80 FR 47340 - Equal Protection of the Laws for Faith-Based and Community Organizations

DEPARTMENT OF VETERANS AFFAIRS

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

Page Range		47340-47347
FR Document		2015-18492

The Department of Veterans Affairs (VA) proposes to amend its existing regulations concerning VA Homeless Providers Grant and Per Diem Program (GPD) and Supportive Service for Veterans Families Program (SSVF) and to establish a new part. More specifically, VA proposes to revise provisions that apply to religious organizations that receive financial assistance from VA in order to more clearly distinguish between ``direct'' and ``indirect'' financial assistance, amend VA's regulations to replace the term ``inherently religious activities'' with the term ``explicitly religious activities'', and establish new provisions that provide valuable protections for beneficiaries, provide guidance to VA employees and faith-based and other neighborhood organizations that receive ``direct'' or ``indirect'' VA financial assistance, and provide clear and uniform instructions on the fundamental principles that apply to their awards.

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

[Federal Register Volume 80, Number 151 (Thursday, August 6, 2015)]
[Proposed Rules]
[Pages 47340-47347]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-18492]

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Vol. 80

Thursday,

No. 151

August 6, 2015

Part XIII

Department of Veterans Affairs

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38 CFR Parts 50, 61, and 62

Equal Protection of the Laws for Faith-Based and Community
Organizations; Proposed Rule

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

[[Page 47340]]

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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Parts 50, 61, and 62

RIN 2900-AP05

Equal Protection of the Laws for Faith-Based and Community
Organizations

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its
existing regulations concerning VA Homeless Providers Grant and Per
Diem Program (GPD) and Supportive Service for Veterans Families Program
(SSVF) and to establish a new part. More specifically, VA proposes to
revise provisions that apply to religious organizations that receive
financial assistance from VA in order to more clearly distinguish
between ``direct'' and ``indirect'' financial assistance, amend VA's
regulations to replace the term ``inherently religious activities''
with the term ``explicitly religious activities'', and establish new
provisions that provide valuable protections for beneficiaries, provide
guidance to VA employees and faith-based and other neighborhood
organizations that receive ``direct'' or ``indirect'' VA financial
assistance, and provide clear and uniform instructions on the
fundamental principles that apply to their awards.

DATES: Comments must be received on or before October 5, 2015.

ADDRESSES: Written comments may be submitted through http://www.Regulations.gov; by mail or hand-delivery to: Director, Regulation
Policy and Management (02REG), Department of Veterans Affairs, 810
Vermont Ave. NW., Room 1068, Washington, DC 20420; or by fax to (202)
273-9026. (This is not a toll-free telephone number.) Comments should
indicate that they are submitted in response to ``RIN 2900-AP05-Equal
Protection of the Laws for Faith-Based and Community Organizations.''
Copies of comments received will be available for public inspection in
the Office of Regulation Policy and Management, Room 1068, between the
hours of 8:00 a.m. and 4:30 p.m., Monday through Friday (except
holidays). Please call (202) 461-4902 for an appointment. (This is not
a toll-free telephone number.) In addition, during the comment period,
comments may be viewed online through the Federal Docket Management
System (FDMS) at http://www.Regulations.gov.

FOR FURTHER INFORMATION CONTACT: Stephen B. Dillard, Deputy Director
Faith-based and Neighborhood Partnership (00FB), Office of the
Secretary, Department of Veterans Affairs, 810 Vermont Ave. NW.,
Washington, DC 20420, (202) 461-7689. (This is not a toll-free
telephone number.)

SUPPLEMENTARY INFORMATION:

Background

On December 12, 2002, President Bush signed Executive Order 13279,
Equal Protection of the Laws for Faith-Based and Community
Organizations, 67 FR 77141. Executive Order 13279 sets 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 services
programs and, where appropriate, to implement new policies that were
consistent with and necessary to further the fundamental principles and
policymaking criteria that have implications for faith-based and
community organizations.
On September 26, 2003, VA codified 38 CFR part 61, governing the
Homeless Provider Grant and Per Diem Program, as a final rule. Section
61.64 ensures that VA programs, under this part, are open to all
qualified organizations, regardless of their religious character and
establishes instructions for the proper uses of direct Federal
financial assistance.
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
services by faith-based and other neighborhood organizations.
In March 2010, the Advisory Council issued its recommendations in a
report entitled, ``A New Era of Partnerships: Report of Recommendations
to the President'' (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
new set of fundamental principles to guide agency decision-making in
administering Federal financial assistance and support to faith-based
and neighborhood organizations.
On November 17, 2010, President Obama signed Executive Order 13559,
``Fundamental Principles and Policymaking Criteria for Partnerships
with Faith-Based and Other Neighborhood Organizations.'' 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:
(1) 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);
(2) 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;
(3) 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;
(4) 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

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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;
(5) Emphasize that religious providers are welcome to compete for
government social service funding and maintain a religious identity as
described in the order;
(6) 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;
(7) Clarify that the standards in these proposed regulations apply
to sub-awards as well as prime awards; and
(8) Direct agencies to adopt regulations and guidance that
distinguish between ``direct'' and ``indirect'' Federal financial
assistance.
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.
The Executive Order also stated that, following receipt of the
Working Group's report, the Office of Management and Budget (OMB), in
coordination with the Department of Justice, must issue guidance to
agencies on the implementation of the order. In August 2013, OMB issued
such guidance. In this guidance, OMB instructed specified agency heads
to adopt regulations and guidance that will fulfill the requirements of
the Executive Order and to amend regulations and guidance to ensure
that they are consistent with Executive Order 13559. On November 10,
2010, VA published a final rule promulgating 38 CFR part 62,
regulations implementing 38 U.S.C. 2044 by establishing an SSVF
Program. 75 FR 68979. Through this program, VA offers grants identified
in the regulations, that provide supportive services to very low-income
veterans and families who are at risk for becoming homeless or who, in
some cases, have recently become homeless. 38 CFR 62.62 describes that
religious or faith-based organizations are eligible for supportive
services grants and contains certain conditions on the use of
supportive services grant funds as it relates to religious activities.

Overview of Proposed Rule

We propose that the regulation incorporate the provisions of
Executive Order 13279, as amended by Executive Order 13559, by adding a
new Part 50 concerning religious and community organizations and
amending existing Parts 61 and 62. Specifically we propose to amend the
regulations to replace the term ``inherently religious activities''
with the term ``explicitly religious activities'' and define the latter
term as including activities that involve overt religious content such
as worship, religious instruction, or proselytization. We would also
include regulatory language to distinguish between direct and indirect
Federal financial assistance; clarify the responsibilities of
intermediaries; provide valuable protections for beneficiaries and
ensure that beneficiaries are aware of their rights, through
appropriate notice, when potentially obtaining services from providers
with a religious affiliation; and provide guidance that decisions about
awards of Federal financial assistance must be free from political
interference or even the appearance of such interference.

Proposed Amendments to Title 38 CFR

Prohibited Uses of Direct Federal Financial Assistance

VA's current regulations, 38 CFR 61.64 and 62.62, prohibit
nongovernmental 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. Accordingly, we propose
to replace the term ``inherently religious activities'' with a term
that will more accurately describe the restriction on direct Federal
financial assistance.
The 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 would 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 would 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, would not be considered
``explicitly religious activities'' merely because the provider is
religiously motivated to provide those services. The study or
acknowledgement of religion as a historical or cultural reality also
would not be considered an explicitly religious activity.
Notwithstanding the general prohibition on the use of direct
Federal financial assistance to support explicitly religious
activities, there are times when religious activities may be Federally
financed under the Establishment Clause and not subject to the direct
Federal financial assistance restrictions; for instance, in situations
where Federal financial assistance is provided to chaplains to work
with inmates in prisons, detention facilities, or community correction
centers through social service programs. This is because where there is
extensive government control over the environment of the Federally-
financed social service

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program, program officials may sometimes need to take affirmative steps
to provide an opportunity for beneficiaries of the social service
program to exercise their religion. See Cruz v. Beto, 405 U.S. 319, 322
n.2 (1972) (per curiam) (``reasonable opportunities must be afforded to
all prisoners to exercise the religious freedom guaranteed by the First
and Fourteenth Amendment without fear of penalty''); Katcoff v. Marsh,
755 F.2d 223, 234 (2d Cir. 1985) (finding it ``readily apparent'' that
the Government is obligated by the First Amendment to ``to make
religion available to soldiers who have been moved by the Army to areas
of the world where religion of their own denominations is not available
to them''). Without such efforts, religious freedom might not exist for
these beneficiaries. Accordingly, in proposed Sec. 50.1(a), we would
provide that services that can be publically funded under the
Establishment clause, such as chaplaincy services, would not be
considered explicitly religious activities that are subject to direct
financial aid restrictions.
Likewise, it is important to emphasize that the restrictions on
explicit religious content apply to content generated by the
administrators of the program receiving direct Federal financial
assistance, not to spontaneous comments made by individual
beneficiaries about their personal lives in the context of these
programs. For example, if a person administering a federally funded job
skills program asks beneficiaries to describe how they gain the
motivation necessary for their job searches and some beneficiaries
refer to their faith or membership in a faith community, these kinds of
comments do not violate the restrictions and should not be censored. In
this context, the administrator of the government program did not
orchestrate or encourage such comments.
The Department, therefore, proposes to amend its regulations to
replace the term ``inherently religious activities'' with the term
``explicitly religious activities'' in 38 CFR 61.64 and 62.62. We would
also provide a parenthetical explanation of ``explicitly religious
activities'' in 38 CFR 50.1(a) specifically stating that the term
``includ[es] activities that involve overt religious content such as
worship, religious instruction, or proselytization.'' These changes in
language would provide greater clarity and more closely match
constitutional standards as they have been developed in case law.
These restrictions would not diminish existing regulatory
protections for the religious identity of faith-based providers. The
proposed rule would not affect, for example, organizations' ability to
use religious terms in their organizational names, select board members
on a religious basis, include religious references in mission
statements and other organizational documents, and post religious art,
messages, scriptures and symbols in buildings where Federal financial
assistance is delivered.

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. This distinction is confirmed in proposed
Sec. 50.1(a). To clarify this distinction, proposed Sec. 50.1(b)
provides definitions of these terms.
In proposed Sec. 50.1(b)(1), we would define direct Federal
financial assistance or Federal financial assistance provided directly
to mean that the government or an intermediary, as identified in
proposed Sec. 50.1(d), selects the 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. In addition, in proposed Sec.
50.1(b)(1), we would note that Federal financial assistance shall be
treated as direct unless it meets the definition of indirect Federal
financial assistance in Sec. 50.1(b)(2). We would also amend
Sec. Sec. 61.64(b)(2) and 62.62(b)(2) to conform to the above noted
proposed definition.
In proposed Sec. 50.1(b)(2), we would define indirect Federal
financial assistance or Federal financial assistance provided
indirectly 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. For example, the government could choose to allow the
beneficiary to secure the needed service on his or her own.
Alternatively, a governmental 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 government-provided certificate. Either way,
the 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 government could then pay for the
beneficiary's choice of provider by giving the beneficiary a voucher or
similar document. Alternatively, the government could choose to pay the
provider directly after asking the beneficiary to indicate his or her
choice. See Freedom From Religion Found. v. McCallum, 324 F.3d 880, 882
(7th Cir. 2003).
The Supreme Court has held that if a program meets certain
criteria, the government may fund the program if, among other things,
it places the benefit in the hands of individuals, who in turn have the
freedom to choose the provider to which they take their benefit and
``spend'' it, whether that provider is public or private, non-religious
or religious. 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. Accordingly, these
criteria also are included in the text of the proposed definition of
``indirect financial assistance.''

Intermediaries

We also propose regulatory language that would clarify the
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 would be
required to select any providers to receive direct 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

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would have to ensure that any providers to which they disburse Federal
financial assistance also comply with these rules. We would also
provide that, 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.

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.
The Executive Order makes it clear that all organizations that
receive Federal financial assistance for the purpose of delivering
social welfare services are prohibited from discriminating against
beneficiaries or potential beneficiaries of those programs on the basis
of religion, a religious belief, refusal to hold a religious belief, or
a refusal to attend or participate in a religious practice. It also
states that organizations offering explicitly religious activities
(including activities that involve overt religious content such as
worship, religious instruction or proselytization) must not use direct
Federal financial assistance to subsidize or support those activities,
and that any explicitly religious activities must be offered outside of
programs that are supported with direct Federal financial assistance
(including through prime awards or sub-awards). In other words, to the
extent that an organization provides explicitly religious activities,
those activities must be offered separately in time or location from
programs or services supported with direct Federal financial
assistance. And, as noted above, participation in those religious
activities must be completely voluntary for beneficiaries of programs
supported by Federal financial assistance.
Executive Order 13559 also requires faith-based organizations
administering a program that is supported by direct Federal financial
assistance to give written notice in a manner prescribed by the agency
to beneficiaries and prospective beneficiaries of their right to be
referred to an alternative provider when available. When the nature of
the service provided or exigent circumstances make it impracticable to
provide such written notice in advance of the actual service, service
providers must advise beneficiaries of their protections at the
earliest available opportunity. In proposed Sec. 50.3(a), we would
provide that, if a beneficiary or prospective beneficiary of a social
service program supported by VA financial assistance objects to the
religious character of an organization that provides services under the
program, the beneficiary must be referred to an alternative provider.
More specifically, the proposed rule provides that, if a beneficiary or
prospective beneficiary of a social service program supported by direct
VA 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.
In proposed Sec. 50.3(b), we would provide that a referral may be
made to another religiously affiliated provider, if the beneficiary has
no objection to that provider. We would also provide that 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.
In proposed Sec. 50.3(c), we would specify that, except for
services provided by telephone, internet, or similar means, the
referral must be to an alternate provider that is in geographic
proximity to the organization making the referral and that offers
services that are similar in substance and quality to those offered by
the organization. We would also provide that the alternative provider
also must have the capacity to accept additional clients. If a VA-
funded alternative provider meets these requirements and is acceptable
to the beneficiary, a referral should be made to that provider. If,
however, there is no VA-funded 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 VA financial
assistance but does meet these requirements and is acceptable to the
beneficiary.
If the organization is unable to identify an alternative provider,
the organization is required under the proposed rule to notify VA and
VA would determine whether there is any other suitable alternative
provider to which the beneficiary may be referred. Further, the
executive order requires VA 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, VA may
also be unable to identify a suitable alternative provider.

Political or Religious Affiliation

In proposed Sec. 50.4, we provide 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 religion or religious belief. The
awarding entity would be expected to 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 peer
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 peer reviewers by
advertising for these positions in a wide variety of venues.

Executive Orders 12866 and 13563

Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, when
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, and other advantages; distributive impacts;
and equity). Executive Order 13563 (Improving Regulation and Regulatory
Review) emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
Executive Order 12866 (Regulatory Planning and Review) defines a
``significant regulatory action,'' requiring review by

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OMB, unless OMB waives such review, as ``any regulatory action that is
likely to result in a rule that may: (1) Have an annual effect on the
economy of $100 million or more or adversely affect in a material way
the economy, a sector of the economy, productivity, competition, jobs,
the environment, public health or safety, or State, local, or tribal
governments or communities; (2) Create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
this Executive Order.''
The economic, interagency, budgetary, legal, and policy
implications of this regulatory action have been examined and it has
been determined not to be a significant regulatory action under
Executive Order 12866.VA's impact analysis can be found as a supporting
document at http://www.regulations.gov, usually within 48 hours after
the rulemaking document is published. Additionally, a copy of the
rulemaking and its impact analysis are available on VA's Web site at
http://www.va.gov/orpm by following the link for VA Regulations
Published from FY 2004 through FYTD.

Paperwork Reduction Act

This proposed rule includes provisions constituting collections of
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521) that require approval by OMB. Accordingly, under 44 U.S.C.
3507(d), VA has submitted a copy of this rulemaking action to OMB for
review.
OMB assigns control numbers to collections of information it
approves. VA may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. Proposed Sec. 50.2 contains a
collection of information under the Paperwork Reduction Act of 1995. If
OMB does not approve the collection of information as requested, VA
will immediately remove the provisions containing a collection of
information or take such other action as is directed by OMB.
Comments on the collection of information contained in this
proposed rule should be submitted to the Office of Management and
Budget, Attention: Desk Officer for the Department of Veterans Affairs,
Office of Information and Regulatory Affairs, Washington, DC 20503,
with copies sent by mail or hand delivery to the Director, Regulation
Policy and Management (02REG), Department of Veterans Affairs, 810
Vermont Avenue NW., Room 1068, Washington, DC 20420; fax to (202) 273-
9026; email to www.Regulations.gov. Comments should indicate that they
are submitted in response to ``RIN 2900-AP05-Equal Protection of the
Laws for Faith-Based and Community Organizations.''
OMB is required to make a decision concerning the collection of
information contained in this proposed rule between 30 and 60 days
after publication of this document in the Federal Register. Therefore,
a comment to OMB is best assured of having its full effect if OMB
receives it within 30 days of publication. This does not affect the
deadline for the public to comment on the proposed rule.
The Department considers comments by the public on proposed
collections of information in--
Evaluating whether the proposed collections of information
are necessary for the proper performance of the functions of the
Department, including whether the information will have practical
utility;
Evaluating the accuracy of the Department's estimate of
the burden of the proposed collections of information, including the
validity of the methodology and assumptions used;
Enhancing the quality, usefulness, and clarity of the
information to be collected; and
Minimizing the burden of the collections 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 information technology, e.g., permitting
electronic submission of responses.
The collection of information contained in 38 CFR 50.2 is described
immediately following this paragraph, under its title.
Title: Written Notice of Beneficiary Rights.
Summary of collection of information: The new collection
of information in proposed 38 CFR 50.2 would require faith-based or
religious organizations that receive VA financial assistance in
providing social services to beneficiaries to provide to beneficiaries
(or prospective beneficiaries) written notice informing them of certain
protections.
Description of need for information and proposed use of
information: The collection(s) of information is necessary to (1) Allow
beneficiaries to obtain services from non-faith based organizations;
(2) Allow beneficiaries to report violation of VA procedures regarding
faith-based organizations.
Description of likely respondents: Veterans and family
members.
Estimated number of respondents: 190,700.
Estimated frequency of responses: We estimate that 0.1% of
beneficiaries would request alternative placements: 1,907
beneficiaries.
Estimated average burden per response: 2 minutes.
Estimated total annual reporting and recordkeeping burden:
64 hours.
VA plans to use the following form as our notice of beneficiary
rights:

WRITTEN NOTICE OF BENEFICIARY RIGHTS

U.S. DEPARTMENT OF VETERANS AFFAIRS

Name of Organization:

Name of Program:

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

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

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

We may not discriminate against you on the basis of religion
or religious belief;
We may not require you to attend or participate in any
explicitly religious activities that are offered by us, and any
participation by you in these activities must be purely voluntary;
We must separate in time or location any privately funded
explicitly religious activities from activities supported with direct
Federal financial assistance;
If you object to the religious character of our organization,
we must make reasonable efforts to identify and refer you to an
alternative provider to which you have no objection; and
You may report violations of these protections to the
[awarding entity].

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

BENEFICARY REFERRAL REQUEST

If you object to receiving services from us based on the religious
character of our organization, please complete this form and return it
to the program contact identified above. If you object, we will make
reasonable efforts to refer you to another service provider. With

[[Page 47345]]

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 all that apply:

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

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

Name:

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

( ) Please do not follow up.

This information will be used by VA National Grant & Per Diem
Program Office, to identify those beneficiaries who object to the
religious character of the faith-based organization providing services;
and to provide them with services from another faith-based or community
organization. Once the beneficiaries complete and submit this form to
the faith-based organization, then the form will be submitted to VA
National Grant & Per Diem Program Office, 10770 N. 46th Street, Suite
C-200 Tampa, FL 33617. The VA National Program Office will notify the
faith-based organization that the form has been received via email or
U.S Mail. This form will be kept on internal file at VA for the purpose
identifying the beneficiaries' treatment location and for data
collection/metrics.
The Paperwork Reduction Act: This information collection is in
accordance with the clearance requirements of section 3507 of the
Paperwork Reduction Act of 1995. Public reporting burden for this
collection of information is estimated to average 10 2 minutes per
response, including the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information. Respondents
should be aware that notwithstanding any other provision of law, no
person shall be subject to any penalty for failing to comply with a
collection of information if it does not display a currently valid OMB
control number. The purpose of this data collection is to determine
eligibility for benefits.
Beneficiary Name (print):

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

Beneficiary Name (sign)
Date:

Regulatory Flexibility Act

The Secretary hereby certifies that this proposed rule would not
have a significant economic impact on a substantial number of small
entities as they are defined in the Regulatory Flexibility Act, 5
U.S.C. 601-612. Although small entities participating in VA's GPD and
SSVF programs would be affected by this proposed rule, any economic
impact would be minimal. Therefore, pursuant to 5 U.S.C. 605(b), this
rulemaking is exempt from the initial and final regulatory flexibility
analysis requirements of sections 603 and 604.

Unfunded Mandates

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C.
1532, that agencies prepare an assessment of anticipated costs and
benefits before issuing any rule that may result in the expenditure by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100 million or more (adjusted annually for
inflation) in any 1 year. This proposed rule would have no such effect
on State, local, and tribal governments, or on the private sector.

Catalog of Federal Domestic Assistance

The Catalog of Federal Domestic Assistance numbers and titles for
the programs affected by this document are 64.008, Veterans Domiciliary
Care; 64.009, Veterans Medical Care Benefits; 64.024, VA Homeless
Providers Grant and Per Diem Program; 64.033, VA Supportive Services
for Veteran Families Program.

Signing Authority

The Secretary of Veterans Affairs, or designee, approved this
document and authorized the undersigned to sign and submit the document
to the Office of the Federal Register for publication. Jose D. Riojas,
Chief of Staff, Department of Veterans Affairs, approved this document
on January 15, 2015, for publication.

List of Subjects

38 CFR Part 50

Administrative practice and procedure, Alcohol abuse, Alcoholism,
Day care, Dental health, Drug abuse, Government contracts, Grant
programs--health, Grant programs--veterans, Health care, Health
facilities, Health professions, Health records, Homeless, Mental health
programs, Per-diem program, Reporting and recordkeeping requirements,
Travel and transportation expenses, Veterans.

38 CFR Part 61

Administrative practice and procedure, Alcohol abuse, Alcoholism,
Day care, Dental health, Drug abuse, Government contracts, Grant
programs--health, Grant programs--veterans, Health care, Health
facilities, Health professions, Health records, Homeless, Mental health
programs, Reporting and recordkeeping requirements, Travel and
transportation expenses, Veterans.

38 CFR Part 62

Administrative practice and procedure, Day care, Disability
benefits, Government contracts, Grant programs--health, Grant
programs--social services, Grant programs--transportation, Grant
programs--veterans, Grants--housing and community development, Heath
care, Homeless, Housing, Housing assistance payments, Indian--lands,
Individuals with disabilities, Low and moderate income housing,
Manpower training program, Medicare, Medicaid, Public assistance
programs, Public housing, Relocation assistance, Rent subsidies,
Reporting and recordkeeping requirements, Rural areas, Social security,
Supplemental security income (SSI), Travel and transportation expenses,
Unemployment compensation, Veterans.

Dated: July 23, 2015.
Michael P. Shores,
Chief Impact Analyst, Office of Regulation and Policy Management,
Office of General Counsel, Department of Veterans Affairs.

For the reasons set out in the preamble, the Department of Veterans
Affairs proposes to add 38 CFR part 50 and to amend Parts 61 and 62 as
follows:

0
1. Add Part 50 to read as follows:

PART 50--RELIGIOUS AND COMMUNITY ORGANIZATIONS: PROVIDING
BENEFICIARY PROTECTIONS TO POLITICAL OR RELIGIOUS AFFILIATION

Sec.
50.1 Religious organizations; general provisions.
50.2 Beneficiary protections; written notice.
50.3 Beneficiary protections; referral requirements.
50.4 Political or religious affiliation.

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

Sec. 50.1 Religious organizations; general provisions.

(a) A faith-based organization that applies for, or participates
in, a social service program supported with Federal financial
assistance may retain its independence and may continue to carry out
its mission, including the definition, development, practice, and
expression of its religious beliefs, provided that it does not use
direct Federal financial assistance that it receives (including through
a prime or sub-award) to support or engage in any

[[Page 47346]]

explicitly religious activities (including activities that involve
overt religious content such as worship, religious instruction, or
proselytization), or in any other manner prohibited by law. Direct
Federal financial assistance may not be used to pay for equipment or
supplies to the extent they are allocated to such activities. The use
of indirect Federal financial assistance is not subject to this
restriction. Religious activities that can be publicly funded under the
Establishment Clause, such as chaplaincy services, are not be
considered explicitly religious activities that are subject to direct
Federal financial assistance restrictions.
(b)(1) Direct Federal financial assistance or Federal financial
assistance provided directly means that the government or an
intermediary as defined in paragraph (d) of this section 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). Federal financial
assistance shall be treated as direct, unless it meets the definition
of indirect Federal financial assistance or Federal financial
assistance provided indirectly in paragraph (b)(2) of this section.
(2) 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.
(3) 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 Federal financial 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.
(c) The recipients of sub-grants that receive Federal financial
assistance through State-administered programs are not considered
recipients of indirect Federal financial assistance (or recipients of
Federal funds provided indirectly) as those terms are used in Executive
Order 13559.
(d) Intermediary means an entity, including a non-governmental
organization, acting under a contract, grant, or other agreement with
the Federal Government or with a State or local government, that
accepts Federal financial assistance and distributes that assistance to
other organizations that, in turn, provide government-funded social
services. In these regulations, the terms intermediary and pass-through
entity may be used interchangeably.

(Authority: 2 CFR 200.74)

(e) If an intermediary, acting under a contract, grant, or other
agreement with VA or with a State or local government that is
administering a program supported by VA financial assistance, is given
the authority under the contract, grant, or agreement to select non-
governmental organizations to provide services funded by VA, the
intermediary must select any providers to receive direct financial
assistance in a manner that does not favor or disfavor organizations on
the basis of religion or religious belief and 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. 50.2 Beneficiary protections; written notice.

(a) Faith-based or religious organizations providing social
services to beneficiaries under a VA program supported by direct VA
financial assistance must give written notice to beneficiaries and
prospective beneficiaries of certain protections. Such notice must be
given in a manner prescribed by VA. The notice will 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 that are offered by
the organization, and any participation by beneficiaries in such
activities must be purely voluntary;
(3) The organization must separate in time or location any
privately funded explicitly religious activities from activities
supported by direct VA financial assistance;
(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 protections to VA.
(b) This written notice must be given to beneficiaries prior to the
time they enroll in the program or receive services from such programs.
When the nature of the service provided or exigent circumstances make
it impracticable to provide such written notice in advance of the
actual service, service providers must advise beneficiaries of their
protections at the earliest available opportunity.

(The Office of Management and Budget has approved the information
collection provisions in this section under control number 2900-
XXXX.)

Sec. 50.3 Beneficiary protections; referral requirements.

(a) If a beneficiary or prospective beneficiary of a social service
program supported by VA 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 faith-based organization if
the beneficiary has no objection to that provider. 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 provider that is in
reasonable geographic proximity to the organization making the referral
and that offers services that are similar in substance and quality to
those offered by the organization. The alternative provider also must
have the capacity to accept additional clients.
(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 VA. If
the organization is unable to identify an alternative provider, VA
shall determine whether there is any other suitable alternative
provider to which the beneficiary may be referred. An intermediary that
receives a request for assistance in identifying an alternative
provider may request assistance from VA.

Sec. 50.4 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

[[Page 47347]]

must be made on the basis of merit, not on the basis of religion or
religious belief.

(Authority: 38 U.S.C. 501)

PART 61--VA HOMELESS PROVIDERS GRANT AND PER DIEM PROGRAM

Subpart F--Awards, Monitoring, and Enforcement of Agreements

0
2. The authority citation for part 61 continues to read as follows:

Authority: 38 U.S.C. 501, 2001, 2002, 2011, 2012, 2061, 2064.

0
3. Amend Sec. 61.64 by:
0
a. In paragraph (b)(1)(i), removing ``Inherently'' and adding, in its
place, ``Explicitly''.
0
b. In paragraphs (c), (d), and (g), removing all references to
``inherently'' and adding, in each place, ``explicitly''.
0
c. In paragraph (b)(2), revising the last sentence to read as follows:

Sec. 61.64 Religious organizations.

* * * * *
(b) * * *
(2) * * * ``Direct financial assistance'' means that VA or an
intermediary as defined in 38 CFR 50.1(d) 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). Financial assistance shall be treated as
direct, unless it meets the definition of indirect financial assistance
in this paragraph.
* * * * *

PART 62--SUPPORTIVE SERVICES FOR VETERAN FAMILIES PROGRAM

0
4. The authority citation for part 62 continues to read as follows:

Authority: 38 U.S.C. 501, 2044, and as noted in specific
sections.

0
5. Amend Sec. 62.62 by:
0
a. In paragraph (b)(1)(i), removing ``Inherently'' and adding, in its
place, ``Explicitly''.
0
b. In paragraphs (c), (d), and (g), removing all references to
``inherently'' and adding, in each place, ``explicitly''.
0
c. In paragraph (b)(2), revising the last sentence to read as follows:

Sec. 62.62 Religious organizations.

$Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules 47347 must be made on the basis of merit, not § 61.64 Religious organizations. ■ a. In paragraph (b)(1)(i), removing on the basis of religion or religious * * * * * ‘‘Inherently’’ and adding, in its place, belief. ‘‘Explicitly’’. (b) * * * (Authority: 38 U.S.C. 501) ■ b. In paragraphs (c), (d), and (g), (2) * * * ‘‘Direct financial assistance’’ removing all references to ‘‘inherently’’ means that VA or an intermediary as and adding, in each place, ‘‘explicitly’’. PART 61—VA HOMELESS PROVIDERS defined in 38 CFR 50.1(d) selects the ■ c. In paragraph (b)(2), revising the last GRANT AND PER DIEM PROGRAM provider and either purchases services sentence to read as follows: Subpart F—Awards, Monitoring, and from that provider (e.g., via a contract) or awards funds to that provider to carry § 62.62 Religious organizations. Enforcement of Agreements out a service (e.g., via grant or * * * * * ■ 2. The authority citation for part 61 cooperative agreement). Financial (b) * * * continues to read as follows: assistance shall be treated as direct, (2) * * * ‘‘Direct financial assistance’’ unless it meets the definition of indirect means that VA or an intermediary as Authority: 38 U.S.C. 501, 2001, 2002, financial assistance in this paragraph. defined in 38 CFR 50.1(d) selects the 2011, 2012, 2061, 2064. * * * * * provider and either purchases services ■ 3. Amend § 61.64 by: from that provider (e.g., via a contract) PART 62—SUPPORTIVE SERVICES or awards funds to that provider to carry ■ a. In paragraph (b)(1)(i), removing out a service (e.g., via grant or ‘‘Inherently’’ and adding, in its place, FOR VETERAN FAMILIES PROGRAM cooperative agreement). Financial ‘‘Explicitly’’. assistance shall be treated as direct, ■ 4. The authority citation for part 62 ■ b. In paragraphs (c), (d), and (g), continues to read as follows: unless it meets the definition of indirect removing all references to ‘‘inherently’’ financial assistance in this paragraph. and adding, in each place, ‘‘explicitly’’. Authority: 38 U.S.C. 501, 2044, and as noted in specific sections. * * * * * ■ c. In paragraph (b)(2), revising the last [FR Doc. 2015–18492 Filed 8–5–15; 8:45 am] sentence to read as follows: ■ 5. Amend § 62.62 by: BILLING CODE 8320–01–P mstockstill on DSK4VPTVN1PROD with PROPOSALS2 VerDate Sep<11>2014 21:29 Aug 05, 2015 Jkt 235001 PO 00000 Frm 00009 Fmt 4701 Sfmt 9990 E:\FR\FM\06AUP11.SGM 06AUP11$

Document Created: 2018-02-23 10:55:37
Document Modified: 2018-02-23 10:55:37

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Proposed Rules
Action		Proposed rule.
Dates		Comments must be received on or before October 5, 2015.
Contact		Stephen B. Dillard, Deputy Director Faith-based and Neighborhood Partnership (00FB), Office of the Secretary, Department of Veterans Affairs, 810 Vermont Ave. NW., Washington, DC 20420, (202) 461-7689. (This is not a toll-free telephone number.)
FR Citation		80 FR 47340
RIN Number		2900-AP05
CFR Citation		38 CFR 50 38 CFR 61 38 CFR 62
CFR Associated		Administrative Practice and Procedure; Alcohol Abuse; Alcoholism; Day Care; Dental Health; Drug Abuse; Government Contracts; Grant Programs-Health; Grant Programs-Veterans; Health Care; Health Facilities; Health Professions; Health Records; Homeless; Mental Health Programs; Per-Diem Program; Reporting and Recordkeeping Requirements; Travel and Transportation Expenses; Veterans; Disability Benefits; Grant Programs-Social Services; Grant Programs-Transportation; Grants-Housing and Community Development; Heath Care; Housing; Housing Assistance Payments; Indian-Lands; Individuals with Disabilities; Low and Moderate Income Housing; Manpower Training Program; Medicare; Medicaid; Public Assistance Programs; Public Housing; Relocation Assistance; Rent Subsidies; Rural Areas; Social Security; Supplemental Security Income (ssi) and Unemployment Compensation