Charitable Choice: House-Passed Version of H.R. 7 Compared with Existing Charitable Choice Laws

Charitable Choice: House-Passed Version of H.R. 7 Compared with Existing Charitable Choice Laws

Order Code RL31042
CRS Report for Congress
Received through the CRS Web
Charitable Choice:
House-Passed Version of H.R. 7
Compared with Existing Charitable Choice Laws
Updated December 17, 2002
Vee Burke
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

Charitable Choice: House-Passed Version of H.R. 7
Compared with Existing Charitable Choice Laws
Summary
This report provides a side-by-side comparison (Table 1) of two versions of the
Charitable Choice Act of 2001 (Title II of H.R. 7) with three existing charitable
choice laws. The table shows how the bill passed by the House on July 19, 2001,
differs from the original version of H.R. 7, from the first charitable choice law (the
1996 welfare reform law, P.L. 104-193), and from two later laws that extended
charitable choice rules to substance abuse treatment and prevention services under
the Public Health Service Act (P.L. 106-310 and P.L. 106-554).1
As the table shows, the House bill2 refines somewhat the list of programs and
activities to which H.R. 7 rules would apply. In a new provision, it authorizes the
secretary of the department administering a covered program to require that
assistance be disbursed to recipients as vouchers redeemable by religious and other
providers chosen by individual beneficiaries. If a beneficiary objects to the religious
character of a provider, the government must provide assistance of equal value from
an accessible and alternate provider that is unobjectionable on religious grounds (the
original bill required the government to offer assistance from an alternative provider,
“including a nonreligious one”). The bill stipulates that if a religious organization
receiving direct funds (through contract or agreement) for provision of services offers
sectarian worship, instruction, or proselytization, the religious activity must be
voluntary and offered separate from the program funded under the Charitable Choice
Act. The bill retains the provision (which is in all charitable choice laws) allowing
religious organizations to hire only co-religionists, but it deletes a provision in the
original H.R. 7 measure that would have allowed a religious organization to require
its employees to adhere to its religious practices.
The House bill includes a new provision to earmark $50 million annually in
Justice Department funds for training and technical assistance to small
nongovernmental organizations in procedures relating to participation in federally
funded benefit programs. Common to both versions of H.R. 7, but absent from any
other charitable choice measure, is a declaration that funds received by a religious
organization under the Act are not to be construed as aid to religious organizations
or an endorsement of religion. The table shows that over time charitable choice
legislation has grown longer and more detailed, as sponsors have sought to draft
language to meet disparate concerns that charitable choice might weaken the
religious character of participating organizations, impair the religious freedom of
beneficiaries, and erode the wall separating church and state.
1 A fourth current charitable choice law is Title II of 105-285, which applies its charitable
choice rules to any program carried out under the Community Services Block Grant
program. These provisions are shown in Table 1 of CRS Report RL31030.
2 The House-passed version of Title II is the same as that approved on June 28, 2001, by the
House Judiciary Committee.

Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Major Arguments of Supporters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Major Arguments of Opponents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Short Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Programs Covered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Inclusion of Religious Organizations as Nongovern-mental Providers . . . . 8
Requirement for Consistency with the First Amendment to the
Constitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Prohibition on Discrimination Against Religious Organizations . . . . . . . . 10
Funds Not Construed to Be Aid to Religious Organizations . . . . . . . . . . . . 11
Funds Not Construed to Be Endorsement of Religion . . . . . . . . . . . . . . . . . 12
Religious Character and Independence . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Employment Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Application of Other Laws Forbidding Discrimination . . . . . . . . . . . . . . . . 15
Rights of Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Nondiscrimination Against Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Limitation on Use of Funds for Sectarian Activities . . . . . . . . . . . . . . . . . . 19
Authority to Require Use of Vouchers and Certificates . . . . . . . . . . . . . . . 20
Fiscal Accountability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Effect on State and Local Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Treatment of Intermediate Contractors/Grantors
(Nongovernmental Organizations Acting under Agreement
with a Government Entity) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Technical Assistance for Small Nongovernmental Organizations . . . . . . . . 24
Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Preemption of Other Law? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
List of Tables
Table 1. Charitable Choice: House-Passed H.R. 7 Compared with Three
Existing Charitable Choice Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Charitable Choice: House-Passed Version
of H.R. 7 Compared with
Existing Charitable Choice Laws
Background

Charitable choice is a set of provisions in law intended to allow religious
organizations to provide federally funded services from specifically named programs
on the same basis as any other nongovernmental provider without impairing the
religious character of the organizations or the religious freedom of recipients.
Charitable choice does not contain special funding for faith-based organizations and
it applies only to programs designated by Congress.
The 1996 welfare reform law (P.L. 104-193) put the first charitable choice
language into federal law, applying it to the block grant program of Temporary
Assistance for Needy Families (TANF).3 In 1998, Congress extended charitable
choice rules to grants under the Community Services Block Grant Act (P.L. 105-285)
and, in 2000, to grants for prevention and treatment of substance abuse under the
Public Health Service Act (P.L. 106-310 and P.L. 106-554).
The 2000 Republican platform proposed to apply charitable choice to all federal
social service programs. In their 2000 platform, Democrats said they believed that
faith-based programs should augment — not replace — government programs. “In
every instance where this Administration sees a responsibility to help people, it will
look to faith-based organizations, charities, and groups that have shown the ability
to change lives,” said the FY2002 budget press release of the Department of Health
and Human Services (HHS). “These groups will not replace government but rather
partner with it.”
H.R. 7, as passed by the House on July 19, 2001 by a vote of 233 to 198, would
apply charitable choice rules, significantly changed from those in current charitable
choice laws, to a range of (nine) program areas and activities, some of which may
overlap with TANF-funded activities. Sponsored by Representative Watts and
introduced on March 29 as the Community Solutions Act of 2001, H.R. 7 was
referred to the Committees on Ways and Means and the Judiciary. The measure
embodies two major components of President Bush’s faith-based initiative —
namely, tax incentives to expand private giving (Title I) and expansion of charitable
choice (Title II). The Ways and Means Committee dealt with Titles I and III, the
Judiciary Committee with Title II. As modified by the Ways and Means Committee
3 The 1996 law also applied charitable choice rules to food stamps, Medicaid, and
Supplemental Security Income (SSI) to the extent that they use contracts or vouchers.

CRS-2
and passed by the House, the tax incentives in Title I were scaled back sharply (for
instance, the Bush budget proposal to allow tax deductions for a portion of charitable
donations for non-itemizing tax filers was estimated to cost $84 billion in forgone
revenue over 10 years, but the smaller version voted by the House is estimated to cost
$6.4 billion). As introduced, Title III of H.R. 7 proposed a permanent program of
Individual Development Accounts, financed with tax credits, but the Ways and
Means Committee substituted language revising and extending an existing IDA
program and doubling its authorized funding. On June 18, 2002, the Senate Finance
Committee approved a revised H.R. 7 (now called the Care Act), which omitted
provisions to expand charitable choice, but included tax incentives for private giving
and IDA provisions. This bill did not reach the Senate floor.
The H.R. 7 charitable choice proposal resulted in several congressional hearings
(the first ever conducted on charitable choice) and has aroused much controversy.
For background and legal issues, see CRS Report RL31043.
Major Arguments of Supporters
! To fund only secular programs discriminates against religious
programs. It is just as inappropriate for government to favor non-
religion as to promote one religion over another;
! Faith-based programs can attract large amounts of volunteer time;
staff have a sense of mission that inspires those they serve; these
organizations often help in ways that government cannot, providing
love as well as services, guidance and friendship as well as a meal
or training;
! Charitable choice has been carefully written to protect constitutional
values;
! Charitable choice rules protect the religious character of faith-based
providers; they specify that religious organizations shall retain
control over the definition, development, practice, and expression of
their religious beliefs; and
! Charitable choice rules protect the religious liberty of beneficiaries;
they require that if a recipient objects to the religious character of the
provider, the government must provide an alternate and accessible
provider.

Major Arguments of Opponents
! Charitable choice may lead to unconstitutional use of government
funds to promote a specific religious practice or belief;
! Since money is interchangeable, government funds given for a
secular purpose could indirectly help to fund the organization’s
religious purposes, undermining governmental neutrality toward
religion;
! Charitable choice rules would require government to decide what is
a legitimate religion and what is not, what is preaching and what is
not;

CRS-3
! Direct government grants to religious groups could make churches
dependent on government, eroding their mission and tending to
secularize them; and
! Charitable choice promotes government-funded discrimination by
allowing religious organizations that receive federal dollars for their
services to hire and fire on the basis of religious beliefs.

CRS-4
Table 1. Charitable Choice: House-Passed H.R. 7 Compared with Three Existing Charitable Choice Laws4
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Title
Provision of assistance
Same as original H.R. 7
Services provided by
Nondiscrimination and
Prevention and treatment
under government
charitable, religious, or
institutional safeguards
of substance abuse;
programs by religious and
private organizations.
for religious providers.
services provided through
community organizations.
[Section 104]
religious organizations.
Would enact a new
Same as original H.R. 7
[Section 3305, as titled
[Section 144 , Subtitle E,
Section 1991 in Title
above, added to Title
of H.R. 5662, added to
XXIV of the Revised
XIX of Public Health
Title V of Public Health
Statutes.
Service Act a new
Service Act a new Part G,
[Section 201]
Section 1955.]
entitled “services
provided through
religious organizations.”]
Short Title
Charitable Choice Act of
Same as original H.R. 7
None
None
None
2001. [Section 1991(a)]
4 A fourth current charitable choice law is Title II of P.L. 105-285, which applies its charitable choice rules to any program carried
out under the Community Services Block Grant program. These provisions are shown in Table 1 of CRS Report RL31030.

CRS-5
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Purposes
(1) To provide assistance
Adds a fifth purpose to
To allow states to
To prohibit
To allow religious
to needy individuals and
those in original H.R. 7
contract with religious
discrimination against
organizations to be
families in the most
and lists it as number 2:
organizations (and to
nongovernmental
program participants on
effective and efficient
— To supplement the
allow religious
organizations and
the same basis as any
manner;
Nation’s social service
organizations to accept
certain individuals on
other nonprofit private
(2) To prohibit
capacity by facilitating the
certificates, vouchers, or
the basis of religion in
provider without
discrimination against
entry of new efforts and
any other forms of
the distribution of
impairing the religious
religious organizations on
expanding existing efforts
disbursement) under any
government funds to
character of the
the basis of religion in the
by religious and other
covered program on the
provide substance abuse
organizations and without
administration and
community organizations
same basis as any other
services under this Title
diminishing the religious
distribution of
in the administration and
nongovernmental
(XIX) and Title V, and
freedom of program
government assistance
distribution of
provider — without
the receipt of services
beneficiaries. [Section
under covered programs;
government assistance
impairing the religious
under these titles; and to
582(b)]
(3) To allow religious
under covered programs.
character of the
allow the organizations
organizations to assist in
organizations, and
to accept the funds to
the administration and
without diminishing the
provide services without
distribution of assistance
religious freedom of
impairing the religious
without impairing their
beneficiaries. [Section
character of the
religious character; and
104(b)]
organizations or the
(4) To protect the
religious freedom of the
religious freedom of those
individuals. [Section
in need who are eligible
1955(a)]
for government aid,
including expanding the
possibility of their
choosing to receive
services from a religious
organization. [Section
1991(b)]

CRS-6
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Programs
A program using federal
A program using federal
Temporary Assistance
Any program providing
Discretionary and
Covered
funds that carries out
funds that carries out
for Needy Families
substance abuse services
formula grant programs
activities that are:
activities that are:
(TANF) and Welfare-to-
under Title 19 (formula
(Titles 5 and 19,
— related to the
— related to the
Work grants.
block grants) and Title 5
respectively)
prevention and treatment
prevention and treatment
(discretionary grants) of
administered by the
of juvenile delinquency
of juvenile delinquency
Any other program
the Public Health
Substance Abuse and
and the improvement of
and the improvement of
modified or established
Service Act. [Section
Mental Health Services
the juvenile justice
the juvenile justice
under Titles I or II of
1955(a)(1)]
Administration that
system, including those
system, including those
P.L. 104-193 that
award financial assistance
funded under the Juvenile
funded under the Juvenile
permits contracts with
to public or private
Justice and Delinquency
Justice and Delinquency
organizations or permits
entities to carry out
Prevention Act;
Prevention Act;
certificates, vouchers, or
activities to prevent or
— related to the
— related to the
other forms of
treat substance abuse.
prevention of crime,
prevention of crime and
disbursement to be
[Section 581]
including programs
assistance to crime
provided to beneficiaries,
funded under Title I of the
victims and offenders’
as a means of providing
Omnibus Crime Control
families, including
aid. [Section 104 (a)(2)]
and Safe Streets Act;
programs funded under
Title I of the Omnibus
These programs are food
Crime Control and Safe
stamps, Medicaid, and
— under federal housing
Streets Act;
Supplemental Security
laws;
— related to the
Income (SSI) — to the
provision of assistance
extent that they are
under federal housing
administered through
laws, including the
contracts or vouchers
Community Development
with nongovernmental
— under Title I of the
Block Grant Program
agencies. They generally
Workforce Investment
(CDBG);
are administered directly
Act (training programs
— under subtitle B or D
by public agencies, and
and Job Corps);
of Title I of the
federal law requires that
— under the Older
Workforce Investment
eligibility for Medicaid
Americans Act;
Act (training programs);
and food stamps be
— under the Child Care
— under the Older
decided by government
and Development Block
Americans Act;
personnel or by persons

CRS-7
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Programs
and regulations governing
comparable merit
Covered
religious providers of
systems.
(continued)
child care under the
— (Note: Judiciary
CCDBG).
Committee bill moved
— under the Community
CDBG to housing entry
Development Block Grant
above)
program;
— related to intervention
— related to intervention
in and prevention of
in and prevention of
domestic violence
domestic violence
activities, including
activities;
programs under the Child
Abuse Prevention and
Treatment Act or the
Family Violence
Prevention and Services
Act;
— related to hunger relief
— related to hunger relief
activities;
activities;
— under the Job Access
— under the Job Access
and Reverse Commute
and Reverse Commute
grant program under the
grant program under the
Federal Transit Act; and
Federal Transit Act; and
— to assist students
— to assist students
obtain equivalents of
obtain equivalents of
secondary school
secondary school
diplomas and activities
diplomas and activities
relating to non-school-
relating to non-school-
hour programs.
hour programs, including
programs under Chapter 3
of subtitle A of Title II of
the Workforce Investment
Act or part I of Title X of
the Elementary and
Secondary Education Act.

CRS-8
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Programs
Note: Activities carried
Note: Activities carried
Covered
out under federal
out under federal
(continued)
programs providing
programs providing
education to children
education to children
eligible to attend
eligible to attend
elementary or secondary
elementary or secondary
schools are not covered — schools are not covered —
unless they are provided
unless they are provided
under one of the above-
under one of the above-
listed authorities or are
listed authorities or are
diploma-equivalent or
diploma-equivalent or
non-school-hour
non-school-hour
programs.
programs.
[Section 1991(c)(4)]
[Section 1991(c)(4)]
Inclusion of
For a covered program
For a covered program
Authorizes states (1) to
A state that chooses to
Notwithstanding any
Religious
carried out by the federal
carried out by the federal
administer and provide
use nongovernmental
other provision of law, a
Organizations
government, or by a state
government, or by a state
services under covered
organizations to provide
religious organization
as Nongovern-
or local government with
or local government with
programs through
services under a covered
may receive financial
mental
federal funds, the
federal funds, the
contracts with charitable,
program must consider
assistance and be a
Providers
government must consider
government must consider
religious, or private
religious organizations
provider of services under
religious organizations on
religious organizations on
organizations, and (2) to
on the same basis as
a covered program on the
the same basis as other
the same basis as other
provide beneficiaries of
other nongovernmental
same basis as any other
non-governmental
non-governmental
covered programs with
entities, subject to the
nonprofit private
organizations, subject to
organizations, and the
certificates, vouchers, or
provision immediately
provider. [Section
provision immediately
program shall be
other forms of
below. [Section
582(a)]
below. [Section
implemented in a manner
disbursement redeemable
1955(b)(2)]
1991(c)(1)(A)]
that is consistent with the
with charitable,
establishment clause and
religious, or private
the free exercise clause of
organizations. [Section
the first amendment to the
104(a)(1)]
Constitution. [Section
1991(c)(1)(A)]

CRS-9
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Requirement
The nondiscrimination
See provision
If a state uses this
The nondiscrimination
The nondiscrimination
for
provision above applies if
immediately above.
authority, religious
provision above applies
provision above applies
Consistency
the program is
organizations are
so long as the programs
as long as the programs
with the First
implemented in a manner
eligible, on the same
are implemented in a
are implemented
Amendment to
consistent with the
basis as any other private
manner consistent with
consistent with the
the
Establishment and Free
organization, to be
the Establishment
Establishment and the
Constitution
Exercise Clauses of the
contractors, or to accept
Clause of the first
Free Exercise Clauses of
first amendment to the
certificates, vouchers, or
amendment to the
the first amendment to
Constitution.
other forms of
Constitution. [Section
the Constitution. [Section
[Section 1991(c)(1)(A)]
disbursement under a
1955(b)(2)]
582(c)]
covered program — so
long as the program is
implemented consistent
with the Establishment
Clause of the first
amendment to the
Constitution.
[Section104(c)]

CRS-10
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Prohibition on
Neither the federal
Same as original H.R. 7.
Unless state law forbids
Same as original H.R. 7.
Same as original H.R. 7.
Discrimination
government, nor a state or
[Section 1991(c)(1)(B)]
or restricts spending of
[Section 1955(b)(2)]
(Section 582 (c)(2)]
Against
local government
state funds by religious
Religious
receiving funds under a
bodies, neither the
Organizations
covered program may
federal government nor a
discriminate against an
state receiving funds
organization that provides
under a covered program
assistance or applies to
may discriminate against
provide assistance under
an organization that is or
the program, on the basis
applies to be a contractor
that the organization has
or that accepts
a religious character.
certificates, vouchers, or
[Section 1991(c)(1)(B)]
other forms of
disbursement, on the
basis that the
organization has a
religious character.
[Section 104(c)]

CRS-11
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Funds Not
Federal, state, or local
Federal, state, or local
No provision
No provision
No provision
Construed to
government funds or other
government funds or other
Be Aid to
assistance received by a
assistance received by a
Religious
religious organization for
religious organization for
Organizations
the provision of services
the provision of services
under this Act constitutes
under this Act constitutes
aid to needy individuals
aid to needy individuals
and families, the ultimate
and families, the ultimate
beneficiaries of the
beneficiaries of the
services, and not aid to the
services, and not support
religious organization.
for religion or the
[Section 1991(c)(2)]
organization’s religious
beliefs or practices.
Notwithstanding these
provisions, Title VI of the
Civil Rights Act, which
bars discrimination on the
basis of race, color, or
national origin, shall
apply to organizations
receiving direct assistance
funded under any covered
program. [Section
1991(c)(2)]

CRS-12
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Funds Not
The receipt by a religious
The receipt by a religious
No provision
No provision
No provision
Construed to
organization of federal,
organization of Federal,
Be
state, or local government
State, or local government
Endorsement
funds or other assistance
funds or other assistance
of Religion
under the Charitable
under the Charitable
Choice Act is not and
Choice Act is not an
should not be perceived as
endorsement by the
an endorsement by the
government of religion or
government of religion or
the organization’s
the organization’s
religious beliefs or
religious beliefs or
practices. [Section
practices. [Section
1991(c)(3)]
1991(c)(3)]
Religious
Character and
Independence
Control
A religious organization
A religious organization
A religious organization
A religious organization
Any religious
over
that provides assistance
that provides assistance
with a contract or which
that provides services
organization that is a
religious
under a covered program
under a covered program
accepts certificates,
under a covered
program participant
practices
retains its autonomy from
has the right to retain its
vouchers, or other forms
program retains its
retains its independence
federal, state, and local
autonomy from federal,
of disbursement under a
independence from
from federal, state, and
governments, including its
state, and local
covered program, retains
federal, state, or local
local government,
control over the
governments, including its
its independence from
governments, including
including its control over
definition, development,
control over the
federal, state, and local
its control over the
the definition,
practice, and expression
definition, development,
governments, including
definition, development,
development, practice,
of its religious beliefs.
practice, and expression
its control over the
practice, and expression
and expression of its
[Section 1991(d)(1)]
of its religious beliefs.
definition, development,
of its religious beliefs.
religious beliefs. [Section
[Section 1991(d)(1)]
practice, and expression
[Section 1955(c)(1)]
582(d)(1)]

CRS-13
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
of its religious beliefs.
[Section 104(d)(1)]
Internal
Neither the federal
Neither the federal
Neither the federal
Neither the federal nor a
Neither the federal
gover-
government nor a state or
government nor a state or
government nor a state
state or local
government nor a state
nance and
local government may
local government with
may require a religious
government may require
may require a religious
religious
require a religious
federal funds may require
organization to alter its
a religious organization
organization to alter its
symbols
organization to alter its
a religious organization to
form of internal
to alter its form of
form of internal
form of internal
alter its form of internal
governance, or to
internal governance or
governance or remove
governance; or to remove
governance or provisions
remove religious art,
to remove religious art,
religious art, icons,
religious art, icons,
in its charter documents;
icons, scripture, or other
icons, scripture, or other
scripture, or other
scripture, or other
or to remove religious art,
symbols in order to be
symbols in order to be
symbols. [Section
symbols because they are
icons, scripture, or other
eligible to contract to
eligible to provide
582(d)(2)]
religious, in order to be
symbols, or to change its
provide assistance or to
services under any
eligible to provide
name, because the
accept certificates,
covered program.
assistance under a covered
symbols or name are
vouchers, or other forms
[Section 1955(c)(2)]
program. [Section
religious, in order to be
of disbursement funded
1991(d)(2)]
eligible to provide
under a covered
assistance under a covered
program. [Section
program. [Section
104(d)(2)]
1991(d)(2)]
Employment
Practices
Civil Rights
The exemption of a
The exemption of a
A religious
The exemption of a
The exemption of a
Act
religious organization
religious organization
organization’s exemption
religious organization
religious organization
exemption
under Sections 702 or
under Sections 702 or
under Section 702 of the
under Sections 702 or
under Section 702 of the
703(e)(2)b of the Civil
703(e)(2)b of the Civil
Civil Rights Act
703(e)(2)b of the Civil
Civil Rights Act
Rights Act regarding
Rights Act regarding
regarding employment
Rights Act regarding
regarding employment
employment practices is
employment practices is
practices is not affected
employment practices is
practices is not affected
not affected by its
not affected by its
by its participation in, or
not affected by its
by its participation in, or
provision of assistance
provision of assistance
receipt of funds, from
provision of services
receipt of funds from, a

CRS-14
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
under, or receipt of funds
under, or receipt of funds
covered programs.
under, or receipt of
covered program.
from, a covered program.
from, a covered program,
[Section 104(f)]
funds from any covered
[Section 582(e)]
[Section 1991(e)(2)]
and any provision in these
program. [Section
programs that is
1955(d)(2)]
inconsistent with or would
diminish the exercise of
Civil Rights
an organization’s
For conflicting rule
For conflicting provision
Act
autonomy recognized in
regarding formula
regarding formula grants
exemption
section 702 or in this Act
grants in Public Health
in Public Health Service
(continued)
shall have no effect.
Service law, see
law, see Application of
Nothing in this Act affects
Application of Other
Other Laws Forbidding
the duty of religious
Laws Forbidding
Discrimination, below.
organizations to comply
Discrimination, below.
with nondiscrimination
provisions of Title 7 in the
use of federal funds.
[Section 1991(e)]
Tenets and
Notwithstanding any other
No provision
No provision
A religious organization
No provision
religious
provision of law, a
that provides services
practices
religious organization that
under a covered
provides assistance under
substance abuse
a covered program may
program may require
require that its employees
that its employees
adhere to its religious
adhere to rules
practices. [Section
forbidding the use of
1991(e)(1)]
drugs or alcohol.
[Section 1955(d)(1)]

CRS-15
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Education-
No provision
No provision
No provision
No provision
In determining whether
al require-
personnel of a religious
ments for
organization with a
personnel
record of successful drug
treatment for the
preceding 3 years have
satisfied state or local
requirements for
education and training, a
state or local government
shall not discriminate
against education and
training provided to
personnel by a religious
organization, so long as it
includes basic content
substantially equivalent
to the content of credit-
eligible training provided
by nonreligious
organizations. [Section
584(b)]
Application of
Nothing in this Act alters
Same as in original H.R. 7
P.L. 104-193 says that
No provision
Nothing in this section
Other Laws
the duty of a religious
[Section 1991(f)]
any program or activity
shall be construed to
Forbidding
organization to comply
that receives funding
modify or affect any
Discrimination
with federal laws
from the program of
other federal or state law
prohibiting discrimination
Temporary Assistance
or regulation concerning
on the basis of: race,
for Needy Families is
discrimination in
color, or national origin
subject to the
employment. [Section
(Title VI of the Civil
nondiscrimination
582(e)]
Rights Act); sex,
provisions of the Age
Note: The Public Health
Note: The Public Health
blindness, or visual
Discrimination Act,
Service Act says that on
Service Act says that on
impairment (Title IX of
Section 504 of the
grounds of religion, no
grounds of religion, no
the Education
Rehabilitation Act, the
one shall be excluded
one shall be excluded

CRS-16
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Amendments of 1972);
Americans with
from, denied benefits of,
from, denied benefits of,
disabilities (of otherwise
Disabilities Act, and
or subjected to
or subjected to
qualified persons)
Title VI of the Civil
discrimination under a
discrimination under a
(Section 504 of the
Rights Act.
program or activity
program or activity
Application of
Rehabilitation Act); (Age
[Section 408(d) of the
receiving substance
receiving substance abuse
Other Laws
Discrimination Act).
Social Security Act]
abuse or mental health
or mental health block
Forbidding
[Section 1991(e)(3)]
block grant funds [42
grant funds [42 U.S.C.
Discrimination
U.S.C. 300x-21 and
300x-21 and 200x-57].
(continued)
200x-57]. Courts have
Courts have held that
held that these
these prohibitions against
prohibitions against
religious discrimination
religious discrimination
apply to employment
apply to employment
practices as well as to
practices as well as to
beneficiary service.
beneficiary service.
Rights of
Beneficiaries
Right to
If a beneficiary or
If a beneficiary or
If a beneficiary of,
If a beneficiary or
If a beneficiary or
alternative
applicant has an objection
applicant has an objection
applicant for, or a person
applicant has an
applicant objects to the
provider
to the religious character
to the religious character
who requests to apply for
objection to the
religious character of a
of the organization
of the organization
assistance under a
religious character of
provider, the faith-based
providing assistance, the
providing assistance, the
covered program has an
the organization
provider must refer the
appropriate governmental
appropriate governmental
objection to the religious
providing services, the
person to services
entity must provide,
entity must provide,
character of the
appropriate
(provided by the
within a reasonable period
within a reasonable period
organization or
governmental entity
governmental unit that
of time, assistance from
of time, assistance from
institution providing
must provide, within a
administers the program)
an accessible and alternate
an accessible and alternate
assistance, the state in
reasonable period of
from an alternative and
provider, including a
provider that is
which the person resides,
time, services from an
accessible provider with a
secular one, that is at
unobjectionable to the
must provide, within a
alternative and
value at least equal to that
least equal in value to the
person on religious
reasonable period of
accessible provider with
of services that would
aid that would have been
grounds and that is at least
time, assistance from an
a value at least equal to
have been received from
received from the
equal in value to the aid
accessible and
that of services that
the religious organization.
religious entity.
that would have been
alternative provider with
would have been
The faith-based

CRS-17
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
[Section 1991(f)(1) & and
received from the
a value at least equal to
received from the
organization must notify
(3)]
religious organization.
that of the assistance that
religious organization.
the government agency
[Section 1991(g)(1) and
would have been
[Section 1955(e)(1)]
that administers the
(3)]
received from the
program about its
religious organization.
referral.
[Section 104(e)]
[Section 582(f)(1)]
Before making the
referral, the faith-based
organization must
consider any list that
state or local government
makes available of
entities in the area that
provide program services.
The faith-based
organization must ensure
that the beneficiary
makes contact with the
alternative provider.
[Section 582(f)(3)]
Notice of
The appropriate federal,
Same as original H.R. 7
No provision
The appropriate
Program participants
benefici-
state or local
[Section 1991(g)(2)]
governmental entity
(including faith-based
ary right to
governmental entity must
must guarantee that
organizations), public
alterna-
guarantee that notice of
notice of beneficiary
agencies that refer
tive
beneficiary rights to
rights to service from an
persons to covered
provider
service from an
alternate provider is
programs, and the
alternative provider is
given to beneficiaries or
governments that
given to beneficiaries or
applicants for assistance
administer covered
applicants for assistance
under a covered
programs or are program
under a covered program.
program. [Section
participants must ensure
[Section 1991(f)(2) and
1955(e)(2) and (3)]
that notice of their rights
(3)]
to service from an
alternative provider is
given to beneficiaries or

CRS-18
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
prospective beneficiaries.
Section 582(f)(2)
Non-
A religious organization
A religious organization
Except as otherwise
A religious organization
A religious organization
discrimination
providing assistance
providing assistance
provided in law, a
providing services
shall not discriminate
Against
through a grant or contract through a grant or
religious organization
through a grant,
against a program
Beneficiaries
under a covered program
cooperative agreement
shall not discriminate
contract, or cooperative
beneficiary or prospective
shall not discriminate, in
under a covered program
against a person in
agreement under any
beneficiary on the basis
carrying out the program,
may not discriminate, in
giving assistance under
covered program shall
of religion or religious
against a beneficiary or
carrying out the program,
any covered program on
not discriminate against
belief in providing
applicant on the basis of
against a beneficiary or
the basis of religion, a
a beneficiary or
services or engaging in
religion, a religious belief,
applicant on the basis of
religious belief, or
applicant on the basis of
outreach activities under
or refusal to hold a
religion, a religious belief,
refusal to actively
religion, a religious
covered programs.
religious belief. [Section
or a refusal to hold a
participate in a religious
belief, a refusal to hold
[Section 582(f)(4)]
1991(g)(1)]
religious belief. [Section
practice. [Section
a religious belief, or a
1991(h)(1)].
104(g)]
refusal to actively
A religious organization
A religious organization
participate in a religious
providing assistance
providing assistance
practice. [Section
through a voucher,
through a voucher,
1955(f)]
certificate, or other form
certificate, or other form
of indirect disbursement
of indirect disbursement
under a covered program,
under a covered program,
shall not discriminate, in
may not deny admission
carrying out the program,
into the program on the
against a beneficiary or
basis of religion, religious
applicant on the basis of
belief, or refusal to hold a
religion, religious belief,
religious belief. [Section
or refusal to hold a
1991(h)(2)]
religious belief. [Section
Note: If a religious
1991(g)(2)]
organization that receives
funds through a grant or
cooperative agreement
offers religious activities,
they must be voluntary

CRS-19
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Nondiscrimi-
for recipients, and offered
nation Against
separate from the program
Beneficiaries
funded under this Act.
(continued)
[Section 1991(j)]
(See immediately below)
Limitation on
No funds provided
Same prohibition on use
No funds provided
No funds provided
No funds provided under
Use of Funds
through a grant or contract
of direct funding for
directly to institutions or
through a grant or
a covered program shall
for Sectarian
to a religious organization
religious activity as in
organizations to provide
contract to a religious
be spent for sectarian
Activities
for assistance under a
original H.R. 7.
services and administer
organization to provide
worship, instruction, or
covered program may be
[Section 1991(j)]
programs may be spent
services under any
proselytization. [Section
spent for sectarian
for sectarian worship,
covered program may
583]
worship, instruction, or
If such an organization
instruction, or
be spent for sectarian
proselytization.
offers sectarian worship,
proselytization. [Section
worship, instruction, or
[Section 1991(i)]
instruction, or
104(j)]
proselytization. [Section
proselytization, the
[Note: This prohibition
1955(i)]
religious activity must be
does not apply in cases
voluntary for recipients
of assistance provided to
and offered separate from
individuals through
the program funded under
certificates, vouchers, or
this Act.
other forms of
Each recipient
Each recipient
disbursement redeemable
organization must file a
organization must file a
at charitable, religious,
signed certificate
separately signed
or private organizations.]
providing assurance that it
certificate certifying that
will comply with the
the organization is aware
above rule. [Section
of and will comply with
1991(i)]
these rules. [Section
1991(j)]

CRS-20
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Authority to
No provision
When consistent with the
No provision
No provision
No provision
Require Use of
purpose of a covered
Vouchers and
program, the Secretary of
Certificates
the department
administering it may
require that some or all of
the funds be in the form of
vouchers, certificates or
other forms of indirect
disbursement.
Organizations receive
these funds only as a
result of private choices of
beneficiaries, and no
government endorsement
of any religion, or of
religion generally, occurs.
[Section 1991(l)]

CRS-21
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Fiscal
Accountability
Audit
Except for the
Except for the limited
Except for the limited
Same as original H.R. 7.
Essentially the same as
(general)
requirement to segregate
audit and self-audit
audit provision noted
[Section 1955(g)(1)]
original H.R. 7. [Section
government funds and the
provisions noted below,
below, any religious
582(g)(1)]
limited audit provision
any religious organization
organization contracting
noted below, any religious
proving assistance
to provide assistance
organization contracting
through a grant or
under a covered program
to provide assistance
cooperative agreement
is subject to the same
under a covered program
under a covered program
regulations as other
is subject to the same
is subject to the same
contractors to account
regulations as other
regulations as other
for use of funds received
nongovernmental
nongovernmental
in accord with generally
organizations to account
organizations to account
accepted auditing
for use of funds received
for use of funds received
principles. [Section
in accord with generally
in accord with generally
104(h)(1)]
accepted auditing
accepted auditing
principles.
principles.
[Section 1991(h)(1)]
[Section 1991(I)(1)]
Limited
The religious organization
If the organization
If the religious
Same as original H.R. 7.
Essentially the same as
audit
must segregate
provides assistance
organization segregates
[Section 1955(g)(2)]
original H.R. 7.
government funds
through a grant or
federal program funds
[Section582(g)(2)]
provided into a separate
cooperative agreement, it
into separate accounts,
account. Only the
must segregate
only the financial
government funds are
government funds into a
assistance provided with
subject to audit by the
separate account. If it
those funds is subject to
government. [Section
provides assistance
audit. [Section
1991(h)(2)]
through vouchers,
104(h)(2)]
certificates,

CRS-22
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Limited
or other indirect aid, it
audit
may segregate
(continued)
government funds. Only
separate accounts
consisting of government
funds are subject to audit
by government. [Section
1991(i)(2)]
Self Audit
No provision
An organization providing
No provision
No provision
No provision
services under any
covered program shall
conduct annually a self
audit for compliance with
its duties under this Act
and submit a copy to the
appropriate government
agency, along with a plan
to correct any variances.
[Section 1991(i)(3)]

CRS-23
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Effect on State
If a state or local
Same as original H.R. 7
No provision
Same as original H.R. 7.
No provision
and Local
government contributes
[Section 1991(k)]
[Section 1955(j)]
Funds
funds to carry out a
covered program, the state
or local government may
segregate its funds from
the federal funds provided
for the program or may
commingle its funds with
federal funds. If funds are
commingled, the
provisions of this Act
apply in the same manner,
and to the same extent, as
they apply to federal
funds.
[Section 1991(j)]

CRS-24
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Treatment of
If an intermediate
If an intermediate grantor
No provision
If an intermediate
No provision
Intermediate
contractor is given
is given authority to select
organization is given
Contractors/
authority to select
nongovernmental
authority to select
Grantors
nongovernmental
organizations as
nongovernmental
(Non-
organizations as
subgrantors to provide
organizations to provide
governmental
subcontractors to provide
assistance under a covered
services under any
Organizations
assistance under a covered
program, the intermediate
covered program, the
Acting under
program, the intermediate
grantor has the same
intermediate
Agreement
contractor has the same
duties under this Act as
organization has the
with a
duties under this Act as
the government when
same duties under this
Government
the government when
selecting or otherwise
section as the
Entity)
selecting or otherwise
dealing with subgrantors;
government but shall
dealing with
but, if the intermediate
retain all other rights of
subcontractors; but, if the
grantor is a religious
a nongovernmental
intermediate contractor is
organization, it retains all
organization under this
a religious organization, it
other rights of a religious
section. [Section
retains all other rights of a
organization under this
1955(k)]
religious organization
Act. [Section 1991(m)]
under this Act. [Section
1991(k)]
Technical
No provision
Out of amounts made
No provision
No provision
No provision
Assistance for
available for Office of
Small
Justice Programs,
Nongovern-
including those for the
mental
Office of Community
Organizations
Oriented Policing
Services, authorizes $50
million annually to
provide training and
technical assistance to
small nongovernmental
organizations, as
determined by the
Attorney General,

CRS-25
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Technical
including religious
Assistance for
organizations, in
Small
procedures related to
Nongovern-
participating in covered
mental
programs. Assistance
Organizations
may include help in
(continued)
creating a non-profit
Section 501(c)(3)
corporation, help in grant
writing, information and
referrals to other
nongovernmental groups
that provide expertise in
accounting, legal issues,
tax issues, and other
areas; and guidance on
how to comply with
federal nondiscrimination
provisions. Reserves at
least $5 million for
assistance in providing
access to disabled
persons. Gives priority to
small governmental
organizations serving
urban and rural
communities. [Section
1991(o)].

CRS-26
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Compliance
A party alleging that a
A party alleging that a
Any party which seeks to
Any party that seeks to
A religious organization
state or local government
state or local government
enforce its rights under
enforce its rights under
may obtain review of
has violated its rights
has violated its rights
the charitable choice
this section may assert a
agency action in federal
under this Act may bring a
under this Act may bring
provisions of P.L. 104-
civil action for
court in accordance with
civil action pursuant to
a civil action for
193 may assert a civil
injunctive relief
Chapter 7 of Title 5,
section 1979 against the
injunctive relief pursuant
action for injunctive
exclusively in an
United States Code.
official or government
to section 1979 against the
relief exclusively in an
appropriate federal or
[Section 582(h)]
agency that has allegedly
state official or local
appropriate state court
state court against the
committed the violation.
government agency that
against the entity or
entity, agency, or
A party alleging that the
has allegedly committed
agency that allegedly
official that allegedly
federal government has
the violation. A party
commits the violation.
commits the violation.
violated its rights under
alleging that the federal
[Section 104(i)]
[Section 1955(h)]
this Act may bring a civil
government has violated
action for appropriate
its rights under this Act
relief in an appropriate
may bring a civil action
federal district court
for injunctive relief in
against the official or
federal district court
government agency that
against the official or
allegedly committed the
government agency that
violation. [Section
allegedly committed the
1991(l)]
violation. [Section
1991(n)]

CRS-27
Community Renewal
Charitable Choice Act
Charitable Choice Act
Children’s Health Act
Tax Relief Act
Title II of H.R. 7
Title II of H.R. 7
P.L. 104-193
(Title XXXIII of
(H.R. 5662), enacted as
as introduced
as passed by the House
(Welfare Reform)
P.L. 106-310)
part of P.L. 106-554
Preemption of
No explicit provision.
No explicit provision.c (In
Nothing in the charitable
No explicit provision.
Nothing in this section
Other Law?
a colloquy on the House
choice provisions of P.L.
shall be construed to
floor before passage, Rep.
104-193 is to be
modify or affect any
Watts, bill sponsor, was
construed to preempt a
other federal or state law
asked whether he would
provision of a state
or regulation relating to
commit to working to
constitution or law that
discrimination in
craft language that would
prohibits or restricts
employment. [Section
ensure that religious
spending of state funds
582(e)]
organizations comply with
in or by religious
state and local civil rights
organizations. [Section
laws. Rep. Watts said he
104(k)]
was willing to make a
commitment to “more
clearly address” this issue
in conference.)
a Under the CCDBG, religious providers may receive funding on the same basis as nonsectarian providers. However, religious providers may use funds for construction
(generally disallowed for other providers) to the extent needed to bring facilities into compliance with health and safety standards. Use of CCBDG funds for
religious activities, including sectarian worship or instruction, generally is prohibited; but this prohibition does not apply to funds received by providers in the
form of child care certificates, if the sectarian services are freely chosen by the parent. Providers may not discriminate in admissions against a child on the basis
of religion, with the exceptions of family child care providers and providers who receive CCDBG funds in the form of child care certificates. However, sectarian
providers may reserve unsubsidized slots fo children whose families regularly participate in their organization’s activities, unless 80% or more of their operating
budget comes from federal or state funds, including child care certificates. In their employment practices, providers may not discriminate on the basis of religion
if the employee’s primary duties are to give child care. However, in considering two or more qualified applicants, sectarian providers may give preference to
a person who regularly participates in the organization’s activities. Also, sectarian organizations may require employees to adhere to their religious tenets or
teaching and to rules forbidding the use of drugs or alcohol, unless 80% or more of their operating budget comes from federal or state funds. See CRS Report
RL30785, The Child Care and Development Block Grant: Background and Funding, by Alice Butler and Melinda Gish.
b It appears that provisions of Section 703(e)(2) of the Civil Rights Act are subsumed by Section 702.
c Before passage, the question was asked on the House floor: “If a state law prohibits discrimination based on a particular characteristic, and if a religious organization
would ordinarily (based on state law) be required to comply with that law, would H.R. 7 change that situation in any way? Rep. Watts replied: “Yes, H.R. 7 would
change this situation, in a particular instance. If a religious organization were to commingle federal funds with state monies, it could assert its right under
subsection (d) and (e) of H.R. 7 against the enforcement of state or local procurement provisions that limited the religious organization’s ability to hire staff on
a religious basis.” Note: Subsection (d) concerns the right of a religious organization to retain control over its organizational character and autonomy. Subsection
(e) provides that the religious organization’s right to hire and fire on the basis of religion (under Section 702 of Title VII of the Civil Rights Act) is not affected
by its participating in a program covered by the Act. It also provides that any provision in a covered program that is inconsistent with or that would diminish
the exercise of the religious organization’s autonomy under Section 702 shall have no effect.