[Federal Register: December 17, 2002 (Volume 67, Number 242)]
[Proposed Rules]
[Page 77367-77371]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17de02-23]
[[Page 77367]]
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Part V
Department of Health and Human Services
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Administration for Children and Families
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45 CFR Part 1050
Charitable Choice Provisions Applicable to Programs Authorized Under
the Community Services Block Grant Act; Proposed Rule
[[Page 77368]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
45 CFR Part 1050
RIN 0970-AC13
Charitable Choice Provisions Applicable to Programs Authorized
Under the Community Services Block Grant Act
AGENCY: Administration for Children and Families (ACF), Department of
Health and Human Services (HHS).
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement the Charitable Choice
statutory provisions at section 679 of the Community Services Block
Grant Act (``CSBG Act''). These provisions apply to programs authorized
under the Act, including the Community Services Block grant program,
Training, Technical Assistance and Capacity Building program, Community
Food and Nutrition Program, National Youth Sports program, and
discretionary grants for economic development, rural community
development, and neighborhood innovation, which are all administered by
the Administration for Children and Families (ACF). It is ACF's policy
that, within the framework of constitutional church-state guidelines,
faith-based organizations should be able to compete on an equal footing
for funding, and ACF supports the participation of faith-based
organizations in these programs.
DATES: Consideration will be given to comments received by February 18,
2003.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to Administration for Children and Families, Office
of Community Services, 370 L'Enfant Promenade, SW., 5th floor,
Washington, DC 20447. Attention: Clarence Carter. Comments will be
available for public inspection Monday through Friday 8:30 a.m. to 5
p.m. on the 5th floor of the Department's offices at the above address.
You may also transmit comments electronically via the Internet at:
http://www.acf.dhhs.gov/ hypernews/. To download an electronic version
of the rule, you should access ACF's regulation page at: http://www.acf.dhs.gov/budget/html
.
FOR FURTHER INFORMATION CONTACT: Clarence Carter, (202) 401-9333.
SUPPLEMENTARY INFORMATION:
I. Statutory Authority
This proposed regulation is issued under the authority granted to
the Secretary of Health and Human Services (the Secretary) by 42 U.S.C.
9901. Section 9901 sets forth provisions authorizing States to provide
an opportunity for active participation by faith based groups, as well
as charitable, private, and neighborhood based organizations, in
programs directed to eliminate poverty.
II. Background
Title II of the Community Opportunities, Accountability, and
Training and Education Services Act of 1998 (COATS) (Pub. L. 105-285)
set forth certain ``Charitable Choice'' provisions clarifying Federal,
State, and local authority to use religious organizations to provide
benefits and services that help families achieve self-sufficiency in
programs authorized under the CSBG Act. In addition to giving families
a greater choice of providers, these provisions set forth certain
requirements to ensure that religious organizations are able to compete
on an equal footing for funds without impairing the religious character
of such organizations and without diminishing the religious freedom of
the CSBG Act recipients.
President Bush has made it one of his Administration's top
priorities to ensure that Federal programs are fully open to faith-
based and community groups in a manner that is consistent with the
Constitution. It is the Administration's view that faith-based
organizations are an indispensable part of the social services network
of the United States. Faith-based organizations, including places of
worship, nonprofit organizations, and neighborhood groups, offer scores
of social services to those in need. The Charitable Choice provisions
in the CSBG Act are consistent with the Administration's belief that
there should be an equal opportunity for all organizations--both faith-
based and nonreligious--to participate as partners in Federal programs
to serve Americans in need.
III. Regulatory Provisions
The Charitable Choice provisions in the CSBG Act contain important
protections both for religious organizations that receive funding and
for the individuals who receive their services. This proposed rule
would implement the Charitable Choice provisions applicable to Federal,
State, and local governments when funding public and private
organizations--including religious organizations. The objective of this
proposed rule is to ensure that the CSBG Act programs are open to all
eligible organizations, regardless of their religious affiliation or
character, and to establish clearly the proper uses of CSBG Act funds
and the conditions for receipt of funding.
Under the proposed rule a new Part 1050, ``Charitable Choice Under
the Community Services Block Grant Programs,'' would be added to Title
45 of the Code of Federal Regulations. We propose to add three sections
under this part.
First, section 1050.1, ``Scope,'' would provide that this part
applies to all programs authorized in the Community Services Block
Grant Act.
Second, section 1050.2, ``Definitions,'' would provide the
following definitions applicable to this proposed new part:
Applicable Program means any program authorized under Title II
of the Community Opportunities, Accountability, and Training and
Education Act of 1998, 42 U.S.C. 9901, et. seq.
Direct funding, directly funded, or funding provided directly
means funding that is provided to an organization directly from a
governmental entity or an intermediate organization, as opposed to
funding that an organization receives as a result of the genuine and
independent private choice of a beneficiary.
Intermediate Organization means a non-governmental organization
that is authorized by the terms of a contract, grant or other
agreement with the Federal Government, or a State or local
government, to select other non-governmental organizations to
provide assistance under an applicable program. For example, when a
State uses CSBG funds to pay for technical assistance services
provided by a private entity and also authorizes that entity to
subcontract for a portion of the technical assistance effort, the
private entity is an intermediate organization.
Program Beneficiary or Recipient means an individual who
receives services under a program funded in whole or part by an
applicable program.
Program Participant means a public or private entity that has
received financial assistance under an applicable program.
Religious organization means a nonprofit religious organization.
The third and final section of the proposed new part, ``What
Conditions Apply to the Charitable Choice Provisions of the CSBG Act?''
would be found at section 1050.3. Introductory language would speak to
the applicability of the Charitable Choice provisions of the CSBG Act.
Specifically, the rules would provide that the Charitable Choice
provisions apply whenever the Federal government, or State or local
governments, provide awards, contracts, or other assistance under any
program authorized in the Community Services
[[Page 77369]]
Block Grant Act, 42 U.S.C. 9901, et seq. Additionally, these provisions
apply whenever an intermediate organization acting under a contract,
grant, or other agreement with a Federal, State, or local government
entity selects another nongovernmental organizations to provide
assistance under any of the programs authorized in the CSBG Act.
However, because the Charitable Choice provisions refer only to
Federal, State and local governments, these provisions do not apply to
Tribal governments operating CSBG programs under section 677 of the
Community Services Block Grant Act.
The CSBG Charitable Choice rules apply to programs carried out
under the CSBG statute. When a program is funded by CSBG as well as by
other Federal sources, the CSBG Charitable Choice rules apply to the
use of those funds except to the extent that the Charitable Choice
provisions are inconsistent with provisions applicable to the other
funding sources.
Section 1050.3 of the proposed rule would contain the following
elements:
[sbull] Equal Treatment for Religious Organizations. The Charitable
Choice provision in the CSBG Act clarifies the rights of faith-based
organizations that receive funding. The proposed rule would make clear
under paragraph (a) of section 1050.3 that organizations are eligible
to participate in assistance programs without regard to their religious
character or affiliation, and that organizations may not be excluded
from the competition for program funds simply because they are
religious. Specifically, religious organizations are eligible to
compete for funding on the same basis, and under the same eligibility
requirements, as all other nonprofit organizations. The Federal
government, and State and local governments and intermediate
organizations administering programs under the CSBG Act, are prohibited
from discriminating against organizations on the basis of religion or
their religious character.
The Charitable Choice provisions must be implemented within the
context of the authorizing legislation. The Community Services Block
Grant program under the CSBG Act contains specific requirements
concerning CSBG eligible entities. The law requires that all eligible
entities in that program administer CSBG funds ``through a tripartite
board * * * that fully participates in the development, planning,
implementation, and evaluation of the program to serve low-income
communities.'' (42 U.S.C. 9910). Section 9910 further requires that the
tripartite board include equal representation from elected public
officials, representatives of low-income families in the neighborhoods
served, and officials or members of business, industry, labor,
religious, law enforcement, education or other major groups interested
in the community served.
[sbull] Restriction on Religious Activities by Organizations that
Receive Direct CSBG Funding. Paragraph (b) of section 1050.3 of the
proposed rule describes limitations on the use of funds provided under
the CSBG Act directly to an organization by a governmental entity or by
an intermediate organization that has the same duties as a governmental
entity, as opposed to those funds that an organization receives as the
result of the genuine and independent private choice of a
beneficiary.\1\ Specifically, program funds that are provided directly
to a participating organization may not be used to support inherently
religious activities, such as worship, religious instruction, or
proselytization. If the organization engages in such activities, the
activities must be offered separately, in time or location, from the
programs or services for which it receives direct funding under the
CSBG Act, and participation must be voluntary for the program
participants. This requirement ensures that program funds provided
directly to religious organizations are not used to support inherently
religious activities. Thus, funds provided directly under the CSBG Act
to a participating organization may not be used, for example, to
conduct prayer meetings, studies of sacred texts, or any other activity
that is inherently religious. Additionally, organizations may not fund
these activities with cost sharing or matching funds, which must be
used in a manner consistent with the federal funds.
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\1\ In the Charitable Choice context, the term ``direct''
funding is used to describe funds that are provided ``directly'' by
a governmental entity or an intermediate organization with the same
duties as a governmental entity, as opposed to funds that an
organization receives as the result of the genuine and independent
private choice of a beneficiary. In other contexts, the term
``direct'' funding may be used to refer to those funds that an
organization receives directly from the Federal government (also
known as ``discretionary'' funding), as opposed to funding that it
receives from a State or local government (also known as
``indirect'' or ``block grant'' funding). In these proposed
regulations, the term ``direct'' has the former meaning.
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This restriction does not mean that an organization that receives
direct funding under the CSBG Act cannot engage in inherently religious
activities. It simply means such an organization cannot fund these
activities with such funds provided directly from a government source
or an intermediate organization that has the same duties as a
governmental entity. Thus, faith-based organizations that receive
direct funding must take steps to separate, in time or location, their
inherently religious activities from the government- or intermediate
organization-funded services that they offer.
In addition, any participation by a beneficiary in such religious
activities must be voluntary. An invitation to participate in an
organization's religious activities is not in itself inappropriate.
However, participating religious organizations must be careful to
reassure program beneficiaries that they will receive services even if
they do not participate in these activities, and that their decision
will have no bearing on the services they receive. In short, any
participation by recipients of services in such religious activities
must be voluntary and understood to be voluntary.
These restrictions on inherently religious activities do not apply
where CSBG funds are provided to religious organizations as a result of
a genuine and independent private choice of a program beneficiary. A
religious organization may receive funds as the result of a
beneficiary's genuine and independent private choice if, for example, a
beneficiary redeems a voucher, coupon, certificate, or similar funding
mechanism that was provided to that individual under a program that is
designed to give that individual a choice among providers. Thus,
religious organizations that receive funds under the CSBG Act as a
result of a beneficiary's genuine and independent private choice need
not separate, in time or location, their inherently religious
activities from the CSBG-funded services they provide, provided that
they otherwise satisfy the requirements of the program.
[sbull] Religious Character and Independence of Religious
Organizations. Paragraph (c) of the proposed rule clarifies that a
religious organization that participates in the CSBG Act programs
retains its independence from Federal, State, and local governments,
provided that it does not use direct program funds to support
inherently religious activities. It may continue to carry out its
mission, including the definition, practice and expression of its
religious beliefs. Among other things, religious organizations may use
their facilities to provide government-funded services, without
removing religious art, icons, scriptures, or other symbols. In
addition, a government-funded religious organization may retain
religious terms in its organization's name, select its
[[Page 77370]]
board members on a religious basis, and include religious references in
its organization's mission statements and other governing documents.
[sbull] Employment Practices. Under paragraph (d), the proposed
rule clarifies that the receipt of funds from programs authorized in
the CSBG Act does not affect a participating religion organization's
exemption provided under 42 U.S.C. 2000-e regarding employment
practices. Title VII of the Federal Civil Rights Act of 1964 provides
that a religious organization may, without running afoul of Title VII,
employ individuals who share its religious beliefs. This provision
helps enable faith-based groups to promote common values, a sense of
community and unity of purpose, and shared experiences through
service--all of which can contribute to a religious organization's
effectiveness. It thus helps protect the religious liberties of
communities of faith. The CSBG Act's Charitable Choice provisions thus
reflect the recognition that a religious organization may determine
that, in order to define or carry out its mission, it is important that
it be able to take its faith into account in making employment
decisions.
[sbull] Nondiscrimination Against Beneficiaries. The proposed rule
also contains provisions that apply to the individuals who receive
funded services. The first of these is found under paragraph (e) of the
proposed rule. This section clarifies that religious organizations are
prohibited from discriminating against beneficiaries or potential
beneficiaries on the basis of religion or religious belief.
Accordingly, religious organizations, in providing services funded in
whole or in part under any program authorized in the CSBG Act, may not
discriminate against current or prospective program beneficiaries on
the basis of religion, a religious belief, a refusal to hold a
religious belief, or a refusal to actively participate in a religious
practice.
[sbull] Fiscal Accountability. Under paragraph (f) of the proposed
rule, we outline the financial responsibility incurred through the
receipt of funds from programs authorized under the CSBG Act. Religious
organizations that receive such funding to provide services or benefits
are subject to the same requirements as other nongovernmental
organizations to account, in accordance with generally accepted
auditing and accounting principles, for use of such funds. Religious
organizations are also required to account for the expenditure of all
governmental funds and are subject to audit by the government.
Religious organizations must segregate their government funds provided
under any of the programs in the CSBG Act from their other funds so
that only the use of their government funds would be subject to audit
under the applicable CSBG Act program.
[sbull] Effect on State and Local Funds. The proposed rule at
paragraph (g) provides that if a State or local government contributes
its own funds to supplement federal CSBG funded activities, the State
or local government has the option to separate out the Federal funds or
commingle them. However, if the funds are commingled, the Charitable
Choice provisions apply to all of the commingled funds.
[sbull] Treatment of Intermediate Organizations. Finally, paragraph
(h) of the proposed rule provides that, if a nongovernmental
organization (referred to here as an ``intermediate organization''),
acting under a contract, grant, or other agreement with the Federal
Government or a State or local government, is given the authority under
the contract or agreement to select other nongovernmental organizations
to provide services under the program, the intermediate organization
must ensure that there is compliance with the Charitable Choice
provisions. The intermediate organization retains all other rights of a
nongovernmental organization under the Charitable Choice provisions.
IV. Paperwork Reduction Act of 1995
No new information collection requirements are imposed by these
regulations, nor are any existing requirements changed as a result of
their promulgation. Therefore, the requirements of the Paperwork
Reduction Act of 1995 (44 U.S.C. 3507(d)), regarding reporting and
record keeping, do not apply.
V. Regulatory Flexibility Analysis
The Secretary certifies, under 5 U.S.C. 605(b), as enacted by the
Regulatory Flexibility Act (Pub. L. 96-354), that this rule will not
result in a significant impact on a substantial number of small
entities.
VI. Regulatory Impact Analysis
Executive Order 12866 requires that regulations be reviewed to
ensure that they are consistent with the priorities and principles set
forth in the Executive Order. The Department has determined that this
rule is consistent with these priorities and principles. This rule is
considered a ``significant regulatory action'' under 3(f) of the
Executive Order, and therefore has been reviewed by the Office of
Management and Budget.
VII. Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995 requires
that a covered agency prepare a budgetary impact statement before
promulgating a rule that includes any Federal mandate that may result
in the expenditure by State, local, and Tribal governments, in the
aggregate, or by the private sector, of $100 million or more in any one
year.
The Department has determined that this rule would not impose a
mandate that will result in the expenditure by State, local, and Tribal
governments, in the aggregate, or by the private sector, of more than
$100 million in any one year.
VIII. Congressional Review
This regulation is not a major rule as defined in 5 U.S.C. chapter
8.
IX. Assessment of Federal Regulation and Policies on Families
Section 654 of the Treasury and General Government Appropriations
Act of 1999 requires Federal agencies to determine whether a proposed
policy or regulation may affect family well being. If the agency's
determination is affirmative, then the agency must prepare an impact
assessment addressing seven criteria specified in the law. These
regulations will not have an impact on family well being as defined in
the legislation.
X. Executive Order 13132
Executive Order 13132, Federalism, requires that Federal agencies
consult with State and local government officials in the development of
regulatory policies with federalism implications. Consistent with
Executive Order 13132, we specifically solicit comment from State and
local government officials on this proposed rule.
Executive Order 13175: Consultation and Coordination with Indian Tribal
Governments
Executive Order 13175 (65 FR 67249, November 6, 2000) requires us
to develop an accountable process to ensure ``meaningful and timely
input by tribal officials in the development of regulatory policies
that have tribal implications.'' Although it is not clear that the
proposed rule will have tribal implications, we specifically solicit
comment on this proposed rule from tribal officials.
List of Subjects in 45 CFR Part 1050
Grant programs-social programs.
[[Page 77371]]
(Catalog of Federal Domestic Assistance Programs No. 93569
Community Services Block Grant)
Dated: December 12, 2002.
Tommy G. Thompson,
Secretary of Health and Human Services.
For the reasons discussed above, we are proposing to add to 45 CFR
chapter X a new part 1050 to read as follows:
PART 1050--CHARITABLE CHOICE UNDER THE COMMUNITY SERVICES BLOCK
GRANT PROGRAM
Sec.
1050.1 Scope.
1050.2 Definitions.
1050.3 What conditions apply to the Charitable Choice provisions of
the CSBG Act?
Authority: 42 U.S.C. 9901 et seq.
Sec. 1050.1 Scope.
This part applies to programs authorized under the Community
Services Block Grant Act (CSBG Act). (42 U.S.C. 9901, 9913, 9920, 9921,
9922, 9923)
Sec. 1050.2 Definitions.
Applicable program means any program authorized under Title II of
the Community Opportunities, Accountability, and Training and Education
Act of 1998, 42 U.S.C. 9901, et seq.
Direct funding, directly funded or funding provided directly means
funding that is provided to an organization directly by a governmental
entity or an intermediate organization that has the same duties as a
governmental entity, as opposed to funding that an organization
receives as a result of the genuine and independent private choice of a
beneficiary.
Intermediate organization means an organization that is authorized
by the terms of a contract, grant or other agreement with the Federal
Government, or a State or local government, to select other non-
governmental organizations to provide assistance under an applicable
program. For example, when a State uses CSBG funds to pay for technical
assistance services provided by a private entity and also authorizes
that entity to subcontract for a portion of the technical assistance
effort, the private entity is an intermediate organization.
Program beneficiary or recipient means an individual who receives
services under a program funded in whole or part by an applicable
program.
Program participant means a public or private entity that has
received financial assistance under an applicable program.
Religious organization means a nonprofit religious organization.
Sec. 1050.3 What conditions apply to the Charitable Choice provisions
of the CSBG Act?
These Charitable Choice provisions apply whenever the Federal
government, or a State or local government, uses-CSBG provided awards,
contracts, or other assistance under any program authorized in the
Community Services Block Grant, 42 U.S.C. 9901, et seq. Additionally,
these provisions apply whenever an intermediate organization acting
under a contract, grant, or other agreement with a Federal, State, or
local government entity selects nongovernmental organizations to
provide assistance under any of the programs authorized under the
Community Services Block Grant Act.
(a)(1) Religious organizations are eligible, on the same basis as
any other organization, to participate in the applicable programs as
long as they use program funds consistent with the Establishment Clause
and the Free Exercise Clause of the First Amendment to the United
States Constitution.
(2) Neither the Federal government nor a State or local government
receiving funds under an applicable program shall discriminate against
an organization that applies to provide, or provides, services or
benefits on the basis of the organization's religious character or
affiliation.
(b) No program participant that receives direct funding under an
applicable program may expend the program funds, for inherently
religious activities, such as worship, religious instruction, or
proselytization. If an organization conducts such activities, it must
offer them separately, in time or location, from the programs or
services directly funded under any applicable program, and
participation must be voluntary for program beneficiaries.
(c) A religious organization that participates in an applicable
program will retain its independence from Federal, State, and local
governments and may continue to carry out its mission, including the
definition, practice and expression of its religious beliefs, provided
that it does not expend any direct funding under the applicable program
to support any inherently religious activities, such as worship,
religious instruction, or proselytization. Among other things, faith-
based organizations may use space in their facilities to provide
services funded under an applicable program without removing religious
art, icons, scriptures, or other symbols. In addition, such a religious
organization retains the authority over its internal governance, and it
may retain religious terms in its organization's name, select its board
members on a religious basis, and include religious references in its
organization's mission statements and other governing documents.
(d) The participation of a religious organization in, or its
receipt of funds from, an applicable program does not affect that
organization's exemption provided under 42 U.S.C. 2000e-1 regarding
employment practices.
(e) A religious organization that receives funds under an
applicable program, shall not, in providing program services or
benefits, 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 actively
participate in a religious practice.
(f) Religious organizations that receive funds under an applicable
program are subject to the same regulations as other nongovernmental
organizations to account, in accordance with generally accepted
auditing and accounting principles, for the use of such funds. In
addition, religious organizations are required to keep any Federal
funds they receive for services segregated in a separate account from
non-Federal funds. Only the segregated government funds are subject to
audit by the government under the applicable program.
(g) If a State or local government contributes its own funds to
supplement CSBG funded activities, the State or local government has
the option to segregate the Federal funds or commingle them. However,
if the funds are commingled, the Charitable Choice provisions apply to
all of the commingled funds.
(h) If a nongovernmental intermediate organization, acting under a
grant, contract, or other agreement with the Federal, State or local
government, is given the authority to select nongovernmental
organizations to provide services under an applicable program, then the
intermediate organization must ensure that there is compliance with
these Charitable Choice provisions. The intermediate organization
retains all other rights of a nongovernmental organization under the
Charitable Choice provisions.
[FR Doc. 02-31675 Filed 12-12-02; 4:32 pm]
BILLING CODE 4184-01-P