SUPPLEMENTARY INFORMATION:

I. Background

A. Purpose

GSA is rescinding portions of its regulations promulgated pursuant to Title VI, 42 U.S.C. 2000d-1, to more closely align its regulations to the statute, which prohibits intentionally discriminatory conduct, see42 U.S.C. 2000d. There are serious statutory and constitutional concerns with the legality of GSA's current Title VI regulations because they go beyond intentional discrimination by prohibiting conduct that has an unintentional disparate impact. This rule accordingly rescinds those portions of the regulations, which are in considerable tension with both the statute and the Constitution and do not sufficiently serve the public interest.

GSA's revisions also conform to Executive Order 14281, Restoring Equality of Opportunity and Meritocracy,90 FR 17537 (Apr. 23, 2025). That Order states that “[i]t is the policy of the United States to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible to avoid violating the Constitution, Federal civil rights laws, and basic American ideals.” Id. at 17537. That Order also directs Federal agencies to ensure that their civil rights regulations are consistent with Title VI. In furtherance of that directive, on December 10, 2025, DOJ issued a final rule revising its regulations implementing Title VI. Although GSA would take this action independent of Executive Order 14281, GSA's revisions align with Executive Order 14281 and DOJ's revised Title VI rule, see Rescinding Portions of Department of Justice Title VI Regulations To Conform More Closely with the Statutory Text and To Implement Executive Order 14281,90 FR 57141 (Dec. 10, 2025). This final rule is consistent with Executive Order 12250, Leadership and Coordination of Nondiscrimination Laws,45 FR 72995 (Nov. 2, 1980), which authorizes the Attorney General to coordinate the implementation and enforcement of Title VI and related nondiscrimination statutes across Federal agencies.

Finally, this final rule migrates GSA's Title VI regulations from the FPMR to the GSPMR and updates outdated terminology, cross-references, and citations. Due to the migration, this rule also contains technical, non-substantive changes to sections in 41 CFR 101-4 and 101-8 to update cross-references to the sections being migrated. This will ensure accuracy and clarity for both federal employees and the public.

This final rule does not alter the statutory nondiscrimination obligation imposed by Title VI. This rule makes clear that GSA's Title VI regulations do not prohibit conduct or activities that have a disparate impact and prohibit only intentional discrimination, and GSA thus will not pursue Title VI disparate-impact liability claims against its Federal-funding recipients.

B. Statutory and Regulatory History

Title VI provides that no person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, denied the benefits of, or subjected to discrimination under any program or activity receiving Federal financial assistance. See42 U.S.C. 2000d. The statute directs Federal agencies that extend Federal financial assistance to effectuate the provisions of Title VI by issuing rules, regulations, or orders of general applicability. See42 U.S.C. 2000d-1. GSA's Title VI regulations apply to recipients of Federal financial assistance from GSA. Consistent with this authority, GSA's regulations establish requirements for GSA's compliance oversight and coordination.

GSA initially issued its Title VI implementing regulations in December 1964, shortly after enactment of Title VI, and codified them in the FPMR as Subpart 101-6.2. See29 FR 16287 (Dec. 4, 1964). In July 1973, GSA revised and republished portions of these regulations following a notice of proposed rulemaking issued in December 1971. See38 FR 17973 (July 5, 1973). The 1973 revisions updated and clarified regulatory coverage and ( printed page 52538) made conforming and editorial changes to reflect programmatic developments and statutory authorities applicable at that time. In August 2003, GSA amended its Title VI regulations to adopt government-wide changes incorporating definitions added by the Civil Rights Restoration Act of 1987. See68 FR 51373 (Aug. 26, 2003). Those amendments updated terminology and definitions, including the use of the terms “program” and “program or activity,” and promoted consistency across Federal civil rights regulations.

C. Overview of Significant Changes

In this final rule, GSA migrates its Title VI regulations from the FPMR to the GSPMR. This migration consolidates GSA's property-related regulations within a single regulatory framework.

In issuing this final rule, GSA agrees with the interpretive analysis and explanations set forth in the preamble to DOJ's final rule revising its Title VI regulations, which explains the basis for the removal and revision of the provisions that extend beyond Title VI. See90 FR 57141. In its rulemaking, DOJ determined that Title VI does not prohibit so-called unintentional discrimination, which occurs when a facially neutral policy has a disparate impact on a particular demographic group or population without any discriminatory intent. GSA agrees with the reasoning of DOJ's final rule and now issues its own rule consistent with that rule. Specifically, GSA agrees that there are serious legal and policy concerns with its Title VI regulations that impose disparate-impact liability.

1. Serious Legal Concerns

There are serious statutory concerns as to whether Title VI authorizes the disparate-impact provisions of the current regulations. As the Supreme Court has made clear, Title VI prohibits “only intentional discrimination” and “permits” facially neutral policies that result in disparate outcomes so long as there is no discriminatory intent. Alexander v. Sandoval, 532 U.S. 275, 280, 286 n.6 (2001). That is the “single, best meaning” of Title VI. Loper Bright Enters. v. Raimondo, 603 U.S. 369, 400 (2024). Sandoval calls into serious doubt the legality of GSA's “disparate-impact regulations.” Sandoval, 532 U.S. at 281-82, 284-85 (noting that DOJ's regulations were in “considerable tension” with the Supreme Court's Title VI precedents); see also id. at 286 n.6 (“[Title VI] permits the very behavior that the regulations forbid.”). Although Sandoval resolved only the question of private enforceability, subsequent cases such as Loper Bright have made clear that GSA cannot extend Title VI beyond its best meaning. See 603 U.S. at 412-13 (holding that “courts must . . . ensur[e] that [an] agency acts within” its statutory authority). And even in the absence of Supreme Court precedent, GSA would have concluded that the best reading of Title VI is that it prohibits only intentional discrimination.

Title VI authorizes agencies to promulgate regulations “to effectuate” the statute's prohibition of intentional discrimination. 42 U.S.C. 2000d-1. The current regulations' prohibition of conduct having an unintentional disparate impact reaches a vastly broader scope of conduct than the statute itself. This scope is too broad to be considered a simple prophylactic measure aimed at preventing intentional discrimination. See Sandoval, 532 U.S. at 286 n.6 (“[Title VI] permits the very behavior that the regulations forbid.”). Thus, the disparate-impact regulations do not “effectuate” Title VI. 42 U.S.C. 2000d-1.

There are also serious concerns about whether GSA's Title VI regulations pass constitutional muster under the Equal Protection Clause. As the Supreme Court recently held in Students for Fair Admissions, Inc. v. President & Fellows of Harvard College, “the Equal Protection Clause . . . applies without regard to any differences of race, of color, or of nationality—it is universal in its application,” and the “guarantee of equal protection cannot mean one thing when applied to one individual and something else when applied to a person of another color.” 600 U.S. 181, 206 (2023) (internal quotation marks omitted) (first quoting Yick Wo v. Hopkins, 118 U.S. 356, 369 (1886); and then quoting Regents of the Univ. of Cal. v. Bakke, 438 U.S. 265, 289-90 (1978) (Powell, J.)) ( SFFA). Despite the promises of the Equal Protection Clause, a funding recipient's risk of disparate-impact liability under GSA's regulations is triggered by unintentional disparate outcomes, which the recipient may not even know about without investigation. To evaluate and avoid this risk, the funding recipient must incur investigatory costs, such as conducting an impact analysis; and the recipient may be coerced to proactively consider race, color, and national origin and then use these characteristics to change unintended disparate outcomes.

In short, disparate-impact liability encourages and, in some cases, requires entities to engage in the intentional use of race and racial balancing to eliminate those disparate outcomes by treating certain racial groups differently from others—the exact conduct the Equal Protection Clause forbids. See id. The serious constitutional concerns raised by these perverse incentives further confirm that the best reading of Title VI is that it prohibits only intentional discrimination and does not authorize GSA to impose disparate-impact liability. See Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568, 575 (1988) (“[W]here an otherwise acceptable construction of a statute would raise serious constitutional problems, the Court will construe the statute to avoid such problems unless such construction is plainly contrary to the intent of Congress.” (citing NLRB v. Catholic Bishop of Chi., 440 U.S. 490, 499-501, 504 (1979))).

This encouraged or coerced use of race, color, or national origin violates the Equal Protection Clause unless it survives review under the “daunting” strict-scrutiny standard. SFFA, 600 U.S. at 206; see also Free Speech Coal., Inc. v. Paxton, 606 U.S. 461, 484 (2025) (“Strict scrutiny—which requires a restriction to be the least restrictive means of achieving a compelling governmental interest—is `the most demanding test known to constitutional law.'” (quoting City of Boerne v. Flores, 521 U.S. 507, 534 (1997))). The use of race, color, or national origin necessitated by GSA's disparate-impact provisions runs into serious issues with the requirement of narrow tailoring to achieve a compelling interest. SFFA, 600 U.S. at 206-07.

Similarly, the “affirmative action” provision in GSA's current regulations authorizes and sometimes requires the intentional use of race without requiring that this intentional use be narrowly tailored to serve a recognized compelling interest. Instead, it encourages intentional racial balancing “to overcome the consequences of” unintended racial disparities. 41 CFR 101-6.204-2(a)(4). Thus, for substantially the same reasons as above, the “affirmative action” provision raises serious constitutional concerns.

Separately, GSA has serious legal concerns regarding the provision that seeks to hold recipients responsible for conduct having a disparate impact in employment where the objective of the financial assistance is not for employment. See41 CFR 101-6.204-2(d)(2). This provision oversteps the reach of Title VI and encroaches upon an area generally governed by Title VII of the Civil Rights Act of 1964 (Title VII). See42 U.S.C. 2000e. Additionally, the rule points to the application of now rescinded Executive Order 11246. See41 CFR 101-6.204-2(d)(1). ( printed page 52539)

As summarized above, there are serious statutory and constitutional concerns with GSA's disparate-impact regulations. And even if the regulations, after full judicial review, might be deemed legal, GSA concludes that merely raising serious constitutional concerns such as those addressed above would independently justify the amendment of its regulations. Cf. U.S. Tel. Ass'n v. FCC, 188 F.3d 521, 528 (D.C. Cir. 1999) (concluding it was not “arbitrary and capricious” to adopt a certain policy in order to “avoid[] raising a non-trivial constitutional question”). Further—and as discussed in the next section—even if the regulations did not raise serious constitutional concerns, GSA finds that eliminating the costs and confusion caused by the mismatch between the statute and the disparate-impact regulations, as well as other policy concerns, would independently justify the repeal of the regulations.

2. Serious Policy Concerns

GSA has serious policy concerns with the imposition of disparate-impact liability. Although GSA expresses its policy concerns with disparate-impact liability independent of Executive Order 14281, that Order explains many of the valid policy concerns associated with disparate-impact liability. As noted in section 1 of the Order, “On a practical level, disparate-impact liability has hindered businesses from making hiring and other employment decisions based on merit and skill, their needs, or the needs of their customers because of the specter that such a process might lead to disparate outcomes, and thus disparate-impact lawsuits. This has made it difficult, and in some cases impossible, for employers to use bona fide job-oriented evaluations when recruiting, which prevents job seekers from being paired with jobs to which their skills are most suited—in other words, it deprives them of opportunities for success.” 90 FR at 17537.

Moreover, the legal concerns identified above have caused uncertainty and confusion for Federal-funding recipients as to whether and when they need to comply with the disparate-impact regulations and when they can or must consider race, color, and national origin. As explained above, Sandoval casts substantial doubt on the validity of the disparate-impact regulations that many Federal departments and agencies have promulgated pursuant to Title VI. 532 U.S. at 280-82.

Additionally, in practice, and as explained above, disparate-impact liability leads covered entities to engage in racial balancing even as Title VI forbids intentional racial discrimination. For example, under 41 CFR 101-6.204-2(a)(3), a recipient is prohibited from selecting a site or location that would have the “effect of” defeating or substantially impairing the objectives of Title VI. However, imposing liability on a recipient for disparities that are unforeseen in planning the location of its program would, in many instances, unjustifiably burden the recipient's operations. And a recipient may proactively consider race simply to avoid triggering liability. This tension tends to create confusion and undermine public confidence in the nation's civil rights laws and in the rule of law itself, as the law seems to both forbid and require the same conduct.

These problems are amplified by the arbitrary nature of the racial and ethnic categories typically used to measure disparate effects, which, by virtue of their arbitrariness, typically lack a meaningful connection to a compelling interest. See, e.g., SFFA, 600 U.S. at 216-17 (explaining that the “[racial] categories” used in the affirmative action programs at issue were “themselves imprecise in many ways” and that “the use of these opaque racial categories undermine[d], instead of promote[d], [the programs'] goals”). This confusion undermines adherence to the principle of nondiscrimination established in Title VI. GSA believes these policy concerns independently justify repealing the disparate-impact portions of its regulations to cure this confusion, remove the incentive for covered entities to engage in racial balancing, and maintain clarity and public confidence in the nation's civil rights laws.

GSA's current regulations impose disparate-impact liability for outcomes that may not be intended by the recipient. Disparate-impact liability is not contemplated by Title VI and does not pass constitutional muster. GSA has explored the possibility of requiring entities to remedy unintentional disparate impacts in programs by crafting a modified version of disparate-impact liability, for example, in only certain types of cases, in recipient eligibility determinations, or in screening decisions within surplus or excess property programs. But GSA has determined that any imposition of disparate-impact liability is inconsistent with the best meaning of Title VI, and any benefits from adopting alternative versions of disparate-impact liability are outweighed by GSA's legal and policy concerns. And even if possible, developing such a rule would not solve the confusion or rule-of-law concerns expressed above, nor reduce the compliance and litigation costs that covered entities face. GSA believes that the better course is to avoid the complexities, costs, and litigation associated with this alternative, even if eliminating disparate-impact liability would ultimately leave some problems unaddressed and others inadequately addressed.

At least since Sandoval, GSA's enforcement of its disparate-impact regulations has been minimal. Sandoval, more than two decades ago, cast serious doubt on the continuing viability of GSA's disparate-impact regulations. In addition, Executive Order 14281 also directed all agencies to “deprioritize enforcement of all statutes and regulations to the extent they include disparate-impact liability,” including specifically GSA's disparate-impact regulations. See 90 FR at 17538. For these reasons, GSA concludes that the legal and other policy concerns associated with its current regulations outweigh any claim of reliance on GSA enforcement of its current disparate impact regulations.

Further, GSA has considered whether rescission of its disparate-impact provisions may affect other reliance interests. Potential reliance interests include those recipients of Federal funds that may have adopted compliance practices, policies, internal procedures, or other compliance measures to address disparate-impact liability under the existing regulations. GSA has also considered whether beneficiaries of GSA-assisted programs may have understood the regulations to authorize disparate-impact enforcement in certain circumstances. In light of the legal and policy considerations discussed above, including GSA's limited enforcement history and evaluation of alternative approaches, GSA does not believe these potential reliance interests are substantial and concludes that they do not outweigh the legal and policy reasons for rescinding the disparate-impact provisions.

In addition to the considerations discussed above, GSA notes that Sandoval has also led to a divergence between Title VI enforcement by private plaintiffs and enforcement by Federal departments and agencies. After Sandoval, private plaintiffs can enforce only Title VI's statutory prohibition on intentional discrimination, while GSA could continue to pursue disparate-impact liability. Repealing GSA's disparate-impact regulations would eliminate this incongruent enforcement.

Although GSA understands that examining disparate effects can sometimes be useful in identifying ( printed page 52540) covert attempts to engage in intentional discrimination or intentional indifference to unnecessary and arbitrary barriers, GSA notes that eliminating disparate-impact liability does not preclude the use of data on disparate outcomes to help prove intentional discrimination. Both GSA and private litigants rely on such data as a potential indicator of intentional discrimination. This use of statistical disparities to help establish, as an evidentiary matter, liability for intentional discrimination materially differs from using it to impose liability for an unintentional disparate impact.

Overall, after considering the relevant issues and factors and weighing the relevant considerations, GSA finds that, regardless of the legality of GSA's disparate-impact regulations, the above summarized policy concerns, when viewed separately or cumulatively, independently justify the repeal of its disparate-impact regulations.

3. Administrative Changes

In addition to making changes to GSA's Title VI regulations to remove provisions regarding disparate-impact liability, this final rule removes references in GSA's regulations to the former Department of Health, Education, and Welfare. This final rule reflects current Federal agency responsibilities, including by referring to the Department of Health and Human Services and the Department of Education, as appropriate. This final rule also makes additional technical and conforming edits, including by updating cross-references and citations to improve clarity and internal consistency within GSA's regulations. These updates are technical and conforming in nature and do not change the substance of GSA's Title VI obligations or enforcement framework.

Section-by-Section Analysis of Significant Changes

Section 101-6.204-2(a)(2) [Removed]

Section 101-6.204-2(a)(2) serves as an overarching prohibition on conduct that subjects individuals to unintentional disparate impacts because of their race, color, or national origin. It prohibits the use of criteria or methods of administration that have the “effect” of unintentional discrimination. The sole purpose of this section is to extend the scope of Title VI to conduct that has a disparate impact on individuals because of their race, color, or national origin. This rule deletes this paragraph in its entirety and thus conforms GSA's regulations to the scope of Title VI. The rule also addresses the legal and policy considerations discussed above. Additionally, this rule renumbers paragraph (a)(3) as paragraph (a)(2) to reflect removal of paragraph (a)(2).

Section 101-6.204-2(a)(3) [Redesignated Section 105-10.106(a)(2)]

Section 101-6.204-2(a)(3) addresses a Federal-funding recipient's or applicant's selection of the site or location of facilities. It provides that a funding recipient may not make selections with the “purpose or effect” of discriminating, or “with the purpose or effect of defeating or substantially impairing the accomplishment of the objectives of” Title VI or GSA's implementing regulations. The paragraph's two references to “effect” extend to conduct having an unintentional disparate impact. This rule deletes both “or effect” references to conform paragraph (a)(3) more closely to Title VI and to address the legal and policy considerations and determinations described in this document. Additionally, this rule redesignates paragraph (a)(3) as § 105-10.106(a)(2), consistent with other structural changes made by this rule.

Section 101-6.204-2(a)(4) [Removed]

Section 101-6.204-2(a)(4) expressly permits the consideration of race, color, or national origin where the purpose and effect is to remove or overcome the consequences of past practices that limit participation in a program on the ground of race, color, or national origin. Additionally, where those past practices tended to exclude participation on the ground of race, color, or national origin, this paragraph directs recipients to take “reasonable action” to address the “effects” of those practices. This provision's references to unintentional “effects” encourages intentional racial classifications, racial preferences, and other race-based actions. However, the provision does not require the compelling interest and narrow tailoring necessary to survive constitutional scrutiny. Requiring a recipient to take reasonable action to remove or overcome the consequences of past discriminatory practices goes beyond the Equal Protection Clause of the Fourteenth Amendment, which permits—but does not require—a government, in limited circumstances, to take narrowly tailored action to remedy the effects of its identified past discrimination. See Bakke, 438 U.S. at 307.

This rule, therefore, removes paragraph (a)(4).

Section 101-6.204-2(d)(2) [Removed]

Section 101-6.204-2(d) addresses prohibited discriminatory employment practices. Paragraph (d)(1) prohibits intentionally discriminatory employment practices in a program when a primary objective of the Federal financial assistance that program receives is to provide employment. Paragraph (d)(2) extends the prohibition on discrimination to employment practices of the funding recipient even “[w]here a primary objective of the Federal financial assistance is not to provide employment” if discrimination in the non-funded “employment practices” “tends, on the ground of race, color, or national origin, to exclude persons from participation in, to deny them the benefits of or to subject them to discrimination under the program to which this part applies.” This paragraph prohibits not only intentional discrimination but also conduct that “tends” to have a discriminatory effect.

Moreover, GSA notes that paragraph (d)(2)'s extension to employment practices where the Federal funding's primary objective is not to provide employment conflicts with the statutory limitation found in 42 U.S.C. 2000d-3. That section states that “[n]othing contained in [Title VI] shall be construed to authorize action under [Title VI] by any department or agency with respect to any employment practice of any employer, employment agency, or labor organization except where a primary objective of the Federal financial assistance is to provide employment.” 42 U.S.C. 2000d-3; see also Johnson v. Transp. Agency, Santa Clara Cnty., 480 U.S. 616, 627-28 n.6 (1987) (citing the statutory limitation and noting Congress's intent that Title VI not “impinge” on Title VII, which prohibits discriminatory employment practices). The rule deletes paragraph (d)(2) to amend the regulation so that it more closely adheres to Title VI and to address the legal and policy considerations and determinations described in this document.

GSA also removes references to Executive Order 11246 from paragraph (d)(1) to reflect its revocation by Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity,90 FR 8633 (Jan. 21, 2025), and to avoid potential confusion regarding current legal requirements. This rule makes a technical edit to paragraph (d)(1) to reflect the removal of paragraph (d)(2). Finally, this rule redesignates subsection (d) as § 105-10.106(d). All the changes described in this paragraph are technical in nature. ( printed page 52541)

Sections 101-6.206(h)-(j) [Removed]

Section 101-6.206 addresses illustrative examples of prohibited actions and practices. Sections 101-6.206(h)-(j) describe actions and conduct that indirectly accomplished what this part prohibits directly, as well as circumstances in which the continuing effects of past discrimination may limit the availability of program benefits. These provisions further contemplate remedial or outreach-based actions, including race- or nationality-based measures, to address disparities in program participation or service availability.

Title VI prohibits intentional discrimination on the basis of race, color, or national origin, but does not prohibit so-called unintentional discrimination; nor does Title VI require or permit recipients to take race-based actions to remedy statistical disparities. Consistent with Executive Order 14281, DOJ clarified, and GSA agrees, that regulations premised on discriminatory effects, indirect discrimination, or the continuing consequences of past practices extend beyond Title VI, which proscribes only intentional discrimination.

Paragraphs (h) through (j) are premised on effects-based and remedial concepts that are not supported by the text of Title VI. In particular, these provisions contemplate obligations or permissions tied to disparate outcomes or group-based considerations, rather than intentional discriminatory conduct.

Accordingly, GSA removes paragraphs (h) through (j) to conform its regulations to the requirements of Title VI and Executive Order 14281. Finally, this rule redesignates the remaining parts of § 101-6.206 as § 105-10.112.

Section 101-6.215-1(a)

Section 101-6.215-1 addresses the relationship between this part and other regulations, orders, and instructions. It supersedes prior GSA nondiscrimination directives to the extent they address conduct prohibited by this part while preserving existing obligations and identifies executive orders and other authorities that are not superseded.

Paragraph (a) of this section currently identifies Executive Orders 10925, 11114, and 11246 as authorities not superseded by this part. Executive Order 11246 superseded Executive Orders 10925 and 11114, and Executive Order 11246 was subsequently revoked by Executive Order 14173. Because these executive orders no longer have legal effect, GSA removes paragraph (a) from this section. This change is technical in nature. This rule also makes a technical edit to paragraph (b) to reflect the removal of paragraph (a). Finally, this rule redesignates § 101-6.215-1 as § 105-10.401.

II. Regulatory Certifications

A. Executive Order 12250

Executive Order 12250 authorizes the Attorney General to coordinate the implementation and enforcement of Title VI and related nondiscrimination statutes across Federal agencies. Under Executive Order 12250, Executive agencies must submit regulations implementing Title VI to DOJ to ensure consistent and effective implementation of various laws prohibiting discriminatory practices in Federal programs and programs receiving Federal financial assistance. Additionally, section 1-101 of Executive Order 12250 delegated the President's responsibility to approve Title VI regulations to the Attorney General. See42 U.S.C. 2000d-1. This final rule has been reviewed and approved by DOJ in accordance with Executive Order 12250.

B. Executive Orders 12866 and 13563

Executive Order 12866, Regulatory Planning and Review,58 FR 51735 (Sep. 30, 1993), directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563, Improving Regulation and Regulatory Review,76 FR 3821 (Jan. 18, 2011), emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.

The Office of Information and Regulatory Affairs (OIRA), within the Office of Management and Budget (OMB), has determined that this final rule is a significant regulatory action under Executive Order 12866. However, the rule is not economically significant under section 3(f)(1), as it does not have an annual effect on the economy of $100 million or more.

This final rule revises GSA's Title VI regulation by removing regulatory provisions related to disparate-impact liability and aligning the regulations with the statutory text and the interpretation adopted by DOJ pursuant to Executive Order 12250. The rule does not impose new compliance obligations, reporting requirements, recordkeeping requirements, or procedural requirements on recipients of Federal financial assistance. In addition, the rule includes organizational, conforming, and technical amendments, including the migration of GSA's Title VI provisions to the GSPMR, which are administrative in nature and do not create or modify substantive compliance obligations.

In evaluating the economic effects of this rule, GSA considered the nature and scope of its Federal financial assistance activities. Unlike other agencies, GSA does not administer Federal financial assistance primarily through monetary grants. Rather, GSA's provision of Federal financial assistance arises in connection with the agency's statutory responsibilities for Federal property management and related intergovernmental functions. Such assistance may include, as applicable, the donation of surplus personal property, the discounted conveyance of Federal real property for authorized public purposes, and the temporary detail of Federal personnel pursuant to applicable statutory authorities.

Because GSA does not administer assistance through centralized grant programs, it does not maintain data that would allow the agency to isolate or quantify costs incurred by recipients as a result of disparate-impact liability, independent of other compliance or enforcement activities. In particular, GSA does not track complaints, compliance reviews, or enforcement actions based on disparate-impact theories, nor does it collect information regarding recipient expenditures undertaken to mitigate disparate-impact risk.

Because of these data limitations, GSA is unable to reliably quantify the economic effects associated with the removal of disparate-impact liability. Any attempt to estimate such effects would require assumptions that cannot be supported by available evidence. Accordingly, GSA has relied on a qualitative assessment of the economic effects of this rule. This approach is consistent with the analytical framework used by DOJ in its Title VI final rule, see 90 FR at 57147, which similarly relied on qualitative analysis due to the absence of data isolating disparate-impact complaints or enforcement actions.

The primary qualitative benefits of this final rule arise from the removal of disparate-impact liability from GSA's Title VI regulation. By eliminating regulatory provisions that extend beyond the statutory prohibition on intentional discrimination, the rule clarifies the scope of Title VI and aligns GSA's regulation with the governing statute and the interpretation adopted by DOJ. ( printed page 52542)

This clarification reduces regulatory uncertainty for recipients of Federal financial assistance by narrowing the conduct subject to enforcement. Recipients are no longer subject to liability based solely on the effects of neutral policies or practices absent discriminatory intent. As a result, recipients are afforded greater regulatory predictability in the administration of programs and activities receiving Federal financial assistance.

The rule also reduces ongoing compliance and administrative burdens by eliminating the need for recipients to assess, document, or mitigate potential disparate-impact liability associated with neutral policies or practices. In the absence of disparate-impact liability, recipients are no longer incentivized to engage in resource-intensive analyses of demographic or outcome-based effects for purposes unrelated to statutory compliance. This reduction applies on an ongoing basis and is not limited to one-time compliance activities. This change promotes the more efficient use of agency and recipient resources by focusing compliance efforts on conduct that is prohibited by statute.

Any potential costs associated with familiarization with the revised regulation are minimal, one-time, and incidental, and are outweighed by the ongoing qualitative benefits associated with increased clarity, reduced uncertainty, and reduced compliance and enforcement burden.

Based on the qualitative assessment of the practical costs and benefits discussed above, GSA has determined that this rule is consistent with the principles of Executive Orders 12866 and 13563. The rule removes regulatory provisions that are not authorized by the statute and does not impose new compliance obligations or administrative requirements on recipients of Federal financial assistance. Accordingly, GSA has determined that the benefits of this rule justify its costs and that the rule represents a reasoned and appropriate exercise of regulatory authority.

This determination reflects consideration of the rule in its entirety, including the organizational, conforming, and technical amendments and the migration of GSA's Title VI provisions to the GSPMR, which are administrative in nature and do not affect the qualitative assessment or conclusions reached under Executive Orders 12866 and 13563.

C. Executive Order 14192

Executive Order 14192, Unleashing Prosperity Through Deregulation,90 FR 9065, (Jan. 31, 2025), directs agencies to identify and implement deregulatory actions that reduce regulatory burden. This final rule qualifies as a deregulatory action under Executive Order 14192. By removing provisions regarding disparate-impact liability from GSA's Title VI regulations, the rule reduces regulatory uncertainty and administrative and enforcement-related burdens associated with outcome-based liability assessments, while imposing no new compliance requirements. To the extent that recipients or internal program offices may choose to update materials that reference GSA's Title VI regulations following the revisions in this rule, any such updates would be non-substantive, discretionary, and one-time, and may be incorporated into routine policy maintenance activities. Any de minimis costs of effectuating this rule are outweighed by the elimination of recurring compliance and enforcement-related burdens.

Based on this assessment, GSA has determined that the total costs of this rule are less than zero; therefore, the rule should be classified as a deregulatory action under Executive Order 14192.

D. Executive Order 13132 (Federalism)

This rule will not have a substantial, direct effect on the relationship between the national government and the states, on distribution of power and responsibilities among various levels of government, or on states' policymaking discretion. States that choose to receive Federal financial assistance from GSA do so voluntarily and agree to comply with relevant statutory requirements as a condition of receiving such funding. This rule does not subject states or any other funding recipients or beneficiaries to new obligations. This rule amends and clarifies existing regulations that are required by statute. Therefore, in accordance with section 6 of Executive Order 13132, Federalism,64 FR 43255, 43257-58 (Aug. 4, 1999), GSA has determined that these amendments do not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.

E. Regulatory Flexibility Act

GSA does not expect this final rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. This final rule is also exempt from the Administrative Procedure Act (APA) pursuant to 5 U.S.C. 553(a)(2) because it applies to agency management and personnel and public property. The rule therefore does not require notice and comment and is accordingly exempt from the RFA as well. See5 U.S.C. 603-04. Hence, an Initial Regulatory Flexibility Analysis has not been performed.

F. Administrative Procedure Act

GSA issues this final rule without prior public notice and comment or a delayed effective date pursuant to the APA's exception for rules “relating to agency management or personnel or to public property, loans, grants, benefits, or contracts.” 5 U.S.C. 553(a)(2).

Title VI of the Civil Rights Act of 1964 concerns nondiscrimination conditions on the receipt of Federal financial assistance. In particular, Title VI applies to programs or activities receiving Federal financial assistance, including Federal grants and loans, the use or transfer of Federal property, Federal personnel assistance, and any Federal agreement, arrangement, or other contract that has as one of its purposes the provision of assistance. See41 CFR 101-6.216.102(c) (redesignated as 41 CFR 101-10.104); see also41 CFR 101-6.205-1 (redesignated as 41 CFR 101-10.108) (requiring funding recipients to sign contractual assurance of compliance with Title VI).

Courts have recognized that Congress enacted Title VI pursuant to its authority to establish the terms on which Federal funds are disbursed. See Cummings v. Premier Rehabilitation Keller, P.L.L.C., 596 U.S. 212, 217-18 (2022); Pennhurst State School and Hospital v. Halderman, 451 U. S. 1, 17 (1981). Consistent with this understanding, agencies have invoked the exception at 5 U.S.C. 553(a)(2) when issuing or revising civil rights regulations governing Federal financial assistance programs. See, e.g., Rescinding Portions of Department of Justice Title VI Regulations To Conform More Closely With the Statutory Text and To Implement Executive Order 14281,90 FR 57141 (invoking the section 553(a)(2) exception); Education Programs or Activities Receiving or Benefitting from Federal Financial Assistance,82 FR 46655, 46655 (Oct. 6, 2017) (invoking the section 553(a)(2) exception to amend Title IX regulations to “promote consistency in the enforcement of Title IX for [the Department of Agriculture] financial assistance recipients”); Preserving Community and Neighborhood Choice,85 FR 47899 (Aug. 7, 2020) (invoking the exception to repeal Housing and Urban Development rule regarding Federal grantees); Participation by Minority Business Enterprise in Department of Transportation Programs,53 FR 18285 (May 23, 1988) ( printed page 52543) (invoking the exception to expand coverage of Department of Transportation regulation regarding Federal Aviation Administration's airport financial assistance program).

OMB defines “Federal financial assistance” using the same categories identified in the APA. See2 CFR 200.1. Federal financial assistance administered by GSA falls within the categories of public property, personnel, grants, benefits, and contractual arrangements; therefore, the APA exception applies. Accordingly, GSA issues this final rule without prior public notice and comment and without a delayed effective date under 5 U.S.C. 553(a)(2).

G. Congressional Review Act

OIRA has determined that this rule does not meet the criteria under 5 U.S.C. 804(2).

H. Unfunded Mandates Reform Act of 1995

The Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1501 et seq., requires agencies to prepare several analytic statements before proposing any rule that may result in annual expenditures of $100 million by state, local, or tribal governments, or the private sector. 2 U.S.C. 1532(a). GSA does not expect this rule will cause any such expenditures. But even if such expenditures were likely, the UMRA excludes any proposed or final Federal regulation that “establishes or enforces any statutory rights that prohibit discrimination on the basis of race, color, religion, sex, national origin, age, handicap, or disability.” 2 U.S.C. 1503(2). Accordingly, this rulemaking is not subject to the provisions of the UMRA.

I. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the GSPMR do not impose recordkeeping or information collection requirements, or the collection of information from offerors, contractors, or members of the public that require the approval of OMB under 44 U.S.C. 3501 et seq.

III. Severability

GSA's position is that each of the amendments described in this rule serves a vital, related, but distinct purpose. GSA also confirms that each of the amendments is intended to operate independently of each other and that the potential invalidity of one amendment should not affect the other amendments. GSA would adopt any of the amendments independently of the invalidity of a separate amendment.

For the reasons set forth in the preamble, GSA amends 41 CFR subtitle C, chapters 101 and 105, as set forth below:

Chapter 101—Federal Property Management Regulations

91 FR 52537