The Civil Rights Restoration Act of 1987
By Richard R. Hammar, J.D., LL.M., CPA
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In 1988, Congress voted to override President Reagan's veto of the Civil Rights Restoration Act of 1987 (also known as the “Grove City Bill”). This section will summarize the application of this civil rights law to churches and clergy.
Grove City College is a private college that accepted no direct financial assistance from the federal government. However, the college did enroll students who received federally funded Pell grants and guaranteed student loans. Between 1974 and 1984, students financed their education at Grove City College with more than $1.8 million in Pell grant funds. In 1976, the United States Department of Education asked the college to certify that it was complying with Title IX of the Education Amendments of 1972,1 which prohibits sex discrimination in any education program or activity receiving federal funds. The college refused to comply with this request on the ground that the receipt of Pell grants and guaranteed student loans by students did not make the college a recipient of federal funds. In 1984, the United States Supreme Court unanimously held that Grove City College was a recipient of federal funds.2 However, by a 6--3 vote, the Court held that federal financial assistance does not subject an entire educational institution to the Title IX ban on sex discrimination, but rather only the specific “program or activity” that receives the federal funds. Accordingly, Pell grant funding triggered Title IX coverage only of the college's financial aid program. The college remained free to discriminate on the basis of sex in all other programs and activities, including academic instruction and extracurricular activities.
Three other federal anti--discrimination laws were directly affected by the Grove City ruling. The Rehabilitation Act of 19733 prohibits discrimination based on handicap in any program or activity receiving federal funding, and the Age Discrimination Act of 19754 and Title VI of the Civil Rights Act of 19645 ban age and race discrimination, respectively, by any program or activity receiving federal funding. Under the Grove City ruling, only the specific program or activity receiving federal funds, not the institution itself, was subject to these nondiscrimination provisions.
The Civil Rights Restoration Act of 19876 was designed to reverse the Supreme Court's Grove City ruling, and to make an entire institution subject to federal anti--discrimination laws rather than just the specific program or activity within an institution that ultimately receives federal funds. Accordingly, the Act amends Title IX of the Education Amendments of 1972,7 as well as the Rehabilitation Act,8 Age Discrimination Act,9 and Title VI of the Civil Rights Act,10 to make it clear that these nondiscrimination provisions apply to certain institutions “as a whole” if any of their programs or activities receives federal financial assistance.
How does this new law impact churches, church schools, and religious institutions? Consider the following:
1. Churches
First, it must be emphasized that only recipients of federal financial assistance are covered by the new law. Churches, church schools, and religious institutions that receive no federal funds are simply not affected by the Civil Rights Restoration Act. Since the vast majority of churches receive no federal financial assistance, they need not be concerned about the this law. The contentions that churches are recipients of federal funding if they receive contributions from social security recipients, or if parents pay for church child care services with AFDC payments, are at this time unfounded for two reasons. First, in the Grove City decision the Supreme Court specifically ruled that a school is not made a recipient of federal financial assistance simply because some of its students pay their educational expenses with money received from “food stamps, social security benefits, welfare payments, and other forms of general purpose governmental assistance” since (a) there is no evidence Congress intended that the use of such benefits to pay for school expenses triggered coverage under Title IX; (b) such “general assistance payments, unlike student aid programs, were not designed to assist schools”; (c) “educational institutions have no control over, and indeed perhaps no knowledge of, whether they ultimately receive federal funds made available to individuals under general assistance programs”; and (d) students' “eligibility for general assistance is not tied to attendance at an educational institution.”1 Such language, which was approved unanimously by the Supreme Court and which was neither repudiated nor affected by the Civil Rights Restoration Act, clearly suggests that use of federal benefits received under a general assistance program to pay for church services or benefits does not render the church a recipient of federal financial assistance.
Second, the Act itself (section 7) specifies that it shall not be construed to extend the coverage of any of the four federal anti--discrimination laws affected by the Act to the “ultimate beneficiaries of federal financial assistance.”2 This language means that individuals who receive social security benefits or welfare payments, grocers who accept food stamps, or farmers who receive crop subsidies, will not be subject to federal anti--discrimination law solely on that basis. If that is so, it is hard to imagine how a court could interpret the Act to cover churches to whom such “ultimate beneficiaries” make contributions or payments. No court has ever reached such a conclusion. Many of the senators who sponsored or co--sponsored the bill specifically rejected the notion that churches are covered if any of their members donates money that is attributable, in whole or in part, to social security, veterans benefits, or any other form of federal assistance. Such statements will be directly relevant in any judicial interpretation of the law.
Some have suggested that exemption from federal income taxation renders a church a recipient of federal financial assistance. If this were true, nearly every church would be subject to the Act. While several senators publicly scoffed at such a suggestion, it is nevertheless true that one federal court has reached just such a conclusion. In 1972, a federal district court in the District of Columbia concluded that “there is little question that the provision of a tax deduction for charitable contributions is a grant of federal financial assistance . . . . The charitable contribution deduction is a special tax provision not required by, and contrary to, widely accepted definitions of income applicable to the determination of the structure of an income tax. It operates in effect as a government matching grant . . . .”3 This radical conclusion has never been endorsed by any other federal court, and indeed it seems to have been rejected by the United States Supreme Court.4 However, the existence of even one decision reaching such a result is disturbing, and at the least suggests the possibility that other courts might adopt such a view in the future.
Some churches do receive federal financial assistance. Perhaps the most common examples would be church participation in the federal commodities program, the school lunch program, disaster relief, HUD loans, refugee relief, low--income housing, or churches that operate nursing or retirement homes and that receive medicaid or medicare funds. An additional potential source of federal financial assistance to large numbers of churches would be participation in federally subsidized child care. In 1991, Congress enacted legislation authorizing financial assistance to low--income families to provide child care. The assistance (beginning in 1992) will be in the form of “child care certificates” that low--income parents can use to obtain child care services at authorized facilities. Churches that are “registered” or licensed under state law are eligible to participate in the program, if they satisfy various requirements (most of which pertain to health and safety matters). There is little doubt that most churches will qualify as eligible child care providers under this legislation, and accordingly there is the possibility of huge amounts of federal financial assistance flowing to low--income parents and then on to church child care facilities.
Testimony before Congress during the debate leading up to the enactment of this legislation demonstrated that the vast majority of Americans in need of child care would prefer that their children attend church--operated facilities. Obviously, the question arises—will a church become a recipient of federal financial assistance by receiving child care certificates and redeeming them for cash with the state agency administering the program? If so, then a church will be subject to the anti--discrimination provisions of the four federal statutes summarized above (prohibiting discrimination on account of sex, age, handicap, and race). Further, according to the Civil Rights Restoration Act, the anti--discrimination provisions would apply “institution--wide” rather than to the particular program or activity receiving the assistance. In the only reference to this issue, the federal child care law simply states that “child care certificates shall not be considered to be grants or contracts.”5 A joint House--Senate conference committee made the following statement:
The managers intend that the determination whether any financial assistance provided under this [law], including a . . . child care certificate, constitutes federal financial assistance for purposes of title VI of the Civil Rights Act of 1964, title IX of the Education Amendments of 1972, the Rehabilitation Act of 1973, the Age Discrimination Act of 1975, all as amended, and the regulations issued thereunder, shall be made in accordance with those provisions.6
Unfortunately, this language holds open the possibility that child care certificates redeemed by a church--operated child care provider will make that church a recipient of federal financial assistance. Congress had the opportunity to repudiate such a view in the child care legislation, and chose to reject it. As a result, this question will be left to the courts to decide on a case--by--case basis. It is entirely possible that a church that accepts and redeems child care certificates will be deemed to be a recipient of federal financial assistance.
Under the Civil Rights Restoration Act, complete coverage of all the activities and operations of a church or other religious organization would result under two circumstances. First, if federal financial assistance is extended to the organization “as a whole,” the organization as a whole would be required to comply with federal anti--discrimination law. Second, when “principally engaged in the business of providing education, health care, housing, social services, or parks and recreation,” an organization is subject “as a whole” to federal anti--discrimination law. However, it is reasonably certain that a church will not be covered “as a whole” on the basis of this second circumstance even if it is engaged in providing child care, nursing home, or other social services, since it will still be “principally engaged” in providing religious services. Except in these two circumstances, a church or other religious organization that receives federal assistance will not be covered in its entirety. Rather, only the specific “plant or other comparable, geographically separate facility to which federal financial assistance is extended” will be subjected to federal anti--discrimination law.
Example. First Church operates a private elementary school in a separate building on the church's premises. The school is a recipient of federal financial assistance. Since the aid is not to the church “as a whole,” and the church is principally engaged in religious rather than educational or social services, the church “as a whole” is not subject to federal laws banning discrimination based on age, sex, race, or handicap by recipients of federal aid. Rather, only the “geographically separate facility to which federal financial assistance is extended” (i.e., the school) will be covered.
Example. Same facts as the preceding example, except that the elementary school is not in a geographically separate facility, but is located within the church building. In this case, the Civil Rights Restoration Act would impose all four federal anti--discrimination laws to the church as a whole rather than to just the school, since the church and school are not geographically separate facilities.
Despite the denials of many senators, churches will be covered “as a whole” under the Act if any program or activity receives federal financial assistance and the program or activity is not conducted in a geographically separate facility. In most cases, church programs and activities are conducted in the church facility itself, not in a geographically separate facility. In such cases, the four federal anti--discrimination laws discussed above will apply to the entire church and all of its programs and activities. Substitute bills offered by Senator Hatch and President Reagan would have limited the application of federal anti--discrimination law to only the specific program or activity within a church that receives federal funds, even if that program or activity were not conducted in a geographically separate facility. These substitutes were both rejected.
The courts have recognized that the first amendment guaranty of religious freedom gives churches the right to select clergy without governmental interference. Accordingly, it is less likely that the Civil Rights Restoration Act, or the four federal anti--discrimination statutes that it amends, will apply to clergy than other categories of church workers.
2. Homosexuals and AIDS Victims
Does the Civil Rights Restoration Act prevent churches from discriminating against homosexuals or AIDS victims? This is a question that several church leaders have asked. The Rehabilitation Act of 1973,7 as amended by the Civil Rights Restoration Act, forbids discrimination on the basis of handicap by any institution that receives federal financial assistance. In 1987, the Supreme Court ruled that a public school teacher suffering from tuberculosis was a “handicapped individual” entitled to protection under the Act.8 The Court emphasized that the teacher was handicapped because her tuberculosis caused physical impairment, not because the disease was contagious. “This case does not present, and we therefore do not reach,” concluded the Court, “the questions whether a carrier of a contagious disease such as AIDS could be considered to have a physical impairment, or whether such a person could be considered, solely on the basis of contagiousness, a handicapped person.” To clarify that a contagious disease (such as AIDS) does not render a person “handicapped” in the absence of physical impairment, the Act was amended to read that the term handicapped does not include “an individual who has a currently contagious disease or infection and who, by reason of such disease or infection, would constitute a direct threat to the health or safety of other individuals or who, by reason of the currently contagious disease or infection, is unable to perform the duties of the job.”9 According to this language, an AIDS victim could be classified as handicapped if he or she was physically impaired by the disease and did not constitute a threat to the health or safety of others. A few courts have ruled that under these circumstances AIDS is a handicap.10
While it is possible that the federal courts will interpret the term handicapped to include homosexuals, such a result is unlikely as a result of the overwhelming expression by Congress that homosexuality is not a handicap. Consider the following sampling of comments (contained in the Congressional Record) of some of the sponsors and co--sponsors of the bill (many other examples could be cited). “[The Act] does not prohibit discrimination against homosexuals and does not give sweeping protection to alcoholics and drug addicts” (Senator Kennedy). “The bill does not change the definition of who is handicapped. There are no Supreme Court rulings which require anyone to consider alcoholics, drug addicts, active homosexuals or transvestites to be handicapped. [Some have suggested that] churches and religious leaders could be forced to hire a practicing homosexual drug addict with AIDS to be a teacher or youth pastor. This is the most blatant untruth of all. No American government has ever had or could ever get the power, under our Constitution, to dictate any choice of pastor in a church—whether it be a youth pastor or any other” (Senator Mitchell). “There is no truth to the charges that the Act would require schools, churches, or any employer to hire homosexuals, alcoholics, drug abusers, or victims of AIDS” (Senator Conrad). “The Civil Rights Restoration Act absolutely does not expand coverage of the civil rights laws to homosexuals” (Senator Ford). “This law will not require churches to hire homosexuals” (Senator Bentsen). “If, for instance, the religious tenets of an organization require it to take disciplinary action against a homosexual because of that person's sexual preference . . . the Act would not protect the individual” (Senator DeConcini). “Is it true that churches and religious schools will have to hire homosexuals as a result of this bill? No, it is not true” (Senator Levin).
One federal court has concluded that transvestites are protected by federal anti--discrimination law. The court concluded that “while homosexuals are not handicapped it is clear that transvestites are, because many experience strong social rejection in the work place as a result of their mental ailment made blatantly apparent by their cross--dressing life--style.”11 While no other federal court has concluded that transvestites are handicapped, the existence of the one decision certainly makes the acceptance of such a conclusion by other courts a possibility. Again, there is ample testimony in the Congressional Record by the sponsors and co--sponsors of the Civil Rights Restoration Act demonstrating that it was not the intent of Congress to treat transvestites as handicapped. Such testimony will be relevant in future judicial decisions interpreting the term handicapped. But again, it cannot be said with certainty that the courts will not treat transvestites as handicapped, and therefore that churches covered by the Act will not be required to hire transvestites.
Finally, note that churches or religious institutions receiving federal funds can discriminate against any handicapped individual for reasons not relating to a handicap (e.g., other applicants were more qualified for the job).
3. Alcoholics and drug addicts
Are alcoholics and drug addicts “handicapped,” and therefore entitled to the protections of the Civil Rights Restoration Act? The answer is no, since the Rehabilitation Act of 1973 specifically defines the term handicap to exclude “any individual who is an alcoholic or drug abuser whose current use of alcohol or drugs prevents such individual from performing the duties of the job in question . . . .”12
4. Handicap Accommodations
Must churches construct ramps and make other structural alterations to accommodate handicapped persons? If a church receives federal financial assistance, then it may be required to make structural alterations to accommodate the handicapped. The Act provides, however, that “small providers (i.e., those with fewer than 15 employees) are not required . . . to make significant structural alterations to their existing facilities . . . if alternative means of providing the services are available.”13
5. Religious Schools
One of the major objections to the Civil Rights Restoration Act was its treatment of religious schools. Specifically, the Act exempts “an entity which is controlled by a religious organization” from the prohibition of sex discrimination contained in Title IX of the Education Amendments of 1972 if coverage would “not be consistent with the religious tenets of such organization.” This exemption restates the exemption of church--controlled educational institutions that has always been available under Title IX, and clarifies that the exemption applies to the entire institution. An amendment offered by Senator Hatch, which would have exempted from the prohibition of sex discrimination any educational institution “controlled by, or closely identified with the tenets of, a particular religious organization,” was rejected.
6. Abortion
The Act was amended to include an “abortion neutrality” clause stating that “no provision of this Act or any amendment made by this Act shall be construed to force or require any individual or hospital or any other institution, program, or activity receiving federal funds to perform or pay for an abortion.”14
7. Conclusion
How will the Civil Rights Restoration Act impact churches? The answer to this question will depend on how the federal courts interpret a few key terms. Specifically, how broadly will the courts interpret “federal financial assistance”? How broadly will they interpret the term handicapped? And, will they apply the Act to churches “as a whole” or to only a specific program or activity within a church that receives federal financial assistance? Unfortunately, all attempts to clarify the application of such terms to churches and religious organizations failed. If, as nearly every Senator testified, the Act poses no threat to churches, it is hard to understand why clarifying language was not inserted in the bill.
No one can predict how the federal courts will interpret the law. For a time, the Supreme Court interpreted the word “Congress” to include shopping malls. But the courts, when interpreting legislation, often attach considerable significance to the statements of those members of Congress who sponsored the bill. In the case of the Civil Rights Restoration Act, there are numerous statements in the official record by the chief sponsors of the bill that make a broad interpretation of the Act unwarranted. Such statements were doubtless a result of the outpouring of opposition to the bill that flooded Congress in the days immediately preceding the vote to override the President's veto. But the courts can and do ignore even the most clearly expressed “original intent” of the drafters of both statutory and constitutional provisions. As a result, no one can predict how the courts ultimately will apply the Act to churches and religious organizations. Again, Congress had ample opportunity to clarify the application of the Act to churches, but chose not to do so.
For related information on this topic see the following articles:Regulation of Charitable Solicitations
Limitations on Charitable Giving
Federal and State Securities Laws
Judicial Resolution of Church Disputes
Americans with Disabilities Act
Political Activities by Churches and Other Religious Organizations