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/ DIECUTIVE PREGINENT
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
STATES
WASHINGTON, D.C. 20503
June 15, 1984
MEMORANDUM TO: Jack Svahn
FROM:
Mike Horowitz MH
SUBJECT:
Senator Hatch's Draft Amendments to S. 2568
You have sent out two Hatch options for amending S. 2568.
1. Under the first option, S. 2568 would be amended to affect
only Title IX. There would be campus-wide coverage for
educational institutions, and an "explicit rule of construction"
divorcing the interpretation of the phrase "program and activity"
in Title VI, Section 504, and the Age Discrimination Act from the
interpretation of the same phrase in Title IX (effectively
returning the meaning of "program and activity" in the former
statutes to their pre-Grove City construction). This option
would also exempt Grove City College and similar educational
institutions which receive only indirect assistance from coverage
-- unless (like, e.g., Bob Jones University) they had lost their
tax-exempt status.
2. Under the second option, "recipient"-based coverage would be
in effect for educational institutions and State and local
governments, while the present "program and activity" language
would be retained for private, non-educational institutions. For
educational institutions, coverage would be campus wide; coverage
of State and local governments would be agency or department
wide, with a rebuttable presumption of recipient-wide coverage
for block grants and similar Federal assistance provided to
States and local governments rather than directly to their
individual departments. This option also includes the above
Grove City exemption.
3. The first is apparently Senator Hatch's preferred option, but
it will be hard to sell. As to the second option, aside from an
easily corrected drafting error (unlike the existing S. 2568, it
would define a State's "subunits" to include its political
subdivisions, not simply its departments, agencies, and
instrumentalities), two comments are in order:
There is likely to be strong resistance to retaining the
existing "program and activity" language for private,
non-educational institutions. We should therefore be
-2-
prepared, if necessary, to offer substitute language on
the order of the "rebuttable presumption" for State and
local governments, i.e. to define non-educational private
recipients into functional sub-units analoguous to
campuses and State or local agencies.
While providing relief for Grove City College and similar
educational institutions, it would provide no similar
exemption for other private "indirect recipients" of
Federal assistance. This is key. The need to do so
derives not only from the broad language of the bill
itself. The reports of the House Education and Labor and
Judiciary Committees on the Packwood bill clearly state,
for example, that Guaranteed Student Loans and payments
under Medicaid and Medicare would trigger coverage of the
institutions at which those benefits are exercised. More
importantly, they have artfully left the door open for
coverage of grocery stores which accept food stamps. (The
reports state that the respective committees "[believe]
the Supreme Court adequately addressed this issue in the
Grove city College ruling", and then quote a footnote in
which the Supreme Court simply noted that food stamps by
students does not trigger coverage of the colleges and
universities they attend. The House report concludes that
"H.R. 5490 would not alter this section of the opinion.
The legislation reflects the reasoning of the Court in
finding student assistance to be aid to the school. Under
the bill, as has always been true, neither the landlord
whose rent is paid with the proceeds of an AFDC or SSI
check, nor the grocer who is paid for food from an SSI
check, is covered as a result of that transaction". The
Committees avoided a square answer to the food stamp
question and clearly implied that grocery stores would be
covered.
4. There is steadily widening interest group concern regarding
the Packwood bill's current language. The National Governors'
Association has written Senators Durenberger and Hatch expressing
concern regarding ambiguities in the legislation. The Chamber of
Commerce has expressed concerns based on an independent legal
analysis it commissioned of the legislation. The American Farm
Bureau Federation, the National Federation of Independent
Business, the American Association of Presidents of Independent
Colleges and Universities, and the Catholic Conference have
written letters expressing similar concerns about the potential
effects of the Packwood bill's current language.
-3-
5. Finally, I understand that the Solicitor of Labor will be
forwarding a letter (similar to that prepared by the Department
of Agriculture's General Counsel) raising questions regarding the
potential scope of the Packwood bill's coverage under the JTPA
and similar programs administered by the Department.
CC: Nancy Risque
Jim Cicconi
Ken Cribb
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
ROUTE SLIP
L. Hays
Take necessary action
TO
Approval or signature
Comment
Prepare reply
Discuss with me
For your information
See remarks below
FROM
Branden Blum
DATE
6/18/84
REMARKS
Proposed changes to Agency reports
(Labor, Agriculture, Commerce) on S. 2568
Per your request, attached is a copy
of the suggested changes. Please advise
me of any comments by 4:30 TODAY.
CC: J. Cicconi
F. Fielding
L. Verstandig
M. Uhlmann
SPECIAL
OMB FORM 4
Rev Aug 70
June 18, 1984
MEMORANDUM TO: Branden Blum
FROM:
Mike Horowitz
SUBJECT:
Proposed Changes to Agency Statements Regarding
S. 2568
DEPARTMENT OF LABOR:
The second and third paragraphs should be changed to read:
With regard to our responsibilities in administering the
various federal grant programs, we are concerned that
clarification of the bill' S requirements is necessary if we
are to avoid adversely affecting the willingness of private
sector employers to get involved in programs under the Job
Training Partnership Act (JTPA) as well as the Emergency
Veterans' Job Training Act.
In that regard, we are concerned that the broad language of
S. 2568, together with the statements in the reports of the
House Judiciary and Education and Labor Committees that, as
a result of this legislation, "a recipient of federal
financial assistance will understand that receipt of federal
funds means it is covered throughout its operations" -- see
page 26 of the Judiciary Committee's report), would be
perceived by many employers as expanding the substantive
scope Department of Labor regulations under these statutes
to employer activities totally unrelated to the operation of
the federally assisted training programs; resulting in
increased reporting, exposure to compliance reviews, and
other regulatory burdens. Faulty or not, such a perception,
if prevalent among employers, could have significant adverse
consequences for training and employment programs.
The following paragaph should be inserted between the final
paragraph on page 1 and the first paragraph on page 2:
S. 2568's broad language extending coverage not only to
direct recipients, but to any "successor, assignee, or
transferee of any [entity] to which Federal financial
assistance is extended
", would, absent clarification,
create further uncertainty among employers and the entities
with which they do business.
Blum calld
to see of
you have
any
comments
COMMERCE
The following paragraph should be inserted following the third
paragraph on page 1:
While the following discussion deals with the impact of
covering all of the programs and activities of recipients,
we should at this time note that the bill's current language
might, absent clarification, expand the definition of who is
a "recipient" for purposes of coverage of these statute in
unforeseen ways. S. 2568 would extend coverage not only to
all operations of a recipient, but to "any successor,
assignee, or transferee of any
entity
to which
Federal financial assistance is extended (directly or
through another entity or a person) It is not clear
exactly what kind of relationship with a Department of
Commerce-funded entity would subject another entity to
coverage as a "recipient" as well. Our concern in this
regard is heightened by the extremely broad language in the
reports of the House Education and Labor and Judiciary
Committees on this legislation. (they specify, e.g., specify
that Guaranteed Student Loans and payments under Medicaid
and Medicare would trigger coverage of the institutions at
which those benefits are exercised. and leave the clear
implication that they intend that grocery stores which
redeem food stamps would be considered as "recipients" as
well)
The following language should be added at the conclusion of the
final paragraph on page 1:
(The reports of the House Judiciary and Education and Labor
Committees on this legislation, however, by repeatedly
referring to Guaranteed Student Loans as bases for coverage
of colleges and universities even though the courts have
held that they are excluded from coverage on the same basis
as the loan guarantees administered by the Department of
Justice, might in the absence of further clarification cast
some doubt on their continued exclusion should S. 2568 be
enacted in its present form.)
necessary?
AGRICULTURE
The following language should be inserted before the final
paragraph on page 2:
Finally, we would note that the reports of the House
Education and Labor and Judiciary Committees on this
legislation appear to have artfully left the door open for
coverage of grocery stores which accept food stamps. (The
reports state that the respective committees " [believe] the
Supreme Court adequately addressed this issue in the Grove
city College ruling", and then quote a footnote in which the
Supreme Court simply noted that food stamps by students does
not trigger coverage of the colleges and universities they
attend. The House report concludes that "H.R. 5490 would not
alter this section of the opinion. The legislation reflects
the reasoning of the Court in finding student assistance to
be aid to the school. Under the bill, as has always been
true, neither the landlord whose rent is paid with the
proceeds of an AFDC or SSI check, nor the grocer who is paid
for food from an SSI check, is covered as a result of that
transaction". [Emphasis added]. The Committees thus clearly
imply that grocery stores would be covered -- particularly
since they explicitly state that reimbursements under
medicare and medicaid, which operate in a similar manner,
would suffice to trigger coverage. For the sake of the food
stamp program, we would hope that your Committee would act to
clarify this issue.
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
ROUTE SLIP
J. Svahn
L. Verstandig
Take necessary action
TO
M. Horowitz N. Sweeney
Approval or signature
N. Risque
K. Newman
J. Cicconi
P. Hanna
Comment
A. Meyer
R. Landis
F. Fielding
Prepare reply
K. Wilson
Discuss with me
K. Cribb
M. Uhlmann
For your information
B. White
See remarks below
FROM
Branden Blum XS
DATE
6/18/84
REMARKS
Commerce, Agriculture and Labor draft reports
on S. 2568, the Civil Rights Act of 1984
We have been asked to clear the attached
reports as soon as possible. Please provide
me with any comments by NOON TODAY. (Copies
of the draft reports have been sent to
Justice.)
Attachment
SPECIAL
TPI ADC call Branden I
and objection to
tell him
have the attached no
OMB FORM 4
Two
Rev Aug 70
THE UNDER SECRETARY OF LABOR
WASHINGTON
NOUVI OF
FAMILY COMMUNITY NHID 01
DRAFT
Honorable Orrin G. Hatch
United States Senate
Washington, D.C. 20510
Dear Senator Hatch:
Secretary Donovan has asked me to respond to your letter of May 29,
1984 concerning the Department of Labor's (DOL) perspective on
the effects of S. 2568, the proposed "Civil Rights Act of 1984."
Specifically, you asked that we comment on the effects this bill
would have on our substantive responsibilities in administering
various federal grant programs within the Department's jurisdic-
tion. You have also asked that we comment on the enforcement
aspects of the proposed bill.
With regard to our responsibilities in administering the various
federal grant programs, we are concerned about the possible impli-
cations of the bill for our training and employment programs.
Our concern stems not from any disagreement with the bill's puta-
tive purpose, but rather from the perspective of its effect on
the willingness of private sector employers to get involved in
programs under the Job Training Partnership Act (JTPA) as well
as the Emergency Veterans' Job Training Act.
One view is that S. 2568 will expand the substantive scope of
federal nondiscrimination requirements, increasing the reporting
burdens, and the exposure to compliance reviews, among other
things. Whether or not this is legally correct, employers may
perceive this to be the case. Faulty or not, such a perception,
if prevalent among employers, could have significant adverse
consequences for training and employment programs.
Section 167 of JTPA makes clear that those entities operating
training and selected programs are subject to federal nondiscrim-
ination prohibitions. It does not extend those prohibitions
to employing establishments that are in contact with JTPA programs.
If S. 2568 were construed as broadly as reflected in the Justice
Department's May 24 letter to you on this subject, it might be
possible for employers to believe that association with JTPA
or the emergency veterans' job training program may increase
their ex-posure and liability under the various civil rights
laws.
- 2 -
It is possible, therefore, that S. 2568 would cause employers
to avoid federally supported training and employment services
in a belief that they were prudently avoiding "new" burdens or
compliance risks. Under such circumstances, employers:
-- Might not provide training slots for JTPA;
-- Might not provide training slots for the
emergency veterans' job training program;
--- Might not list jobs with the employment service;
-- Might not take advantage of TJTC; and
-- Might not serve on Private Industry Councils (PICs)
and State Job Training Coordinating Councils (SJTCCs).
In sum, unless S. 2568 makes clear the implications for employers
who become associated with training and employment services,
it may discourage employers' participation in such activities.
This, in turn, will condemn such activities to futility.
It would also appear that under S. 2568, the entire workforce
of States which receive assistance from several DOL component
agencies (the Employment and Training Administration, the Mine
Safety and Health Administration, the Occupational Safety and
Health Administration) could be covered by the nondiscrimination
provisions of section 504 of the Rehabilitation Act of 1973.
The Department has, in the past, interpreted section 504 to cover
only those employees directly employed with DOL funds or in connec-
tion with the specific DOL-funded programs. Potentially, under
S. 2568, any employee, even one working in an area unrelated
to a DOL-funded program, could file a complaint with the Depart-
ment's Office of Civil Rights. That Office would be required
to accept and process such a complaint. Moreover, the same com-
plaint could just as likely be filed with several other agencies,
thereby leading to "determination shopping."
We would like to make clear that we fully support the objective
of equal employment opportunity for all Americans. However,
imprecise legislation may have adverse consequences which should
be avoided.
- 3 -
We appreciate the opportunity to comment on this significant
undertaking.
The Office of Management and Budget advises that there is no objection
to the submission of this report from the standpoint of the Administration's
Sincerely, program.
Ford B. Ford
TIMITED
DEPARTMENT OF AGRICULTURE
OFFICE OF THE SECRETARY
DRAFT
WASHINGTON, D. C. 20250
The Honorable Orrin G. Hatch
Chairman
Committee on Labor and Human Resources
United States Senate
Washington, D. C. 20510
Dear Mr. Chairman:
On May 29, 1984, you wrote to me requesting comments on the
manner in which S. 2568, entitled the "Civil Rights Act of
1984," would affect the administration of this Department's
programs, and on the enforcement aspects of the measure as
well. S. 2568 has been introduced in response to the
Supreme Court's decision in Grove City College v. Bell, 104
S. Ct. 1211 (1984).
As indicated by Daniel Oliver, General Counsel of this
Department, in his letter of June 8, 1984, to the Honorable
Jesse Helms and in his testimony before the Senate Committee
on Agriculture, Nutrition, and Forestry on June 12, 1984,
the Department of Agriculture is committed to vigorous
enforcement of Federal civil rights laws. However, we are
concerned that if S. 2568 is enacted in its present form, it
could so broaden the reach of the Federal laws regarding
discrimination that it would make them applicable to over
2,000,000 individual farmers who are recipients of Federal
loans and grants under programs administered by this
Department.
Currently the anti-discrimination statutes prohibit
discrimination in a "program or activity" receiving Federal
financial assistance. Also, our regulations exempt
"ultimate beneficiaries" from the definition of recipient.
S. 2568 would remove the "program or activity" concept from
the statute, and would seem to remove the exemption for
ultimate beneficiaries. S. 2568 also greatly broadens the
definition of recipient. We believe that S. 2568 would very
likely effect a major transformation in the Federal
anti-discrimination laws by making them applicable to
farmers and the people they do business with, and would
impose an enomous enforcement hurden on this Department.
The Honorable Orrin G. Hatch -- Page 2
There are three principal categories of Departmental
programs under which we believe recipients would be most
directly affected if S. 2568 were enacted: farm price
supports loans, loans made by the Farmers Home
Administration, and Federal crop insurance programs.
Because farmers who receive Federal price support loans on
their commodities are not themselves involved in a "program
or activity receiving Federal financial assistance" and
because they are ultimate beneficiaries of the programs
involved, those farmers are not now deemed to be subject to
the Federal anti-discrimination laws. If S. 2568 were to be
enacted in its present form, however, we believe that
farmers who receive price support loans would come within
the reach of those laws. More than 2,000,000 producers
received price support loans last year.
Recipients of loans made by the Farmers Home Administration
could likewise be covered by Federal anti-discrimination
laws if S. 2568 were enacted in its present form. This
would include recipients of farm operating loans, farm real
estate loans, disaster loans, and loans made for other
purposes such as rural housing and business and industry
loans. While the anti-discrimination laws do not currently
apply to farmers and others who receive loans directly from
the Farmers Home Administration, we believe such recipients
could be covered by those laws if S. 2568 became law. In
fiscal year 1983, approximately 145,000 loans were made
directly to such recipients by the Farmers Home
Administration.
The situation would be the same for producers receiving
assistance in the form of premium subsidies under the
Federal crop insurance programs. Like recipients of Federal
loans, producers who purchase subsidized crop insurance are
not now covered by Federal anti-discrimination laws because
they are not involved in a program or activity receiving
Federal financial assistance and because they are ultimate
beneficiaries as well. If S. 2568 were to become law,
however, such producers could be deemed to be "recipients"
of Federal financial assistance. We believe this would be
true whether they purchased Federal crop insurance directly
from the government or from private insurers participating
in the government's reinsurance program. Approximately
225,000 producers purchased subsidized crop insurance under
these programs in fiscal year 1983, and approximately
328,000 are expected to do so in fiscal year 1984.
The language of S. 2568 is broad, vague, and clearly
ambiguous. How the proposal would affect the American
farmer and the people he does business with -- the American
farming industry as a whole -- is far from clear. Such a
proposal should not be enacted without the fullest
consideration. I therefore recommend that S. 2568 be
The Honorable Orrin G. Hatch -- Page 3
thoroughly considered for its potential effects on millions
of beneficiaries of Federal assistance under programs
administered by this Department -- as well as by dozens of
other Federal agencies.
The Office of Management and Budget has advised that there
is no objection to the submission of this report from the
standpoint of the Administration's program.
Sincerely,
/ or COMPANY
GENERAL COUNSEL OF THE
-
/
UNITED STATES DEPARTMENT OF COMMERCE
Washington, D.C. 20230
STATES
of
Draft
Honorable Orrin G. Hatch
Chairman, Committee on Labor
and Human Resources
United States Senate
Washington, D.C. 20510
Dear Mr. Chairman:
This is in response to your request for the views of this
Department concerning S. 2568,
"The Civil Rights Act of 1983,"
particularly, the effect of its provisions on the administration
and enforcementof our loan and grant programs.
We believe that in its current form S. 2568 would create
significant problems regarding the administration of our loan and
grant programs.
S. 2568 would amend Title VI of the Civil Rights Act of 1964, the
Age Discrimination Act of 1975, Section 504 of the Rehabilitation
Act of 1973 and Title IX of the Education Amendments of 1972, all
of which prohibit certain types of discrimination in federally-
assisted programs and set out sanctions for noncompliance. The
bill proposes to eliminate all references to "program or
activity" which characterize the existing prohibitions in these
statutes and replace them with broad references to
"recipients" of federal aid. The Economic Development
Administration (EDA), National Bureau of Standards (NBS), National
Oceanic and Atmospheric Administration (NOAA), and National
Telecommunications and Information Administration (NTIA)
administer the primary loan and grant programs that fall within
the jurisdiction of the Department of Commerce. The following
discussion sets forth what we perceive would be the impact of S.
2568 on these programs.
1. Economic Development Administration:
The Public Works and Economic Development Act of 1965, as amended,
(42 U.S.C. §§ 3121-3246h) (PWEDA) authorizes EDA to provide
financial assistance in the form of grants and loans to rural and
urban areas. All grants and direct loans made under this
authority are subject to the nondiscrimination provisions of the
Acts amended by S. 2568. Loan guarantees, however, are
specifically excluded from Title VI and the Age Discrimination
Act, and Departmental regulations exclude them from the ambit of
discrimination prohibited by the Rehabilitation Act.
-2-
Draft
Extent of Covered Activities
The administration of EDA's grant program would be significantly
altered by the amendments proposed by S. 2568. S. 2568 provides
that these Acts would be amended to extend the range of prohibited
discrimination from specific programs or activities to all
operations of recipients of federal financial assistance or
support. S. 2568 would define the term "recipients" to mean --
any State or political subdivision thereof, or any
instrumentality of a State or political subdivision thereof,
or any public or private agency, institution, or
organization, or other entity (including any subunit of any
State, subdivision, instrumentality, agency, institution,
organization, or entity), and
any successor, assignee, or transferee of any such State,
subdivision, instrumentality, agency, institution,
organization, or entity or of any such subunit,
to which Federal financial assistance is extended (directly
or through another entity or a person), or which receives
support from the extension of Federal financial assistance to
any of its subunits.
By redefining prohibited discrimination, S. 2568, in effect, would
compel EDA to alter the administration of its grant programs -- in
some cases by expanding the universe of compliance and in other
cases by contracting that universe.
Titles I and IX of PWEDA authorizes EDA to make grants for the
construction of public facilities, including roads, sewers,
industrial parks and water lines, in order to save or create jobs.
Before approving grants EDA requires a statement from the private
sector beneficiary concerning the number of jobs which would be
saved or created by the project and certifying that it will not
discriminate in the operation of the subject facility. If
S. 2568 were enacted, EDA might be required to expand this
requirement to apply not only to the private sector beneficiaries
at the location assisted by EDA but to all operations of the
beneficiaries, wherever located, and to all its subsidiaries.
Such a requirement would greatly increase the administrative
burdens upon both EDA and the private sector beneficiaries of EDA
assistance. Consider the case of a major national retailer which
might be interested in building a warehouse in an industrial park
improved with an EDA grant. The retailer would be required to
certify that all its operations, wherever located nationally, as
well as those of its subsidiaries, were nondiscriminatory under
the laws covered by S. 2568, and EDA would have the
responsibility for monitoring that nondiscrimination.
Draft
-3-
Similar problems would be created in the administration of
revolving loan fund grants made by EDA under the authority
provided in Title IX of PWEDA. EDA makes grants to states, local
governments and non-profit corporations representative of EDA-
designated redevelopment areas to be used for loans to local
companies for the purpose of saving or creating jobs. S. 2568
would require that EDA monitor the compliance of grantees, loan
recipients, all subunits of grantees and loan recipients, and all
operations of these entities, wherever located.
In addition, Title III of PWEDA authorizes EDA to fund the
planning activities of states and local governments as well as
Indian tribes and quasi-public planning entities. Because of the
breadth of the term "recipient" and the extent of its loan
activity EDA could find itself responsible for monitoring the
compliance of most of the governmental units of the United States.
Enforcement Burden
In the past, EDA has monitored compliance with non-discrimination
requirements applicable to the specific programs and activities it
directly administers. Under S. 2568, EDA would become involved in
a new area of enforcement which would necessitate the development
of extraordinary procedures for applicant disqualification and
grant terminations based upon discrimination in any grantee/
recipient operation. This would inject EDA into an area of law in
which EDA has little expertise. This burden could only impair the
ability of EDA to fulfill its primary responsibilities.
2. National Bureau of Standards:
The grant programs of NBS are primarily for research and
development (such as its fire research grants) and are primarily
awarded to state and local institutions. These programs would be
affected by section 2 (a) (2) of S. 2568, which would substantially
expand the enforcement provisions for non-discrimination included
in the Education Amendments Act of 1972. Any noncompliance with
the provisions of this Act by any unit of a state or local
government could result in the termination of all federal
assistance to affiliated colleges and universities (regardless of
compliance on the part of the college or university).
3. National Oceanic and Atmospheric Administration:
The grant programs of NOAA are primarily administered pursuant to
authority contained in the National Sea Grant College Program Act
(33 U.S.C. § 1121) and the Coastal Zone Management Improvement Act
(16 U.S.C. $ 1451). Through the Sea Grant College Program NOAA
makes grants to public and private entities, including
colleges, institutes and laboratories, to promote research,
-4-
Draft
education, training and advisory services related to the
conservation of our nation's ocean and coastal resources.
Through the Coastal Zone Management Act, NOAA makes grants to
coastal states for the purposes of carrying out state coastal
zone management programs. S. 2568 would affect NOAA's programs
as it would EDA's and NBS's. For example, if it is determined
that the Sea Grant program of a college is not in compliance with
the non-discrimination provisions of these Acts, the state
chartering the college and the state's other federally-funded
activities could be affected.
4. National Telecommunications and Information Administration:
The Educational Broadcasting Facilities and Telecommunications
Demonstration Act of 1976 (47 U.S.C. §§ 390-394) authorizes NTIA
to make grants for certain purposes, including to increase
ownership and operation of public telecommunications services
and facilities by minorities and women. S. 2568 could curtail
funding of a program designed to-benefit a minority group if some
distantly associated unit of the organization were involved in a
discrimination proceeding. This would be contrary to the
stated intent of S. 2568.
Conclusion:
We endorse the objective of eliminating all prohibited forms of
discrimination by recipients of federal assistance. We believe,
however, that a revision of longstanding policy as extensive as
that proposed by S. 2568 requires careful consideration and
structuring. S. 2568 in its current form would give federal
agencies vast responsibility for monitoring state and local
governments, as well as large numbers of small businesses and
other elements of the private sector. In order to carry out this
responsibility we would have to develop unprecedented monitoring
capacities and reallocate our resources to meet the proposed new
statutory mandate.
We have been advised by the Office of Management and Budget that
there is no objection to our submission of this letter to the
Congress from the standpoint of the Administration's program.
Sincerely,
Secretary of Commerce
DAN QUAYLE
COMMITTEES:
INDIANA
ARMED SERVICES
BUDGET
524 HARTGENATE OFFICE BUILDING
(202) 224-5623
United States Senate
LABOR AND HUMAN RESOURCES
INDIANAPOLIS OFFICE:
WASHINGTON, D.C. 20510
ROOM 447, 46 EAST OHIO STREET
INDIANAPOLIS, INDIANA 46204
(317) 269-5555
June 8, 1984
William Bradford Reynolds
Assistant Attorney General
Civil Rights Division
U.S. Department of Justice
Washington, D.C. 20530
Dear Brad:
It is my understanding that you and I agree on what the
proposed Civil Rights Act ought to accomplish; first, any
organization or institution that is not covered under current
law will not be brought under the law by the proposal;
second, for any institution that is currently covered, the
non-discrimination provisions will apply institution-wide
and not be limited to the discrete activity receiving
federal aid.
This means that churches, private and Christian schools,
private colleges, farmers, and any strictly private organi-
zations that do not receive Federal financial assistance and
are not subject to the Civil Rights acts under present law
will not be brought under them by the proposal.
That was my intent when I cosponsored the bill and
remains my intent today. I look forward to working with you
to produce a bill that will carry out these two objectives.
Dr. Charles Rice of the Notre Dame Law School has
kindly offered his services for the purpose of reviewing any
proposal. Please feel free to contact him directly.
Sincerely,
Dan Quayle
U.S. Senator
Briefing Memo for JABIII
What we want to do:
put the responsibility for resolving this in their lap
assure the Senators that we support legislation over-
turning the Grove City decision in Title IX
assure them that we support an extension of the
legislation to the other three Civil Rights statutes
race
so that Grove City will not be a precedent in
interpreting them
handicapped
age
get them to agree on a set of principles which they have
basically agreed to on an individual basis
- no expansion of coverage
- no expansion of enforcement
- legislation should reverse Grove City and return
to pre Grove City status quo
- perhaps use Quayle's letter as a basis for agreement
What we don't want to do:
accept responsibility for drafting language
get between H. Baker and O. Hatch - they 're on
completely different sides on this
get put in a position of appearing to kill this
legislation
be co-opted into negotiating language with the
parties
they should develop language - we will provide
technical assistance
let them are this piece of paper
THE WHITE HOUSE
WASHINGTON
June 12, 1984
MEMORANDUM FOR THE PRESIDENT
FROM:
JOHN A. SVAHN
TAS
ASSISTANT TO THE PRESIDENT FOR POLICY DEVELOPMENT
SUBJECT:
Grove City Legislation
In Grove City, the Supreme Court held that Title IX
(anti-sex discrimination in educational institutions) applies
only to the specific program of the college receiving federal
assistance, rather than to the college as a whole. Although the
Court did not consider the statutes which ban discrimination
based on age, handicap or race, the same language that prompted
the court to hold as it did for Title IX also appears in the
other anti-discrimination laws.
In response to Grove City, bills have been introduced in the
Congress to amend the laws prohibiting discrimination based on
sex, age, handicap and race. The stated intent of the bills is
to restore the coverage of these laws to entire institutions
rather than to specific programs within them. However, as you
know, the bill pending in the Senate (S. 2568, introduced by
Senator Kennedy with 61 co-sponsors) goes far beyond restoring
the status quo. For example, price support loans and subsidies
to farmers could subject them to the requirements of the
anti-discrimination laws, and USDA to their enforcement. Grocery
stores receiving food stamps could, among other things, be
required to re-model their shelves so they would all be
accessible to people in wheel chairs.
In discussions with Senate staff and Senators Baker, Quayle
Hatch and Helms, it has become obvious that many Republican
Senators were unaware of the far-reaching effects of their bill.
These discussions, coupled with opposition from groups such as
the Farm Bureau and the Chamber of Commerce, have raised concern
with several Senators. Jim Baker and I are meeting today with
Senators Baker, Dole, Hatch and Packwood. Our goal is to reach
agreement on the principles and instruct staff to draft technical
amendments to S. 2568 that will carry out those principles.
We hope that, at least in the Senate, we will achieve
legislation that will restore the scope and enforcement of civil
rights legislation to its pre-Grove City status.
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
ROUTE SLIP
J. Svahn
L. Verstandig
Take necessary action
TO
M. Horowitz
N. Risque
R. Landis
Approval or signature
It
Cicconi
N. Sweeney
Comment
A. Meyer
F. Fielding
Prepare reply
K. Wilson
Discuss with me
K. Cribb
M. Uhlmann
For your information
B. White
See remarks below
FROM
Branden Blum
BB
DATE 6/11/84
REMARKS
Draft Agriculture testimony on S. 2568, the Civil
Rights Act of 1984
Attached is Agriculture's draft testimony for a
hearing before the Senate Agriculture Committee
scheduled for 10:00 A.M. tomorrow (6/12/84) . A
copy of the testimony has been forwarded to Justice.
Please review and provide me with any comments as
soon as possible.
Attachment
SPECIAL
OMB FORM 4
Rev Aug 70
Agriculture - Dan Oliver
Mr. Chairman, it's a pleasure to appear before your
Committee again, and I welcome this opportunity to present
my views on S. 2568 entitled the "Civil Rights Act of 1984. "
This Administration, as you do know and all should
know, is committed to the principles of non-discrimination
and equal opportunity. Those principles and this
Administration's commitment to them and efforts on behalf of
them have been eloquently described by others, especially by
the Honorable Wm. Bradford Reynolds, the distinguished
Assistant Attorney General for the Civil Rights Division.
That commitment is not in dispute here -- is not in dispute
anywhere where serious people are gathered together -- and I
will say no more about it, except that I am heartily in
concurrence with it.
Mr. Chairman, S. 2568 was introduced following the
Supreme Court's decision in the Grove City case (Grove City
College V. Bell, 104 S. Ct. 1211 (1984)). The stated
purpose of the bill is, as I understand it, to reverse only
a single holding of that decision, specifically, the Court's
holding that the law prohibiting discrimination on the basis
of gender (Title IX of the Education Amendments of 1972)
prohibits such discrimination only in programs or activities
receiving Federal financial assistance.
- 2 -
Some have said that that reading of the law (which I
will call the "program specific" reading) -- and I should
add here that the laws prohibiting discrimination on the
grounds of race, handicap, and age have the same provision
-- some have said that that program specific reading
represents a "new interpretation" of the anti-discrimination
laws.
I believe that is not SO. Every Federal court of
appeals that has considered the issue has adopted the
program specific reading -- every court, that is, except the
Third Circuit, in the Grove Citv case. And, of course, the
Third Circuit was overruled by the Supreme Court.
But more important for our purposes here this morning,
Mr. Chairman, the statutes' focus on activities receiving
Federal financial assistance rather than on recipients of
that assistance is the basis of the Department's current and
long-standing view that these anti-discrimination laws are
concerned, not with the activities of the ultimate
beneficiaries of Federal financial assistance, but with the
activities of the groups and individuals through which the
government works to provide assistance to those ultimate
beneficaries.
This understanding of many years is reflected in the
regulations of the Department of Agriculture and of other
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agencies implementing the Federal anti-discrimination laws.
Specifically, the regulation defining "recipient" excludes
from that definition the ultimate beneficiaries of a program
or activity (7 C.F.R. 15.2(e)).
It is important to note that this specific exclusion of
ultimate beneficiaries is not grounded in any statutory
definition of a recipient of Federal financial assistance or
in any other specific statutory exclusion. It is grounded
in the fact that the anti-discrimination statutes are
directed at programs or activities receiving Federal
financial assistance and therefore appear not to be directed
at the ultimate beneficiaries of the assistance under those
programs.
S. 2568 would amend Title VI of the Civil Rights Act of
1964, Title IX of the Education Amendments of 1972, Section
504 of the Rehabilitation Act of 1973 ("Section 504"), and
the Age Discrimination Act of 1975 to prohibit
discrimination by "recipients of Federal financial
assistance" rather than discrimination in programs and
activities receiving Federal financial assistance. If this
legislation is enacted, it appears doubtful that the current
exclusion of ultimate beneficiaries from the definition of
recipients of Federal financial assistance could be
continued. Indeed, from the proposed bill's tracking of all
the language of the present regulation defining a recipient,
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except that portion relating to the ultimate beneficiary, it
seems entirely fair to infer a legislative intent to
preclude continuation of the exemption of the ultimate
beneficiary, and I certainly would not be surprised if a
court made that inference.
The definition in the proposed bill of a recipient is
as follows:
" (A) any State or political
subdivision thereof, or any
instrumentality of a State or political
subdivision thereof, or any public or
private agency, institution, or
organization, or other entity (including
any subunit of any such State,
subdivision, instrumentality, agency,
institution, organization, or entity),
and
11 (B) any successor, assignee, or
transferee of any such State,
subdivision, instrumentality, agency,
institution, organization, or entity of
any such subunit,
to which Federal financial assistance is extended
(directly or through another entity or a person),
or which receives support from the extension of
Federal financial assistance to any of its
subunits.
"
I realize, Mr. Chairman, that some people may say that
that definition of a recipient of Federal financial
assistance does not, could not, and was not intended to,
include a farmer. I suggest, nevertheless, that that
language could indeed include a farmer.
- 5 -
In the first place, it is not clear what is meant by
the word "entity" contained in section (A) of S. 2568's
definition of a recipient.
Let us take the case of a Farmer Program loan, extended
directly to a farmer by the Farmers Home Administration.
Currently, the anti-discrimination laws do not apply to
Farmer Program loans, because the farmer is considered to be
the ultimate beneficiary. Under the proposed bill, however,
there is no exclusion for ultimate beneficiaries, and it is
at least plausible to say that the farmer is included within
the bill's definition of a recipient of Federal financial
assistance.
Cannot a farmer be an "entity?" And even if a farmer
in his individual capacity is not an "entity," -- and I am
not sure he is not -- what about his farming operation?
What if that operation is a huge corporation, employing
hundreds of people -- is that not an "entity" within the
meaning of the statute? S. 2568 is sufficiently ambiguous
to leave unresolved whether or not the farmer or his
operation would be a recipient under the proposed
definition.
Mr. Chairman, in addition to there being a real
possibility of a farmer's being included within section (A)
of the definition of recipient contained in the proposed
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bill, there is also a real possibility that some farmers
will be included within section (B) of that definition.
Let us consider, for example, a tobacco farmer. All
tobacco price support loans are provided to farmers through
producer associations. These associations are, even now,
considered by the Department of Agriculture to be covered by
the anti-discrimination laws. They are the recipients of
the Federal financial assistance being provided, but they
are not the ultimate beneficiaries of that assistance.
Therefore, their price support activities are subject to the
prohibitions of the Federal anti-discrimination laws. The
individual tobacco farmer, himself, however, is not
currently considered to be covered by those laws, because it
is he who is considered to be the ultimate beneficiary of
the Federal financial assistance.
Under the proposed bill, however, I believe such a
tobacco farmer might be subject to the anti-discrimination
laws. Under section (A) of the proposed bill's definition
of a recipient, the producer association would almost
certainly be a recipient. It is certainly a "private"
...
"organization"
...
"to which Federal financial assistance is
extended. " And under section (B), because the farmer would
seem to be a transferee of the cooperative or association,
he might also be a recipient. It certainly would not be an
unreasonable interpretation to say he was a recipient.
- 7 -
Now, Mr. Chairman, let us consider some of the people
and business organizations -- dare we call them "entities"?
-- the farmer does business with.
Let us return to our farmer who received a Farmers Home
Administration loan, and let us suppose he puts half of the
money in a bank, and spends the other half on fertilizer and
a tractor. It is not at all clear that the bank, the seller
of the fertilizer, and the seller of the tractor are not
covered by the definition of recipient contained in the
proposed bill. I believe the bank and the farmer's input
suppliers could be covered by this bill if Grove City
College is meant to be covered by the bill's definition.
The only Federal funds A and I prefer to call them
taxpayers dollars Mr Chairman the only Federal
taxpayers dollars Grove City College received, it received
from students who had obtained grants from the Federal
Government. If those funds retain the characteristic of
being Federal assistance even after they leave the students'
hands, why won't the funds lent to a farmer retain that same
Federal assistance characteristic when the farmer pays them
to the tractor salesman, or when he stores them in the bank?
If those funds remain assistance, then those funds are
"Federal financial assistance" that is being "extended" to a
"private organization" (the banker or tractor seller)
"through" "a person" (the farmer), and the banker and
tractor seller become recipients.
- 8 -
Mr. Chairman, let me hasten to add that I assume the
sponsors of this bill intend that the colleges to which the
students pay over their grants will be covered by the laws
that this bill would amend. But we have a paradox here.
What I don't understand is how these laws, if they are
amended by S. 2568, will cover colleges but not a farmer's
bank or the stores where he buys his fertilizer or tractor.
Finally, Mr. Chairman, let me say that if the American
farmer and the people he does business with -- his banker,
his input suppliers, his implement dealers -- are meant to
be covered by the Federal anti-discrimination laws by reason
of this amendment to them, I believe the enforcement effort
the Department of Agriculture would have to mount would be
staggering. I have no idea how it would be performed, and I
am not prepared to discuss it here this morning. I would
say only that if the Department is to take on an obligation
of that magnitude, policing every farmer and every person he
does business with, Congress should ask it to do SO in a
more explicit manner than is contained in this proposed
bill.
In concluding, Mr. Chairman, I should like to note that
despite extensive debate on the floors of the House and
Senate over the meaning of certain portions of Title IX,
including specifically the program and activity language,
there remains today -- even after the Supreme Court's
- 9 -
decision in Grove City -- disagreement on what it was that
Congress intended by that language. Clearly some of the
language in S. 2568 is also ambiguous. Under the
circumstances, it would seem wise to take enough time fully
to consider the language and implications of such a sweeping
proposal, and to take the care to craft such a proposal with
sufficient precision that another generation of lawyers and
their clients will not have to guess at its meaning. If the
Grove City decision had revealed the existence of widespread
and hitherto undetected discrimination, there might be some
urgency to pass S. 2568. The facts are, however, that there
was not the slightest hint of any failure on the part of
Grove City College to comply with any anti-discrimination
law. The Grove City case had nothing whatever to do with
discrimination past or present. I believe, therefore, that
in respect to this legislation, this deliberative body has,
and should take, the time to deliberate carefully.
Mr. Chairman, I would be happy to try to answer any
questions you may have.