Federal Agencies Finalize Rule Amendments on Grants to Faith-Based Organizations

On March 4, nine federal agencies published a 52-page joint release titled Partnerships With Faith-Based and Neighborhood Organizations (full text) in the Federal Register amending rules adopted by them during the Trump Administration. In a press release, Americans United summarizes the rule changes in part as follows:

The new regulations:

• Reinstate the requirement that people seeking services be informed of their religious freedom rights, which include that:

• They can’t be discriminated against because of their religion or because they are nonreligious.

• They can’t be required to pray or participate in religious activities.

• They can file a complaint if their rights are violated.

• Reinstate safeguards that ensure that people who obtain social services through vouchers are not forced to attend or participate in religious activities.

• Eliminate Trump-era provisions that were designed to allow social service providers to refuse to provide key services....

Federal Agencies Propose Rule Changes to Protect Beneficiaries of Federal Grants from Religious Discrimination

On January 13, nine federal agencies published a Notice of Proposed Rulemaking (full text) in the Federal Register eliminating certain changes made in 2020 by the Trump Administration that loosened restrictions on faith-based organizations' operation of programs and activities funded by federal grants. (See prior posting.) The proposed new rules revert largely to the 2016 version of the agencies' rules. The Notice of Proposed Rulemaking says in part:

[B]oth the 2016 Rule and the 2020 Rule contained provisions prohibiting providers from discriminating against a program beneficiary or prospective 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.” ... 

The 2016 Rule required that, in programs supported by direct Federal financial assistance, beneficiaries and potential beneficiaries also be made aware of these prohibitions on discrimination, but the 2020 Rule removed this notice requirement.

Because the purpose of making providers aware of nondiscrimination requirements is to ensure that beneficiaries can access services free from discrimination, ... all Agencies except USAID therefore propose to reinstate the requirement that organizations providing social services under Agencies’ direct Federal financial assistance programs give written notice to beneficiaries and prospective beneficiaries of certain nondiscrimination protections, and to apply this requirement to all such providers, whether they are faith-based or secular. The Agencies may, as appropriate, require providers to include this notice as part of a broader and more general notice of nondiscrimination on additional grounds.

The 2016 Rule also required the notification to beneficiaries to inform them that, if they were to object to the religious nature of a given provider, the provider would be required to make reasonable efforts to refer them to an alternative provider. The 2020 Rule eliminated that requirement. The Agencies believe, however, that providing assistance to beneficiaries seeking alternative providers would help advance the overarching goal of facilitating access to federally funded programs and services. Without such assistance, it may be challenging for beneficiaries or prospective beneficiaries unfamiliar with Federal grant programs to identify other federally funded providers....

Therefore, with the exception of USAID, the Agencies are proposing a modified version of the 2016 Rule’s referral procedure that would encourage Agencies, when appropriate and feasible, or State agencies and other entities that might be administering a federally funded social service program, to provide notice to beneficiaries or prospective beneficiaries about how to obtain information about other available federally funded service providers.

Finally, with the exception of USAID, the Agencies are proposing to remove language added by the 2020 Rule stating that providers at which beneficiaries choose to expend indirect aid “may require attendance at all activities that are fundamental to the program.”

BJC Online reports on the rule proposals.

HHS Reverses Trump Administration Rules For Family Planning Grantees

The Department of Health and Human Services yesterday revoked the Trump Administration rules that prohibit family planning clinics receiving Title X funds from making referrals for abortions and which require strict physical and financial separation between abortion services and services funded by Title X monies. The HHS 124-page rule release (full text) titled Ensuring Access to Equitable, Affordable, Client-Centered, Quality Family Planning Services reinstates pre-2019 requirements, saying in part:

In addition to readopting the requirements as they existed prior to the 2019 rule, the 2021 rule also includes several revisions that will strengthen the Title X program and ensure access to equitable, affordable, client-centered, quality family planning services for all clients, especially for low-income clients, while retaining the longstanding prohibition on directly promoting or performing abortion that follows from Section 1008’s text and subsequent appropriations enactments.

The new rules require that grantees offer the opportunity for clients to receive non-directive counseling on the range of options available-- pre-natal care and delivery; infant care, foster care or adoption; and pregnancy termination. However "objecting individuals and grantees will not be required to counsel or refer for abortions in the Title X program in accordance with applicable federal law."

The new rules become effective on Nov. 6. AP reports on the new rules. Planned Parenthood issued a press release regarding the new rules.

Suit Challenges DOE's Conditioning of Federal Grants To Colleges On Free Exercise For Student Religious Groups

Suit was filed earlier this week in the D.C. federal district court challenging recent changes to Department of Education rules (see prior posting) on protection of free speech and religious freedom by colleges and universities receiving federal grants. The complaint (full text) in Secular Student Alliance v. U.S. Department of Education, (D DC, filed 1/19/2021) challenges this addition to DOE rules:

As a material condition of the Department’s grant, each State or subgrantee that is a public institution shall not deny to any student organization whose stated mission is religious in nature and that is at the public institution any right, benefit, or privilege that is otherwise afforded to other student organizations at the public institution (including but not limited to full access to the facilities of the public institution, distribution of student fee funds, and official recognition of the student organization by the public institution) because of the religious student organization’s beliefs, practices, policies, speech, membership standards, or leadership standards, which are informed by sincerely held religious beliefs.

The complaint contends:

Under the guise of enforcing the First Amendment, the Rule bars public colleges and universities from requiring religious student organizations to comply with nondiscrimination requirements, including university rules and state laws specifying that university-recognized, university-funded student organizations may not bar students from club membership or leadership on the basis of characteristics such as race, religion, sex, sexual orientation, gender identity, disability status, or status as a veteran.

American Atheists issued a press release announcing the filing of the lawsuit.

Suit Challenges Trump Administration's Loosening of Limits On Faith-Based Federally Funded Programs

Suit was filed this week in a New York federal district court by seven advocacy groups challenging the Trump Administration's loosening of restrictions on faith-based organizations' operation of programs and activities funded by federal grants. The complaint (full text) in MAZON: A Jewish Response to Hunger v. Azar, (SD NY, filed 1/19/2021) alleges in part:

Because the Agencies provide no reasonable justification for the rule change, because they fail to account for the harms caused by the 2020 Rule, because their reasoning is inconsistent and contrary to the record, and because they fail to consider obvious alternatives, the 2020 Rule is arbitrary and capricious in violation of the APA.

The complaint explains the challenged rule as follows:

The 2020 Rule eliminates the common-sense and agreed-upon requirements from the 2016 Rule, such as that beneficiaries receiving services from a faith-based provider receive a notice of their rights not to be discriminated against based on religion and the option to request a referral to an alternate provider. These requirements imposed virtually no burden, but provided beneficiaries with much-needed information empowering them to protect their own religious liberty.

The 2016 rule reflected a consensus proposal of a number of different interest groups. American Atheists issued a press release announcing the filing of the lawsuit.

Federal Agencies Loosen Requirements For Faith-Based Grantees

 Yesterday nine federal departments jointly issued a 381-page release (full text) titled Equal Participation of Faith-Based Organizations in the Federal Agencies’ Programs and Activities. The Release amends existing rules to loosen restrictions on faith-based organizations operation of programs and activities funded by federal grants. The new rules impact grants by the Departments of Education, Homeland Security, Agriculture, Justice, Labor, Veterans Affairs, Housing and Urban Development, Health and Human Services, and Agency for International Development.

DOJ's press release on the new rules says in part:

This final rule ensures equal treatment for faith-based organizations, consistent with the Constitution and other federal law.  It removes requirements in prior regulations that placed unequal burdens on religious organizations, cast unwarranted suspicion on them, and were in tension with their religious liberty rights.  This final rule also clarifies that religious organizations do not lose various legal protections because they participate in federal programs and activities, such as the rights to accommodations and conscience protections under the First Amendment, Religious Freedom Restoration Act, and other federal laws.

Friendly Atheist blog describes the major changes as follows:

Right now, faith-based service providers have to refer clients elsewhere if the people say they feel uncomfortable with their religious affiliation. That’s now gone.

Right now, any clients are required to be told about their religious freedom rights. They’re told they don’t have to participate in any religious activities, they are entitled to go to an alternative service provider, and they can file a complaint if necessary. That’s now gone.

Right now, if clients receive a voucher for social services, there must be a secular provider in addition to any religious providers. That requirement is now gone… which means there may be no secular options for some people.

The new rules become effective Jan. 16, 2021. [Thanks to Scott Mange for the lead.] 

Labor Department Issues New Guidance On Religious Liberty Protections

The U.S. Department of Labor announced last week (May 15) that it has issued a directive and a guidance to advance religious liberty protections. the directive, among other things, instructs DOL to:

Ensure religious organizations are given the opportunity to compete equally with non-religious organizations for Federal financial assistance at the Federal and State levels.

The Guidance (full text) implements Executive Order 13798 in connection with federal grants administered by DOL. The Guidance says in part:

Religious organizations that receive DOL financial assistance retain their programmatic independence from Federal, State, and local governments and may continue to carry out their missions and maintain their religious character. This autonomy includes, among other things, the right to use the organizations’ facilities to provide DOL-supported social services without removing or altering religious art, icons, scriptures or other religious symbols, and the right to govern themselves and to select board members on a religious basis. Faith-based organizations, like all organizations receiving DOL financial assistance, must not use direct DOL financial assistance to support any explicitly religious activities... [including] for example, worship, religious instruction, and proselytization....

If an organization conducts explicitly religious activities using non-DOL funds and also offers social service programs using direct DOL support, then that organization must offer the explicitly religious activities at a time or in a place that is separate from the programs receiving direct DOL support....

New Federal Proposals On Grants To Religious Entities, Campus Speech and Guidance on School Prayer

The White House (Fact Sheet, President's Remarks), the Department of Justice and the Department of Education each yesterday announced initiatives on school prayer and participation of religious organizations in government grant programs.

The Department of Education issued a 203-page Notice of Proposed Rulemaking (full text) which proposes rule changes to prevent discrimination against faith-based entities receiving federal grants and to protect free speech on campuses. DOE and the Department of Justice also issued revised Guidance on Constitutionally Protected Prayer and Religious Expression in Public Elementary and Secondary Schools (full text).

The Department of Justice issued a 29-page Notice of Proposed Rulemaking (full text) on  Equal Participation of Faith-Based Organizations in Department of Justice’s Programs and Activities. Among the changes described in the Notice is one which:

delet[es] 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.

Finally, the Office of Management and Budget issued a 2-page Memorandum providing guidance as to federal grants. (full text). It reads in part:

Even when no Federal regulation or grant term penalizes or disqualifies grant applicants from participation based on their religious character, some state laws governing awards to subgrantees, including state constitutions, may purport to limit sub-grantee participation in violation of the U.S. Constitution. In attempting to comply with such state constitutions and laws, grantees may be discriminating against applicants for sub-grants on the basis of religion, in violation of the Constitution's Free Exercise Clause and the grantee's commitment to adhere to Federal laws prohibiting discrimination under 2 C.F.R. § 200.300. Accordingly, grant awarding agencies shall ensure that the terms of the Federal grants they award make clear that states or other public grantees may not condition sub-awards of Federal grant money in a manner that would disadvantage grant applicants based on their religious character.

USA Today reports on these developments.

DOE Will Not Enforce Ban On Religious Organizations As Contractors For "Equitable Services" Under Federal Grants

The Elementary and Secondary Education Act requires local educational agencies to include private schools in their federally funded programs to provide supplemental educational services to provide equitable, high-quality education for students from low-income families. School districts may contract with outside providers for various educational services, however under ESSA, the provider must be independent of any religious organization.  In a press release yesterday, the U.S. Department of Education announced that this restriction would no longer be enforced, saying in part:

The U.S. Department of Education, in consultation with the U.S. Department of Justice, determined the statutory provisions in Section 1117(d)(2)(B) and 8501(d)(2)(B) of the Elementary and Secondary Education Act (ESEA) that require an equitable services provider to “be independent of … any religious organization” are unconstitutional because they categorically exclude religious organizations based solely on their religious identity.

These provisions run counter to the U.S. Supreme Court decision in Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S. Ct. 2012 (2017) that, under the Free Exercise Clause of the First Amendment of the U.S. Constitution, otherwise eligible recipients cannot be disqualified from a public benefit solely because of their religious character.

The Department will, however, continue to enforce the statutory requirement that the outside services being provided are "secular, neutral and non-ideological."

HHS Grants to Catholic Bishops Conference Upheld

In ACLU of Northern California v. Azar, (ND CA, Oct. 11, 2018), a California federal district court granted summary judgment to the government in the ACLU's Establishment Clause challenge to HHS's choice of the U.S. Conference of Catholic Bishops as a grantee under the Unaccompanied Alien Children Program  (UACP) and the Trafficking Victim Assistance Program (TVAP).  The ACLU focused particularly on the refusal of sub-grantees to directly refer clients for abortion or contraception services. However children in custody in UACP who sought an abortion were transferred to a secular provider that did not have objections, and to an independent medical provider when contraception services were sought. The Bishops' Conference ultimately removed language from its documents that would have prevented TVAP sub-grantees from providing abortion or contraception services. The court held in part:

The government’s grant relationship and interactions with the Bishops Conference in the record in this litigation are not sufficiently likely to be perceived as an endorsement of the Conference’s religious beliefs....

The record here shows that the government’s UACP and TVAP grant money was used to provide general secular care services to unaccompanied minors and that no government money was used for proselytization, religious education, religious facilities, religious items, religious literature, or other religious activity. There is no evidence that the ACLU, or any taxpayer, was forced to monetarily subsidize the Bishops Conference’s religious beliefs. To the extent that the Conference declined to provide unaccompanied minors with access to abortion or contraception services, it did not use any government tax money to do so, and thus its actions are not properly the subject of a taxpayer-standing suit.

Trump's Faith Initiative Executive Order Has Rescinded Protections For Clients Objecting To Religious Provider

As previously reported, on May 3 President Trump signed an Executive Order on the Establishment of a White House Faith and Opportunity Initiative.  As reported by JTA, buried in that order is repeal of a previous provision that required religious social service providers using federal grant funds to refer a client to an alternative provider if the client objected to the religious character of the original provider.  That referral requirement was added in 2010 by President Obama in Executive Order 13559 which amended Executive Order 13279 (2002).  The most recent change was effected by the following language in Sec. 2(b) of President Trump's recent Executive Order:

Executive Order 13279, as amended, is further amended by striking section 2(h) and redesignating sections 2(i) and 2(j) as sections 2(h) and 2(i), respectively.

HHS Seeks Comments on Faith-Based Participation In Programs

The Department of Health and Human Services yesterday published a Release (full text)  in the Federal Register seeking comment on removal of barriers that may exist to participation in HHS programs and grants for faith-based organizations.  The Release says in part:

HHS seeks input from the public and relevant stakeholders on potential changes that could be made to existing HHS regulations or guidance to ensure that faith-based organizations and their religious beliefs and moral convictions are properly accommodated, that faith based organizations are not required to act contrary to their religious beliefs or moral convictions (as a recipient, subrecipient, contractor, sub-contractor, or otherwise) or are otherwise not restricted, excluded, substantially burdened, discriminated against, or disproportionately disadvantaged in HHS-conducted or funded programs or activities (including those administered by state and local governments) because of their religious character, identity, beliefs, or moral convictions

HHS also seeks input on whether faith-based organizations could face potential obstacles to participation in state or locally funded programs, or restrictions on their privately funded activities, because of HHS requirements imposed on state and local governments as a condition of receiving HHS funding.

Catholic Philly reports on the Release.

Federal Agencies Adopt Final Rules On Partnering With Faith-Based Organization

Following up Notices of Proposed Rulemaking issued last August (see prior posting), yesterday, nine federal agencies published their final regulations implementing Executive Order 13559 that President Obama signed in 2010.  That Executive Order approved recommendations of the President's Advisory Council for Faith-Based and Neighborhood Partnerships. Yesterday's 304-page release (full text) titled Fundamental Principles and Policymaking Criteria for Partnerships With Faith-Based and Other Neighborhood Organizations adopts regulations aimed at preventing discrimination and assuring appropriate separation of religion and government.  A White House blog post describes the new rules.  The regulations:

Require agencies to ensure that all decisions about Federal financial assistance are based solely on merit, without regard to an organization's religious affiliation....

 Make clear that faith-based organizations are eligible to participate in federally funded social service programs on the same basis as any other private organization.

 Clarify what activities can and cannot be supported with direct Federal financial assistance by replacing use of the term "inherently religious activities" with the term "explicitly religious activities" and providing examples....

Prohibit organizations that receive Federal financial assistance from discriminating against beneficiaries ... based on religion ... or a refusal to attend or participate in a religious practice.

Require faith-based organizations that receive direct Federal financial assistance for domestic social service programs to provide written notice of certain protections to beneficiaries of the program....

In adopting the final regulations, the agencies refused to either broadly prohibit employment discrimination on the basis of religion by all recipients of Federal grants, or to clarify that such faith-based hiring is permissible. The Hill reports on the new rules.

9 Federal Agencies Propose Rules On Grants To Faith-Based Organizations

Yesterday nine federal agencies issued Notices of Proposed Rulemaking (NPRMs) to implement many of the recommendations made in 2010 by President Obama's  Advisory Council for Faith-Based and Neighborhood Partnerships. (See prior posting.) In November 2010 President Obama signed Executive Order 13559 approving a number of the recommendations.  Yesterday's actions constitute the next step in assuring that agencies providing grants to faith-based organizations implement these recommendations.  As described by the White House in a blog post from the Office of Faith-based and Neighborhood Partnerships:

The proposed rules clarify the principle that organizations offering explicitly religious activities may not subsidize those activities with direct federal financial assistance and must separate such activities in time or location from programs supported with direct federal financial assistance.  For example, if a faith-based provider offers a Bible study as well as a federally supported job training program, the Bible study must be privately funded and separated in time or location from the job training program. 

The NPRMs also propose new protections for beneficiaries or prospective beneficiaries of social service programs that are supported by direct federal financial assistance.  In the proposed rules, the agencies set forth a notice to beneficiaries and prospective beneficiaries that informs them of these protections.  These notices would make it clear, for example, that beneficiaries may not be discriminated against on the basis of religion or religious belief or be required to participate in any religious activities and advises beneficiaries that they may request an alternative provider if they object to the religious character of their current provider.

At the same time, the NPRMs assure religious providers of their equal ability to compete for government funds and of continuing protections for their religious identity like the ability of providers to use religious terms in their organizational names and to include religious references in mission statements and in other organizational documents. ...

Links to the proposals from each agency can be found at the end of the White House blog post.  Both Americans United and the ADL issued statements welcoming yesterday's developments, but expressed concern that the proposed rules do not bar faith-based groups from hiring on the basis of religion in federally funded programs.

Chabad of California Liable For $845K Damages Under False Claims Act

In United States ex. rel. Kozak v. Chabad-Lubavitch, Inc., (ED CA, Dec. 9. 2014), a California federal district court granted summary judgment in a False Claims Act  qui tam action, finding Chabad of California liable for $844,985 in treble damages and statutory penalties.  The court concluded that Chabad of California misappropriated Department of Homeland Security grant funds intended to pay for video surveillance and other security equipment for Chabad and two of its affiliated institutions. (See prior related posting.) Chabad executed documents assuring the government that it would comply with specific financial management standards in receiving advances of the grant funds to assure that the funds would be used for the purposes for which they were awarded. However Chabad had no written financial management procedures, deposited the grant funds into its general checking account and used $272,495 of the funds for non-grant purposes.

While Chabad argued that there were triable issues of fact as to whether it submitted false claims "knowingly," the court said:

The undisputed facts in this matter show that Chabad knew about the requirements attendant to NSG Program grants in general and to drawdown advance requests in particular, yet had no compunction whatsoever in failing to adhere to those requirements. Under the circumstances, it is clear to the Court that Chabad acted at minimum “knowingly” as defined by the FCA.

The court did not grant summary judgment against two Chabad affiliates that were also defendants, finding that triable issues of fact remain as to their liability.  Jewish Journal reports on the court's decision.