In late September the Bush administration announced final regulations implementing faith-based grant rules that Congress could not even pass. For example, the rules place the burden of objecting to the religious nature of a service provider on the person in need, who must ask for an alternative provider. The regulations do not clearly define "inherently religious" activities that cannot be paid for with federal funds in grant programs. However, services paid for with vouchers or certificates can contain religious content. The rules also sanction discrimination based on religion in hiring for federally funded jobs. The rules apply to welfare, substance abuse and housing programs and take effect on Oct. 30. Similar new regulations were proposed by four agencies. See a list of new and proposed regulations and links to Federal Register versions. Citing charitable choice language in authorizing statues and Executive Orders signed by President Bush as authority, the new rules require equal treatment of religious organizations, including houses of worship, in competition for federal grants. The purpose is to give people in need a greater choice of programs. However, the rules do not take diminishing funding for social services programs into account. Greater competition for fewer dollars will not necessarily result in greater choice for people in need of services. Under the rules, religious organizations cannot be excluded from grant competition because of their religious character. This includes having religious art and icons displayed in buildings where services are provided, having a religious reference in their name or requiring religious affiliation for board members. Health and Human Services (HHS) said religious organizations must comply with Community Services Block Grant rules that require governing boards that oversee services to represent a broad cross section of the community served. The language implies the requirement applies to the board overseeing services, not necessarily the board of the entire organization. Overall, the regulations state that religious organizations must be held to the same program eligibility conditions as other nonprofits. All the regulations state that no federal funds can be spent on "inherently religious" activities. Any worship, prayer or similar activities must be conducted at a separate time or location from the government-funded program. A religious organization can invite program participants to religious activities if they make it clear participation is voluntary and the same level of services will be provided whether they accept the invitation or not. However, "inherently" religious should not be mistaken for "partially" religious activities, which could still conceivably be funded or supported. For example, a soup kitchen that says grace before each meal or shelters that say goodnight prayers mixed with federally funded services could claim the overall service is not inherently religious. The regulations prohibit discrimination against program beneficiaries or prospective beneficiaries on the basis of religion or religious belief where services are provided through grants or cooperative agreements. Except for welfare programs, religious discrimination is allowed when services are paid for with vouchers or certificates. Regulations require that service providers offer alternatives should program beneficiaries object to the religious nature of the services offered. The alternative does not have to be secular, as long as it is acceptable to the beneficiary. Nonprofits, as well as, state and local governments that receive federal funds directly, bear the responsibility for providing these alternative services. According to agency comments, states and local governments are encouraged to coordinate their plans so that alternatives are available. The agencies rejected the argument that the alternative provider requirement is an un-funded mandate on states. The rules require all grantees to meet the same standards of program and fiscal accountability. Religious organizations are required to keep their federal funds in a segregated account, and audits of federal programs will review only that account. Other standards, including health, safety and professional qualifications for staff, must be the same for all providers. Training provided by a religious organization can be used to meet federal standards if it is comparable to training provided by nonreligious entities. Intermediary organizations will be subject to the charitable choice regulations in making subgrants and reports. The regulations require intermediaries to ensure funded activities are carried out in religiously neutral manner, except when paid for by vouchers. All six of the regulations permit discrimination based on religion in hiring for positions funded with federal dollars. The rules vary for substance abuse programs, which prohibit discrimination based on religion unless a religious organization certifies that compliance with the rule would substantially burden its free exercise of religion under the Religious Freedom Restoration Act. Civil rights laws exempt religious organizations from a prohibition on religious discrimination when hiring for positions that involve religious activities funded with private dollars. The law does not directly address extension of this exemption to federally funded positions. The issue is being debated in Congress, but has not been resolved. The Senate dropped language permitting religious discrimination from the CARE Act earlier this year because it was too controversial and threatened chances for the charitable giving incentives in the bill from passing. The House is currently considering the issue in the Workforce Investment Act and Community Services Block Grant legislation. The House has dropped the discriminatory language from its charitable giving legislation (H.R. 7). The regulations issued by the Department of Housing and Urban Development (HUD) include rules for funding construction or rehabilitation of buildings used for both worship and federally funded programs. The new rules make preservation/reconstruction grants available for multipurpose facilities that house HUD eligible programs but not those serving only religious programs. Under HUD's old Community Development Block Grant rules the structure had to be leased to a "wholly secular" entity in order to qualify for funding. Similar rules will apply to programs like Home Investment Partnerships, which had barred religious organizations from receiving federal funds to rehabilitate or construct low-income housing, and restricted use of federal funds for rehabilitation/conversion of structures owned by religious organizations, including emergency shelters and supportive housing. The rules require that inherently religious activities, including primary worship services, take place at either a different time or in a different location than government funded programs. Thus the activity can still take place in the same structure as long as it occurs in a different room away from other inherently religious activity, or at a different time, but not both. Proposed rules for Departments of Labor, Education, Justice and Veterans Affairs are substantially the same as the new rules. This article serves as a correction to the article originally published on October 6, 2003.