September 23, 1977

Rehabilitation Act of 1973—Nondiscrimination

Provision

You have requested our opinion whether the term “Federal financial 

assistance,” as used in section 504 of the Rehabilitation Act of 1973, as 

amended, 29 U.S.C. § 794 (Supp. V 1975) (Act), includes Federal programs of guarantee or insurance. Section 504 provides:

No otherwise qualified handicapped individual in the United 

States, as defined in section 7(6) of this A ct [29 U.S.C. § 706(6)], 

shall, solely by reason of his handicap, be excluded from participation in, be denied the benefits of, or be subjected to discrimination 

under any program or activity receiving Federal financial assistance.

While it is clear that the term “Federal financial assistance” encompasses direct Federal aid by way of grants and loans, it is unclear 

whether this term also includes indirect or contingent Federal financial 

support through programs of insurance or guarantee, such as that 

provided by the Federal Housing Administration.

The legislative history of § 504 sheds some light on the question. The 

language that became § 504 first appeared as § 503 of S. 3987, 92d 

Congress, 2d Session, the Vocational Rehabilitation Act of 1972 

(pocket-vetoed by President Nixon). The Senate Report accompanying 

this bill twice described the provision relating to nondiscrimination 

against the handicapped as requiring nondiscrimination by Federal grantees and elsewhere it used the statutory term “Federal financial assistance.” Sen. Rep. 92-1135, 92d Sess. 9, 49 (1972). In one instance, the 

term “grants” was used in the heading and the text therein spoke in 

terms of “Federal financial assistance.” Id. 49. While far from conclusive, this usage in the Senate report intimates that Congress equated 

direct aid with the term “Federal financial assistance,” thus excluding 

indirect aid through programs of insurance or guarantee.

77-52 MEMORANDUM OPINION FOR THE

GENERAL COUNSEL OF THE DEPARTMENT

OF HEALTH, EDUCATION, AND WELFARE

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The nondiscrimination provision in the vetoed 1972 bill was carried 

forward verbatim in §705 of H.R. 17, 93d Congress, 1st Session, also 

vetoed. The provision was then included in the revised bill, which 

eventually became the Act. The legislative reports and debates on these 

bills shed no new light on the question.

The Act was amended in 1974. Although § 504 was not itself amended, the definition of handicapped individual in § 7(6) was amended and 

made more expansive. The Senate report on the 1974 amendments, 

which is the only legislative report, states that § 504 “was patterned 

after and is almost identical to the antidiscrimination language o f ’ Title 

VI of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000d-2000d-6 (1970 

ed.) (“Title VI”), and Title IX of the Education Act Amendments of

1972, 20 U.S.C. §§ 1681-1686 (1975 Supp.) (“Title IX”). S. Rep. 93- 

1297, 93d Cong., 2d Sess. 39 (1974). Here again, the report speaks of 

“grants” and of “Federal financial assistance” interchangeably, thus 

indicating that § 504 was directed at programs receiving direct Federal 

aid. Id. 40. Additionally, in explaining why the 1974 amendments 

changed the definition of “handicapped,” the Senate report provides 

examples of kinds of handicapped persons who may inadvertently have 

been excluded from the prior definition and examples of the kinds of 

programs receiving Federal financial assistance that might continue to 

discriminate against these handicapped in the absence of the amendments. It is noteworthy that all of the programs enumerated receive 

direct Federal aid; none receive Federal support in the form of insurance or guarantees. Id. 38. This subsequent legislation and related 

legislative report, declaring the intent of the previous statute, is entitled 

to great weight. See, e.g., Red Lion Broadcasting Co., Inc. v. FCC, 395 

U.S. 367, 380-81 (1969).

Neither Title VI nor Title IX, the two models for § 504, prohibit 

discrimination in programs receiving Federal aid through insurance or 

guarantee. Indeed, each expressly excludes such programs, albeit in an 

elliptical way. Section 601 of Title VI, 42 U.S.C. § 2000d (1970 ed.), 

prohibits discrimination on the basis of race, color, and national origin 

in the same words as § 504 prohibits such discrimination with respect to 

a handicap. Section 602 of Title VI, 42 U.S.C. § 2000d-l (1970 ed.), 

provides for the enforcement of the policy of § 601 by “each Federal 

department and agency which is empowered to extend Federal financial assistance to any program or activity, by way of grant, loan or 

contract other than contracts of insurance or guarantee . . . .” Title IX, 

which forbids sex discrimination in federally assisted education programs, follows precisely the pattern of Title VI, including the express 

exclusion in its enforcement section for programs of guarantee and 

insurance. 20 U.S.C. § 1682 (1975 Supp.).

The Senate report, supra, stating that § 504 was modeled on Titles VI 

and IX, might be used to argue the question either way. One could take 

the view that because Congress in enacting those laws saw a need

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expressly to exclude insurance and guarantees, it believed those programs were otherwise within the meaning of “Federal financial assistance.” 1 However, one could also hold that in modeling § 504 on Titles 

VI and IX, Congress intended the reach of § 504 to be coextensive with 

that of those titles, thus excluding programs of guarantee and insurance. 

In our opinion, the second line of reasoning is to be preferred, and the 

first is historically inaccurate. Indeed, a careful analysis of the legislative history of Title VI supports the conclusion that “Federal financial 

assistance” excludes programs of insurance and guarantee.

Title VI of the Civil Rights Act of 1964 (1964 Act) was the first 

Federal statute to prohibit discrimination in programs receiving “Federal financial assistance.” Section 602 of the 1964 Act, as reported out of 

committee, provided for the enforcement of the policy of § 601 by 

“each Federal department and agency which is to extend Federal 

financial assistance to any program or activity, by way of grant, contract or loan.” H.R. Rep. 88-914, 88th Cong., 1st Sess. 8 (1963).

Opponents of the 1964 Act asserted that the term “contract” was 

sufficiently broad to bring federally insured or guaranteed programs 

within the prohibition on discrimination. See, e.g., H.R. Rep. 88-914, 

supra, 70 (minority report). In order to alleviate this fear § 602 was 

amended on the floor of the House to exclude specifically contracts of 

guarantee and insurance from that section. When that amendment was 

being considered, Representative Celler, the floor manager of the bill 

and the Chairman of the House Judiciary Committee, stated that the 

bill did not include programs of guarantee and insurance and that the 

express exclusion was being added solely to put to rest any erroneous 

suggestions to the contrary. 110 Cong. Rec. 2490, 2500 (1964).

Senator Humphrey, the manager of the bill on the Senate side, 

asserted that §601, which does not expressly exclude guarantees and 

insurance from the term “ Federal financial assistance,” did not, in any 

event, include them. 110 Cong. Rec. 7410-7420 (1964). Several Senators 

who'opposed the bill took the contrary position.

Giving the appropriate weight to the floor statements by the managers of the bill in each House, see, United States v. American Trucking

Ass’n., Inc., 310 U.S. 534, 546-548 (1940), and disregarding the contrary 

views expressed by opponents of the bill in the Senate, see, Holtzman v.

1 It could also be argued that the failure to include an exclusionary provision in the Act 

reflected a congressional intent to include programs of guarantee and insurance. This 

argument, however, assumes too much in an obscure area.

The usual pattern of antidiscrimination legislation has been to model such legislation 

upon the Title VI of the 1964 Act and to include in the enforcement provisions an 

express exemption for programs of insurance and guarantee. See, in addition to Titles VI 

and IX, 42 U.S.C. §§6101-07 (Supp. V 1975) (age discrimination); 20 U.S.C. §1684 

(blindness). Because no enforcement provisions were included in the 1973 Act, no express 

exemption was included. Thus, giving any weight at all to the failure to include an 

enforcement provision (and its customary attendant: an exclusion for insurance and 

guarantees), must also lead to the conclusion that Congress did not intend to authorize 

and direct the Federal agencies concerned to enforce § 504. Were such to be the case, 

this inquiry would be moot.

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Schlesinger, 414 U.S. 1304, 1312-13 n. 13 (Marshall, Circuit Justice, 

1973), it appears that the better view is that the term “Federal financial 

assistance” as used in the 1964 Act did not include programs of guarantee and insurance. Because the same words were used in § 504, the 

reasonable assumption is that these words were meant to have the same 

meaning in both acts, thus excluding programs of guarantee and insurance from § 504.

In conclusion, it is our opinion that the term “Federal financial 

assistance” in § 504 does not include programs of insurance or guarantee. In addition to the analysis above, this conclusion is supported by 

the absence of any reason to think that Congress intended to extend the 

prohibition against discrimination of the handicapped beyond that of 

the existing antidiscrimination legislation with respect to race, color, 

national origin, sex, age, and blindness.

J o h n M. H a r m o n

Assistant Attorney General

Office o f Legal Counsel

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