[Federal Register Volume 69, Number 132 (Monday, July 12, 2004)]
[Proposed Rules]
[Pages 41769-41770]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-15709]



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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 667

Office of the Secretary

29 CFR Part 37

RIN 1291-AA29


Use of Federal Financial Assistance for Religious Activities 
Under the Nondiscrimination and Equal Opportunity Provisions of the 
Workforce Investment Act of 1998

AGENCY: Office of the Secretary and Employment and Training 
Administration, Labor.

ACTION: Proposed rule; partial withdrawal and termination.

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SUMMARY: The Department of Labor is withdrawing portions of the 
proposed rule, published in the Federal Register on September 30, 2003 
(68 FR 58386), that proposed to amend several provisions in the interim 
final regulations that implement the equal opportunity and 
nondiscrimination provisions of the Workforce Investment Act of 1998 
(WIA), and the regulations promulgated by the Employment and Training 
Administration that implement the general provisions of WIA. This 
withdrawal covers only the proposed amendments that would have 
prohibited the use of all types of WIA Title I financial assistance for 
the employment or training of participants in religious activities. For 
the reason discussed below, the Department is also terminating the part 
of the rulemaking proceeding that relates to the proposed amendments 
here withdrawn.

DATES: This partial withdrawal and termination of the NPRM published on 
September 30, 2003 (68 FR 68386) is issued as of July 12, 2004.

FOR FURTHER INFORMATION CONTACT: Regarding the withdrawal of part of 
the proposed amendments to 29 CFR part 37: Annabelle T. Lockhart, 
Director, Civil Rights Center (CRC), (202) 693-6500 (VOICE). Please 
note that this is not a toll-free number. Individuals who do not use 
voice telephones may contact Ms. Lockhart via TTY/TDD by calling the 
toll-free Federal Information Relay Service at (800) 877-8339.
    Regarding the withdrawal of the proposed amendments to 20 CFR part 
667: Maria Flynn, Acting Administrator, Office of Policy Development, 
Evaluation and Research, Employment and Training Administration, (202) 
693-3700 (VOICE) or (202) 877-889-5627 (TTY/TDD). Please note that 
these are not toll-free numbers.

SUPPLEMENTARY INFORMATION: The Department is withdrawing portions of a 
Notice of Proposed Rulemaking (NPRM) published on September 30, 2003 
(68 FR 58386) that proposed amendments to the interim final 
regulations, codified at 29 CFR part 37, that implement section 188 
(a)(3) of the Workforce Investment Act of 1998 (WIA), and the 
regulations promulgated by the Employment and Training Administration 
(ETA), codified in 20 CFR part 667, that implement the general 
provisions of WIA. In the NPRM, the Department proposed to revise 29 
CFR 37.6(f)(1), which barred recipients from employing or training 
participants in religious activities; 29 CFR 37.6(f)(2), which limited 
the circumstances under which participants in programs receiving WIA 
Title I financial assistance could be employed to carry out the 
construction, operation, or maintenance of any part of any facility 
used or to be used for religious instruction or as a place of religious 
worship; and 29 CFR 37.6(f)(3), which provided an exception to the 
limitation in 29 CFR 37.6(f)(2). In addition, the September 30 NPRM 
proposed to revise 20 CFR 667.266(b)(1), which at that time referenced 
29 CFR 37.6(f)(1) in providing that WIA Title I financial assistance 
could not be spent on the employment or training of participants in 
religious activities, and 20 CFR 667.275(b), which at that time also 
referenced the prohibition on employment and training in religious 
activities found in the then-current version of 29 CFR 37.6(f).
    As explained in the preamble to the September 30 NPRM, the 
Department has determined that the broad prohibition in the then-
current version of 29 CFR 37.6(f)(1) on the use of all types of WIA 
Title I financial assistance to employ or train participants in 
religious activities is inconsistent with current law, which permits 
the use of such financial assistance to provide religious training in 
cases in which the assistance is provided indirectly within the meaning 
of the Constitution. Such assistance is provided indirectly, for 
example, when participants are given a genuine and independent private 
choice among training providers, and freely elect to receive training 
in religious activities. Thus, the September 30 NPRM proposed to revise 
paragraph 37.6(f)(1) to clarify that only where financial assistance is 
provided directly is the use of such assistance to support religious 
employment or training prohibited. In addition, consistent with current 
law, the September 30 NPRM proposed to add a new paragraph 37.6(f)(2) 
that would have set forth specific criteria, applicable only to WIA 
programs and activities, for determining whether financial assistance 
was indirect and therefore could be used to support religious 
employment or training.
    As a result of the insertion of this new paragraph, the September 
30 NPRM proposed to redesignate then-current paragraphs 37.6(f)(2) and 
(f)(3) as paragraphs 37.6(f)(3) and (f)(4), respectively. The NPRM also 
proposed to revise the latter two paragraphs to make them easier to 
understand, and to adhere more closely to the language of WIA section 
188(a)(3).
    Finally, because ETA's then-current programmatic regulations at 20 
CFR 667.266(b)(1) and 667.275(b) also prohibited the use of WIA 
financial assistance for employment and training in religious 
activities, and referenced the prohibition in 29 CFR 37.6(f)(1), the 
September 30 NPRM proposed to revise those two ETA provisions to 
conform to the proposed amendments to 29 CFR 37.6(f).
    After the September 30 NPRM was published, the Department 
determined that further rulemaking was needed in order to implement the 
policies and principles of Executive Order 13279 (67 FR 77141, December 
16, 2002), ``Equal Protection of the Laws for Faith-Based and Community 
Organizations.'' Executive Order 13279 directs executive branch 
agencies to take the action necessary to ensure equal treatment to 
faith-based and community organizations that apply for or receive 
Federal financial assistance to meet social needs in America's 
communities. The Department concluded that its general regulations at 
29 CFR part 2 should be revised to clarify that faith-based and 
community organizations can participate in all DOL social service 
programs without regard to the organizations' religious character or 
affiliation, and can apply for and compete on an equal footing with 
other organizations to receive DOL support. Accordingly, on March 9, 
2004, the Department published an NPRM that proposed adding to DOL's 
general regulations in 29 CFR part 2 a new subpart D, to be entitled 
``Equal Treatment in Department of Labor Programs for Religious 
Organizations; Protection of Religious Liberty of Department of Labor 
Social Service Providers and Beneficiaries.'' 69 FR 11234, 11235.
    During the development of the March 9 NPRM, the Department 
determined

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that, in order to ensure uniformity and consistency in implementing the 
principles of Executive Order 13279 throughout DOL, the regulations 
dealing with faith-based and community organizations, and with 
religious activities, should to the extent possible be consolidated in 
one place. 69 FR 11234. The Department further determined that these 
regulations should not be program-specific, but should apply to all 
such organizations receiving DOL support, except where the implementing 
statute imposed particular requirements. Accordingly, in the March 9 
NPRM, the Department proposed new revisions to 29 CFR 37.6(f)(1), as 
well as to 20 CFR 667.266(b)(1) and 667.275(b). Instead of the language 
proposed in the September 30 NPRM, the March 9 NPRM proposed that each 
of these regulatory provisions cross-reference 29 CFR part 2, subpart 
D. See 69 FR at 11237, 11238, 11241. Thus, the amendments to 29 CFR 
37.6(f)(1), 20 CFR 667.266(b)(1), and 20 CFR 667.275(b) proposed in the 
September 30 NPRM were superseded by the amendments to those paragraphs 
that were proposed in the March 9 NPRM and finalized in the final rule 
published elsewhere in today's Federal Register. The March 9 NPRM also 
superseded the proposal in the September 30 NPRM to add a new paragraph 
(f)(2) to 29 CFR 37.6.
    For these reasons, the Department is withdrawing, and is 
terminating the rulemaking proceedings on, the portion of the September 
30 NPRM that proposed to revise 29 CFR 37.6(f)(1), 20 CFR 
667.266(b)(1), and 20 CFR 667.275(b), and to add a new 29 CFR 
37.6(f)(2). The Department has proceeded with that part of the 
September 30 NPRM that proposed other amendments to 29 CFR 37.6(f). A 
final rule accomplishing these amendments is published elsewhere in 
today's Federal Register.

    Signed at Washington, DC this 7th day of July, 2004.
Emily S. DeRocco,
Assistant Secretary for Employment and Training.
 Elaine L. Chao,
Secretary of Labor.
[FR Doc. 04-15709 Filed 7-8-04; 8:45 am]
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