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Federal funding threatened by N. Carolina bathroom law

Agencies review for discrimination

CHARLOTTE, N.C. — North Carolina is facing additional threats to its federal funding as two more agencies — the U.S. Department of Transportation and the Department of Housing and Urban Development — say they are reviewing the state’s controversial House Bill 2.

Earlier this week, U.S. Justice Department officials told Gov. Pat McCrory that the law — which pre-empted Charlotte’s anti-discrimination ordinance — violates the U.S. Civil Rights Act and Title IX, which bars discrimination in education based on sex. That could jeopardize billions in federal education funding.

In response to questions from the Observer Thursday, a spokesperson for the U.S. Department of Transportation wrote the agency is reviewing House Bill 2 “to determine if, among other things, it violates non-discrimination grant provisions for DOT federally-assisted projects.”

The federal DOT provides about $1 billion a year to North Carolina.

HUD has also been examining House Bill 2 for more than a month. On Thursday, a spokesperson confirmed that HUD continues to review the law.

HUD provides millions each year to North Carolina cities. In 2012, HUD Secretary Shaun Donovan announced new regulations designed to ensure the agency’s housing programs are open to all, regardless of sexual orientation or gender identity.

The Republican-controlled General Assembly passed HB2 in March in response to Charlotte’s extension of its anti-discrimination ordinance.

That ordinance would have allowed transgender people to use the bathroom of the gender with which they identify and would have extended anti-discrimination protections to LGBT residents. HB2 pre-empted that ordinance, requiring people to use bathrooms in government buildings that match what’s on their birth certificate.

The law has ignited a civil liberties fight in North Carolina and beyond. As prominent performers called for boycotts of the state, at least two companies announced plans not to relocate or expand in North Carolina.

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