80_FR_47479 80 FR 47328 - Equal Treatment in Department of Labor Programs for Faith-Based and Community Organizations; Protection of Religious Liberty of Department of Labor Social Service Providers and Beneficiaries

80 FR 47328 - Equal Treatment in Department of Labor Programs for Faith-Based and Community Organizations; Protection of Religious Liberty of Department of Labor Social Service Providers and Beneficiaries

DEPARTMENT OF LABOR
Office of the Secretary

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

Page Range47328-47338
FR Document2015-18260

The United States Department of Labor (DOL or the Department) proposes to amend its general regulations regarding the equal treatment of religious organizations in Department of Labor programs and the protection of religious liberty for Department of Labor social service providers and beneficiaries. Specifically, this proposed rule would: Clarify the definition of direct and indirect financial assistance, 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,'' require faith- based organizations administering a program supported with direct DOL financial assistance to provide beneficiaries with a written notice informing them of their religious liberty rights, including the right to a referral to an alternative provider if the beneficiary objects to the religious character of the organization providing services, and add a provision stating that decisions about awards of Federal financial assistance must be free from political interference and based on merit. These changes are necessitated by the issuance in November 2010, of Executive Order 13559, Fundamental Principles and Policymaking Criteria for Partnerships with Faith-Based and Other Neighborhood Organizations.

Federal Register, Volume 80 Issue 151 (Thursday, August 6, 2015)
[Federal Register Volume 80, Number 151 (Thursday, August 6, 2015)]
[Proposed Rules]
[Pages 47328-47338]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-18260]



[[Page 47327]]

Vol. 80

Thursday,

No. 151

August 6, 2015

Part XII





Department of Labor





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29 CFR Part 2





Equal Treatment in Department of Labor Programs for Faith-Based and 
Community Organizations; Protection of Religious Liberty of Department 
of Labor Social Service Providers and Beneficiaries; Proposed Rule

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

[[Page 47328]]


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DEPARTMENT OF LABOR

Office of the Secretary

29 CFR Part 2

RIN 1290-AA29


Equal Treatment in Department of Labor Programs for Faith-Based 
and Community Organizations; Protection of Religious Liberty of 
Department of Labor Social Service Providers and Beneficiaries

AGENCY: Office of the Secretary, Labor.

ACTION: Proposed rule; request for comments.

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SUMMARY: The United States Department of Labor (DOL or the Department) 
proposes to amend its general regulations regarding the equal treatment 
of religious organizations in Department of Labor programs and the 
protection of religious liberty for Department of Labor social service 
providers and beneficiaries. Specifically, this proposed rule would: 
Clarify the definition of direct and indirect financial assistance, 
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,'' require faith-
based organizations administering a program supported with direct DOL 
financial assistance to provide beneficiaries with a written notice 
informing them of their religious liberty rights, including the right 
to a referral to an alternative provider if the beneficiary objects to 
the religious character of the organization providing services, and add 
a provision stating that decisions about awards of Federal financial 
assistance must be free from political interference and based on merit. 
These changes are necessitated by the issuance in November 2010, of 
Executive Order 13559, Fundamental Principles and Policymaking Criteria 
for Partnerships with Faith-Based and Other Neighborhood Organizations.

DATES: Comments must be submitted (postmarked, sent, or received) by 
October 5, 2015.

ADDRESSES: You may submit comments concerning the NPRM, identified by 
RIN number 1290-AA29, by any of the following methods:
    [ssquf] Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions on-line for submitting comments.
    [ssquf] Email: [email protected]. Include RIN number 1290-AA29 in the 
subject line of the message.
    [ssquf] Fax: (202) 693-6091 (for comments of 10 pages or less).
    [ssquf] Mail, hand delivery, express mail, messenger, or courier 
service: Phil Tom, Director, Center for Faith-Based and Neighborhood 
Partnerships (CFBNP), U.S. Department of Labor, 200 Constitution Ave. 
NW., Room C-2318, Washington, DC 20210.

    Instructions: Please submit your comments by only one method. 
Receipt of submissions will not be acknowledged; however, the sender 
may request confirmation that a submission has been received by 
telephoning (202) 693-6017. All submissions received must include the 
agency name and docket number or Regulatory Information Number (RIN) 
for this rulemaking. All comments received, including any personal 
information provided, are considered part of the public record and 
available for public inspection online at http://www.regulations.gov 
and during normal business hours at Room C-2318, 200 Constitution 
Avenue NW., Washington, DC 20210. Parties who wish to comment 
anonymously may do so by submitting their comments via 
www.regulations.gov, leaving the fields that would identify the 
commenter blank and including no identifying information in the comment 
itself. Comments submitted via www.regulations.gov are immediately 
available for public inspection. Upon request, individuals who require 
assistance to review comments will be provided with appropriate aids 
such as readers or print magnifiers. Copies of this NPRM will be made 
available in the following formats: Large print, electronic file on 
computer disc, and audiotape. To schedule an appointment to review the 
comments and/or to obtain this NPRM in an alternate format, contact 
CFBNP at (202) 693-6017.

FOR FURTHER INFORMATION CONTACT: Phil Tom, Director, Center for Faith-
Based and Neighborhood Partnerships (CFBNP), U.S. Department of Labor, 
Frances Perkins Building, 200 Constitution Ave. NW., Room C-2318, 
Washington, DC 20210; telephone: (202) 693-6017. Please note this is 
not a toll-free number. Individuals with hearing or speech impairments 
may access this telephone number via TTY by calling the toll-free 
Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    This proposal concerns and implements two Executive Orders: 
Executive Order 13279, Equal Protection of the Laws for Faith-Based and 
Community Organizations, issued on December 12, 2002, 67 FR 77141 (Dec. 
16, 2002) and Executive Order 13559, Fundamental Principles and 
Policymaking Criteria for Partnerships with Faith-Based and Other 
Neighborhood Organizations, issued on November 17, 2010, 75 FR 71319 
(Nov. 22, 2010), which amends Executive Order 13279. Executive Order 
13279 set forth the principles and policymaking criteria to guide 
Federal agencies in formulating and developing policies with 
implications for faith-based organizations 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 service 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 community organizations.
    On July 12, 2004, the Department of Labor issued regulations 
through notice and comment rulemaking implementing Executive Order 
13279 at 29 CFR part 2, subpart D, Equal Treatment in Department of 
Labor Programs for Religious Organizations; Protection of Religious 
Liberty of Department of Labor Social Service Providers and 
Beneficiaries (``Equal Treatment Regulations''), which apply to all 
providers that implement DOL-supported social service programs. 69 FR 
41882. These regulations clarify that faith-based and community 
organizations may participate in the Department's social service 
programs without regard to the organizations' religious character or 
affiliation, and are able to apply for and compete on an equal footing 
with other eligible organizations to receive DOL support. 29 CFR 2.30. 
In addition, these regulations ensure that the Department's social 
service programs are implemented in a manner consistent with the 
Constitution, including the Religion Clauses of the First Amendment. 
Id.
    The current Equal Treatment Regulations are divided into seven 
sections. Section 2.30 sets forth the purpose of the regulations as 
explained in the previous paragraph. Section 2.31 provides definitions 
for certain terms

[[Page 47329]]

used in the regulations, including ``Federal financial assistance,'' 
``social service program,'' ``DOL,'' ``DOL-supported social service 
program'', ``DOL social service program'', ``DOL social service 
provider,'' ``DOL social service intermediary provider,'' and the term 
``DOL support.'' Section 2.32 clarifies that religious organizations 
receiving DOL support may continue to carry out their religious 
activities provided that no direct DOL support is used to support 
inherently religious activities. Specifically, religious organizations 
that receive DOL support need not remove religious signs or symbols 
from their facilities offering DOL-supported services and may continue 
to select their board members and otherwise govern themselves on a 
religious basis.
    Currently, DOL social service providers, including State and local 
governments and other intermediaries administering DOL support, have 
certain responsibilities as recipients of DOL support. Section 2.33 of 
the Equal Treatment Regulations sets forth these responsibilities, 
namely that as providers of DOL support, they must not discriminate for 
or against a current or prospective beneficiary on the basis of 
religion or religious belief. In addition, they must ensure that no 
direct DOL support is used to support inherently religious activities, 
except in very limited circumstances, which are explained in paragraph 
(b)(3) of this section. As a general rule, if a provider engages in 
inherently religious activities, such activities must be offered 
separately, in time or location, from the social service programs 
receiving direct DOL financial assistance, and participation must be 
voluntary for the beneficiaries of DOL social service programs. 
Paragraph (c) of Sec.  2.33 clarifies that these responsibilities do 
not apply to social service programs where DOL support is provided to a 
religious organization indirectly. Religious and other non-governmental 
organizations will be considered to have received support indirectly, 
for example, if as a result of a program beneficiary's genuine and 
independent choice the beneficiary redeems a voucher, coupon, or 
certificate that allows the beneficiary to choose the service provider, 
or some other mechanism is provided to ensure that beneficiaries have a 
genuine and independent choice among providers or program options.
    Section 2.34 of the existing Equal Treatment Regulations addresses 
the application of the regulations to State and local funds. This 
section clarifies that if a State or local government contributes its 
own funds (voluntarily or in accordance with a matching funds program) 
to supplement Federal funds that support DOL social service programs, 
the State or local government has the option to segregate the Federal 
funds or commingle them. If the funds are commingled, the regulations 
apply to both the Federal and the State or local funds.
    Section 2.35 clarifies that receipt of DOL support does not cause 
religious organizations to forfeit their exemption from title VII of 
the Civil Rights Act of 1964's prohibitions on employment 
discrimination on the basis of religion. However, the Equal Treatment 
Regulations do not alter the effect of other statutes which may require 
recipients of certain types of DOL support to refrain from religious 
discrimination.
    Finally, Sec.  2.36 of the current rule establishes alternative 
mechanisms by which organizations can prove they are nonprofit, which 
is sometimes an eligibility requirement for receiving DOL support. Such 
mechanisms, however, do not apply where a statute requires a specific 
method for establishing nonprofit status.
    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. 9, 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, 
among other things, make recommendations to the President for changes 
in policies, programs, and practices that affect the delivery of social 
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/microsites/ofbnp-council-final-report.pdf). The Advisory 
Council Report included recommendations to amend Executive Order 13279 
in order to clarify the legal foundation of partnerships and offered a 
revised set of fundamental principles to guide agency decision-making 
in administering Federal financial assistance and support to faith-
based and 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 
(available at http://www.thefederalregister.org/fdsys/pkg/FR-2010-11-22/pdf/2010-29579.pdf). Executive Order 13559 incorporated the Advisory Council's 
recommendations by amending Executive Order 13279 to:
     emphasize that religious providers are welcome to compete 
for government social service funding and maintain a religious identity 
as described in the order;
     clarify (i) the principle that organizations engaging in 
explicitly religious activity must separate these activities in time or 
location from programs supported with direct Federal financial 
assistance, (ii) that participation in any explicit religious activity 
cannot be subsidized with direct Federal financial assistance, and 
(iii) that participation in such activities must be voluntary for the 
beneficiaries of the social service program supported with such Federal 
financial assistance;
     direct agencies to adopt regulations and guidance that 
distinguish between ``direct'' and ``indirect'' Federal financial 
assistance;
     clarify that the standards in these proposed regulations 
apply to sub-awards as well as prime awards;
     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 
neighborhood organizations and to post online a list of entities 
receiving such assistance;
     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;
     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); and

[[Page 47330]]

     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.

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. Executive Order 13559, Sec.  1(c) (amending Sec.  3 of 
Executive Order 13279).
    The Executive Order also required OMB, in coordination with the 
Department of Justice, to issue guidance to agencies on the 
implementation of the Order following receipt of the Working Group's 
report. In August 2013, OMB issued such guidance. In this guidance, OMB 
instructed specified agency heads to adopt regulations and guidance 
that will fulfill the requirements of the Executive Order to the extent 
such regulations and guidance do not exist and to amend any existing 
regulations and guidance to ensure that they are consistent with the 
requirements set forth in Executive Order 13559. Memorandum from Sylvia 
M. Burwell, Director, on Implementation of Executive Order 13559 to 
Heads of Executive Departments and Agencies (Aug. 2, 2013) (available 
at http://www.whitehouse.gov/sites/default/files/omb/memoranda/2013/m-13-19.pdf. Pursuant to the August 2, 2013 OMB Memo, the Department is 
hereby publishing this proposed rule amending its existing regulations 
to ensure they are consistent with Executive Order 13279 as amended by 
Executive Order 13559.
    As explained below, the Department's existing Equal Treatment 
Regulations at 29 CFR part 2, subpart D meet many of the provisions of 
Executive Order 13559. However, a few provisions will need to be 
revised or proposed in order to meet the requirements of Executive 
Order 13279 as amended. Existing sections Sec. Sec.  2.30 and 2.32 of 
the Equal Treatment Regulations emphasize that religious providers are 
eligible on the same basis as any other organization to seek DOL 
support or participate in DOL programs for which they are otherwise 
eligible. Section 2.32 also clarifies that religious providers retain 
their independence and religious identity. Section 2.33 prohibits 
discrimination against beneficiaries on the basis of religion or 
religious belief and sets forth the requirements related to inherently 
religious activities in DOL-supported social service programs. 
Specifically, Sec.  2.33 prohibits organizations from using direct DOL 
support for inherently religious activities, such as worship, religious 
instruction, or proselytization, and requires DOL social service 
providers to take certain steps to separate out in time or location 
their inherently religious activities from the services that they offer 
with direct DOL support. This provision also clarifies that the 
restrictions on inherently religious activities do not apply where DOL 
support is provided indirectly to organizations, or where there is 
extensive government control over the environment of a DOL-supported 
social service program, such that affirmative steps must be taken by 
the social service provider to ensure that beneficiaries are able to 
exercise freely their religion. And finally, the current Equal 
Treatment Regulations already apply to both prime and sub-awards. See 
29 CFR 2.31(f) (defining term ``DOL social service intermediary 
provider''); see also 29 CFR 2.33 (enumerating responsibilities of DOL 
providers, including intermediary providers and State and local 
governments administering DOL support).

II. Overview of Proposed Rule

A. Purpose of the Proposed Rule

    Consistent with Executive Order 13559, this proposed rule would 
revise the Department's Equal Treatment Regulations to: (1) clarify the 
distinction between direct and indirect Federal financial assistance as 
well as the rights and obligations of DOL social service providers; (2) 
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,'' (3) require 
faith-based organizations administering a program supported with direct 
DOL financial assistance to provide beneficiaries with a written notice 
informing them of their religious liberty rights, including the right 
to a referral to an alternative provider if the beneficiary objects to 
the religious character of the organization providing services, and (4) 
add a provision stating that decisions about awards of Federal 
financial assistance must be free from political interference and made 
based on merit. These changes will ensure the Department's regulations 
implement all of the requirements of Executive Order 13279 as amended.

B. Proposed Amendments to DOL Equal Treatment Regulations

    DOL proposes to amend its Equal Treatment Regulations at 29 CFR 
part 2, subpart D to address the areas identified below.
1. Direct and Indirect Federal Financial Assistance
    Executive Order 13559 noted that new regulations should distinguish 
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. Executive Order 13559, Sec.  1(c) 
(amending Sec.  3(b) of Executive Order 13279).
    Programs are supported with direct Federal financial assistance 
when either the government or an intermediary, as identified in these 
proposed rules, 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's identity.
    ``Indirect'' Federal financial assistance is distinguishable 
because it places the choice of service provider in the hands of a 
beneficiary before the Federal government pays for the cost of that 
service through a voucher, certificate, or other similar means. For 
example, the Federal government could choose to allow the beneficiary 
to secure the needed service on his or her own. Alternatively, a 
Federal agency, operating under a neutral program of aid, could present 
each beneficiary or prospective beneficiary with a list of all 
qualified providers from which the beneficiary could obtain services 
using a Federal government-provided certificate, e.g. through the use 
of Individual Training Accounts. Either way, the Federal government 
empowers the beneficiary to choose for himself or herself whether to 
receive the needed services, including those that contain explicitly 
religious activities, through a faith-based or other neighborhood 
organization. The Federal government could then pay for the 
beneficiary's choice of provider by giving the beneficiary a voucher or 
similar document. Alternatively, the Federal government could choose to 
pay the provider directly after asking the beneficiary to indicate his 
or her choice. See Freedom From Religion Found. v.

[[Page 47331]]

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. See 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.
    The Department's Equal Treatment Regulations currently note this 
distinction between direct and indirect financial assistance at 
paragraphs (b)(1) and (b)(3) of Sec.  2.33. The current regulations do 
not, however, provide explicit definitions for the terms ``direct 
Federal financial assistance'' and ``indirect Federal financial 
assistance,'' which might help to clarify the distinction. Accordingly, 
the Department proposes to add definitions of these terms to paragraph 
(a) of Sec.  2.31, the section containing the definition of certain 
terms used in the Equal Treatment Regulations. Paragraph (a) defines 
the term ``Federal financial assistance.'' Consistent with Executive 
Order 13559's mandate to adopt regulations on ``the distinction between 
`direct' and `indirect' Federal financial assistance,'' \1\ the 
proposed rule adds language to paragraph (a) indicating that Federal 
financial assistance may be direct or indirect. Proposed paragraph 
(a)(1) provides a definition for the term ``direct Federal financial 
assistance'' or ``Federal financial assistance provided directly'' and 
defines it to mean that the Government or an intermediary 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, Federal 
financial assistance will be treated as direct, unless it meets the 
definition of indirect Federal financial assistance or Federal 
financial assistance provided indirectly.
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    \1\ Executive Order 11246, Sec.  3(b)(iii), as amended by 
Executive Order 13559, Sec.  1.75 FR at 71321.
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    Proposed paragraph (a)(2) provides a definition for the term 
``indirect Federal financial assistance'' or ``Federal financial 
assistance provided indirectly'' and defines it to mean that the choice 
of the service provider is placed in the hands of the beneficiary, and 
the cost of that service is paid through a voucher, certificate, or 
other similar means of government-funded payment. Federal financial 
assistance provided to an organization is considered ``indirect'' when 
(1) the government funded 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. 
Proposed paragraph (a)(3) notes that recipients of sub-awards that 
receive Federal financial assistance through programs administered by 
states or other intermediaries are not considered recipients of 
indirect Federal financial assistance.
2. Inherently Religious Activities
    Existing agency regulations and Executive Order 13279 prohibits 
non-governmental organizations from using direct Federal financial 
assistance (e.g., government grants, contracts, sub-grants, and 
subcontracts) for ``inherently religious activities, such as worship, 
religious instruction, and proselytization.'' 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 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, while the Supreme Court has sometimes used the term 
``inherently religious,'' it has not used it to indicate the boundary 
of what the Government may subsidize with direct Federal financial 
assistance. If the term is interpreted narrowly, it could permit 
actions that the Constitution prohibits. On the other hand, one could 
also argue that the term ``inherently religious'' is too broad rather 
than too narrow. For example, some might consider their 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, JJ., 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 should 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. Secular activity also includes the study or 
acknowledgement of religion as a historical or cultural reality.
    The Department, therefore, proposes to replace the term 
``inherently religious activities'' with the term ``explicitly 
religious activities'' throughout the Equal Treatment Regulations and 
to define the latter term as ``including activities that involve overt 
religious content such as worship, religious instruction, or 
proselytization.'' These changes in language are consistent with the 
use of the term ``explicitly religious activities'' in Executive Order 
13559 and will provide greater clarity and more closely match 
constitutional standards as they have been developed in case law.
3. Intermediaries
    The Department also proposes to add regulatory language at proposed

[[Page 47332]]

Sec.  2.33(d) that will clarify the rights and responsibilities of 
intermediaries. An intermediary is an entity, including a non-
governmental organization, acting under a contract, grant, or other 
agreement with the Federal Government or with a State or local 
government, that accepts 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, providing any 
services supported with direct Federal financial assistance in a 
religiously neutral manner that does not include explicitly religious 
activities. 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. 
While 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 non-governmental organization, it 
retains all other rights of a non-governmental 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 effectively monitor the actions of such 
organizations. States are obligated to manage the day-to-day operations 
of grant- and sub-grant- 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.
4. Protections for Beneficiaries
    Executive Order 13559 indicates a variety of valuable protections 
for the religious liberty rights of social service beneficiaries. These 
protections are aimed at ensuring that Federal financial assistance is 
not used to coerce or pressure beneficiaries along religious lines, and 
to make beneficiaries aware of their rights, through appropriate 
notice, when potentially obtaining services from providers with a 
religious affiliation.
    Both section 2(d) of Executive Order 13279 as amended and the 
Department's current Equal Treatment Regulations make clear that all 
organizations that receive Federal financial assistance for the purpose 
of delivering social 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. 
Executive Order 13559, Sec.  1(b) (amending Sec.  2(d) of Executive 
Order 13279); 29 CFR 2.33. Both also state 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 sub-awards). Executive Order 13559, Sec.  1(b) 
(amending Sec.  2(f) of Executive Order 13279); 29 CFR 2.33. 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 direct Federal financial assistance.
    To strengthen the protections provided to beneficiaries, Executive 
Order 13559 requires that organizations administering a program that is 
supported by direct Federal financial assistance must give written 
notice in a manner prescribed by the Department to beneficiaries and 
prospective beneficiaries of their religious liberty rights, including 
the right to be referred to an alternative provider when available. If 
a beneficiary or prospective beneficiary of a social service program 
supported by Federal financial assistance objects to the religious 
character of an organization that provides services under the program, 
the social service program must refer the beneficiary to an alternative 
provider. Accordingly, the proposed rule supplements existing 
beneficiary protections in the Equal Treatment Regulations by adding 
two new sections to the regulations--one addressing the written notice 
requirement at proposed Sec.  2.34 and the other addressing the 
referral requirement at proposed Sec.  2.35. In light of the addition 
of these two new sections, the existing sections discussing the 
application to State and local funds at Sec.  2.34, the effect of DOL 
support on title VII employment nondiscrimination requirements and on 
other existing statutes at Sec.  2.35, and the status of nonprofit 
organizations at Sec.  2.36 are redesignated as Sec. Sec.  2.36, 2.37, 
and 2.38 respectively.
a. Written Notice
    Executive Order 13279, as amended by Executive Order 13559, 
requires that the Secretary of Labor, among other agency heads, 
establish policies and procedures designed to ensure that each 
beneficiary of a social service program receives written notice of 
their religious liberty rights. Executive Order 13279, Sec.  2(h)(ii) 
as amended by Executive Order 13559, Sec.  1.75 FR at 71320-21. 
Consistent with this mandate, proposed Sec.  2.34 requires DOL social 
service providers with a religious affiliation to give beneficiaries 
written notice of their religious liberty rights when seeking or 
obtaining services supported by direct DOL financial assistance. The 
notice is set forth in proposed paragraph (a) and informs beneficiaries 
that:
    (1) the organization may not discriminate against beneficiaries on 
the basis of religion or religious belief;
    (2) the organization may not require beneficiaries to attend or 
participate in any explicitly religious activities, and any 
participation by beneficiaries in such activities must be purely 
voluntary;
    (3) the organization must separate out in time or location any 
explicitly religious activities from activities supported with direct 
DOL support;
    (4) 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
    (5) beneficiaries may report violations of these enumerated 
religious liberty rights to the Civil Rights Center, Room N-4123, 200 
Constitution Avenue NW., Washington, DC 20210, 
[email protected].
    The purpose of the notice is to make beneficiaries aware of their 
religious liberty rights and helps to ensure that beneficiaries are not 
coerced or pressured along religious lines in order to obtain DOL-
supported social service programs. Paragraph (a) provides that DOL 
social service providers may post and distribute exact duplicate copies 
of the notice, including through electronic means. Paragraph (b) 
requires that the notice be given to beneficiaries before they enroll 
in the program or receive

[[Page 47333]]

services from such programs. However, when the nature of the service 
provided--such as a one-time emergency hotline call--or exigent 
circumstances make it impracticable to provide such written notice in 
advance of the actual service, DOL social service providers are to 
advise beneficiaries of their protections at the earliest available 
opportunity.
b. Referral Requirements
    Proposed Sec.  2.35 implements Executive Order 13559's requirement 
that a beneficiary be referred to an alternative provider when he or 
she objects to the religious character of an organization that provides 
services under the federally-financed program. Executive Order 11246, 
Sec.  2(h)(i) as amended by Executive Order 13559, Sec.  1. 75 FR at 
71320. Accordingly, paragraph (a) of proposed Sec.  2.35 provides 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.
    Paragraph (b) states that a referral may be made 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 a 
referral must be made to that provider.
    Paragraph (c) of proposed Sec.  2.35 specifies that, except for 
services provided by telephone, internet, or similar means, the 
referral must be to an alternative provider that is in 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. 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 paragraph (d) of proposed Sec.  2.35 
to notify the awarding entity and that entity is to determine whether 
there is any other suitable alternative provider to which the 
beneficiary may be referred. Paragraph (e) notes that a DOL social 
service intermediary provider may request assistance from the 
Department in identifying an alternative service provider. Further, the 
executive order and the proposed rule require the relevant government 
agency to ensure that appropriate and timely referrals are made to an 
appropriate provider, and that referrals are made in a manner 
consistent with applicable privacy laws and regulations. It must be 
noted, however, that in some instances, the awarding entity may also be 
unable to identify a suitable alternative provider. The Department 
requests specific comment on proposed Sec.  2.35 and the referral 
requirement.
5. Political or Religious Affiliation
    Consistent with Sec.  2(j) of Executive Order 11246 as amended by 
Sec.  1 of Executive Order 13559, the proposed rule adds a new 
provision at proposed Sec.  2.39 to require 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 based on merit, not on the basis of religion or religious belief. 
This requirement will increase confidence that the rules applicable to 
federally funded partnerships are actually being observed and that 
decisions about government grants are made on the merits of proposals, 
not on political or religious considerations. The awarding entity must 
instruct participants in the awarding process to refrain from taking 
religious affiliations or non-religious affiliations into account in 
this process; i.e., 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 reviewers, the awarding entity should never ask about 
religious affiliation or take such matters into account. But it should 
encourage religious, political and professional diversity among 
reviewers by advertising for these positions in a wide variety of 
venues.
6. Miscellaneous Provisions
    The proposed rule would also modify the following provisions:
a. Definition of DOL Social Service Intermediary Provider
    The proposed rule would modify the definition of the term ``DOL 
social service intermediary provider'' in Sec.  2.31(f) by adding that 
the term encompasses non-governmental organizations. This change 
clarifies that non-governmental organizations have the same obligations 
as governmental intermediary providers, such as state agencies.
b. Protection of Religious Organizations' Independence
    Consistent with Section 2(g) of Executive Order 13559, the proposed 
rule would modify Sec.  2.32(b) by adding the term ``development'' to 
indicate that the development of religious beliefs is protected for 
faith-based organizations that apply for, or participate in, a social 
service program supported with Federal financial assistance.

III. Regulatory Procedures

Executive Orders 12866 and 13563

    Executive Orders (E.O.) 12866 and 13563 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). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
reducing costs, harmonizing rules, and promoting flexibility. Section 
3(f) of E.O. 12866 defines a ``significant regulatory action'' as an 
action that is likely to result in a rule that: (1) Has an annual 
effect on the economy of $100 million or more or adversely and 
materially affects 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) creates serious inconsistency or otherwise 
interferes with an action taken or planned by another agency; (3) 
materially alters the budgetary impacts of entitlement grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) raises novel legal or policy issues arising out of 
legal mandates, the President's priorities, or the principles set forth 
in E.O. 12866.
    The Department believes that the only provisions of this proposed 
rule likely to impose costs on the regulated community are the 
requirements that DOL social service providers with a religious 
affiliation: (1) Give beneficiaries a written notice informing them of 
their religious liberty rights when seeking or obtaining services 
supported by direct DOL financial

[[Page 47334]]

assistance, (2) at the beneficiary's request, make reasonable efforts 
to identify and refer the beneficiary to an alternative provider to 
which the beneficiary has no objection, and (3) document such action. 
To minimize compliance costs on DOL social service providers, the 
proposed rule provides the language of the notice directly within the 
proposed rule.
    An estimate of the cost of providing this notice and referring 
beneficiaries is discussed in the Paperwork Reduction Act section of 
this proposed rule. To minimize compliance costs and allow maximum 
flexibility in implementation, the Department has elected not to 
establish a specific format for the referrals required when 
beneficiaries request an alternative provider. To estimate the cost of 
the referral provision, the Department would need to know the number of 
religious direct social service providers funded by DOL annually, the 
number of beneficiaries who would ask for a referral, the costs of 
making the referral and notifying relevant parties of the referral.
    Unfortunately, at this time, there is no known source of 
information to quantify precisely the numbers or proportions of program 
beneficiaries who will request referral to alternative providers. 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 
organization. There is a possibility that because of this rule, when 
beneficiaries start receiving notices of their right to request 
referral to an alternative service provider, more of them may raise 
objections. However, our estimate of the number of referrals is also 
informed by 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 V and XIX of the Public Health Service Act, 42 
U.S.C. 290aa, et seq. and 42 U.S.C. 300x-21 et seq. Specifically, 42 
U.S.C. 290kk-1 and 300x-65, require faith-based organizations that 
receive assistance under the Act to provide notice to beneficiaries of 
their right under statute to request an alternative service provider. 
Recipients of assistance must also report all referrals to the 
appropriate federal, state, or local government agency that administers 
the SAMHSA program. To date, SAMHSA has not received any reports of 
referral by recipients or subrecipients. The Department invites 
interested parties to provide data on which to base estimates of the 
number of beneficiaries who will request referral to an alternative 
service provider and the attendant compliance cost service providers 
may face.
    Notwithstanding the absence of concrete data, the Department 
believes that this proposed rule is not significant within the meaning 
of the Executive Order because the annual costs associated with 
complying with the written notice and referral requirements will not 
approach $100 million.

Initial Regulatory Flexibility Analysis

    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 which will describe the impact of the 
proposed rule on small entities. Section 605 of the RFA allows an 
agency to certify a rule, in lieu of preparing an analysis, if the 
proposed rulemaking is not expected to have a significant economic 
impact on a substantial number of small entities. Furthermore, under 
the Small Business Regulatory Enforcement Fairness Act of 1996, 5 
U.S.C. 801 (SBREFA), an agency is required to produce compliance 
guidance for small entities if the rule has a significant economic 
impact on a substantial number of small entities. The RFA defines small 
entities as small business concerns, small not-for-profit enterprises, 
or small governmental jurisdictions. As described above, 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 by providing in the rule the 
notice for providers to give beneficiaries informing them of their 
rights and by not proscribing a specific format for making referrals. 
The Department estimates it will take no more than two minutes for 
providers to print, duplicate, and distribute an adequate number of 
disclosure notices for potential beneficiaries. Using the May 2013 
Bureau of Labor Statistics hourly mean wage for a Training and 
Development Specialist of $29.22 results in an estimate of the labor 
cost per service provider of preparing the notice of approximately 
$0.97. In addition, the Department estimates an upper limit of $100 for 
the annual cost of materials (paper, ink, toner) to print multiple 
copies of the notices. Because these costs will be borne by every small 
service provider with a religious affiliation, the Department believes 
that a substantial number of these small entities may be affected by 
this provision. However, 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, we 
note 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.
    The rule will also require religious social service providers, 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. If an organization is unable to identify 
an alternative provider, the organization is required to notify the 
awarding entity and that entity is to determine whether there is any 
other suitable alternative provider to which the beneficiary may be 
referred. A DOL social service intermediary may request assistance from 
the Department in identifying an alternative service provider. The 
Department estimates that each referral request will require no more 
than two hours of a Training and Development Specialist's time to 
process at a labor cost of $29.22 per hour. Although we do 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 service providers. The Department invites 
interested parties to provide data on which we can formulate better 
estimates of the compliance costs associated with the disclosure and 
referral requirements of this proposed rule.

Paperwork Reduction Act

    The purposes of the Paperwork Reduction Act of 1995 (PRA), 44 
U.S.C. 3501 et seq., include minimizing 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.
    A Federal agency may not conduct or sponsor a collection of 
information unless it is approved by OMB under the PRA, and displays a 
currently valid OMB control number, and the public is not required to 
respond to a collection of information unless it displays a currently 
valid OMB control number. Also, notwithstanding any other provisions of 
law, no person shall 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). This 
rule proposes a new information collection.

[[Page 47335]]

    Section 2.34 would impose requirements on religious social service 
providers to give beneficiaries (or potential beneficiaries) a 
standardized notice instructing (potential) beneficiaries of their 
rights and requiring an occasional written response that may impose a 
burden under the PRA. The Department has determined this notice is not 
a collection of information subject to OMB clearance under the PRA 
because the Federal Government has provided the exact text that a 
provider must use. See 5 CFR 1320.3(c)(2). The beneficiary's response, 
however, is subject to OMB clearance under the PRA. Care has been taken 
to limit the information to simply obtaining minimal identifying 
information and providing check boxes for material responses.
    Section 2.35 would require that when a beneficiary or prospective 
beneficiary of a social service program supported by direct DOL 
financial assistance 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. The referral process 
could entail collections of information subject to PRA clearance, 
specifically, informing the beneficiary of a referral to an alternative 
provider. If an organization is unable to identify an alternative 
provider, the organization is required under paragraph (d) of proposed 
Sec.  2.35 to notify the awarding entity and that awarding entity is to 
determine whether there is any other suitable alternative provider to 
which the beneficiary may be referred. Paragraph (e) notes that a DOL 
social service intermediary provider may request assistance from the 
Department in identifying an alternative service provider. Further, the 
executive order and the proposed rule require the relevant government 
agency to ensure that appropriate and timely referrals are made to an 
appropriate provider, and that referrals are made in a manner 
consistent with applicable privacy laws and regulations.
    Religious social service providers 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. (The religious 
social service provider will be required to complete the referral form, 
notify the awarding entity, and maintain information only if a 
beneficiary requests a referral to an alternate provider.) In the case 
of paper notices, religious social service providers could meet the 
record-keeping requirements in these proposed regulations by keeping 
the bottom portion of the notice. For those religious social service 
providers that provide notice electronically, the notices would have to 
include a means for beneficiaries to request an alternative placement--
and follow-up, if desired--that is recorded so the religious social 
service providers may retain evidence of compliance with these proposed 
regulations. We do not include an estimate of the burden of maintaining 
the records needed to demonstrate compliance with the requirements 
imposed on religious social service providers. The record-keeping 
burden that these proposed regulations would add is so small that, 
under most programs, it would not measurably increase the burden that 
already exists under current program and administrative requirements. 
If, due to the unique nature of a particular program, the record-
keeping burden associated with these proposed regulations is large 
enough to be measurable, that burden will be calculated under the 
record-keeping and reporting requirements of the affected program and 
identified in information collection requests that are submitted to OMB 
for PRA approval. Therefore, we have not included any estimate of 
record-keeping burden in this PRA analysis.
    Concurrent with publication of this NPRM, the Department is 
submitting an information collection request (ICR) to the OMB to obtain 
PRA approval for the proposed information collection requirements. A 
copy of this ICR with applicable supporting documentation including a 
description of the likely respondents, proposed frequency of response, 
and estimated total burden may be obtained free of charge from the 
RegInfo.gov Web site on the day following publication of this notice or 
by contacting Michel Smyth by telephone at 202-693-4129, TTY 202-693-
8064, (these are not toll-free numbers) or sending an email to 
[email protected].
    As part of its continuing effort to reduce paperwork burdens, the 
Department conducts a preclearance consultation program to provide the 
general public and Federal agencies with an opportunity to comment on 
collections of information in accordance with the PRA. This program 
helps to ensure that requested data can be provided in the desired 
format, reporting burden (time and financial resources) is minimized, 
collection instruments are clearly understood, and the impact of 
collection requirements on respondents can be properly assessed. A 
comment to the Department about the information collection requirements 
may be submitted in the same way as any other comment for this 
rulemaking. In addition to having an opportunity to file comments with 
the Department, written comments under the PRA about the information 
collection requirements may be addressed to the OMB. Comments to the 
OMB should be directed to: Office of Information and Regulatory 
Affairs, Attention OMB Desk Officer for the DOL-OS, Office of 
Management and Budget, Room 10235, Washington, DC 20503. You can also 
submit comments to OMB by email at [email protected]. The OMB 
will consider all written comments it receives within 30 days of 
publication of this information collection.
    The OMB and the Department are particularly interested in comments 
that:
     Evaluate whether the collections of information are 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the collection of information, including the validity of the 
methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of IT (e.g., permitting electronic submission 
of responses.
    The burden for the information collection provisions of this NPRM 
can be summarized as follows:
    Agency: DOL-OS.
    Title of Collection: Grant Beneficiary Referrals.
    OMB ICR Reference Number Control Number: 1291-0NEW.
    Affected Public: State and local governments; Private Sector--not-
for-profit institutions; and Individuals or Households.
    Frequency of Response: On occasion.
    Total Estimated Number of Respondents: 38.
    Total Estimated Number of Responses: 38.
    Total Estimated Annual Burden Hours: 9.
    Total Estimated Other Costs: $0.

Executive Order 13132

    Section 6 of Executive Order 13132 requires Federal agencies to 
consult with State entities when a regulation or policy may have a 
substantial direct

[[Page 47336]]

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 the Executive Order. Section 3(b) of the Executive Order 
further provides that Federal agencies must implement regulations that 
have a substantial direct effect only if statutory authority permits 
the regulation and it is 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 the Executive Order 
13132. Any action taken by a State as a result of the proposed rule 
would be at its own discretion as the rule imposes no requirements.

Unfunded Mandates Reform Act of 1995

    This regulatory action has been reviewed in accordance with the 
Unfunded Mandates Reform Act of 1995 (Reform Act). Under the Reform 
Act, a Federal agency must determine whether a regulation proposes a 
Federal mandate that would result in 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. The Department has 
determined 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.

Effect on Family Life

    The Department certifies that this proposed rule has been assessed 
according to section 654 of the Treasury and General Government 
Appropriations Act, enacted as part of the Omnibus Consolidated and 
Emergency Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 
Stat. 2681), for its effect on family well-being. It will not adversely 
affect the well-being of the nation's families. Therefore, the 
Department certifies that this proposed rule does not adversely impact 
family well-being.

List of Subjects in 29 CFR Part 2

    Administrative practice and procedure, Claims, Courts, Government 
employees, Religious Discrimination.

    For the reasons set forth in the preamble, the Department of Labor 
amends part 2 of title 29 of the Code of Federal Regulations as set 
forth below.

PART 2--GENERAL REGULATIONS

Subpart D--Equal Treatment in Department of Labor Programs for 
Religious Organizations; Protection of Religious Liberty of 
Department of Labor Social Service Providers and Beneficiaries

0
1. The authority citation for part 2 is revised to read as follows:

    Authority: 5 U.S.C. 301; Executive Order 13198, 66 FR 8497, 3 
CFR 2001 Comp., p. 750; Executive Order 13279, 67 FR 77141, 3 CFR 
2002 Comp., p. 258; Executive Order 13559, 75 FR 71319, 3 CFR 2011 
Comp., p. 273.

0
2. Amend Sec.  2.31 by revising paragraphs (a) and (f) to read as 
follows:


Sec.  2.31  Definitions.

* * * * *
    (a) The term Federal financial assistance means assistance that 
non-Federal entities (including State and local governments) receive or 
administer in the form of grants, contracts, loans, loan guarantees, 
property, cooperative agreements, direct appropriations, or other 
direct or indirect assistance, but does not include a tax credit, 
deduction or exemption. Federal financial assistance may be direct or 
indirect.
    (1) The term direct Federal financial assistance or Federal 
financial assistance provided directly means that the Government or a 
DOL social service intermediary provider 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 grant or cooperative agreement). In general, 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) The term indirect Federal financial assistance or Federal 
financial assistance provided indirectly means that the choice of the 
service provider is placed in the hands of the beneficiary, and the 
cost of that service is paid through a voucher, certificate, or other 
similar means of government-funded payment. Federal financial 
assistance provided to an organization is considered indirect when:
    (i) The Government program through which the beneficiary receives 
the voucher, certificate, or other similar means of Government-funded 
payment is neutral toward religion;
    (ii) The organization receives the assistance as a result of a 
decision of the beneficiary, not a decision of the government; and
    (iii) The beneficiary has at least one adequate secular option for 
the use of the voucher, certificate, or other similar means of 
Government-funded payment.
    (3) The recipient of sub-awards received through programs 
administered by States or other intermediaries that are themselves 
recipients of Federal financial assistance (e.g., local areas that 
receive within-state allocations to provide workforce services under 
title I of the Workforce Innovation and Opportunity Act) are not 
considered recipients of indirect Federal financial assistance or 
recipients of Federal financial assistance provided indirectly as those 
terms are used in Executive Order 13559. These recipients of sub-awards 
are considered recipients of direct Federal financial assistance.
* * * * *
    (f) The term DOL social service intermediary provider means any DOL 
social service provider, including a non-governmental organization, 
that, as part of its duties, selects subgrantees to receive DOL support 
or subcontractors to provide DOL-supported services, or has the same 
duties under this part as a governmental entity.
0
3. Amend Sec.  2.32 by revising paragraph (b) introductory text and 
paragraph (c) to read as follows:


Sec.  2.32  Equal participation of religious organizations.

* * * * *
    (b) A religious organization that is a DOL social service provider 
retains its independence from Federal, State, and local governments and 
must be permitted to continue to carry out its mission, including the 
definition, development, practice, and expression of its religious 
beliefs, subject to the provisions of Sec.  2.33. Among other things, 
such a religious organization must be permitted to:
* * * * *
    (c) A grant document, contract or other agreement, covenant, 
memorandum of understanding, policy, or regulation that is used by DOL, 
a State or local government administering DOL support, or a DOL social 
service intermediary provider must not require only religious 
organizations to provide assurances that they will not use direct DOL 
support for explicitly religious activities (including activities that 
involve overt religious content, such as worship, religious 
instruction, or proselytization). Any such requirements must apply 
equally to both religious and other organizations. All organizations, 
including religious ones, that are DOL social service providers must 
carry out

[[Page 47337]]

DOL-supported activities in accordance with all applicable legal and 
programmatic requirements, including those prohibiting the use of 
direct DOL support for explicitly religious activities (including 
activities that involve overt religious content, such as worship, 
religious instruction, or proselytization). A grant document, contract 
or other agreement, covenant, memorandum of understanding, policy, or 
regulation that is used by DOL, a State or local government, or a DOL 
social service intermediary provider in administering a DOL social 
service program must not disqualify organizations from receiving DOL 
support or participating in DOL programs on the grounds that such 
organizations are motivated or influenced by religious faith to provide 
social services, have a religious character or affiliation, or lack a 
religious component.
0
4. Amend Sec.  2.33 by revising paragraph (b)(1) and paragraph (b)(3) 
introductory text, and adding a new paragraph (d) to read as follows:


Sec.  2.33  Responsibilities of DOL, DOL social service providers and 
State and local governments administering DOL support.

* * * * *
    (b)(1) DOL, DOL social service intermediary providers, DOL social 
service providers, and State and local governments administering DOL 
support must ensure that they do not use direct DOL support for 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization). DOL social service providers must be permitted to 
offer explicitly religious activities so long as they offer those 
activities separately in time or location from social services 
receiving direct DOL support, and participation in the explicitly 
religious activities is voluntary for the beneficiaries of social 
service programs receiving direct DOL support. For example, 
participation in an explicitly religious activity must not be a 
condition for participating in a directly-supported social service 
program.
    * * *
    (3) Notwithstanding the requirements of paragraph (b)(1) of this 
section, and to the extent otherwise permitted by Federal law 
(including constitutional requirements), direct DOL support may be used 
to support explicitly religious activities (including activities that 
involve overt religious content such as worship, religious instruction, 
or proselytization), and such activities need not be provided 
separately in time or location from other DOL-supported activities, 
under the following circumstances:
    * * *
    (d) If an intermediary, acting under a contract, grant, or other 
agreement with the Federal government or with a State or local 
government that is administering a program supported by Federal 
financial assistance, is given the authority under the contract, grant, 
or agreement to select non-governmental organizations to provide 
services funded by the Federal government, the intermediary must ensure 
compliance with the provisions of Executive Order 13279, as amended by 
Executive Order 13559, and any implementing rules or guidance, by the 
recipient of a contract, grant or agreement. If the intermediary is a 
non-governmental organization, it retains all other rights of a non-
governmental organization under the program's statutory and regulatory 
provisions.
* * * * *


Sec. Sec.  2.34, 2.35, and 2.36  [Redesignated as Sec. Sec.  2.36, 
2.37, and 2.38]

0
5. Redesignate Sec. Sec.  2.34, 2.35, and 2.36 as Sec.  2.36, Sec.  
2.37, and Sec.  2.38, respectively.
0
6. Add new Sec.  2.34 and Sec.  2.35 to subpart D to read as follows:


Sec.  2.34  Beneficiary protections: Written notice.

    (a) Contents. Religious organizations providing social services to 
beneficiaries under a DOL program supported by direct Federal financial 
assistance must give written notice to beneficiaries and prospective 
beneficiaries of certain protections. Such notice must be given in a 
manner prescribed by DOL, and state that:
    (1) The organization may not discriminate against beneficiaries on 
the basis of religion or religious belief;
    (2) The organization may not require beneficiaries to attend or 
participate in any explicitly religious activities (including 
activities that involve overt religious content such as worship, 
religious instruction, or proselytization) that are offered by our 
organization, and any participation by beneficiaries in such activities 
must be purely voluntary;
    (3) The organization must separate out in time or location any 
privately-funded explicitly religious activities (including activities 
that involve overt religious content such as worship, religious 
instruction, or proselytization) from activities supported with direct 
Federal financial assistance;
    (4) If a beneficiary objects to the religious character of the 
organization, the organization must make reasonable efforts to identify 
and refer the beneficiary to an alternative provider to which the 
beneficiary has no objection. The organization cannot guarantee, 
however, that in every instance, an alternative provider will be 
available; and
    (5) Beneficiaries may report violations of these protections to the 
U.S. Department of Labor (or, the intermediary, if applicable). The 
required language of the notice is set forth below and may be 
downloaded from the Center for Faith-Based and Neighborhood 
Partnerships' Web site at http://www.dol.gov/cfbnp. DOL social service 
providers may post and distribute exact duplicate copies of the notice, 
including through electronic means:
NOTICE OF BENEFICIARY RELIGIOUS LIBERTY 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:
    (1) We may not discriminate against you on the basis of religion or 
religious belief;
    (2) We may not require you to attend or participate in any 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) that are offered by our organization, and any 
participation by beneficiaries in such activities must be purely 
voluntary;
    (3) We must separate out in time or location any privately-funded 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) from activities supported with direct Federal 
financial assistance;
    (4) If you object to the religious character of an organization, we 
must make reasonable efforts to identify and refer you to an 
alternative provider to which you have no objection. We cannot 
guarantee, however, that in every instance, an alternative provider 
will be available; and
    (5) You may report violations of these protections to the U.S. 
Department of Labor's Civil Rights Center, 200 Constitution Ave. NW., 
Room N-4123, Washington, DC 20210, or by email to 
[email protected]. This written notice must be given to you 
prior to the

[[Page 47338]]

time you enroll in the program or receive services from such programs, 
unless the nature of the service provided or urgent circumstances makes 
it impracticable to provide such notice in advance of the actual 
service. In such an instance, this notice must be given to you at the 
earliest available opportunity.

-----------------------------------------------------------------------

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. 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. 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 other service provider.
    Name:
    Best way to reach me (phone/address/email):
    ( ) Please do not follow up.

-----------------------------------------------------------------------


    (b) Timing of notice. 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, DOL social service providers 
must advise beneficiaries of their protections at the earliest 
available opportunity.


Sec.  2.35  Beneficiary protections: Referral requirements.

    (a) If a beneficiary or prospective beneficiary of a social service 
program supported by direct DOL financial assistance 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.
    (b) A referral may be made to another religious organization, 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.
    (c) Except for services provided by telephone, internet, or similar 
means, the referral must be to an alternative Federally-financed 
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 that organization. The 
alternative provider also must have the capacity to accept additional 
clients. Where there is no Federally-financed alternative provider 
available, 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.
    (d) 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 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.
    (e) An intermediary that receives a request for assistance in 
identifying an alternative provider may request assistance from DOL.
0
7. Add new Sec.  2.39 to subpart D to read as follows:


Sec.  2.39  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.

    Dated: February 12, 2015.
Thomas E. Perez,
Secretary of Labor.
[FR Doc. 2015-18260 Filed 8-5-15; 8:45 am]
BILLING CODE P



                                                      47328                  Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules

                                                      DEPARTMENT OF LABOR                                        D Fax: (202) 693–6091 (for comments                and Community Organizations, issued
                                                                                                              of 10 pages or less).                                 on December 12, 2002, 67 FR 77141
                                                      Office of the Secretary                                    D Mail, hand delivery, express mail,               (Dec. 16, 2002) and Executive Order
                                                                                                              messenger, or courier service: Phil Tom,              13559, Fundamental Principles and
                                                      29 CFR Part 2                                           Director, Center for Faith-Based and                  Policymaking Criteria for Partnerships
                                                      RIN 1290–AA29                                           Neighborhood Partnerships (CFBNP),                    with Faith-Based and Other
                                                                                                              U.S. Department of Labor, 200                         Neighborhood Organizations, issued on
                                                      Equal Treatment in Department of                        Constitution Ave. NW., Room C–2318,                   November 17, 2010, 75 FR 71319 (Nov.
                                                      Labor Programs for Faith-Based and                      Washington, DC 20210.                                 22, 2010), which amends Executive
                                                      Community Organizations; Protection                        Instructions: Please submit your                   Order 13279. Executive Order 13279 set
                                                      of Religious Liberty of Department of                   comments by only one method. Receipt                  forth the principles and policymaking
                                                      Labor Social Service Providers and                      of submissions will not be                            criteria to guide Federal agencies in
                                                      Beneficiaries                                           acknowledged; however, the sender may                 formulating and developing policies
                                                                                                              request confirmation that a submission                with implications for faith-based
                                                      AGENCY:Office of the Secretary, Labor.                                                                        organizations and other community
                                                                                                              has been received by telephoning (202)
                                                            Proposed rule; request for
                                                      ACTION:
                                                                                                              693–6017. All submissions received                    organizations, to ensure equal
                                                      comments.                                               must include the agency name and                      protection of the laws for faith-based
                                                                                                              docket number or Regulatory                           and other community organizations, and
                                                      SUMMARY:    The United States Department
                                                                                                              Information Number (RIN) for this                     to expand opportunities for, and
                                                      of Labor (DOL or the Department)
                                                                                                              rulemaking. All comments received,                    strengthen the capacity of, faith-based
                                                      proposes to amend its general
                                                                                                              including any personal information                    and other community organizations to
                                                      regulations regarding the equal
                                                                                                              provided, are considered part of the                  meet social needs in America’s
                                                      treatment of religious organizations in
                                                                                                              public record and available for public                communities. In addition, Executive
                                                      Department of Labor programs and the
                                                                                                              inspection online at http://                          Order 13279 asked specified agency
                                                      protection of religious liberty for
                                                                                                              www.regulations.gov and during normal                 heads to review and evaluate existing
                                                      Department of Labor social service
                                                                                                              business hours at Room C–2318, 200                    policies relating to Federal financial
                                                      providers and beneficiaries.
                                                                                                              Constitution Avenue NW., Washington,                  assistance for social service programs
                                                      Specifically, this proposed rule would:
                                                                                                              DC 20210. Parties who wish to comment                 and, where appropriate, to implement
                                                      Clarify the definition of direct and
                                                                                                              anonymously may do so by submitting                   new policies that were consistent with
                                                      indirect financial assistance, replace the
                                                                                                              their comments via                                    and necessary to further the
                                                      term ‘‘inherently religious activities’’
                                                                                                              www.regulations.gov, leaving the fields               fundamental principles and
                                                      with the term ‘‘explicitly religious
                                                                                                              that would identify the commenter                     policymaking criteria that have
                                                      activities’’ and define the latter term as
                                                                                                              blank and including no identifying                    implications for faith-based and
                                                      ‘‘including activities that involve overt
                                                                                                              information in the comment itself.                    community organizations.
                                                      religious content such as worship,
                                                                                                                                                                       On July 12, 2004, the Department of
                                                      religious instruction, or                               Comments submitted via
                                                                                                                                                                    Labor issued regulations through notice
                                                      proselytization,’’ require faith-based                  www.regulations.gov are immediately
                                                                                                                                                                    and comment rulemaking implementing
                                                      organizations administering a program                   available for public inspection. Upon
                                                                                                                                                                    Executive Order 13279 at 29 CFR part 2,
                                                      supported with direct DOL financial                     request, individuals who require
                                                                                                                                                                    subpart D, Equal Treatment in
                                                      assistance to provide beneficiaries with                assistance to review comments will be
                                                                                                                                                                    Department of Labor Programs for
                                                      a written notice informing them of their                provided with appropriate aids such as
                                                                                                                                                                    Religious Organizations; Protection of
                                                      religious liberty rights, including the                 readers or print magnifiers. Copies of                Religious Liberty of Department of Labor
                                                      right to a referral to an alternative                   this NPRM will be made available in the               Social Service Providers and
                                                      provider if the beneficiary objects to the              following formats: Large print,                       Beneficiaries (‘‘Equal Treatment
                                                      religious character of the organization                 electronic file on computer disc, and                 Regulations’’), which apply to all
                                                      providing services, and add a provision                 audiotape. To schedule an appointment                 providers that implement DOL-
                                                      stating that decisions about awards of                  to review the comments and/or to obtain               supported social service programs. 69
                                                      Federal financial assistance must be free               this NPRM in an alternate format,                     FR 41882. These regulations clarify that
                                                      from political interference and based on                contact CFBNP at (202) 693–6017.                      faith-based and community
                                                      merit. These changes are necessitated by                FOR FURTHER INFORMATION CONTACT: Phil                 organizations may participate in the
                                                      the issuance in November 2010, of                       Tom, Director, Center for Faith-Based                 Department’s social service programs
                                                      Executive Order 13559, Fundamental                      and Neighborhood Partnerships                         without regard to the organizations’
                                                      Principles and Policymaking Criteria for                (CFBNP), U.S. Department of Labor,                    religious character or affiliation, and are
                                                      Partnerships with Faith-Based and                       Frances Perkins Building, 200                         able to apply for and compete on an
                                                      Other Neighborhood Organizations.                       Constitution Ave. NW., Room C–2318,                   equal footing with other eligible
                                                      DATES: Comments must be submitted                       Washington, DC 20210; telephone: (202)                organizations to receive DOL support.
                                                      (postmarked, sent, or received) by                      693–6017. Please note this is not a toll-             29 CFR 2.30. In addition, these
                                                      October 5, 2015.                                        free number. Individuals with hearing                 regulations ensure that the Department’s
                                                      ADDRESSES: You may submit comments                      or speech impairments may access this                 social service programs are
                                                      concerning the NPRM, identified by RIN                  telephone number via TTY by calling                   implemented in a manner consistent
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                                                      number 1290–AA29, by any of the                         the toll-free Federal Information Relay               with the Constitution, including the
                                                      following methods:                                      Service at 1–800–877–8339.                            Religion Clauses of the First
                                                         D Federal eRulemaking Portal: http://                SUPPLEMENTARY INFORMATION:                            Amendment. Id.
                                                      www.regulations.gov. Follow the                                                                                  The current Equal Treatment
                                                      instructions on-line for submitting                     I. Background                                         Regulations are divided into seven
                                                      comments.                                                  This proposal concerns and                         sections. Section 2.30 sets forth the
                                                         D Email: cfbnp@dol.gov. Include RIN                  implements two Executive Orders:                      purpose of the regulations as explained
                                                      number 1290–AA29 in the subject line                    Executive Order 13279, Equal                          in the previous paragraph. Section 2.31
                                                      of the message.                                         Protection of the Laws for Faith-Based                provides definitions for certain terms


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                                                                             Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules                                           47329

                                                      used in the regulations, including                      contributes its own funds (voluntarily or             to faith-based and neighborhood
                                                      ‘‘Federal financial assistance,’’ ‘‘social              in accordance with a matching funds                   organizations.
                                                      service program,’’ ‘‘DOL,’’ ‘‘DOL-                      program) to supplement Federal funds                     President Obama signed Executive
                                                      supported social service program’’,                     that support DOL social service                       Order 13559, Fundamental Principles
                                                      ‘‘DOL social service program’’, ‘‘DOL                   programs, the State or local government               and Policymaking Criteria for
                                                      social service provider,’’ ‘‘DOL social                 has the option to segregate the Federal               Partnerships with Faith-Based and
                                                      service intermediary provider,’’ and the                funds or commingle them. If the funds                 Other Neighborhood Organizations, on
                                                      term ‘‘DOL support.’’ Section 2.32                      are commingled, the regulations apply                 November 17, 2010. 75 FR 71319
                                                      clarifies that religious organizations                  to both the Federal and the State or local            (available at http://www.gpo.gov/fdsys/
                                                      receiving DOL support may continue to                   funds.                                                pkg/FR-2010-11-22/pdf/2010-
                                                      carry out their religious activities                       Section 2.35 clarifies that receipt of             29579.pdf). Executive Order 13559
                                                      provided that no direct DOL support is                  DOL support does not cause religious                  incorporated the Advisory Council’s
                                                      used to support inherently religious                    organizations to forfeit their exemption              recommendations by amending
                                                      activities. Specifically, religious                     from title VII of the Civil Rights Act of             Executive Order 13279 to:
                                                      organizations that receive DOL support                  1964’s prohibitions on employment                        • emphasize that religious providers
                                                      need not remove religious signs or                      discrimination on the basis of religion.              are welcome to compete for government
                                                      symbols from their facilities offering                  However, the Equal Treatment                          social service funding and maintain a
                                                      DOL-supported services and may                          Regulations do not alter the effect of                religious identity as described in the
                                                      continue to select their board members                  other statutes which may require                      order;
                                                      and otherwise govern themselves on a                    recipients of certain types of DOL                       • clarify (i) the principle that
                                                      religious basis.                                        support to refrain from religious                     organizations engaging in explicitly
                                                         Currently, DOL social service                        discrimination.                                       religious activity must separate these
                                                      providers, including State and local                       Finally, § 2.36 of the current rule                activities in time or location from
                                                      governments and other intermediaries                    establishes alternative mechanisms by                 programs supported with direct Federal
                                                      administering DOL support, have                         which organizations can prove they are                financial assistance, (ii) that
                                                      certain responsibilities as recipients of               nonprofit, which is sometimes an                      participation in any explicit religious
                                                      DOL support. Section 2.33 of the Equal                  eligibility requirement for receiving                 activity cannot be subsidized with
                                                      Treatment Regulations sets forth these                  DOL support. Such mechanisms,                         direct Federal financial assistance, and
                                                      responsibilities, namely that as                        however, do not apply where a statute                 (iii) that participation in such activities
                                                      providers of DOL support, they must not                                                                       must be voluntary for the beneficiaries
                                                                                                              requires a specific method for
                                                      discriminate for or against a current or                                                                      of the social service program supported
                                                                                                              establishing nonprofit status.
                                                      prospective beneficiary on the basis of
                                                                                                                 Shortly after taking office, President             with such Federal financial assistance;
                                                      religion or religious belief. In addition,
                                                                                                              Obama signed Executive Order 13498,                      • direct agencies to adopt regulations
                                                      they must ensure that no direct DOL
                                                                                                              Amendments to Executive Order 13199                   and guidance that distinguish between
                                                      support is used to support inherently
                                                                                                              and Establishment of the President’s                  ‘‘direct’’ and ‘‘indirect’’ Federal
                                                      religious activities, except in very
                                                                                                              Advisory Council for Faith-Based and                  financial assistance;
                                                      limited circumstances, which are
                                                      explained in paragraph (b)(3) of this                   Neighborhood Partnerships, 74 FR 6533                    • clarify that the standards in these
                                                      section. As a general rule, if a provider               (Feb. 9, 2009). Executive Order 13498                 proposed regulations apply to sub-
                                                      engages in inherently religious                         changed the name of the White House                   awards as well as prime awards;
                                                      activities, such activities must be                     Office of Faith-Based and Community                      • require agencies that provide
                                                      offered separately, in time or location,                Initiatives to the White House Office of              Federal financial assistance for social
                                                      from the social service programs                        Faith-Based and Neighborhood                          service programs to post online
                                                      receiving direct DOL financial                          Partnerships and established the                      regulations, guidance documents, and
                                                      assistance, and participation must be                   President’s Advisory Council for Faith-               policies that have implications for faith-
                                                      voluntary for the beneficiaries of DOL                  Based and Neighborhood Partnerships                   based and neighborhood organizations
                                                      social service programs. Paragraph (c) of               (Advisory Council). The President                     and to post online a list of entities
                                                      § 2.33 clarifies that these responsibilities            created the Advisory Council to bring                 receiving such assistance;
                                                      do not apply to social service programs                 together experts to, among other things,                 • state that the Federal government
                                                      where DOL support is provided to a                      make recommendations to the President                 has an obligation to monitor and enforce
                                                      religious organization indirectly.                      for changes in policies, programs, and                all standards regarding the relationship
                                                      Religious and other non-governmental                    practices that affect the delivery of                 between religion and government in
                                                      organizations will be considered to have                social services by faith-based and other              ways that avoid excessive entanglement
                                                      received support indirectly, for                        neighborhood organizations.                           between religious bodies and
                                                      example, if as a result of a program                       The Advisory Council issued its                    governmental entities;
                                                      beneficiary’s genuine and independent                   recommendations in a report entitled A                   • require agencies that administer or
                                                      choice the beneficiary redeems a                        New Era of Partnerships: Report of                    award Federal financial assistance for
                                                      voucher, coupon, or certificate that                    Recommendations to the President in                   social service programs to implement
                                                      allows the beneficiary to choose the                    March 2010 (available at http://                      protections for the beneficiaries or
                                                      service provider, or some other                         www.whitehouse.gov/sites/default/files/               prospective beneficiaries of those
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                                                      mechanism is provided to ensure that                    microsites/ofbnp-council-final-                       programs (these protections include
                                                      beneficiaries have a genuine and                        report.pdf). The Advisory Council                     providing referrals to alternative
                                                      independent choice among providers or                   Report included recommendations to                    providers if the beneficiary objects to
                                                      program options.                                        amend Executive Order 13279 in order                  the religious character of the
                                                         Section 2.34 of the existing Equal                   to clarify the legal foundation of                    organization providing services, and
                                                      Treatment Regulations addresses the                     partnerships and offered a revised set of             ensuring that written notice of these and
                                                      application of the regulations to State                 fundamental principles to guide agency                other protections is provided to
                                                      and local funds. This section clarifies                 decision-making in administering                      beneficiaries before they enroll in or
                                                      that if a State or local government                     Federal financial assistance and support              receive services from the program); and


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                                                      47330                  Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules

                                                         • state that decisions about awards of               religious activities in DOL-supported                 B. Proposed Amendments to DOL Equal
                                                      Federal financial assistance must be free               social service programs. Specifically,                Treatment Regulations
                                                      from political interference or even the                 § 2.33 prohibits organizations from                     DOL proposes to amend its Equal
                                                      appearance of such interference, and                    using direct DOL support for inherently               Treatment Regulations at 29 CFR part 2,
                                                      must be made on the basis of merit, not                 religious activities, such as worship,                subpart D to address the areas identified
                                                      on the basis of the religious affiliation,              religious instruction, or proselytization,            below.
                                                      or lack of affiliation, of the recipient                and requires DOL social service
                                                      organization.                                           providers to take certain steps to                    1. Direct and Indirect Federal Financial
                                                      In addition, Executive Order 13559                      separate out in time or location their                Assistance
                                                      created the Interagency Working Group                   inherently religious activities from the                 Executive Order 13559 noted that new
                                                      on Faith-Based and Other Neighborhood                   services that they offer with direct DOL              regulations should distinguish between
                                                      Partnerships (Working Group) to review                  support. This provision also clarifies                ‘‘direct’’ and ‘‘indirect’’ Federal
                                                      and evaluate existing regulations,                      that the restrictions on inherently                   financial assistance because the
                                                      guidance documents, and policies.                       religious activities do not apply where               limitation on explicitly religious
                                                      Executive Order 13559, § 1(c) (amending                 DOL support is provided indirectly to                 activities applies to programs that are
                                                      § 3 of Executive Order 13279).                          organizations, or where there is                      supported with ‘‘direct’’ Federal
                                                         The Executive Order also required                    extensive government control over the                 financial assistance but does not apply
                                                      OMB, in coordination with the                           environment of a DOL-supported social                 to programs supported with ‘‘indirect’’
                                                      Department of Justice, to issue guidance                service program, such that affirmative                Federal financial assistance. Executive
                                                      to agencies on the implementation of                    steps must be taken by the social service             Order 13559, § 1(c) (amending § 3(b) of
                                                      the Order following receipt of the                      provider to ensure that beneficiaries are             Executive Order 13279).
                                                      Working Group’s report. In August                       able to exercise freely their religion.                  Programs are supported with direct
                                                      2013, OMB issued such guidance. In                      And finally, the current Equal                        Federal financial assistance when either
                                                      this guidance, OMB instructed specified                 Treatment Regulations already apply to                the government or an intermediary, as
                                                      agency heads to adopt regulations and                   both prime and sub-awards. See 29 CFR                 identified in these proposed rules,
                                                      guidance that will fulfill the                          2.31(f) (defining term ‘‘DOL social                   selects a service provider and either
                                                      requirements of the Executive Order to                  service intermediary provider’’); see                 purchases services from that provider
                                                      the extent such regulations and                         also 29 CFR 2.33 (enumerating                         (e.g., through a contract) or awards
                                                      guidance do not exist and to amend any                                                                        funds to that provider to carry out a
                                                                                                              responsibilities of DOL providers,
                                                      existing regulations and guidance to                                                                          social service (e.g., through a grant or
                                                                                                              including intermediary providers and
                                                      ensure that they are consistent with the                                                                      cooperative agreement). Under these
                                                                                                              State and local governments
                                                      requirements set forth in Executive                                                                           circumstances, there are no intervening
                                                                                                              administering DOL support).
                                                      Order 13559. Memorandum from Sylvia                                                                           steps in which the beneficiary’s choice
                                                      M. Burwell, Director, on                                II. Overview of Proposed Rule                         determines the provider’s identity.
                                                      Implementation of Executive Order                                                                                ‘‘Indirect’’ Federal financial assistance
                                                      13559 to Heads of Executive                             A. Purpose of the Proposed Rule                       is distinguishable because it places the
                                                      Departments and Agencies (Aug. 2,                          Consistent with Executive Order                    choice of service provider in the hands
                                                      2013) (available at http://                             13559, this proposed rule would revise                of a beneficiary before the Federal
                                                      www.whitehouse.gov/sites/default/files/                                                                       government pays for the cost of that
                                                                                                              the Department’s Equal Treatment
                                                      omb/memoranda/2013/m-13-19.pdf.                                                                               service through a voucher, certificate, or
                                                                                                              Regulations to: (1) clarify the distinction
                                                      Pursuant to the August 2, 2013 OMB                                                                            other similar means. For example, the
                                                                                                              between direct and indirect Federal
                                                      Memo, the Department is hereby                                                                                Federal government could choose to
                                                                                                              financial assistance as well as the rights
                                                      publishing this proposed rule amending                                                                        allow the beneficiary to secure the
                                                                                                              and obligations of DOL social service
                                                      its existing regulations to ensure they                                                                       needed service on his or her own.
                                                                                                              providers; (2) replace the term                       Alternatively, a Federal agency,
                                                      are consistent with Executive Order
                                                                                                              ‘‘inherently religious activities’’ with              operating under a neutral program of
                                                      13279 as amended by Executive Order
                                                      13559.                                                  the term ‘‘explicitly religious activities’’          aid, could present each beneficiary or
                                                         As explained below, the Department’s                 and define the latter term as ‘‘including             prospective beneficiary with a list of all
                                                      existing Equal Treatment Regulations at                 activities that involve overt religious               qualified providers from which the
                                                      29 CFR part 2, subpart D meet many of                   content such as worship, religious                    beneficiary could obtain services using
                                                      the provisions of Executive Order                       instruction, or proselytization,’’ (3)                a Federal government-provided
                                                      13559. However, a few provisions will                   require faith-based organizations                     certificate, e.g. through the use of
                                                      need to be revised or proposed in order                 administering a program supported with                Individual Training Accounts. Either
                                                      to meet the requirements of Executive                   direct DOL financial assistance to                    way, the Federal government empowers
                                                      Order 13279 as amended. Existing                        provide beneficiaries with a written                  the beneficiary to choose for himself or
                                                      sections §§ 2.30 and 2.32 of the Equal                  notice informing them of their religious              herself whether to receive the needed
                                                      Treatment Regulations emphasize that                    liberty rights, including the right to a              services, including those that contain
                                                      religious providers are eligible on the                 referral to an alternative provider if the            explicitly religious activities, through a
                                                      same basis as any other organization to                 beneficiary objects to the religious                  faith-based or other neighborhood
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                                                      seek DOL support or participate in DOL                  character of the organization providing               organization. The Federal government
                                                      programs for which they are otherwise                   services, and (4) add a provision stating             could then pay for the beneficiary’s
                                                      eligible. Section 2.32 also clarifies that              that decisions about awards of Federal                choice of provider by giving the
                                                      religious providers retain their                        financial assistance must be free from                beneficiary a voucher or similar
                                                      independence and religious identity.                    political interference and made based                 document. Alternatively, the Federal
                                                      Section 2.33 prohibits discrimination                   on merit. These changes will ensure the               government could choose to pay the
                                                      against beneficiaries on the basis of                   Department’s regulations implement all                provider directly after asking the
                                                      religion or religious belief and sets forth             of the requirements of Executive Order                beneficiary to indicate his or her choice.
                                                      the requirements related to inherently                  13279 as amended.                                     See Freedom From Religion Found. v.


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                                                                             Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules                                            47331

                                                      McCallum, 324 F.3d 880, 882 (7th Cir.                   financial assistance provided                         provision of a hot meal to a needy
                                                      2003).                                                  indirectly’’ and defines it to mean that              person to be an ‘‘inherently religious’’
                                                         The Supreme Court has held that if a                 the choice of the service provider is                 act when it is undertaken from a sense
                                                      program meets certain criteria, the                     placed in the hands of the beneficiary,               of religious motivation or obligation,
                                                      government may fund the program if,                     and the cost of that service is paid                  even though it has no overt religious
                                                      among other things, it places the benefit               through a voucher, certificate, or other              content.
                                                      in the hands of individuals, who in turn                similar means of government-funded                       The Supreme Court has determined
                                                      have the freedom to choose the provider                 payment. Federal financial assistance                 that the Government cannot subsidize
                                                      to which they take their benefit and                    provided to an organization is                        ‘‘a specifically religious activity in an
                                                      ‘‘spend’’ it, whether that provider is                  considered ‘‘indirect’’ when (1) the                  otherwise substantially secular setting.’’
                                                      public or private, non-religious or                     government funded program through                     Hunt v. McNair, 413 U.S. 734, 743
                                                      religious. See Zelman v. Simmons-                       which the beneficiary receives the                    (1973). It has also said a direct aid
                                                      Harris, 536 U.S. 639, 652–53 (2002). In                 voucher, certificate, or other similar                program impermissibly advances
                                                      these instances, the government does                    means of government-funded payment                    religion when the aid results in
                                                      not encourage or promote any explicitly                 is neutral toward religion; (2) the                   governmental indoctrination of religion.
                                                      religious programs that may be among                    organization receives the assistance as a             See Mitchell v. Helms, 530 U.S. 793, 808
                                                      the options available to beneficiaries.                 result of a decision of the beneficiary,              (2000) (Thomas, J., joined by Rehnquist,
                                                      Notably, the voucher scheme at issue in                 not a decision of the government; and                 C.J., Scalia, and Kennedy, JJ., plurality);
                                                      the Zelman decision, which was                          (3) the beneficiary has at least one                  id. at 845 (O’Connor, J., joined by
                                                      described by the Court as one of ‘‘true                 adequate secular option for the use of                Breyer, J., concurring in the judgment);
                                                      private choice,’’ id. at 653, was also                  the voucher, certificate, or other similar            Agostini v. Felton, 521 U.S. 203, 223
                                                      neutral toward religion and offered                     means of government-funded payment.                   (1997). This terminology is fairly
                                                      beneficiaries adequate secular options.                 Proposed paragraph (a)(3) notes that                  interpreted to prohibit the Government
                                                         The Department’s Equal Treatment                     recipients of sub-awards that receive                 from directly subsidizing any
                                                      Regulations currently note this                         Federal financial assistance through                  ‘‘explicitly religious activity,’’ including
                                                      distinction between direct and indirect                 programs administered by states or                    activities that involve overt religious
                                                      financial assistance at paragraphs (b)(1)               other intermediaries are not considered               content. Thus, direct Federal financial
                                                      and (b)(3) of § 2.33. The current                       recipients of indirect Federal financial              assistance should not be used to pay for
                                                      regulations do not, however, provide                    assistance.                                           activities such as religious instruction,
                                                      explicit definitions for the terms ‘‘direct                                                                   devotional exercises, worship,
                                                      Federal financial assistance’’ and                      2. Inherently Religious Activities                    proselytizing or evangelism; production
                                                      ‘‘indirect Federal financial assistance,’’                 Existing agency regulations and                    or dissemination of devotional guides or
                                                      which might help to clarify the                         Executive Order 13279 prohibits non-                  other religious materials; or counseling
                                                      distinction. Accordingly, the                           governmental organizations from using                 in which counselors introduce religious
                                                      Department proposes to add definitions                  direct Federal financial assistance (e.g.,            content. Similarly, direct Federal
                                                      of these terms to paragraph (a) of § 2.31,              government grants, contracts, sub-                    financial assistance may not be used to
                                                      the section containing the definition of                grants, and subcontracts) for ‘‘inherently            pay for equipment or supplies to the
                                                      certain terms used in the Equal                         religious activities, such as worship,                extent they are allocated to such
                                                      Treatment Regulations. Paragraph (a)                    religious instruction, and                            activities. Activities that are secular in
                                                      defines the term ‘‘Federal financial                    proselytization.’’ The term ‘‘inherently              content, such as serving meals to the
                                                      assistance.’’ Consistent with Executive                 religious’’ has proven confusing. In                  needy or using a nonreligious text to
                                                      Order 13559’s mandate to adopt                          2006, for example, the Government                     teach someone to read, are not
                                                      regulations on ‘‘the distinction between                Accountability Office (GAO) found that,               considered ‘‘explicitly religious
                                                      ‘direct’ and ‘indirect’ Federal financial               while all 26 of the religious social                  activities’’ merely because the provider
                                                      assistance,’’ 1 the proposed rule adds                  service providers it interviewed said                 is religiously motivated to provide those
                                                      language to paragraph (a) indicating that               they understood the prohibition on                    services. Secular activity also includes
                                                      Federal financial assistance may be                     using direct Federal financial assistance             the study or acknowledgement of
                                                      direct or indirect. Proposed paragraph                  for ‘‘inherently religious activities,’’ four         religion as a historical or cultural
                                                      (a)(1) provides a definition for the term               of the providers described acting in                  reality.
                                                      ‘‘direct Federal financial assistance’’ or              ways that appeared to violate that rule.                 The Department, therefore, proposes
                                                      ‘‘Federal financial assistance provided                 GAO, Faith-Based and Community                        to replace the term ‘‘inherently religious
                                                      directly’’ and defines it to mean that the              Initiative: Improvements in Monitoring                activities’’ with the term ‘‘explicitly
                                                      Government or an intermediary selects                   Grantees and Measuring Performance                    religious activities’’ throughout the
                                                      the provider and either purchases                       Could Enhance Accountability, GAO–                    Equal Treatment Regulations and to
                                                      services from that provider (e.g., via a                06–616, at 34–35 (June 2006) (available               define the latter term as ‘‘including
                                                      contract) or awards funds to that                       at http://www.gao.gov/new.items/                      activities that involve overt religious
                                                      provider to carry out a service (e.g., via              d06616.pdf).                                          content such as worship, religious
                                                      a grant or cooperative agreement). In                      Further, while the Supreme Court has               instruction, or proselytization.’’ These
                                                      general, Federal financial assistance will              sometimes used the term ‘‘inherently                  changes in language are consistent with
                                                                                                              religious,’’ it has not used it to indicate           the use of the term ‘‘explicitly religious
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                                                      be treated as direct, unless it meets the
                                                      definition of indirect Federal financial                the boundary of what the Government                   activities’’ in Executive Order 13559
                                                      assistance or Federal financial                         may subsidize with direct Federal                     and will provide greater clarity and
                                                      assistance provided indirectly.                         financial assistance. If the term is                  more closely match constitutional
                                                         Proposed paragraph (a)(2) provides a                 interpreted narrowly, it could permit                 standards as they have been developed
                                                      definition for the term ‘‘indirect Federal              actions that the Constitution prohibits.              in case law.
                                                      financial assistance’’ or ‘‘Federal                     On the other hand, one could also argue
                                                                                                              that the term ‘‘inherently religious’’ is             3. Intermediaries
                                                        1 Executive Order 11246, § 3(b)(iii), as amended      too broad rather than too narrow. For                    The Department also proposes to add
                                                      by Executive Order 13559, § 1.75 FR at 71321.           example, some might consider their                    regulatory language at proposed


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                                                      47332                  Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules

                                                      § 2.33(d) that will clarify the rights and                 Both section 2(d) of Executive Order               sections, the existing sections
                                                      responsibilities of intermediaries. An                  13279 as amended and the Department’s                 discussing the application to State and
                                                      intermediary is an entity, including a                  current Equal Treatment Regulations                   local funds at § 2.34, the effect of DOL
                                                      non-governmental organization, acting                   make clear that all organizations that                support on title VII employment
                                                      under a contract, grant, or other                       receive Federal financial assistance for              nondiscrimination requirements and on
                                                      agreement with the Federal Government                   the purpose of delivering social services             other existing statutes at § 2.35, and the
                                                      or with a State or local government, that               are prohibited from discriminating                    status of nonprofit organizations at
                                                      accepts Federal financial assistance and                against beneficiaries or potential                    § 2.36 are redesignated as §§ 2.36, 2.37,
                                                      distributes that assistance to other                    beneficiaries of those programs on the                and 2.38 respectively.
                                                      organizations that, in turn, provide                    basis of religion, a religious belief,                a. Written Notice
                                                      government-funded social services.                      refusal to hold a religious belief, or a
                                                      Each intermediary must abide by all                     refusal to attend or participate in a                    Executive Order 13279, as amended
                                                      statutory and regulatory requirements                   religious practice. Executive Order                   by Executive Order 13559, requires that
                                                      by, for example, providing any services                 13559, § 1(b) (amending § 2(d) of                     the Secretary of Labor, among other
                                                      supported with direct Federal financial                 Executive Order 13279); 29 CFR 2.33.                  agency heads, establish policies and
                                                      assistance in a religiously neutral                     Both also state that organizations                    procedures designed to ensure that each
                                                      manner that does not include explicitly                 offering explicitly religious activities              beneficiary of a social service program
                                                      religious activities. The intermediary                  (including activities that involve overt              receives written notice of their religious
                                                      also has the same duties as the                         religious content such as worship,                    liberty rights. Executive Order 13279,
                                                      government to comply with these rules                   religious instruction or proselytization)             § 2(h)(ii) as amended by Executive
                                                      by, for example, selecting any providers                must not use direct Federal financial                 Order 13559, § 1.75 FR at 71320–21.
                                                      to receive Federal financial assistance in              assistance to subsidize or support those              Consistent with this mandate, proposed
                                                      a manner that does not favor or disfavor                activities, and that any explicitly                   § 2.34 requires DOL social service
                                                      organizations on the basis of religion or               religious activities must be offered                  providers with a religious affiliation to
                                                      religious belief. While intermediaries                  outside of programs that are supported                give beneficiaries written notice of their
                                                      may be used to distribute Federal                       with direct Federal financial assistance              religious liberty rights when seeking or
                                                      financial assistance to other                           (including through prime awards or sub-               obtaining services supported by direct
                                                      organizations in some programs,                         awards). Executive Order 13559, § 1(b)                DOL financial assistance. The notice is
                                                      intermediaries remain accountable for                   (amending § 2(f) of Executive Order                   set forth in proposed paragraph (a) and
                                                      the Federal financial assistance they                   13279); 29 CFR 2.33. In other words, to               informs beneficiaries that:
                                                      disburse. Accordingly, intermediaries                   the extent that an organization provides                 (1) the organization may not
                                                      must ensure that any providers to which                 explicitly religious activities, those                discriminate against beneficiaries on the
                                                      they disburse Federal financial                         activities must be offered separately in              basis of religion or religious belief;
                                                      assistance also comply with these rules.                                                                         (2) the organization may not require
                                                                                                              time or location from programs or
                                                      If the intermediary is a non-                                                                                 beneficiaries to attend or participate in
                                                                                                              services supported with direct Federal
                                                      governmental organization, it retains all                                                                     any explicitly religious activities, and
                                                                                                              financial assistance. And, as noted
                                                      other rights of a non-governmental                                                                            any participation by beneficiaries in
                                                                                                              above, participation in those religious
                                                      organization under the statutory and                                                                          such activities must be purely
                                                                                                              activities must be completely voluntary
                                                      regulatory provisions governing the                                                                           voluntary;
                                                                                                              for beneficiaries of programs supported                  (3) the organization must separate out
                                                      program.                                                by direct Federal financial assistance.
                                                         A State’s use of intermediaries does                                                                       in time or location any explicitly
                                                      not relieve the State of its traditional                   To strengthen the protections                      religious activities from activities
                                                      responsibility to effectively monitor the               provided to beneficiaries, Executive                  supported with direct DOL support;
                                                      actions of such organizations. States are               Order 13559 requires that organizations                  (4) if a beneficiary objects to the
                                                      obligated to manage the day-to-day                      administering a program that is                       religious character of the organization,
                                                      operations of grant- and sub-grant-                     supported by direct Federal financial                 the organization will undertake
                                                      supported activities to ensure                          assistance must give written notice in a              reasonable efforts to identify and refer
                                                      compliance with applicable Federal                      manner prescribed by the Department to                the beneficiary to an alternative
                                                      requirements and performance goals.                     beneficiaries and prospective                         provider to which the prospective
                                                      Moreover, a State’s use of intermediaries               beneficiaries of their religious liberty              beneficiary has no objection; and
                                                      does not relieve the State of its                       rights, including the right to be referred               (5) beneficiaries may report violations
                                                      responsibility to ensure that providers                 to an alternative provider when                       of these enumerated religious liberty
                                                      are selected, and deliver services, in a                available. If a beneficiary or prospective            rights to the Civil Rights Center, Room
                                                      manner consistent with the First                        beneficiary of a social service program               N–4123, 200 Constitution Avenue NW.,
                                                      Amendment’s Establishment Clause.                       supported by Federal financial                        Washington, DC 20210,
                                                                                                              assistance objects to the religious                   CivilRightsCenter@dol.gov.
                                                      4. Protections for Beneficiaries                        character of an organization that                        The purpose of the notice is to make
                                                         Executive Order 13559 indicates a                    provides services under the program,                  beneficiaries aware of their religious
                                                      variety of valuable protections for the                 the social service program must refer the             liberty rights and helps to ensure that
                                                      religious liberty rights of social service              beneficiary to an alternative provider.               beneficiaries are not coerced or
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                                                      beneficiaries. These protections are                    Accordingly, the proposed rule                        pressured along religious lines in order
                                                      aimed at ensuring that Federal financial                supplements existing beneficiary                      to obtain DOL-supported social service
                                                      assistance is not used to coerce or                     protections in the Equal Treatment                    programs. Paragraph (a) provides that
                                                      pressure beneficiaries along religious                  Regulations by adding two new sections                DOL social service providers may post
                                                      lines, and to make beneficiaries aware of               to the regulations—one addressing the                 and distribute exact duplicate copies of
                                                      their rights, through appropriate notice,               written notice requirement at proposed                the notice, including through electronic
                                                      when potentially obtaining services                     § 2.34 and the other addressing the                   means. Paragraph (b) requires that the
                                                      from providers with a religious                         referral requirement at proposed § 2.35.              notice be given to beneficiaries before
                                                      affiliation.                                            In light of the addition of these two new             they enroll in the program or receive


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                                                                             Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules                                           47333

                                                      services from such programs. However,                   proposed § 2.35 to notify the awarding                service intermediary provider’’ in
                                                      when the nature of the service                          entity and that entity is to determine                § 2.31(f) by adding that the term
                                                      provided—such as a one-time                             whether there is any other suitable                   encompasses non-governmental
                                                      emergency hotline call—or exigent                       alternative provider to which the                     organizations. This change clarifies that
                                                      circumstances make it impracticable to                  beneficiary may be referred. Paragraph                non-governmental organizations have
                                                      provide such written notice in advance                  (e) notes that a DOL social service                   the same obligations as governmental
                                                      of the actual service, DOL social service               intermediary provider may request                     intermediary providers, such as state
                                                      providers are to advise beneficiaries of                assistance from the Department in                     agencies.
                                                      their protections at the earliest available             identifying an alternative service
                                                      opportunity.                                            provider. Further, the executive order                b. Protection of Religious Organizations’
                                                                                                              and the proposed rule require the                     Independence
                                                      b. Referral Requirements
                                                                                                              relevant government agency to ensure                     Consistent with Section 2(g) of
                                                         Proposed § 2.35 implements                           that appropriate and timely referrals are             Executive Order 13559, the proposed
                                                      Executive Order 13559’s requirement                     made to an appropriate provider, and                  rule would modify § 2.32(b) by adding
                                                      that a beneficiary be referred to an                    that referrals are made in a manner                   the term ‘‘development’’ to indicate that
                                                      alternative provider when he or she                     consistent with applicable privacy laws               the development of religious beliefs is
                                                      objects to the religious character of an                and regulations. It must be noted,                    protected for faith-based organizations
                                                      organization that provides services                     however, that in some instances, the                  that apply for, or participate in, a social
                                                      under the federally-financed program.                   awarding entity may also be unable to                 service program supported with Federal
                                                      Executive Order 11246, § 2(h)(i) as                     identify a suitable alternative provider.             financial assistance.
                                                      amended by Executive Order 13559, § 1.                  The Department requests specific
                                                      75 FR at 71320. Accordingly, paragraph                  comment on proposed § 2.35 and the                    III. Regulatory Procedures
                                                      (a) of proposed § 2.35 provides that, if                referral requirement.                                 Executive Orders 12866 and 13563
                                                      a beneficiary or prospective beneficiary
                                                      of a social service program supported by                5. Political or Religious Affiliation                    Executive Orders (E.O.) 12866 and
                                                      direct Federal financial assistance                        Consistent with § 2(j) of Executive                13563 direct agencies to assess all costs
                                                      objects to the religious character of an                Order 11246 as amended by § 1 of                      and benefits of available regulatory
                                                      organization that provides services                     Executive Order 13559, the proposed                   alternatives and, if regulation is
                                                      under the program, that organization                    rule adds a new provision at proposed                 necessary, to select regulatory
                                                      shall promptly undertake reasonable                     § 2.39 to require that decisions about                approaches that maximize net benefits
                                                      efforts to identify and refer the                       awards of Federal financial assistance                (including potential economic,
                                                      beneficiary to an alternative provider to               must be free from political interference              environmental, public health and safety
                                                      which the prospective beneficiary has                   or even the appearance of such                        effects; distributive impacts; and
                                                      no objection.                                           interference and must be made based on                equity). E.O. 13563 emphasizes the
                                                         Paragraph (b) states that a referral may             merit, not on the basis of religion or                importance of quantifying both costs
                                                      be made to another religiously affiliated               religious belief. This requirement will               and benefits, reducing costs,
                                                      provider, if the beneficiary has no                     increase confidence that the rules                    harmonizing rules, and promoting
                                                      objection to that provider. But if the                  applicable to federally funded                        flexibility. Section 3(f) of E.O. 12866
                                                      beneficiary requests a secular provider,                partnerships are actually being observed              defines a ‘‘significant regulatory action’’
                                                      and a secular provider that offers the                  and that decisions about government                   as an action that is likely to result in a
                                                      needed services is available, then a                    grants are made on the merits of                      rule that: (1) Has an annual effect on the
                                                      referral must be made to that provider.                 proposals, not on political or religious              economy of $100 million or more or
                                                         Paragraph (c) of proposed § 2.35                     considerations. The awarding entity                   adversely and materially affects a sector
                                                      specifies that, except for services                     must instruct participants in the                     of the economy, productivity,
                                                      provided by telephone, internet, or                     awarding process to refrain from taking               competition, jobs, the environment,
                                                      similar means, the referral must be to an               religious affiliations or non-religious               public health or safety, or State, local or
                                                      alternative provider that is in                         affiliations into account in this process;            Tribal governments or communities
                                                      geographic proximity to the                             i.e., an organization should not receive              (also referred to as ‘‘economically
                                                      organization making the referral and                    favorable or unfavorable marks merely                 significant’’); (2) creates serious
                                                      that offers services that are similar in                because it is affiliated or unaffiliated              inconsistency or otherwise interferes
                                                      substance and quality to those offered                  with a religious body, or related or                  with an action taken or planned by
                                                      by the organization. The alternative                    unrelated to a specific religion. When                another agency; (3) materially alters the
                                                      provider also must have the capacity to                 selecting reviewers, the awarding entity              budgetary impacts of entitlement grants,
                                                      accept additional clients. If a Federally-              should never ask about religious                      user fees, or loan programs or the rights
                                                      supported alternative provider meets                    affiliation or take such matters into                 and obligations of recipients thereof; or
                                                      these requirements and is acceptable to                 account. But it should encourage                      (4) raises novel legal or policy issues
                                                      the beneficiary, a referral should be                   religious, political and professional                 arising out of legal mandates, the
                                                      made to that provider. If, however, there               diversity among reviewers by                          President’s priorities, or the principles
                                                      is no Federally-supported alternative                   advertising for these positions in a wide             set forth in E.O. 12866.
                                                      provider that meets these requirements                                                                           The Department believes that the only
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                                                                                                              variety of venues.
                                                      and is acceptable to the beneficiary, a                                                                       provisions of this proposed rule likely
                                                      referral should be made to an alternative               6. Miscellaneous Provisions                           to impose costs on the regulated
                                                      provider that does not receive Federal                     The proposed rule would also modify                community are the requirements that
                                                      financial assistance but does meet these                the following provisions:                             DOL social service providers with a
                                                      requirements and is acceptable to the                                                                         religious affiliation: (1) Give
                                                      beneficiary.                                            a. Definition of DOL Social Service                   beneficiaries a written notice informing
                                                         If an organization is unable to identify             Intermediary Provider                                 them of their religious liberty rights
                                                      an alternative provider, the organization                  The proposed rule would modify the                 when seeking or obtaining services
                                                      is required under paragraph (d) of                      definition of the term ‘‘DOL social                   supported by direct DOL financial


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                                                      47334                  Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules

                                                      assistance, (2) at the beneficiary’s                    provider and the attendant compliance                 provider’s total revenue. In addition, we
                                                      request, make reasonable efforts to                     cost service providers may face.                      note that after the first year, the labor
                                                      identify and refer the beneficiary to an                  Notwithstanding the absence of                      cost associated with compliance will
                                                      alternative provider to which the                       concrete data, the Department believes                likely decrease significantly because
                                                      beneficiary has no objection, and (3)                   that this proposed rule is not significant            small service providers will be familiar
                                                      document such action. To minimize                       within the meaning of the Executive                   with the requirements.
                                                      compliance costs on DOL social service                  Order because the annual costs                           The rule will also require religious
                                                      providers, the proposed rule provides                   associated with complying with the                    social service providers, at the
                                                      the language of the notice directly                     written notice and referral requirements              beneficiary’s request, to make
                                                      within the proposed rule.                               will not approach $100 million.                       reasonable efforts to identify and refer
                                                         An estimate of the cost of providing                                                                       the beneficiary to an alternative
                                                                                                              Initial Regulatory Flexibility Analysis
                                                      this notice and referring beneficiaries is                                                                    provider to which the beneficiary has no
                                                      discussed in the Paperwork Reduction                       The Regulatory Flexibility Act (RFA)
                                                                                                                                                                    objection. If an organization is unable to
                                                      Act section of this proposed rule. To                   at 5 U.S.C. 603(a) requires agencies to
                                                                                                                                                                    identify an alternative provider, the
                                                      minimize compliance costs and allow                     prepare and make available for public
                                                                                                                                                                    organization is required to notify the
                                                      maximum flexibility in implementation,                  comment an initial regulatory flexibility
                                                                                                                                                                    awarding entity and that entity is to
                                                      the Department has elected not to                       analysis which will describe the impact
                                                                                                                                                                    determine whether there is any other
                                                      establish a specific format for the                     of the proposed rule on small entities.
                                                                                                                                                                    suitable alternative provider to which
                                                      referrals required when beneficiaries                   Section 605 of the RFA allows an
                                                                                                                                                                    the beneficiary may be referred. A DOL
                                                      request an alternative provider. To                     agency to certify a rule, in lieu of
                                                                                                                                                                    social service intermediary may request
                                                      estimate the cost of the referral                       preparing an analysis, if the proposed
                                                                                                                                                                    assistance from the Department in
                                                      provision, the Department would need                    rulemaking is not expected to have a
                                                                                                              significant economic impact on a                      identifying an alternative service
                                                      to know the number of religious direct                                                                        provider. The Department estimates that
                                                      social service providers funded by DOL                  substantial number of small entities.
                                                                                                              Furthermore, under the Small Business                 each referral request will require no
                                                      annually, the number of beneficiaries                                                                         more than two hours of a Training and
                                                      who would ask for a referral, the costs                 Regulatory Enforcement Fairness Act of
                                                                                                              1996, 5 U.S.C. 801 (SBREFA), an agency                Development Specialist’s time to
                                                      of making the referral and notifying                                                                          process at a labor cost of $29.22 per
                                                      relevant parties of the referral.                       is required to produce compliance
                                                                                                              guidance for small entities if the rule               hour. Although we do not have any way
                                                         Unfortunately, at this time, there is no
                                                                                                              has a significant economic impact on a                to determine the number of referrals that
                                                      known source of information to quantify
                                                                                                              substantial number of small entities.                 will occur in any one year, the
                                                      precisely the numbers or proportions of
                                                                                                              The RFA defines small entities as small               Department does not believe that
                                                      program beneficiaries who will request
                                                      referral to alternative providers. We are               business concerns, small not-for-profit               referral costs will be appreciable for
                                                      not aware of any instances in which a                   enterprises, or small governmental                    small service providers. The Department
                                                      beneficiary of a program of the                         jurisdictions. As described above, the                invites interested parties to provide data
                                                      Department has objected to receiving                    Department has made every effort to                   on which we can formulate better
                                                      services from a faith-based organization.               ensure that the disclosure and referral               estimates of the compliance costs
                                                      There is a possibility that because of                  requirements of the proposed rule                     associated with the disclosure and
                                                      this rule, when beneficiaries start                     impose minimum burden and allow                       referral requirements of this proposed
                                                      receiving notices of their right to request             maximum flexibility in implementation                 rule.
                                                      referral to an alternative service                      by providing in the rule the notice for               Paperwork Reduction Act
                                                      provider, more of them may raise                        providers to give beneficiaries informing
                                                      objections. However, our estimate of the                them of their rights and by not                         The purposes of the Paperwork
                                                      number of referrals is also informed by                 proscribing a specific format for making              Reduction Act of 1995 (PRA), 44 U.S.C.
                                                      the experience of the Department of                     referrals. The Department estimates it                3501 et seq., include minimizing the
                                                      Health and Human Services, Substance                    will take no more than two minutes for                paperwork burden on affected entities.
                                                      Abuse and Mental Health Services                        providers to print, duplicate, and                    The PRA requires certain actions before
                                                      Administration (SAMHSA), which                          distribute an adequate number of                      an agency can adopt or revise a
                                                      administers beneficiary substance abuse                 disclosure notices for potential                      collection of information, including
                                                      service programs under titles V and XIX                 beneficiaries. Using the May 2013                     publishing a summary of the collection
                                                      of the Public Health Service Act, 42                    Bureau of Labor Statistics hourly mean                of information and a brief description of
                                                      U.S.C. 290aa, et seq. and 42 U.S.C.                     wage for a Training and Development                   the need for and proposed use of the
                                                      300x–21 et seq. Specifically, 42 U.S.C.                 Specialist of $29.22 results in an                    information.
                                                      290kk–1 and 300x–65, require faith-                     estimate of the labor cost per service                  A Federal agency may not conduct or
                                                      based organizations that receive                        provider of preparing the notice of                   sponsor a collection of information
                                                      assistance under the Act to provide                     approximately $0.97. In addition, the                 unless it is approved by OMB under the
                                                      notice to beneficiaries of their right                  Department estimates an upper limit of                PRA, and displays a currently valid
                                                      under statute to request an alternative                 $100 for the annual cost of materials                 OMB control number, and the public is
                                                      service provider. Recipients of                         (paper, ink, toner) to print multiple                 not required to respond to a collection
                                                      assistance must also report all referrals               copies of the notices. Because these                  of information unless it displays a
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                                                      to the appropriate federal, state, or local             costs will be borne by every small                    currently valid OMB control number.
                                                      government agency that administers the                  service provider with a religious                     Also, notwithstanding any other
                                                      SAMHSA program. To date, SAMHSA                         affiliation, the Department believes that             provisions of law, no person shall be
                                                      has not received any reports of referral                a substantial number of these small                   subject to penalty for failing to comply
                                                      by recipients or subrecipients. The                     entities may be affected by this                      with a collection of information if the
                                                      Department invites interested parties to                provision. However, the Department                    collection of information does not
                                                      provide data on which to base estimates                 does not believe that a compliance cost               display a currently valid OMB control
                                                      of the number of beneficiaries who will                 of less than $200 per provider per year               number (44 U.S.C. 3512). This rule
                                                      request referral to an alternative service              is a significant percentage of a                      proposes a new information collection.


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                                                                             Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules                                         47335

                                                         Section 2.34 would impose                            the bottom portion of the notice. For                 may be submitted in the same way as
                                                      requirements on religious social service                those religious social service providers              any other comment for this rulemaking.
                                                      providers to give beneficiaries (or                     that provide notice electronically, the               In addition to having an opportunity to
                                                      potential beneficiaries) a standardized                 notices would have to include a means                 file comments with the Department,
                                                      notice instructing (potential)                          for beneficiaries to request an                       written comments under the PRA about
                                                      beneficiaries of their rights and                       alternative placement—and follow-up, if               the information collection requirements
                                                      requiring an occasional written response                desired—that is recorded so the                       may be addressed to the OMB.
                                                      that may impose a burden under the                      religious social service providers may                Comments to the OMB should be
                                                      PRA. The Department has determined                      retain evidence of compliance with                    directed to: Office of Information and
                                                      this notice is not a collection of                      these proposed regulations. We do not                 Regulatory Affairs, Attention OMB Desk
                                                      information subject to OMB clearance                    include an estimate of the burden of                  Officer for the DOL–OS, Office of
                                                      under the PRA because the Federal                       maintaining the records needed to                     Management and Budget, Room 10235,
                                                      Government has provided the exact text                  demonstrate compliance with the                       Washington, DC 20503. You can also
                                                      that a provider must use. See 5 CFR                     requirements imposed on religious                     submit comments to OMB by email at
                                                      1320.3(c)(2). The beneficiary’s response,               social service providers. The record-                 OIRA_submission@omb.eop.gov. The
                                                      however, is subject to OMB clearance                    keeping burden that these proposed                    OMB will consider all written
                                                      under the PRA. Care has been taken to                   regulations would add is so small that,               comments it receives within 30 days of
                                                      limit the information to simply                         under most programs, it would not                     publication of this information
                                                      obtaining minimal identifying                           measurably increase the burden that                   collection.
                                                      information and providing check boxes                   already exists under current program                     The OMB and the Department are
                                                      for material responses.                                 and administrative requirements. If, due              particularly interested in comments
                                                         Section 2.35 would require that when                 to the unique nature of a particular                  that:
                                                      a beneficiary or prospective beneficiary                program, the record-keeping burden                       • Evaluate whether the collections of
                                                      of a social service program supported by                associated with these proposed                        information are necessary for the proper
                                                      direct DOL financial assistance objects                 regulations is large enough to be                     performance of the functions of the
                                                      to the religious character of an                        measurable, that burden will be                       agency, including whether the
                                                      organization that provides services                     calculated under the record-keeping and               information will have practical utility;
                                                      under the program, that organization                    reporting requirements of the affected                   • Evaluate the accuracy of the
                                                      must promptly undertake reasonable                      program and identified in information                 agency’s estimate of the burden of the
                                                      efforts to identify and refer the                       collection requests that are submitted to             collection of information, including the
                                                      beneficiary to an alternative provider.                 OMB for PRA approval. Therefore, we                   validity of the methodology and
                                                      The referral process could entail                       have not included any estimate of                     assumptions used;
                                                      collections of information subject to                   record-keeping burden in this PRA                        • Enhance the quality, utility, and
                                                      PRA clearance, specifically, informing                  analysis.                                             clarity of the information to be
                                                      the beneficiary of a referral to an                        Concurrent with publication of this                collected; and
                                                      alternative provider. If an organization                NPRM, the Department is submitting an                    • Minimize the burden of the
                                                      is unable to identify an alternative                    information collection request (ICR) to               collection of information on those who
                                                      provider, the organization is required                  the OMB to obtain PRA approval for the                are to respond, including through the
                                                      under paragraph (d) of proposed § 2.35                  proposed information collection                       use of appropriate automated,
                                                      to notify the awarding entity and that                  requirements. A copy of this ICR with                 electronic, mechanical, or other
                                                      awarding entity is to determine whether                 applicable supporting documentation                   technological collection techniques or
                                                      there is any other suitable alternative                 including a description of the likely                 other forms of IT (e.g., permitting
                                                      provider to which the beneficiary may                   respondents, proposed frequency of                    electronic submission of responses.
                                                      be referred. Paragraph (e) notes that a                 response, and estimated total burden                     The burden for the information
                                                      DOL social service intermediary                         may be obtained free of charge from the               collection provisions of this NPRM can
                                                      provider may request assistance from                    RegInfo.gov Web site on the day                       be summarized as follows:
                                                      the Department in identifying an                        following publication of this notice or                  Agency: DOL–OS.
                                                      alternative service provider. Further, the              by contacting Michel Smyth by                            Title of Collection: Grant Beneficiary
                                                      executive order and the proposed rule                   telephone at 202–693–4129, TTY 202–                   Referrals.
                                                      require the relevant government agency                  693–8064, (these are not toll-free                       OMB ICR Reference Number Control
                                                      to ensure that appropriate and timely                   numbers) or sending an email to DOL_                  Number: 1291–0NEW.
                                                      referrals are made to an appropriate                    PRA_PUBLIC@dol.gov.                                      Affected Public: State and local
                                                      provider, and that referrals are made in                  As part of its continuing effort to                 governments; Private Sector—not-for-
                                                      a manner consistent with applicable                     reduce paperwork burdens, the                         profit institutions; and Individuals or
                                                      privacy laws and regulations.                           Department conducts a preclearance                    Households.
                                                         Religious social service providers that              consultation program to provide the                      Frequency of Response: On occasion.
                                                      would be subject to these requirements                  general public and Federal agencies                      Total Estimated Number of
                                                      would have to keep records to show that                 with an opportunity to comment on                     Respondents: 38.
                                                      they have met the referral requirements                 collections of information in accordance                 Total Estimated Number of
                                                      in the proposed regulations. (The                       with the PRA. This program helps to                   Responses: 38.
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                                                      religious social service provider will be               ensure that requested data can be                        Total Estimated Annual Burden
                                                      required to complete the referral form,                 provided in the desired format,                       Hours: 9.
                                                      notify the awarding entity, and maintain                reporting burden (time and financial                     Total Estimated Other Costs: $0.
                                                      information only if a beneficiary                       resources) is minimized, collection
                                                      requests a referral to an alternate                     instruments are clearly understood, and               Executive Order 13132
                                                      provider.) In the case of paper notices,                the impact of collection requirements on                Section 6 of Executive Order 13132
                                                      religious social service providers could                respondents can be properly assessed. A               requires Federal agencies to consult
                                                      meet the record-keeping requirements in                 comment to the Department about the                   with State entities when a regulation or
                                                      these proposed regulations by keeping                   information collection requirements                   policy may have a substantial direct


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                                                      47336                  Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules

                                                      effect on the States or the relationship                amends part 2 of title 29 of the Code of              beneficiary, not a decision of the
                                                      between the National Government and                     Federal Regulations as set forth below.               government; and
                                                      the States, or the distribution of power                                                                         (iii) The beneficiary has at least one
                                                      and responsibilities among the various                  PART 2—GENERAL REGULATIONS                            adequate secular option for the use of
                                                      levels of government, within the                                                                              the voucher, certificate, or other similar
                                                                                                              Subpart D—Equal Treatment in                          means of Government-funded payment.
                                                      meaning of the Executive Order. Section
                                                                                                              Department of Labor Programs for                         (3) The recipient of sub-awards
                                                      3(b) of the Executive Order further
                                                                                                              Religious Organizations; Protection of                received through programs administered
                                                      provides that Federal agencies must
                                                                                                              Religious Liberty of Department of                    by States or other intermediaries that are
                                                      implement regulations that have a
                                                                                                              Labor Social Service Providers and                    themselves recipients of Federal
                                                      substantial direct effect only if statutory
                                                                                                              Beneficiaries                                         financial assistance (e.g., local areas that
                                                      authority permits the regulation and it
                                                      is of national significance.                                                                                  receive within-state allocations to
                                                                                                              ■ 1. The authority citation for part 2 is
                                                         This proposed rule does not have a                                                                         provide workforce services under title I
                                                                                                              revised to read as follows:
                                                      substantial direct effect on the States or                                                                    of the Workforce Innovation and
                                                                                                                Authority: 5 U.S.C. 301; Executive Order            Opportunity Act) are not considered
                                                      the relationship between the National                   13198, 66 FR 8497, 3 CFR 2001 Comp., p.
                                                      Government and the States, or the                                                                             recipients of indirect Federal financial
                                                                                                              750; Executive Order 13279, 67 FR 77141, 3
                                                      distribution of power and                               CFR 2002 Comp., p. 258; Executive Order
                                                                                                                                                                    assistance or recipients of Federal
                                                      responsibilities among the various                      13559, 75 FR 71319, 3 CFR 2011 Comp., p.              financial assistance provided indirectly
                                                      levels of Government, within the                        273.                                                  as those terms are used in Executive
                                                      meaning of the Executive Order 13132.                                                                         Order 13559. These recipients of sub-
                                                                                                              ■ 2. Amend § 2.31 by revising                         awards are considered recipients of
                                                      Any action taken by a State as a result                 paragraphs (a) and (f) to read as follows:
                                                      of the proposed rule would be at its own                                                                      direct Federal financial assistance.
                                                      discretion as the rule imposes no                       § 2.31   Definitions.                                 *       *    *     *     *
                                                      requirements.                                           *       *    *     *     *                               (f) The term DOL social service
                                                                                                                 (a) The term Federal financial                     intermediary provider means any DOL
                                                      Unfunded Mandates Reform Act of 1995                    assistance means assistance that non-                 social service provider, including a non-
                                                         This regulatory action has been                      Federal entities (including State and                 governmental organization, that, as part
                                                      reviewed in accordance with the                         local governments) receive or                         of its duties, selects subgrantees to
                                                      Unfunded Mandates Reform Act of 1995                    administer in the form of grants,                     receive DOL support or subcontractors
                                                      (Reform Act). Under the Reform Act, a                   contracts, loans, loan guarantees,                    to provide DOL-supported services, or
                                                      Federal agency must determine whether                   property, cooperative agreements, direct              has the same duties under this part as
                                                      a regulation proposes a Federal mandate                 appropriations, or other direct or                    a governmental entity.
                                                                                                              indirect assistance, but does not include             ■ 3. Amend § 2.32 by revising paragraph
                                                      that would result in increased
                                                      expenditures by State, local, or tribal                 a tax credit, deduction or exemption.                 (b) introductory text and paragraph (c)
                                                      governments, in the aggregate, or by the                Federal financial assistance may be                   to read as follows:
                                                      private sector, of $100 million or more                 direct or indirect.                                   § 2.32 Equal participation of religious
                                                      in any single year. The Department has                     (1) The term direct Federal financial              organizations.
                                                      determined this proposed rule does not                  assistance or Federal financial
                                                                                                              assistance provided directly means that               *      *     *    *      *
                                                      include any Federal mandate that may                                                                            (b) A religious organization that is a
                                                      result in increased expenditure by State,               the Government or a DOL social service
                                                                                                                                                                    DOL social service provider retains its
                                                      local, and Tribal governments in the                    intermediary provider under this part
                                                                                                                                                                    independence from Federal, State, and
                                                      aggregate of more than $100 million, or                 selects the provider and either
                                                                                                                                                                    local governments and must be
                                                      increased expenditures by the private                   purchases services from that provider
                                                                                                                                                                    permitted to continue to carry out its
                                                      sector of more than $100 million.                       (e.g., via a contract) or awards funds to
                                                                                                                                                                    mission, including the definition,
                                                                                                              that provider to carry out a service (e.g.,
                                                      Effect on Family Life                                                                                         development, practice, and expression
                                                                                                              via grant or cooperative agreement). In
                                                                                                                                                                    of its religious beliefs, subject to the
                                                        The Department certifies that this                    general, Federal financial assistance
                                                                                                                                                                    provisions of § 2.33. Among other
                                                      proposed rule has been assessed                         shall be treated as direct, unless it meets
                                                                                                                                                                    things, such a religious organization
                                                      according to section 654 of the Treasury                the definition of indirect Federal
                                                                                                                                                                    must be permitted to:
                                                      and General Government                                  financial assistance or Federal financial
                                                                                                              assistance provided indirectly.                       *      *     *    *      *
                                                      Appropriations Act, enacted as part of                                                                          (c) A grant document, contract or
                                                                                                                 (2) The term indirect Federal financial
                                                      the Omnibus Consolidated and                                                                                  other agreement, covenant,
                                                                                                              assistance or Federal financial
                                                      Emergency Supplemental                                                                                        memorandum of understanding, policy,
                                                                                                              assistance provided indirectly means
                                                      Appropriations Act of 1999 (Pub. L.                                                                           or regulation that is used by DOL, a
                                                                                                              that the choice of the service provider
                                                      105–277, 112 Stat. 2681), for its effect                                                                      State or local government administering
                                                                                                              is placed in the hands of the beneficiary,
                                                      on family well-being. It will not                       and the cost of that service is paid                  DOL support, or a DOL social service
                                                      adversely affect the well-being of the                  through a voucher, certificate, or other              intermediary provider must not require
                                                      nation’s families. Therefore, the                       similar means of government-funded                    only religious organizations to provide
                                                      Department certifies that this proposed                 payment. Federal financial assistance                 assurances that they will not use direct
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                                                      rule does not adversely impact family                   provided to an organization is                        DOL support for explicitly religious
                                                      well-being.                                             considered indirect when:                             activities (including activities that
                                                      List of Subjects in 29 CFR Part 2                          (i) The Government program through                 involve overt religious content, such as
                                                                                                              which the beneficiary receives the                    worship, religious instruction, or
                                                        Administrative practice and                           voucher, certificate, or other similar                proselytization). Any such requirements
                                                      procedure, Claims, Courts, Government                   means of Government-funded payment                    must apply equally to both religious and
                                                      employees, Religious Discrimination.                    is neutral toward religion;                           other organizations. All organizations,
                                                        For the reasons set forth in the                         (ii) The organization receives the                 including religious ones, that are DOL
                                                      preamble, the Department of Labor                       assistance as a result of a decision of the           social service providers must carry out


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                                                                             Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules                                          47337

                                                      DOL-supported activities in accordance                  activities, under the following                       efforts to identify and refer the
                                                      with all applicable legal and                           circumstances:                                        beneficiary to an alternative provider to
                                                      programmatic requirements, including                       * * *                                              which the beneficiary has no objection.
                                                      those prohibiting the use of direct DOL                    (d) If an intermediary, acting under a             The organization cannot guarantee,
                                                      support for explicitly religious activities             contract, grant, or other agreement with              however, that in every instance, an
                                                      (including activities that involve overt                the Federal government or with a State                alternative provider will be available;
                                                      religious content, such as worship,                     or local government that is                           and
                                                      religious instruction, or proselytization).             administering a program supported by                     (5) Beneficiaries may report violations
                                                      A grant document, contract or other                     Federal financial assistance, is given the            of these protections to the U.S.
                                                      agreement, covenant, memorandum of                      authority under the contract, grant, or               Department of Labor (or, the
                                                      understanding, policy, or regulation that               agreement to select non-governmental                  intermediary, if applicable). The
                                                      is used by DOL, a State or local                        organizations to provide services funded              required language of the notice is set
                                                      government, or a DOL social service                     by the Federal government, the                        forth below and may be downloaded
                                                      intermediary provider in administering                  intermediary must ensure compliance                   from the Center for Faith-Based and
                                                      a DOL social service program must not                   with the provisions of Executive Order                Neighborhood Partnerships’ Web site at
                                                      disqualify organizations from receiving                 13279, as amended by Executive Order                  http://www.dol.gov/cfbnp. DOL social
                                                      DOL support or participating in DOL                     13559, and any implementing rules or                  service providers may post and
                                                      programs on the grounds that such                       guidance, by the recipient of a contract,             distribute exact duplicate copies of the
                                                      organizations are motivated or                          grant or agreement. If the intermediary               notice, including through electronic
                                                      influenced by religious faith to provide                is a non-governmental organization, it                means:
                                                      social services, have a religious                       retains all other rights of a non-                    NOTICE OF BENEFICIARY RELIGIOUS
                                                      character or affiliation, or lack a                     governmental organization under the                   LIBERTY PROTECTIONS
                                                      religious component.                                    program’s statutory and regulatory
                                                      ■ 4. Amend § 2.33 by revising paragraph                 provisions.                                           Name of Organization:
                                                      (b)(1) and paragraph (b)(3) introductory                *      *      *    *    *                             Name of Program:
                                                      text, and adding a new paragraph (d) to                                                                       Contact information for Program Staff
                                                                                                              §§ 2.34, 2.35, and 2.36 [Redesignated as              (name, phone number, and email
                                                      read as follows:
                                                                                                              §§ 2.36, 2.37, and 2.38]
                                                                                                                                                                    address, if appropriate):
                                                      § 2.33 Responsibilities of DOL, DOL social              ■ 5. Redesignate §§ 2.34, 2.35, and 2.36
                                                      service providers and State and local                                                                         lllllllllllllllllll
                                                                                                              as § 2.36, § 2.37, and § 2.38,
                                                      governments administering DOL support.                  respectively.                                            Because this program is supported in
                                                      *     *      *    *     *                               ■ 6. Add new § 2.34 and § 2.35 to                     whole or in part by financial assistance
                                                        (b)(1) DOL, DOL social service                        subpart D to read as follows:                         from the Federal Government, we are
                                                      intermediary providers, DOL social                                                                            required to let you know that:
                                                                                                              § 2.34 Beneficiary protections: Written                  (1) We may not discriminate against
                                                      service providers, and State and local                  notice.
                                                      governments administering DOL                                                                                 you on the basis of religion or religious
                                                                                                                 (a) Contents. Religious organizations              belief;
                                                      support must ensure that they do not
                                                                                                              providing social services to beneficiaries               (2) We may not require you to attend
                                                      use direct DOL support for explicitly
                                                                                                              under a DOL program supported by                      or participate in any explicitly religious
                                                      religious activities (including activities
                                                                                                              direct Federal financial assistance must              activities (including activities that
                                                      that involve overt religious content such
                                                                                                              give written notice to beneficiaries and              involve overt religious content such as
                                                      as worship, religious instruction, or
                                                                                                              prospective beneficiaries of certain                  worship, religious instruction, or
                                                      proselytization). DOL social service
                                                                                                              protections. Such notice must be given                proselytization) that are offered by our
                                                      providers must be permitted to offer
                                                                                                              in a manner prescribed by DOL, and                    organization, and any participation by
                                                      explicitly religious activities so long as
                                                                                                              state that:                                           beneficiaries in such activities must be
                                                      they offer those activities separately in                  (1) The organization may not                       purely voluntary;
                                                      time or location from social services                   discriminate against beneficiaries on the                (3) We must separate out in time or
                                                      receiving direct DOL support, and                       basis of religion or religious belief;                location any privately-funded explicitly
                                                      participation in the explicitly religious                  (2) The organization may not require               religious activities (including activities
                                                      activities is voluntary for the                         beneficiaries to attend or participate in             that involve overt religious content such
                                                      beneficiaries of social service programs                any explicitly religious activities                   as worship, religious instruction, or
                                                      receiving direct DOL support. For                       (including activities that involve overt              proselytization) from activities
                                                      example, participation in an explicitly                 religious content such as worship,                    supported with direct Federal financial
                                                      religious activity must not be a                        religious instruction, or proselytization)            assistance;
                                                      condition for participating in a directly-              that are offered by our organization, and                (4) If you object to the religious
                                                      supported social service program.                       any participation by beneficiaries in                 character of an organization, we must
                                                        * * *                                                 such activities must be purely                        make reasonable efforts to identify and
                                                        (3) Notwithstanding the requirements                  voluntary;                                            refer you to an alternative provider to
                                                      of paragraph (b)(1) of this section, and                   (3) The organization must separate out             which you have no objection. We
                                                      to the extent otherwise permitted by                    in time or location any privately-funded              cannot guarantee, however, that in every
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                                                      Federal law (including constitutional                   explicitly religious activities (including            instance, an alternative provider will be
                                                      requirements), direct DOL support may                   activities that involve overt religious               available; and
                                                      be used to support explicitly religious                 content such as worship, religious                       (5) You may report violations of these
                                                      activities (including activities that                   instruction, or proselytization) from                 protections to the U.S. Department of
                                                      involve overt religious content such as                 activities supported with direct Federal              Labor’s Civil Rights Center, 200
                                                      worship, religious instruction, or                      financial assistance;                                 Constitution Ave. NW., Room N–4123,
                                                      proselytization), and such activities                      (4) If a beneficiary objects to the                Washington, DC 20210, or by email to
                                                      need not be provided separately in time                 religious character of the organization,              CivilRightsCenter@dol.gov. This written
                                                      or location from other DOL-supported                    the organization must make reasonable                 notice must be given to you prior to the


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                                                      47338                  Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules

                                                      time you enroll in the program or                       programs. When the nature of the                      accept additional clients. Where there is
                                                      receive services from such programs,                    service provided or exigent                           no Federally-financed alternative
                                                      unless the nature of the service                        circumstances make it impracticable to                provider available, a referral should be
                                                      provided or urgent circumstances makes                  provide such written notice in advance                made to an alternative provider that
                                                      it impracticable to provide such notice                 of the actual service, DOL social service             does not receive Federal financial
                                                      in advance of the actual service. In such               providers must advise beneficiaries of                assistance but does meet these
                                                      an instance, this notice must be given to               their protections at the earliest available           requirements and is acceptable to the
                                                      you at the earliest available opportunity.              opportunity.                                          beneficiary.
                                                      lllllllllllllllllll                                     § 2.35 Beneficiary protections: Referral
                                                                                                                                                                       (d) When the organization makes a
                                                                                                              requirements.
                                                                                                                                                                    referral to an alternative provider, or
                                                      BENEFICARY REFERRAL REQUEST                                                                                   when the organization determines that it
                                                                                                                 (a) If a beneficiary or prospective                is unable to identify an alternative
                                                      If you object to receiving services from
                                                                                                              beneficiary of a social service program               provider, the organization shall notify
                                                      us based on the religious character of
                                                                                                              supported by direct DOL financial                     the awarding entity. If the organization
                                                      our organization, please complete this
                                                                                                              assistance objects to the religious                   is unable to identify an alternative
                                                      form and return it to the program
                                                                                                              character of an organization that                     provider, the awarding entity shall
                                                      contact identified above. If you object,
                                                                                                              provides services under the program,                  determine whether there is any other
                                                      we will make reasonable efforts to refer
                                                                                                              that organization must promptly                       suitable alternative provider to which
                                                      you to another service provider. With
                                                                                                              undertake reasonable efforts to identify              the beneficiary may be referred.
                                                      your consent, we will follow up with
                                                                                                              and refer the beneficiary to an                          (e) An intermediary that receives a
                                                      you or the organization to which you
                                                                                                              alternative provider to which the                     request for assistance in identifying an
                                                      were referred to determine whether you
                                                                                                              prospective beneficiary has no                        alternative provider may request
                                                      contacted that organization.
                                                                                                              objection.                                            assistance from DOL.
                                                      Please check if applicable:                                (b) A referral may be made to another
                                                         ( ) I want to be referred to another                                                                       ■ 7. Add new § 2.39 to subpart D to read
                                                                                                              religious organization, if the beneficiary
                                                      service provider. If you checked above                                                                        as follows:
                                                                                                              has no objection to that provider. But if
                                                      that you wish to be referred to another                 the beneficiary requests a secular                    § 2.39    Political or religious affiliation.
                                                      service provider, please check one of the               provider, and a secular provider is
                                                      following:                                                                                                       Decisions about awards of Federal
                                                                                                              available, then a referral must be made               financial assistance must be free from
                                                         ( ) Please follow up with me or the                  to that provider.
                                                      other service provider.                                                                                       political interference or even the
                                                                                                                 (c) Except for services provided by                appearance of such interference and
                                                         Name:
                                                                                                              telephone, internet, or similar means,                must be made on the basis of merit, not
                                                         Best way to reach me (phone/address/
                                                                                                              the referral must be to an alternative                on the basis of religion or religious
                                                      email):
                                                         ( ) Please do not follow up.                         Federally-financed provider that is in                belief.
                                                                                                              reasonable geographic proximity to the
                                                      lllllllllllllllllll                                     organization making the referral and                    Dated: February 12, 2015.
                                                        (b) Timing of notice. This written                    that offers services that are similar in              Thomas E. Perez,
                                                      notice must be given to beneficiaries                   substance and quality to those offered                Secretary of Labor.
                                                      prior to the time they enroll in the                    by that organization. The alternative                 [FR Doc. 2015–18260 Filed 8–5–15; 8:45 am]
                                                      program or receive services from such                   provider also must have the capacity to               BILLING CODE P
asabaliauskas on DSK5VPTVN1PROD with PROPOSALS




                                                 VerDate Sep<11>2014   21:39 Aug 05, 2015   Jkt 235001   PO 00000   Frm 00012   Fmt 4701   Sfmt 9990   E:\FR\FM\06AUP10.SGM   06AUP10



Document Created: 2018-02-23 10:55:56
Document Modified: 2018-02-23 10:55:56
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionProposed rule; request for comments.
DatesComments must be submitted (postmarked, sent, or received) by October 5, 2015.
ContactPhil Tom, Director, Center for Faith- Based and Neighborhood Partnerships (CFBNP), U.S. Department of Labor, Frances Perkins Building, 200 Constitution Ave. NW., Room C-2318, Washington, DC 20210; telephone: (202) 693-6017. Please note this is not a toll-free number. Individuals with hearing or speech impairments may access this telephone number via TTY by calling the toll-free Federal Information Relay Service at 1-800-877-8339.
FR Citation80 FR 47328 
RIN Number1290-AA29
CFR AssociatedAdministrative Practice and Procedure; Claims; Courts; Government Employees and Religious Discrimination

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