Health Law Daily Rule clarifies rights of faith-based organizations participating in federal programs
Tuesday, December 15, 2020

Rule clarifies rights of faith-based organizations participating in federal programs

By Jeffrey H. Brochin, J.D.

Final rule jointly issued by nine federal agencies provides clarity about the rights and obligations of faith-based organizations participating in federal financial assistance programs and activities.

A final rule clarifying the rights as well as obligations of faith-based organizations that participate in federal programs and which receive financial assistance from those programs, has been jointly issued by the U.S. Departments of Education (ED), Homeland Security (DHS), Agriculture (USDA), Agency for International Development (AID), Housing and Urban Development (HUD), Department of Justice (DOJ), Labor (DOL), Veterans Affairs (VA), and Health and Human Services (HHS). The final rule, which will be published in the Federal Register on December 18, 2020, restates the right of faith-based organizations to participate in federally funded programs, and builds upon a number of Executive Orders issued by previous administrations dating back to 2001, and is intended to protect religious liberty for faith-based organizations including as guaranteed by the First Amendment to the U.S. Constitution.

Leveling the social services playing field. On January 29, 2001, President George W. Bush signed Executive Order 13199, establishing a White House Office of Faith-Based and Community Initiatives, to ensure that private and charitable groups, including religious ones, enjoyed the fullest opportunity permitted by law to compete on a ‘level playing field’ in the delivery of social services. The office was charged with the primary responsibility to establish policies, priorities, and objectives for the federal government’s comprehensive effort to enlist, equip, enable, empower, and expand the work of faith-based and other community organizations to the extent permitted by law.

A succession of Executive Orders. In December, 2002, President Bush signed Executive Order 13279, setting forth principles and policymaking criteria to guide federal agencies in formulating and implementing policies with implications for faith-based organizations and other community organizations, to ensure equal protection of the laws for faith-based and community organizations, and to expand opportunities for, and strengthen the capacity of, faith-based and other community organizations to meet social needs in America’s communities.

President Obama maintained President Bush’s program but with modifications. In February, 2009, he signed Executive Order 13498, that changed the name of the responsible White House office, and created the President’s Advisory Council on Faith-Based and Neighborhood Partnerships. In November, 2010, President Obama signed Executive Order 13559 making minor and substantive textual changes to the fundamental principle, adding a provision requiring that any religious social service provider refer potential beneficiaries to an alternative provider if the beneficiaries objected to the first provider’s religious character; adding a provision requiring that the faith-based provider give notice of potential referral to potential beneficiaries; and adding a provision that awards must be free of political interference and not be based on religious affiliation or lack thereof.

Latest iteration of the Executive Orders. On May 4, 2017, President Trump issued Executive Order 13798, which states that federal law protects the freedom of Americans and their organizations to exercise religion and participate fully in civic life without undue interference by the federal government, and which further directed the Attorney General to issue guidance interpreting religious liberty protections in federal law. This was followed by President Trump signing Executive Order 13831 on May 3, 2018 which made changes to the way the initiative was to operate.

Agency-proposed amendments. On January 17, 2020, the DHS, USDA, USAID, DOJ, DOL, VA, HHS, and ED issued NPRMs (Notices of Proposed Rulemaking) with proposed regulatory amendments to implement Executive Order 13831 and conform more closely to the Supreme Court’s current First Amendment jurisprudence, and relevant federal statutes such as the Religious Freedom Restoration Act (RFRA). Together, the agencies received over 95,000 public comments, and the instant final rule filed with the Federal Register reflects that input as well as the sentiment expressed by some members of Congress.

Joint Preamble. The final rule contains a Joint Preamble in which the signers note that several commenters, including Members of Congress, agreed with the proposed rules and said that they protect religious liberty for faith-based organizations, including as guaranteed by the First Amendment to the U.S. Constitution, and that faith-based organizations are allowed to participate in federal funding programs and to compete on equal footing with secular organizations, without any discriminatory or unfair restrictions imposed based on religious character, affiliation, or exercise, which would raise constitutional problems. Another common theme was that organizations should not be forced to check their faith at the door when participating in government programs. The joint preamble also noted the comments tendered by those who disagreed with the proposed final rule, arguing that no federal funds should be given to faith-based organizations.

Changes from NPRM draft. Among the changes that the final rule makes from the proposed rule are the following:

  • Updates prohibitions against agencies discriminating in selecting and disqualifying an organization, so as to prohibit such conduct on the basis of religious character and affiliation;
  • Updates the notices in the appendices for ED, DHS, USDA, DOJ, DOL, HUD, VA, and HHS to reflect that the prohibitions apply to discrimination on the basis of religious character, affiliation, or exercise;
  • Removes the notice-and-referral requirements that were required of faith-based organizations but were not required of other organizations;
  • Require the agencies’ notices or announcements of award opportunities and notices of awards or contracts to include language clarifying the rights and obligations of faith-based organizations that apply for and receive federal funding.

Overall, the final rule is intended to provide clarity as to the rights and obligations of faith-based organizations participating in the agencies’ federal financial assistance programs and activities, and to ensure that the agencies’ rulemaking for federal financial assistance programs and activities are implemented in a manner consistent with the requirements of federal law, including the First Amendment to the Constitution and the RFRA. The rule will become effective 30 days after publication in the Federal Register.

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