[Federal Register Volume 85, Number 12 (Friday, January 17, 2020)]
[Proposed Rules]
[Pages 2929-2938]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-26862]


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DEPARTMENT OF LABOR

Office of the Secretary

29 CFR Part 2

RIN 1291-AA41


Equal Participation of Faith-Based Organizations in the 
Department of Labor's Programs and Activities: Implementation of 
Executive Order 13831

AGENCY: Office of the Secretary, Department of Labor.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The rule proposes to amend Department of Labor (Department, 
DOL) regulations to implement Executive Order 13831 (Establishment of a 
White House Faith and Opportunity Initiative). Among other changes, 
this rule proposes changes to provide clarity about the rights and 
obligations of faith-based organizations participating in Department 
programs, clarify the Department's guidance documents for financial 
assistance in regard to faith-based organizations, and eliminate 
certain requirements for faith-based organizations that no longer 
reflect executive branch guidance. This proposed rulemaking is intended 
to ensure that the Department's social service programs are implemented 
in a manner consistent with the requirements of federal law, including 
the First Amendment to the Constitution and the Religious Freedom 
Restoration Act.

DATES: Comments must be received by DOL on or before February 18, 2020.

FOR FURTHER INFORMATION CONTACT: Mr. Mark Zelden, Director, Centers for 
Faith & Opportunity Initiatives; telephone: 202-693-6017, email: 
[email protected].

ADDRESSES: To ensure proper handling of comments, please reference 
Docket No. DOL-2019-0006 on all electronic and written correspondence. 
The Department encourages the electronic submission of all comments 
through http://www.regulations.gov using the electronic comment form 
provided on that site. For easy reference, an electronic copy of this 
document is also available at that website. It is not necessary to 
submit paper comments that duplicate the electronic submission, as all 
comments submitted to http://www.regulations.gov will be posted for 
public review and are part of the official docket record. However, 
should you wish to submit written comments through regular or express 
mail, they should be sent to Centers for Faith & Opportunity 
Initiatives, U.S. Department of Labor, Room S-2228, 200 Constitution 
Avenue NW, Washington, DC 20210.

SUPPLEMENTARY INFORMATION: 

I. Posting of Public Comments

    All comments, including any personal information you provide, are 
placed in the public docket without change and may be made available 
online at http://www.regulations.gov. Therefore, the Department 
cautions commenters about submitting statements they do not want made 
available to the public, or submitting comments that contain personal 
information (either about themselves or others), such as Social 
Security Numbers, birthdates, and medical data. If you wish to inspect 
the agency's public docket file in person by appointment, please see 
the FOR FURTHER INFORMATION CONTACT paragraph.

II. Background

    Shortly after taking office in 2001, President George W. Bush 
signed Executive Order 13199, Establishment of White House Office of 
Faith-based and Community Initiatives, 66 FR 8499 (January 29, 2001). 
That Executive Order sought to ensure that ``private and charitable 
groups, including religious ones, . . . have the fullest opportunity 
permitted by law to compete on a level playing field'' in the delivery 
of social services. To do so, it created an office within the White 
House, the White House Office of Faith-Based and Community Initiatives 
with primary responsibility to ``establish policies, priorities, and 
objectives for the Federal Government's comprehensive effort to enlist, 
equip, enable, empower, and expand the work of faith-based and other 
community organizations to the extent permitted by law.''
    On December 12, 2002, President Bush signed Executive Order 13279, 
Equal Protection of the Laws for Faith-Based and Community 
Organizations, 67 FR 77141 (December 12, 2002). Executive Order 13279 
set forth the principles and policymaking criteria to guide federal 
agencies in formulating and implementing policies with implications for 
faith-based organizations and other community organizations, to ensure 
equal protection of the laws for faith-based and 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 directed specified agency heads to review and evaluate existing 
policies that had implications for faith-based and community 
organizations relating to their eligibility for federal financial 
assistance for social service programs and, where appropriate, to 
implement new policies that were consistent with and necessary to 
further the fundamental principles and policymaking criteria 
articulated in the Order.
    In 2004, the Department of Labor issued regulations through notice-
and-comment rulemaking implementing Executive Order 13279 at 29 CFR 
part 2 subpart D (``Part 2 Subpart D''). 69 FR 41882 (July 12, 2004). 
The regulations applied to all providers that implemented social 
service programs supported by the Department. The Department 
subsequently issued guidance detailing the process for recipients of 
financial assistance to

[[Page 2930]]

obtain exemptions from religious nondiscrimination requirements under 
the Religious Freedom Restoration Act (RFRA), 42 U.S.C. 2000bb-2000bb-
4. See Office of the Assistant Secretary for Administration & 
Management, The Effect of the Religious Freedom Restoration Act on 
Recipients of DOL Financial Assistance, https://www.dol.gov/oasam/grants/RFRA-Guidance.htm.
    President Obama maintained President Bush's program, but modified 
it in certain respects. 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). This Executive 
Order 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 it created an Advisory Council that 
subsequently submitted recommendations regarding the work of the 
Office.
    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 (November 
17, 2010). Executive Order 13559 made various changes to Executive 
Order 13279 which included: Making minor and substantive textual 
changes to the fundamental principles; adding a provision requiring 
that any religious social service provider refer potential 
beneficiaries to an alternative provider if the beneficiaries object to 
the first provider's religious character; adding a provision requiring 
that the faith-based provider give notice of potential referral to 
potential beneficiaries; and adding a provision that awards must be 
free of political interference and not be based on religious 
affiliation or lack thereof. An interagency working group was tasked 
with developing model regulatory changes to implement Executive Order 
13279 as amended by Executive Order 13559, including provisions that 
clarified the prohibited uses of direct financial assistance, allowed 
religious social service providers to maintain their religious 
identities, and distinguished between direct and indirect assistance.
    These efforts eventually resulted in amendments to agency 
regulations, including the Department's Part 2 Subpart D. In April 
2016, the Department amended its existing regulations through notice-
and-comment rulemaking to ensure consistency with Executive Order 13279 
as amended by Executive Order 13559. 81 FR 19355, 19391 (April 4, 
2016). In July 2016, the Department issued guidance to grantees on the 
amended rule. See Center for Faith-Based & Neighborhood Partnerships, 
Guidance on Protections for and Obligations of Organizations that 
Administer Social Service Programs Supported by DOL Financial 
Assistance, https://www.dol.gov/cfoi/GuidanceProviderProtections.pdf; 
Center for Faith-Based & Neighborhood Partnerships, Frequently Asked 
Questions on Federal Financial Assistance and Protections for Religious 
Identity, https://www.dol.gov/cfoi/FAQsFederalFinancialAssistanceProtectionsForReligiousIdentity.pdf.
    The revised regulations defined ``indirect assistance'' as 
government aid to a beneficiary, such as a voucher, that flows to a 
religious provider only through the genuine and independent choice of 
the beneficiary. 29 CFR 2.31(a). The rules not only required that 
faith-based providers give the notice of the right to an alternative 
provider specified in Executive Order 13559, but also required faith-
based providers, but not other providers, to give written notice to 
beneficiaries and potential beneficiaries of programs funded with 
direct federal financial assistance of various rights, including 
nondiscrimination based on religion, the requirement that participation 
in any religious activities must be voluntary and that they must be 
provided separately from the federally funded activity, and that 
beneficiaries may report violations. 29 CFR 2.34.
    President Trump has given new direction to the program established 
by President Bush and continued by President Obama. On May 4, 2017, 
President Trump issued Executive Order 13798, Presidential Executive 
Order Promoting Free Speech and Religious Liberty, 82 FR 21675 (May 4, 
2017). Executive Order 13798 states that ``[f]ederal law protects the 
freedom of Americans and their organizations to exercise religion and 
participate fully in civic life without undue interference by the 
Federal Government. The executive branch will honor and enforce those 
protections.'' It directed the Attorney General to ``issue guidance 
interpreting religious liberty protections in Federal law.'' Pursuant 
to this instruction, the Attorney General, on October 6, 2017, issued 
the Memorandum for All Executive Departments and Agencies, ``Federal 
Law Protections for Religious Liberty,'' 82 FR 49668 (October 26, 2017) 
(the ``Attorney General's Memorandum on Religious Liberty'').
    The Attorney General's Memorandum on Religious Liberty emphasized 
that individuals and organizations do not give up religious liberty 
protections by providing government-funded social services, and that 
``government may not exclude religious organizations as such from 
secular aid programs . . . when the aid is not being used for 
explicitly religious activities such as worship or proselytization.''
    On May 3, 2018, President Trump signed Executive Order 13831, 
Executive Order on the Establishment of a White House Faith and 
Opportunity Initiative, 83 FR 20715 (May 3, 2018), amending Executive 
Order 13279 as amended by Executive Order 13559, and other related 
Executive Orders. Among other things, Executive Order 13831 changed the 
name of the ``White House Office of Faith-Based and Neighborhood 
Partnerships'' as established in Executive Order 13498, to the ``White 
House Faith and Opportunity Initiative''; changed the way that the 
Initiative is to operate; directed departments and agencies with 
``Centers for Faith-Based and Community Initiatives'' to change those 
names to ``Centers for Faith and Opportunity Initiatives''; and ordered 
that departments and agencies without a Center for Faith and 
Opportunity Initiatives designate a ``Liaison for Faith and Opportunity 
Initiatives.'' Executive Order 13831 also eliminated the alternative 
provider referral requirement and requirement of notice thereof in 
Executive Order 13559 described above.

Alternative Provider Referral and Alternative Provider Notice 
Requirement

    Executive Order 13559 imposed notice and referral burdens on faith-
based organizations not imposed on secular organizations. Section 1(b) 
of Executive Order 13559 had amended section 2 of Executive Order 
13279, entitled ``Fundamental Principles,'' by, in pertinent part, 
adding a new subsection (h) to section 2. As amended, section 2(h)(i) 
provided: ``If a beneficiary or a prospective beneficiary of a social 
service program supported by Federal financial assistance objects to 
the religious character of an organization that provides services under 
the program, that organization shall, within a reasonable time after 
the date of the objection, refer the beneficiary to an alternative 
provider.'' Section 2(h)(ii) directed agencies to establish policies 
and procedures to ensure that referrals are timely and follow privacy 
laws and regulations;

[[Page 2931]]

that providers notify agencies of and track referrals; and that each 
beneficiary ``receives written notice of the protections set forth in 
this subsection prior to enrolling in or receiving services from such 
program'' (emphasis added). The reference to ``this subsection'' rather 
than to ``this Section'' indicated that the notice requirement of 
section 2(h)(ii) was referring only to the alternative provider 
provisions in subsection (h), not all of the protections in section 2. 
In 2016, the Department revised its regulations to conform to Executive 
Order 13559. 29 CFR 2.34(a)(4), 2.35.
    In revising its regulations, the Department explained in 2015 that 
the revisions would implement the alternative provider provisions in 
Executive Order 13559. Executive Order 13831, however, has removed the 
alternative provider requirements articulated in Executive Order 13559. 
The Department also explained that the alternative provider provisions 
would protect religious liberty rights of social service beneficiaries. 
But the methods of providing such protections were not required by the 
Constitution or any applicable law. Indeed, the selected methods are in 
tension with more recent Supreme Court precedent regarding 
nondiscrimination against religious organizations, with the Attorney 
General's Memorandum on Religious Liberty, and with RFRA.
    As the Supreme Court recently clarified in Trinity Lutheran Church 
of Columbia, Inc. v. Comer, 137 S. Ct. 2012, 2019 (2017), a case in 
which a church operated preschool was denied state grant funds for 
updating playgrounds: ``The Free Exercise Clause `protect[s] religious 
observers against unequal treatment' and subjects to the strictest 
scrutiny laws that target the religious for `special disabilities' 
based on their `religious status.' '' (quoting Church of Lukumi Babalu 
Aye, Inc. v. Hialeah, 508 U.S. 520, 533 (1993) (alteration in 
original)). The Court in Trinity Lutheran added: ``[T]his Court has 
repeatedly confirmed that denying a generally available benefit solely 
on account of religious identity imposes a penalty on the free exercise 
of religion that can be justified only by a state interest `of the 
highest order.' '' Id. (quoting McDaniel v. Paty, 435 U.S. 618, 628 
(1978) (plurality opinion)); see also Mitchell v. Helms, 530 U.S. 793, 
827 (2000) (plurality opinion) (``The religious nature of a recipient 
should not matter to the constitutional analysis, so long as the 
recipient adequately furthers the government's secular purpose.''); 
Attorney General's Memorandum on Religious Liberty, principle 6 
(``Government may not target religious individuals or entities for 
special disabilities based on their religion.'').
    Applying the alternative provider requirement categorically to all 
faith-based providers and not to other providers of federally funded 
social services is thus in tension with the nondiscrimination principle 
articulated in Trinity Lutheran and the Attorney General's Memorandum 
on Religious Liberty.
    In addition, the alternative provider requirement could in certain 
circumstances raise implications under RFRA. Under RFRA, where the 
government substantially burdens an entity's exercise of religion, the 
government must prove that the burden is in furtherance of a compelling 
government interest and is the least restrictive means of furthering 
that interest. 42 U.S.C. 2000bb-1(b). The World Vision OLC opinion 
makes clear that when a faith-based grant recipient carries out its 
social service programs, it may engage in an exercise of religion 
protected by RFRA, and certain conditions on receiving those grants may 
substantially burden the religious exercise of the recipient. See 
Application of the Religious Freedom Restoration Act to the Award of a 
Grant Pursuant to a Juvenile Justice and Delinquency Prevention Act, 31 
O.L.C. 162, 169-71, 174-83 (June 29, 2007). Requiring faith-based 
organizations to comply with certain conditions in receiving social 
service grants could impose such a burden, such as in a case in which a 
faith-based organization has a religious objection to referring the 
beneficiary to an alternative provider that provided services in a 
manner that violated the organization's religious tenets. See Burwell 
v. Hobby Lobby Stores, Inc., 573 U.S. 682, 720-26 (2014). When imposing 
the alternative provider requirement in 2016, the agencies asserted an 
interest in informing beneficiaries of protections of their religious 
liberty. 81 FR 19353, 19365. But it is far from clear that the 
alternative provider requirement would meet the strict scrutiny that 
RFRA requires of laws that substantially burden religious practice. The 
Department has not received information concerning instances in which a 
beneficiary has actually sought an alternative provider, undermining 
the suggestion that the interests this requirement serves are in fact 
important, much less compelling enough to outweigh a substantial burden 
on religious exercise. Moreover, even if the government's interest is 
compelling, it is doubtful that imposing notification and referral 
requirements on faith-based organizations are the least restrictive 
means of achieving that interest. The Department often makes publicly 
available information about grant recipients that provide benefits 
under its programs, so the Department could supply information to 
beneficiaries seeking an alternate provider.
    Executive Order 13831 chose to eliminate the alternative provider 
requirement for good reason. This decision avoids tension with the 
nondiscrimination principle articulated in Trinity Lutheran and the 
Attorney General's Memorandum on Religious Liberty, avoids problems 
with RFRA that may arise, and fits within the Administration's broader 
deregulatory agenda.

Other Notice Requirements

    As noted above, Executive Order 13559 amended Executive Order 13279 
by adding a right to an alternative provider and notice of this right.
    While Executive Order 13559's requirement of notice to 
beneficiaries was limited to notice of alternative providers, Part 2 
Subpart D as most recently amended goes further than Executive Order 
13559 by requiring that faith-based social service providers funded 
with direct federal funds provide a much broader notice to 
beneficiaries and potential beneficiaries. This requirement applies 
only to faith-based providers and not to other providers. In addition 
to the notice of the right to an alternative provider, the rule 
requires notice of nondiscrimination based on religion; that 
participation in religious activities must be voluntary and separate in 
time or space from activities funded with direct federal funds; and 
that beneficiaries or potential beneficiaries may report violations.
    Separate and apart from these notice requirements, Executive Order 
13279, as amended, clearly sets forth the underlying requirements of 
nondiscrimination, voluntariness, and the holding of religious 
activities separate in time or place from any federally funded 
activity. Faith-based providers of social services, like other 
providers of social services, are required to follow the law and the 
requirements of grants and contracts they receive. See, e.g., 29 CFR 
38.25. There is no basis on which to presume that they are less likely 
than other social service providers to follow the law. See Mitchell, 
530 U.S. at 856-57 (O'Connor, J., concurring) (noting that in Tilton v. 
Richardson, 403 U.S. 672 (1971), the Court's upholding of grants to 
universities for construction of

[[Page 2932]]

buildings with the limitation that they only be used for secular 
educational purposes ``demonstrate[d] our willingness to presume that 
the university would abide by the secular content restriction.''). 
There is thus no need for prophylactic protections that create 
administrative burdens on faith-based providers that are not imposed on 
other providers.

Definition of Indirect Federal Financial Assistance

    Executive Order 13559 directed its Interagency Working Group on 
Faith-Based and Other Neighborhood Partnerships to propose model 
regulations and guidance documents regarding, among other things, ``the 
distinction between `direct' and `indirect' Federal financial 
assistance[.]'' 75 FR 71319, 71321 (2010). Following issuance of the 
Working Group's report, the 2016 joint final rule amended existing 
regulations to make that distinction, and to clarify that 
``organizations that participate in programs funded by indirect 
financial assistance need not modify their program activities to 
accommodate beneficiaries who choose to expend the indirect aid on 
those organizations' programs,'' need not provide notices or referrals 
to beneficiaries, and need not separate their religious activities from 
supported programs. 81 FR 19355, 19358 (2016). In so doing, the final 
rule attempted to capture the definition of ``indirect'' aid that the 
U.S. Supreme Court employed in Zelman v. Simmons-Harris, 536 U.S. 639 
(2002). See 81 FR 19355, 19361-62 (2016).
    In Zelman, the Court concluded that a government funding program is 
``one of true private choice''--that is, an indirect-aid program--where 
there is ``no evidence that the State deliberately skewed incentives 
toward religious'' providers. Id. at 650. The Court upheld the 
challenged school-choice program because it conferred assistance 
``directly to a broad class of individuals defined without reference to 
religion'' (i.e., parents of schoolchildren); it permitted 
participation by both religious and nonreligious educational providers; 
it allocated aid ``on the basis of neutral, secular criteria that 
neither favor nor disfavor religion''; and it made aid available ``to 
both religious and secular beneficiaries on a nondiscriminatory 
basis.'' Id. at 653-54 (quotation marks omitted). While the Court noted 
the availability of secular providers, it specifically declined to make 
its definition of indirect aid hinge on the ``preponderance of 
religiously affiliated private'' providers in the city, as that 
preponderance arose apart from the program; doing otherwise, the Court 
concluded, ``would lead to the absurd result that a neutral school-
choice program might be permissible in some parts of Ohio, . . . but 
not in'' others. Id. at 656-58. In short, the Court concluded that 
``[t]he constitutionality of a neutral . . . aid program simply does 
not turn on whether and why, in a particular area, at a particular 
time, most [providers] are run by religious organizations, or most 
recipients choose to use the aid at a religious [provider].'' Id. at 
658.
    The final rule issued after the Working Group's report included 
among its criteria for indirect federal financial assistance a 
requirement that beneficiaries have ``at least one adequate secular 
option'' for use of the federal financial assistance. See 81 FR 19355, 
19407-19426 (2016). In other words, the rule amended regulations to 
make the definition of ``indirect'' aid hinge on the availability of 
secular providers. A regulation defining ``indirect Federal financial 
assistance'' to require the availability of secular providers is in 
tension with the Supreme Court's choice not to make the definition of 
indirect aid hinge on the geographically varying availability of 
secular providers. Thus, it is appropriate to amend existing 
regulations to bring the definition of ``indirect'' aid more closely 
into line with the Supreme Court's definition in Zelman.

Overview of the Proposed Rule

    The Department proposes to amend Part 2 Subpart D to implement 
Executive Order 13831 and conform more closely to the Supreme Court's 
current First Amendment jurisprudence; relevant federal statutes such 
as RFRA; Executive Order 13279, as amended by Executive Orders 13559 
and 13831; and the Attorney General's Memorandum on Religious Liberty.
    Consistent with these authorities, this proposed rule would amend 
Part 2 Subpart D to conform to Executive Order 13279, as amended, by 
deleting the requirement that faith-based social service providers 
refer beneficiaries objecting to receiving services from them to an 
alternative provider and the requirement that faith-based organizations 
provide notices that are not required of secular organizations.
    This proposed rule would also make clear that a faith-based 
organization that participates in Department-funded programs or 
services shall retain its autonomy; right of expression; religious 
character; and independence from federal, state, and local governments. 
This autonomy extends to the particular features and attendance 
requirements a faith-based organization includes as ``fundamental'' in 
programs funded through indirect financial assistance.\1\ It would 
further clarify that none of the guidance documents that the Department 
or any state or local government uses in administering the Department's 
financial assistance shall require faith-based organizations to provide 
assurances or notices where similar requirements are not imposed on 
secular organizations, and that any restrictions on the use of grant 
funds shall apply equally to faith-based and secular organizations.
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    \1\ The Department invites comment on how this ``fundamental'' 
criterion could be further clarified or elaborated in any final 
rule.
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    This proposed rule would additionally require that the Department's 
notices and announcements of award opportunities and notices of awards 
and contracts include language clarifying the rights and obligations of 
faith-based organizations that apply for and receive federal funding. 
The language would clarify that, among other things, faith-based 
organizations may apply for awards on the same basis as any other 
organization; that the Department will not, in the selection of 
recipients, discriminate against an organization on the basis of the 
organization's religious exercise or affiliation; and that a faith-
based organization that participates in a federally funded program 
retains its independence from the government and may continue to carry 
out its mission consistent with religious freedom protections in 
federal law, including the Free Speech and Free Exercise Clauses of the 
First Amendment to the Constitution.
    The Department further proposes to include a requirement that 
notices or announcements of award opportunities and notices of awards 
or contracts shall include language similar to those found in 
appendices to the proposed rule, which serve as notice to potential 
recipients of federal financial assistance See, e.g., principles 6, 10-
15, and 20 of the Attorney General's Memorandum on Religious Liberty, 
82 FR 49668 (October 26, 2017); Application of the Religious Freedom 
Restoration Act to the Award of a Grant Pursuant to the Juvenile 
Justice and Delinquency Prevention Act, 31 Op. O.L.C. 162 (2007). This 
change is intended to ensure that faith-based organizations are aware 
of their legal protections so that they will not fail to participate in 
government programs because of confusion about what options are 
available to them.
    The Department also proposes to revise the prohibition that 
organizations

[[Page 2933]]

may not ``support or engage in any explicitly religious activity'' as 
part of a program or service funded with direct federal financial 
assistance to state instead that organizations may not ``engage in'' 
such activity. The inclusion of the word ``support'' is vague and 
overly broad and may encompass protected activity. For example, if a 
faith-based organization provides addiction counseling that is funded 
through direct federal financial assistance and provides attendees a 
map of the location that labels a room as a ``chapel,'' providing that 
map to program participants could raise claims that the organization is 
``supporting'' its explicitly religious activities because a program 
participant may see that the facility includes a chapel and thereby 
engage in such religious activity. Prohibiting organizations from 
``engaging in'' explicitly religious activity is sufficient to prevent 
any impermissible uses of direct federal financial assistance.
    Finally, the proposed rule would directly reference the definition 
of ``religious exercise'' in RFRA, and would amend the definition of 
``indirect Federal financial assistance'' to align more closely with 
the Supreme Court's definition in Zelman.

Explanations for the Proposed Amendments in 29 CFR Part 2 Subpart D

Title
    The Title of Subpart D is proposed to be changed in order to align 
the text more closely with Executive Order 13831, which uses the term 
``faith-based and community organizations,'' and to clarify that the 
rule encompasses organizations that may be nondenominational but 
clearly motivated by faith.
Section 2.31 Definitions
    Section 2.31(a)(2)(ii) is proposed to be changed in order clarify 
the text and eliminate extraneous language.
    Section 2.31(a)(2)(iii) is proposed to be deleted to align the text 
more closely with the First Amendment. See, e.g., Trinity Lutheran 
Church of Columbia, Inc. v. Comer, 137 S. Ct. 2012 (2017); Zelman v. 
Simmons-Harris, 536 U.S. 639 (2002).
    Section 2.31(a) is proposed to be modified in order to align the 
text more closely with Executive Order 13279, 67 FR 77141 (December 12, 
2002).
    Section 2.31(h) is proposed to be added to provide a definition of 
religious exercise that is aligned with the definition used in the 
Religious Freedom Restoration Act of 1993 (RFRA), 42 U.S.C. 2000bb et 
seq., and with the Religious Land Use and Individualized Persons Act of 
2000 (RLUIPA), 42 U.S.C. 2000cc-5(7)(A). See, e.g., principles 10-15 of 
the Attorney General's Memorandum on Religious Liberty, 82 FR 49668 
(October 26, 2017).
Section 2.32 Equal Participation of Faith-Based Organizations
    Section 2.32(a) is proposed to be changed in order to clarify the 
text by eliminating extraneous language and to align it more closely 
with RFRA by recognizing that DOL may accommodate religion in a manner 
consistent with the religion clauses of the First Amendment and by 
making clear that government may not discriminate for or against an 
organization based on its religious exercise. See, e.g., principles 6, 
10-15, and 20 of the Attorney General's Memorandum on Religious 
Liberty, 82 FR 49668 (October 26, 2017); Application of the Religious 
Freedom Restoration Act to the Award of a Grant Pursuant to the 
Juvenile Justice and Delinquency Prevention Act, 31 Op. O.L.C. 162 
(2007). Also, the term ``religious'' organizations is replaced with 
``faith-based'' organizations to align with the terminology used in 
Executive Order 13831.
    Section 2.32(b) is proposed to be changed in order to clarify the 
text by eliminating extraneous language and to align it more closely 
with the First Amendment and with RFRA by providing more detail about 
the autonomy from government that a faith-based organization retains 
while participating in government programs. See, e.g., E.O. 13279, 67 
FR 77141 (December 12, 2002), as amended by E.O. 13831, 83 FR 20715 
(May 8, 2018); principles 9-15, 19, and 20 of the Attorney General's 
Memorandum on Religious Liberty, 82 FR 49668 (October 26, 2017).
    Section 2.32(c) is proposed to be changed in order to clarify the 
text and align it more closely with the First Amendment and with RFRA 
by recognizing that faith-based providers shall not be required to 
provide notices or assurances where they are not required of non-faith-
based providers and by making clear that an organization may not be 
disqualified from participating in a DOL program because of its 
religious exercise or lack thereof. See, e.g., Trinity Lutheran Church 
of Columbia, Inc. v. Comer, 137 S. Ct. 2012 (2017); principles 6, 7, 
and 10-15 of the Attorney General's Memorandum on Religious Liberty, 82 
FR 49668 (October 26, 2017).
    Section[thinsp]2.33 Responsibilities of DOL, DOL social service 
providers and State and local governments administering DOL support.
    Section 2.33(a) is proposed to be changed to clarify that a faith-
based organization that participates in a program funded by indirect 
financial assistance may require that beneficiaries attend all 
activities that the organization includes as ``fundamental'' in its 
programs. For example, a drug rehabilitation and job training program 
funded by indirect financial assistance need not be modified to 
eliminate attendance at all associated religious programs fundamental 
to the program. This change is intended to align the text more closely 
with the First Amendment and with RFRA. See, e.g., Zelman v. Simmons-
Harris, 536 U.S. 639 (2002); principles 10-15 of the Attorney General's 
Memorandum on Religious Liberty, 82 FR 49668 (October 26, 2017).
    Section 2.33(c) is proposed to be changed in accordance with 
Executive Order 13831, 83 FR 20715 (May 3, 2018).
Section[thinsp]2.34 Beneficiary Protections: Written Notice
    Section 2.34 is proposed to be removed (and reserved) to align more 
closely with the First Amendment and with RFRA for the reasons 
discussed above. See, e.g., Trinity Lutheran Church of Columbia, Inc. 
v. Comer, 137 S. Ct. 2012 (2017); Zelman v. Simmons-Harris, 536 U.S. 
639 (2002); principles 2, 3, 6-7, 9-17, 19, and 20 of the Attorney 
General's Memorandum on Religious Liberty, 82 FR 49668 (October 26, 
2017); E.O. 13279, 67 FR 77141 (December 12, 2002), as amended by E.O. 
13559, 75 FR 71319 (November 17, 2010), and E.O. 13831, 83 FR 20715 
(May 8, 2018).
Section[thinsp]2.35 Beneficiary Protections: Referral Requirements
    Section 2.35 is proposed to be removed (and reserved) to align more 
closely with the First Amendment and with RFRA for the reasons 
discussed above. See, e.g., Trinity Lutheran Church of Columbia, Inc. 
v. Comer, 137 S. Ct. 2012 (2017); Zelman v. Simmons-Harris, 536 U.S. 
639 (2002); principles 2, 3, 6-7, 9-17, 19, and 20 of the Attorney 
General's Memorandum on Religious Liberty, 82 FR 49668 (October 26, 
2017); E.O. 13279, 67 FR 77141 (December 12, 2002), as amended by E.O. 
13559, 75 FR 71319 (November 17, 2010), and E.O. 13831, 83 FR 20715 
(May 8, 2018).

[[Page 2934]]

Section[thinsp]2.37 Effect of DOL Support on Title VII Employment 
Nondiscrimination Requirements and on Other Existing Statutes
    Section 2.37 is proposed to be changed in order to clarify the text 
by eliminating extraneous language and to align it more closely with 
RFRA and Title VII case law. See, e.g., Kennedy v. St. Joseph's 
Ministries, Inc., 657 F.3d 189, 194 (4th Cir. 2011); Hall v. Baptist 
Mem'l Health Care Corp., 215 F.3d 618, 624 (6th Cir. 2000); Killinger 
v. Samford Univ., 113 F.3d 196, 200 (11th Cir. 1997); Little v. Wuerl, 
929 F.2d 944, 951 (3d Cir. 1991); principles 6, 10-17, 19 and 20 of the 
Attorney General's Memorandum on Religious Liberty, 82 FR 49668 
(October 26, 2017); Application of the Religious Freedom Restoration 
Act to the Award of a Grant Pursuant to the Juvenile Justice and 
Delinquency Prevention Act, 31 Op. O.L.C. 162 (2007).
Section[thinsp]2.38 Status of Nonprofit Organizations
    Section 2.38(b)(5) is proposed to be added in order to align more 
closely with RFRA. See, e.g., principles 10-15 of the Attorney 
General's Memorandum on Religious Liberty, 82 FR 49668 (October 26, 
2017). For any entity that holds a sincerely-held religious belief that 
it cannot apply for a determination as an entity that is tax exempt 
under section 501(c)(3) of the Internal Revenue Code, the entity may 
provide information otherwise provided on the Form 1023 such as 
information about the organization, its purposes, a narrative 
description of its activities, limitations on disposition of assets of 
the organization, compensation and other financial arrangements with 
its officers, directors, trustees, employees, and independent 
contractors, etc. Other legally binding documents that establish that 
no part of the net earnings of the organization may lawfully benefit 
any private shareholder or individual may also be appropriate.
Section[thinsp]2.39 Political or Religious Affiliation
    Section 2.39 is proposed to be changed to include revised language 
that was inadvertently omitted in publishing the 2016 final rule: ``The 
last clause of 29 CFR 2.39 in the final regulation will be modified 
from `not on the basis of religion or religious belief' to `not on the 
basis of the religious affiliation of a recipient organization or lack 
thereof.' '' 81 FR 19394.
Section 2.40 Nondiscrimination Among Faith-Based Organizations
    Section 2.40 is proposed to be added in order to align more closely 
with the First Amendment by making clear that these provisions relating 
to nondiscrimination toward faith-based organizations should not be 
construed to advantage or disadvantage historically recognized 
religions or sects over other religions or sects. See, e.g., Larson v. 
Valente, 456 U.S. 228 (1982); principle 8 of the Attorney General's 
Memorandum on Religious Liberty, 82 FR 49668 (October 26, 2017).
Appendix A and Appendix B
    Appendix A and Appendix B are proposed to be changed to align the 
text more closely with the First Amendment and with RFRA by deleting 
the notice and referral requirements that solely burdened faith-based 
organizations and instead requiring notices of the terms on which 
faith-based organizations may generally participate in DOL-funded 
programs. See, e.g., Trinity Lutheran Church of Columbia, Inc. v. 
Comer, 137 S. Ct. 2012 (2017); Zelman v. Simmons-Harris, 536 U.S. 639 
(2002); principles 2, 3, 6-7, 9-17, 19, and 20 of the Attorney 
General's Memorandum on Religious Liberty, 82 FR 49668 (October 26, 
2017); E.O. 13279, 67 FR 77141 (December 12, 2002), as amended by E.O. 
13559, 75 FR 71319 (November 17, 2010), and E.O. 13831, 83 FR 20715 
(May 8, 2018). The Department also proposes to revise the prohibition 
that organizations may not ``support or engage in any explicitly 
religious activity'' as part of a program or service funded with direct 
federal financial assistance to state, instead, that organizations may 
not ``engage in'' such activity. The inclusion of the word ``support'' 
is vague and overly broad and may encompass protected activity.

III. Regulatory Certifications

Analysis Conducted in Accordance With Executive Order 12866, Regulatory 
Planning and Review, Executive Order 13563, Improved Regulation and 
Regulatory Review, and Executive Order 13771, Reducing Regulation and 
Controlling Regulatory Costs

    This NPRM has been drafted in accordance with Executive Order 13563 
of January 18, 2011, 76 FR 3821, Improving Regulation and Regulatory 
Review; Executive Order 12866 of September 30, 1993, 58 FR 51735, 
Regulatory Planning and Review; and Executive Order 13771 of January 
30, 2017, 82 FR 9339, Reducing Regulation and Controlling Regulatory 
Costs. Executive Order 12866 directs agencies, to the extent permitted 
by law, to propose or adopt a regulation only upon a reasoned 
determination that its benefits justify its costs; tailor the 
regulation to impose the least burden on society, consistent with 
obtaining the regulatory objectives; and, in choosing among alternative 
regulatory approaches, select those approaches that maximize net 
benefits. Executive Order 13563 recognizes that some benefits and costs 
are difficult to quantify and provides that, where appropriate and 
permitted by law, agencies may consider and discuss qualitatively 
values that are difficult or impossible to quantify, including equity, 
human dignity, fairness, and distributive impacts.
    Under Executive Order 12866, the Office of Information and 
Regulatory Affairs (OIRA) must determine whether this regulatory action 
is ``significant'' and, therefore, subject to the requirements of the 
executive order and subject to review by the Office of Management and 
Budget (OMB). Section 3(f) of Executive Order 12866 defines a 
``significant regulatory action'' as an action likely to result in a 
regulation 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 
(also referred to as an ``economically significant'' regulation);
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impacts 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 stated in 
Executive Order 12866.
    OIRA has determined that this proposed rule is a significant, but 
not economically significant, regulatory action subject to review by 
OMB under section 3(f) of Executive Order 12866. Accordingly, OMB has 
reviewed this proposed rule.
    The Department has also reviewed these regulations under Executive 
Order 13563, which supplements and reaffirms the principles, 
structures, and definitions governing regulatory review established in 
Executive Order 12866. To the extent permitted by law, section 1(b) of 
Executive Order 13563 requires that an agency:
    (1) Propose or adopt regulations only upon a reasoned determination 
that

[[Page 2935]]

their benefits justify their costs (recognizing that some benefits and 
costs are difficult to quantify);
    (2) Tailor its regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives, and taking into 
account--among other things and to the extent practicable--the costs of 
cumulative regulations;
    (3) In choosing among alternative regulatory approaches, select 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity);
    (4) To the extent feasible, specify performance objectives, rather 
than the behavior or manner of compliance that regulated entities must 
adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including providing economic incentives--such as user fees 
or marketable permits--to encourage the desired behavior, or providing 
information that enables the public to make choices.
    76 FR 3821, 3821 (January 21, 2011). Section 1(c) of Executive 
Order 13563 also requires an agency ``to use the best available 
techniques to quantify anticipated present and future benefits and 
costs as accurately as possible.'' Id. The Office of Information and 
Regulatory Affairs of OMB has emphasized that these techniques may 
include ``identifying changing future compliance costs that might 
result from technological innovation or anticipated behavioral 
changes.'' Memorandum for the Heads of Executive Departments and 
Agencies, and of Independent Regulatory Agencies, from Cass R. 
Sunstein, Administrator, Office of Information and Regulatory Affairs, 
Re: Executive Order 13563, ``Improving Regulation and Regulatory 
Review,'' at 1 (February 2, 2011), available at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/2011/m11-10.pdf.
    The Department is issuing these proposed regulations upon a 
reasoned determination that their benefits justify their costs. In 
choosing among alternative regulatory approaches, the Department 
selected those approaches that maximize net benefits. Based on the 
analysis that follows, the Department believes that these proposed 
regulations are consistent with the principles in Executive Order 
13563. It is the reasoned determination of the Department that this 
proposed action would, to a significant degree, eliminate costs that 
have been incurred by faith-based organizations as they complied with 
the requirements of section 2(b) of Executive Order 13559, while not 
adding any other requirements on those organizations.
    The Department also has determined that this regulatory action does 
not unduly interfere with State, local, or tribal governments in the 
exercise of their governmental functions.
    In accordance with Executive Orders 12866 and 13563, the Department 
has assessed the potential costs and benefits, both quantitative and 
qualitative, of this regulatory action. The potential costs and cost 
savings associated with this regulatory action are those resulting from 
the removal of the notification and referral requirements of Executive 
Order 13279, as amended by Executive Order 13559 and further amended by 
Executive Order 13831, and those determined to be necessary for 
administering the Department's programs and activities. For example, 
the Department recognizes that the removal of the notice and referral 
requirements could impose some costs on beneficiaries who may now need 
to investigate alternative providers on their own if they object to the 
religious character of a potential social service provider. The 
Department invites comment on any information that it could use to 
quantify this potential cost. The Department also notes a quantifiable 
cost savings of the removal of the notice requirements, which the 
Department previously estimated as imposing a cost of no more than $200 
per organization per year for the notices. 81 FR 19395. The Department 
was previously unable to quantify the cost of the referral requirement. 
Id. The Department invites comment on any data by which it could assess 
the actual implementation costs of the notice and referral 
requirements--including the number of affected organizations, any 
estimates of staff time spent on compliance with the requirements, in 
addition to the printing costs for the notices referenced above--and 
thereby accurately quantify the cost savings of removing these 
requirements in the final rule.
    In terms of benefits, the Department recognizes a non-quantified 
benefit to religious liberty that comes from removing requirements 
imposed solely on faith-based organizations, in tension with the 
principles of free exercise articulated in Trinity Lutheran. The 
Department also recognizes a non-quantified benefit to grant recipients 
and beneficiaries alike that comes from increased clarity in the 
regulatory requirements that apply to faith-based organizations 
operating social service programs funded by the federal government. 
Beneficiaries will also benefit from the increased capacity of faith-
based social service providers to provide services, both because these 
providers will be able to shift resources otherwise spent fulfilling 
the notice and referral requirements to provision of services, and 
because more faith-based social service providers may participate in 
the marketplace under these streamlined regulations.
    This proposed rule is expected to be an Executive Order 13771 
deregulatory action.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA), generally requires an agency to prepare a regulatory 
flexibility analysis of any rule subject to the notice and comment 
rulemaking requirements under the Administrative Procedure Act (5 
U.S.C. 553) or any other statute, unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities.
    The Department has determined that this rule will not have a 
significant economic impact on a substantial number of small entities. 
Consequently, the Department has not prepared a regulatory flexibility 
analysis.

Executive Order 12988: Civil Justice Reform

    This proposed rule has been reviewed in accordance with Executive 
Order 12988, ``Civil Justice Reform.'' The provisions of this proposed 
rule will not have preemptive effect with respect to any State or local 
laws, regulations, or policies that conflict with such provision or 
which otherwise impede their full implementation. The rule will not 
have retroactive effect.

Executive Order 13175: Consultation and Coordination With Indian Tribal 
Governments

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' Executive Order 13175 requires federal agencies 
to consult and coordinate with tribes on a government-to-government 
basis on policies that have tribal implications, including regulations, 
legislative comments or proposed legislation, and other policy 
statements or actions that have substantial direct effects on one or 
more Indian tribes, on the relationship between the federal government 
and Indian tribes or on the distribution of power and responsibilities 
between the federal government and Indian tribes.

[[Page 2936]]

    The Department has assessed the impact of this rule on Indian 
tribes and determined that this rule does not, to our knowledge, have 
tribal implications that require tribal consultation under Executive 
Order 13175.

Executive Order 13132: Federalism

    Executive Order 13132 directs that, to the extent practicable and 
permitted by law, an agency shall not promulgate any regulation that 
has federalism implications, that imposes substantial direct compliance 
costs on State and local governments, that is not required by statute, 
or that preempts State law, unless the agency meets the consultation 
and funding requirements of section 6 of the Executive Order. Because 
each change proposed by this rule does not have federalism implications 
as defined in the Executive Order, does not impose direct compliance 
costs on State and local governments, is required by statute, or does 
not preempt State law within the meaning of the Executive Order, the 
Department has concluded that compliance with the requirements of 
section 6 is not necessary.

Plain Language Instructions

    The Department makes every effort to promote clarity and 
transparency in its rulemaking. In any regulation, there is a tension 
between drafting language that is simple and straightforward and 
drafting language that gives full effect to issues of legal 
interpretation. The Department is proposing a number of changes to this 
regulation to enhance its clarity and satisfy the plain language 
requirements. If any commenter has suggestions for how the regulation 
could be written more clearly, please provide comments using the 
contact information provided in the introductory section of this 
proposed rule entitled, FOR FURTHER INFORMATION CONTACT.

Paperwork Reduction Act

    This proposed rule does not contain any new or revised 
``collection[s] of information'' as defined by the Paperwork Reduction 
Act of 1995, 44 U.S.C. 3501 et seq.

Unfunded Mandates Reform Act

    Section 4(2) of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 
1503(2), excludes from coverage under that Act 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.'' Accordingly, this 
rulemaking is not subject to the provisions of the Unfunded Mandates 
Reform Act.

List of Subjects in 29 CFR Part 2

    Administrative practice and procedure, Claims, Courts, Government 
employees, Religious discrimination.
    Accordingly, for the reasons set forth in the preamble, part 2 of 
Title 29 of the Code of Federal Regulations is proposed to be amended 
as follows:

PART 2--GENERAL REGULATIONS

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

    Authority: 5 U.S.C. 301; E.O. 13198, 66 FR 8497; E.O. 13279, 67 
FR 77141; E.O. 13559, 75 FR 71319; E.O. 13831, 83 FR 20715.

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

0
2. Amend Sec.  2.31 by revising paragraph (a) introductory text, 
(a)(2), and adding paragraph (h) as follows:


Sec.  2.31  Definitions.

    (a) The term Federal financial assistance means assistance that 
non-Federal entities (including State and local governments) receive or 
administer in the form of grants, contracts, loans, loan guarantees, 
property, cooperative agreements, direct appropriations, or other 
direct or indirect assistance, but does not include a tax credit, 
deduction, or exemption, nor the use by a private participant of 
assistance obtained through direct benefit programs (such as SNAP, 
social security, pensions). Federal financial assistance may be direct 
or indirect.
* * * * *
    (2) The term indirect Federal financial assistance or Federal 
financial assistance provided indirectly means that the choice of the 
service provider is placed in the hands of the beneficiary, and the 
cost of that service is paid through a voucher, certificate, or other 
similar means of government-funded payment. Federal financial 
assistance provided to an organization is considered indirect when:
    (i) The Government program through which the beneficiary receives 
the voucher, certificate, or other similar means of Government-funded 
payment is neutral toward religion; and
    (ii) The organization receives the assistance as a result of a 
genuine, independent choice of the beneficiary.
* * * * *
    (h) The term religious exercise has the meaning given to the term 
in 42 U.S.C. 2000cc-5(7)(A).
0
3. Revise Sec.  2.32 to read as follows:


Sec.  2.32  Equal participation of faith-based organizations.

    (a) Faith-based organizations must be eligible, on the same basis 
as any other organization and considering any reasonable accommodation, 
to seek DOL support or participate in DOL programs for which they are 
otherwise eligible. DOL and DOL social service intermediary providers, 
as well as State and local governments administering DOL support, must 
not discriminate for or against an organization on the basis of the 
organization's religious exercise or affiliation, although this 
requirement does not preclude DOL, DOL social service providers, or 
State or local governments administering DOL support from accommodating 
religion in a manner consistent with the Religion Clauses of the First 
Amendment to the Constitution. In addition, because this rule does not 
affect existing constitutional requirements, DOL, DOL social service 
providers (insofar as they may otherwise be subject to any 
constitutional requirements), and State and local governments 
administering DOL support must continue to comply with otherwise 
applicable constitutional principles, including, among others, those 
articulated in the Establishment, Free Speech, and Free Exercise 
Clauses of the First Amendment to the Constitution. Notices and 
announcements of award opportunities and notices of award and contracts 
shall include language substantially similar to that in Appendices A 
and B, respectively, to this part.
    (b) A faith-based organization that is a DOL social service 
provider retains its autonomy; right of expression; religious 
character; and independence from Federal, State, and local governments 
and must be permitted to continue to carry out its mission, including 
the definition, development, practice, and expression of its religious 
beliefs. Among other things, such a faith-based organization must be 
permitted to:
    (1) Use its facilities to provide DOL-supported social services 
without concealing, removing, or altering religious art, icons, 
scriptures, or other religious symbols from those facilities; and
    (2) Retain its authority over its internal governance, including 
retaining religious terms in its name, selecting its board members on 
the basis of their acceptance of or adherence to the religious 
requirements or standards of the organization, and including

[[Page 2937]]

religious references in its mission statements and other governing 
documents.
    (c) A grant document, contract or other agreement, covenant, 
memorandum of understanding, policy, or regulation that is used by DOL, 
a State or local government administering DOL support, or a DOL social 
service intermediary provider must not require faith-based 
organizations to provide assurances or notices where they are not 
required of non-faith-based organizations. Any restrictions on the use 
of grant funds shall apply equally to faith-based and non-faith-based 
organizations. All organizations, including religious ones that are DOL 
social service providers, must carry out DOL-supported activities, 
subject to any required or appropriate religious accommodation, in 
accordance with all program requirements, including those prohibiting 
the use of direct DOL support for explicitly religious activities 
(including worship, religious instruction, or proselytization). A grant 
document, contract or other agreement, covenant, memorandum of 
understanding, policy, or regulation that is used by DOL, a State or 
local government, or a DOL social service intermediary provider in 
administering a DOL social service program must not disqualify 
organizations from receiving DOL support or participating in DOL 
programs because such organizations are motivated or influenced by 
religious faith to provide social services, or because of their 
religious exercise or affiliation, or lack thereof.


Sec.  2.33  [Amended]

0
4. Amend Sec.  2.33 as follows:
0
a. In paragraph (a), by adding ``and may require attendance at all 
activities that are fundamental to the program'' after ``organization's 
program''.
0
b. In paragraph (c), by adding ``and further amended by Executive Order 
13831'' after ``13559''.


Sec. Sec.  2.34 and 2.35  [Removed and Reserved]

0
5. Remove and reserve Sec. Sec.  2.34 and 2.35.
0
6. Revise Sec.  2.37 to read as follows:


Sec.  2.37  Effect of DOL support on Title VII employment 
nondiscrimination requirements and on other existing statutes.

    A religious organization's exemption from the Federal prohibition 
on employment discrimination on the basis of religion, set forth in 
section[thinsp]702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-
1, is not forfeited when the organization receives direct or indirect 
DOL support. An organization qualifying for such exemption may make its 
employment decisions on the basis of their acceptance of or adherence 
to the religious requirements or standards of the organization, but not 
on the basis of any other protected characteristic. Some DOL programs, 
however, were established through Federal statutes containing 
independent statutory provisions requiring that recipients refrain from 
discriminating on the basis of religion. Accordingly, to determine the 
scope of any applicable requirements, including in light of any 
additional constitutional or statutory protections for employment 
decisions that may apply, recipients and potential recipients should 
consult with the appropriate DOL program official or with the Civil 
Rights Center, U.S. Department of Labor, 200 Constitution Avenue NW, 
Room N4123, Washington, DC 20210, (202) 693-6500. Individuals with 
hearing or speech impairments may access this telephone number via TTY 
by calling the toll-free Federal Information Relay Service at 1-800-
877-8339.
0
7. In Sec.  2.38, revise paragraphs (b)(3) and (4) and add paragraph 
(b)(5) to read as follows:


Sec.  2.38  Status of nonprofit organizations.

* * * * *
    (b) * * *
    (3) A certified copy of the applicant's certificate of 
incorporation or similar document that clearly establishes the 
nonprofit status of the applicant;
    (4) Any item described in paragraphs (b)(1) through (b)(3) of this 
section, if that item applies to a State or national parent 
organization, together with a statement by the State or national parent 
organization that the applicant is a local nonprofit affiliate of the 
organization; or
    (5) For an entity that holds a sincerely-held religious belief that 
it cannot apply for a determination as an entity that is tax exempt 
under section 501(c)(3) of the Internal Revenue Code, evidence 
sufficient to establish that the entity would otherwise qualify as a 
nonprofit organization under paragraphs (b)(1) through (b)(4) of this 
section.


Sec.  2.39  [Amended]

0
8. Amend Sec.  2.39 by removing ``not on the basis of religion or 
religious belief or lack thereof '' and add in its place ``not on the 
basis of the religious affiliation of a recipient organization or lack 
thereof.''
0
9. Add a new Sec.  2.40 to read as follows:


Sec.  2.40  Nondiscrimination among faith-based organizations.

    Neither DOL nor any State or local government or other entity 
receiving funds under any DOL program or service shall construe the 
provisions of this part in such a way as to advantage or disadvantage 
faith-based organizations affiliated with historic or well-established 
religions or sects in comparison with other religions or sects.
0
10. Revise Appendix A and Appendix B to Part 2 to read as follows:

Appendix A to Part 2--Notice or Announcement of Award Opportunities

    Faith-based organizations may apply for this award on the same 
basis as any other organization, as set forth at, and subject to the 
protections and requirements of, part 2 subpart D and 42 U.S.C. 
2000bb et seq. DOL will not, in the selection of recipients, 
discriminate against an organization on the basis of the 
organization's religious exercise or affiliation.
    A faith-based organization that participates in this program 
will retain its independence from the government and may continue to 
carry out its mission consistent with religious freedom protections 
in federal law, including the Free Speech and Free Exercise Clauses 
of the First Amendment, 42 U.S.C. 2000bb et seq., 42 U.S.C. 238n, 42 
U.S.C. 18113, 42 U.S.C. 2000e-1(a) and 2000e-2(e), 42 U.S.C. 
12113(d), and the Weldon Amendment, among others. Religious 
accommodations may also be sought under many of these religious 
freedom protection laws.
    A faith-based organization may not use direct financial 
assistance from DOL to engage in any explicitly religious activities 
except where consistent with the Establishment Clause of the First 
Amendment to the Constitution and any other applicable requirements. 
Such an organization also may not, in providing services funded by 
DOL, discriminate against a program beneficiary or prospective 
program beneficiary on the basis of religion, a religious belief, a 
refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice.

Appendix B to Part 2--Notice of Award or Contract

    A faith-based organization that participates in this program 
retains its independence from the government and may continue to 
carry out its mission consistent with religious freedom protections 
in federal law, including the Free Speech and Free Exercise Clauses 
of the First Amendment to the Constitution, 42 U.S.C. 2000bb et 
seq., 42 U.S.C. 238n, 42 U.S.C. 18113, 42 U.S.C. 2000e-1(a) and 
2000e-2(e), 42 U.S.C. 12113(d), and the Weldon Amendment, among 
others. Religious accommodations may also be sought under many of 
these religious freedom protection laws.
    A faith-based organization may not use direct financial 
assistance from DOL to engage in any explicitly religious activities 
except when consistent with the Establishment Clause of the First 
Amendment and any other applicable requirements. Such an 
organization also may not, in providing services funded by DOL, 
discriminate against a program beneficiary or prospective program 
beneficiary on the basis

[[Page 2938]]

of religion, a religious belief, a refusal to hold a religious 
belief, or a refusal to attend or participate in a religious 
practice.

    Dated: December 9, 2019.
Eugene Scalia,
Secretary, U.S. Department of Labor.
[FR Doc. 2019-26862 Filed 1-16-20; 8:45 am]
 BILLING CODE P