Charitable Choice Guide - Footnotes
Introduction
1 The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, H.R 3734, 104th Congress, 2d Session, P.L. 104-193.
2 The detailed explanation is based on a memorandum prepared by Carl H. Esbeck, Isabelle Wade & Paul C. Lyda Professor of Law, University of Missouri-Columbia (J.D., Cornell University, 1974). The staff of Sen. John Ashcroft (R-Missouri), the sponsor of Section 104, worked closely with Esbeck beginning in February, 1995, when Charitable Choice was just an idea. His university position is listed for identification only.
An Overview of Section 104
1 See Henry G. Cisneros, Higher Ground: Faith Communities and Community Building (Department of Housing and Urban Development, Feb.1996); Marvin Olasky, The Tragedy of American Compassion (Washington, DC: Regnery Gateway, 1992); Steven V. Monsma, "Overcoming Poverty: The Role of Religiously Based Nonprofit Organizations," in Stanley W. Carlson-Thies and James W. Skillen, eds., Welfare in America: Christian Perspectives on a Policy in Crisis (Grand Rapids, Mich.: Eerdmans, 1996); Ronald J. Sider and Heidi Rolland, "Correcting the Welfare Tragedy: Toward a New Model for Church/State Partnership," also in Carlson-Thies and Skillen, eds., Welfare in America.
2 Stephen V. Monsma, When Sacred And Secular Mix: Religious Nonprofit Organizations And Public Money (Lanham, Maryland: Rowman & Littlefield, 1996); Carl H. Esbeck, The Regulation of Religious Organizations As Recipients of Governmental Assistance (Washington, DC: Center for Public Justice, 1996).
3 TANF is codified in Title 1 of PRWOR, 42 U.S.C. section 601 et seq. AFDC was codified at 42 U.S.C. section 601 et seq. AFDC is repealed by section 103(a) of PRWOR.
4 Subsection (a)(2)(B) extends the coverage of Section 104 beyond TANF to "[a]ny other program established or modified under title I or II" of PRWOR that permits contracts or vouchers. According to the analysis of the Congressional Research Service, these additional programs are the SSI program, and probably the food stamps and Medicaid programs. See CRS memo, "Questions Re Section 104 of P.L. 104-193 Concerning Services Provided by Charitable, Religious, or Private Organizations," Sept. 9, 1996 (from the American Law Division), and CRS memo, "Application of Section 104 of P.L. 104-193," Oct. 18, 1996 (by the Education and Public Welfare Division).
5 However, faith-based providers may find it advantageous to form separate 501(c)(3) nonprofit corporations to administer purchase-of-service contracts. Such action incurs some legal and administrative costs, but it eases the keeping of separate accounts in order to limit audits, as permitted by subsection (h)(2), and it restricts the coverage of certain civil-rights laws (see footnote 7 on page 20).
6 Title VII only applies to employers with fifteen or more employees. Under federal law, religious organizations with fewer employees are already free to hire only those of compatible religious belief.
7 Four federal anti-discrimination statutes are triggered by the receipt of federal funds: Title VI of the Civil Rights Act of 1964 (prohibiting discrimination on the bases of race, color, and national origin); the Age Discrimination Act of 1975 (prohibiting discrimination on the basis of age); Section 504 of the Rehabilitation Act of 1973 (prohibiting discrimination against otherwise qualified disabled individuals, including individuals with a contagious disease or an infection such as HIV); and Title IX of the Educational Amendments of 1972 (prohibiting discrimination in educational institutions on the bases of sex and visual impairment). Separate incorporation as a 501(c)(3) nonprofit can have the effect of removing the parent religious organization from coverage of these four civil-rights laws that are triggered by federal funding See Esbeck, Regulation of Religious Organizations 28-34.
8 As federal legislation, Section 104's requirements preempt state and local laws that conflict with it. Supremacy Clause, U.S. Constitution, art. VI, cl. 2.
9 The Constitution requires government neutrality between religions and between religion and secularism, not discrimination against religious activity, expression, or organizations. See Rosenberger v. Rector and Visitors of Univ. of Virginia, 115 S. Ct. 2510(1995) (upholding aid in the form of equal access to government funding for printing of religious newspaper); Capitol Sq. Review & Advisory Bd. v. Pinette, 115 5. Ct. 2440 (1995) (upholding aid in the form of equal access to public property for purpose of religious expression). See also Church on the Rock v. City of Albuquerque, 84 F. 3d 1273 (10th Cir. 1996), cert. denied (Oct. 21, 1996), No.96-286. Following Rosenberger and Pinette, the appeals court in Church on the Rock struck down a congressional prohibition on private religious speech in senior-citizen centers funded by the federal government. The court ordered the senior centers to permit worship and other religious speech as a matter of neutrality.
10 Because Section 104 is a new law untested in the courts and because the applicable constitutional law is developing, it is essential that faith-based providers consult legal counsel. It is prudent for such providers to maintain a separate account for the federal funds, as permitted by subsection (h), and to use careful accounting procedures to track how these funds are used. A very conservative approach is to create a separate corporation to receive and expend the government funds. It should be noted that the most restrictive reading of current constitutional law disqualifies from participation in government programs all "pervasively sectarian organizations-an undefined term. However, many legal authorities believe that providers whose programs fulfill a law's public purpose, albeit that they are infused with religious messages or aspects, are nevertheless eligible to participate in government programs. Participation under Section 104 by deeply religious provider relies on a legal interpretation that has not been fully tested in the Supreme Court. For further discussion see Carl H. Esbeck, "A Constitutional Case for Governmental Cooperation with Faith Based Social-Service Providers," 46 Emory Law Journal (forthcoming, Winter 1997).
11 The distinction is well-established in constitutional law. See Zobrest v. Catalina Foothill Sch. Dist., 509 U.S. 1(1993) (providing special education services to a student attending Catholic high school not prohibited by establishment clause); Mueller v. Allen, 463 U.S. 388, 399-400 (1983) (upholding a state income tax deduction for parents paying school tuition); Witters v. Washington Dep't of Servs. for the Blind 474 U.S. 481(1986) (upholding a state vocational rehabilitation grant to disabled student choosing to use grant for training as cleric); Everson v. Board of Educ., 330 U.S. 1(1947) (upholding state law providing reimbursement to parents for expense of transporting children by bus to school, including religious schools).
12 In the case of vouchers or certificates, the chain of causation
between government and a faith-based provider is broken, precluding any possible governmental endorsement of religion. In such indirect financial relations, how the funds are ultimately used is irrelevant for purposes of the establishment clause. As the Supreme Court said in Corporation of presiding Bishop v. Amos 483 U.S. 327 (1987):
A law is not unconstitutional simply because it allows churches to advance religion, which is their very purpose. For a law to have forbidden "effects" under Lemon [v. Kurtzman, 403 U.S. 602 (1971)], it must be fair to say that the government itself has advanced religion through its own activities arid influence.
Id. at 337 (emphasis in original). This is much the same as observing that once the voucher or certificate leaves the government's hands, what is done with its value is not "state action" for purposes of the First and Fourteenth Amendments.
13 Subsection (e)(1) requires only that assistance be obtainable from an "alternative" provider. It is implicit in the structure of Charitable Choice, however, that a beneficiary who objects to a faith-based provider will have recourse to a non-religious provider. However, there is no requirement for a state to ensure that a beneficiary has access to a provider sharing his or her faith.
14 Subsection (k) is a "saving" clause preventing federal preemption in a narrow circumstance, but one within the control of state authorities. The subsection provides:
Nothing in this section shall be construed to preempt any provision of a State constitution or State statute that prohibits or restricts the expenditure of State funds in or by religious organizations [emphasis added].
The use of the word "State" to limit the scope of the word "funds" gives the subsection the narrow effect that Congress intended.
15 Conference Report 430, accompanying H.R. 4, 104th Congress, 1st Session (Dec. 20, 1995)-the previously adopted welfare bill with the identical subsection (k)-provides the following explanation for the subsection:
It is the intent of Congress . . . to encourage States to involve religious organizations in the delivery of welfare services to the greatest extent possible. The conferees do not intend that t his language be construed to require that funds provided by the Federal government . . . be segregated and expended under rules different than funds provided by the State for the same purposes; however, States may revise such laws, or segregate State and Federal funds, as necessary to allow full participation in these programs by religious organizations [p 361].
16 Rights acknowledged outside of Section 104, such as those secured by the First Amendment, can be pursued by providers or beneficiaries in the appropriate court, federal or state.
