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Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Rules and Regulations
beliefs precluded it from complying with the religious nondiscrimination provision, required the Department to issue an exception to South Carolina for that faith-based organization and other similarly situated faith-based participants in South Carolinas foster care program who were willing to refer would-be foster parents to other providers. A federal district court in Michigan likewise concluded that RFRA
required an exception from 75.300c for a Catholic organization that participated in Michigans foster care and adoption program, but could not consistent with its Catholic beliefs review and recommend to the State same-sex or unmarried couples although it referred such cases to other child placing agencies for review and recommendation. The court issued a preliminary injunction precluding the Secretary from taking any enforcement action against the State under 45 CFR
75.300c based upon plaintiffs protected religious exercise . . . or upon the State of Michigans obligation under this preliminary injunction to accommodate such protected religious exercise. Buck, 429 F.Supp.3d at 461.
Finally, as noted above, the Departments OCR notified the Texas Attorney General that it had concluded that application of 75.300d and certain provisions in 75.300c to require Texas to exclude the Archdiocese of Galveston or similarly situated entities from its foster care and adoption programs would violate RFRA.
The Department recognized that it had a number of options to address the burdens imposed on religious exercise by 75.300c and d. As noted above, the Department proposed to amend the provisions to mirror the balance struck by Congress with respect to nondiscrimination requirements and to reduce confusion for grant applicants and recipients. This exercise of the Departments discretion also alleviates the substantial burdens on religious exercise that the Department had identified and others of which it is not yet aware. Especially in the absence of any statutory requirement to impose 75.300c and d, the Department believes that the best way to avoid such burdens on religious exercise is, instead of requiring individual objectors to assert claims under RFRA or other applicable laws, to avoid such regulatory requirements.23
Comments: A number of commenters opposed the proposed revisions to 23 See California v. Azar, No. 1915974, 2020 WL
878528, at 24 9th Cir. Feb. 24, 2020 en banc HHS acted well within its authority in deciding how best to avoid conflict with the Federal conscience laws.

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75.300 because they asserted that the revisions would lead to spending of taxpayer dollars to support organizations that discriminate in violation of equal rights. Similarly, some commenters asserted that the proposed revisions to 75.300 would violate the separation of church and state.
Response: The Department respectfully disagrees. Under the state action doctrine, the First, Fifth, and Fourteenth Amendment of the Constitution among others, apply only to state action, i.e., the action of the federal government and, as applicable, the state governments. It does not apply to private conduct. See United States v.
Morrison, 529 U.S. 598 2000; Civil Rights Cases, 109 U.S. 3 1883. Thus, only the action of the federal government or state governments could violate the Establishment Clause or the Due Process or Equal Protection Clauses. The private conduct of Federal recipients and subrecipients is not considered state action merely by receipt of partial funding from the government. See Rendell-Baker v. Kohn, 457 U.S. 830 1982. And the Departments funding of faith-based and other organizations for a wide variety of purposes does not constitute sufficient involvement or entwinement with the government for private recipients to be considered state actors. See Shelley v.
Kraemer, 334 U.S. 1 1948.
The government does not violate the Establishment Clause where grants are awarded to a wide variety of entities, including faith-based organizations, and for a wide variety of purposes, none of which are the promotion of religion.
Indeed, a significant factor in upholding governmental programs in the face of Establishment Clause attack is their neutrality towards religion.
Rosenberger v. Rector & Visitors of Univ.
of Va., 515 U.S. 819, 839 1995. That guarantee of neutrality is respected, not offended, when the government, following neutral criteria and evenhanded policies, extends benefits to recipients whose ideologies and viewpoints, including religious ones, are broad and diverse. Id. Thus, religious adherents and organizations may, like nonreligious adherents and organizations, receive direct financial aid through a secular-aid program.
Indeed, excluding religious adherents and organizations from secular-aid programs may violate the Free Exercise Clause. See, e.g., Trinity Lutheran, 137
S. Ct. 2012 scrap tire program. And the Department is under an affirmative duty to allow faith-based organizations to participate equally in federal grant programs while maintaining their
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independence, including their expression of their religious beliefs. See, e.g., 42 U.S.C. 290kk1 SAMHSA
discretionary funds, 300x65
SAMHSA block grants, 604a Temporary Assistance for Needy Families; see also 45 CFR 87.3.24
Comment: The Department received numerous comments on a variety of other laws as well. These included Title VII, the Affordable Care Act, the Family First Prevention Services Act, and state and local laws dealing with discrimination and child welfare. Some commenters believed these laws required keeping the current language of 75.300c and d, while other commenters believed these laws required the Department to repeal or amend paragraphs c and d. Some also thought agency action to be premature given the pendency of several cases surrounding these laws at the Supreme Court.
Response: This rulemaking does not alter a grant applicant or recipients obligations under the referenced laws or any regulations promulgated to implement such laws. Thus, grant applicants and recipients that are subject to nondiscrimination requirements in Title VII, the Affordable Care Act, and/or state or local laws dealing with discrimination, will remain subject to those laws to the same extent that they were before this rulemaking. Conversely, grant applicants and recipients who are not subject to those requirements will continue not to be subject to them. The Department will also continue to enforce any nondiscrimination provisions for which it has enforcement authority relating to grant applicants and recipients, and it will do so in accordance with the terms of the statutes. For example, the Department will continue to require State foster care plans under the Family First Prevention Services Act to include the prohibition on delaying or denying the placement of a child for adoption or into foster care, on the basis of the race, color, or national origin of the adoptive or foster parent, or of the child, 24 The Department is aware that a federal district court has recently declined to dismiss a challenge, brought by a same-sex couple against South Carolina and the Department, challenging the exception granted to the State of South Carolina with respect to the religious nondiscrimination provision in the current 75.300c for Miracle Hill and similarly situated entities in South Carolina.
The court dismissed the plaintiffs equal protection claim for religious discrimination and denied the motion to dismiss the plaintiffs claims for violation of the Establishment Clause and equal protection based on sexual orientation discrimination. Nothing in that decision would preclude the Department from finalizing this rule. Rogers v. HHS, 19cv 01567TMC D.S.C. 2019.

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