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[Federal Register: January 6, 2003 (Volume 68, Number 3)]
[Proposed Rules]
[Page 647-654]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06ja03-35]
[[Page 647]]
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Part III
Department of Housing and Urban Development
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24 CFR Parts 92, 570, 572, et al.
Participation in HUD Programs by Faith Based Organizations; Providing
for Equal Treatment of All HUD Program Participants; Proposed Rule
[[Page 648]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 92, 570, 572, 574, 576, 582, 583, and 585
[Doc. No. FR-4782-P-01]
RIN 2501-AC89
Participation in HUD Programs by Faith-Based Organizations;
Providing for Equal Treatment of All HUD Program Participants
AGENCY: Office of the Secretary, HUD.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would revise those HUD regulations that
impose unwarranted barriers to the participation of faith-based
organizations in HUD programs and implement HUD's policy that, within
the framework of constitutional church-state guidelines, faith-based
organizations should be able to compete on an equal footing with other
organizations for HUD funding. HUD supports the participation of faith-
based organizations in its programs.
DATES: Comments Due Date: March 7, 2003.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Office of the Rules Docket Clerk, Office of
General Counsel, Room 10276, Department of Housing and Urban
Development, 451 Seventh Street, SW., Washington, DC 20410-0500.
Communications should refer to the above docket number and title.
Facsimile (FAX) comments are not acceptable. A copy of each
communication submitted will be available for inspection and copying
between 7:30 a.m. and 5:30 p.m. at the above address.
FOR FURTHER INFORMATION CONTACT: Steven Wagner, Director, Center for
Faith-Based and Community Initiatives, Department of Housing and Urban
Development, Room 10184, 451 Seventh Street, SW., Washington, DC 20410;
telephone: (202) 708-2404 (this is not a toll-free number). Hearing- or
speech-impaired individuals may access this telephone number via TTY by
calling the toll-free Federal Information Relay Service at 1-800-877-
8339. For program specific information, contact the following offices
in HUD's Office of Community Planning and Development: For the HOME
Program and the HOPE for Homeownership of Single Family Homes (HOPE 3),
Virginia Sardone, Director, Program Policy Division, Office of
Affordable Housing Programs, (202) 708-2864; for the Community
Development Block Grants Program, Robert Duncan, Office of Block Grant
Assistance (202) 708-3587: and for the remaining programs, John
Garrity, Office of Special Needs Assistance Programs, (202) 708-4300.
(These numbers are not toll-free numbers.) Hearing- or speech-impaired
individuals may access this telephone number via TTY by calling the
toll-free Federal Information Relay Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
Faith-based organizations are an important part of the social
services network of the United States, offering a multitude of social
services to those in need. In addition to places of worship, faith-
based organizations may include small nonprofit organizations created
to provide one program or multiple services, as well as neighborhood
groups formed to respond to a crisis or to lead community renewal.
Faith-based groups everywhere, either acting alone or as partners with
other service providers and government programs, serve the poor, and
help to strengthen families and rebuild communities.
All too often, however, federal policy and programs have not
recognized faith-based groups as resources for providing social
assistance. Federal, state, and local governments have often imposed
barriers to the participation of religious organizations in social
service programs, including unwarranted regulatory barriers.
President Bush has directed the federal agencies, including HUD, to
take steps to ensure that federal policy and programs are fully open to
faith-based community groups in a manner that is consistent with the
Constitution. The Administration believes that faith-based groups
possess an under-appreciated ability to meet the needs of poor
Americans and revitalize distressed neighborhoods. The Administration
believes that there should be an equal opportunity for all
organizations--both faith-based and nonreligious--to participate as
partners in federal programs.
As part of these efforts, President Bush issued Executive Order
13198 on January 29, 2001. The Order was published in the Federal
Register on January 31, 2001 (66 FR 8499). Executive Order 13198
created Centers for Faith-Based and Community Initiatives in five
cabinet departments--HUD, Health and Human Services, Education, Labor,
and Justice. The Executive Order charged the Centers to identify and
eliminate regulatory, contracting, and other programmatic obstacles to
the full participation of faith-based and community organizations in
the provision of social services by their Departments. This proposed
rule is part of HUD's efforts to fulfill its responsibilities under the
Executive Order.
II. This Proposed Rule
A. Purpose of Proposed Rule
Consistent with the President's initiative, this proposed rule
would revise HUD's regulations to remove unwarranted barriers to the
equal participation of faith-based organizations in HUD's programs. The
objective of this proposed rule is to ensure that HUD programs are open
to all qualified organizations, regardless of their religious
character, and to establish clearly the proper uses to which funds may
be put, and the conditions for receipt of funding.
B. HUD Program Regulations Amended by Proposed Rule
The proposed rule would amend the regulations for the following HUD
programs:
1. HOME Investment Partnerships (24 CFR part 92);
2. Community Development Block Grants (CDBG) (24 CFR part 570);
3. Hope for Homeownership of Single Family Homes (HOPE 3) (24 CFR part
572);
4. Housing Opportunities for Persons with AIDS (HOPWA) (24 CFR part
574);
5. Emergency Shelter Grants (ESG) (24 CFR part 576);
6. Shelter Plus Care (24 CFR part 582);
7. Supportive Housing (24 CFR part 583); and
8. Youthbuild (24 CFR part 585).
C. Proposed Regulatory Amendments
The proposed rule would make the following specific amendments to
HUD's regulations for the programs listed above.
1. Participation by Faith-Based Organizations in HUD Programs
The proposed rule would make clear that organizations are eligible
to participate in HUD programs without regard to their religious
character or affiliation, and organizations may not be excluded from
the competition for HUD funds simply because they are religious.
Specifically, religious organizations are eligible to compete for
funding on the same basis, and under the same eligibility requirements,
as all other nonprofit organizations. The federal government, as well
as state and local governments administering funds under
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HUD programs, are prohibited from discriminating against organizations
on the basis of religion or their religious character.
2. Faith-Based Activities
The proposed rule would describe the requirements applicable to all
recipient organizations regarding the use of HUD funds for faith-based
activities. Specifically, a participating organization may not use
direct HUD funds to support inherently religious activities, such as
worship, religious instruction, or proselytization. If the organization
engages in such activities, the activities must be offered separately,
in time or location, from the programs or services funded with HUD
assistance, and participation must be voluntary for the beneficiaries
of the HUD-funded programs or services. This requirement ensures that
HUD funds provided directly to religious organizations are not used to
support inherently religious activities. Thus, HUD funds provided
directly to a participating organization may not be used, for example,
to conduct prayer meetings, studies of sacred texts, or any other
activity that is inherently religious.
This restriction does not mean that an organization that receives
HUD funds cannot engage in inherently religious activities. It simply
means such an organization cannot fund these activities with direct HUD
funds. Thus, faith-based organizations that receive HUD funds must take
steps to separate, in time or location, their inherently religious
activities from the direct HUD-funded services that they offer.
These restrictions on inherently religious activities do not apply
where HUD funds are provided to religious organizations as a result of
a genuine and independent private choice of a beneficiary, provided the
religious organizations otherwise satisfy the secular requirements of
the program. A religious organization may receive such funds as the
result of a beneficiary's genuine and independent choice if, for
example, a beneficiary redeems a voucher, coupon, certificate, or
similar funding mechanism that was provided to that individual using
HUD funds under a program that is designed to give that individual a
choice among providers.
3. Independence of Faith-Based Organizations
The proposed rule clarifies that a religious organization that
participates in HUD programs will retain its independence and may
continue to carry out its mission, including the definition, practice,
and expression of its religious beliefs, provided that it does not use
HUD funds to support any inherently religious activities, such as
worship, religious instruction, or proselytization. Among other things,
faith-based organizations may use space in their facilities to provide
HUD-funded services, without removing religious art, icons, scriptures,
or other religious symbols. In addition, a HUD-funded religious
organization may retain religious terms in its organization's name,
select its board members on a religious basis, and include religious
references in its organization's mission statements and other governing
documents.
4. Nondiscrimination in Providing Assistance
The proposed rule clarifies that an organization that participates
in a HUD program shall not, in providing program assistance,
discriminate against a program beneficiary or prospective program
beneficiary on the basis of religion or religious belief. Accordingly,
religious organizations, in providing services funded in whole or in
part by HUD, may not discriminate against current or prospective
program beneficiaries on the basis of religion, a religious belief, a
refusal to hold a religious belief, or a refusal to actively
participate in a religious practice.
5. Structures Used for Religious Activities
The proposed rule would also clarify that HUD funds may not be used
for the acquisition, construction or rehabilitation of structures to
the extent that those structures are used for inherently religious
activities, such as worship, religious instruction, or prayer. HUD
funds may be used for the acquisition, construction, or rehabilitation
of structures only to the extent that those structures are used for
conducting eligible activities under the specific HUD program. Where a
structure is used for both eligible and inherently religious
activities, HUD funds may not exceed the cost of those portions of the
acquisition, construction, or rehabilitation that are attributable to
eligible activities.
6. Assurance Requirements
The proposed rule would remove those provisions of HUD's
regulations that require only HUD-funded religious organizations to
provide assurances that they will conduct eligible program activities
in a manner that is ``free from religious influences.'' HUD imposes no
comparable assurance requirements in any other context, and HUD
believes it is unfair to require religious organizations alone to
provide additional assurances, above and beyond those any other
organization is required to provide, that they will comply with HUD
requirements. All organizations that participate in HUD programs,
including religious ones, must carry out eligible activities in
accordance with all program requirements and other applicable
requirements governing the conduct of HUD-funded activities, including
those prohibiting the use of direct HUD funds to engage in inherently
religious activities. In addition, to the extent that provisions of
HUD's regulations disqualify religious organizations from participating
in HUD's programs merely because they are motivated or influenced by
religious faith to provide social services, the proposed rule removes
that restriction, which is inconsistent with governing law.
7. Inapplicability of Executive Order 11246
The proposed rule would also amend the CDBG regulations to provide
that Executive Order 11246, regarding equal employment opportunity, and
the implementing regulations issued by the Department of Labor at 41
CFR part 60 do not apply to CDBG grantees. By its own terms, the
Executive Order applies to government contractors and subcontractors,
not grantees.
III. Findings and Certifications
Regulatory Planning and Review
The Office of Management and Budget (OMB) reviewed this rule under
Executive Order 12866, Regulatory Planning and Review. OMB determined
that this rule is a ``significant regulatory action'' as defined in
section 3(f) of the Order (although not an economically significant
regulatory action under the Order). Any changes made to the rule as a
result of that review are identified in the docket file, which is
available for public inspection in the office of the Department's Rules
Docket Clerk, Room 10276, 451 Seventh Street, SW., Washington, DC
20410-0500.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) establishes requirements for federal agencies to assess the
effects of their regulatory actions on state, local, and tribal
governments and the private sector. This proposed rule does not impose
any federal mandates on any state, local, or tribal governments or the
private sector within the meaning of Unfunded Mandates Reform Act of
1995.
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Executive Order 13132, Federalism
Executive Order 13132, Federalism, requires that federal agencies
consult with state and local governments with state and local
government officials in the development of regulatory policies with
federalism implications. Consistent with Executive Order 13132, we
specifically solicit comment from state and local government officials
on this proposed rule.
Environmental Impact
A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations at 24 CFR part 50,
which implement section 102(2)(C) of the National Environmental Policy
Act of 1969 (42 U.S.C. 4332). The Finding of No Significant Impact is
available for public inspection between the hours of 7:30 a.m. and 5:30
p.m. weekdays in the Office of the Rules Docket Clerk, Office of
General Counsel, Room 10276, Department of Housing and Urban
Development, 451 Seventh Street, SW., Washington, DC 20410.
Impact on Small Entities
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)) has reviewed and approved this proposed rule and in so
doing certifies that this rule will not have a significant economic
impact on a substantial number of small entities. The proposed rule
would not impose any new costs, or modify existing costs, applicable to
HUD grantees. Rather, the purpose of the proposed rule is to remove
regulatory prohibitions that currently restrict the equal participation
of faith-based organizations (large and small) in HUD's programs.
Notwithstanding HUD's determination that this rule will not have a
significant economic effect on a substantial number of small entities,
HUD specifically invites comments regarding any less burdensome
alternatives to this rule that will meet HUD's objectives as described
in this preamble.
Catalog of Federal Domestic Assistance Numbers
The Catalog of Federal Domestic Assistance Numbers for the programs
affected by this rule are 14.218, 14.219, 14.225, 14.227, 14.228,
14.231, 14.235, 14.237, 14.238, 14.239, 14.241, 14.243, 14.246, 14.248,
14.512, 14.514, and 14.515.
List of Subjects
24 CFR Part 92
Administrative practice and procedure, Grant programs--housing and
community development, Grant programs--Indians, Indians, Low and
moderate income housing, Manufactured homes, Rent subsidies, Reporting
and recordkeeping requirements.
24 CFR Part 570
Administrative practice and procedure, American Samoa, Community
development block grants, Grant programs--education, Grant programs--
housing and community development, Guam, Indians, Lead poisoning, Loan
programs--housing and community development, Low and moderate income
housing, New communities, Northern Mariana Islands, Pacific Islands
Trust Territory, Pockets of poverty, Puerto Rico, Reporting and
recordkeeping requirements, Small cities, Student aid, Virgin Islands.
24 CFR Part 572
Condominiums, Cooperatives, Fair housing, Government property,
Grant programs--housing and community development, Low and moderate
income housing, Nonprofit organizations, Reporting and recordkeeping
requirements.
24 CFR Part 574
AIDS/HIV, Community facilities, Disabled, Grant programs--health
programs, Grant programs--housing and community development, Grant
programs--social programs, Homeless, Housing, Low and moderate income
housing, Nonprofit organizations, Rent subsidies, Reporting and
recordkeeping requirements, Technical assistance.
24 CFR Part 576
Community facilities, Emergency shelter grants, Grant programs--
housing and community development, Grant programs--social programs,
Homeless, Reporting and recordkeeping requirements.
24 CFR Part 582
Homeless, Rent subsidies, Reporting and recordkeeping requirements.
24 CFR Part 583
Homeless, Rent subsidies, Reporting and recordkeeping requirements.
CFR Part 585
Grant programs--housing and community development, Homeless, Low
and very low-income families, Reporting and recordkeeping requirements,
Homeless, Housing, Low and moderate income housing, Nonprofit
organizations, Rent subsidies, Reporting and recordkeeping
requirements, Technical assistance.
For the reasons stated in the preamble, HUD proposes to amend title
24 of the Code of Federal Regulations to read as follows:
PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM
1. The authority citation for 24 CFR part 92 continues to read as
follows:
Authority: 42 U.S.C. 3535(d) and 12701-12839.
2. Revise Sec. 92.257 to read as follows:
Sec. 92.257 Faith-based activities.
(a) Organizations that are religious or faith-based are eligible,
on the same basis as any other organization, to participate in the HOME
program. Neither the federal government nor a state or local government
receiving funds under HOME programs shall discriminate against an
organization on the basis of the organization's religious character or
affiliation.
(b) Organizations that are directly funded under the HOME program
may not engage in inherently religious activities, such as worship,
religious instruction, or proselytization, as part of the programs or
services funded under this part. If an organization conducts such
activities, the activities must be offered separately, in time or
location, from the programs or services funded under this part, and
participation must be voluntary for the HUD-funded programs or
services.
(c) A religious organization that participates in the HOME program
will retain its independence from federal, state, or local governments,
and may continue to carry out its mission, including the definition,
practice, and expression of its religious beliefs, provided that it
does not use direct HOME funds to support any inherently religious
activities, such as worship, religious instruction, or proselytization.
Among other things, faith-based organizations may use space in their
facilities, without removing religious art, icons, scriptures, or other
religious symbols. In addition, a HOME-funded religious organization
retains its authority over its internal governance, and it may retain
religious terms in its organization's name, select its board members on
a religious basis, and include religious references in its
organization's mission statements and other governing documents.
(d) An organization that participates in the HOME program shall
not, in providing housing or housing assistance, discriminate against
a
program beneficiary or prospective program beneficiary on the basis of
religion or religious belief.
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(e) HOME funds may not be used for the acquisition, construction,
or rehabilitation of structures to the extent that those structures are
used for inherently religious activities. HOME funds may be used for
the acquisition, construction or rehabilitation of structures only to
the extent that those structures are used for conducting eligible
activities under this part. Where a structure is used for both eligible
and inherently religious activities, HOME funds may not exceed the cost
of those portions of the acquisition, construction, or rehabilitation
that are attributable to eligible activities.
3. In Sec. 92.504, remove paragraph (c)(3)(x) and redesignate
paragraph (c)(3)(xi) as paragraph (c)(3)(x).
PART 570--COMMUNITY DEVELOPMENT BLOCK GRANTS
4. The authority citation for 24 CFR part 570 continues to read as
follows:
Authority: 42 U.S.C. 3535(d) and 5301-5320.
5. Revise Sec. 570.200(j) to read as follows:
Sec. 570.200 General policies.
* * * * *
(j) Faith-based activities. (1) Organizations that are religious or
faith-based are eligible, on the same basis as any other organization,
to participate in the CDBG program. Neither the federal government nor
a state or local government receiving funds under CDBG programs shall
discriminate against an organization on the basis of the organization's
religious character or affiliation.
(2) Organizations that are directly funded under the CDBG program
may not engage in inherently religious activities, such as worship,
religious instruction, or proselytization, as part of the programs or
services funded under this part. If an organization conducts such
activities, the activities must be offered separately, in time or
location, from the programs or services funded under this part, and
participation must be voluntary for the beneficiaries of the HUD-funded
programs or services.
(3) A religious organization that participates in the CDBG program
will retain its independence from federal, state, or local governments
and may continue to carry out its mission, including the definition,
practice, and expression of its religious beliefs, provided that it
does not use direct CDBG funds to support any inherently religious
act
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