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Monday,

July 12, 2004

Part II

Department of Labor
Employment and Training Administration

20 CFR Parts 667 and 670


29 CFR Parts 2 and 37
Workforce Investment Act—Equal
Treatment in Department of Labor
Programs for Faith-Based Community
Organizations; Protection of Religious
Liberty, and Limitation on Employment
of Participants; Final Rules

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41882 Federal Register / Vol. 69, No. 132 / Monday, July 12, 2004 / Rules and Regulations

DEPARTMENT OF LABOR Job Corps, (202) 693–3000. On 29 CFR believes that there should be an equal
37.6, contact Annabelle T. Lockhart, opportunity for all organizations—both
Employment and Training Director, Civil Rights Center (CRC), faith-based and otherwise—to
Administration (202) 693–6500. Please note these are participate as partners in Federal
not toll-free numbers. Individuals with programs.
20 CFR Parts 667 and 670 hearing or speech impairments may Consistent with the President’s
access these telephone numbers via TTY initiative, the Department’s proposed
Office of the Secretary by calling the toll-free Federal rule of March 9, 2004, proposed to
Information Relay Service at 1–800– amend the Department’s general
29 CFR Parts 2 and 37 877–8339. regulations as well as the specific
SUPPLEMENTARY INFORMATION: regulations governing Job Corps and
RIN 1290–AA21
implementing the Workforce Investment
I. Background—The March 9, 2004 Act. The objective of the proposed rule
Equal Treatment in Department of
Proposed Rule was to ensure that DOL-supported social
Labor Programs for Faith-Based and
Community Organizations; Protection On March 9, 2004, the Department service programs were open to all
of Religious Liberty of Department of published a proposed rule (69 FR qualified organizations, regardless of
Labor Social Service Providers and 11234) to amend the Department’s their religious character, and to
Beneficiaries general regulations to make clear that establish clearly the proper uses of DOL
faith-based and community support and the conditions for receipt of
AGENCY: Employment and Training organizations may participate in the such support. In addition, this proposed
Administration and the Office of the Department’s social service programs, rule was designed to ensure that the
Secretary, Labor. including as recipients of Federal implementation of the Department’s
ACTION: Final rule. financial assistance. The proposed rule social service programs would be
also set forth conditions for seeking, conducted in a manner consistent with
SUMMARY: Consistent with constitutional the requirements of the Constitution,
receiving, and using DOL support
guidelines, this final rule clarifies that related to DOL programs. The proposed including the Religion Clauses of the
faith-based and community rule was part of the Department’s effort First Amendment. The proposed rule
organizations may participate in the to fulfill its responsibilities under two had the following specific objectives:
United States Department of Labor (DOL Executive Orders issued by President 1. Participation by faith-based
or the Department) social service George W. Bush. The first of these organizations in the Department of
programs without regard to the Orders, Executive Order 13198 (66 FR Labor’s programs. The proposed rule
organizations’ religious character or 8497), published in the Federal Register clarified that organizations are eligible
affiliation, and are able to apply for and on January 31, 2001, created Centers for to participate in DOL social service
compete on an equal footing with other Faith-Based and Community Initiatives programs without regard to their
eligible organizations to receive DOL in five cabinet departments—Education, religious character or affiliation, and
support. In addition, in order to Health and Human Services, Housing that organizations must not be excluded
consolidate the Department’s and Urban Development, Justice, and from competing for DOL support simply
regulations on religious activities, this Labor—and directed these Centers to because they are faith-based.
final rule revises the Employment and identify and eliminate regulatory, Specifically, the proposed rule included
Training Administration’s (ETA) contracting, and other programmatic regulatory provisions specifying that
regulation on religious services at Job obstacles to the equal participation of faith-based organizations would be
Corps centers and the Department’s faith-based and community eligible to compete for DOL support on
Workforce Investment Act of 1998 organizations in the provision of social the same basis, and under the same
(WIA) regulations relating to the use of services by these Departments. The eligibility requirements, as all other
WIA Title I financial assistance to second of these Executive Orders, organizations. The proposed rule also
support employment and training in Executive Order 13279, published in the included provisions designed to ensure
religious activities, and employment at Federal Register on December 16, 2002 that DOL, DOL social service providers,
specified locations defined with (67 FR 77141), charged executive branch and State and local governments
reference to certain religious activities. agencies to give equal treatment to faith- administering DOL support would be
The U.S. Department of Labor supports based and community groups that apply prohibited from discriminating for or
the participation of faith-based and for Federal financial assistance to meet against organizations on the basis of
community organizations in its social social needs in America’s communities. religion, religious belief, or religious
service programs. In the Order, President Bush called for character in the administration or
DATES: Effective Date: August 11, 2004. an end to discrimination against faith- distribution of DOL support, including
FOR FURTHER INFORMATION CONTACT: On based organizations and ordered grants, contracts, and cooperative
the Office of the Secretary’s general implementation of these policies agreements.
regulations, 29 CFR part 2, contact: throughout the executive branch in a 2. Inherently religious activities. The
Rhett Butler, Associate Director for manner consistent with the First proposed rule included requirements
Policy Development, DOL Center for Amendment to the United States related to inherently religious activities
Faith-Based and Community Initiatives Constitution. He further directed that in DOL-supported social service
(CFBCI), (202) 693–6450. On 20 CFR faith-based organizations be allowed to programs. Specifically, under the
part 667, contact Maria K. Flynn, Acting retain their religious autonomy over proposed regulatory provisions, an
Administrator, Office of Policy their internal governance and organization could not use direct DOL
Development, Evaluation and Research, composition of boards, and over their support 1 for inherently religious
Employment and Training display of religious art, icons, 1 As in the proposed rule, the term ‘‘direct DOL
Administration, (202) 693–3700. On 20 scriptures, or other religious symbols, support’’ is used here to refer to DOL support
CFR 670.555, contact: Grace Kilbane, when participating in Federally- provided directly to a religious or other non-
Administrator of the National Office of financed programs. The Administration governmental organization within the meaning of

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Federal Register / Vol. 69, No. 132 / Monday, July 12, 2004 / Rules and Regulations 41883

activities, such as worship, religious prisoners have opportunities to exercise basis, and include religious references
instruction, or proselytization. If the their religion. in its mission statements and other
organization engaged in such activities, The proposed rule also recognized governing documents.
the proposed provisions required the that the legal restrictions applied to
4. Nondiscrimination in providing
organization to offer those activities inherently religious activities in other
assistance. The proposed rule provided
separately in time or location from the DOL-supported social service programs
under extensive government control, for that DOL, DOL social service
social service programs receiving direct
example isolated residential Job Corps intermediary providers, DOL social
DOL support, and participation by
program beneficiaries in any such facilities, would sometimes be different service providers in their use of direct
inherently religious activities would from the legal restrictions applied to DOL support, and State and local
have to be voluntary. The proposed other DOL-supported social service governments could not, in providing
requirements ensured that direct DOL programs. These restrictions would social services (including outreach for
support would not be used to support differ because the extensive government such services), discriminate for or
inherently religious activities. Such control over the environment of these against a current or prospective program
support could not be used, for example, DOL social service programs sometimes beneficiary on the basis of religion,
to conduct prayer meetings, worship would require that affirmative steps be religious belief, or absence thereof. The
services, or any other activity that is taken by program officials to ensure that proposed rule clarified that
inherently religious. the beneficiaries of these programs have organizations receiving DOL support
The proposed rule clarified that this the opportunity to exercise their indirectly (for example, as a result of the
restriction would not mean that DOL religion. The proposed rule emphasized genuine and independent private choice
social service providers could not that any participation in such inherently of a beneficiary of a program offering
engage in inherently religious activities, religious activities would have to be choice among providers or program
but only that such providers could not voluntary and that nothing in the options) would not be prohibited from
use direct DOL support for these proposed rule was intended to restrict offering assistance that integrates faith
activities. Under the proposed rule, the exercise of rights or duties and social services and requires
such providers would have to take steps guaranteed by the Constitution. For participation in all aspects of the
to separate in time or location their example, the proposed rule specified organizations’ programs and activities,
inherently religious activities from the that program officials, although including the religious aspects.
services they offer with direct DOL permitted to impose reasonable time,
support. The proposed rule further place, and manner restrictions, would 5. Assurance requirements. The
provided that these restrictions on not be allowed to restrict program proposed rule also prohibited, and
inherently religious activities would not beneficiaries’ ability to freely express directed the removal of, provisions in
apply where DOL support was their views and to exercise their right to the Department’s grant documents,
indirectly provided. The proposed rule religious freedom. In addition, the agreements, covenants, memoranda of
clarified that indirect DOL support proposed rule specified that residential understanding, policies, or regulations
referred to DOL support that is indirect facilities receiving DOL support would that require only faith-based
within the meaning of the Establishment be required to permit residents to organizations applying for or receiving
Clause of the First Amendment to the engage in voluntary religious activities, DOL support to provide assurances that
Constitution. An organization receives including holding religious services, at they would not use such support for
indirect support if, for example, a such facilities (although reasonable inherently religious activities. Under the
program beneficiary redeems a voucher, time, place, and manner restrictions proposed rule, all DOL social service
coupon, certificate, or similar would be permitted). providers, as well as State and local
mechanism that was provided to that 3. Independence of faith-based governments administering DOL
individual using DOL financial organizations. The proposed rule also support, would be required to carry out
assistance under a program that was clarified that a faith-based organization all DOL-supported activities in
designed to give that individual a that is a DOL social service provider or accordance with all program
genuine and independent private choice that participates in DOL social service requirements and other applicable
among providers or program options. programs would retain its independence requirements governing the conduct of
In addition, the proposed rule and could continue to carry out its DOL-supported activities, including
clarified that the legal restrictions mission, including the definition,
those requirements prohibiting the use
applied to inherently religious activities development, practice, and expressions
of direct DOL support for inherently
in DOL social service programs within of its religious beliefs, although no
religious activities. In addition, to the
correctional facilities would sometimes organization, faith-based or otherwise,
could use direct DOL support for any extent that provisions in grant
be different from the legal restrictions documents, agreements, covenants,
that are applied to other DOL-supported inherently religious activities, such as
worship, religious instruction, or memoranda of understanding, policies,
social service programs, because the or regulations used by DOL, or by a DOL
degree of government control over proselytization. Among other things, the
proposed rule included provisions that social service intermediary provider or
correctional environments sometimes a State or local government
warrants affirmative steps by prison explicitly stated that a faith-based
organization could use space in its administering DOL support, disqualify
officials, in the form of chaplaincies and organizations from participating in
similar programs, to ensure that facilities to provide DOL-supported
social services without removing DOL’s programs because such
religious art, icons, scriptures, or other organizations are motivated or
the Establishment Clause of the First Amendment.
For example, direct DOL support may occur where religious symbols. In addition, under influenced by religious faith to provide
the Federal Government, a State or local the proposed rule, a DOL-supported social services, or because of the
government administering DOL support, or a DOL faith-based organization could retain its organizations’ religious character or
intermediary social service provider selects an
organization and obtains the needed services
name (even if the name made a religious affiliation, the proposed rule removed
straight from the organization (e.g., via a grant or reference), select its board members and such restrictions, which are inconsistent
cooperative agreement). otherwise govern itself on a religious with governing law.

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II. Discussion of Comments Received on organizations that violate these accommodations to religion that would
the Proposed Rule requirements are subject to applicable vitiate the essence of the program, or
The Department received comments sanctions and penalties. The regulations which would work a hardship on
on the proposed rule from 7 would thus ensure that direct DOL participants.’’
support is not used for inherently The Department does not agree that
commenters—two individuals, four civil
religious activities, as required by the requested change is necessary. The
or religious liberties organizations, and
current case law. purpose of the rule is to clarify that all
one State agency receiving financial
Moreover, the Supreme Court’s organizations, both faith-based and
assistance under the Workforce
‘‘pervasively sectarian’’ doctrine— otherwise, are eligible to participate in
Investment Act (WIA). Some comments
which held that there are certain DOL social service programs without
were generally supportive of the
religious institutions in which religion regard to their religious character or
proposed rule; others were critical. The is so pervasive that no government aid affiliation and to establish clearly the
following is a summary of the may be provided to them, because their proper uses to which DOL support
comments, and the Department’s performance of even ‘‘secular’’ tasks could be put and the conditions for
responses. will be infused with religious purpose— receipt of such support. The rule is
Participation by Faith-Based no longer enjoys the support of a designed to ensure that the
Organizations in Department of Labor majority of the Court. Four Justices implementation of the Department’s
Social Service Programs expressly abandoned it in Mitchell v. social service programs will be
Helms, 530 U.S. 793, 825–29 (2000) conducted in a manner consistent with
Several commenters expressed
(plurality opinion), and Justice the requirements of the Constitution,
appreciation and support for the
O’Connor’s opinion in that case, joined including the Religion Clauses of the
Department’s efforts to clarify the rules
by Justice Breyer, set forth reasoning First Amendment. All accommodations
governing participation of religious
that is inconsistent with its underlying provided to religious individuals or
organizations in its programs. Two
premises, see id. at 857–58 (O’Connor, organizations must be done within the
commenters commended DOL, in J., concurring in judgment) (requiring confines of law. Such law includes
particular, for explicitly stating that proof of ‘‘actual diversion of public statutory program requirements as well
DOL, DOL social service providers, and support to religious uses’’). Thus, six as the conditions set forth in this rule.
State and local governments members of the Court have rejected the The statement in the rule concerning
administering DOL-supported social view that aid provided to religious accommodation simply clarifies that
service programs may not discriminate institutions will invariably advance the otherwise valid religious
either for or against religious providers. institutions’ religious purposes. That accommodations do not violate the
Other commenters disagreed with the view is the foundation of the religious nondiscrimination
proposed rule, arguing that it would ‘‘pervasively sectarian’’ doctrine. The requirement of the rule.
allow Federal financial assistance to be Department therefore believes that One commenter requested that the
given to ‘‘pervasively sectarian’’ under current precedent, the Department revise § 2.32(c) to clarify
organizations in violation of what the Department may provide DOL support that an organization may not be
commenters described as a to all social service providers, without discriminated against because it lacks a
constitutional principle that government regard to religion and without criteria faith-based component. This section as
may not fund programs that are so that would require providers to abandon proposed stated in pertinent part: ‘‘A
permeated by religion that their secular their religious expression or character. grant document, agreement, covenant,
side cannot be separated from the As a result, the Department declines to memorandum of understanding, policy,
sectarian. These commenters make the requested change. or regulation that is used by DOL, a
maintained that the rule places no Another commenter expressed State or local government, or a DOL
limitations on the kinds of religious concern that section 2.32(a) of the social service intermediary provider in
organizations that can receive financial proposed rule failed to circumscribe administering a DOL social service
assistance, and they requested that how and when religion could be program must not disqualify religious
‘‘pervasively sectarian’’ organizations be accommodated. Section 2.32(a) states in organizations from receiving DOL
barred from receiving such assistance pertinent part: ‘‘DOL, DOL social service support or participating in DOL
from the Department. providers, as well as State and local programs on the grounds that such
We do not agree that the Constitution governments administering DOL organizations are motivated or
requires the Department to assess the support, must not discriminate for or influenced by religious faith to provide
overall religiousness of an organization against an organization on the basis of social services, or on the grounds that
and deny financial assistance to the organization’s religious character or such organizations have a religious
organizations that are ‘‘pervasively affiliation, although this requirement character or affiliation.’’
sectarian.’’ Rather, faith-based (and does not preclude DOL, DOL social We believe the commenter’s concerns
other) organizations that receive direct service providers, or State and local are already addressed by § 2.32(a),
DOL support must not use such support governments administering DOL which provides, inter alia, that ‘‘DOL,
for inherently religious activities, and support from accommodating religion in DOL social service intermediary
they must ensure that such religious a manner consistent with the providers, as well as State and local
activities are separate in time or location Establishment Clause.’’ The commenter governments administering DOL
from services directly supported by the suggested that the Department revise the support, must not discriminate for or
Department and that participation in rule to set limits on permissible against an organization on the basis of
such activities by program beneficiaries accommodation, for instance, by stating the organization’s religious character or
is voluntary. Furthermore, under the that accommodation must be handled in affiliation’’ (emphasis added). However,
proposed rule, such religious an even-handed manner and not favor we have modified the language of the
organizations are prohibited from some faiths over others; by stating that final rule to further address this concern
discriminating for or against program accommodation is permissible only if it and to make even more clear that it is
beneficiaries on the basis of religion or removes a substantial burden on impermissible to disqualify an
religious belief, and participating religious exercise; and by ‘‘prohibiting organization from receiving DOL

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support based on the organization’s to retain the language of the proposed commenter, the Department believes it
religious faith, character, or affiliation, rule, which provides examples of would be permissible under the rule for
or because such organization lacks a prohibited activities. This approach is staff of a DOL-supported social services
religious component. Section 2.32(c) of consistent with Supreme Court provider to engage in inherently
the final rule reads: ‘‘A grant document, precedent, which likewise has not religious activity with a beneficiary at a
agreement, covenant, memorandum of comprehensively defined inherently beneficiary’s request before or after the
understanding, policy, or regulation that religious activities. In response to the provision of social service activities
is used by DOL, a State or local suggestion that the rule will indicate or directly supported by DOL. Such
government, or a DOL social service create the appearance that the activity would be permitted because it
intermediary provider in administering Department endorses religious content, would be voluntary (because it was at
a DOL social service program must not it again merits emphasis that the rule the beneficiary’s request) and separate
disqualify organizations from receiving forbids the use of direct government in time from any social service activity
DOL support or from participating in assistance for inherently religious receiving direct DOL support (because it
DOL programs on the grounds that such activities and states that any such took place before or after, but not
organizations are motivated or activities must be voluntary for during, the social service activities
influenced by religious faith to provide participants and separated in time or directly supported by DOL). Under the
social services, have a religious location from activities directly rule, an organization receiving direct
character or affiliation, or lack a supported by the Department. As to the DOL support is responsible for
religious component.’’ suggestion that the government must maintaining a distinction between the
exclude from its programs those social service activities directly
Inherently Religious Activities
organizations that convey religious supported by DOL and any privately-
Some commenters suggested that the messages or advance religion with their supported inherently religious
proposed rule does not sufficiently own funds, the Department finds no activities. Of course, no direct DOL
detail the scope of religious content that constitutional support for this view. As support can be used for inherently
must be omitted from programs noted above, the Supreme Court has religious activities.
receiving DOL support. For example, held that the Constitution forbids the
two commenters suggested that the Voucher-Style Programs Under the Rule
use of direct Federal financial assistance
explanation given of ‘‘inherently for inherently religious activities, but Two commenters claimed that the
religious activities’’ as ‘‘worship, the Court has rejected the presumption proposed rule would authorize the use
religious instruction, or proselytization’’ that religious organizations will of voucher programs to provide
is unclear or incomplete. Relatedly, one inevitably divert such assistance for assistance to faith-based organizations
commenter suggested that the proposed their own religious activities. The without instituting adequate
rule would authorize conduct that Department likewise rejects the view ‘‘constitutional safeguards,’’ and
would impermissibly convey the that faith-based organizations cannot be requested that the rule be revised to
message that government endorses trusted to fulfill their written promises comply with the framework instituted
religious content. Another commenter to adhere to grant or contract by Zelman v. Simmons-Harris, 536 U.S.
suggested that the Department modify requirements. 639 (2002). These commenters
the proposed rule to make clear that the Moreover, for reasons similar to those emphasized the need for program
government may not disburse public articulated above regarding ‘‘inherently beneficiaries to have a ‘‘real choice’’ of
funds to organizations that convey religious activities,’’ the Department their social service provider and
religious messages or in any way does not believe that it would be suggested there was ‘‘no * * * social
advance religion. Another commenter appropriate to provide a more detailed service structure in place to ensure a
suggested that the rule define definition of ‘‘participation.’’ real choice.’’ One commenter requested
‘‘participation’’ to provide guidance as Nonetheless, we reaffirm that a clarification whether inherently
to whether ‘‘compelled but passive beneficiary’s participation in any religious activities conducted by a
presence at religious activities * * * religious activities offered by a recipient service provider receiving both direct
constitute[s] coerced participation.’’ of DOL support must be entirely and indirect support must be separate in
Finally, one commenter requested voluntary and further, that such time and location from DOL program
clarification whether it would be activities must be offered separately in services. This commenter also requested
permissible for a DOL social services time or location from social service reconciliation between, as the
provider to engage in inherently programs receiving direct DOL support. commenter described it, the rule’s
religious activity at a beneficiary’s We recommend that DOL social service requirement that service providers
request before or following the providers, including State and local receiving vouchers must satisfy ‘‘all
provision of social services that receive governments administering DOL- legal and programmatic requirements’’
direct financial assistance. supported programs, help to ensure that (see 2.32(c) and 2.33(c), both referring to
The Department disagrees with these beneficiaries and prospective ‘‘all applicable legal and programmatic
comments and declines to make the beneficiaries of their programs requirements’’) and the rule’s
requested changes. Concerning the understand their rights by having implication that the Department may
rule’s definition of ‘‘inherently religious literature available for the beneficiaries ‘‘dispense with programmatic
activities,’’ it would be difficult, if not explaining their rights. requirements where doing so relieves a
impossible, to establish a complete list Finally, in response to commenter’s substantial burden on religious
of all inherently religious activities. request for further clarification of the practice.’’ Last, one commenter
Inevitably, a regulatory definition would ‘‘separate, in time or location’’ requested a rule change that would
exclude some inherently religious requirement, the Department declines to make the nondiscrimination provision
activities while including activities that revise this portion of the rule, because of § 2.33(a) applicable to service
arguably may not be inherently the Department does not believe that it providers receiving indirect support.
religious. Rather than attempt to is ambiguous or necessitates additional The Department respectfully declines
establish an exhaustive regulatory regulation for proper adherence. to adopt the recommendations of the
definition, the Department has decided Regarding the example posed by the commenters requesting incorporation of

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41886 Federal Register / Vol. 69, No. 132 / Monday, July 12, 2004 / Rules and Regulations

additional requirements by regulation. rule does not alter any proposed rule, the legal restrictions that
The proposed rule clearly states that any nondiscrimination provisions of apply to religious programs within
organization receiving indirect DOL existing statutes, including statutes correctional facilities will sometimes be
support, whether through a voucher- governing programs providing DOL different from legal restrictions that
style program or other qualifying support. See section of preamble govern other Department programs. That
program offered by the Department, entitled Applicability and Notice of is because correctional institutions are
must comply with Federal law. Such Nondiscrimination Requirements. Thus, heavily regulated, and this extensive
law includes constitutional to the extent that such statutes restrict government control over the prison
requirements. The Department thus the activities of indirectly funded environment means that prison officials
believes that the proposed rule organizations, those restrictions remain must sometimes take affirmative steps,
adequately addresses these commenters’ in effect under this rule. Questions in the form of chaplaincies and similar
constitutional concerns. regarding the applicability of these other programs, to provide an opportunity for
Regarding the inquiry whether statutes may be addressed to the prisoners to exercise their religion.
inherently religious activities conducted appropriate DOL program official or the Without such efforts, religious freedom
by a social service provider receiving DOL’s Civil Rights Center. See § 2.35 of would not exist for Federal prisoners.
both direct and indirect support must be this final rule. Additionally, the See Cruz v. Beto, 450 U.S. 319, 322 n.2
separate in time and location from DOL religious freedom of beneficiaries in a (1972) (explaining that ‘‘reasonable
program services, § 2.33(b)(1) of the rule program receiving indirect support is opportunities must be afforded to all
plainly prohibits service providers from protected by the guarantee of genuine prisoners to exercise the religious
using direct DOL support to conduct and independent private choice. freedom guaranteed by the First and
inherently religious activities. Using any Officials administering public support Fourteenth Amendments without fear of
direct support to conduct such activities under a program providing indirect penalty’’); Abington School District v.
would violate this prohibition, even if assistance have an obligation to ensure Schempp, 374 U.S. 203, 299 (1963)
the organization also received indirect that every eligible applicant receives (Brennan, J., concurring) (observing that
support. Religious activity need not be services from some provider, and no ‘‘hostility, not neutrality, would
restricted, however, when related to beneficiary may be required to receive characterize the refusal to provide
services (or part of programs) that services from a provider to which the chaplains and places of worship for
receive only indirect DOL support. beneficiary has a religious objection. In prisoners . . . cut off by the State from
The Department also disagrees with other words, DOL-supported vouchers all civilian opportunities for public
the suggestion that the rule is and other mechanisms for providing communion’’). Of course, religious
inconsistent in requiring faith-based indirect support must be available to all activities must be voluntary for the
organizations to meet applicable legal participants regardless of their religious inmates.
and programmatic requirements but also belief, and those who object to a Sometimes the activities of chaplains
permitting constitutional religious provider have a right to and those assisting them will be
accommodations for certain religious services from some alternative provider. inherently religious. For example, a
practices. One fundamental purpose of chaplain might conduct a voluntary
this rule is to allow organizations to be Exceptions for Chaplains and Certain worship service or administer
eligible for Department programs DOL-Supported Social Service Programs sacraments. The rule does not effect any
without regard to their religious From the Restriction on Direct Funding change in the professional or legal
character or affiliation and to prevent of ‘‘Inherently Religious’’ Activities responsibilities of chaplains or those
the exclusion of organizations from Some commenters objected to the persons or organizations assisting them.
competing for DOL support simply exception from the ‘‘inherently religious Nor does it diminish the fact that
because of their religious character. activities’’ restrictions for religious or chaplains’ duties often include the
Thus, faith-based organizations are other organizations assisting chaplains provision of secular counseling. Rather,
eligible to compete for DOL support on in carrying out their duties in prisons, the rule is intended simply to make
the same basis, and under the same detention facilities, or community clear that the rule’s otherwise-
eligibility requirements, as all other correction centers. Others criticized the applicable restrictions on the use of
organizations. The statement in the rule for excepting certain DOL- direct DOL support for inherently
proposed rule that indicated supported social service programs—i.e., religious activities do not apply to
accommodations to religion may be those that involve a high degree of chaplains in correctional facilities or
permitted, ‘‘in a manner consistent with government control over the program those functioning in similar roles.
the Establishment Clause,’’ does not environment—from the restriction on Accordingly, the rule as stated reflects
signify that discrimination against or direct financial assistance of inherently the law and requires no change.
preferential treatment for religion is religious activities, asserting that there For similar reasons, the legal
permissible, but rather acknowledges is no legal basis for such an exception. restrictions that apply to religious
the special circumstances involved One commenter suggested modifying activities within some DOL-supported
when DOL provides support to religious the proposed rule to clarify that social service programs, such as isolated
organizations. Necessarily included religious accommodation at remote Job residential Job Corps facilities, may
within these special circumstances are Corps centers must be available to all sometimes be different from the legal
any accommodations for religious participants and not limited to restrictions that govern other DOL
practices that are consistent with the participants of dominant religions. Still programs. This is because where there is
Free Exercise and Establishment Clauses another commenter criticized the rule extensive government control over the
of the Constitution. for lacking clarity, and expressed environment of a DOL-supported social
The Department also disagrees with concern that too much discretion was service program, like an isolated
the commenter’s request to extend the being given to the government in residential Job Corps facility, program
proposed rule’s nondiscrimination determining which programs have a officials must sometimes take
provision (§ 2.33(a)) to religious high degree of government control. affirmative steps, in the form of access
organizations receiving indirect DOL The Department respectfully disagrees to ministers and similar programs, to
support. As an initial matter, this final with these comments. As noted in the ensure that program beneficiaries may

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exercise their religious freedom. Cf. local diversity and nondiscrimination commingled and thus subject to the
Katcoff v. Marsh, 755 F.2d 223, 234 (2d requirements. Both commenters requirements of this rule. The
Cir. 1985) (finding it ‘‘readily apparent’’ suggested that the proposed rule be Department also disagrees that it lacks
that government is obligated by the First modified to provide that State and local statutory or constitutional authority to
Amendment to make religion available laws will not be preempted by the rule. require States to comply with this rule
to members of the Army who otherwise Conversely, one commenter indicated for commingled State funds when State
would not have access to their religion that the rule should clearly state that it law is inconsistent with the rule.
because they are often in isolated areas preempts all such State and local Neither States nor localities are
without access to religious requirements. obligated to participate in Department
opportunities). Without such efforts, The requirements that govern programs, but should they choose to do
religious freedom would not exist for financial assistance under the so, they must comply with Federal
these DOL program beneficiaries. Of Department programs at issue in these requirements. Valid Federal
course, participation in such activities regulations do not address preemption requirements may be imposed through,
must be voluntary. In response to the of State or local diversity or among other means, statute or agency
suggestion that the rule be modified to nondiscrimination laws. Federal rulemaking, as was done here. And, of
clarify that any religious financial assistance, however, carries course, where no statute requires
accommodation at Job Corps centers Federal obligations. The Federal commingling of funds, States remain
must not be limited to participants from obligations continue to be applicable free to separate their funds from Federal
dominant faiths, the Department rejects even when Federal financial assistance funds, and Federal requirements do not
the suggestion as unnecessary. Of is first given to the States or localities apply to segregated State funds.
course, religious activities on Job Corps through block grants and the latter are
then responsible for disbursing the Organizations’ Display of Religious Art
Centers must be permitted for all
Federal financial assistance. No or Symbols
beneficiaries of such DOL programs
regardless of faith. The rule already organization is required to apply for Three commenters objected to the
provides that there can be no assistance under these programs, but provisions allowing faith-based
‘‘discriminat[ion] for or against a current organizations that apply and are organizations conducting DOL-
or prospective program beneficiary on selected for assistance must comply supported social service programs in
the basis of religious or religious belief.’’ with the applicable legal and their facilities to retain religious art,
The Department believes that the programmatic requirements. As icons, scriptures, or other religious
proposed rule requires no change in this discussed below, these Federal symbols in their facilities.
regard. requirements apply not only to Federal The Department disagrees with these
financial assistance but also to State comments. A number of Federal statutes
Applicability and Notice of matching funds and to State funds that affirm the principle embodied in this
Nondiscrimination Requirements are commingled with the Federal rule. See, e.g., 42 U.S.C. 290kk–
Three commenters suggested that the assistance. 1(d)(2)(B). Moreover, for no other
rule should explain the scope of service providers do Department
applicable independent statutory Applicability of Rule to State, Local, regulations prescribe the types of
provisions requiring grantees not to and ‘‘Commingled’’ Funds artwork or symbols that may be placed
discriminate on the basis of religion, One commenter stated that the within the structures or room in which
rather than simply referring grantees to proposed rule was unclear on whether DOL-supported social services are
appropriate Department program offices. it applied to funds supplied by the provided. In addition, a prohibition on
One commenter further suggested that States. Two commenters stated that the the use of religious icons would make
the proposed rule be amended to Department lacked the statutory or it more difficult for many religious
provide specific directions on which constitutional authority to require States organizations to participate in
programs statutorily bar religious to waive, for their own funds, State law Department programs than other
discrimination. that is inconsistent with the rule. A organizations by forcing them to procure
The Department understands that third commenter requested a rule additional space. It would thus be an
organizations participating in DOL change that would make State matching inappropriate and excessive restriction,
programs need to be aware of such funds that are not commingled subject typical of the types of regulatory barriers
provisions, but declines to adopt the to the rule’s requirements. that this final rule seeks to eliminate.
suggested recommendation because the The Department disagrees with these Consistent with constitutional church-
Department believes such information is objections, but has modified the state guidelines, a religious organization
most easily obtained and best explained regulatory text slightly for clarification. that participates in Department
by the appropriate Department offices. The rule makes clear that when States programs retains its independence and
The purpose of this rulemaking is to and local governments voluntarily may continue to carry out its mission,
eliminate undue administrative barriers choose to contribute their own funds to although it must not use direct DOL
that the Department has imposed to the supplement program activities, they support to support any inherently
participation of religious organizations have the option of commingling their religious activities. Accordingly, this
in Department programs; it is not to funds with Federal funds or to separate final rule continues to provide that
alter existing statutory requirements, out their funds from Federal funds. The religious organizations may use space in
which apply to Department programs to rule applies to State funds in the former their facilities to provide DOL-
the same extent that they applied under instance, but not the latter. To the extent supported services, without removing
the prior rule. a Department program may explicitly religious art, icons, scriptures, or other
require that Federal rules apply to State religious symbols.
State and Local Diversity Requirements matching funds (or other grantee
and Preemption contributions) or may require State Religious Freedom Restoration Act
Two commenters expressed concern matching funds to be part of the One commenter requested that the
that the proposed rule will exempt program grant budget, these State Department include language in the
religious organizations from State and matching funds are considered to be regulation stating that the Religious

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41888 Federal Register / Vol. 69, No. 132 / Monday, July 12, 2004 / Rules and Regulations

Freedom Restoration Act (‘‘RFRA’’), 42 As to the suggestion that the prohibiting organizations from
U.S.C. 2000bb et seq., may provide relief Constitution restricts the government discriminating for or against program
from otherwise applicable statutory from providing support for social beneficiaries on the basis of religion or
provisions prohibiting employment services to religious organizations that religious belief encompasses
discrimination on the basis of religion. consider faith in hiring, that view does beneficiaries who hold no religious
The commenter noted that, for example, not accurately represent the law. As belief or who desire to be free of
the Department of Health and Human noted below, the employment decisions religion. Such a prohibition is
Services has recognized RFRA’s ability of organizations that receive extensive straightforward and requires no further
to provide relief from certain public financial assistance are not elaboration. In addition, the rule
employment nondiscrimination attributable to the State, see Rendell- provides that organizations may not use
requirements in the final regulations it Baker v. Kohn, 457 U.S. 830 (1982), and direct DOL support for inherently
promulgated governing its substance it has been settled for more than 100 religious activities and that any such
abuse and mental health programs (e.g., years that the Establishment Clause does activities must be offered separately in
42 CFR 54.6). not bar the provision of direct Federal time or location and must be voluntary
The Department notes that RFRA, grants to organizations that are for program beneficiaries. These
which applies to all Federal law and its controlled and operated exclusively by requirements further protect the rights
implementation, 42 U.S.C. 4000bb–3, members of a single faith. See Bradfield of program beneficiaries. The
4000bb–2(1), is applicable regardless of v. Roberts, 175 U.S. 291 (1899); see also Department also declines to adopt the
whether it is specifically mentioned in Bowen v. Kendrick, 487 U.S. 589, 609 recommendation that the rule create a
this rule. Whether a party is entitled to (1988). Finally, the Department notes grievance process that is specific to the
an exemption or other relief under that allowing religious organizations to requirements contained in this rule,
RFRA simply depends upon whether consider faith in hiring when they because traditional channels of airing
the party satisfies the RFRA’s statutory receive government support is much grievances or filing complaints are
requirements. The Department therefore like allowing a Federally-supported already generally available.
declines to adopt this recommendation environmental organization to hire
Assurance Requirements
at this time. those who share its views on protecting
the environment—both types of One commenter, in order to mitigate
Recognition of Religious Organizations’ organization are allowed to consider constitutional concerns raised by the
Title VII Exemption ideology and missions, which improves proposed rule, opposed the removal of
the organizations’ effectiveness and any existing requirements that faith-
The Department received three based organizations provide assurances
comments expressing views on the preserves their integrity. Thus, the
Department declines to amend the final that direct DOL support will not be used
rule’s provision that, absent statutory for inherently religious activities. This
authority to the contrary, religious rule to require religious organizations to
forfeit their Title VII rights. commenter, and one other, stated that
organizations do not forfeit their Title the proposed rule should include
The Department also rejects the
VII exemption by receiving financial additional assurances and safeguards to
request to give this section a more
assistance from the Department. One ‘‘prevent religious use of [Department]
expansive title. The section relates most
commenter approved of the retention of funds.’’ Still another commenter
directly to the retention of the Title VII
the Title VII exemption, but urged exemption, and the proposed title requested that the rule require State and
renaming the section with a more accurately reflects the section’s scope local governments to provide assurances
expansive title, such as ‘‘Preserving the and purpose. that they will follow the equal treatment
Freedom of Faith-Based Organizations principles of this rule.
in Employment Decisions.’’ Two Nondiscrimination in Providing The Department disagrees with the
commenters stated that the rule Assistance commenters and declines to adopt their
‘‘improperly extends [the] Title VII’’ Commenters have requested a number recommendations. Once this rule comes
exemption because ‘‘Congress has never of rule changes that would provide into effect, each prospective DOL social
authorized [the] exemption’’ for DOL express protections for beneficiaries service provider, including State and
programs. These commenters further who object to the religious character of local governments, must certify in its
assert that providing Federal financial an assigned service provider. One application for assistance that it will
assistance for the provision of social commenter requested a revision to make comply with various laws applicable to
services to an organization that clear that the right to religious freedom recipients of Federal financial
considers religion in its employment includes the right to be free from assistance, including this final rule and
decisions is unconstitutional. religion. Other commenters have its prohibitions on the use of direct DOL
The Department disagrees with the requested provisions that would require support for inherently religious
objections to the rule’s recognition that notice to beneficiaries that they may activities and on discrimination either
a religious organization does not forfeit object to a religious service provider and for or against religious organizations.
its Title VII exemption when obtain a secular alternative; that Additional assurances, such as those
administering DOL-supported social participation in religious activity is that are being removed and prohibited
services. As an initial matter, applicable voluntary, and pressure or coercion, by this rule, only perpetuate an unfair
statutory nondiscrimination even subtly applied, is prohibited; and presumption that program requirements
requirements are not altered by this that the failure to participate in religious applicable to all DOL providers are
rule. Congress establishes the conditions activities will not impact the receipt of insufficient to bind faith-based
under which religious organizations are social services. These commenters organizations and that additional
exempt from Title VII. This rule simply additionally requested the creation of a requirements and assurances must be
recognizes that the Title VII exemption, grievance process and remedies for imposed on these organizations.
including its limitations, is fully violations of these rights. The Department believes that no
applicable to Federally-assisted The Department declines to adopt additional requirements above and
organizations unless Congress says these recommendations, because it beyond those imposed on all
otherwise. believes that the rule’s existing language participating organizations are needed.

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Federal Register / Vol. 69, No. 132 / Monday, July 12, 2004 / Rules and Regulations 41889

In issuing this rule, the Department’s the regulation, the Department has made activities would apply to volunteer
general approach is that faith-based the requested change. mentors who were not paid with
organizations are not a category of government money. The commenter
Employment or Training Activities That
applicants or service providers that wondered whether such mentors could
Involve the Maintenance of a Building
require additional requirements or engage in religious activities with the
Used for Religious Activities
oversight in order to ensure compliance children they mentored in an activity
with program regulations. Rather, the One commenter objected that the receiving direct DOL support.
Department presumes that faith-based proposed rule purportedly DOL social service providers may not
organizations, like other recipients of ‘‘incorporates by reference an earlier use direct DOL support for inherently
DOL support, fully understand the proposed rule’’ proposing revisions to religious activities. As is discussed
restrictions on the support they receive, 29 CFR 37.6(f)(2). The commenter stated below, DOL support includes more than
including the restriction that inherently that the proposed revision to 37.6(f)(2) money. Thus, in a program receiving
religious activities cannot be undertaken would lead to confusion and possible any form of direct DOL support, a DOL
with direct DOL support and must unconstitutional use of Federal funds social service provider—including one
remain separate from the Federally- for capital improvements to religious staffed by volunteer mentors—must
supported activities. The requirements buildings. The Department notes that, comply with this rule’s restrictions on
for use of DOL support under a contrary to the commenter’s assertions, inherently religious activities. Of
Department program apply to, and are the rule proposed on March 9 did not course, where volunteer mentors are
binding on, all Department social include proposed changes to 29 CFR acting outside the scope of a DOL-
service providers. 37.6(f)(2). As a result, the Department supported program, they are not subject
One commenter requested that the has responded in detail to this and to such restrictions on their religious
proposed rule require monthly reports similar objections in its notice of final activities.
and periodic site visits of all rulemaking for 29 CFR part 37, One commenter suggested that the
Department grantees to ensure published elsewhere in the Federal Department provide a definition for
compliance with the Establishment Register today. ‘‘religious organization’’ or ‘‘faith-based
Clause. organization,’’ reasoning that a common
Definitions
The Department respectfully declines definition across Federal programs
to adopt this recommendation. Ordinary The Department received several would maximize opportunities for these
enforcement and monitoring procedures comments relating to definitions for organizations. The Department declines
are sufficient to ensure that faith-based terms used in the proposed rule. Two to adopt this suggestion. One of the
organizations, like other participating comments focused on the definition of objectives of this rule is to move away
organizations, do not violate program ‘‘social service program,’’ which the from unnecessary Federal inquiry into
restrictions, including those concerning Department defined as including, inter the religious nature, or absence of
unauthorized uses of financial alia, childcare services and literacy and religious nature, of an organization
assistance. The need for enforcement of mentoring programs. One commenter seeking DOL support or participation in
Department regulations does not expressed concern that the proposed a DOL social service program. The
increase simply because some service rule subsequently failed to address how Department believes the focus should
providers are faith-based organizations. a religious childcare service provider always be on (1) whether the
The Department has a responsibility to would be able to ensure that children as organization is eligible as defined by the
ensure that all DOL support is used in young as three or four, or perhaps even program in question; and (2) whether
accordance with program-specific younger, would have a choice as to the organization commits to abide, and
regulations and any government-wide whether to participate in inherently does abide, by all legal and
requirements. Compliance with the religious activities of the childcare programmatic requirements that govern
Establishment Clause is just one aspect center. Likewise, the commenter was that support.
of compliance with legal and concerned that such children would be Finally, a commenter suggested that
programmatic requirements. We believe unable to separate out the religious ‘‘Federal financial assistance’’ should be
the monitoring mechanisms currently in childcare center’s views from the defined to include non-financial
place are sufficient to address whatever instruction provided. assistance that might be provided by
compliance issues may arise. The Department disagrees that DOL or by State or local governments
Another commenter suggested that changes to the rule are necessary in using DOL funds. The Department
the Department amend the proposed response to this comment. As with the declines to amend the definition.
rule regarding assurances to clarify that definition of ‘‘inherently religious Historically, Federal regulations have
§ 2.32(c) is not limited to grant activities’’ discussed earlier in this used similar, if not identical, language
documents and applies equally to preamble, it would be difficult, if not to define Federal financial assistance.
contracts. The commenter noted that impossible, to craft regulatory language Through the course of time, it has been
State and local governments frequently that would address the specific clearly established that such assistance
administer federally-financed social circumstances of every activity covered includes more than money. See U.S.
service programs by issuing contracts by the rule. In the Department’s view, Dep’t of Transp. v. Paralyzed Veterans,
with service providers rather than the language of the rule is sufficiently 477 U.S. 597, 607 n.11 (1986) (noting
grants. broad to cover the circumstances that Federal financial assistance may
The Department believes that no suggested by the commenter. That take non-monetary form). Federal
change is required. Section 2.32(c) language requires recipients to operate financial assistance may include, for
applies to ‘‘a grant document, their DOL-supported programs in a example, the use or rent of Federal land
agreement, covenant, memorandum of manner consistent with applicable or property at below market value,
understanding, policy, or regulation.’’ Federal law. Such law, of course, Federal training, a loan of Federal
The language is broadly sweeping and includes the Constitution. personnel, subsidies, or other
the use of the term ‘‘agreement’’ The same commenter questioned arrangements with the intention of
includes by definition ‘‘contracts.’’ whether a ban on using direct DOL providing assistance. See Delmonte v.
However, in an effort to further clarify support for inherently religious Department of Bus. & Prof’l Regulation,

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41890 Federal Register / Vol. 69, No. 132 / Monday, July 12, 2004 / Rules and Regulations

877 F. Supp. 1563 (S.D. Fla. 1995) changes made to the rule as a result of consultation and funding requirements
(training of city police officers by that review are identified in the docket of section 6 of the Executive Order.
Federal personnel considered to be file, which is available for public Consistent with Executive Order 13132,
Federal financial assistance). inspection in the office of the Center for the Department specifically solicited
Faith-Based and Community Initiatives, comments from State and local
Unfunded Mandates Reform Act of 1995
U.S. Department of Labor, 200 government officials on this proposed
Section 202 of the Unfunded Constitution Avenue, NW., Room S– rule, and no comments from these
Mandates Reform Act of 1995 requires 2235, Washington, DC 20210. entities were submitted that raised
that a covered agency prepare a federalism concerns.
budgetary impact statement before Regulatory Flexibility Act
promulgating a rule that includes any The Secretary of Labor, in accordance List of Subjects
Federal mandate that may result in the with the Regulatory Flexibility Act (5 20 CFR Part 667
expenditure by State, local, and tribal U.S.C. 605(b)), has reviewed and
governments, in the aggregate, or by the approved this final rule and in so doing Employment; Grant programs—labor;
private sector, of $100 million or more certifies that the rule will not have a Reporting and recordkeeping
in any one year. significant economic impact on a requirements.
One commenter suggested that the substantial number of small entities. 20 CFR Part 670
rule met the unfunded mandate The final rule will not impose any new
requirement only because the rule failed costs, or modify existing costs, Employment; Grant programs—labor;
to mandate that alternative secular applicable to recipients of DOL support. Job Corps; Religious discrimination.
providers must be made available for Rather, the purpose of the rule is to 29 CFR Part 2
beneficiaries who object to the religious clarify that DOL’s social service
character of an organization. Contrary to programs are open to all qualified Administrative practice and
the commenter’s suggestion, the organizations, regardless of their procedure; Claims; Courts; Government
Department has determined that this religious character, and to establish employees; Religious discrimination.
rule would not impose a mandate that clearly the permissible uses to which
29 CFR Part 37
will result in the expenditure by State, DOL support may be put.
local, and tribal governments, in the Notwithstanding the Secretary’s Administrative practice and
aggregate, or by the private sector, of determination that this rule will not procedure; Aged; Aliens; Civil rights;
more than $100 million in any one year. have a significant economic effect on a Discrimination; Equal educational
This is largely because these regulations substantial number of small entities, the opportunity; Equal employment
impact only Federal financial Department specifically invited opportunity; Grant programs-labor;
assistance. Although State or local comments regarding any less Individuals with disabilities;
governments may commingle their burdensome alternatives to this rule that Investigations; Manpower training
funds with Federal funds, the rule does will meet the Department’s objectives as programs; Political affiliation
not require them to do so. described in this preamble. No such discrimination; Religious
comments were received. discrimination; Reporting and
Amendments to Job Corps and WIA recordkeeping requirements; Sex
Regulations Unfunded Mandates Reform Act
discrimination.
Except to the extent discussed above, Title II of the Unfunded Mandates
Signed at Washington, DC, this 7th day of
the Department did not receive Reform Act of 1995 (2 U.S.C. 1531– July, 2004.
comments concerning the portions of 1538) establishes requirements for
Elaine L. Chao,
the proposed rule that proposed to Federal agencies to assess the effects of
their regulatory actions on State, local, Secretary of Labor.
amend the Job Corps and WIA
and tribal governments, and on the Emily S. DeRocco,
regulations. The Department has revised
the language of these portions of the private sector. This final rule does not Assistant Secretary for Employment and
impose any Federal mandates on any Training.
proposed rule to improve their clarity
and consistency with the part of the State, local, or tribal governments, or the ■ For the reasons set forth in the
proposed rule that is now the new private sector, within the meaning of the preamble, the Department of Labor
subpart D of DOL’s final general Unfunded Mandates Reform Act of amends 20 CFR Part 667; 20 CFR Part
regulation at 29 CFR part 2. The 1995. 670; 29 CFR Part 2; and 29 CFR Part 37
Department has also revised the Paperwork Reduction Act as set forth below.
language of the proposed WIA
The Paperwork Reduction Act does Title 20—Employees’ Benefits
regulations in order to ensure greater
conformity with the language of WIA not apply because this rule does not Chapter V—Employment and Training
section 188(a)(3). contain any information collection Administration, Department of Labor
requirements that require the approval
II. Findings and Certifications of the Office of Management and PART 667—ADMINISTRATIVE
Executive Order 12866 Budget. PROVISIONS UNDER TITLE I OF THE
Executive Order 13132, Federalism WORKFORCE INVESTMENT ACT
The Office of Management and Budget
(OMB) determined that this rule is a Executive Order 13132, Federalism, ■ 1. The authority citation for part 667 is
‘‘significant regulatory action’’ as prohibits an agency from publishing any revised to read as follows:
defined in section 3(f) of the Order rule that has federalism implications if
Authority: Subtitle C of Title I, Sec. 506(c),
(although not an economically the rule either imposes substantial Pub. L. 105–220, 112 Stat. 936 (20 U.S.C.
significant regulatory action under the direct compliance costs on State and 9276(c)); Executive Order 13198, 66 FR 8497,
Order). OMB reviewed this final rule local governments and is not required 3 CFR 2001 Comp., p. 750; Executive Order
under Executive Order 12866, by statute, or the rule preempts State 13279, 67 FR 77141, 3 CFR 2002 Comp., p.
Regulatory Planning and Review. Any law, unless the agency meets the 258.

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■ 2. In § 667.266, paragraph (b) and the 29 CFR 37.6(f)(1). 29 CFR part 2, subpart Subpart D—Equal Treatment in
section heading are revised to read as D also contains requirements related to Department of Labor Programs for
follows: equal treatment of religious Religious Organizations; Protection of
organizations in Department of Labor Religious Liberty of Department of
§ 667.266 What are the limitations related programs, and to protection of religious
to religious activities?
Labor Social Service Providers and
liberty of Department of Labor social Beneficiaries
* * * * * service providers and beneficiaries.
(b)(1) 29 CFR part 2, subpart D Limitations on the employment of Sec.
governs the circumstances under which 2.30 Purpose.
participants under WIA Title I to carry 2.31 Definitions.
DOL support, including WIA Title I out the construction, operation, or
financial assistance, may be used to 2.32 Equal participation of religious
maintenance of any part of any facility organizations.
employ or train participants in religious used or to be used for religious 2.33 Responsibilities of DOL, DOL social
activities. Under that subpart, such instruction or as a place of religious service providers and State and local
assistance may be used for such worship are described at 29 CFR governments administering DOL
employment or training only when the 37.6(f)(2). See section 188(a)(3) of the support.
assistance is provided indirectly within Workforce Investment Act of 1998, 29 2.34 Application to State and local funds.
the meaning of the Establishment Clause 2.35 Effect of DOL support on Title VII
U.S.C. 2938(a)(3). employment nondiscrimination
of the U.S. Constitution, and not when
requirements and on other existing
the assistance is provided directly. As PART 670—THE JOB CORPS UNDER statutes.
explained in that subpart, assistance TITLE I OF THE WORKFORCE 2.36 Status of nonprofit organizations.
provided through an Individual INVESTMENT ACT
Training Account is generally § 2.30 Purpose.
considered indirect, and other ■ 4. The authority citation for part 670 is The purpose of the regulations in this
mechanisms may also be considered revised to read as follows: subpart is to ensure that DOL-supported
indirect. See also 20 CFR 667.275 and social service programs are open to all
29 CFR 37.6(f)(1). 29 CFR part 2, subpart Authority: Subtitle C of title I, sec. 506(c),
qualified organizations, regardless of the
D also contains requirements related to Pub. L. 105–220, 112 Stat. 936 (20 U.S.C.
organizations’ religious character, and to
2881 et seq. and 9276(c)); 5 U.S.C. 301;
equal treatment in Department of Labor establish clearly the permissible uses to
Executive Order 13198, 66 FR 8497, 3 CFR
programs for religious organizations, which DOL support for social service
2001 Comp., p. 750); Executive Order 13279,
and to protecting the religious liberty of 67 FR 77141, 3 CFR 2002 Comp., p. 258. programs may be put, and the
Department of Labor social service conditions for receipt of such support.
providers and beneficiaries. ■ 5. Section 670.555 is amended by In addition, this proposed rule is
(2) Limitations on the employment of removing paragraph (b), redesignating designed to ensure that the
participants under WIA Title I to carry paragraph (d) as paragraph (b), and Department’s social service programs
out the construction, operation, or revising paragraph (c) to read as follows: are implemented in a manner consistent
maintenance of any part of any facility with the requirements of the
used or to be used for religious § 670.555 What are the center’s
responsibilities in ensuring that students’
Constitution, including the Religion
instruction or as a place for religious religious rights are respected? Clauses of the First Amendment.
worship are described at 29 CFR
37.6(f)(2). * * * * * § 2.31 Definitions.
■ 3. In § 667.275, paragraph (b) and the (c) Requirements related to equal As used in the regulations in this
section heading are revised to read as treatment of religious organizations in subpart:
Department of Labor programs, and to (a) The term Federal financial
follows:
protection of religious liberty of assistance means assistance that non-
§ 667.275 What are a recipient’s Department of Labor social service Federal entities (including State and
obligations to ensure nondiscrimination providers and beneficiaries, are found at local governments) receive or
and equal opportunity, and what are a subpart D of 29 CFR part 2. See also administer in the form of grants,
recipient’s obligations with respect to contracts, loans, loan guarantees,
religious activities?
§§ 667.266 and 667.275 of 20 CFR; 29
CFR part 37. property, cooperative agreements, direct
* * * * * appropriations, or other direct or
(b) 29 CFR part 2, subpart D governs Title 29—Labor indirect assistance, but does not include
the circumstances under which a tax credit, deduction or exemption.
Chapter I—Office of the Secretary of
recipients may use DOL support, (b) The term social service program
Labor
including WIA Title I financial means a program that is administered or
assistance, to employ or train PART 2—GENERAL REGULATIONS supported by the Federal Government,
participants in religious activities. or by a State or local government using
Under that subpart, such assistance may ■ 7. The authority citation for part 2 is Federal financial assistance, and that
be used for such employment or training revised to read as follows: provides services directed at reducing
only when the assistance is provided poverty, improving opportunities for
indirectly within the meaning of the Authority: 5 U.S.C. 301; Executive Order low-income children, revitalizing low-
Establishment Clause of the U.S. 13198, 66 FR 8497, 3 CFR 2001 Comp., p. income communities, empowering low-
Constitution, and not when the 750; Executive Order 13279, 67 FR 77141, 3
income families and low-income
assistance is provided directly. As CFR 2002 Comp., p. 258.
individuals to become self-sufficient, or
explained in that subpart, assistance otherwise helping people in need. Such
■ 8. Part 2 is amended by adding a new
provided through an Individual programs include, but are not limited to,
subpart D to read as follows:
Training Account is generally the following:
considered indirect, and other PART 2—GENERAL REGULATIONS (1) Child care services and services to
mechanisms may also be considered meet the special needs of children, older
indirect. See also 20 CFR 667.266 and * * * * * individuals, and individuals with

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41892 Federal Register / Vol. 69, No. 132 / Monday, July 12, 2004 / Rules and Regulations

disabilities (including physical, mental, does not preclude DOL, DOL social program must not disqualify
or emotional disabilities); service providers, or State and local organizations from receiving DOL
(2) Job training and related services, governments administering DOL support or participating in DOL
and employment services; support from accommodating religion in programs on the grounds that such
(3) Information, referral, and a manner consistent with the organizations are motivated or
counseling services; Establishment Clause. In addition, influenced by religious faith to provide
(4) Literacy and mentoring programs; because this rule does not affect existing social services, have a religious
and constitutional requirements, DOL, DOL character or affiliation, or lack a
(5) Services for the prevention and social service providers (insofar as they religious component.
treatment of juvenile delinquency and may otherwise be subject to any
substance abuse, services for the constitutional requirements), and State § 2.33 Responsibilities of DOL, DOL social
prevention of crime and the provision of service providers and State and local
and local governments administering governments administering DOL support.
assistance to the victims and the DOL support must continue to comply
families of criminal offenders, and with otherwise applicable constitutional (a) DOL, DOL social service
services related to intervention in, and principles, including, among others, intermediary providers, DOL social
prevention of domestic violence. those articulated in the Establishment, service providers in their use of direct
(c) The term DOL means the U.S. Free Speech, and Free Exercise Clauses DOL support, and State and local
Department of Labor. of the First Amendment to the governments administering DOL
(d) The term DOL-supported social Constitution. support must not, when providing
service program, DOL social service (b) A religious organization that is a social services, discriminate for or
program, or DOL program means a DOL social service provider retains its against a current or prospective program
social service program, as defined in independence from Federal, State, and beneficiary on the basis of religion or
paragraph (b) of this section, that is local governments and must be religious belief. This requirement does
administered by or for DOL with DOL permitted to continue to carry out its not preclude DOL, DOL social service
support. Such programs include, but are mission, including the definition, intermediary providers, or State or local
not limited to, the One Stop Career practice, and expression of its religious governments administering DOL
Center System, the Job Corps, and other beliefs, subject to the provisions of support from accommodating religion in
programs supported through the § 2.33 of this subpart. Among other a manner consistent with the
Workforce Investment Act. things, such a religious organization Establishment Clause of the First
(e) The term DOL social service must be permitted to: Amendment to the Constitution.
provider means any non-Federal (1) Use its facilities to provide DOL- (b)(1) DOL, DOL social service
organization, other than a State or local supported social services without providers, and State and local
government, that seeks or receives DOL removing or altering religious art, icons, governments administering DOL
support as defined in paragraph (g) of scriptures, or other religious symbols support must ensure that they do not
this section, or participates in DOL from those facilities; and use direct DOL support for inherently
programs other than as the ultimate (2) Retain its authority over its religious activities such as worship,
beneficiary of such programs. internal governance, including retaining religious instruction, or proselytization.
(f) The term DOL social service religious terms in its name, selecting its DOL social service providers must be
intermediary provider means any DOL board members on a religious basis, and permitted to offer inherently religious
social service provider that, as part of its including religious references in its activities so long as they offer those
duties, selects subgrantees to receive mission statements and other governing activities separately in time or location
DOL support or subcontractors to documents. from social services receiving direct
provide DOL-supported services, or has (c) A grant document, contract or DOL support, and participation in the
the same duties under this part as a other agreement, covenant, inherently religious activities is
governmental entity. memorandum of understanding, policy, voluntary for the beneficiaries of social
(g) The term DOL support means or regulation that is used by DOL, a service programs receiving direct DOL
Federal financial assistance, as well as State or local government administering support. For example, participation in
procurement funding provided to a non- DOL support, or a DOL social service an inherently religious activity must not
Federal organization, including a State intermediary provider must not require be a condition for participating in a
or local government, to support the only religious organizations to provide directly-supported social service
organization’s administration of or assurances that they will not use direct program.
participation in a DOL social service DOL support for inherently religious (2) This regulation is not intended to
program as defined in paragraph (d) of activities. Any such requirements must and does not restrict the exercise of
this section. apply equally to both religious and rights or duties guaranteed by the
other organizations. All organizations, Constitution. For example, program
§ 2.32 Equal participation of religious including religious ones, that are DOL officials must not impermissibly restrict
organizations. social service providers must carry out the ability of program beneficiaries or
(a) Religious organizations must be DOL-supported activities in accordance DOL social service providers to freely
eligible, on the same basis as any other with all applicable legal and express their views and to exercise their
organization, to seek DOL support or programmatic requirements, including right to religious freedom. Additionally,
participate in DOL programs for which those prohibiting the use of direct DOL subject to reasonable and permissible
they are otherwise eligible. DOL, DOL support for inherently religious time, place and manner restrictions,
social service intermediary providers, as activities. A grant document, contract or residential facilities that receive DOL
well as State and local governments other agreement, covenant, support must permit residents to engage
administering DOL support, must not memorandum of understanding, policy, in voluntary religious activities,
discriminate for or against an or regulation that is used by DOL, a including holding religious services, at
organization on the basis of the State or local government, or a DOL these facilities.
organization’s religious character or social service intermediary provider in (3) Notwithstanding the requirements
affiliation, although this requirement administering a DOL social service of paragraph (b)(1), and to the extent

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Federal Register / Vol. 69, No. 132 / Monday, July 12, 2004 / Rules and Regulations 41893

otherwise permitted by Federal law § 2.35 Effect of DOL support on Title VII (i) the organization is a nonprofit
(including constitutional requirements), employment nondiscrimination organization operating within the State;
direct DOL support may be used to requirements and on other existing and
support inherently religious activities, statutes. (ii) no part of its net earnings may
and such activities need not be provided A religious organization’s exemption lawfully benefit any private shareholder
separately in time or location from other from the Federal prohibition on or individual;
DOL-supported activities, under the employment discrimination on the basis (3) A certified copy of the applicant’s
following circumstances: of religion, set forth in § 702(a) of the certificate of incorporation or similar
(i) Where DOL support is provided to Civil Rights Act of 1964, 42 U.S.C. document that clearly establishes the
chaplains to work with inmates in § 2000e–1, is not forfeited when the nonprofit status of the applicant; or
prisons, detention facilities, or organization receives direct or indirect (4) Any item described in paragraphs
community correction centers through DOL support. Some DOL programs, (b)(1) through (b)(3) of this section, if
social service programs; however, were established through that item applies to a State or national
(ii) Where DOL support is provided to Federal statutes containing independent parent organization, together with a
social service programs in prisons, statutory provisions requiring that statement by the State or national parent
detention facilities, or community recipients refrain from discriminating organization that the applicant is a local
correction centers, in which social on the basis of religion. Accordingly, to nonprofit affiliate of the organization.
service organizations assist chaplains in determine the scope of any applicable
carrying out their duties; or requirements, recipients and potential PART 37—IMPLEMENTATION OF THE
(iii) Where DOL-supported social recipients should consult with the NONDISCRIMINATION AND EQUAL
service programs involve such a degree appropriate DOL program official or OPPORTUNITY PROVISIONS OF THE
of government control over the program with the Civil Rights Center, U.S. WORKFORCE INVESTMENT ACT OF
environment that religious exercise Department of Labor, 200 Constitution 1998 (WIA)
would be significantly burdened absent Avenue, NW., Room N4123,
affirmative steps by DOL or its social Washington, DC 20210, (202) 693–6500. ■ 9. The authority citation for part 37 is
service providers. Individuals with hearing or speech revised to read as follows:
(c) To the extent otherwise permitted impairments may access this telephone Authority: Sections 134(b), 136(d)(2)(F),
by Federal law, the restrictions set forth number via TTY by calling the toll-free 136(e), 172(a), 183(c), 185(d)(1)(E), 186, 187
in this section regarding the use of Federal Information Relay Service at 1– and 188 of the Workforce Investment Act of
direct DOL support do not apply to 800–877–8339. 1998, 29 U.S.C. 2801, et seq.; Title VI of the
social service programs where DOL Civil Rights Act of 1964, as amended, 42
support is provided to a religious or § 2.36 Status of nonprofit organizations. U.S.C. 2000d, et seq.; Section 504 of the
Rehabilitation Act of 1973, as amended, 29
other non-governmental organization (a) In general, DOL does not require
U.S.C. 794; the Age Discrimination Act of
indirectly within the meaning of the that an organization, including a 1975, as amended, 42 U.S.C. 6101; Title IX
Establishment Clause of the First religious organization, obtain tax- of the Education Amendments of 1972, as
Amendment to the Constitution. exempt status under section 501(c)(3) of amended, 29 U.S.C. 1681; Executive Order
Religious or other non-governmental the Internal Revenue Code in order to be 13198, 66 FR 8497, 3 CFR 2001 Comp., p.
organizations will be considered to have eligible for Federal financial assistance 750; and Executive Order 13279, 67 FR
received support indirectly, for under DOL social service programs. 77141, 3 CFR 2002 Comp., p. 258.
example, if as a result of a program Many such programs, however, do ■ 10. In § 37.6, paragraph (f)(1) and the
beneficiary’s genuine and independent require an organization to be a section heading are revised to read as
choice the beneficiary redeems a ‘‘nonprofit organization’’ in order to be follows:
voucher, coupon, or certificate that eligible for such support. Individual
allows the beneficiary to choose the solicitations that require organizations § 37.6 What specific discriminatory
service provider, or some other to have nonprofit status must actions, based on prohibited grounds other
mechanism is provided to ensure that specifically so indicate in the eligibility than disability, are prohibited by this part,
beneficiaries have a genuine and section of the solicitation. In addition, and what limitations are there related to
any solicitation for a program that religious activities?
independent choice among providers or
program options. All organizations requires an organization to maintain tax- * * * * *
must, however, satisfy all applicable exempt status must expressly state the (f)(1) 29 CFR part 2, subpart D governs
legal and programmatic requirements. statutory authority for requiring such the circumstances under which DOL
status. For assistance with questions support, including WIA Title I financial
§ 2.34 Application to State and local funds. about a particular solicitation, assistance, may be used to employ or
If a State or local government applicants should contact the DOL train participants in religious activities.
voluntarily contributes its own funds to program office that issued the Under that subpart, such assistance may
supplement activities carried out under solicitation. be used for such employment or training
the applicable programs, the State or (b) Unless otherwise provided by only when the assistance is provided
local government has the option to statute, in DOL programs in which an indirectly within the meaning of the
separate out the Federal funds or applicant must show that it is a Establishment Clause of the U.S.
commingle them. If the funds are nonprofit organization, the applicant Constitution, and not when the
commingled, then the provisions of this must be permitted to do so by any of the assistance is provided directly. As
subpart apply to all of the commingled following means: explained in that subpart, assistance
funds in the same manner, and to the (1) Proof that the Internal Revenue provided through an Individual
same extent, as the provisions apply to Service currently recognizes the Training Account is generally
the Federal assistance. State funds that applicant as tax exempt under section considered indirect, and other
are contributed pursuant to the 501(c)(3) of the Internal Revenue Code; mechanisms may also be considered
requirements of a matching or grant (2) A statement from a State taxing indirect. See also §§ 667.266 and
agreement are considered to be body or the State Secretary of State 667.275 of 20 CFR. 29 CFR part 2,
commingled funds. certifying that: subpart D also contains requirements

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41894 Federal Register / Vol. 69, No. 132 / Monday, July 12, 2004 / Rules and Regulations

related to equal treatment of religious primary mechanism for providing in sectarian activities that had appeared
organizations in Department of Labor financial assistance for a comprehensive in the JTPA regulations at 20 CFR
programs, and to protection of religious system of employment and training 627.210(b). This prohibition was not
liberty for Department of Labor social services for adults and dislocated related to the limitations in WIA section
service providers and beneficiaries. workers, and comprehensive youth 188(a)(3) on employing participants to
* * * * * activities for eligible youth. That system carry out construction, operation, or
[FR Doc. 04–15707 Filed 7–8–04; 8:45 am] is known as the One Stop Career Center maintenance, and was not based on
BILLING CODE 4510–23–P
system. DOL’s Employment and either the JTPA statute or the WIA
Training Administration (ETA) statute. See section I(B) of this
administers the One Stop Career Center preamble, below. Second, although
DEPARTMENT OF LABOR system. paragraphs 37.6(f)(2) and (3) did deal
WIA section 188 contains certain with the subject matter of WIA section
Office of the Secretary nondiscrimination, equal opportunity,
188(a)(3), the language of these
and other requirements applicable to
paragraphs departed from the statutory
29 CFR Part 37 recipients of WIA financial assistance.
DOL’s Civil Rights Center (CRC) language and organization, containing
RIN 1291–AA29 administers these requirements. several ‘‘structural, stylistic, and
Section 188(a)(3) of WIA prohibits the phrasing changes’’ intended to
Limitation on Employment of ‘‘enhance the readability of the rule.’’ 64
Participants Under Title I of the employment of WIA participants to
carry out construction, operation, and FR 61691.
Workforce Investment Act of 1998
maintenance at specified locations, with ETA had published on April 15, 1999,
AGENCY: Office of the Secretary, Labor. a limited exception for maintenance. prior to CRC’s IFR, an IFR implementing
ACTION: Final rule. Specifically, this section provides as WIA title I and III, including section
follows: 188(a)(3). 64 FR 18661. That IFR
SUMMARY: This final rule amends the Participants shall not be employed under included a new part 667 of title 20 of
Department of Labor’s (the Department’s this title to carry out the construction, the Code of Federal Regulations, which
or DOL’s) regulations that implement operation, or maintenance of any part of any ‘‘assemble[d] all of the administrative
section 188(a)(3) of the Workforce facility that is used or to be used for sectarian
requirements from the various parts of
Investment Act of 1998 (WIA). That instruction or as a place for religious worship
(except with respect to the maintenance of a the Act and other applicable sources in
statutory section delimits the order to facilitate the administrative
circumstances under which WIA title I facility that is not primarily or inherently
devoted to sectarian instruction or religious management of WIA programs.’’ Id. This
participants may be employed to carry worship, in a case in which the organization new part 667 included two sections—
out the construction, operation, or operating the facility is part of a program or §§ 667.266 and 667.275—that related to
maintenance of any part of any facility activity providing services to participants).
that is used, or to be used, for religious WIA section 188(a)(3). Section
29 U.S.C. 2938(a)(3).
instruction or as a place for religious 667.266(b) tracked the language of the
Section 188(e) of WIA authorizes the statutory section almost exactly, while
worship. The amendments make the
Secretary to issue regulations necessary § 667.275(b) referred only to the
relevant regulatory language adhere
to implement this section. 29 U.S.C. statute’s maintenance exception. After
more closely to the language of section
2938(e). Both ETA and CRC have CRC promulgated its November 12, 1999
188(a)(3).
published rules relating to WIA section IFR, ETA on August 11, 2000, published
DATES: This rule is effective August 11, 188(a)(3).
2004. a Final Rule based on ETA’s April 15,
CRC on November 12, 1999, 1999 IFR. The preamble to this Final
FOR FURTHER INFORMATION CONTACT: published an Interim Final Rule (IFR) Rule noted that CRC had published an
Annabelle T. Lockhart, Director, Civil entitled ‘‘Implementation of the
IFR in the interim, and stated that
Rights Center (CRC), (202) 693–6500. Nondiscrimination and Equal
changes had been made to ETA’s Final
Please note that this is not a toll-free Opportunity Provisions of the
number. Individuals who do not use Rule ‘‘for consistency with the [CRC]
Workforce Investment Act of 1998,’’ to
voice telephones may contact Ms. implement Section 188 of WIA. 64 FR regulations implementing * * * WIA
Lockhart via TTY/TDD by calling the 61692. That IFR, which was codified at Section 188.’’ With respect to §§ 667.266
toll-free Federal Information Relay 29 CFR part 37 and remains in effect, and 667.275, however, the Final Rule’s
Service at (800) 877–8339. generally carried over the preamble described only changes
nondiscrimination and equal relating to cross-references. Except for
SUPPLEMENTARY INFORMATION:
opportunity-related policies and the addition of these cross references,
This section of the preamble to this
procedures promulgated in the JTPA one technical change (‘‘funds’’ was
final rule is organized as follows:
regulations. changed to ‘‘financial assistance’’), and
I. Background. some rearranging of phrase ordering,
Section 37.6(f) of CRC’s IFR contained
II. Differences Between the September 30,
several paragraphs—specifically, ETA’s Final Rule did not alter the
2003, Proposed Rule and the Final Rule.
III. Comments Received on the Proposed paragraphs (f)(1), (2), and (3)—that relevant initial language of either
Rule and DOL’s Responses. related to religious activities. Although § 667.266(b) or § 667.275(b).
IV. Regulatory Procedure. the preamble to the IFR stated that
‘‘[p]aragraph 37.6(f) * * * is directly B. The September 30, 2003, Proposed
I. Background based on, and implements, section Rule
188(a)(3) of WIA,’’ the actual language On December 12, 2002, President
A. WIA and DOL’s Implementing of § 37.6(f) differed from the statute in
Regulations Bush issued Executive Order 13279,
several significant respects. 64 FR
published in the Federal Register on
WIA superseded the Job Training 61691. First, § 37.6(f)(1) carried over a
Partnership Act (JTPA) as DOL’s prohibition on employment and training December 16, 2002 (67 FR 77141).

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Executive Order 13279 charges training is permitted by the engage in employment or training activities
executive branch agencies with giving Establishment Clause of the First that involve the construction, operation, or
equal treatment to faith-based and Amendment to the Constitution where maintenance of any facility, or any part of a
facility, that is used, or will be used, for
community organizations that apply for certain requirements are satisfied. For
religious instruction or as a place of religious
or receive Federal financial assistance to example, assistance is indirect in cases worship.
meet social needs in America’s in which participants are given a (4) A recipient may permit participants to
communities. Consistent with, and to genuine and independent private choice engage in employment or training activities
assist in implementing, the principles among training providers or program that involve the maintenance of a facility that
underlying this Executive Order, the options, and freely elect to receive is used, or will be used, for religious
Department published a Notice of training in religious activities. Of instruction or religious worship,
Proposed Rule-Making (NPRM) on course, the training offered must (i) To the extent that the facility is not
primarily or inherently devoted to religious
September 30, 2003. See 68 FR 56386, otherwise satisfy the requirements of the
instruction or religious worship, and
56388. The NPRM proposed to amend governmental program through which (ii) Provided that the organization
the regulatory provisions promulgated the financial assistance is provided. 68 operating the facility is part of a program or
by CRC, codified at 29 CFR 37.6(f), as FR at 56387–88. For this reason, and to activity providing services to participants.
well as the provisions promulgated by permit participants in WIA title I-
68 FR at 56390. The proposed revisions
ETA, codified at 20 CFR 667.266 and financially assisted programs and
were intended to make these paragraphs
667.275, that referenced § 37.6(f). The activities more choice and greater
easier to understand, and to adhere
proposed amendments fell into two freedom while obtaining essential
more closely to the language of the
main categories: first, amendments employment and training skills, the
intended to eliminate inappropriate Department proposed in the September statute. 68 FR at 56388. As explained in
restrictions on the use of indirect WIA 30, 2003, NPRM to amend 20 CFR section II of this preamble, however, the
financial assistance; and second, 667.266(b)(1), 20 CFR 667.275(b), and language of this proposal also diverged
amendments intended to clarify the 29 CFR 37.6(f)(1), to add a new 29 CFR in several respects from the language of
language of the various regulatory 37.6(f)(2), and to renumber 37.6(f)(2) the statute. This final rule returns to the
provisions related to WIA section and (3) as (f)(3) and (4), respectively. statutory language in order to better
188(a)(3). These proposed revisions are discussed ensure close adherence to the intent of
in detail in the preamble to the Congress.
1. Use of Indirect Federal Financial The Department also proposed to
September 30, 2003, NPRM (see 68 FR
Assistance revise 20 CFR 667.266(b)(2) to correct
at 56387–89).
As explained in the preamble to the the cross-references contained therein.
September 30, 2003, NPRM, among the 2. General Prohibition on Employment As explained in the September 30, 2003,
Department’s primary reasons for of Participants for Construction, NPRM, the Department had determined,
proposing the amendments was to Operation, or Maintenance at Specified upon examination, that the insertion of
eliminate inappropriate regulatory Locations Defined With Reference to the cross-references in this paragraph of
restrictions, set forth in the original Certain Religious Activities; ETA’s August 11, 2000, Final Rule had
language of 29 CFR 37.6(f)(1) and Maintenance Exception been done erroneously. The cross-
referenced in original paragraphs 20 In the same September 30, 2003, reference in the first sentence of
CFR 667.266(b)(1) and 667.275(b), on NPRM, the Department proposed § 667.266(b)(2), instead of referring to
the use of indirect Federal financial revisions to those portions of CRC’s and § 37.6(f)(2), referred to § 37.6(f)(1). The
assistance to employ or train ETA’s regulations that related to WIA cross-reference in the second sentence
participants in religious activities. 29 section 188(a)(3). These revisions were of § 667.266(b)(2), instead of referring to
CFR 37.6(f)(1) has precluded recipients intended both to clarify these § 37.6(f)(3), had referred to § 37.6(f)(2).
from permitting participants ‘‘to be paragraphs and to adhere more closely The Department proposed to correct
employed or trained in sectarian to the statute. these two cross-references without
activities,’’ regardless of whether the With regard to CRC’s regulations, the otherwise altering the language of
financial assistance at issue is direct or NPRM proposed changes to 29 CFR § 667.266.
indirect. Similarly, 20 CFR 667.266(b)(1) 37.6(f)(2) and (3). The original language Finally, the September 30, 2003,
has stated that ‘‘WIA title I financial of these paragraphs broke the language NPRM also proposed to revise 20 CFR
assistance may not be spent on the of WIA section 188(a)(3) down into 667.275(b) in two respects. First, as
employment or training of participants separate elements in an effort to make noted in section I(B)(1) of this preamble,
in sectarian activities’’ (referring readers the statutory requirements easier to the flat prohibition on the employment
to 29 CFR 37.6(f)(1) for further understand. However, in the course of of participants in ‘‘sectarian activities’’
information), and 20 CFR 667.275(b) has drafting the September 30, 2003, NPRM, was revised to permit such employment
stated, in pertinent part, that ‘‘[u]nder DOL determined that these paragraphs when financial assistance is provided
29 CFR 37.6(f)(1), the employment or should be further revised to make them indirectly. Second, the paragraph was
training of participants in sectarian easier to understand and to adhere more revised so that it referred to the entire
activities is prohibited.’’ closely to the language of WIA section prohibition in section 188(a)(3), rather
These restrictions, which were carried 188(a)(3). See 68 FR at 56388. Therefore, than just the maintenance exemption.
over from the JTPA nondiscrimination in the September 30, 2003, NPRM, the The proposed revisions to this
regulations, were not based on any Department proposed to renumber the paragraph contained minor language
specific statutory authority conferred by paragraphs in accordance with the differences from the statute and from
either WIA or JTPA, and are proposed revisions described in the proposed CRC revisions to
inconsistent with current law as Subsection I(B)(1) of this preamble, and § 37.6(f)(2) and (3). These differences
articulated by the U.S. Supreme Court. to revise the language of the paragraphs were not intended to alter the meaning
68 FR at 56387. The Court has clarified as follows: of the statute or to diverge from the
in a number of cases issued since JTPA (3) Except under the circumstances meaning of the corresponding
was enacted that the use of indirect described in paragraph (f)(4) below, a provisions of the relevant ETA and CRC
financial assistance to provide religious recipient must not permit participants to regulations.

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41896 Federal Register / Vol. 69, No. 132 / Monday, July 12, 2004 / Rules and Regulations

3. Comments on the Proposed Rule Labor Social Service Providers and services to participants. See 29 U.S.C.
The closing date for comments on the Beneficiaries.’’ 69 FR 11234, 11235. 2938(a)(3); see also new paragraphs
At the same time, the Department also 37.6(f)(2) and (3) below. Therefore, it
September 30, 2003, NPRM was
determined that, in order to ensure would be inappropriate for these issues
December 1, 2003. 68 FR at 56386. DOL
uniformity and consistency in to be addressed by amendments or
received a total of 11 sets of comments
implementing the principles of these additions to DOL’s general regulations
on the proposed rule, six sets from civil
Executive Orders throughout DOL, the at 29 CFR part 2.
or religious liberties organizations or
regulations dealing with faith-based and For these reasons, the Department has
other stakeholders and five sets from
community organizations, and with chosen to publish this final rule
individual members of the public. All of
religious activities, should to the extent amending 29 CFR 37.6(f)(2) and (3). As
the comments were received by the
possible be consolidated in one place. noted in section I(C) of this preamble, a
closing date. 69 FR 11234. The Department further separate final rule amending those
Two commenters expressed general
determined that the new subpart D provisions addressed in the March 9,
support for the revisions proposed in
should not be program-specific, but 2004, NPRM is published elsewhere in
the NPRM, without reservation or should apply to all organizations today’s Federal Register.
suggestions for change. Seven receiving DOL support, except where
commenters expressed opposition to D. Proposed Amendments Dealing With
the implementing statute imposed
those revisions, and two commenters Indirect Federal Financial Assistance
particular requirements. Accordingly, in
either took no position on, raised the March 9, 2004, NPRM, the The Department is withdrawing the
questions about, or suggested changes or Department proposed new revisions to portions of the September 30, 2003,
alternatives to, the various proposed 29 CFR 37.6(f)(1), as well as to 20 CFR NPRM that proposed amending 29 CFR
revisions. 667.266(b)(1) and (2) and 667.275(b). 37.6(f)(1), as well as 20 CFR
The majority of comments dealt with Instead of the language proposed in the 667.266(b)(1) and 20 CFR 667.275(b), to
the issue of the use of indirect financial September 30, 2003, NPRM, the March eliminate inappropriate restrictions on
assistance to employ or train 9, 2004, NPRM proposed that each of the use of indirect Federal financial
participants in religious activities. As these regulatory provisions cross- assistance for religious activities. As
explained earlier in this section of this reference 29 CFR part 2, subpart D. See explained in section I(C) of this
preamble, however, that issue is now 69 FR at 11237, 11238, 11241. The preamble, these restrictions are now
addressed in a separate NPRM, March 9, 2004, NPRM also proposed eliminated by the other final rule,
published on March 9, 2004, that similar revisions to the relevant published elsewhere in today’s Federal
proposed revisions to 29 CFR part 2, as provision of the regulations governing Register, that finalizes the rules
well as conforming revisions to 29 CFR Job Corps, at 20 CFR 670.555(c). See 69 proposed in the March 9, 2004, NPRM.
part 37 and 20 CFR part 667. Therefore, FR at 11237, 11238. An additional document, withdrawing
this preamble will not address those The March 9, 2004, NPRM contained those portions of the September 30,
comments. Comments on the March 9, no proposals for revisions to 29 CFR 2003, NPRM now dealt with by that new
2004, NPRM, which is discussed in the 37.6(f)(2) and (3), for two reasons. First, rule, is published in the proposed rule
next section of this preamble, were as discussed in section I(B)(2) of this section of today’s Federal Register.
solicited separately. The final rule that preamble, those two paragraphs are
addresses the proposals made in the II. Differences Between the September
program-specific: they effectuate a
March 9, 2004, NPRM is published 30, 2003, Proposed Rule and This Final
specific paragraph of WIA section 188
elsewhere in today’s Federal Register. Rule
that applies only to recipients of
The comments received that are relevant financial assistance under WIA title I, As described above, the amendments
to this final rule will be discussed below and not to recipients of other types of to 29 CFR 37.6(f)(1), as well as 20 CFR
in section III of this preamble. DOL support. See 29 U.S.C. 2938(a)(3); 667.266(b)(1) and (2), and 20 CFR
see also 29 CFR 37.2(b)(1), ‘‘Limitation 667.275(b), proposed in the September
C. The March 9, 2004, Proposed Rule
of Application.’’ 30, 2003, NPRM were superseded by the
After the September 30, 2003, NPRM Second, careful analysis reveals that amendments to those paragraphs that
was published, the Department the statutory and regulatory provisions were proposed in the March 9, 2004,
determined that in order to implement at issue do not genuinely deal with NPRM. Therefore, this final rule does
more fully the principles of Executive ‘‘religious activities.’’ Instead, the not include amendments to those
Order 13279, DOL would revise its ‘‘activities’’ they address are the regulatory provisions.
general regulations at 29 CFR part 2 to employment of participants in the In addition, upon consideration, the
clarify that faith-based and community nonreligious skills of construction, Department has concluded that the
organizations are able both to operation, and maintenance. The language of 29 CFR 37.6(f)(2) and (3)
participate in all DOL social service provisions at issue merely limit the that was proposed in the September 30,
programs for which they are otherwise physical locations in which such 2003, NPRM did not adequately track
eligible—not just those financially employment may take place: the language of WIA section 188(a)(3).
assisted under WIA title I—without participants may not be employed to Therefore, in the final rule, these two
regard to the organizations’ religious carry out construction, operation or paragraphs have been revised to track
character or affiliation, and to apply for maintenance of any part of any facility the statutory language more closely and
and compete on an equal footing with used or to be used for religious thereby ensure that the meaning of WIA
other organizations to receive DOL instruction or as a place for religious section 188(a)(3) is not changed. Such
support. Accordingly, on March 9, 2004, worship, except that participants may revisions are necessary in order to fulfill
DOL published an NPRM that proposed be employed to carry out maintenance the intent of the September 30, 2003,
adding to 29 CFR part 2 a new subpart of a facility that is not primarily or NPRM, which stated that a primary
D, to be entitled ‘‘Equal Treatment in inherently devoted to religious purpose of the proposed revisions was
Department of Labor Programs for instruction or worship when the to adhere more closely to Congressional
Religious Organizations; Protection of organization operating the facility is language. Comments and responses
Religious Liberty of Department of part of a program or activity providing regarding the substantive effects of these

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provisions are discussed in section III of 188(a)(3) and that it effectuates noted above, the final rule that
this preamble. Congressional intent more closely, we addresses the proposals contained in the
Finally, as a result of the amendments have changed the paragraph to use March 9, 2004, NPRM is published
proposed in the March 9, 2004, NPRM, language identical to that in the statute. elsewhere in today’s Federal Register.
the Department has decided that Other comments received are
paragraphs 37.6(f)(2) and (3) will retain D. ‘‘Used, or Will Be Used’’ vs. ‘‘Used,
summarized and discussed below.
their original numbers. or To Be Used’’
The following changes have been In the same vein, the proposed A. Comments and Questions Regarding
made to the language proposed in the revisions of 29 CFR 37.6(f)(2) and (3) ‘‘Carry[ing] Out the Construction,
September 30, 2003, NPRM for these referred to any part of any facility that Operation, or Maintenance of Any Part
two paragraphs: is ‘‘used, or will be used,’’ for religious of Any Facility Used or To Be Used for
instruction or as a place for religious Religious Instruction or as a Place for
A. ‘‘Permit’’ vs. ‘‘Employ’’ Religious Worship,’’ and the
worship. This language was different
The proposed revisions of 29 CFR from the language of WIA section Maintenance Exemption
37.6(f)(2) and (3) stated that a recipient 188(a)(3), which used the phrase ‘‘used 1. Comment: The proposed rule could
‘‘must not permit’’ participants to or to be used.’’ To ensure that these unconstitutionally allow religious
engage in the activities prohibited by paragraphs do not alter the meaning of institutions to use public funds to make
the statute. This language was different WIA section 188(a)(3) and that they capital improvements to structures used
from the language of WIA section effectuate Congressional intent more for religious activities.
188(a)(3), which states that participants closely, we have changed the language Several commenters asserted that it
‘‘shall not be employed’’ in prohibited of the final rule to employ the phrase would violate the Constitution if
activities. Recipients are not expected, ‘‘used, or to be used.’’ recipients’ efforts were to increase the
and this section of the statute does not monetary value of, or result in an
authorize them, to control the work E. ‘‘Place of Worship’’ vs. ‘‘Place For improvement to, facilities used by such
activities of participants except when Religious Worship’’ institutions, ‘‘at least in part,’’ for
such work is financially assisted under Furthermore, the proposed revision of religious instruction or worship.
WIA title I. To ensure that these 29 CFR 37.6(f)(2) referred to any part of Commenters suggested that the
paragraphs do not alter the meaning of any facility that is a place ‘‘of worship.’’ regulation be amended to prohibit any
WIA section 188(a)(3), and that they This language was different from WIA such result.
effectuate Congressional intent more section 188(a)(3), which referred to a Additionally, several commenters
closely, we have changed the language place ‘‘for religious worship.’’ To ensure raised questions about the
of the final rule to use the phrase ‘‘must that this paragraph does not alter the constitutionality of the proposed
not employ.’’ meaning of WIA section 188(a)(3) and maintenance exception. These
that it effectuates Congressional intent commenters contend that the exception
B. ‘‘Engage in Employment or Training is unconstitutional, because in their
more closely, we have changed the
Activities That Involve’’ vs. ‘‘Employed view maintenance might result in
language of the final rule to use the
* * * To Carry Out’’ capital improvements to structures
phrase ‘‘for religious worship.’’
The proposed revisions of 29 CFR owned by religious institutions. In the
37.6(f)(2) and (3) required recipients not F. Separate Paragraphs vs. One view of these commenters, public funds
to permit participants to ‘‘engage in Paragraph may be used by religious institutions for
employment or training activities that The proposed revision of 29 CFR capital improvements only when the
involve’’ construction, operation, or 37.6(f)(3) separated that paragraph into improved structures are wholly and
maintenance. This language was two subparagraphs. To adhere more permanently dedicated to secular use.
different from the language of WIA closely to the statute, the final rule uses DOL response: We do not agree with
section 188(a)(3), which provides only a single paragraph to set forth the the contention that paragraphs
that participants must not be ‘‘employed relevant requirements. § 37.6(f)(2) and (3) (or WIA section
* * * to carry out’’ such construction, 188(a)(3) itself) will allow religious
III. Comments Received on the institutions to use WIA financial
operation, or maintenance. For the
September 30, 2003, Proposed Rule and assistance to make impermissible
reasons expressed in section II(A) of this
DOL’s Responses capital improvements to, or to otherwise
preamble, as well as to ensure that these
paragraphs do not alter the meaning of As noted in section II of this increase the value of, facilities used for
WIA section 188(a)(3) and that they preamble, the amendments to 20 CFR religious activity. These statutory and
effectuate Congressional intent more 667.266(b)(1) and (2), 20 CFR regulatory provisions may not be
closely, we have changed the language 667.275(b), and 29 CFR 37.6(f)(1) viewed in isolation. Rather, they must
of the final rule to use the phrase proposed in the September 30, 2003, be considered in the broader context not
‘‘employ * * * to carry out.’’ NPRM were superseded by the only of the WIA administrative system,
amendments to those paragraphs that but also of the entire Federal system for
C. ‘‘Any Facility, or Any Part of a were proposed in the NPRM published providing and administering domestic
Facility’’ vs. ‘‘Any Part of Any Facility’’ March 9, 2004, and the Department is financial assistance.
Similarly, the proposed revision of 29 withdrawing the portions of the Section 188(a)(3) clearly prohibits the
CFR 37.6(f)(2) used the language ‘‘any September 30, 2003, NPRM that employment of participants to carry out
facility, or any part of a facility,’’ to proposed amending those provisions to construction, or even the operation, of
discuss which facilities were covered by eliminate inappropriate restrictions on ‘‘any part of any facility that is used or
the provision. This language was the use of indirect Federal financial to be used for sectarian instruction or
different from the language of WIA assistance for religious activities. religious worship.’’ Thus, the range of
section 188(a)(3), which used the phrase Therefore, this preamble will not activities permitted under Section
‘‘any part of any facility.’’ To ensure that address the comments that were 188(a)(3), and the implementing
this provision of the final rule does not submitted regarding the proposed regulation finalized today, does not
alter the meaning of WIA section amendments to those provisions. As exceed constitutional boundaries.

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41898 Federal Register / Vol. 69, No. 132 / Monday, July 12, 2004 / Rules and Regulations

With respect to maintenance, under value, there is no need to make manner, and following the same
the statutory scheme established by additional changes to the regulation to procedures, that have been established
Congress, the only type of work that address the commenter’s concern that for investigating complaints alleging
participants may be employed under maintenance work might violations of the other
WIA title I to carry out in any part of unconstitutionally increase capital nondiscrimination provisions of WIA.
any facility that is used or to be used for value. See 29 CFR 37.70–37.75, 37.80–37.89. In
religious instruction or worship is Overall, then, the various regulatory addition, violations of the provisions
‘‘maintenance.’’ See 29 U.S.C. and administrative requirements preventing maintenance expenditures
2938(a)(3); see also new paragraph described above are sufficient to make from being used for capital
37.6(f)(3) below. Even such clear that no WIA title I financial improvements will be investigated and
‘‘maintenance’’ work is permitted only assistance will be used to employ resolved in accordance with the
in specific, well-delineated participants to make impermissible procedures set forth in 20 CFR part 667.
circumstances: the facility must not be capital improvements to any part of any The amount of oversight and monitoring
‘‘primarily or inherently devoted to facility used or to be used for religious needed to ensure that WIA financial
religious instruction or religious instruction or as a place for religious assistance is not used impermissibly is
worship,’’ and the organization worship. Therefore, the Department has no greater than that involved in
operating the facility must be part of a not revised the final rule in response to monitoring to ensure compliance with
program or activity providing services to this comment. other regulatory requirements.
participants. Id. The provisions relating 2. Comment: The proposed rule could Finally, the Department is already
to maintenance must be read in result in excessive entanglement with obliged, to a certain extent, to determine
conjunction with the remainder of religion, in violation of the ‘‘what acts constitute religion,’’ in the
ETA’s general WIA regulations, as well Establishment Clause of the First course of investigating allegations of
as with DOL’s regulations establishing Amendment. unlawful religious-based discrimination
uniform administrative requirements for One commenter noted that proposed (and, for that matter, in the course of
Federal grants and agreements with paragraphs 37.6(f)(3) and (f)(4) ensuring that direct DOL assistance is
nonprofit organizations. See 20 CFR (paragraphs 37.6(f)(2) and (3) of the final not used to support inherently religious
667.200; 29 CFR part 95. Both of these rule) authorize the employment of activities). Cf. 29 CFR part 1605, Equal
sets of regulations require that the participants under WIA title I ‘‘for Employment Opportunity Commission
allowability of costs incurred by maintenance of a facility on the (EEOC) Guidelines on Discrimination
nonprofit organizations receiving conditions that the facility is not Because of Religion, section 1605.1,
Federal financial assistance be ‘primarily or inherently devoted to ‘‘Religious nature of a practice or
determined in accordance with the religious instruction or religious belief.’’ In the Department’s view,
provisions of Office of Management and worship * * *’ ’’ This commenter was determinations as to ‘‘whether a facility
Budget (OMB) Circular A–122, ‘‘Cost therefore concerned that the rule is actually used for sectarian purposes’’
Principles for Non-Profit ‘‘raise[s] the specter of the government or ‘‘whether facility usage is primarily
Organizations.’’ 20 CFR 667.200; 29 CFR monitoring pervasively sectarian religious’’ will not require a greater
95.27. institutions to determine on a case-by- amount of ‘‘entanglement with religion’’
Circular A–122 explicitly describes case basis whether a facility is actually than the determination of whether a
‘‘maintenance and repair costs’’ as used for sectarian purposes or whether particular participant’s, applicant’s, or
‘‘costs incurred for necessary facility usage is primarily religious. This employee’s beliefs should be protected
maintenance, repair, or upkeep of monitoring will put government as ‘‘religious’’ beliefs.
buildings and equipment * * * which officials in the problematic position of For these reasons, the Department has
neither add to the permanent value of determining what acts constitute not revised the final rule in response to
the property nor appreciably prolong its religion,’’ likely resulting in this comment.
intended life, but keep it in an efficient Establishment Clause violations on the 3. Comment: Violations of these
operating condition.’’ Circular No. A– basis of excessive entanglement with provisions ‘‘could raise difficult
122, Attachment B, ‘‘Selected Items of religion. remedial questions.’’
Cost,’’ paragraph 27. The Circular DOL response: The Department does The commenter who raised this issue
further provides that ‘‘[c]osts incurred not agree that the rule will lead to inquired, ‘‘Will the Department of Labor
for improvements which add to the excessive governmental entanglement in * * * remove a structure from an
permanent value of the buildings and the affairs of recipients that are religious offending institution? Will it place liens
equipment or appreciably prolong their organizations. The existing WIA on houses of worship?’’
intended life shall be treated as capital regulations—both the DOL response: The WIA regulations at
expenditures.’’ Id. nondiscrimination regulations 29 CFR part 37 provide that if
Maintenance and repair costs, promulgated by CRC at 29 CFR part 37 compliance is not achieved through the
according to the Circular, are allowable; and the programmatic regulations procedures set forth in the regulations,
by contrast, capital expenditures are promulgated by ETA—impose the Secretary of Labor may take the
generally unallowable as direct costs, numerous limitations on the use of WIA following actions: ‘‘(1) After opportunity
except with the prior approval of the financial assistance. See, e.g., 20 CFR for a hearing, suspend, terminate, deny
awarding agency. Circular No. A–122, 667.260–667.270. The Department will or discontinue the [recipient’s] WIA
Attachment B, ‘‘Selected Items of Cost,’’ monitor the compliance of recipients Title I financial assistance, in whole or
paragraph 15. Thus, the administrative that ‘‘employ participants to carry out’’ in part; (2) Refer the matter to the
system is designed to ensure that a the activities covered by the statute in Attorney General with a
recipient cannot receive reimbursement the same way that it monitors the recommendation that an appropriate
for capital expenditures by attempting compliance of other recipients. See 29 civil action be instituted; or (3) Take
to characterize them as ‘‘maintenance’’ CFR 37.60, 37.62–37.66. Similarly, the such action as may be provided by law.’’
expenditures. Because of the limitations Department will investigate and resolve 29 CFR 37.110(a). The Department does
already in place to prevent the use of complaints alleging violations of these not view the ‘‘remedial questions’’
‘‘maintenance’’ work to increase capital regulatory provisions in the same raised by the regulatory provisions

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amended by this final rule as any more B. General Comments Regarding the 4. Comment: The rule should contain
‘‘difficult’’ than those raised with regard Proposed Rule administrative requirements to ensure
to possible violations of other regulatory 1. Comment: The terms ‘‘faith-based’’ that government funds are not used to
provisions. Therefore, the Department and ‘‘religious organization’’ should be support religious activities.
has not revised the final rule in ‘‘clearly defined’’ in the regulations. One commenter recommended that
response to this comment. The commenter that made this ‘‘faith-based and community-based
suggestion provided no reasons for organizations * * * be held as
4. Comment: Providing financial
adding these definitions to the accountable as any other non-profit
assistance under WIA to ‘‘pervasively
regulations. entity that receives taxpayer dollars’’
sectarian’’ organizations or institutions and that ‘‘firewalls * * * be [put] in
violates the Establishment Clause of the DOL response: The Department
declines to adopt the recommended place prohibiting federal money from
First Amendment. being used to fund religious materials.’’
change in this final rule. Such
The commenter that raised this issue definitions are unnecessary, because Additionally, the commenter
noted that under the proposed these terms are not used in 29 CFR part recommended that Federal funds
regulatory provisions, ‘‘WIA Title I 37 as amended by this final rule. ‘‘supplement and not supplant existing
funds could be used for construction, 2. Comment: The regulations should money.’’ Two additional commenters
operation, or maintenance of a facility be amended to require faith-based made similar recommendations.
used by a pervasively sectarian organizations ‘‘to abide by * * * state DOL response: In the Department’s
organization for non-religious and local civil rights laws.’’ view, the Federal reporting, financial
purposes.’’ In this commenter’s view, One commenter strongly suggested management, and other administrative
such use would violate the that the rule should make clear that requirements that are already in place,
Establishment Clause. Therefore, the nothing in the new regulations affected and that are applicable to all recipients
commenter recommended that the state and local non-discrimination laws of WIA title I financial assistance, are
provisions be amended to ‘‘prohibit the covering sexual orientation and gender sufficient to ensure that faith-based and
use of WIA Title I funds for identity/expression. community organizations are held as
construction, operation, or maintenance DOL response: In the Department’s accountable as any other recipient of
of facilities owned or operated by view, the recommended change is federal assistance. Some of these
unnecessary. The WIA regulations at 29 requirements are described above in
pervasively sectarian institutions.’’
CFR part 37 already contain a provision section II(A)(1) of this preamble. Faith-
DOL response: The Department does that explicitly states that the IFR ‘‘does based and community organizations are
not agree with the commenter’s not preempt consistent State and local not exempt from these requirements.
analysis. The Supreme Court’s requirements.’’ 29 CFR 37.3(f). As a See 20 CFR part 667; 29 CFR part 95;
‘‘pervasively sectarian’’ doctrine— result, unless specific provisions of OMB Circulars Nos. A–110, ‘‘Uniform
which held that there are certain State or local civil rights laws conflict Administrative Requirements for Grants
religious institutions in which religion with the requirements set forth in the and Other Agreements with Institutions
is so pervasive that no government aid rule, those provisions will continue to of Higher Education, Hospitals, and
may be provided to them, because their apply to recipients of WIA title I Other Nonprofit Organizations,’’ A–122,
performance of even ‘‘secular’’ tasks financial assistance. The Department ‘‘Cost Principles for Nonprofit
will be infused with religious purpose— therefore declines to make the suggested Organizations,’’ and A–133, ‘‘Audits of
no longer enjoys the support of a change. States, Local Governments, and Non-
majority of the Court. Four Justices 3. Comment: The regulations should Profit Organizations.’’ Furthermore, the
expressly abandoned it in Mitchell v. be amended to bar discrimination on the Department believes that new subpart D
Helms, 530 U.S. 793, 825–829 (2000) basis of sexual orientation and gender to 29 CFR part 2, published in today’s
(plurality opinion), and Justice identity. Federal Register, sets up appropriate
O’Connor’s opinion in that case, joined The commenter that made this constitutional safeguards regarding the
by Justice Breyer, set forth reasoning suggestion stated that ‘‘Federal policy use of DOL assistance. For example,
expanding the application of charitable with regard to direct financial
that is inconsistent with its underlying
choice provisions should prohibit assistance, new subpart D makes clear
premises, see id. at 857–858 (O’Connor,
discrimination on the basis of religion that such assistance must not be used
J., concurring in judgment) (requiring for inherently religious activities. The
and sexual orientation and gender
proof of ‘‘actual diversion of public Department therefore declines to impose
identity—discrimination against those
support to religious uses’’). Thus, six additional changes related to
organizations applying for a federal
members of the Court have rejected the grant or contract, employees of the accountability.
view that aid provided to religious grantee, as well as the ultimate With regard to the comments that
institutions will invariably advance the beneficiary of the program or service.’’ federal funds must ‘‘supplement and not
institutions’ religious purposes, and that (Emphases in original.) supplant existing money,’’ we would
view is the foundation of the DOL response: The Department simply note that WIA already provides
‘‘pervasively sectarian’’ doctrine. declines to adopt the recommended that title I financial assistance must only
Therefore, under current precedent, the change. The WIA regulations at 29 CFR be used for activities that ‘‘are in
Department may provide financial part 37 implement section 188 of WIA; addition to those that would otherwise
assistance to all service providers, therefore, they address only be available in the local area in the
without regard to religion, so long as the discrimination on bases prohibited by absence of such funds.’’ WIA section
providers meet eligibility requirements that statutory section. Neither sexual 195(2); 29 U.S.C. 2945(2). We disagree,
and the assistance is not otherwise orientation nor gender identity is therefore, that any additional such
precluded. The Department therefore included among these bases, see 29 requirements must be included in this
declines to adopt the recommended U.S.C. 2938(a)(2), and we decline to regulation.
change. impose a prohibition on such 5. Comment: The proposed rules ‘‘fail
discrimination by regulation. to take any steps to prevent government

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41900 Federal Register / Vol. 69, No. 132 / Monday, July 12, 2004 / Rules and Regulations

money from flowing to anti-Semitic, defined in section 3(f) of the Order. Signed at Washington, DC, this 7th day of
racist and bigoted organizations.’’ However, this rule is not an July.
DOL response: The WIA regulations at economically significant regulatory Elaine L. Chao,
29 CFR part 37 that are already in place action under the Order, and therefore, Secretary of Labor.
contain several provisions designed to no regulatory impact analysis has been
ensure that organizations that prepared. Title 29—Labor
discriminate on prohibited grounds—
Regulatory Flexibility Act ■ For the reasons discussed in the
including race, color, national origin,
and religion—are barred from receiving The final rule will not substantially preamble, Part 37, Subpart A, title 29 of
financial assistance under WIA. The change the existing obligation of the Code of Federal Regulations, is
regulations contain a broad provision recipients or entities operating amended to read as set forth below.
stating that ‘‘[n]o individual in the Federally-assisted programs or activities
PART 37—IMPLEMENTATION OF THE
United States’’ may be ‘‘excluded from to apply a policy of nondiscrimination
NONDISCRIMINATION AND EQUAL
participation in, denied the benefits of, and equal opportunity in employment
OPPORTUNITY PROVISIONS OF THE
subjected to discrimination under, or or services. The Secretary, in
WORKFORCE INVESTMENT ACT OF
denied employment in the accordance with the Regulatory
1998 (WIA)
administration of or in connection Flexibility Act (5 U.S.C. § 605(b)), has
with’’ any WIA title I-financially reviewed and approved this final rule, ■ 1. The authority citation for Part 37
assisted program or activity on any and in so doing certifies that this rule continues to read as follows:
prohibited basis, including race, color, will not have a significant economic
national origin, or religion. 29 CFR 37.5. impact on a substantial number of small Authority: Sections 134(b), 136(d)(2)(F),
entities. Therefore, a regulatory 136(e), 172(a), 183(c), 185(c)(2), 185(d)(1)(E),
In addition, the regulations explicitly
186, 187 and 188 of the Workforce
prohibit recipients from ‘‘[a]id[ing] or flexibility analysis is not required.
Investment Act of 1998, 29 U.S.C. 2801, et
perpetuat[ing] discrimination by Unfunded Mandates Reform seq.; title VI of the Civil Rights Act of 1964,
providing significant assistance to an as amended, 42 U.S.C. 2000d, et seq.; section
agency, organization, or person that For purposes of the Unfunded 504 of the Rehabilitation Act of 1973, as
discriminates on a prohibited ground Mandates Reform Act of 1995, as well amended, 29 U.S.C. 794; the Age
[including race, color, national origin, or as Executive Order 12875, this final rule Discrimination Act of 1975, as amended, 42
religion] in providing any aid, benefits, does not include any Federal mandate U.S.C. 6101; and title IX of the Education
services, or training to registrants, that may result in increased Amendments of 1972, as amended, 20 U.S.C.
applicants, or participants in a WIA expenditures by any State, local, and 1681.
Title I-funded program or activity.’’ 29 tribal governments.
CFR 37.6(c)(1). This provision bars not ■ 2. In § 37.6, paragraphs (f)(2) and (3)
Paperwork Reduction Act are revised to read as follows:
only direct assistance to persons or
entities that discriminate, but also bars The final rule contains no new
information collection requirements. § 37.6 What specific discriminatory action,
assistance provided ‘‘through based on prohibited grounds other than
contractual, licensing, or other Therefore, it is not subject to the disability, are prohibited by this part?
arrangements.’’ 29 CFR 37.6(c). Paperwork Reduction Act.
* * * * *
Recipients that provide such assistance Executive Order 13132 (f)(2) Except under the circumstances
are themselves violating the This final rule has been reviewed in described in paragraph (f)(3) below, a
nondiscrimination requirements, and accordance with Executive Order 13132 recipient must not employ participants
can be subjected to the sanctions listed regarding Federalism. The final rule will
in 29 CFR 37.110. These provisions to carry out the construction, operation,
not have substantial direct effects on the or maintenance of any part of any
contain no exemption for religious
States, on the relationship between the facility that is used, or to be used, for
organizations. See generally 29 CFR part
national government and the States, or religious instruction or as a place for
37. Therefore, in the Department’s view,
on the distribution of power and religious worship.
no additional regulatory provisions ‘‘to
responsibilities among the various (3) A recipient may employ
prevent government money from
levels of government. Therefore, the participants to carry out the
flowing to anti-Semitic, racist and
requirements of section 6 of Executive maintenance of a facility that is not
bigoted organizations’’ are needed.
Order 13132 do not apply to this rule. primarily or inherently devoted to
IV. Regulatory Procedures religious instruction or religious
List of Subjects in 29 CFR Part 37
Executive Order 12866 Administrative practice and worship if the organization operating
The Office of Management and Budget procedure, Discrimination, Civil rights, the facility is part of a program or
(OMB) has reviewed this rule under Equal education opportunity, Equal activity providing services to
Executive Order 12866, ‘‘Regulatory employment opportunity, Grant participants.
Planning and Review.’’ OMB has programs—Labor, Individuals with * * * * *
determined that this rule is a disabilities, Investigations, Reporting [FR Doc. 04–15708 Filed 7–8–04; 8:45 am]
‘‘significant regulatory action’’ as and recordkeeping requirements. BILLING CODE 4510–23–P

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