ACLU Letter to the House of Representatives Regarding the Non-Profit Gag Rule Amendment to H.R. 1461

Re: Non-Profit Gag Rule Amendment to H.R. 1461

Dear Representative:

H.R. 1461would establish the Affordable Housing Fund, (AHF) an important source of revenue to support the creation of new, affordable housing for low-income families. However, we understand there will be a manager's amendment on the floor that is anti-democratic and would impose unconstitutional restrictions on the non-profit recipients of Fund dollars. We urge you to oppose these restrictions, and, in the event the restrictions are not removed from the bill, to vote ""no"" on the overall bill when the House of Representatives considers it this week.

The funding restrictions would prohibit granting funds to any non-profit entity that engaged in voter registration, voter identification, or get-out-the-vote activities a year prior to or during the grant cycle, even though none of the funds used for these activities came from the Affordable Housing Fund.[1]

Not only would non-profits who actually engaged in the aforementioned activities be ineligible, but non-profits who even affiliated with another organization that engaged in those activities would render the non-profit ineligible. ""Affiliation"" is defined broadly to include having overlapping board members, sharing physical space, employees, supplies, Internet or other public communications, or transferring more than 20% of the organization's funding to, or receiving 20% of the organization's funding from, another organization. For example, a non-profit that shared a fax machine or copier with another organization that engaged in the prohibited activities would be disqualified from receiving any funds from the AHF.

We agree that the housing funds appropriated should be used for the purpose of constructing affordable housing. However, the amendment is unnecessary to accomplish that purpose. Non-profits are already prohibited from lobbying with federal funds, and 501(c)(3) organizations are banned from partisan political activity. H.R. 1461, as passed by the House Committee on Financial Services, makes it abundantly clear that the funds are to be spent on housing projects.[2]

The language in the amendment goes far further than just restricting the housing funds to housing projects. It prohibits non-profits from using their own funds to encourage citizens to exercise their right to vote. Furthermore, the provision retroactively penalizes non-profits who have engaged in such activity in the past, even if they did not do so when applying for the grant. And, finally, for-profit organizations do not face similar restrictions.

The Restrictions on Non-Profit Grantees Violate the First Amendment

The illogic of these restrictions demonstrates their unconstitutionality.

Under First Amendment analysis, funding restrictions that infringe on freedom of expression are suspect. Typically, courts examine such conditions under a ""heightened scrutiny,"" and usually overturn restrictions that prohibit an organization from using its own funds to engage in constitutionally protected speech. For example, in FCC v. League of Women Voters, 468 U.S. 364, 400-01 (1984), the Federal Communications Commission prohibited public television and radio stations that received federal funds from using their own non-federal funds to broadcast their own editorial views. The Supreme Court struck down the regulation.

In circumstances where the Supreme Court has upheld some funding restrictions on organizations, it has done so because the organization had the ability to work through affiliated organizations to make its voice heard. Here, the amendment effectively forecloses certain speech as a condition of receiving the federal housing funds. For example, in Regan v. Taxation with Representation of Washington, 461 U.S. 540, 544-46 (1983), the Court upheld a federal law prohibiting lobbying by 501(c)(3) organizations, because the organizations could still lobby through closely affiliated, but legally separate, 501(c)(4) groups. The prohibitions in H.R. 1461 extend to such affiliated, but legally separate organizations, stifling their speech as well, and rendering the restriction unconstitutional. Similarly, in Rust v. Sullivan, 500 U.S. 173, 196 (1991), the Court upheld a federal law prohibiting groups receiving federal funds under the Title X program from conducting abortions, reasoning that the groups could still use private funding to engage in such activities in a separate physical location. H.R. 1461 prohibits the organization from using any funds, private or otherwise, for the disfavored activities.

Voting identification, voter registration, get-out-the-vote activities and lobbying are quintessential First Amendment activities and are cornerstones of our democratic society. Thus, any infringement must be judged at least by ""heightened scrutiny,"" in which the government demonstrates it has an important governmental interest.[3]

Here, there is no important governmental interest being served. If the government claims the interest is in assuring the funds are being spent on housing projects, it makes no sense to restrict activities before a grantee even applies for the housing funds. Furthermore, restricting the use of non-federal, private funds, does nothing to insure the housing funds are spent appropriately. The amendment's language sweeps far too broadly to achieve the goal.

Additionally, it would also be anomalous for the government to claim its interest is in stopping the promotion of or participation in elections. The Help America Vote Act, as well as the National Voter Registration Act demonstrates a commitment to encourage voter participation rather than discourage it. Because the legislation does not serve the important governmental interest that must be satisfied for restrictions on speech that trigger heightened scrutiny, we believe the legislation is unconstitutional.

Conclusion

H.R. 1461 passed out of the House Committee on Financial Services on a bipartisan 65-5 vote without these unconstitutional restrictions on speech. Because these conditions are unconstitutional, we urge you to reject these conditions, or, if the conditions are not removed from the bill, to vote against the bill.

Sincerely,

Caroline Fredrickson
Director

Marvin J. Johnson
Legislative Counsel

Endnotes

[1] Voter identification involves identifying potential voters, while get-out-the-vote involves getting those registered voters to the polls. Organizations often provide transportation to the polling place, particularly for elderly and/or disabled voters. If the organization is a 501(c)(3) organization, the activity must be done on a non-partisan basis.
[2] See, for example, Section 128(c), [funds may only be used for ""eligible"" activities]; Section 128(f)(6)(A), [requires the regulator to establish regulations setting forth prohibited use of housing funds, including political activities, advocacy, lobbying, counseling services, and travel expenses]; Section 128(f)(6)(B), [funds may not be used for administrative outreach]; and Section 128(k)(2)(C), [regulator required to establish specific selection criteria].
[3] See, League of Women Voters, supra., 468 U.S. at 380 (applying a heightened scrutiny to funding restrictions limiting the use of private funding; the Court declined to apply ""strict"" scrutiny only because of the government's significant control over broadcasting).