80 FR 47316 - Partnerships With Faith-Based and Other Neighborhood Organizations

DEPARTMENT OF JUSTICE

Federal Register Volume 80, Issue 151 (August 6, 2015)

Page Range		47316-47326
FR Document		2015-18259

The rule proposes to amend Department of Justice (Department) regulations on the equal treatment for faith-based or religious organizations and to implement Executive Order 13559 (Fundamental Principles and Policymaking Criteria for Partnerships With Faith-Based and Other Neighborhood Organizations). This rule proposes to revise Department regulations pertaining to prohibited religious uses of direct Federal financial assistance to provide clarity about the rights and obligations of faith-based and religious groups participating in Department programs and to provide protections for beneficiaries of those programs. The Department seeks public comments only on the proposed revisions that are being made to implement Executive Order 13559.

Federal Register, Volume 80 Issue 151 (Thursday, August 6, 2015)

[Federal Register Volume 80, Number 151 (Thursday, August 6, 2015)]
[Proposed Rules]
[Pages 47316-47326]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-18259]

[[Page 47315]]

Vol. 80

Thursday,

No. 151

August 6, 2015

Part XI

Department of Justice

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28 CFR Part 38

Partnerships With Faith-Based and Other Neighborhood Organizations;
Proposed Rule

Federal Register / Vol. 80 , No. 151 / Thursday, August 6, 2015 /
Proposed Rules

[[Page 47316]]

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DEPARTMENT OF JUSTICE

28 CFR Part 38

[Docket No. OAG 149; AG Order No. 3541-2015]
RIN 1105-AB45

Partnerships With Faith-Based and Other Neighborhood
Organizations

AGENCY: Office of the Attorney General, Department of Justice.

ACTION: Proposed rule.

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SUMMARY: The rule proposes to amend Department of Justice (Department)
regulations on the equal treatment for faith-based or religious
organizations and to implement Executive Order 13559 (Fundamental
Principles and Policymaking Criteria for Partnerships With Faith-Based
and Other Neighborhood Organizations). This rule proposes to revise
Department regulations pertaining to prohibited religious uses of
direct Federal financial assistance to provide clarity about the rights
and obligations of faith-based and religious groups participating in
Department programs and to provide protections for beneficiaries of
those programs. The Department seeks public comments only on the
proposed revisions that are being made to implement Executive Order
13559.

DATES: Written comments must be postmarked and electronic comments must
be submitted on or before October 5, 2015. Comments received by mail
will be considered timely if they are postmarked on or before that
date. The electronic Federal Docket Management System (FDMS) will
accept comments until Midnight Eastern Time at the end of that day.

ADDRESSES: To ensure proper handling of comments, please reference
[Docket No. OAG 149] on all electronic and written correspondence. The
Department encourages the electronic submission of all comments through
http://www.regulations.gov using the electronic comment form provided
on that site. For easy reference, an electronic copy of this document
is also available at that Web site. It is not necessary to submit paper
comments that duplicate the electronic submission, as all comments
submitted to http://www.regulations.gov will be posted for public
review and are part of the official docket record. However, should you
wish to submit written comments through regular or express mail, they
should be sent to Eugene Schneeberg, Director, Center for Faith-Based &
Neighborhood Partnerships, U.S. Department of Justice, Washington, DC
20531.

FOR FURTHER INFORMATION CONTACT: Eugene Schneeberg, Director, Center
for Faith-based & Neighborhood Partnerships, U.S. Department of
Justice, Washington, DC 20531. Phone: (202) 307-0588.

SUPPLEMENTARY INFORMATION:

I. Posting of Public Comments

Please note that all comments received are considered part of the
public record and made available for public inspection online at http://www.regulations.gov. Information made available for public inspection
includes personal identifying information (such as your name, address,
etc.) voluntarily submitted by the commenter.
If you wish to submit personal identifying information (such as
your name, address, etc.) as part of your comment, but do not wish it
to be posted online, you must include the phrase ``PERSONAL IDENTIFYING
INFORMATION'' in the first paragraph of your comment. You must also
locate all the personal identifying information that you do not want
posted online in the first paragraph of your comment and identify what
information you want the agency to redact. Personal identifying
information identified and located as set forth above will be placed in
the agency's public docket file, but not posted online.
If you wish to submit confidential business information as part of
your comment but do not wish it to be posted online, you must include
the phrase ``CONFIDENTIAL BUSINESS INFORMATION'' in the first paragraph
of your comment. You must also prominently identify confidential
business information to be redacted within the comment. If a comment
has so much confidential business information that it cannot be
effectively redacted, the agency may choose not to post that comment
(or to post that comment only partially) on http://www.regulations.gov.
Confidential business information identified and located as set forth
above will not be placed in the public docket file, nor will it be
posted online.
If you wish to inspect the agency's public docket file in person by
appointment, please see the FOR FURTHER INFORMATION CONTACT paragraph.

II. Background

On December 12, 2002, President Bush signed Executive Order 13279,
Equal Protection of the Laws for Faith-Based and Community
Organizations, 67 FR 77141. Executive Order 13279 set forth the
principles and policymaking criteria to guide Federal agencies in
formulating and developing policies with implications for faith-based
and other community organizations, to ensure equal protection of the
laws for faith-based and other 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 asked specified agency
heads to review and evaluate existing policies relating to Federal
financial assistance for social services programs and, where
appropriate, to implement new policies that were consistent with and
necessary to further the fundamental principles and policymaking
criteria that have implications for faith-based and other community
organizations.
On January 21, 2004, the Department of Justice promulgated 28 CFR
part 38. That rule implemented the executive branch policy that, within
the framework of constitutional church-state guidelines, religious (or
faith-based) organizations should be able to compete on an equal
footing with other organizations for the Department's funding. It
revised Department regulations to remove barriers to the participation
of faith-based or religious organizations in Department programs and to
ensure that these programs are consistent with the requirements of the
Constitution, including the Religion Clauses of the First Amendment.
Shortly after taking office, President Obama signed Executive Order
13498, Amendments to Executive Order 13199 and Establishment of the
President's Advisory Council for Faith-Based and Neighborhood
Partnerships, 74 FR 6533 (Feb. 5, 2009). Executive Order 13498 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 established the President's Advisory Council for
Faith-Based and Neighborhood Partnerships (Advisory Council). The
President created the Advisory Council to bring together experts to
make, among other things, recommendations to the President for changes
in policies, programs, and practices that affect the delivery of
services by faith-based and other neighborhood organizations.
The Advisory Council issued its recommendations in a report
entitled A New Era of Partnerships: Report of Recommendations to the
President in March 2010 (available at http://www.whitehouse.gov/sites/
default/files/

[[Page 47317]]

microsites/ofbnp-council-final-report.pdf). The Advisory Council Report
included recommendations to amend Executive Order 13279 to strengthen
the constitutional and legal footing of partnerships and to offer a new
set of fundamental principles to guide agency decision-making in
administering Federal social service programs in partnership with
faith-based and other neighborhood organizations.
President Obama signed Executive Order 13559, Fundamental
Principles and Policymaking Criteria for Partnerships with Faith-Based
and Other Neighborhood Organizations, on November 17, 2010. 75 FR
71319. Executive Order 13559 incorporated the Advisory Council's
recommendations by amending Executive Order 13279 to, among other
things:
Require agencies that administer or award Federal
financial assistance for social service programs to implement
protections for the beneficiaries or prospective beneficiaries of those
programs (these protections include providing referrals to alternative
providers if the beneficiary objects to the religious character of the
organization providing services and ensuring that written notice of
these and other protections is provided to beneficiaries before they
enroll in or receive services from the program);
state that 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 the religious affiliation, or lack of
affiliation, of the recipient organization;
state that the Federal Government has an obligation to
monitor and enforce all standards regarding the relationship between
religion and government in ways that avoid excessive entanglement
between religious bodies and governmental entities;
clarify that organizations engaging in explicitly
religious activity must (i) perform such activities and offer such
services outside of programs that are supported with direct Federal
financial assistance, (ii) separate these activities in time or
location from programs supported with direct Federal financial
assistance, and (iii) ensure that participation in any such activities
must be voluntary for the beneficiaries of the social service program
supported with Federal financial assistance;
emphasize that religious providers should be eligible to
compete for social service funding from the Government and to
participate fully in social service programs supported with Federal
financial assistance, and that such organizations may do so while
maintaining their religious identities;
require agencies that provide Federal financial assistance
for social service programs to post online regulations, guidance
documents, and policies that have implications for faith-based and
other neighborhood organizations and to post online a list of entities
receiving such assistance; and
clarify that the principles set forth apply to subawards
as well as prime awards.
In addition, Executive Order 13559 created the Interagency Working
Group on Faith-Based and Other Neighborhood Partnerships (Working
Group) to review and evaluate existing regulations, guidance documents,
and policies, and to submit a report to the President on amendments,
changes, or additions necessary to ensure that regulations and guidance
documents associated with the distribution of Federal financial
assistance for social service programs would be consistent with the
fundamental principles set forth in the Executive Order. The Executive
Order mandated that this report include a model set of regulations and
guidance documents for the agencies to adopt in a number of areas,
including, among other things, prohibited uses of direct Federal
financial assistance and separation requirements, protections for
religious identity, the distinction between ``direct'' and ``indirect''
Federal financial assistance, and protections for beneficiaries of
social service programs.
The Executive Order also stated that, following receipt of the
Working Group's report, the Office of Management and Budget (OMB), in
coordination with the Department of Justice, must issue guidance to
agencies on the implementation of the order. In August 2013, OMB issued
such guidance. In this guidance, OMB noted the Working Group's
recommendations and instructed specified agency heads that Executive
Order 13559 required them to amend existing agency regulations,
guidance documents, and policies that have implications for faith-based
and religious grounds to ensure they are consistent with the
fundamental principles set forth in the Order. The Department is
accordingly issuing guidance on the applicability of the Executive
Order and this rule to particular programs.

III. Overview of Proposed Rule

The regulation proposes to amend Part 38 to implement Executive
Order 13559, change the title of current Part 38, and rearrange the
current regulations to conform to the existing regulatory structure of
the Executive Order. This restructuring sets forth some original text
from Part 38 so that readers can understand the overall context of the
rule, but eliminates the repetition of language under Sec. 38.1,
Discretionary grants, contracts, and cooperative agreements, and Sec.
38.2, Formula grants, which presently have the same provisions. Among
other things, the Department specifically proposes to amend its
regulations to replace the term ``inherently religious activities''
with the term ``explicitly religious activities'' and define the latter
term as ``including activities that involve overt religious content
such as worship, religious instruction, or proselytization.'' In
addition, the proposed rule distinguishes between ``direct'' and
``indirect'' Federal financial assistance because the limitation on
explicitly religious activities applies to programs that are supported
with ``direct'' Federal financial assistance but does not apply to
programs supported with ``indirect'' Federal financial assistance. The
Department also proposes regulatory language to clarify the
responsibilities of intermediaries. The proposed rule provides that
decisions about awards of Federal financial assistance must be free
from political interference or even the appearance of such
interference. Finally, the proposed rule provides protections for
beneficiaries and includes provisions for assurances and enforcement.
Proposed amendments to Part 38.

Part 38. Partnerships With Faith-Based and Other Neighborhood
Organizations

A. Prohibited Uses of Direct Federal Financial Assistance

Part 38 of title 28 of the Code of Federal Regulations and
Executive Order 13279 prohibit organizations that receive direct
Federal financial assistance from the Department (e.g., formula or
discretionary grants, contracts, subgrants, subcontracts, and
cooperative agreements) from engaging in ``inherently religious
activities, such as worship, religious instruction, or proselytization,
as part of the programs or services funded with direct financial
assistance from the Department.'' 28 CFR 38.1(b)(1). The term
``inherently religious'' has proven confusing. In 2006, for example,
the Government Accountability Office (GAO) found that, while all 26 of
the religious social service providers it interviewed said they
understood the prohibition on using direct Federal financial assistance
for ``inherently religious activities,'' four of the providers
described acting in

[[Page 47318]]

ways that appeared to violate that rule. GAO, Faith-Based and Community
Initiative: Improvements in Monitoring Grantees and Measuring
Performance Could Enhance Accountability, GAO-06-616, at 34-35 (June
2006) (available at http://www.gao.gov/new.items/d06616.pdf).
Further, although the Supreme Court has sometimes used the term
``inherently religious,'' it has never established it as the test for
what the Government may not subsidize with direct Federal financial
assistance. If the term is interpreted narrowly, it could permit
actions that the Constitution may prohibit. For example, some might not
consider teaching an individual to read the English language using the
Bible or another religious text an ``inherently religious'' act. On the
other hand, one could also argue that the term ``inherently religious''
is too broad. For example, some might consider the provision of a hot
meal to a needy person to be an ``inherently religious'' act when it is
undertaken from a sense of religious motivation or obligation, even
though it has no overt religious content.
The Supreme Court has determined that the Government cannot
subsidize ``a specifically religious activity in an otherwise
substantially secular setting.'' Hunt v. McNair, 413 U.S. 734, 743
(1973). It has also said a direct aid program impermissibly advances
religion when the aid results in governmental indoctrination of
religion. See Mitchell v. Helms, 530 U.S. 793, 808 (2000) (Thomas, J.,
joined by Rehnquist, C.J., Scalia, and Kennedy, J.J., plurality); id.
at 845 (O'Connor, J., joined by Breyer, J., concurring in the
judgment); Agostini v. Felton, 521 U.S. 203, 223 (1997). This
terminology is fairly interpreted to prohibit the Government from
directly subsidizing any ``explicitly religious activity,'' including
activities that involve overt religious content. Thus, direct Federal
financial assistance may not be used to pay for activities such as
religious instruction, devotional exercises, worship, proselytizing, or
evangelism; production or dissemination of devotional guides or other
religious materials; or counseling in which counselors introduce
religious content. Similarly, direct Federal financial assistance may
not be used to pay for equipment or supplies to the extent they are
allocated to such activities. Activities that are secular in content,
such as serving meals to the needy or using a nonreligious text to
teach someone to read, are not considered ``explicitly religious
activities'' merely because the provider is religiously motivated to
provide those services. The study or acknowledgement of religion as a
historical or cultural reality also would not be considered an
explicitly religious activity.
Notwithstanding the general prohibition on the use of direct
Federal financial assistance to support explicitly religious
activities, there are times when religious activities may be federally
financed under the Establishment Clause and not subject to the direct
Federal financial assistance restrictions, for example, in situations
where Federal financial assistance is provided to chaplains to work
with inmates in prisons or detention facilities through social service
programs. Where there is extensive government control over the
environment of the federally financed social service program, program
officials may sometimes need to take affirmative steps to provide an
opportunity for beneficiaries of the social service program to exercise
their religion. See Cruz v. Beto, 405 U.S. 319, 322 n.2 (1972) (per
curiam) (``[R]easonable opportunities must be afforded to all prisoners
to exercise the religious freedom guaranteed by the First and
Fourteenth Amendment without fear of penalty.''); Katcoff v. Marsh, 755
F.2d 223, 234 (2d Cir. 1985) (finding it ``readily apparent'' that the
Government is obligated by the First Amendment ``to make religion
available to soldiers who have been moved by the Army to areas of the
world where religion of their own denominations is not available to
them''). Without such efforts, religious freedom might not exist for
these beneficiaries. Accordingly, services such as chaplaincy services
would not be considered explicitly religious activities that are
subject to direct financial aid restrictions.
Likewise, it is important to emphasize that the restrictions on
explicitly religious content apply to content generated by the
administrators of the program receiving direct Federal financial
assistance, not to spontaneous comments made by individual
beneficiaries about their personal lives in the context of these
programs. For example, if a person administering a federally funded job
skills program asks beneficiaries to describe how they gain the
motivation necessary for their job searches and some beneficiaries
refer to their faith or membership in a faith community, these kinds of
comments do not violate the restrictions and should not be censored. In
this context, it is clear that the administrator of the government
program did not orchestrate or encourage such comments.
The Department, therefore, proposes to amend its regulations to
replace the term ``inherently religious activities'' with the term
``explicitly religious activities'' and to define the latter term as
``including activities that involve overt religious content such as
worship, religious instruction, or proselytization.'' These proposed
changes in language would provide greater clarity and more closely
match constitutional standards as they have been developed in case law.
These proposed restrictions would not diminish existing regulatory
protections for the religious identity of faith-based providers. The
proposed rule would not affect, for example, organizations' ability to
use religious terms in their organizational names; select board members
on a religious basis; include religious references in mission
statements and other organizational documents; and post religious art,
messages, scriptures, and symbols in buildings where they deliver
federally funded services and benefits.

B. Direct and Indirect Federal Financial Assistance

Executive Order 13559 noted that the model regulations proposed by
the Working Group should distinguish between ``direct'' and
``indirect'' Federal financial assistance. This distinction is vital
because the limitation on Federal financial assistance supporting
explicitly religious activities applies to programs that are supported
with ``direct'' Federal financial assistance but does not apply to
programs supported with ``indirect'' Federal financial assistance. To
clarify this distinction, the proposed rule provides definitions of
these terms. Under the proposed rule, programs would be understood to
be supported with ``direct'' Federal financial assistance when either
the Government or an intermediary (as identified in this proposed rule)
selects a service provider and either purchases services from that
provider (e.g., through a contract) or awards funds to that provider to
carry out a social service (e.g., through a grant or cooperative
agreement). Under these circumstances, there are no intervening steps
in which the beneficiary's choice determines the provider.
``Indirect'' Federal financial assistance is distinguishable
because it places the choice of service provider in the hands of the
beneficiary before the Government pays for the cost of that service
through a voucher, certificate, or other similar means. For example,
the Government could allow the beneficiary to secure the needed service
independently. Alternatively, a governmental agency, operating under a
neutral program of aid, could present each beneficiary or prospective

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beneficiary with a list of all qualified providers from which the
beneficiary could obtain services using a Government-provided
certificate. Either way, the Government empowers the beneficiaries to
choose for themselves whether to receive the needed services, including
those that contain explicitly religious activities, through a faith-
based or other neighborhood organization. The Government could then pay
for the beneficiary's choice of provider by giving the beneficiary a
voucher or similar document. Alternatively, the Government could choose
to pay the provider directly after asking the beneficiary to indicate
the beneficiary's choice. See Freedom From Religion Found. v. McCallum,
324 F.3d 880, 882 (7th Cir. 2003).
The Supreme Court has held that if a program meets certain
criteria, the Government may fund the program if, among other things,
it places the benefit in the hands of individuals who in turn have the
freedom to choose the provider to which they take their benefit and
``spend'' it, whether that provider is public or private, non-religious
or religious. Zelman v. Simmons-Harris, 536 U.S. 639, 652-53 (2002). In
these instances, the Government does not encourage or promote any
explicitly religious programs that may be among the options available
to beneficiaries. Notably, the voucher scheme at issue in the Zelman
decision, which was described by the Court as one of ``true private
choice,'' id. at 653, was also neutral toward religion and offered
beneficiaries adequate secular options. Accordingly, these criteria
also are included in the text of the proposed definition of ``indirect
financial assistance.''

C. Intermediaries

The Department also proposes regulatory language that would clarify
the responsibilities of intermediaries. The terms ``intermediary'' and
``pass-through entity'' may be used interchangeably. 2 CFR 200.74. An
intermediary is an entity, including a nongovernmental organization,
acting under a contract, grant, or other agreement with the Federal
Government or with a State or local government, that accepts Federal
financial assistance and distributes that assistance to other
organizations that, in turn, provide Government-funded social services.
Each intermediary must abide by all statutory and regulatory
requirements by, for example, not engaging in any explicitly religious
activities as part of the programs or services funded by direct Federal
financial assistance. The intermediary also has the same duties as the
Government to comply with these rules by, for example, selecting any
providers to receive Federal financial assistance in a manner that does
not favor or disfavor organizations on the basis of religion or
religious belief. Although intermediaries may be used to distribute
Federal financial assistance to other organizations in some programs,
intermediaries remain accountable for the Federal financial assistance
they disburse. Accordingly, intermediaries must ensure that any
providers to which they disburse Federal financial assistance also
comply with these rules. If the intermediary is a nongovernmental
organization, it retains all other rights of a nongovernmental
organization under the statutory and regulatory provisions governing
the program.
A State's use of intermediaries does not relieve the State of its
traditional responsibility to monitor effectively the actions of such
organizations. States are obligated to manage the day-to-day operations
of grant- and subgrant-supported activities to ensure compliance with
applicable Federal requirements and performance goals. Moreover, a
State's use of intermediaries does not relieve the State of its
responsibility to ensure that providers are selected, and deliver
services, in a manner consistent with the First Amendment's
Establishment Clause.

D. Protections for Beneficiaries

Executive Order 13559 provides a variety of valuable protections
for social service beneficiaries. These protections are intended to
ensure that programs receiving direct Federal financial assistance do
not discriminate against, coerce, or otherwise burden beneficiaries on
the basis of their religious beliefs or practices, or lack thereof, and
to make beneficiaries aware of their protections, through appropriate
notice, when potentially obtaining services from providers with a
religious affiliation.
The Executive Order makes it clear that all organizations that
receive Federal financial assistance for the purpose of delivering
social welfare services are prohibited from discriminating against
beneficiaries or potential beneficiaries of those programs on the basis
of religion, a religious belief, refusal to hold a religious belief, or
a refusal to attend or participate in a religious practice. It also
states that organizations offering explicitly religious activities
(including activities that involve overt religious content such as
worship, religious instruction, or proselytization) must not use direct
Federal financial assistance to subsidize or support those activities,
and that any explicitly religious activities must be offered outside of
programs that are supported with direct Federal financial assistance
(including through prime awards or subawards). In other words, to the
extent that an organization provides explicitly religious activities,
those activities must be offered separately in time or location from
programs or services supported with direct Federal financial
assistance. And, as noted above, participation in those religious
activities must be completely voluntary for beneficiaries of programs
supported by Federal financial assistance.
Executive Order 13559 also requires faith-based or religious
organizations administering a program that is supported by direct
Federal financial assistance to give written notice in a manner
prescribed by the agency to beneficiaries and prospective beneficiaries
of their right to be referred to an alternative provider when
available. When the nature of the service provided or exigent
circumstances makes it impracticable to provide such written notice in
advance of the actual service (e.g., crisis intervention services by
hotline), service providers must advise beneficiaries of their
protections at the earliest available opportunity. If a beneficiary or
prospective beneficiary of a social service program supported by direct
Federal financial assistance objects to the religious character of an
organization that provides services under the program, the organization
must refer the beneficiary to an alternative provider when available.
More specifically, the proposed rule states that, if a beneficiary or
prospective beneficiary of a social service program supported by direct
Federal financial assistance objects to the religious character of an
organization that provides services under the program, that
organization shall promptly undertake reasonable efforts to identify
and refer the beneficiary to an alternative provider to which the
prospective beneficiary has no objection. See Appendix A for the
proposed model Written Notice of Beneficiary Protections and
Beneficiary Referral Request.
An organization may refer the beneficiary to another religiously
affiliated provider if the beneficiary has no objection to that
provider. But if the beneficiary requests a secular provider, and a
secular provider that offers the needed services is available, then the
organization must refer the beneficiary to that provider.

[[Page 47320]]

The rule proposes to specify that, except for services provided by
telephone, Internet, or similar means, the referral must be to an
alternate provider that is in geographic proximity to the organization
making the referral and that offers services similar in substance and
quality to those offered by the organization. The alternative provider
also must have the capacity to accept additional clients. Under the
proposed rule, if a federally supported alternative provider meets
these requirements and is acceptable to the beneficiary, a referral
should be made to that provider. If, however, there is no federally
supported alternative provider that meets these requirements and is
acceptable to the beneficiary, a referral should be made to an
alternative provider that does not receive Federal financial assistance
but does meet these requirements and is acceptable to the beneficiary.
If an organization is unable to identify an alternative provider,
the organization is required under the proposed rule to notify the
awarding entity, and the awarding entity should determine whether there
are any other suitable alternative providers to which the beneficiary
may be referred. Further, Executive Order 13559 requires (and the
proposed rule so provides) the relevant awarding entity to ensure that
appropriate and timely referrals are made to an alternative provider,
and that referrals are made in a manner consistent with applicable
privacy laws and regulations. In some instances the awarding entity may
be unable to identify a suitable alternative provider.

E. Political or Religious Affiliation

Although this proposed rule does not affect the existing
eligibility of faith-based or religious organizations to participate in
Department programs for which they are otherwise eligible, it provides
that decisions about awards of Federal financial assistance must be
free from political interference or even the appearance of such
interference. The awarding entity is required to instruct participants
in the awarding process to refrain from taking religious affiliation or
non-religious affiliation into account in this process (i.e., under the
proposed rule, an organization should not receive favorable or
unfavorable marks merely because it is affiliated or unaffiliated with
a religious body, or related or unrelated to a specific religion). When
selecting peer reviewers for the review of grant applications, the
awarding entity should never ask about religious affiliation or take
religious affiliation into account. But it should encourage religious,
political, and professional diversity among peer reviewers by
advertising for these positions in a wide variety of venues.

IV. Regulatory Certifications

Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) at 5 U.S.C. 603(a) requires
agencies to prepare and make available for public comment an initial
regulatory flexibility analysis that describes the impact of the
proposed rule on small entities. The RFA at 5 U.S.C. 605(b) allows an
agency not to prepare an analysis if it certifies that the proposed
rulemaking will not have a significant economic impact on a substantial
number of small entities. Furthermore, under the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA) at section 212(a),
an agency is required to produce compliance guidance for small entities
if a final rule will have a significant economic impact on a
substantial number of small entities. 5 U.S.C. 601 note. The RFA
defines small entities as small business concerns, small nonprofit
enterprises, or small governmental jurisdictions. 5 U.S.C. 601(6).
The proposed rule requires a faith-based or religious organization
administering a program that is supported by direct Federal financial
assistance to give written notice to beneficiaries and prospective
beneficiaries of their right to be referred to an alternative provider
when available and, when requested, to refer the beneficiary to an
alternative provider. The provider must inform the beneficiary or
prospective beneficiary in writing and maintain a record of where the
beneficiary is referred.
The Department has made every effort to ensure that the disclosure
and referral requirements of the proposed rule impose minimum burden
and allow maximum flexibility in implementation. The proposed rule
includes a model notice with the required language, which providers
must give beneficiaries to inform them of their rights and protections.
The Department estimates it will take no more than two hours for
providers to familiarize themselves with the notice requirements and
print and duplicate an adequate number of disclosure notices for
potential beneficiaries. Relying upon the May 2013 Bureau of Labor
Statistics hourly mean wage for a staff person, such as a Training and
Development Specialist, of $22.81 per hour, the Department estimates
that the labor cost to prepare the notice will be approximately $45.62
per service provider. In addition, the Department estimates an upper
limit of $100 for the annual cost of materials (paper, ink, and toner)
to print multiple copies of the notices. Although these costs will be
borne by faith-based or religious organizations, some of which may be
small service providers, the Department does not believe that a
substantial number of small entities will be affected by this
provision. Further, the Department does not believe that a compliance
cost of less than $200 per provider per year is a significant
percentage of a provider's total revenue. In addition, the Department
notes that, after the first year, the labor cost associated with
compliance will likely decrease significantly because small service
providers will be familiar with the requirements. Accordingly, the
Attorney General has reviewed this regulation and by approving it
certifies that it will not have a significant economic impact on a
substantial number of small entities.
The proposed rule requires faith-based or religious organizations
that provide social services, at the beneficiary's request, to make
reasonable efforts to identify and refer the beneficiary to an
alternative provider to which the beneficiary has no objection.
Although the Department does not have any way to determine the number
of referrals that will occur in any one year, the Department does not
believe that referral costs will be appreciable for small faith-based
or religious organizations. The Department invites interested parties
to provide data on which it can formulate better estimates of the
compliance costs associated with the disclosure and referral
requirements of this proposed rule.

Executive Orders 12866 and 13563--Regulatory Review

The Department has drafted and evaluated this proposed rule in
accordance with Executive Order 12866, Regulatory Planning and Review,
section 1(b), The Principles of Regulation, and in accordance with
Executive Order 13563, Improving Regulation and Regulatory Review,
section 1(b), General Principles of Regulation. These Executive Orders
direct agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects; distributive
impacts; and equity). Executive Order 13563 emphasizes the importance
of quantifying both costs and benefits, reducing costs, harmonizing
rules, and

[[Page 47321]]

promoting flexibility. Section 3(f) of Executive Order 12866 defines a
``significant regulatory action'' as an action that is likely to result
in a rule that may (1) have an annual effect on the economy of $100
million or more or adversely and materially affect a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local or tribal governments or communities
(also referred to as ``economically significant''); (2) create serious
inconsistency or otherwise interfere with an action taken or planned by
another agency; (3) materially alter the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients; or (4) raise novel legal or policy issues
arising out of legal mandates, the President's priorities, or the
principles set forth in Executive Order 12866.
The Department believes that the only provisions of this proposed
rule likely to impose costs on the regulated community are (1) the
requirement that faith-based or religious recipients, which provide
services or benefits, give beneficiaries a written notice informing
them of their religious protections when seeking or obtaining services
or benefits supported by direct Federal financial assistance from the
Department; and (2) the requirement that, at the beneficiary's request,
the recipient make reasonable efforts to refer the beneficiary to an
alternative provider to which the beneficiary has no objection. To
minimize compliance costs on these recipients, the proposed rule
includes the notice language. An estimate of the cost of providing this
notice to beneficiaries is discussed in the Paperwork Reduction Act
section of this proposed rule.
To estimate the cost of the referral provision, the Department
would need to know the number of faith-based or religious organizations
that provide social services or benefits that are funded annually by
the Department, the number of beneficiaries who would ask for a
referral, and the costs of making and notifying relevant parties of the
referral. The Department estimates that there are approximately 150
organizations that may be affected by the requirement, based on data
maintained by two components of the Department. Unfortunately, the
Department has limited or no data on the other variables and invites
interested parties to provide data on which to base compliance cost
estimates. This regulation has been drafted and reviewed in accordance
with Executive Order 12866, Regulatory Planning and Review, section
1(b), The Principles of Regulation. The Department of Justice has
determined that this rule is not a ``significant regulatory action''
under Executive Order 12866, section 3(f), and accordingly this rule
has not been reviewed by OMB.

Executive Order 13132--Federalism

Section 6 of Executive Order 13132 requires Federal agencies to
consult with State entities when a regulation or policy will have a
substantial direct effect on the States, the relationship between the
National Government and the States, or the distribution of power and
responsibilities among the various levels of government within the
meaning of the Executive Order. Section 3(b) of the Executive Order
further provides that Federal agencies may implement a regulation
limiting the policymaking discretion of the States only if
constitutional or statutory authority permits the regulation and the
regulation is appropriate in light of the presence of a problem of
national significance.
This proposed rule does not have a substantial direct effect on the
States or the relationship between the National Government and the
States, or the distribution of power and responsibilities among the
various levels of government, within the meaning of Executive Order
13132. Furthermore, constitutional and statutory authority supports the
proposed rule, and it is appropriate in light of the presence of a
problem of national significance.

Executive Order 12988--Civil Justice Reform

Executive Order 12988 provides that agencies shall draft
regulations that meet applicable standards to avoid drafting errors and
ambiguity, minimize litigation, provide clear legal standards for
affecting conduct, and promote simplification and burden reduction.
This proposed rule meets the applicable standards set forth in sections
3(a) and 3(b)(2) of Executive Order 12988.

Unfunded Mandates Reform Act of 1995

Section 202(a) of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires that a Federal agency determine whether a regulation proposes
a Federal mandate that would result in the increased expenditures by
State, local, or tribal governments, in the aggregate, or by the
private sector, of $100 million or more in any single year. If a
regulation would result in increased expenditures in excess of $100
million, UMRA requires the agency to prepare a written statement
containing, among other things, a qualitative and quantitative
assessment of the anticipated costs and benefits of the Federal
mandate. The Department has reviewed this proposed rule in accordance
with UMRA and determined that the total cost to implement the proposed
rule in any one year will not meet or exceed $100 million. This
proposed rule does not include any Federal mandate that may result in
increased expenditure by State, local, and tribal governments in the
aggregate of more than $100 million, or increased expenditures by the
private sector of more than $100 million. Accordingly, UMRA does not
require any further action.

Small Business Regulatory Enforcement Fairness Act of 1996

This proposed rule is not a major rule as defined by section 251 of
the Small Business Regulatory Enforcement Fairness Act of 1996, 5
U.S.C. 804. This proposed rule will not result in an annual effect on
the economy of $100 million or more; a major increase in costs or
prices; or significant adverse effects on competition, employment,
investment, productivity, innovation, or on the ability of United
States-based enterprises to compete with foreign-based enterprises in
domestic and export markets.

Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq.,
was enacted to minimize the paperwork burden on affected entities. The
PRA requires certain actions before an agency can adopt or revise a
collection of information, including publishing a summary of the
collection of information and a brief description of the need for and
proposed use of the information. 44 U.S.C. 3507. Specifically, a
Federal agency may not conduct or sponsor a collection of information
unless OMB approves the collection of information under the PRA, and
the collection of information must display a currently valid OMB
control number. Notwithstanding any other provisions of law, no person
will be subject to penalty for failing to comply with a collection of
information if the collection of information does not display a
currently valid OMB control number. 44 U.S.C. 3512.
The proposed rule includes two new paperwork requirements. Section
38.6(c) would require faith-based or religious organizations to give
beneficiaries (or prospective beneficiaries) notice informing them of
their rights and protections under this regulation. Section 38.6(d)
would require faith-

[[Page 47322]]

based or religious organizations to make reasonable efforts to identify
and refer beneficiaries requesting referrals to alternative service
providers. The content of the notice and the actions the faith-based or
religious organizations must take if a beneficiary objects to the
religious character of the organization are described in the preamble.
The burdens of providing notice to beneficiaries and identifying and
referring a beneficiary to an alternative service provider are
estimated in this section.
Faith-based or religious organizations that would be subject to
these requirements would have to keep records to show that they have
met the referral requirements in the proposed regulations. If an
organization provides paper notice and uses the model form in Appendix
A, it can meet the recordkeeping requirements in these proposed
regulations by retaining the bottom portion of the form. If an
organization provides notice electronically, the notice would have to
include a means for beneficiaries to request an alternative provider
and follow-up, if desired--that is recorded, so that the organizations
may retain evidence of compliance with these proposed regulations. The
Department has not included an estimate of the burden of maintaining
the records needed to demonstrate compliance with the recordkeeping
requirements because the Department already uses information-collection
instruments to comply with the recordkeeping requirements in existing
Department programs. Those collection instruments are approved by OMB
and each collection has an OMB-assigned information-collection control
number. The burden that would be added by these proposed regulations is
so small as to not be measurable, given all the program and
administrative requirements and the existing program collection
instruments. Therefore, the Department has not included any estimate of
recordkeeping burden in this analysis.
In calculating the burden that the notice and referral requirements
would impose on faith-based or religious organizations, the Department
has made several assumptions. As indicated in the discussion below,
where there is no source for data, the Department has relied on
conversations with other Federal agencies that have regulations
requiring notices and referrals, for data based on their experiences.
For example, the Department estimates that an organization would need
approximately one minute to distribute the required notice to a
beneficiary. This estimate assumes that there may be instances during
which less or more time may be necessary, depending on the number of
beneficiaries seeking the services or benefits from the organization.
Accordingly, the Department estimates that the amount of time needed to
give the notice (T) will be equal to one (1) minute.
The Department acknowledges that estimating the number of faith-
based or religious organizations that provide services or benefits
under Department programs is challenging. To obtain this estimate, the
Department relied upon information from two of its grantmaking
components: The Office on Violence Against Women (OVW) and the Office
of Justice Programs (OJP). OVW estimates that there are approximately
100 grantees and subgrantees that would have to provide the notice to
beneficiaries. OJP estimates that there may be fewer than 50 grantees
and subgrantees subject to the notice requirement, based on three years
of information related to legal name, application for funding, and use
of special conditions that is maintained in its Grants Management
System. Accordingly, the Department estimates that the total number of
organizations that must give notice (N) will be approximately 150.
Under the proposed regulations, faith-based or religious
organizations are required to make reasonable efforts to refer
beneficiaries seeking a referral to an alternate provider. We are not
aware of any instances in which a beneficiary of a program of the
Department has objected to receiving services from a faith-based or
religious organization. When beneficiaries start receiving notices of
their right to request referral to an alternative service provider,
more may raise objections. Our estimate of the number of referrals is
based on the experience of the Department of Health and Human Services,
Substance Abuse and Mental Health Services Administration (SAMHSA),
which administers beneficiary substance abuse service programs under
titles VI and XIX of the Public Health Service Act, 42 U.S.C. 290aa et
seq. and 42 U.S.C. 300x-21 et seq. These programs require faith-based
or religious organizations that receive assistance under the Public
Health Service Act to provide notice to beneficiaries of their right
under statute to request an alternative service provider. 42 U.S.C.
290kk-1(f), 300x-65(e); 42 CFR 54a.8. Recipients of assistance must
also report all referrals to the appropriate Federal, State, or local
government agency that administers the program. 42 CFR 54a.8(d). To
date, SAMHSA has not received any reports of referral by recipients or
subrecipients.
Despite that information, the Department will err on the high side
and estimate that the number of requests for referrals will be one per
month for each faith-based or religious organization. Accordingly, the
Department estimates that the number of beneficiaries or potential
beneficiaries who request referrals (Z) will be twelve (12) per year.
Because the Department has presumed that each faith-based or
religious organization may receive one request per month, it must
estimate the amount of time needed by an organization for a reasonable
effort to identify and make a referral. Based on other Federal
agencies' experiences, the Department estimates that the number of
hours required for an organization to make reasonable efforts to
identify and refer a beneficiary (R) will be two (2) hours.
Based on the information provided, the total estimated annual
burden hours (B) can be calculated using the following equation:

B = T x N x Z x R,
Where

T = the time needed to give the notice = 1 minute = 1/60 hour;
N = the number of faith-based or religious organizations = 150;
Z = the number of annual requests for a referral = 12 per year; and
R = the number of hours needed to identify and make a referral = 2
hours.

Accordingly, the Department estimates that the Total Estimated Annual
Burden Hours (B) will be 1/60 x 150 x 12 x 2, or 60 hours per year.
The Department will submit an information-collection request (ICR)
to OMB to obtain PRA approval for the information-collection formatting
requirements contained in this notice of proposed rulemaking (NPRM).
Draft control number XXXX will be used for public comment.
Title of Collection: Written Notice of Beneficiary Protections.
OMB ICR Reference Number Control Number: XXXX.
Affected Public: State and local governments, nonprofit
organizations.
Abstract: The recipient provider will be required to complete a
referral form, notify the awarding entity, and maintain information
only if a beneficiary requests a referral to an alternate provider.
For additional information, please contact Jerri Murray, Department
Clearance Officer, Policy and Planning Staff, Justice Management
Division, U.S. Department of Justice, Two Constitution

[[Page 47323]]

Square, 145 N Street NE., Suite 3E.405B, Washington, DC 20530.

List of Subjects in 28 CFR Part 38

Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements, Nonprofit organizations.

For the reasons stated in the preamble, the Department proposes to
revise part 38 of title 28 of the Code of Federal Regulations 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.

Authority: 28 U.S.C. 509; 5 U.S.C. 301; E.O. 13279, 67 FR 77141
(Dec. 12, 2002), 3 CFR, 2002 Comp., p. 258; 18 U.S.C. 4001, 4042,
5040; 42 U.S.C. 14045b; 21 U.S.C. 871; 25 U.S.C. 3681; Pub. L. 107-
273, 116 Stat. 1758; Public Law 109-162, 119 Stat. 2960; 42 U.S.C.
3751, 3753, 3762b, 3782, 3796dd-1, 3796dd-7, 3796gg-1, 3796gg-0b,
3796gg-3, 3796h, 3796ii-2, 3797u-3, 3797w, 5611, 5672, 10604; E.O.
13559, 75 FR 71319 (Nov. 17, 2010), 3 CFR, 2010 Comp., p. 273.

Sec. 38.1 Purpose.

The purpose of this part is to implement Executive Order 13279 and
Executive Order 13559.

Sec. 38.2 Applicability and scope.

(a) A faith-based or religious 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. Religious activities that can be publicly funded
under the Establishment Clause, such as chaplaincy services, likewise
would not be considered ``explicitly religious activities'' that are
subject to direct Federal financial assistance restrictions.

Sec. 38.3 Definitions.

As used in this part:
(a)(1) Direct Federal financial assistance or Federal financial
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 subgrants that receive Federal financial
assistance through State administering agencies or State-administered
programs are recipients of ``direct Federal financial assistance'' (or
recipients of ``Federal funds 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 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;
(2) The organization receives the assistance as a result of a
decision of the beneficiary, not a decision of the Government; and
(3) The beneficiary has at least one adequate secular option for
the use of the voucher, certificate, or other similar means of
government-funded payment.
(c)(1) Intermediary or pass-through entity means an entity,
including a nonprofit or nongovernmental organization, acting under a
contract, grant, or other agreement with the Federal Government or with
a State or local government, such as a State administering agency, that
accepts Federal financial assistance as a primary recipient or grantee
and distributes that assistance to other organizations that, in turn,
provide government-funded social services.
(2) When an intermediary, such as a State administering agency,
distributes Federal financial assistance to other organizations, it
replaces the Department as the awarding entity. The intermediary
remains accountable for the Federal financial assistance it disburses
and, accordingly, must ensure that any providers to which it disburses
Federal financial assistance also comply with this part.
(d) Department program refers to a grant, contract, or cooperative
agreement funded by a discretionary, formula, or block grant program
administered by or from the Department.
(e) Grantee includes a recipient of a grant, a signatory to a
cooperative agreement, or a contracting party.
(f) The Office for Civil Rights refers to the Office for Civil
Rights in the Department's Office of Justice Programs.

Sec. 38.4 Policy.

(a) Grants (formula and discretionary), contracts, and cooperative
agreements. Faith-based or religious organizations are eligible, on the
same basis as any other organization, 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.
(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 or religious belief.

Sec. 38.5 Responsibilities.

(a)(1) Organizations that receive direct 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 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 financial
assistance from the Department, and participation must be voluntary for
beneficiaries of the programs or services funded with such assistance.
(2) Where Department funds are provided to chaplains to work with
inmates in prisons, detention facilities, or community correction
centers, or where Department funds are provided to

[[Page 47324]]

religious or other organizations for programs in prisons, detention
facilities, or community correction centers, in which such
organizations assist chaplains in carrying out their duties, or to any
other activity that can be publicly funded under the Establishment
Clause, these activities would not be considered ``explicitly religious
activities'' that are subject to direct Federal financial assistance
restrictions.
(b) A faith-based or religious organization that participates in
the Department-funded programs or services will retain its 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 financial
assistance from the Department to support any explicitly religious
activities, including activities that involve overt religious content
such as worship, religious instruction, or proselytization. Among other
things, a faith-based or religious organization that receives financial
assistance from the Department may use space in its facilities without
removing scriptures or religious art, icons, messages, scriptures, or
symbols. In addition, a faith-based or religious organization that
receives financial assistance from the Department 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.
(c) Any organization that participates in programs funded by direct
financial assistance from the Department shall not, in providing
services, discriminate against a program 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.
(d) No grant document, agreement, covenant, memorandum of
understanding, policy, or regulation that the Department or a State or
local government uses in administering financial assistance from the
Department shall require only faith-based or religious organizations to
provide assurances that they will not use monies or property for
explicitly religious activities. All organizations, including religious
ones, that participate in Department programs must carry out eligible
activities in accordance with all program requirements and other
applicable requirements governing the conduct of Department-funded
activities, including those prohibiting the use of direct 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 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.
(e) Exemption from Title VII employment discrimination
requirements. A faith-based or 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(a), is not forfeited when the organization receives
direct or indirect 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 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 religious organization, obtain tax-exempt status under
section 501(c)(3) of the Internal Revenue Code to be eligible for
funding under Department programs. Many grant programs, however, do
require an organization to be a ``nonprofit organization'' in order to
be eligible for funding. Individual solicitations that require
organizations to have nonprofit status will specifically so indicate in
the eligibility section of a solicitation. In addition, any
solicitation that requires an organization to maintain tax-exempt
status will 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; or
(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.
(h) Grantees should consult with the appropriate Department program
office to determine the applicability of this part in foreign countries
or sovereign lands.

Sec. 38.6 Procedures.

(a) Effect on State and local funds. If a State or local government
voluntarily contributes its own funds to supplement activities carried
out under the applicable programs, the State or local government has
the option to separate out the Federal funds or commingle them. If the
funds are commingled, the provisions of this section shall apply to all
of the commingled funds in the same manner, and to the same extent, as
the provisions apply to the Federal funds.
(b) To the extent otherwise permitted by Federal law, the
restrictions on explicitly religious activities set forth in this
section do not apply to indirect Federal financial assistance.
(c) Beneficiary protections: Written notice. (1) Faith-based or
religious organizations providing social services to beneficiaries
under a program

[[Page 47325]]

supported by direct Federal financial assistance from the Department
must give written notice to beneficiaries and prospective beneficiaries
of certain protections. Such notice must be given in a manner
prescribed by the Office for Civil Rights. This notice must state the
following:
(i) The organization may not discriminate against beneficiaries on
the basis of religion or religious belief;
(ii) The organization may not require beneficiaries to attend or
participate in any explicitly religious activities that are offered by
the organization, and any participation by beneficiaries in such
activities must be purely voluntary;
(iii) The organization must separate in time or location any
privately funded explicitly religious activities from activities
supported by direct Federal financial assistance;
(iv) If a beneficiary objects to the religious character of the
organization, the organization will undertake reasonable efforts to
identify and refer the beneficiary to an alternative provider to which
the prospective beneficiary has no objection; and
(v) Beneficiaries may report an organization's violation of these
protections or file a written complaint of any denials of services or
benefits by an organization with the Office for Civil Rights or the
intermediary that awarded funds to the organization.
(2) This written notice must be given to beneficiaries prior to the
time they enroll in the program or receive services from such programs.
When the nature of the service provided or exigent circumstances make
it impracticable to provide such written notice in advance of the
actual service, service providers must advise beneficiaries of their
protections at the earliest available opportunity.
(3) The notice that a faith-based or religious organization may use
to notify beneficiaries or prospective beneficiaries of their
protections under paragraph (c)(1) of this section is available at
http://ojp.gov/fbnp/index.htm.
(d) Beneficiary protections: Referral requirements. (1) If a
beneficiary or prospective beneficiary of a social service program
supported by the Department objects to the religious character of an
organization that provides services under the program, that
organization must promptly undertake reasonable efforts to identify and
refer the beneficiary to an alternative provider to which the
prospective beneficiary has no objection based on the organization's
religious character. See Written Notice of Beneficiary Protections,
available at http://ojp.gov/fbnp/index.htm.
(2) An organization may refer a beneficiary or prospective
beneficiary to another faith-based or religious organization that
provides comparable services, if the beneficiary has no objection to
that provider. But if the beneficiary requests a secular provider, and
a secular provider is available, then a referral must be made to that
provider.
(3) Except for services provided by telephone, Internet, or similar
means, the referral must be to an alternative provider that is in
reasonable geographic proximity to the organization making the referral
and that offers services that are similar in substance and quality to
those offered by the organization. The alternative provider also must
have the capacity to accept additional clients.
(4) When the organization makes a referral to an alternative
provider, or when the organization determines that it is unable to
identify an alternative provider, the organization shall notify and
maintain a record for review by the awarding entity. If the
organization is unable to identify an alternative provider, the
awarding entity shall determine whether there is any other suitable
alternative provider to which the beneficiary may be referred. An
intermediary that receives a request for assistance in identifying an
alternative provider may request assistance from the Department.

Sec. 38.7 Assurances.

(a) Every application submitted to the Department for direct
Federal financial assistance subject to this part must contain, as a
condition of its approval and the extension of any such assistance, or
be accompanied by, an assurance or statement that the program is or
will be conducted in compliance with this part.
(b) Every intermediary must provide for such methods of
administration as are required by the Office for Civil Rights to give
reasonable assurance that the intermediary will comply with this part
and effectively monitor the actions of its recipients.

Sec. 38.8 Enforcement.

(a) The Office for Civil Rights may review the practices of
recipients of direct Federal financial assistance to determine whether
they are in compliance with this part.
(b) The Office for Civil Rights may investigate any allegations of
noncompliance with this part.
(c) Recipients of direct 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 part, may be filed with the Office for
Civil Rights or the intermediary that awarded the funds to the
organization.

Dated: July 16, 2015.
Loretta E. Lynch,
Attorney General.

Note: The following Appendix will not appear in the Code of
Federal Regulations.

APPENDIX A

WRITTEN NOTICE OF BENEFICIARY PROTECTIONS

Name of Organization:

Name of Program:

Contact Information for Program Staff (name, phone number, and
email address, if appropriate):

Because this program is supported in whole or in part by
financial assistance from the Federal Government, we are required to
let you know that--

We may not discriminate against you on the basis of
religion or religious belief;
We may not require you to attend or participate in any
explicitly religious activities that we offer, and your
participation in these activities must be purely voluntary;
We must separate in time or location any privately funded
explicitly religious activities from activities supported with
direct Federal financial assistance;
If you object to the religious character of our
organization, we must make reasonable efforts to identify and refer
you to an alternative provider to which you have no objection; and
You may report violations of these protections to the U.S.
Department of Justice, Office of Justice Programs, Office for Civil
Rights or to [name of agency that awarded grant].

We must give you this written notice before you enroll in our
program or receive services from the program.

BENEFICARY REFERRAL REQUEST

If you object to receiving services from us based on the
religious character of our organization, please complete this form
and return it to the program contact identified above. If you
object, we will make reasonable efforts to refer you to another
service provider. We cannot guarantee, however, that in every
instance, an alternative provider will be available. With your
consent, we will follow up with you or the organization to which you
were referred to determine whether you contacted that organization.

Please check if applicable:

( ) I want to be referred to another service provider.

[[Page 47326]]

If you checked above that you wish to be referred to another
service provider, please check one of the following:

( ) Please follow up with me or the service provider to which I
was referred.

Name:

Best way to reach me (phone/address/email):

( ) Please do not follow up.
[FR Doc. 2015-18259 Filed 8-5-15; 8:45 am]
BILLING CODE 4410-18-P

47322 Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules

based or religious organizations to make estimate assumes that there may be received any reports of referral by
reasonable efforts to identify and refer instances during which less or more recipients or subrecipients.
beneficiaries requesting referrals to time may be necessary, depending on Despite that information, the
alternative service providers. The the number of beneficiaries seeking the Department will err on the high side
content of the notice and the actions the services or benefits from the and estimate that the number of requests
faith-based or religious organizations organization. Accordingly, the for referrals will be one per month for
must take if a beneficiary objects to the Department estimates that the amount of each faith-based or religious
religious character of the organization time needed to give the notice (T) will organization. Accordingly, the
are described in the preamble. The be equal to one (1) minute. Department estimates that the number
burdens of providing notice to The Department acknowledges that of beneficiaries or potential
beneficiaries and identifying and estimating the number of faith-based or beneficiaries who request referrals (Z)
referring a beneficiary to an alternative religious organizations that provide will be twelve (12) per year.
service provider are estimated in this services or benefits under Department Because the Department has
section. programs is challenging. To obtain this presumed that each faith-based or
Faith-based or religious organizations estimate, the Department relied upon religious organization may receive one
that would be subject to these information from two of its grantmaking request per month, it must estimate the
requirements would have to keep components: The Office on Violence amount of time needed by an
records to show that they have met the Against Women (OVW) and the Office organization for a reasonable effort to
referral requirements in the proposed of Justice Programs (OJP). OVW identify and make a referral. Based on
regulations. If an organization provides estimates that there are approximately other Federal agencies’ experiences, the
paper notice and uses the model form in 100 grantees and subgrantees that would Department estimates that the number
Appendix A, it can meet the have to provide the notice to of hours required for an organization to
recordkeeping requirements in these beneficiaries. OJP estimates that there make reasonable efforts to identify and
proposed regulations by retaining the may be fewer than 50 grantees and refer a beneficiary (R) will be two (2)
bottom portion of the form. If an subgrantees subject to the notice hours.
organization provides notice requirement, based on three years of Based on the information provided,
electronically, the notice would have to information related to legal name, the total estimated annual burden hours
include a means for beneficiaries to application for funding, and use of (B) can be calculated using the
request an alternative provider and special conditions that is maintained in following equation:
follow-up, if desired—that is recorded, its Grants Management System.
so that the organizations may retain Accordingly, the Department estimates B = T × N × Z × R,
Where
evidence of compliance with these that the total number of organizations
proposed regulations. The Department that must give notice (N) will be T = the time needed to give the notice = 1
has not included an estimate of the approximately 150. minute = 1/60 hour;
burden of maintaining the records Under the proposed regulations, faith- N = the number of faith-based or religious
based or religious organizations are organizations = 150;
needed to demonstrate compliance with
Z = the number of annual requests for a
the recordkeeping requirements because required to make reasonable efforts to referral = 12 per year; and
the Department already uses refer beneficiaries seeking a referral to R = the number of hours needed to identify
information-collection instruments to an alternate provider. We are not aware and make a referral = 2 hours.
comply with the recordkeeping of any instances in which a beneficiary
requirements in existing Department of a program of the Department has Accordingly, the Department estimates
programs. Those collection instruments objected to receiving services from a that the Total Estimated Annual Burden
are approved by OMB and each faith-based or religious organization. Hours (B) will be 1/60 × 150 × 12 × 2,
collection has an OMB-assigned When beneficiaries start receiving or 60 hours per year.
information-collection control number. notices of their right to request referral The Department will submit an
The burden that would be added by to an alternative service provider, more information-collection request (ICR) to
these proposed regulations is so small as may raise objections. Our estimate of the OMB to obtain PRA approval for the
to not be measurable, given all the number of referrals is based on the information-collection formatting
program and administrative experience of the Department of Health requirements contained in this notice of
requirements and the existing program and Human Services, Substance Abuse proposed rulemaking (NPRM). Draft
collection instruments. Therefore, the and Mental Health Services control number XXXX will be used for
Department has not included any Administration (SAMHSA), which public comment.
estimate of recordkeeping burden in this administers beneficiary substance abuse Title of Collection: Written Notice of
analysis. service programs under titles VI and Beneficiary Protections.
In calculating the burden that the XIX of the Public Health Service Act, 42 OMB ICR Reference Number Control
notice and referral requirements would U.S.C. 290aa et seq. and 42 U.S.C. 300x– Number: XXXX.
impose on faith-based or religious 21 et seq. These programs require faith- Affected Public: State and local
organizations, the Department has made based or religious organizations that governments, nonprofit organizations.
several assumptions. As indicated in the receive assistance under the Public Abstract: The recipient provider will
discussion below, where there is no Health Service Act to provide notice to be required to complete a referral form,
mstockstill on DSK4VPTVN1PROD with PROPOSALS2

source for data, the Department has beneficiaries of their right under statute notify the awarding entity, and maintain
relied on conversations with other to request an alternative service information only if a beneficiary
Federal agencies that have regulations provider. 42 U.S.C. 290kk–1(f), 300x– requests a referral to an alternate
requiring notices and referrals, for data 65(e); 42 CFR 54a.8. Recipients of provider.
based on their experiences. For assistance must also report all referrals For additional information, please
example, the Department estimates that to the appropriate Federal, State, or contact Jerri Murray, Department
an organization would need local government agency that Clearance Officer, Policy and Planning
approximately one minute to distribute administers the program. 42 CFR Staff, Justice Management Division, U.S.
the required notice to a beneficiary. This 54a.8(d). To date, SAMHSA has not Department of Justice, Two Constitution

VerDate Sep<11>2014 21:24 Aug 05, 2015 Jkt 235001 PO 00000 Frm 00008 Fmt 4701 Sfmt 4702 E:\FR\FM\06AUP9.SGM 06AUP9

$47326 Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules If you checked above that you wish to be Name: ( ) Please do not follow up. referred to another service provider, please Best way to reach me (phone/address/ [FR Doc. 2015–18259 Filed 8–5–15; 8:45 am] check one of the following: email): BILLING CODE 4410–18–P ( ) Please follow up with me or the service provider to which I was referred. mstockstill on DSK4VPTVN1PROD with PROPOSALS2 VerDate Sep<11>2014 21:24 Aug 05, 2015 Jkt 235001 PO 00000 Frm 00012 Fmt 4701 Sfmt 9990 E:\FR\FM\06AUP9.SGM 06AUP9$

Document Created: 2018-02-23 10:55:33
Document Modified: 2018-02-23 10:55:33

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Proposed Rules
Action		Proposed rule.
Dates		Written comments must be postmarked and electronic comments must be submitted on or before October 5, 2015. Comments received by mail will be considered timely if they are postmarked on or before that date. The electronic Federal Docket Management System (FDMS) will accept comments until Midnight Eastern Time at the end of that day.
Contact		Eugene Schneeberg, Director, Center for Faith-based & Neighborhood Partnerships, U.S. Department of Justice, Washington, DC 20531. Phone: (202) 307-0588.
FR Citation		80 FR 47316
RIN Number		1105-AB45
CFR Associated		Administrative Practice and Procedure; Grant Programs; Reporting and Recordkeeping Requirements and Nonprofit Organizations