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This final rule will repromulgate certain nondiscrimination provisions of the Uniform Administrative Requirements, 45 CFR part 75, under the Department’s Housekeeping Authority, 5 U.S.C. 301. The rule will clarify the Department’s public policy requirement that no person otherwise eligible will be discriminated against in the administration of HHS grants, consistent with applicable federal statute and applicable Supreme Court precedent. It will also set forth a list of thirteen Federal statutes which prohibit discrimination on the basis of sex to include on the basis of sexual orientation and gender identity, consistent with the Supreme Court’s decision in Bostock v. Clayton County.

Statement of Need:

This rule is needed to provide the Department with uniform regulations governing HHS grants, put the Department in the best position to defend HHS from ongoing litigation risk, and provide certainty to participants in HHS grant programs.

Summary of the Legal Basis:

This rule is promulgated under 5 U.S.C. 301 and the December 26, 2013 OMB requirements, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 79 FR 75867.

Alternatives:

The Department published a final rule in 2021, 86 FR 2257. That rule was vacated by a federal district court because it had not been promulgated in compliance with the Administrative Procedure Act. Thus, HHS effectively reverts to the prior Final Rule (2016 Grants Rule), 81 FR 89393, which is currently not being enforced due to a 2019 Notice of Nonenforcement, 84 FR 63809. Both the 2016 Grants Rule and the 2019 Notice of Nonenforcement are subject to litigation risk. If OCR did not promulgate this new Grants Rule, HHS could lift the 2019 Notice of Nonenforcement and defend the 2016 Grants Rule. However, we believe that issuing the proposed rule is the most effective way to provide the Department with uniform grants regulations in a manner that avoids costly litigation.

Anticipated Costs and Benefits:

The Department expects the benefits of regulatory clarity will simplify compliance and ensure fair and nondiscriminatory administration of covered programs under this rule. Costs associated with implementing this administrative change include costs for grantees to become familiar with the rule and for some covered entities to seek an exemption from the rule. 

Risks:

To be determined.