125
loose or missing steps or railings, and no eleva-
tor; or
(E) has severe maintenance problems, in-
cluding water leaks involving the roof, windows,
doors, basement, or pipes or plumbing fixtures,
holes or open cracks in walls or ceilings, severe
paint peeling or broken plaster, and signs of ro-
dent infestation.
(9) SINGLE
FAMILY
PROPERTY.—The term
‘‘single family property’’ means a 1- to 4-family resi-
dence.
(10) SUBSTANDARD.—The term ‘‘substandard’’
means, with respect to a multifamily housing
project, that 25 percent or more of the dwelling
units in the project have severe physical problems.
(11) UNIT
OF
GENERAL
LOCAL
GOVERN-
MENT.—The term ‘‘unit of general local govern-
ment’’ has the meaning given the term in section
102(a) of the Housing and Community Development
Act of 1974.
(12) UNOCCUPIED.—The term ‘‘unoccupied’’
means, with respect to a residential property, that
the unit of general local government having jurisdic-
tion over the area in which the project is located has
126
certified in writing that the property is not inhab-
ited.
SEC. 402. PREVENTION AND TREATMENT OF SUBSTANCE
ABUSE; SERVICES PROVIDED THROUGH RELI-
GIOUS ORGANIZATIONS.
Title V of the Public Health Service Act (42 U.S.C.
290aa et seq.) is amended by adding at the end the follow-
ing part:
‘‘PART G—SERVICES PROVIDED THROUGH RELIGIOUS
ORGANIZATIONS
‘‘SEC. 581. APPLICABILITY TO DESIGNATED PROGRAMS.
‘‘(a) DESIGNATED
PROGRAMS.—Subject to sub-
section (b), this part applies to each program under this
Act that makes awards of Federal financial assistance to
public or private entities for the purpose of carrying out
activities to prevent or treat substance abuse (in this part
referred to as a ‘designated program’). Designated pro-
grams include the program under subpart II of part B
of title XIX (relating to formula grants to the States).
‘‘(b) LIMITATION.—This part does not apply to any
award of Federal financial assistance under a designated
program for a purpose other than the purpose specified
in subsection (a).
‘‘(c) DEFINITIONS.—For purposes of this part (and
subject to subsection (b)):
127
‘‘(1) The term ‘designated award recipient’
means a public or private entity that has received an
award under a designated program (whether the
award is a designated direct award or a designated
subaward).
‘‘(2) The term ‘designated direct award’ means
an award under a designated program that is re-
ceived directly from the Federal Government.
‘‘(3) The term ‘designated subaward’ means an
award of financial assistance made by a non-Federal
entity, which award consists in whole or in part of
Federal financial assistance provided through an
award under a designated program.
‘‘(4) The term ‘designated program’ has the
meaning given such term in subsection (a).
‘‘(5) The term ‘financial assistance’ means a
grant, 
cooperative 
agreement, 
contract, 
or
voucherized assistance.
‘‘(6) The term ‘program beneficiary’ means an
individual who receives program services.
‘‘(7) The term ‘program participant’ has the
meaning given such term in section 582(a)(2).
‘‘(8) The term ‘program services’ means treat-
ment for substance abuse, or preventive services re-
128
garding such abuse, provided pursuant to an award
under a designated program.
‘‘(9) The term ‘religious organization’ means a
nonprofit religious organization.
‘‘(10) 
The 
term 
‘voucherized 
assistance’
means—
‘‘(A) a system of selecting and reimbursing
program services in which—
‘‘(i) the beneficiary is given a docu-
ment or other authorization that may be
used to pay for program services;
‘‘(ii) the beneficiary chooses the orga-
nization that will provide services to him or
her according to rules specified by the des-
ignated award recipient; and
‘‘(iii) the organization selected by the
beneficiary is reimbursed by the designated
award recipient for program services pro-
vided; or
‘‘(B) any other mode of financial assist-
ance to pay for program services in which the
program beneficiary determines the allocation
of program funds through his or her selection
of one service provider from among alternatives.
129
‘‘SEC. 582. RELIGIOUS ORGANIZATIONS AS PROGRAM PAR-
TICIPANTS.
‘‘(a) IN GENERAL.—
‘‘(1) SCOPE OF AUTHORITY.—Notwithstanding
any other provision of law, a religious organiza-
tion—
‘‘(A) may be a designated award recipient;
‘‘(B) may make designated subawards to
other public or nonprofit private entities (in-
cluding other religious organizations);
‘‘(C) may provide for the provision of pro-
gram services to program beneficiaries through
the use of voucherized assistance; and
‘‘(D) may be a provider of services under
a designated program, including a provider that
accepts voucherized assistance.
‘‘(2) DEFINITION OF PROGRAM PARTICIPANT.—
For purposes of this part, the term ‘program partici-
pant’ means a public or private entity that has re-
ceived a designated direct award, or a designated
subaward, regardless of whether the entity provides
program services. Such term includes an entity
whose only participation in a designated program is
to provide program services pursuant to the accept-
ance of voucherized assistance.
130
‘‘(b) RELIGIOUS ORGANIZATIONS.—The purpose of
this section is to allow religious organizations to be pro-
gram participants on the same basis as any other non-
profit private provider without impairing the religious
character of such organizations, and without diminishing
the religious freedom of program beneficiaries.
‘‘(c) NONDISCRIMINATION AGAINST RELIGIOUS OR-
GANIZATIONS.—
‘‘(1) FINDINGS.—The Congress finds that the
establishment clause of the first amendment to the
Constitution of the United States does not require
that—
‘‘(A) social-welfare programs discriminate
against faith-based providers of services; or
‘‘(B) faith-based providers of services, as a
prerequisite to participation in Federal pro-
grams, abandon their religious character and
censor their religious expression.
‘‘(2) NONDISCRIMINATION.—Religious organiza-
tions are eligible to be program participants on the
same basis as any other nonprofit private organiza-
tion. Neither the Federal Government nor a State
receiving funds under such programs shall discrimi-
nate against an organization that is or applies to be
131
a program participant on the basis that the organi-
zation has a religious character.
‘‘(d) RELIGIOUS CHARACTER AND FREEDOM.—
‘‘(1) RELIGIOUS
ORGANIZATIONS.—Except as
provided in this section, any religious organization
that is a program participant shall retain its inde-
pendence from Federal, State, and local government,
including such organization’s control over the defini-
tion, development, practice, and expression of its re-
ligious beliefs.
‘‘(2) ADDITIONAL
SAFEGUARDS.—Neither the
Federal Government nor a State shall require a reli-
gious organization to—
‘‘(A) alter its form of internal governance;
or
‘‘(B) remove religious art, icons, scripture,
or other symbols;
in order to be a program participant.
‘‘(e) NONDISCRIMINATION IN EMPLOYMENT.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), nothing in this section shall be construed
to modify or affect the provisions of any other Fed-
eral or State law or regulation that relates to dis-
crimination in employment on the basis of religion.
132
‘‘(2) EXCEPTION.—A religious organization
that is a program participant may require that an
employee rendering programs services adhere to—
‘‘(A) the religious beliefs and practices of
such organization; and
‘‘(B) any rules of the organization regard-
ing the use of drugs or alcohol.
‘‘(f) RIGHTS OF PROGRAM BENEFICIARIES.—
‘‘(1) OBJECTIONS REGARDING RELIGIOUS OR-
GANIZATIONS.—With respect to an individual who is
a program beneficiary or a prospective program ben-
eficiary, if the individual objects to a program par-
ticipant on the basis that the participant is a reli-
gious organization, the following applies:
‘‘(A) If the organization received a des-
ignated direct award, the organization shall ar-
range for the individual to receive program
services through an alternative entity.
‘‘(B) If the organization received a des-
ignated subaward, the non-Federal entity that
made the subaward shall arrange for the indi-
vidual to receive the program services through
an alternative program participant.
‘‘(C) If the organization is providing serv-
ices pursuant to voucherized assistance, the
133
designated award recipient that operates the
voucherized assistance program shall arrange
for the individual to receive the program serv-
ices through an alternative provider.
‘‘(D) Arrangements under any of subpara-
graphs (A) through (C) with an alternative en-
tity shall provide for program services the mon-
etary value of which is not less than the mone-
tary value of the program services that the indi-
vidual would have received from the religious
organization involved.
‘‘(2) NONDISCRIMINATION.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B) or as otherwise provided in
law, a religious organization that is a program
participant shall not in providing program serv-
ices discriminate against a program beneficiary
on the basis of religion or religious belief.
‘‘(B) LIMITATION.—A religious organiza-
tion that is a program participant may require
a program beneficiary who has elected in ac-
cordance with paragraph (1) to receive program
services from such organization—
‘‘(i) to actively participate in religious
practice, worship, and instruction; and
134
‘‘(ii) to follow rules of behavior de-
vised by the organizations that are reli-
gious in content or origin.
‘‘(g) FISCAL ACCOUNTABILITY.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), any religious organization that is a pro-
gram participant shall be subject to the same regula-
tions as other recipients of awards of Federal finan-
cial assistance to account, in accordance with gen-
erally accepted auditing principles, for the use of the
funds provided under such awards.
‘‘(2) LIMITED
AUDIT.—With respect to the
award involved, if a religious organization that is a
program participant maintains the Federal funds in
a separate account from non-Federal funds, then
only the Federal funds shall be subject to audit.
‘‘(h) COMPLIANCE.—With respect to compliance with
this section by an agency, a religious organization may
obtain judicial review of agency action in accordance with
chapter 7 of title 5, United States Code.
‘‘SEC. 583. LIMITATIONS ON USE OF FUNDS FOR CERTAIN
PURPOSES.
‘‘(a) IN GENERAL.—Except as provided in subsection
(b), no funds provided directly to an entity under a des-
135
ignated program shall be expended for sectarian worship
or instruction.
‘‘(b) EXCEPTION.—Subsection (a) shall not apply to
assistance provided to or on behalf of a program bene-
ficiary if the beneficiary may choose where such assistance
is redeemed or allocated.
‘‘SEC. 584. ADMINISTRATION OF PROGRAM AND TREAT-
MENT OF FUNDS.
‘‘(a) FUNDS NOT AID TO INSTITUTIONS.—Financial
assistance under a designated program provided to or on
behalf of program beneficiaries is aid to the beneficiary,
not to the organization providing program services. The
receipt by a program beneficiary of program services at
the facilities of the organization shall not constitute Fed-
eral financial assistance to the organization involved.
‘‘(b) PROHIBITION ON STATE DISCRIMINATION IN
USE OF FUNDS.—No provision in any State constitution
or State law shall be construed to prohibit the expenditure
of Federal funds under a designated program in a reli-
gious facility or by a religious organization that is a pro-
gram participant. If a State law or constitution would pre-
vent the expenditure of State or local public funds in such
a facility or by such an organization, then the State or
local government shall segregate the Federal funds from
136
State or other public funds for purposes of carrying out
the designated program.
‘‘SEC. 585. EDUCATIONAL REQUIREMENTS FOR PERSONNEL
IN DRUG TREATMENT PROGRAMS.
‘‘(a) FINDINGS.—The Congress finds that—
‘‘(1) establishing formal educational qualifica-
tion for counselors and other personnel in drug
treatment programs may undermine the effective-
ness of such programs; and
‘‘(2) such formal educational requirements for
counselors and other personnel may hinder or pre-
vent the provision of needed drug treatment services.
‘‘(b) LIMITATION ON EDUCATIONAL REQUIREMENTS
OF PERSONNEL.—
‘‘(1) TREATMENT OF RELIGIOUS EDUCATION.—
If any State or local government that is a program
participant imposes formal educational qualifications
on providers of program services, including religious
organizations, such State or local government shall
treat religious education and training of personnel
as having a critical and positive role in the delivery
of program services. In applying educational quali-
fications for personnel in religious organizations,
such State or local government shall give credit for
religious education and training equivalent to credit
137
given for secular course work in drug treatment or
any other secular subject that is of similar grade
level and duration.
‘‘(2) RESTRICTION
OF
DISCRIMINATION
RE-
QUIREMENTS.—
‘‘(A) IN GENERAL.—Subject to paragraph
(1), a State or local government that is a pro-
gram participant may establish formal edu-
cational qualifications for personnel in organiza-
tions providing program services that contribute
to success in reducing drug use among program
beneficiaries.
‘‘(B) EXCEPTION.—The Secretary shall
waive the application of any educational quali-
fication imposed under subparagraph (A) for an
individual religious organization, if the Sec-
retary determines that—
‘‘(i) the religious organization has a
record of prior successful drug treatment
for at least the preceding three years;
‘‘(ii) the educational qualifications
have effectively barred such religious orga-
nization from becoming a program pro-
vider;
138
‘‘(iii) the organization has applied to
the Secretary to waive the qualifications;
and
‘‘(iv) the State or local government
has failed to demonstrate empirically that
the educational qualifications in question
are necessary to the successful operation of
a drug treatment program.’’.
SEC. 403. CRA CREDIT FOR INVESTMENTS IN COMMUNITY
DEVELOPMENT ORGANIZATIONS LOCATED IN
RENEWAL COMMUNITIES.
Section 804 of the Community Reinvestment Act of
1977 (12 U.S.C. 2903) is amended by adding at the end
the following new subsection:
‘‘(c) INVESTMENTS IN CERTAIN COMMUNITY DEVEL-
OPMENT ORGANIZATIONS.—In assessing and taking into
account, under subsection (a), the record of a regulated
financial institution, the appropriate Federal financial su-
pervisory agency may consider, as a factor, investments
of the institution in, and capital investment, loan partici-
pation, and other ventures undertaken by the institution
in cooperation with, any community development organi-
zation (as defined in section 234 of the Bank Enterprise
Act of 1991) which is located in a renewal community (as
139
designated under section 1400 of the Internal Revenue
Code of 1986).’’.
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