

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

The Agencies also disagree that Locke 

necessarily implies that the notice-andreferral 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 noticeand-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 noticeand-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 statusbased 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. 

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 

82064 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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-andreferral 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 noticeand-referral requirements is arbitrary 

and capricious. 

Changes: None. 

Affected Regulations: None. 

b. Substantial Burdens 

Summary of Comments: Some 

commenters argued that the notice-andreferral requirements imposed, or could 

impose, substantial burdens on faithbased 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-andreferral 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. 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82065 

40See 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’’). 

41See 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). 

42See, 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.’’). 

43Thomas, 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.’’). 

44Sherbert 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.’’). 

Several commenters cited RFRA cases 

to discredit the notion that the noticeand-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.’’ 

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-andreferral 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). 

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. 

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 

82066 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

45Thomas, 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.’’). 

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’’). 

As mentioned above, some 

commenters argued that the notice-andreferral 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. 

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 contextspecific 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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-andreferral 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 noticeand-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 thirdparty 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-andVerDate Sep<11>2014 19:26 Dec 16, 2020 Jkt 253001 PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 E:\FR\FM\17DER2.SGM 17DER2
82068 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 likeminded 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-governmentimposed processes were sufficient for 

beneficiaries to obtain referrals, without 

the need to impose the burden on faithbased 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 noticeand-referral requirements could impose 

a substantial burden. To be clear, the 

Agencies are not saying that the noticeand-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 complicitybased 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-andreferral 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 faithbased 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. 290kk1(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-andreferral requirements on all religious 

social service providers would in all 

cases serve a compelling government 

interest. 

Changes: None. 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82069 

46See, 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). 

47See, 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’’). 

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 faithbased 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 factspecific 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-andreferral 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-andreferral 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-andreferral 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

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 

82070 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

48See 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)). 

49See 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). 

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 faithbased 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-andreferral 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). 

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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82071 

50Cf. 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). 

51See, 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’’). 

52See, e.g., Texas Monthly, 489 U.S. at 18 n.8; see 

also Cutter, 544 U.S. at 713 (‘‘[T]here is room for 

Continued 

or maintain regulations that go right up 

to the line of what courts would find 

acceptable. 

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). 

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-andreferral 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 noticeand-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 

82072 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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)). 

53See, 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). 

54Hobby 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.’’). 

55See 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’’). 

56Kiryas 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)). 

57See, 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). 

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 thirdparty 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

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. 

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. 

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 governmentimposed burdens on religious exercise 

through accommodations available to all 

religions equally.57 As in Amos, this 

final rule alleviates the Governmentimposed burdens of the notice-andreferral requirements and applies 

equally to all religious organizations. 

Indeed, removal of the notice-andreferral 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. 

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. SimmonsHarris, 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 tuitionassistance 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 tuitionassistance 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 nonreligious 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 

82074 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

58Cf. 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.’’). 

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 faithbased 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 indirectaid 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 indirectaid 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

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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 faithbased 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 faithbased 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. Faithbased 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 

82076 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

59See, 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). 

60See 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 

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. 

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 faithbased 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82077 

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 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. 

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 

82078 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 governmentfunded 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 faithbased 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 wellbeing 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 faithbased 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 faithbased 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 faithbased 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 taxpayerfunded 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 

82080 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

61See Frank J. Bewkes et al., Center for American 

Progress, Welcoming All Families (Nov. 20, 2018) 

https://www.americanprogress.org/issues/lgbtqrights/reports/2018/11/20/461199/welcoming-allfamilies. 

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 faithbased 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. 

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. lll, *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. 

lll, *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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82081 

62See 2 CFR 200.102 (OMB uniform guidance for 

executive branch agencies). 

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 RFRAbased process for employment 

exemptions was beyond the scope of the 

2016 final rule). 

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-andreferral 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, 

82082 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 faithbased 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 contextdependent, 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/worldmiddle-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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82083 

63See, 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’’). 

64For 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 

Continued 

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 nonsectarian 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. MorrisseyBerru, 140 S. Ct. 2049 (2020); HosannaTabor 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). 

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

82084 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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.’’ 

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. 

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 faithbased 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 faithbased 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 faithbased 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82085 

65See 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’’). 

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

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 

82086 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 brightline 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 RFRArelated 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 faithbased 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 noneconomic 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 

82088 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 faithbased 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 faithbased 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 noneconomic 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 faithbased 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 faithbased 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. 

82090 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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, 

§ 19.3(e)); id. at 2901 (USDA, § 16.3(a)); 

id. at 2918 (USAID, § 205.1(a)); id. at 

2925 (DOJ, § 38.4(a)); id. at 2933 (DOL, 

§ 2.32(a)); id. at 2942 (VA, § 50.2(a)); id. 

at 2979 (HHS, § 87.3(a)); id. at 8220 

(HUD, § 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, § 19.3(b), 

§ 19.4(c)); id. at 2901 (USDA, § 16.3(d)); 

id. at 2925 (DOJ § 38.5(d)); id. at 2918 

(USAID, § 205.1(f)); id. at 2933 (DOL, 

§ 2.32(c)); id. at 2942 (VA, § 50.2(e)); id. 

at 2981 (HHS, § 87.3(e)); id. at 3201 (ED, 

§ 3474.15(b)(2), (b)(4)); id. at 3203–04 

(ED, § 75.52(a)(2), (a)(4), § 76.52(a)(2), 

(a)(4)); id. at 8220 (HUD, § 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 faithbased 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 faithbased 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82091 

66See 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). 

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 nonreligious 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 faithbased 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. 

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 cre`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 faithbased 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. 

82092 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 taxexempt 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 selfcertifying 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. 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 

82094 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 faithbased 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 faithbased 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 CoatsSnowe 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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-faithbased 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 faithbased 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 faithbased 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 

82096 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 preexisting 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 faithbased 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82097 

67The 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. 

effect to be considered in the costbenefit 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

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 faithbased 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 

82098 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

68The discussion in Part II.H.2.b is solely on 

behalf of the three Agencies: DHS, DOJ, and HUD. 

the case law in addition to the ordinary 

meaning of the words. 

The Agencies agree with commenters 

that this change makes clear that faithbased 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 contextspecific 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

As noted, DHS, DOJ, and HUD 

proposed to make clear that a faithbased 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82099 

69United 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-StrategicPlan-to-Prevent-and-End-Homelessness.pdf. 

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 wellbeing. 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 faithbased 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. 

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 

82100 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

70USICH, Opening Doors: Federal Strategic Plan 

to Prevent and End Homelessness, https://

www.usich.gov/resources/uploads/asset_library/ 

USICH_OpeningDoors_Amendment2015_

FINAL.pdf. 

71USICH, Expanding the Toolbox: The Whole-ofGovernment 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-regionallistening-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)). 

72HHS, Overview, About Ending the HIV 

Epidemic: Plan for America, https://www.hiv.gov/ 

federal-response/ending-the-hiv-epidemic/overview. 

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, faithbased, 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 faithbased 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: 

• 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, faithbased 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

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-strategy20180917/508compliant.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: 

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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82101 

73Cf. 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)). 

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 faithbased 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-andcomment 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 HispanicServing 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). 

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 

82102 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

74See, 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))). 

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. 

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 faithbased social service providers refer 

beneficiaries objecting to receiving 

services from them to an alternative 

provider and the requirement that faithbased 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82103 

75Christy 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/wpcontent/uploads/Michigan-Economic-Impact-May2019.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/wpcontent//Arizona-Impact-Discrimination-March2018.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-lgbtdiscrimination/; 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/wpcontent//Impact-of-Stigma-and-DiscriminationReport-April-2017.pdf. 

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 noneconomic 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. 

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 

82104 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

were not harmed by the notice-andreferral 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 faithbased 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 faithbased 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 noticeand-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-andreferral 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82105 

76Michigan Study at 41–42; Arizona Study at 36– 

37; Florida Study at 40–41; Texas Study at 39–40. 

77Michigan Study at 16 n.67; Arizona Study at 12 

n.47; Florida Study at 13 n.43; Texas Study at 13 

n.50. 

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-andreferral 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 faithbased 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. 

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-andreferral 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 faithbased 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 noticeand-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 nonprovision 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 

82106 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 faithbased 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-andreferral 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, faithbased 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 faithbased 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 reevaluated 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 noticeand-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 faithbased 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 faithbased 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 faithbased 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 wellestablished 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 noticeand-referral requirements promotes the 

Administration’s deregulatory agenda. 

The commenter argued that doing so 

privileges policy goals above religious 

freedom. 

Response: Removing the notice-andreferral 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-andreferral 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 

82108 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

78The 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 HispanicServing 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. 

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

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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82109 

79 2 CFR 3474.15(f); 34 CFR 75.52(e); 34 CFR 

76.52(e). 

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). 

82 137 S. Ct. 2012, 2019 (2017) (internal quotation 

marks omitted) (‘‘denying a generally available 

Continued 

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. 

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 antiLGBTQ hostility by a Departmentfunded 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

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 faithbased 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 

82110 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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.’’). 

83See 34 CFR 75.52(c)(3)(ii) and 34 CFR 

76.52(c)(3)(ii). 

84See, 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). 

86 Id. 

87 85 FR 3190, 3191–96, 3200–10. 

88 Lynch v. Donnelly, 465 U.S. 668, 673 (1984). 

89 Id. 

90 2 CFR 3474.15(b). 

91See, e.g., 34 CFR 75.532; 34 CFR 76.532. 

92 137 S. Ct. 2021–25. 

93Zelman v. Simmons-Harris, 536 U.S. 639, 652 

(2002). 

94Public Law 96–88, sec. 103(b), 93 Stat. 668, 

670–71 (1979). 

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. 

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

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

Lastly, no wall of separation between 

church and state is offended by the new 

regulations. Rather, preventing faithbased 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. 

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

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

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

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82111 

95Office of Postsecondary Education, U.S. 

Department of Education, Notice of Proposed 

Rulemaking, 84 FR 67778 (Dec. 11, 2019). 

96 85 FR 3201, 3204, 3205. 

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 §§ 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

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. 

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 

82112 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 USAIDspecific 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 ‘‘FaithBased 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). 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82113 

97U.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. 

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-andreferral 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. 

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. 

82114 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 FaithBased 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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-andreferral 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. 

82116 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 faithbased 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 noticeand-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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 nondirective 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 nondirective 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 nondirective 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 postconception 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 nondirective 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 § 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 

82118 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

98Section 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)). 

99See, 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 § 1554 also suggests that this section was not 

intended to restrict HHS interpretations of 

provisions outside the ACA. If Congress intended 

§ 1554 to have sweeping effects on all HHS 

regulations, even those unrelated to the ACA, it 

would have stated that § 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)). 

‘‘[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

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 § 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 carerelated 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 faithbased 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 § 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 

82120 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

100See, e.g., Lisa McCracken, Faith and the NotFor-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/wpcontent/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. 

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 faithbased 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 

§ 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82121 

101See, 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). 

provider’s religious belief,’’ as some 

commenters claimed. 

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, faithbased 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 faithbased 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

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 faithbased 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 

82122 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

102Bureau of Labor Statistics CPI data published 

on June 10, 2020, https://www.bls.gov/news.release/ 

cpi.htm. 103Number of faith-based organizations that are 

DOL grant recipients in FY2019. 104Average number of faith-based organizations 

that are HHS grant recipients in FY2019 and 

FY2020. 105Number of faith-based organizations that are 

USCIS grant recipients as of June 30, 2020. 

106Number of faith-based organizations that are 

USDA grant recipients in FY2019. 107Number of faith-based organizations that are 

DOJ grant recipients in FY2019. 108HUD reported no faith-based organizations 

affected by this final rule. 109USAID 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. 

111A 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. 

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. 

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

Agencies 

Number of 

faith-based 

organizations 

Cost-savings 

per 

organization 

Annual 

cost-savings 

(A) (B) (C = A × 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82123 

112Since 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. 

113To 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. 

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 DOLregulated 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

TABLE 2—THE COST SAVINGS OF THE REMOVAL OF THE NOTICE REQUIREMENTS BY AGENCY

Agency 

Annual cost 

savings of the 

removal of the 

notice 

requirements 

(C) 

Total 

annualized 

cost savings at 

a 7 percent 

discounting 

Perpetual 

annualized 

cost savings at 

a 7 percent 

discounting 

(in 2016 

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 nonquantified 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 noticeand-referral requirements to provision 

of services, and because more faithbased 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. 

82124 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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, Perdiem 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 

■ 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. 

■ 2. Section 3474.15 is revised to read 

as follows: 

§ 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 faithbased 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 Departmentfunded activities, including those 

prohibiting the use of direct financial 

assistance to engage in explicitly 

religious activities. 

82126 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

(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 Departmentfunded 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 faithbased 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 wellestablished religions or sects in 

comparison with other religions or sects. 

■ 3. Section 3474.21 is added to read as 

follows: 

§ 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 

■ 4. The authority citation for part 75 

continues to read as follows: 

Authority: 20 U.S.C. 1221e–3 and 3474, 

unless otherwise noted. 

■ 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: 

§ 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. 

■ 6. Section 75.52 is revised to read as 

follows: 

§ 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 Departmentfunded 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 § 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, § 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 faithbased 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 

82128 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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. 

■ 7. Section 75.63 is added to read as 

follows: 

§ 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. 

§ 75.712 [Removed and Reserved] 

■ 8. Section 75.712 is removed and 

reserved. 

§ 75.713 [Removed and Reserved] 

■ 9. Section 75.713 is removed and 

reserved. 

■ 10. Section 75.714 is revised to read 

as follows: 

§ 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, 

§§ 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. 

■ 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. 

■ 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 

■ 13. The authority citation for part 76 

continues to read as follows: 

Authority: 20 U.S.C. 1221e–3 and 3474, 

unless otherwise noted. 

■ 14. Section 76.52 is revised to read as 

follows: 

§ 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82129 

use of subgrant funds shall apply 

equally to faith-based and non-faithbased 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 faithbased organizations from applying for or 

receiving subgrants under a StateAdministered 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 § 76.532 apply to 

a faith-based organization that receives 

a subgrant from a State under a StateAdministered 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 StateAdministered 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 § 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 faithbased 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. 

82130 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

(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. 

■ 15. Section 76.53 is added to subpart 

A to read as follows: 

§ 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. 

§ 76.712 [Removed and Reserved] 

■ 16. Section 76.712 is removed and 

reserved. 

§ 76.713 [Removed and Reserved] 

■ 17. Section 76.713 is removed and 

reserved. 

■ 18. Section 76.714 is revised to read 

as follows: 

§ 76.714 Subgrants, contracts, and other 

agreements with faith-based organizations. 

If a grantee under a StateAdministered 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, 

§§ 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 

■ 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. 

■ 20. Amend § 19.2 by: 

■ a. Revising the definition of ‘‘Direct 

Federal financial assistance or Federal 

financial assistance provided directly’’; 

■ b. In the definition of ‘‘Financial 

assistance,’’ adding a sentence to the 

end; 

■ c. Revising the definition of ‘‘Indirect 

Federal financial assistance or Federal 

financial assistance provided 

indirectly’’; and 

■ d. Adding a definition for ‘‘Religious 

exercise’’ in alphabetical order. 

The revisions and addition read as 

follows: 

§ 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). 

* * * * * 

■ 21. Amend § 19.3 by revising 

paragraphs (a), (b), and (e) and adding 

paragraph (f) to read as follows: 

§ 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, 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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. 

■ 22. Amend § 19.4 by revising 

paragraphs (b) and (c) to read as follows: 

§ 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. 

* * * * * 

§ 19.5 [Amended] 

■ 23. Amend § 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’’. 

■ 24. Revise § 19.6 to read as follows: 

§ 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. 

§ 19.7 [Removed and Reserved] 

■ 25. Remove and reserve § 19.7. 

■ 26. Revise § 19.8 to read as follows: 

§ 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 § 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 

82132 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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. 

■ 27. Add § 19.11 to read as follows: 

§ 19.11 Nondiscrimination among faithbased 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. 

■ 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. 

■ 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 

■ 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. 

■ 31. Amend § 16.1 by redesignating 

paragraph (b) as paragraph (c) and 

adding a new paragraph (b) to read as 

follows: 

§ 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. 

* * * * * 

■ 32. Revise § 16.2 to read as follows: 

§ 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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). 

■ 33. Revise § 16.3 to read as follows: 

§ 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, 

82134 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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. 

■ 34. Revise § 16.4 to read as follows: 

§ 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. 

■ 35. Revise § 16.5 to read as follows: 

§ 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. 

§ 16.6 [Removed] 

■ 36. Remove § 16.6. 

■ 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. 

■ 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 

■ 39. The authority citation for part 205 

continues to read as follows: 

Authority: 22 U.S.C. 2381(a). 

■ 40. In § 205.1, revise paragraphs (a), 

(c), (f), (g) and add paragraph (l) to read 

as follows: 

§ 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, 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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, USAIDfunded 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 faithbased 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 

■ 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. 

■ 42. Amend § 5.109 by: 

■ a. Revising paragraph (a); 

■ b. In paragraph (b), revising the 

definition of ‘‘Indirect Federal financial 

assistance’’ and adding a definition for 

‘‘Religious exercise’’ in alphabetical 

order; 

■ c. Revising paragraphs (c) and (d); 

■ d. Adding a sentence to the end of 

paragraph (e); 

■ e. Removing paragraph (g); 

■ f. Redesignating paragraph (h) as 

paragraph (g) and revising it; and 

■ g. Adding a new paragraph (h) and 

paragraphs (l) and (m). 

The revisions and additions read as 

follows: 

§ 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 

82136 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 Governmentfunded 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 faithbased 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 faithbased 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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. 

■ 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 

■ 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. 

§ 92.508 [Amended] 

■ 45. Amend § 92.508 by removing 

paragraph (a)(2)(xiii). 

Department of Justice 

■ 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. 

§ 38.1 Purpose. 

The purpose of this part is to 

implement Executive Order 13279, 

Executive Order 13559, and Executive 

Order 13831. 

§ 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 subaward, 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. 

§ 38.3 Definitions. 

As used in this part: 

(a)(1) ‘‘Direct Federal financial 

assistance’’ or ‘‘Federal financial 

82138 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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 ‘‘passthrough 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). 

§ 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. 

§ 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 taxexempt 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 passthrough entity receiving funds under 

any Department program or service shall 

construe these provisions in such a way 

as to advantage or disadvantage faithbased organizations affiliated with 

historic or well-established religions or 

sects in comparison with other religions 

or sects. 

§ 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. 

§ 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 

82140 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

the intermediary will comply with this 

part and effectively monitor the actions 

of its recipients. 

§ 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 

■ 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 

■ 47. Amend § 2.31 by revising 

paragraphs (a) introductory text and 

(a)(2) and adding paragraph (h) to read 

as follows: 

§ 2.31 Definitions. 

* * * * * 

(a) The term Federal financial 

assistance means assistance that nonFederal 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). 

■ 48. Revise § 2.32 to read as follows: 

§ 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 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 DOLsupported 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 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 (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. 

§ 2.33 [Amended] 

■ 49. Amend § 2.33 as follows: 

■ a. In the second sentence of paragraph 

(a), by adding ‘‘and may require 

attendance at all activities that are 

fundamental to the program’’ after 

‘‘organization’s program’’. 

■ b. In paragraph (c), by adding ‘‘and 

further amended by Executive Order 

13831’’ after ‘‘13559’’. 

§§ 2.34 and 2.35 [Removed and Reserved] 

■ 50. Remove and reserve §§ 2.34 and 

2.35. 

■ 51. Revise § 2.37 to read as follows: 

§ 2.37 Effect of DOL support on Title VII 

employment nondiscrimination 

requirements and on other existing 

statutes. 

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 the 

organization receives direct or indirect 

DOL support. An organization 

qualifying for such exemption may 

make its employment decisions on the 

basis of an applicant’s or employee’s 

acceptance of or adherence to the 

religious requirements or standards of 

the organization, but not on the basis of 

any other protected characteristic. Some 

DOL programs, however, were 

established through Federal statutes 

containing independent statutory 

provisions requiring that recipients 

refrain from discriminating on the basis 

of religion. Accordingly, to determine 

the scope of any applicable 

requirements, including in light of any 

additional constitutional or statutory 

protections for employment decisions 

that may apply, recipients and potential 

recipients should consult with the 

appropriate DOL program official or 

with the Civil Rights Center, U.S. 

Department of Labor, 200 Constitution 

Avenue NW, Room N4123, Washington, 

DC 20210, (202) 693–6500. Individuals 

with hearing or speech impairments 

may access this telephone number via 

TTY by calling the toll-free Federal 

Information Relay Service at 1–800– 

877–8339. 

■ 52. Amend § 2.38 by revising 

paragraphs (b)(3) and (4) and adding 

(b)(5) to read as follows: 

§ 2.38 Status of nonprofit organizations. 

* * * * * 

(b) * * * 

(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 

(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 national parent 

organization that the applicant is a local 

nonprofit affiliate of the organization; 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. 

§ 2.39 [Amended] 

■ 53. Amend § 2.39 by removing ‘‘not 

on the basis of religion or religious 

belief or lack thereof’’ and adding in its 

place ‘‘not on the basis of the religious 

affiliation of a recipient organization or 

lack thereof’’. 

■ 54. Add § 2.40 to read as follows: 

§ 2.40 Nondiscrimination among faithbased organizations. 

Neither DOL nor any State or local 

government or other entity receiving 

financial assistance under any DOL 

program or service shall construe the 

provisions of this part 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. 

■ 55. Add § 2.41 to read as follows: 

82142 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

§ 2.41 Severability. 

Should a court of competent 

jurisdiction hold any provision(s) of this 

subpart to be invalid, such action will 

not affect any other provision of this 

subpart. 

■ 56. Revise appendices A and B to read 

as follows: 

Appendix A to Part 2—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 subpart 

D of this part and 42 U.S.C. 2000bb et seq. 

DOL will not, in the selection of recipients, 

discriminate for or 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 financial assistance from DOL to 

engage in any explicitly religious activities 

except where consistent with the 

Establishment Clause of the First 

Amendment to the Constitution and any 

other applicable requirements. Such an 

organization also may not, in providing 

services financially assisted by DOL, 

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 2—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 

First Amendment to 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 DOL to 

engage in any explicitly religious activities 

except when consistent with the 

Establishment Clause of the First 

Amendment and any other applicable 

requirements. Such an organization also may 

not, in providing services financially assisted 

by DOL, 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 VETERANS 

AFFAIRS 

For the reasons set forth in the 

preamble, VA amends parts 50, 61, and 

62 of title 38 of the CFR as follows: 

■ 57. Part 50 is revised to read as 

follows: 

PART 50—EQUAL TREATMENT FOR 

FAITH BASED ORGANIZATIONS 

Sec. 

50.1 Definitions. 

50.2 Faith-based organizations and Federal 

financial assistance. 

Appendix A to Part 50—Notice or 

Announcement of Award Opportunities. 

Appendix B to Part 50—Notice of Award or 

Contract. 

Authority: 38 U.S.C. 501 and as noted in 

specific sections. 

§ 50.1 Definitions. 

(a) 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 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’’ 

or ‘‘Federal financial assistance 

provided indirectly.’’ 

(b) 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 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’’ 

within the meaning of the Establishment 

Clause of the First Amendment to the 

U.S. Constitution 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. 

(c) Federal financial assistance does 

not include a tax credit, deduction, 

exemption, guaranty contracts, or the 

use of any assistance by any individual 

who is the ultimate beneficiary under 

any such program. 

(d) 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. 

(e) Programs or services has the same 

definition as ‘‘social service program’’ in 

Executive Order 13279. 

(f) Recipient means a non-Federal 

entity that receives a Federal award 

directly from a Federal awarding agency 

to carry out an activity under a Federal 

program. The term recipient does not 

include subrecipients, but does include 

pass-through entities. 

(g) Religious exercise has the meaning 

given to the term in 42 U.S.C. 2000cc– 

5(7)(A). 

§ 50.2 Faith-based organizations and 

Federal financial assistance. 

(a) Faith-based organizations are 

eligible, on the same basis as any other 

organization and considering any 

permissible accommodation, to 

participate in any VA program or 

service. Neither the VA program nor any 

State or local government or other passthrough entity receiving funds under 

any VA program shall, in the selection 

of service providers, discriminate for or 

against an organization on the basis of 

the organization’s religious character, 

affiliation, or exercise. Notices or 

announcements of award opportunities 

and notices of award or contracts shall 

include language substantially similar to 

that in appendix A and B, respectively, 

to this part. 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 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82143 

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. 

(b) Organizations that receive direct 

financial assistance from a VA program 

may not engage in any 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 financial 

assistance from the VA program, or in 

any other manner prohibited by law. If 

an organization conducts such 

activities, the activities must be offered 

separately, in time or location, from the 

programs or services funded with direct 

financial assistance from the VA 

program, and participation must be 

voluntary for beneficiaries of the 

programs or services funded with such 

assistance. The use of indirect Federal 

financial assistance is not subject to this 

restriction. Nothing in this part restricts 

VA’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. 

(c) A faith-based organization that 

participates in programs or services 

funded by a VA program will 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, 

development, practice, and expression 

of its religious beliefs. A faith-based 

organization that receives direct Federal 

financial assistance may use space in its 

facilities to provide programs or services 

funded with financial assistance from 

the VA program without concealing, 

removing, or altering religious art, icons, 

scriptures, or other religious symbols. In 

addition, a faith-based organization that 

receives Federal financial assistance 

from a VA program does not lose the 

protections of law. Such a faith-based 

organization 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. 

Note 1 to paragraph (c): 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). 

(d) An 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 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 receiving 

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. 

(e) A faith-based organization is not 

rendered ineligible by its religious 

exercise or affiliation to access and 

participate in Department programs. No 

grant document, agreement, covenant, 

memorandum of understanding, policy, 

or regulation that is used by a VA 

program or a State or local government 

in administering Federal financial 

assistance from any VA program 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 VA programs or services, 

including organizations with religious 

character or affiliations, 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 

activities funded by any VA program, 

including those prohibiting the use of 

direct financial assistance to engage in 

explicitly religious activities. No grant 

document, agreement, covenant, 

memorandum of understanding, policy, 

or regulation that is used by VA or a 

State or local government in 

administering financial assistance from 

VA shall disqualify faith-based 

organizations from participating in the 

VA program’s 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 this part. 

(f) 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 direct or indirect 

Federal financial assistance from a VA 

program. 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. 

Some VA programs, however, contain 

independent statutory provision 

affecting a recipient’s ability to 

discriminate in employment. Recipients 

should consult with the appropriate VA 

program office if they have questions 

about the scope of any applicable 

requirement, including in light of any 

additional constitutional or statutory 

protections for employment decisions 

that may apply. 

(g) In general, VA programs do not 

require that a recipient, including a 

faith-based organization, obtain taxexempt status under section 501(c)(3) of 

the Internal Revenue Code to be eligible 

for funding under VA programs. Some 

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 that 

require organizations to have nonprofit 

status will specifically so indicate in the 

eligibility section of the solicitation. In 

addition, any solicitation 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 VA program office to 

determine the scope of any applicable 

requirements. In VA 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 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 

(g)(1) through (3) of this section if that 

item applies to a State or national parent 

organization, together with a statement 

82144 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

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)(2) 

through (4) of this section. 

(h) If a recipient contributes its own 

funds in excess of those funds required 

by a matching or grant agreement to 

supplement VA program-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 

provision of this part 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 part apply irrespective 

of whether such funds are commingled 

with Federal funds or segregated. 

(i) Decisions about awards of Federal 

financial assistance must be made on 

the basis of merit, not on the basis of the 

religious affiliation, or lack thereof, of a 

recipient organization, and must be free 

from political interference or even the 

appearance of such interference. 

(j) Neither VA nor any State or local 

government or other pass-through entity 

receiving funds under any VA 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. 

(k) If a pass-through entity, 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 passthrough entity must ensure compliance 

with the provisions of this part and any 

implementing regulations or guidance 

by the sub-recipient. If the pass-through 

entity is a non-governmental 

organization, it retains all other rights of 

a non-governmental organization under 

the program’s statutory and regulatory 

provisions. 

Appendix A to Part 50—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 and conscience freedom 

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 financial assistance from the 

Department to support or engage in any 

explicitly religious activities except where 

consistent with the Establishment Clause of 

the First Amendment and 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. 

Appendix B to Part 50—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 the 

Department 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 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 61—VA HOMELESS PROVIDERS 

GRANT AND PER DIEM PROGRAM 

■ 58. The authority citation for part 61 

continues to read as follows: 

Authority: 38 U.S.C. 501, 2001, 2002, 

2011, 2012, 2013, 2061, 2064. 

■ 59. Revise § 61.64 to read as follows: 

§ 61.64 Faith-based organizations. 

(a) Organizations that are faith-based 

are eligible, on the same basis as any 

other organization, to participate in VA 

programs under this part. 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 or religious belief or lack 

thereof. 

(b)(1) No organization may use direct 

financial assistance from VA under this 

part to pay for any of the following: 

(i) Explicitly religious activities such 

as, religious worship, instruction, or 

proselytization; or 

(ii) Equipment or supplies to be used 

for any of those activities. 

(2) For purposes of this section, 

‘‘Indirect financial assistance’’ means 

Federal financial assistance in which a 

service provider receives program funds 

through a voucher, certificate, 

agreement or other form of 

disbursement, as a result of the genuine, 

independent choice of a private 

beneficiary. ‘‘Direct Federal financial 

assistance’’ means Federal financial 

assistance received by an entity selected 

by the Government or a pass-through 

entity as defined in 38 CFR 50.1(d) to 

provide or carry out a service (e.g., by 

contract, grant, or cooperative 

agreement). References to ‘‘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’’ 

in this paragraph (b)(2). 

(c) Organizations that engage in 

explicitly religious activities, such as 

worship, religious instruction, or 

proselytization, must offer those 

services separately in time or location 

from any programs or services funded 

with direct financial assistance from 

VA, and participation in any of the 

organization’s explicitly religious 

activities must be voluntary for the 

beneficiaries of a program or service 

funded by direct financial assistance 

from VA. 

(d) A faith-based organization that 

participates in VA programs under this 

part will retain its independence from 

Federal, State, or 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 

financial assistance from VA under this 

part to support any explicitly religious 

activities, such as worship, religious 

instruction, or proselytization. Among 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82145 

other things, faith-based organizations 

may use space in their facilities to 

provide VA-funded services under this 

part, without concealing, removing, or 

altering religious art, icons, scripture, or 

other religious symbols. In addition, a 

VA-funded faith-based organization 

retains its authority over its internal 

governance, and it may retain religious 

terms in its organization’s name, select 

its board members and otherwise govern 

itself on a religious basis, and include 

religious reference in its organization’s 

mission statements and other governing 

documents. 

(e) An organization that participates 

in a VA program under this part shall 

not, in providing direct program 

assistance, discriminate against a 

program beneficiary or prospective 

program beneficiary regarding housing, 

supportive services, or technical 

assistance, on the basis of religion or 

religious belief. 

(f) If a State or local government 

voluntarily contributes its own funds to 

supplement federally funded activities, 

the State or local government has the 

option to segregate the Federal funds or 

commingle them. However, if the funds 

are commingled, this provision applies 

to all of the commingled funds. 

(g) To the extent otherwise permitted 

by Federal law, the restrictions on 

explicitly religious activities set forth in 

this section do not apply where VA 

funds are provided to faith-based 

organizations through indirect 

assistance as a result of a genuine and 

independent private choice of a 

beneficiary, provided the faith-based 

organizations otherwise satisfy the 

requirements of this part. A faith-based 

organization may receive such funds as 

the result of a beneficiary’s genuine and 

independent choice if, for example, a 

beneficiary redeems a voucher, coupon, 

or certificate, allowing the beneficiary to 

direct where funds are to be paid, or a 

similar funding mechanism provided to 

that beneficiary and designed to give 

that beneficiary a choice among 

providers. 

PART 62—SUPPORTIVE SERVICES 

FOR VETERAN FAMILIES PROGRAM 

■ 60. The authority citation for part 62 

continues to read as follows: 

Authority: 38 U.S.C. 501, 2044, and as 

noted in specific sections. 

■ 61. Revise § 62.62 to read as follows: 

§ 62.62 Faith-based organizations 

(a) Organizations that are faith-based 

are eligible, on the same basis as any 

other organization, to participate in the 

Supportive Services for Veteran 

Families Program under this part. 

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 or religious 

belief or lack thereof. 

(b)(1) No organization may use direct 

financial assistance from VA under this 

part to pay for any of the following: 

(i) Explicitly religious activities such 

as, religious worship, instruction, or 

proselytization; or 

(ii) Equipment or supplies to be used 

for any of those activities. 

(2) For purposes of this section, 

‘‘Indirect financial assistance’’ means 

Federal financial assistance in which a 

service provider receives program funds 

through a voucher, certificate, 

agreement or other form of 

disbursement, as a result of the genuine, 

independent choice of a private 

beneficiary. ‘‘Direct Federal financial 

assistance’’ means Federal financial 

assistance received by an entity selected 

by the Government or a pass-through 

entity as defined in 38 CFR 50.1(d) to 

provide or carry out a service (e.g., by 

contract, grant, or cooperative 

agreement). References to ‘‘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’’ 

in this paragraph (b)(2). 

(c) Organizations that engage in 

explicitly religious activities, such as 

worship, religious instruction, or 

proselytization, must offer those 

services separately in time or location 

from any programs or services funded 

with direct financial assistance from VA 

under this part, and participation in any 

of the organization’s explicitly religious 

activities must be voluntary for the 

beneficiaries of a program or service 

funded by direct financial assistance 

from VA under this part. 

(d) A faith-based organization that 

participates in the Supportive Services 

for Veteran Families Program under this 

part will retain its independence from 

Federal, State, or 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 

financial assistance from VA under this 

part to support any explicitly religious 

activities, such as worship, religious 

instruction, or proselytization. Among 

other things, faith-based organizations 

may use space in their facilities to 

provide VA-funded services under this 

part, without concealing, removing, or 

altering religious art, icons, scripture, or 

other religious symbols. In addition, a 

VA-funded faith-based organization 

retains its authority over its internal 

governance, and it may retain religious 

terms in its organization’s name, select 

its board members and otherwise govern 

itself on a religious basis, and include 

religious reference in its organization’s 

mission statements and other governing 

documents. 

(e) An organization that participates 

in a VA program under this part shall 

not, in providing direct program 

assistance, discriminate against a 

program beneficiary or prospective 

program beneficiary regarding housing, 

supportive services, or technical 

assistance, on the basis of religion or 

religious belief. 

(f) If a State or local government 

voluntarily contributes its own funds to 

supplement federally funded activities, 

the State or local government has the 

option to segregate the Federal funds or 

commingle them. However, if the funds 

are commingled, this provision applies 

to all of the commingled funds. 

(g) To the extent otherwise permitted 

by Federal law, the restrictions on 

explicitly religious activities set forth in 

this section do not apply where VA 

funds are provided to faith-based 

organizations through indirect 

assistance as a result of a genuine and 

independent private choice of a 

beneficiary, provided the faith-based 

organizations otherwise satisfy the 

requirements of this part. A faith-based 

organization may receive such funds as 

the result of a beneficiary’s genuine and 

independent choice if, for example, a 

beneficiary redeems a voucher, coupon, 

or certificate, allowing the beneficiary to 

direct where funds are to be paid, or a 

similar funding mechanism provided to 

that beneficiary and designed to give 

that beneficiary a choice among 

providers. 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

For the reasons set forth in the 

preamble, HHS amends parts 87 and 

1050 of title 45 of the CFR as follows: 

PART 87—EQUAL TREATMENT FOR 

FAITH-BASED ORGANIZATIONS 

■ 62. The authority citation for part 87 

is revised to read as follows: 

Authority: 5 U.S.C. 301; 42 U.S.C. 2000bb 

et seq. 

■ 63. Revise § 87.1 to read as follows: 

§ 87.1 Definitions. 

The following definitions apply for 

the purposes of this part. 

(a) Direct Federal financial assistance, 

Federal financial assistance provided 

directly, or direct funding means 

82146 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

financial assistance received by an 

entity selected by the Government or a 

pass-through entity (as defined in 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. 

(b) Directly funded means funded by 

means of direct Federal financial 

assistance. 

(c) 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. 

(d) 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. 

(e) 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. 

(f) Recipient means a non-Federal 

entity that receives a Federal award 

directly from a Federal awarding agency 

to carry out an activity under a Federal 

program. The term recipient does not 

include subrecipients, but does include 

pass-through entities. 

(g) Religious exercise has the meaning 

given to the term in 42 U.S.C. 2000cc– 

5(7)(A). 

■ 64. Revise § 87.3 to read as follows: 

§ 87.3 Faith-based organizations and 

Federal financial assistance. 

(a) Faith-based organizations are 

eligible, on the same basis as any other 

organization, and considering any 

permissible accommodation, to 

participate in any HHS awarding agency 

program or service for which they are 

otherwise eligible. The HHS awarding 

agency program or service shall provide 

such 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. Neither the HHS awarding 

agency nor any State or local 

government or other pass-through entity 

receiving funds under any HHS 

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. Notices or 

announcements of award opportunities 

and notices of award or contracts shall 

include language substantially similar to 

that in appendices A and B of this part. 

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 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. 

(b) Organizations that receive direct 

financial assistance from an HHS 

awarding agency may not engage in any 

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 financial assistance from the HHS 

awarding agency, or in any other 

manner prohibited by law. If an 

organization conducts such activities, 

the activities must be offered separately, 

in time or location, from the programs 

or services funded with direct financial 

assistance from the HHS awarding 

agency, and participation must be 

voluntary for beneficiaries of the 

programs or services funded with such 

assistance. The use of indirect Federal 

financial assistance is not subject to this 

restriction. Nothing in this part restricts 

HHS’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. 

(c) A faith-based organization that 

participates in HHS awarding-agency 

funded programs or services will 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, 

development, practice, and expression 

of its religious beliefs. A faith-based 

organization may use space in its 

facilities to provide programs or services 

funded with financial assistance from 

the HHS awarding agency without 

concealing, removing, or altering 

religious art, icons, scriptures, or other 

religious symbols. Such a faith-based 

organization 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. In addition, a faith-based 

organization that receives financial 

assistance from the HHS awarding 

agency does not lose the protections of 

law. 

Note 1 to paragraph (c): 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). 

(d) An organization, whether faithbased or not, that receives Federal 

financial assistance shall not, with 

respect to services or activities funded 

by such financial assistance, 

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, a faith-based organization 

receiving indirect Federal financial 

assistance need not modify any religious 

components or integration with respect 

to 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. 

(e) No grant document, agreement, 

covenant, memorandum of 

understanding, policy, or regulation 

used by an HHS awarding agency or a 

State or local government in 

administering Federal financial 

assistance from the HHS awarding 

agency shall require faith-based 

organizations to provide assurances or 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 82147 

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, whether faith-based or 

not, that participate in HHS awarding 

agency programs or services must carry 

out eligible activities in accordance with 

all program requirements (except where 

modified or exempted by any required 

or appropriate religious 

accommodations) including those 

prohibiting the use of direct Federal 

financial assistance to engage in 

explicitly religious activities. No grant 

document, agreement, covenant, 

memorandum of understanding, policy, 

or regulation used by an HHS awarding 

agency or a State or local government in 

administering Federal financial 

assistance from the HHS awarding 

agency shall disqualify faith-based 

organizations from participating in the 

HHS awarding agency’s 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 this part. 

(f) A faith-based organization’s 

exemption from the Federal prohibition 

on employment discrimination on the 

basis of religion, set forth in the Civil 

Rights Act of 1964, 42 U.S.C. 2000e–1 

and 2000e–2 and the Americans with 

Disabilities Act, 42 U.S.C. 12113(d)(2), 

is not forfeited when the faith-based 

organization receives direct or indirect 

Federal financial assistance from an 

HHS awarding agency. 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. 

Recipients should consult with the 

appropriate HHS awarding agency 

program office if they have questions 

about the scope of any applicable 

requirement, including in light of any 

additional constitutional or statutory 

protections or requirements that may 

apply. 

(g) In general, the HHS awarding 

agency 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 HHS 

awarding agency 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 that 

require organizations to have nonprofit 

status will specifically so indicate in the 

eligibility section of the solicitation. In 

addition, any solicitation 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 HHS awarding agency 

program office to determine the scope of 

any applicable requirements. In HHS 

awarding agency 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 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 

(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 any of paragraphs 

(g)(1) through (4) of this section. 

(h) If a recipient contributes its own 

funds in excess of those funds required 

by a matching or grant agreement to 

supplement HHS awarding agencysupported 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 part 

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 

part apply irrespective of whether such 

funds are commingled with Federal 

funds or segregated. 

(i) Decisions about awards of direct 

Federal financial assistance must be 

made on the basis of merit, not on the 

basis of the religious affiliation, or lack 

thereof, of a recipient organization, and 

must be free from political interference 

or even the appearance of such 

interference. 

(j) Neither the HHS awarding agency 

nor any State or local government or 

other pass-through entity receiving 

funds under any HHS awarding agency 

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. 

(k) If a pass-through entity, 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 passthrough entity must ensure compliance 

with the provisions of this part and any 

implementing regulations or guidance 

by the sub-recipient. If the pass-through 

entity is a non-governmental 

organization, it retains all other rights of 

a non-governmental organization under 

the program’s statutory and regulatory 

provisions. 

■ 65. Add § 87.4 to read as follows: 

§ 87.4 Severability. 

Any provision of this part held to be 

invalid or unenforceable by its terms, or 

as applied to any person or 

circumstance, shall be construed so as 

to continue to give maximum effect to 

the provision permitted by law, unless 

such holding shall be one of utter 

invalidity or unenforceability, in which 

event the provision shall be severable 

from this part and shall not affect the 

remainder thereof or the application of 

the provision to other persons not 

similarly situated or to other, dissimilar 

circumstances. 

■ 66. Add appendices A and B to part 

87 to read as follows: 

Appendix A to Part 87—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 

82148 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Rules and Regulations 

continue to carry out its mission consistent 

with religious freedom, nondiscrimination, 

and conscience protections in Federal law, 

including the Free Speech and Free Exercise 

Clauses of the First Amendment of the U.S. 

Constitution, the Religious Freedom 

Restoration Act (42 U.S.C. 2000bb et seq.), 

the Coats-Snowe Amendment (42 U.S.C. 

238n), Title VII of the Civil Rights Act of 

1964 (42 U.S.C. 2000e–1(a) and 2000e–2(e)), 

the Americans with Disabilities Act, 42 

U.S.C. 12113(d)(2), section 1553 of the 

Patient Protection and Affordable Care Act 

(42 U.S.C. 18113), the Weldon Amendment 

(e.g., Further Consolidated Appropriations 

Act, 2020, Public Law 116–94, 133 Stat. 

2534, 2607, div. A, sec. 507(d) (Dec. 20, 

2019)), or any related or similar Federal laws 

or regulations. 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 to engage in any explicitly 

religious activities (including activities that 

involve overt religious content such as 

worship, religious instruction, or 

proselytization). 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. 

Appendix B to Part 87—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, nondiscrimination, 

and conscience protections in Federal law, 

including the Free Speech and Free Exercise 

Clauses of the First Amendment of the U.S. 

Constitution, the Religious Freedom 

Restoration Act (42 U.S.C. 2000bb et seq.), 

the Coats-Snowe Amendment (42 U.S.C. 

238n), Title VII of the Civil Rights Act of 

1964 (42 U.S.C. 2000e–1(a) and 2000e–2(e)), 

the Americans with Disabilities Act (42 

U.S.C. 12113(d)(2)), section 1553 of the 

Patient Protection and Affordable Care Act 

(42 U.S.C. 18113), 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)), or any related or similar 

Federal laws or regulations. Religious 

accommodations may also be sought under 

many of these religious freedom, 

nondiscrimination, and conscience 

protection laws. 

(b) A faith-based organization may not use 

direct financial assistance from the 

Department to engage in any explicitly 

religious activities (including activities that 

involve overt religious content such as 

worship, religious instruction, or 

proselytization). 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 1050—CHARITABLE CHOICE 

UNDER THE COMMUNITY SERVICES 

BLOCK GRANT ACT PROGRAMS 

■ 67. The authority citation for part 

1050 continues to read as follows: 

Authority: 42 U.S.C. 9901 et seq. 

§ 1050.3 [Amended] 

■ 68. Amend § 1050.3 in paragraph (h) 

by removing ‘‘87.3(i) through (l)’’ and 

adding in its place ‘‘87.3(i) and (j)’’. 

Dated: December 3, 2020. 

Betsy DeVos, 

Secretary, U.S. Department of Education. 

Dated: December 3, 2020. 

Chad F. Wolf, 

Acting Secretary, U.S. Department of 

Homeland Security. 

Dated: December 3, 2020. 

Sonny Perdue, 

Secretary, U.S. Department of Agriculture. 

Dated: December 4, 2020. 

Brian Klotz, 

Deputy Director, Center for Faith & 

Opportunity Initiatives, U.S. Agency for 

International Development 

Benjamin S. Carson, Sr., 

Secretary, U.S. Department of Housing and 

Urban Development. 

Dated: December 4, 2020. 

William P. Barr, 

Attorney General. 

Dated: December 4, 2020. 

Eugene Scalia, 

Secretary, U.S. Department of Labor. 

Dated: December 4, 2020. 

Brooks D. Tucker, 

Assistant Secretary for Congressional and 

Legislative Affairs, Performing the Delegable 

Duties of the Chief of Staff, U.S. Department 

Veterans Affairs. 

Dated: December 4, 2020. 

Alex M. Azar II, 

Secretary, U.S. Department of Health and 

Human Services. 

[FR Doc. 2020–27084 Filed 12–14–20; 8:45 am] 

BILLING CODE 4410–01–P; 9112–FH–P; 3410–14–P; 

6116–01–P; 4210–67–P; 4410–18–P; 4510–45; 8320–01–P; 

4150–27–P