HUD and Other Federal Agencies Publish Joint Final Rule on Equal Participation of Faith-Based Organizations

HUD and 8 other federal agencies published a joint final rule on “Equal Participation of Faith-Based Organizations” (§5.109) on December 17. The drastic changes included in the rule were proposed earlier this year with only a 30-day comment period (see Memo 02/18). The final changes remove the requirement that faith-based service providers receiving federal funds take reasonable steps to refer the people they serve to alternative providers if requested, and the rule strips away the requirement that providers give beneficiaries written notice of their religious freedom rights. Among other changes, HUD would expand the existing religious exemption that allows faith-based organizations to accept federal grants and discriminate in employment. These changes put the interests of taxpayer-funded entities ahead of the needs of people seeking critical services. The rule is set to go into effect on January 19, 2020, a day before the inauguration of President-Elect Joe Biden.

The joint rule is intended to implement Executive Order (EO) 13831 issued on May 3, 2018. In addition to HUD, the other federal agencies included in the joint rule are the Departments of Agriculture, Education, Justice, Health and Human Services, Homeland Security, and Veterans Affairs, and the Agency for International Development.

HUD’s portion of the rule remains consistent except for a few changes made in response to comments submitted during the 30-day period:

  • HUD updates language regarding programs funded by indirect Federal financial assistance to language similar to what other agencies are using: “an organization that participates in a program funded by indirect Federal financial assistance need not modify its program or activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization's program and may require attendance at all activities that are fundamental to the program.”
  • All agencies have added regulatory language to clarify that these discrimination and disqualification provisions prohibit discrimination on the basis of the organization's religious exercise, which means to disfavor an organization, including by failing to select an organization, disqualifying an organization, or imposing any condition or selection criterion that otherwise disfavors or penalizes an organization in the selection process or has such an effect: 1) because of conduct that would not be considered grounds to disfavor a secular organization; 2) because of conduct that must or could be granted an appropriate accommodation in a manner consistent with RFRA or the Religion Clauses of the First Amendment to the Constitution; or 3) because of the actual or suspected religious motivation of the organization's religious exercise.
  • All agencies update the prohibitions against agencies discriminating in selecting and disqualifying an organization, so as to prohibit such conduct on the basis of religious character and affiliation and add such a prohibition against discrimination on the basis of religious exercise with additional language based on the applicable Free Exercise Clause and RFRA standards.
  • HUD adds clarifying language for notices in regard to conscience protections.

Americans United for Separation of Church and State provided a four-page background overview about the proposed rules for HUD and the other eight agencies, as well as examples of social services programs affected and likely harms. In addition, the Coalition Against Religious Discrimination (CARD) provided an 18-page comment template that offers a deeper analysis of the rule when it was proposed.

NLIHC plans to follow up with an analysis of the final rule and its changes from the proposal.

The final joint rule in the Federal Register is at:

An easier to read version of the final joint rule is at:

NLIHC’s comment letter opposing HUD’s proposed rule:

NLIHC’s redline showing proposed changes to §5.109 is at:

Americans United’s four-page background explanation of the proposed rule changes is at:

Americans United’s examples of social services programs affected, and potential