North Carolina’s House Bill 2 Puts $4.8 Billion in Federal Funding At Risk

For Immediate Distribution
May 4, 2016

Contact:
The Williams Institute, williamsinstitute@law.ucla.edu, (310) 267-4382

NC Infographic

LOS ANGELES—Today, the U.S. Department of Justice notified North Carolina state officials that House Bill 2, the North Carolina law restricting restroom access based on biological sex, violates the non-discrimination requirements of federal laws including Title IX of the Education Amendments, Title VII of the Civil Rights Act, and the Violence Against Women Act.  As a result of these violations, House Bill 2 puts a total of $4.8 billion in federal funding at risk annually, according to a new analysis conducted by Christy Mallory, senior counsel, and Brad Sears, executive director, at the Williams Institute at UCLA School of Law.

The study analyzes the potential fiscal impact on North Carolina as a result of conflicts between House Bill 2 and the non-discrimination requirements of seven federal laws: Title IX of the Education Amendments of 1972, Executive Order 13672, the Workforce Innovation and Opportunities Act, the Violence Against Women Act, the Affordable Care Act, the Equal Access Rule, and Title VII of the Civil Rights Act of 1964.  Funding provided through the laws supports schools, workforce development programs, law enforcement, health care programs, housing assistance, and programs for survivors of violence.

“The non-discrimination requirements in these federal laws protect transgender people from discrimination, including by allowing them to use restrooms and other facilities that correspond to their gender identity” said Mallory.  “Federal agencies that enforce these laws are authorized to suspend or terminate funds if recipients violate the non-discrimination requirements.”

In addition, North Carolina will incur the costs of litigation arising from the law, and may experience lost sales tax revenue due to corporate boycotts and government travel bans.

The potential fiscal impact of the law includes:

• Loss of federal educational funding of up to $4.7 billion annually as a result of Title IX violations;

• Loss of federal contracts to state and local government entities of an estimated $35 million to $65 million annually as a result of Executive Order 13672 violations;

• Loss of federal funding to support NCWorks of up to $108 million annually;

• Loss of federal grants authorized by the Violence Against Women Act of an estimated $5 million to $5.6 million or more annually;

• Loss of federal funding from the U.S. Department of Health and Human Services as a result of Affordable Care Act violations;

• Loss of federal funding from the U.S. Department of Housing and Urban Development as a result of violations of the Equal Access Rule; and

• Costs incurred as a result of litigation and federal administrative enforcement under Title IX, Executive Order 13672, the Workforce Innovation and Opportunity Act, the Violence Against Women Act, and Title VII of the Civil Rights Act of 1964.

Click here for the full report.

This report was produced as part of a collaboration between Out Leadership and the Williams Institute on the legal and economic implications of LGBT-related policies, and funded by the Evelyn and Walter Haas Jr. fund.

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