2016-29629. Regulation Regarding Nondiscrimination on the Basis of Race, Color, or National Origin in Programs or Activities Receiving Federal Financial Assistance From the Department of the Treasury

AGENCY:

Department of the Treasury.

ACTION:

Final rule.

SUMMARY:

This final rule provides for the enforcement of Title VI of the Civil Rights Act of 1964, as amended (“Title VI”) to the end that no person in the United States shall on the grounds of race, color, or national origin be denied participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity that receives federal financial assistance from the Department of the Treasury. The promulgation of this final regulation will provide guidance to the Department's recipients of federal financial assistance in complying with the provisions of Title VI and will also promote consistent and appropriate enforcement of Title VI by the Department's components. Through this final rule, the Department also notifies beneficiaries of its programs offering financial assistance of the protections against discrimination based on race, color, and national origin.

DATES:

Effective January 12, 2017.

FOR FURTHER INFORMATION CONTACT:

Mariam G. Harvey, Director, Office of Civil Rights and Diversity, Department of the Treasury, [phone] (voice), by mail to Mariam G. Harvey, Director, Office of Civil Rights and Diversity, 1500 Pennsylvania Avenue NW., Washington, DC 20220; or facsimile [phone].

SUPPLEMENTARY INFORMATION:

I. Purpose of the Regulatory Action

The purpose of this final rule is to provide for the enforcement of Title VI of the Civil Rights Act of 1964, as amended (42 U.S.C. 2000d, et seq.), as it applies to programs or activities receiving assistance from the Department of the Treasury. Specifically, the statute states that “[n]o person in the United States shall, on the grounds of race, color, or national origin be denied participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity that receives federal financial assistance.” 42 U.S.C. 2000d. Each federal agency subject to Title VI is required to issue regulations implementing Title VI. 28 CFR 42.403. The Department of the Treasury is issuing Title VI regulations for the first time. Under Treasury's Title VI implementing regulations, Treasury-funded programs are prohibited from taking acts, including permitting actions, that discriminate based on the statutorily protected classes. The regulations further provide for Treasury procedures to ensure compliance, including a hearing procedure.

Prior to this rule, the Department was requiring recipients of financial assistance to sign assurances of compliance with Title VI. With the issuance of this final rule, the Department will continue to require assurance of compliance and strengthen its civil rights compliance requirements.

II. Background

A. Treasury's July 13, 2015, Proposed Rule

On July 13, 2015, at 80 FR 39977, Treasury published its proposed rule implementing Title VI. Each federal agency subject to Title VI is required to issue regulations implementing Title VI. 42 U.S.C. 2000d to 2000d-7; 28 CFR 42.403. The comment period for the proposed rule ended on September 11, 2015.

III. Public Comments and Treasury's Response

A. The Public Comments Generally

The public posted six comments to the Notice of Proposed Rulemaking implementing Title VI. Three comments were from public interest groups. One comment was from a city government office. Two individuals also commented, but one of the comments was nonresponsive. All public comments can be viewed at http://www.regulations.gov/​#!docketBrowser;​rpp=​25;​po=​0;​dct=​PS%252BPR;​D=​TREAS-DO-2015-0006.

The comments can be grouped in two main subjects: Data collection and coverage of Low Income Housing Credits (LIHTCs).

B. Specific Public Comments

1. Burden of Data Collection

Comment: A commenter disagreed with the collection of the ethnicity of the taxpayers receiving tax preparation services through Volunteer Income Tax Assistance (VITA), stating that the information will not help prove or disprove discrimination. The commenter opined that the best data are gained from the feedback received from bureau employees and from the taxpayers who report having issues at a VITA site. The commenter favors the current compliance practices (displaying a poster, providing information about where to file a complaint, and unannounced site visits) as a far better method for monitoring compliance with nondiscrimination regulations.

Treasury Response: Treasury agrees that the practices in place are useful, and they will continue under the final rule. Treasury disagrees with this commenter's view on data collection, however, because it is required for the appropriate enforcement of Title VI. The coordination regulations issued by the Department of Justice (DOJ) under the authority of Executive Order 12250 require agencies to “provide for the collection of data and information from applicants for and recipients of federal assistance sufficient to permit the effective enforcement of Title VI.” 28 CFR 42.406(a). Collecting information about the race and ethnicity of program beneficiaries will help the Department ensure its programs that offer financial assistance are providing equal opportunity to the eligible beneficiaries, regardless of their race and national origin. The data will also allow the Department to investigate discrimination complaints alleging a violation of Title VI adequately.

Comment: A commenter suggests the grantees should have to supplement local data and/or common knowledge regarding the actual neighborhoods that exist within each program jurisdiction, to enhance the utility of the information required to be maintained for assessing the success of Title VI enforcement.

Treasury Response: The Department plans to issue guidelines regarding data collection in accordance with the requirements in 28 CFR 42.406. The Department will collect data sufficient for the effective enforcement of Title VI. The government-wide coordination regulations state that where an agency determines that the collection of additional data, such as demographic maps, the racial composition of affected neighborhoods, or census data, is necessary or appropriate, the agency shall specify, in its guidelines or in other directives, the need to submit such data. The Department can collect such additional data only to the extent that it is readily available or can be compiled with reasonable effort.

Comment: A commenter recommends as a way to minimize the burden of complying with the proposed information collection, Treasury implement a standard form for reporting compliance to agency officials (referencing § 22.6 of the proposed rule that obligates recipients to submit compliance reports). A standard form will also promote consistency and appropriate enforcement of Title VI by the Department's components.

Treasury Response: Treasury agrees that a standard form for reporting compliance information will assist its recipients and promote consistency across the Department's components. The Department will issue guidance to its recipients and agency officials regarding data collection as required by the government-wide coordination regulations, and will consider making a data collection form part of the upcoming guidance.

Comment: A commenter asks what is to be gleaned from the data if a high number of participants opt not to answer the racial and ethnic data question. The commenter wanted to know if recipients will be asked to guess the taxpayers' ethnic backgrounds.

Treasury Response: The Department will provide guidance to its recipients regarding data collection as required by the government-wide coordination regulations, and in accordance with Office of Management and Budget (OMB) guidance, including OMB Statistical Policy Directive No. 15, as revised; and OMB Bulletin No. 00-02. Self-identification is the preferred method of data collection about race and ethnicity. OMB guidance states that respect for individual dignity should guide the processes and methods for collecting data on race and ethnicity. Respondent self-identification should be used to the greatest extent possible, but observer identification is more practical in some data collection systems.

Comment: A commenter asked if the Department will assume that if the vast majority of beneficiaries receiving benefits at a site belong to a particular ethnic background discrimination has occurred.

Treasury Response: Data showing the race and ethnicity of the program beneficiaries are relevant to determine compliance with the requirements of Title VI by the recipients of Treasury financial assistance. If the Department finds during a compliance review or investigation that a protected group in the population of the service area is not participating in the program, the Department will look at the entire record to determine the reason for the lack of participation, and whether corrective actions are needed. The Department will discuss issues of noncompliance with its recipients with the goal of achieving voluntary compliance.

Comment: Two commenters were concerned that increasing the burden on recipients of the VITA program will result in further reduction in the number of volunteers. The commenters stated they oppose any changes created by the rule that would result in additional burden to recipients of the VITA program by requiring additional documentation, reporting, and records retention. One commenter supports the information collection and is in agreement that the information collection does not subject recipients to any new substantive obligations, and that the economic burden associated with the collection of information will not significantly affect small governments or entities.

Treasury Response: The Department believes that any burden created by the requirements of the new rule, including the collection of data, is reasonable and justified by the goal of ensuring equal opportunity and nondiscrimination in the financial assistance programs. In the case of the VITA program, the recipients are already collecting data from the beneficiaries using the intake forms required by the program.

2. Inclusion of Low-Income Housing Credits in the Covered Programs

Comments: Three commenters stated that low-income housing credits (LIHTCs) should be included in the list of programs in the Appendix. These commenters stated that tax credits like LIHTCs provide a subsidy to achieve a specific public benefit and are federal financial assistance (FFA) for the purposes of Title VI. The three commenters stressed the important role LIHTCs play in the development of affordable housing, and stated that listing LIHTCs as FFA would protect millions of low-income individuals from housing discrimination.

Treasury Response: We agree with commenters regarding the importance of protecting the civil rights of individuals living in properties developed using LIHTCs. Other federal civil rights statutes, including the Fair Housing Act, 42 U.S.C. 3601 et seq. (FHA), prohibit discrimination on the bases of race, color, religion, sex, national origin, familial status, and disability, and apply to LIHTC properties. * * * The FHA prohibits both intentional discrimination and practices that have an unjustified discriminatory effect. Treasury's commitment to ensuring that developers, owners, operators, and managers of LIHTC properties do not discriminate, consistent with tax regulations that require LIHTC buildings to comply with fair-housing requirements, includes a 2000 Memorandum of Understanding (MOU) with the Department of Justice and the Department of Housing and Urban Development. This MOU is aimed at ensuring that developers, owners, operators, and managers of LIHTC properties comply with the FHA. See https://www.irs.gov/​businesses/​small-businesses-self-employed/​exhibit-13-2. Among other provisions, the MOU requires the IRS to notify owners of LIHTC properties facing allegations of housing discrimination that a finding of a violation of the FHA could result in a loss of LIHTCs. This MOU demonstrates Treasury's commitment to ensuring that LIHTC housing providers do not discriminate in violation of the FHA.

The comments also stated that Title VI coverage was important to ensure that state agencies allocate housing credit dollar amounts (that is, the eligibility to earn LIHTCs) among proposed projects consistent with civil rights goals. These state agencies allocating housing credit dollar amounts may also receive grants or other forms of FFA from another federal agency, such as the Department of Housing and Urban Development, which would result in Title VI coverage for all of the state agency's operations. Thus, if an individual or organization believes that a state agency is allocating housing credit dollar amounts in a manner inconsistent with the requirements of Title VI, that individual or organization may determine whether the state agency is otherwise receiving FFA (which may include consulting www.usaspending.gov) and may file a complaint with the appropriate federal agency. Civil rights protections thereby cover LIHTC allocations and properties receiving LIHTCs regardless of whether the credits themselves constitute FFA as a legal matter.

While tax credits are generally not considered FFA, we recognize that, as the commenters have pointed out, some aspects of LIHTCs resemble programs that constitute FFA. Though we are not including LIHTCs in the Appendix, we emphasize that the Appendix does not purport to be exhaustive, and the absence of a program or activity from the list does not by such absence limit the applicability of Title VI to that program or activity.

IV. Procedural Requirements

Executive Order 12866

Executive Orders 13563 and 12866 direct agencies to assess costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget.

Unfunded Mandates Reform Act of 1995

The Department certifies that no actions were deemed necessary under the Unfunded Mandates Reform Act of 1995. Furthermore, these regulations will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and they will not significantly or uniquely affect small governments.

The Regulatory Flexibility Act

The Department, in accordance with the Regulatory Flexibility Act, 5 U.S.C. 605(b), has reviewed these Title VI regulations and by approving, certifies that these regulations will not have a significant economic impact on a substantial number of small entities because all of the entities that are subject to these regulations are already subject to Title VI, and some entities already are subject to the Title VI regulations of other agencies.

This rule is not a “major rule,” nor will it have a significant economic impact on a substantial number of small entities, in large part because these regulations do not impose any new substantive obligations on federal funding recipients. All recipients of federal funding have been bound by Title VI's antidiscrimination provision since 1964. Individual participants in the recipients' programs have thus long had the right to be free from discrimination on the basis of race, color, and national origin. This rule merely ensures that the Department and its components have regulations implementing this statute.

Executive Order 13132

These Title VI regulations will not have substantial direct effects on the states, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. These Title VI regulations do not subject recipients of federal funding to any new substantive obligations because all recipients of federal funding have been bound by Title VI's antidiscrimination provision since 1964. Moreover, these Title VI regulations are required by statute; Congress specifically directed federal agencies to adopt implementing regulations when Title VI was enacted. Therefore, in accordance with section 6 of Executive Order 13132, the Department has determined that this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. No further action is required.

Executive Order 12250

The Attorney General has reviewed and approved this rule pursuant to Executive Order 12250.

Paperwork Reduction Act

Under the Paperwork Reduction Act (44 U.S.C. chapter 35), an agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a valid control number issued by the Office of Management and Budget (OMB). The information collections contained in this rule will be submitted and approved by OMB in connection with information collections for the applicable programs listed in appendix A to the regulations.

The information collections contained in this rule are found in §§ 22.5 (reporting), 22.6 (reporting and recordkeeping), 22.7 (reporting), and 22.10 (reporting).

The OMB control numbers that will be revised include the following:

Bureau/office	Program or activity	OMB Control Nos.
Departmental Offices, Office of Domestic Finance, Office of Financial Institutions	Community Development Financial Institutions (CDFI) Fund—Financial Component	1559-0021
Departmental Offices, Office of Domestic Finance, Office of Financial Institutions	Community Development Financial Institutions (CDFI) Fund—Technical Assistance Component	1559-0021
Departmental Offices, Office of Domestic Finance, Office of Financial Institutions	Bank Enterprise Award Program	1559-0032, 1559-0005
Departmental Offices, Office of Domestic Finance, Office of Financial Institutions	Native American Community Development Financial Institutions (CDFI) Assistance Program, Financial Assistance (FA) Awards	1559-0021
Departmental Offices, Office of Domestic Finance, Office of Financial Institutions	Native American Community Development Financial Institutions (CDFI) Assistance (NACA) Program, Technical Assistance Grants	1559-0021
Departmental Offices, Office of Domestic Finance, Office of Financial Institutions	Community Development Financial Institutions Fund, Capital Magnet Fund	1559-0043
Departmental Offices, Office of Domestic Finance, Office of Small Business, Community Development, and Housing Policy	State Small Business Credit Initiative	1505-0227
Internal Revenue Service	Tax Counseling for the Elderly Grant Program	1545-2222
Internal Revenue Service	Volunteer Income Tax Assistance Program	1545-2222
Internal Revenue Service	Volunteer Income Tax Assistance Grant Program	1545-2222
Internal Revenue Service	Low Income Taxpayer Clinic Grant Program	1545-1648
United States Mint	U.S. Commemorative Coin Programs	TBD
Departmental Offices, Treasury Executive Office for Asset Forfeiture	Equitable sharing program (transfer of forfeited property to state and local law enforcement agencies)	1505-0152
Departmental Offices, Office of the Fiscal Assistant Secretary	Grants under the RESTORE Act's Direct Component and Centers of Excellence program and supplemental compliance responsibilities for its Comprehensive Plan and Spill Impact Components.	1505-0250

List of Subjects in 31 CFR Part 22

• Administrative practice and procedure
• Claims
• Disability benefits
• Government contracts
• Nondiscrimination

For the reasons discussed in the preamble, the Department amends 31 CFR by adding part 22 to read as follows:

PART 22—NONDISCRIMINATION ON THE BASIS OF RACE, COLOR, OR NATIONAL ORIGIN IN PROGRAMS OR ACTIVITIES RECEIVING FEDERAL FINANCIAL ASSISTANCE FROM THE DEPARTMENT OF THE TREASURY

22.1

Purpose.

22.2

Application.

22.3

Definitions.

22.4

Discrimination prohibited.

22.5

Assurances required.

22.6

Compliance information.

22.7

Conduct of investigations.

22.8

Procedure for effecting compliance.

22.9

Hearings.

22.10

Decisions and notices.

22.11

Judicial review.

22.12

Effect on other regulations, forms, and instructions.

Appendix A to Part 22—Activities to Which This Part Applies

Authority: 42 U.S.C. 2000d-2000d-7.

§ 22.1

Purpose.

The purpose of this part is to effectuate the provisions of Title VI of the Civil Rights Act of 1964 (Title VI) to the end that no person in the United States shall, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity receiving federal financial assistance from the Department of the Treasury.

§ 22.2

Application.

(a) This part applies to any program for which federal financial assistance is authorized under a law administered by the Department, including the types of federal financial assistance listed in Appendix A to this part. It also applies to money paid, property transferred, or other federal financial assistance extended after the effective date of this part pursuant to an application approved before that effective date. This part does not apply to:

(1) Any federal financial assistance by way of insurance or guaranty contracts;

(2) Any assistance to any individual who is the ultimate beneficiary; or

(3) Any employment practice, under any such program, of any employer, employment agency, or labor organization, except to the extent described in § 22.4(c). The fact that a type of federal financial assistance is not listed in Appendix A to this part shall not mean, if Title VI is otherwise applicable, that a program is not covered. Other types of federal financial assistance under statutes now in force or hereinafter enacted may be added to appendix A to this part.

(b) In any program receiving federal financial assistance in the form, or for the acquisition, of real property or an interest in real property, to the extent that rights to space on, over, or under any such property are included as part of the program receiving that assistance, the nondiscrimination requirement of this part shall extend to any facility located wholly or in part in that space.

§ 22.3

Definitions.

As used in this part:

Applicant means a person who submits an application, request, or plan required to be approved by an official of the Department of the Treasury, or designee thereof, or by a primary recipient, as a condition to eligibility for federal financial assistance, and application means such an application, request, or plan.

Designated agency official means the Assistant Secretary for Management and his or her designee.

Facility includes all or any part of structures, equipment, or other real or personal property or interests therein, and the provision of facilities includes the construction, expansion, renovation, remodeling, alteration, or acquisition of facilities.

Federal financial assistance includes:

(1) Grants and loans of federal funds;

(2) The grant or donation of federal property and interests in property;

(3) The detail of federal personnel;

(4) The sale and lease of, and the permission to use (on other than a casual or transient basis), federal property or any interest in such property without consideration or at a nominal consideration, or at a consideration which is reduced for the purpose of assisting the recipient, or in recognition of the public interest to be served by such sale or lease to the recipient; and

(5) Any federal agreement, arrangement, or other contract which has as one of its purposes the provision of assistance.

Primary recipient means any recipient that is authorized or required to extend federal financial assistance to another recipient.

Program or activity and program mean all of the operations of any entity described in the following paragraphs (1) through (4) of this definition, any part of which is extended federal financial assistance:

(1)(i) A department, agency, special purpose district, or other instrumentality of a State or of a local government; or

(ii) The entity of such state or local government that distributes such assistance and each such department or agency to which the assistance is extended, in the case of assistance to a State or local government;

(2)(i) A college, university, or other postsecondary institution, or a public system of higher education; or

(ii) A local educational agency (as defined in 20 U.S.C. 7801), system of vocational education, or other school system;

(3)(i) An entire corporation, partnership, or other private organization, or an entire sole proprietorship—

(A) If assistance is extended to such corporation, partnership, private organization, or sole proprietorship as a whole; or

(B) Which is principally engaged in the business of providing education, health care, housing, social services, or parks and recreation; or

(ii) The entire plant or other comparable, geographically separate facility to which federal financial assistance is extended, in the case of any other corporation, partnership, private organization or sole proprietorship; or

(4) Any other entity which is established by two or more of the entities described in the preceding paragraph (1), (2), or (3) of this definition.

Recipient may mean any State, territory, possession, the District of Columbia, or Puerto Rico, or any political subdivision thereof, or instrumentality thereof, any public or private agency, institution, or organization, or other entity, or any individual, in any State, territory, possession, the District of Columbia, or Puerto Rico, to whom federal financial assistance is extended, directly or through another recipient, including any successor, assignee, or transferee thereof, but such term does not include any ultimate beneficiary.

§ 22.4

Discrimination prohibited.

(a) General. No person in the United States shall, on the grounds of race, color, or national origin be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under, any program to which this part applies.

(b) Specific discriminatory actions prohibited. (1) A recipient to which this part applies may not, directly or through contractual or other arrangements, on the grounds of race, color, or national origin:

(i) Deny a person any service, financial aid, or other benefit provided under the program;

(ii) Provide any service, financial aid, or other benefit to a person which is different, or is provided in a different manner, from that provided to others under the program;

(iii) Subject a person to segregation or separate treatment in any matter related to his receipt of any service, financial aid, or other benefit under the program;

(iv) Restrict a person in any way in the enjoyment of any advantage or privilege enjoyed by others receiving any service, financial aid, or other benefit under the program;

(v) Treat a person differently from others in determining whether he satisfies any admission, enrollment, quota, eligibility, membership, or other requirement or condition which persons must meet in order to be provided any service, financial aid, or other benefit provided under the program;

(vi) Deny a person an opportunity to participate in the program through the provision of services or otherwise to afford him an opportunity to do so which is different from that afforded others under the program (including the opportunity to participate in the program as a volunteer or as an employee, but only to the extent set forth in paragraph (c) of this section); or

(vii) Deny a person the opportunity to participate as a member of a planning, advisory, or similar body which is an integral part of the program.

(2) A recipient, in determining the types of services, financial aid, or other benefits, or facilities which will be provided under any such program, or the class of persons to whom, or the situations in which, such services, financial aid, other benefits, or facilities will be provided under any such program, or the class of persons to be afforded an opportunity to participate in any such program, may not, directly or through contractual or other arrangements, use criteria or methods of administration which have the effect of subjecting persons to discrimination because of their race, color, or national origin or have the effect of defeating or substantially impairing accomplishment of the objectives of the program with respect to individuals of a particular race, color, or national origin.

(3) In determining the site or location of facilities, a recipient or applicant may not make selections with the purpose or effect of excluding persons from, denying them the benefits of, or subjecting them to discrimination under any program to which this regulation applies, on the grounds of race, color, or national origin; or with the purpose or effect of defeating or substantially impairing the accomplishment of the objectives of Title VI or this part.

(4) As used in this section the services, financial aid, or other benefits provided under a program receiving federal financial assistance include any service, financial aid, or other benefit provided in or through a facility provided with the aid of federal financial assistance.

(5) The enumeration of specific forms of prohibited discrimination in this paragraph does not limit the generality of the prohibition in paragraph (a) of this section.

(6) This part does not prohibit the consideration of race, color, or national origin if the purpose and effect are to remove or overcome the consequences of practices or impediments which have restricted the availability of, or participation in, the program or activity receiving federal financial assistance, on the grounds of race, color, or national origin. Where prior discriminatory practice or usage tends, on the grounds of race, color, or national origin to exclude individuals from participation in, to deny them the benefits of, or to subject them to discrimination under any program or activity to which this part applies, the applicant or recipient must take affirmative action to remove or overcome the effects of the prior discriminatory practice or usage. Even in the absence of prior discriminatory practice or usage, a recipient in administering a program or activity to which this part applies, may take affirmative action to assure that no person is excluded from participation in or denied the benefits of the program or activity on the grounds of race, color, or national origin.

(c) Employment practices. (1) Where a primary objective of the federal financial assistance to a program to which this part applies is to provide employment, a recipient subject to this part shall not, directly or through contractual or other arrangements, subject a person to discrimination on the ground of race, color, or national origin in its employment practices under such program (including recruitment or recruitment advertising, hiring, firing, upgrading, promotion, demotion, transfer, layoff, termination, rates of pay or other forms of compensation or benefits, selection for training or apprenticeship, and use of facilities). Such recipient shall take affirmative action to insure that applicants are employed, and employees are treated during employment, without regard to their race, color, or national origin. The requirements applicable to construction employment under any such program shall be those specified in or pursuant to Part III of Executive Order 11246 or any Executive Order which supersedes it.

(2) Where a primary objective of the federal financial assistance is not to provide employment, but discrimination on the grounds of race, color, or national origin in the employment practices of the recipient or other persons subject to the regulation tends, on the grounds of race, color, or national origin, to exclude individuals from participation in, deny them the benefits of, or subject them to discrimination under any program to which this regulation applies, the provisions of paragraph (c)(1) of this section shall apply to the employment practices of the recipient or other persons subject to the regulation, to the extent necessary to assure equality of opportunity to, and nondiscriminatory treatment of, beneficiaries.

§ 22.5

Assurances required.

(a) General. Either at the application stage or the award stage, federal agencies must ensure that applications for federal financial assistance or awards of federal financial assistance contain, be accompanied by, or be covered by a specifically identified assurance from the applicant or recipient, satisfactory to the designated agency official, that each program or activity operated by the applicant or recipient and to which these Title VI regulations apply will be operated in compliance with these Title VI regulations.

(b) Duration of obligation. (1) In the case where the federal financial assistance is to provide or is in the form of personal property, or real property or interest therein or structures thereon, the assurance shall obligate the recipient, or, in the case of a subsequent transfer, the transferee, for the period during which the property is used for a purpose for which the federal financial assistance is extended or for another purpose involving the provision of similar services or benefits, or for as long as the recipient retains ownership or possession of the property, whichever is longer. In all other cases the assurance shall obligate the recipient for the period during which federal financial assistance is extended to the program.

(2) In the case where federal financial assistance is provided in the form of a transfer of real property, structures, or improvements thereon, or interest therein, from the federal Government, the instrument effecting or recording the transfer shall contain a covenant running with the land assuring nondiscrimination for the period during which the real property is used for a purpose for which the federal financial assistance is extended or for another purpose involving the provision of similar services or benefits. Where no transfer of property or interest therein from the federal government is involved, but property is acquired or improved with federal financial assistance, the recipient shall agree to include such covenant in any subsequent transfer of such property. When the property is obtained from the federal government, such covenant may also include a condition coupled with a right to be reserved by the Department to revert title to the property in the event of a breach of the covenant where, in the discretion of the designated agency official, such a condition and right of reverter is appropriate to the statute under which the real property is obtained and to the nature of the grant and the grantee. In such event if a transferee of real property proposes to mortgage or otherwise encumber the real property as security for financing construction of new, or improvement of existing, facilities on such property for the purposes for which the property was transferred, the designated agency official may agree, upon request of the transferee and if necessary to accomplish such financing, and upon such conditions as the designated agency official deems appropriate, to subordinate such right of reversion to the lien of such mortgage or other encumbrance.

(c) Continuing federal financial assistance. Every application by a State or a State agency for continuing federal financial assistance to which this part applies (including the types of federal financial assistance listed in appendix A to this part) shall as a condition to its approval and the extension of any federal financial assistance pursuant to the application:

(1) Contain, be accompanied by, or be covered by a statement that the program is (or, in the case of a new program, will be) conducted in compliance with all requirements imposed by or pursuant to this part; and

(2) Provide, be accompanied by, or be covered by provision for such methods of administration for the program as are found by the designated agency official to give reasonable guarantee that the applicant and all recipients of federal financial assistance under such program will comply with all requirements imposed by or pursuant to this part.

(d) Assurance from institutions. (1) In the case of any application for federal financial assistance to an institution of higher education (including assistance for construction, for research, for special training projects, for student loans or for any other purpose), the assurance required by this section shall extend to admission practices and to all other practices relating to the treatment of students.

(2) The assurance required with respect to an institution of higher education, hospital, or any other institution, insofar as the assurance relates to the institution's practices with respect to admission or other treatment of individuals as students, patients, or clients of the institution or to the opportunity to participate in the provision of services or other benefits to such individuals, shall be applicable to the entire institution.

(e) Form. (1) The assurances required by paragraph (a) of this section, which may be included as part of a document that addresses other assurances or obligations, shall include that the applicant or recipient will comply with all applicable federal statutes relating to nondiscrimination. This includes but is not limited to Title VI of the Civil Rights Act of 1964, as amended, 42 U.S.C. 2000d, et seq.

(2) The designated agency official will specify the extent to which such assurances will be required of the applicant's or recipient's subgrantees, contractors, subcontractors, transferees, or successors in interest. Any such assurance shall include provisions which give the United States a right to seek its judicial enforcement.

§ 22.6

Compliance information.

(a) Cooperation and assistance. The designated Agency official shall to the fullest extent practicable seek the cooperation of recipients in obtaining compliance with this part and shall provide assistance and guidance to recipients to help them comply voluntarily with this part.

(b) Compliance reports. Each recipient shall keep such records and submit to the designated Agency official timely, complete, and accurate compliance reports at such times, and in such form and containing such information, as the designated Agency official may determine to be necessary to enable the designated Agency official to ascertain whether the recipient has complied or is complying with this part. In the case in which a primary recipient extends federal financial assistance to any other recipient, such other recipient shall also submit such compliance reports to the primary recipient as may be necessary to enable the primary recipient to carry out its obligations under this part. In general recipients should have available for the designated Agency official racial and ethnic data showing the extent to which members of minority groups are beneficiaries of programs receiving Federal financial assistance.

(c) Access to sources of information. Each recipient shall permit access by the designated Agency official during normal business hours to such of its books, records, accounts, and other sources of information, and its facilities as may be pertinent to ascertain compliance with this part. Where any information required of a recipient is in the exclusive possession of any other agency, institution, or person and this agency, institution, or person fails or refuses to furnish this information, the recipient shall so certify in its report and shall set forth what efforts it has made to obtain the information.

(d) Information to beneficiaries and participants. Each recipient shall make available to participants, beneficiaries, and other interested persons such information regarding the provisions of this part and its applicability to the program for which the recipient receives federal financial assistance, and make such information available to them in such manner, as the designated Agency official finds necessary to apprise such persons of the protections against discrimination assured them by Title VI and this part.

§ 22.7

Conduct of investigations.

(a) Periodic compliance reviews. The designated Agency official shall from time to time review the practices of recipients to determine whether they are complying with this part.

(b) Complaints. Any person who believes that he or she, or any specific class of persons, has been subjected to discrimination prohibited by this part may by himself or herself, or by a representative, file with the designated Agency official a written complaint. A complaint must be filed not later than 180 days after the date of the alleged discrimination, unless the time for filing is extended by the designated Agency official.

(c) Investigations. The designated Agency official will make a prompt investigation whenever a compliance review, report, complaint, or any other information indicates a possible failure to comply with this part. The investigation will include, where appropriate, a review of the pertinent practices and policies of the recipient, the circumstances under which the possible noncompliance with this part occurred, and other factors relevant to a determination as to whether the recipient has failed to comply with this part.

(d) Resolution of matters. (1) If an investigation pursuant to paragraph (c) of this section indicates a failure to comply with this part, the designated Agency official will so inform the recipient and the matter will be resolved by informal means whenever possible. If it has been determined that the matter cannot be resolved by informal means, action will be taken as provided for in § 22.8.

(2) If an investigation does not warrant action pursuant to paragraph (d)(1) of this section the designated Agency official will so inform the recipient and the complainant, if any, in writing.

(e) Intimidatory or retaliatory acts prohibited. No recipient or other person shall intimidate, threaten, coerce, or discriminate against any individual for the purpose of interfering with any right or privilege secured by section 601 of Title VI or this part, or because the individual has made a complaint, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this part. The identity of complainants shall be kept confidential except to the extent necessary to carry out the purposes of this part, including the conduct of any investigation, hearing, or judicial proceeding arising thereunder.

§ 22.8

Procedure for effecting compliance.

(a) General. If there appears to be a failure or threatened failure to comply with this part, and if the noncompliance or threatened noncompliance cannot be corrected by informal means, compliance with this part may be effected by the suspension or termination of or refusal to grant or to continue federal financial assistance or by any other means authorized by law. Such other means may include, but are not limited to:

(1) A referral to the Department of Justice with a recommendation that appropriate proceedings be brought to enforce any rights of the United States under any law of the United States (including other titles of the Civil Rights Act of 1964), or any assurance or other contractual undertaking; and

(2) Any applicable proceeding under State or local law.

(b) Noncompliance with § 22.5. If an applicant fails or refuses to furnish an assurance required under § 22.5 or otherwise fails or refuses to comply with a requirement imposed by or pursuant to that section, federal financial assistance may be suspended, terminated, or refused in accordance with the procedures of paragraph (c) of this section. The Agency shall not be required to provide assistance in such a case during the pendency of the administrative proceedings under such paragraph. However, subject to § 22.12, the Agency shall continue assistance during the pendency of such proceedings where such assistance is due and payable pursuant to an application approved prior to the effective date of this part.

(c) Termination of or refusal to grant or to continue federal financial assistance. (1) No order suspending, terminating, or refusing to grant or continue federal financial assistance shall become effective until:

(i) The designated Agency official has advised the applicant or recipient of the applicant's or recipient's failure to comply and has determined that compliance cannot be secured by voluntary means;

(ii) There has been an express finding on the record, after opportunity for hearing, of a failure by the applicant or recipient to comply with a requirement imposed by or pursuant to this part;

(iii) The action has been approved by the designated Agency official pursuant to § 22.10(e); and

(iv) The expiration of 30 days after the designated Agency official has filed with the committee of the House and the committee of the Senate having legislative jurisdiction over the program involved, a full written report of the circumstances and the grounds for such action.

(2) Any action to suspend or terminate or to refuse to grant or to continue federal financial assistance shall be limited to the particular political entity, or part thereof, or other applicant or recipient as to whom such a finding has been made and shall be limited in its effect to the particular program, or part thereof, in which such noncompliance has been so found.

(d) Other means authorized by law. No action to effect compliance with Title VI by any other means authorized by law shall be taken by the Department of the Treasury until:

(1) The designated Agency official has determined that compliance cannot be secured by voluntary means;

(2) The recipient or other person has been notified of its failure to comply and of the action to be taken to effect compliance; and

(3) The expiration of at least 10 days from the mailing of such notice to the recipient or other person. During this period of at least 10 days, additional efforts shall be made to persuade the recipient or other person to comply with the regulation and to take such corrective action as may be appropriate.

§ 22.9

Hearings.

(a) Opportunity for hearing. Whenever an opportunity for a hearing is required by § 22.8(c), reasonable notice shall be given by registered or certified mail, return receipt requested, to the affected applicant or recipient. This notice shall advise the applicant or recipient of the action proposed to be taken, the specific provision under which the proposed action against it is to be taken, and the matters of fact or law asserted as the basis for this action, and either:

(1) Fix a date not less than 20 days after the date of such notice within which the applicant or recipient may request of the designated agency official that the matter be scheduled for hearing; or

(2) Advise the applicant or recipient that the matter in question has been set for hearing at a stated place and time. The time and place so fixed shall be reasonable and shall be subject to change for cause. The complainant, if any, shall be advised of the time and place of the hearing. An applicant or recipient may waive a hearing and submit written information and argument for the record. The failure of an applicant or recipient to request a hearing under this paragraph or to appear at a hearing for which a date has been set shall be deemed to be a waiver of the right to a hearing under section 602 of Title VI and § 22.8(c) and consent to the making of a decision on the basis of such information as is available.

(b) Time and place of hearing. Hearings shall be held at the offices of the Department of the Treasury component administering the program, at a time fixed by the designated Agency official unless the designated Agency official determines that the convenience of the applicant or recipient or of the Agency requires that another place be selected. Hearings shall be held before the designated Agency official, or at designated Agency official's discretion, before a hearing examiner appointed in accordance with section 3105 of title 5, United States Code, or detailed under section 3344 of title 5, United States Code.

(c) Right to counsel. In all proceedings under this section, the applicant or recipient and the Agency shall have the right to be represented by counsel.

(d) Procedures, evidence, and record. (1) The hearing, decision, and any administrative review thereof shall be conducted in conformity with sections 554 through 557 of title 5, United States Code, and in accordance with such rules of procedure as are proper (and not inconsistent with this section) relating to the conduct of the hearing, giving of notices subsequent to those provided for in paragraph (a) of this section, taking of testimony, exhibits, arguments and briefs, requests for findings, and other related matters. Both the designated Agency official and the applicant or recipient shall be entitled to introduce all relevant evidence on the issues as stated in the notice for hearing or as determined by the officer conducting the hearing at the outset of or during the hearing.

(2) Technical rules of evidence do not apply to hearings conducted pursuant to this part, but rules or principles designed to assure production of the most credible evidence available and to subject testimony to test by cross-examination shall be applied where determined reasonably necessary by the officer conducting the hearing. The hearing officer may exclude irrelevant, immaterial, or unduly repetitious evidence. All documents and other evidence offered or taken for the record shall be open to examination by the parties and opportunity shall be given to refute facts and arguments advanced on either side of the issues. A transcript shall be made of the oral evidence except to the extent the substance thereof is stipulated for the record. All decisions shall be based upon the hearing record and written findings shall be made.

(e) Consolidated or joint hearings. In cases in which the same or related facts are asserted to constitute noncompliance with this part with respect to two or more federal statutes, authorities, or other means by which federal financial assistance is extended and to which this part applies, or noncompliance with this part and the regulations of one or more other federal departments or agencies issued under Title VI, the designated Agency official may, by agreement with such other departments or agencies, where applicable, provide for the conduct of consolidated or joint hearings, and for the application to such hearings of rules or procedures not inconsistent with this part. Final decisions in such cases, insofar as this regulation is concerned, shall be made in accordance with § 22.10.

§ 22.10

Decisions and notices.

(a) Procedure on decisions by hearing examiner. If the hearing is held by a hearing examiner, the hearing examiner shall either make an initial decision, if so authorized, or certify the entire record including his recommended findings and proposed decision to the designated agency official for a final decision, and a copy of such initial decision or certification shall be mailed to the applicant or recipient. Where the initial decision is made by the hearing examiner the applicant or recipient may, within 30 days after the mailing of such notice of initial decision, file with the designated Agency official the applicant's or recipient's exceptions to the initial decision, with the reasons therefor. In the absence of exceptions, the designated Agency official may, on his or her own motion, within 45 days after the initial decision, serve on the applicant or recipient a notice that the designated Agency official will review the decision. Upon the filing of such exceptions or of notice of review, the designated Agency official shall review the initial decision and issue his or her own decision thereon including the reasons therefor. In the absence of either exceptions or a notice of review the initial decision shall, subject to paragraph (e) of this section, constitute the final decision of the designated Agency official.

(b) Decisions on record or review by the designated Agency official. Whenever a record is certified to the designated Agency official for decision or he or she reviews the decision of a hearing examiner pursuant to paragraph (a) of this section, or whenever the designated Agency official conducts the hearing, the applicant or recipient shall be given reasonable opportunity to file with the designated Agency official briefs or other written statements of its contentions, and a written copy of the final decision of the designated Agency official shall be sent to the applicant or recipient and to the complainant, if any.

(c) Decisions on record where a hearing is waived. Whenever a hearing is waived pursuant to § 22.9, a decision shall be made by the designated Agency official on the record and a written copy of such decision shall be sent to the applicant or recipient, and to the complainant, if any.

(d) Rulings required. Each decision of a hearing examiner or the designated Agency official shall set forth his or her ruling on each finding, conclusion, or exception presented, and shall identify the requirement or requirements imposed by or pursuant to this part with which it is found that the applicant or recipient has failed to comply.

(e) Approval by designated Agency official. Any final decision by an official of the Agency, other than the designated Agency official personally, which provides for the suspension or termination of, or the refusal to grant or continue federal financial assistance, or the imposition of any other sanction available under this part or Title VI, shall promptly be transmitted to the designated Agency official personally, who may approve such decision, may vacate it, or remit or mitigate any sanction imposed.

(f) Content of orders. The final decision may provide for suspension or termination of, or refusal to grant or continue federal financial assistance, in whole or in part, to which this regulation applies, and may contain such terms, conditions, and other provisions as are consistent with and will effectuate the purposes of Title VI and this part, including provisions designed to assure that no federal financial assistance to which this regulation applies will thereafter be extended to the applicant or recipient determined by such decision to be in default in its performance of an assurance given by it pursuant to this part, or to have otherwise failed to comply with this part, unless and until it corrects its noncompliance and satisfies the designated Agency official that it will fully comply with this part.

(g) Post termination proceedings. (1) An applicant or recipient adversely affected by an order issued under paragraph (f) of this section shall be restored to full eligibility to receive federal financial assistance if it satisfies the terms and conditions of that order for such eligibility or if it brings itself into compliance with this part and provides reasonable assurance that it will fully comply with this part.

(2) Any applicant or recipient adversely affected by an order entered pursuant to paragraph (f) of this section may at any time request the designated Agency official to restore fully its eligibility to receive federal financial assistance. Any such request shall be supported by information showing that the applicant or recipient has met the requirements of paragraph (g)(1) of this section. If the designated Agency official determines that those requirements have been satisfied, he or she shall restore such eligibility.

(3) If the designated Agency official denies any such request, the applicant or recipient may submit a request for a hearing in writing, specifying why it believes such official to have been in error. It shall thereupon be given an expeditious hearing, with a decision on the record in accordance with rules or procedures issued by the designated Agency official. The applicant or recipient will be restored to such eligibility if it proves at such a hearing that it satisfied the requirements of paragraph (g)(1) of this section. While proceedings under this paragraph are pending, the sanctions imposed by the order issued under paragraph (f) of this section shall remain in effect.

§ 22.11

Judicial review.

Action taken pursuant to section 602 of the Title VI is subject to judicial review as provided in section 603 of the Title VI.

§ 22.12

Effect on other regulations, forms, and instructions.

(a) Effect on other regulations. All regulations, orders, or like directions issued before the effective date of this part by any officer of the Department of the Treasury which impose requirements designed to prohibit any discrimination against individuals on the grounds of race, color, or national origin under any program to which this part applies, and which authorize the suspension or termination of or refusal to grant or to continue federal financial assistance to any applicant for a recipient of such assistance for failure to comply with such requirements, are hereby superseded to the extent that such discrimination is prohibited by this part, except that nothing in this part may be considered to relieve any person of any obligation assumed or imposed under any such superseded regulation, order, instruction, or like direction before the effective date of this part. Nothing in this part, however, supersedes any of the following (including future amendments thereof):

(1) Executive Order 11246 (3 CFR, 1965 Supp., p. 167) and regulations issued thereunder; or

(2) Any other orders, regulations, or instructions, insofar as such orders, regulations, or instructions prohibit discrimination on the ground of race, color, or national origin in any program or situation to which this part is inapplicable, or prohibit discrimination on any other ground.

(b) Forms and instructions. The designated Agency official shall issue and promptly make available to all interested persons forms and detailed instructions and procedures for effectuating this part as applied to programs to which this part applies and for which the designated Agency official is responsible.

(c) Supervision and coordination. The designated Agency official may from time to time assign to officials of the Agency, or to officials of other departments or agencies of the Government with the consent of such departments or agencies, responsibilities in connection with the effectuation of the purposes of Title VI and this part (other than responsibility for final decision as provided in § 22.10), including the achievement of effective coordination and maximum uniformity within the Agency and within the Executive Branch of the Government in the application of Title VI and this part to similar programs and in similar situations. Any action taken, determination made or requirement imposed by an official of another department or agency acting pursuant to an assignment of responsibility under this paragraph shall have the same effect as though such action had been taken by the designated Agency official of the Department.

Appendix A to Part 22—Activities to Which This Part Applies

Note:

Failure to list a type of federal assistance in this appendix A shall not mean, if Title VI is otherwise applicable, that a program is not covered.

Component	Program or activity	Authority
Departmental Offices, Office of Domestic Finance, Office of Financial Institutions	Community Development Financial Institutions Fund—Financial Component	Riegle Community Development and Regulatory Improvement Act of 1994, 12 U.S.C. 4701 et seq.
Departmental Offices, Office of Domestic Finance, Office of Financial Institutions	Community Development Financial Institutions Fund—Technical Assistance Component	Riegle Community Development and Regulatory Improvement Act of 1994, 12 U.S.C. 4701 et seq.
Departmental Offices, Office of Domestic Finance, Office of Financial Institutions	Bank Enterprise Award Program	Riegle Community Development and Regulatory Improvement Act of 1994 sec. 114, 12 U.S.C. 4713.
Departmental Offices, Office of Domestic Finance, Office of Financial Institutions	Native American Community Development Financial Institutions Assistance Program, Financial Assistance (FA) Awards	Riegle Community Development Banking and Financial Institutions Act of 1994, 12 U.S.C. 4701 et seq.
Departmental Offices, Office of Domestic Finance, Office of Financial Institutions	Native American Community Development Financial Institutions Assistance (NACA) Program, Technical Assistance Grants	Riegle Community Development Banking and Financial Institutions Act of 1994, 12 U.S.C. 4701 et seq.
Departmental Offices, Office of Domestic Finance, Office of Financial Institutions	Community Development Financial Institutions Fund, Capital Magnet Fund	Housing and Economic Recovery Act of 2008 sec. 1339, 12 U.S.C. 4569.
Departmental Offices, Office of Domestic Finance, Office of Small Business, Community Development, and Housing Policy	State Small Business Credit Initiative	Small Business Jobs Act of 2010, 12 U.S.C. 5701 et seq.
Internal Revenue Service	Tax Counseling for the Elderly Grant Program	Revenue Act of 1978 sec. 163, Public Law 95-600, 92 Stat 2763, 2810-2811.
Internal Revenue Service	Volunteer Income Tax Assistance Program	Tax Reform Act of 1969, Public Law 91-172, 83 Stat. 487.
Internal Revenue Service	Volunteer Income Tax Assistance Grant Program	Consolidated Appropriations Act, Public Law 110-161, 121 Stat. 1844, 1975-76 (2007).
Internal Revenue Service	Low Income Taxpayer Clinic Grant Program	Internal Revenue Service Restructuring and Reform Act of 1998 sec. 3601, 26 U.S.C. 7526.
United States Mint	U.S. Commemorative Coin Programs	Specific acts of Congress that authorize United States commemorative coin and medal programs provide assistance. See, e.g., the Louis Braille Bicentennial—Braille Literacy Commemorative Coin Act, Public Law 109-247 (2006); the Boy Scouts of America Centennial Commemorative Coin Act, Public Law 110-363 (2008); the American Veterans Disabled for Life Commemorative Coin Act, Public Law 110-277 (2008); and the National September 11 Memorial & Museum Commemorative Medal Act of 2010, Public Law 111-221 (2010).
Departmental Offices, Treasury Executive Office for Asset Forfeiture	Equitable sharing program (transfer of forfeited property to state and local law enforcement agencies)	18 U.S.C. 981(e)(2); 21 U.S.C. 881(e)(1)(A); 31 U.S.C. 9703.
Various Treasury Bureaus and Offices (including the Internal Revenue Service)	Unreimbursed detail of Federal Employees through the Intergovernmental Personnel Act	5 U.S.C. 3371 through 3376.
Departmental Offices, Office of the Fiscal Assistant Secretary	Grants under the RESTORE Act's Direct Component and Centers of Excellence program and supplemental compliance responsibilities for its Comprehensive Plan and Spill Impact Components	Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States Act of 2012, Public Law 112-141.

Kody Kinsley,

Assistant Secretary for Management.