In this action for injunctive and declaratory relief appellant
challenges the South Carolina Educational Facilities Authority Act
as violative of the Establishment Clause of the First Amendment
insofar as it authorizes a proposed financing transaction involving
the issuance of revenue bonds benefiting a Baptist controlled
college. The Act establishes an Educational Facilities Authority to
assist (through the issuance of revenue bonds) higher educational
institutions in constructing and financing projects, such as
buildings, facilities, and site preparation, but not including any
facility for sectarian instruction or religious worship. Neither
the State nor the Authority is obligated, directly or indirectly,
to pay the principal of or interest on the bonds; nor is the
State's taxing power pledged or implicated. All expenses of the
Authority also must be paid solely from the revenues of the
projects. The Authority gave preliminary approval to an application
submitted by the college, only 60% of whose students are Baptists.
As subsequently modified, the application requests the issuance of
revenue bonds to be used for refinancing capital improvements and
completing the dining hall. Under the statutory scheme, the project
would be conveyed to the Authority, which would lease it back to
the college, with reconveyance to the college on full payment of
the bonds. The lease agreement would contain a clause obligating
the institution to observe the Act's restrictions on sectarian use
and enabling the Authority to conduct inspections. The provision
for reconveyance would restrict the project to nonsectarian use.
The trial court denied appellant relief, and the State Supreme
Court affirmed. After this Court had vacated the judgment and
remanded the case for reconsideration in the light of
Lemon v.
Kurtzman, 403 U. S. 602, and
other intervening decisions, the State Supreme Court adhered to its
earlier decision.
Held: The Act as construed by the South Carolina
Supreme Court does not, under the guidelines of
Lemon v.
Kurtzman, supra, at
403 U. S.
612-613, violate the Establishment Clause. Pp.
413 U. S.
741-749.
(a) The purpose of the Act is secular, the benefits of the
statute being available to all institutions of higher education in
the
Page 413 U. S. 735
State, whether or not they have a religious affiliation. Pp.
413 U. S.
741-742.
(b) The statute does not have the primary effect of advancing or
inhibiting religion. The college involved has no significant
sectarian orientation, and the project must be confined to a
secular purpose, with the lease agreement, enforced by inspection
provisions, forbidding religious use. Pp.
413 U. S.
742-745.
(c) The statute does not foster an excessive entanglement with
religion. The record here does not show that religion so permeates
the college that inspection by the Authority to insure that the
project is not used for religious purposes would necessarily lead
to such entanglement. The Authority's statutory power to
participate in certain management decisions also does not have that
effect, in view of the narrow construction by the State Supreme
Court, limiting such power to insuring that the college's fees
suffice to meet bond payments. Absent default, the lease agreement
would leave full responsibility with the college regarding fees and
general operations. Pp.
413 U. S.
745-749.
258 S.C. 97,
187
S.E.2d 645, affirmed.
POWELL, J., delivered the opinion of the Court, in which BURGER,
C.J., and STEWART, WHITE, BLACKMUN, and REHNQUIST, JJ., joined.
BRENNAN, J., filed a dissenting opinion, in which DOUGLAS and
MARSHALL, JJ., joined,
post, p.
413 U. S.
749.
MR. JUSTICE POWELL delivered the opinion of the Court.
Appellant, a South Carolina taxpayer, brought this action to
challenge the South Carolina Educational Facilities Authority Act
(the Act), S.C.Code Ann. § 22-41
Page 413 U. S. 736
et seq. (Supp. 1971), as violative of the Establishment
Clause of the First Amendment insofar as it authorizes a proposed
financing transaction involving the issuance of revenue bonds for
the benefit of the Baptist College at Charleston (the College).
[
Footnote 1] The trial court's
denial of relief was affirmed by the Supreme Court of South
Carolina. 255 S.C. 71,
177 S.E.2d
362 (1970). This Court vacated the judgment and remanded the
case for reconsideration in light of the intervening decisions in
Lemon v. Kurtzman, Earley v. DiCenso, and
Robinson v.
DiCenso, 403 U. S. 602
(1971); and
Tilton v. Richardson, 403 U.
S. 672 (1971). 403 U.S. 945 (1971). On remand, the
Supreme Court of South Carolina adhered to its earlier position.
258 S.C. 97,
187 S.E.2d
645 (1972). We affirm.
I
We begin by setting out the general structure of the Act. The
Act established an Educational Facilities Authority (the
Authority), the purpose of which is "to assist institutions for
higher education in the construction, financing and refinancing of
projects . . . ," S.C.Code Ann. § 22-41.4 (Supp. 1971), primarily
through the issuance of revenue bonds. Under the terms of the Act,
a project may encompass buildings, facilities, site preparation,
and related items, but may not include
"any facility used or to be used for sectarian instruction or as
a place of religious worship nor any facility which is used or to
be used primarily in connection with any part of the program of a
school
Page 413 U. S. 737
or department of divinity for any religious denomination."
S.C.Code Ann. § 22-41.2(b) (Supp. 1971). Correspondingly, the
Authority is accorded certain powers over the project, including
the powers to determine the fees to be charged for the use of the
project and to establish regulations for its use.
See
infra at
413 U. S.
747-749.
While revenue bonds to be used in connection with a project are
issued by the Authority, the Act is quite explicit that the bonds
shall not be obligations of the State, directly or indirectly:
"Revenue bonds issued under the provisions of this chapter shall
not be deemed to constitute a debt or liability of the State or of
any political subdivision thereof or a pledge of the faith and
credit of the State or of any such political subdivision, but shall
be payable solely from the funds herein provided therefor from
revenues. All such revenue bonds shall contain on the face thereof
a statement to the effect that neither the State of South Carolina
nor the Authority shall be obligated to pay the same or the
interest thereon except from revenues of the project or the portion
thereof for which they are issued and that neither the faith and
credit nor the taxing power of the State of South Carolina or of
any political subdivision thereof is pledged to the payment of the
principal of or the interest on such bonds. The issuance of revenue
bonds under the provisions of this chapter shall not directly or
indirectly or contingently obligate the State or any political
subdivision thereof to levy or to pledge any form of taxation
whatever therefor or to make any appropriation for their
payment."
S.C.Code Ann. § 22-41.10 (Supp. 1971).
Page 413 U. S. 738
Moreover, since all of the expenses of the Authority must be
paid from the revenues of the various projects in which it
participates, S.C.Code Ann. § 221.5 (Supp. 1971), none of the
general revenues of South Carolina is used to support a
project.
On January 6, 1970, the College submitted to the Authority for
preliminary approval an application for the issuance of revenue
bonds. Under the proposal, the Authority would issue the bonds and
make the proceeds available to the College for use in connection
with a portion of its campus to be designated a project (the
Project) within the meaning of the Act. In return, the College
would convey the Project, without cost, to the Authority, which
would then lease the property so conveyed back to the College.
After payment in full of the bonds, the Project would be reconveyed
to the College. The Authority granted preliminary approval on
January 16, 1970, 255 S.C. at 76, 177 S.E.2d at 365.
In its present form, the application requests the issuance of
revenue bonds totaling $1,250,000, of which $1,050,000 would be
applied to refund short-term financing of capital improvements and
$200,000 would be applied to the completion of dining hall
facilities. [
Footnote 2]
The
Page 413 U. S. 739
advantage of financing educational institutions through a
state-created authority derives from relevant provisions of federal
and South Carolina state income tax laws which provide in effect
that the interest on such bonds is not subject to income taxation.
[
Footnote 3] The income tax
exempt status of the interest enables the Authority, as an
instrumentality of the State, to market the bonds at a
significantly lower rate of interest than the educational
institution would be forced to pay if it borrowed the money by
conventional private financing.
Because the College's application to the Authority was a
preliminary one, the details of the financing arrangement have not
yet been fully worked out. But Rules and Regulations adopted by the
Authority govern certain of its aspects.
See
Jurisdictional Statement, Appendix C, pp. 47-51. Every lease
agreement between the Authority and an institution must contain a
clause
"obligating the Institution that neither the leased land, nor
the facility located thereon, shall be used for sectarian
instruction or as a place of religious worship, or in connection
with any part of the program of a school or department of divinity
of any religious denomination."
258 S.C. at 101, 187 S.E.2d at 647. To insure that this covenant
is honored, each lease agreement must allow the Authority to
conduct inspections, and any reconveyance to the College must
contain a
Page 413 U. S. 740
restriction against use for sectarian purposes. [
Footnote 4] The Rules further provide that
simultaneously with the execution of the lease agreement, the
Authority and the trustee bank would enter into a Trust Indenture
which would create, for the benefit of the bondholders, a
foreclosable mortgage lien on the Project property including a
mortgage on the "right, title and interest of the Authority in and
to the Lease Agreement." Jurisdictional Statement, Appendix C, p.
50.
Our consideration of appellant's Establishment Clause claim
extends only to the proposal as approved preliminarily with such
additions as are contemplated by the Act, the Rules, and the
decisions of the courts below.
Page 413 U. S. 741
II
As we reaffirm today in
Committee for Public Education &
Religious Liberty v. Nyquist, post, p.
413 U. S. 756, the
principles which govern our consideration of challenges to statutes
as violative of the Establishment Clause are three:
"First, the statute must have a secular legislative purpose;
second, its principal or primary effect must be one that neither
advances nor inhibits religion . . . ; finally, the statute must
not foster 'an excessive government entanglement with
religion.'"
Lemon v. Kurtzman, 403 U.S. at
403 U. S.
612-613. With full recognition that these are no more
than helpful signposts, we consider the present statute and the
proposed transaction in terms of the three "tests": purpose,
effect, and entanglement.
A
The purpose of the statute is manifestly a secular one. The
benefits of the Act are available to all institutions of higher
education in South Carolina, whether or not having a religious
affiliation. While a legislature's declaration of purpose may not
always be a fair guide to its true intent, appellant makes no
suggestion that the introductory paragraph of the Act represents
anything other than a good faith statement of purpose:
"It is hereby declared that, for the benefit of the people of
the State, the increase of their commerce, welfare and prosperity
and the improvement of their health and living conditions, it is
essential that this and future generations of youth be given the
fullest opportunity to learn and to develop their intellectual and
mental capacities; that it is essential that institutions for
higher education within
Page 413 U. S. 742
the State be provided with appropriate additional means to
assist such youth in achieving the required levels of learning and
development of their intellectual and mental capacities; and that
it is the purpose of this chapter to provide a measure of
assistance and an alternative method to enable institutions for
higher education in the State to provide the facilities and
structures which are sorely needed to accomplish the purposes of
this chapter, all to the public benefit and good, to the extent and
manner provided herein."
S.C.Code Ann. § 22.41 (Supp. 1971).
The College and other private institutions of higher education
provide these benefits to the States. [
Footnote 5] As of the academic year 1969-1970, there were
1,548 students enrolled in the College, in addition to
approximately 600 night students. Of these students, 95% are
residents of South Carolina who are thereby receiving a college
education without financial support from the State of South
Carolina.
B
To identify "primary effect," we narrow our focus from the
statute as a whole to the only transaction presently before us.
Whatever may be its initial appeal, the proposition that the
Establishment Clause prohibits any program which in some manner
aids an institution with a religious affiliation has consistently
been rejected.
E.g.,
Page 413 U. S. 743
Bradfield v. Roberts, 175 U. S. 291
(1899);
Walz v. Tax Comm'n, 397 U.
S. 664 (1970);
Tilton v. Richardson,
403 U. S. 672
(1971). Stated another way, the Court has not accepted the
recurrent argument that all aid is forbidden because aid to one
aspect of an institution frees it to spend its other resources on
religious ends.
Aid normally may be thought to have a primary effect of
advancing religion when it flows to an institution in which
religion is so pervasive that a substantial portion of its
functions are subsumed in the religious mission or when it funds a
specifically religious activity in an otherwise substantially
secular setting. In
Tilton v. Richardson, supra, the Court
refused to strike down a direct federal grant to four colleges and
universities in Connecticut. MR. CHIEF JUSTICE BURGER, for the
plurality, concluded that, despite some institutional rhetoric,
none of the four colleges was pervasively sectarian, but held open
that possibility for future cases:
"Individual projects can be properly evaluated if and when
challenges arise with respect to particular recipients and some
evidence is then presented to show that the institution does in
fact, possess these characteristics."
Id. at
403 U. S.
682.
Appellant has introduced no evidence in the present case placing
the College in such a category. It is true that the members of the
College Board of Trustees are elected by the South Carolina Baptist
Convention, that the approval of the Convention is required for
certain financial transactions, and that the charter of the College
may be amended only by the Convention. But it was likewise true of
the institutions involved in
Tilton that they were
"governed by Catholic religious organizations."
Id. at
403 U. S. 686.
What little there is in the record concerning the College
establishes that there are no religious qualifications for faculty
membership or student
Page 413 U. S. 744
admission, and that only 60 of the College student body is
Baptist, a percentage roughly equivalent to the percentage of
Baptists in that area of South Carolina. 255 S.C. at 85, 177 S.E.2d
at 369. On the record in this case, there is no basis to conclude
that the College's operations are oriented significantly towards
sectarian, rather than secular, education.
Nor can we conclude that the proposed transaction will place the
Authority in the position of providing aid to the religious, as
opposed to the secular, activities of the College. The scope of the
Authority's power to assist institutions of higher education
extends only to "projects," and the Act specifically states that a
project "shall not include" any buildings or facilities used for
religious purposes. In the absence of evidence to the contrary, we
must assume that all of the proposed financing and refinancing
relates to buildings and facilities within a properly delimited
project. It is not at all clear from the record that the portion of
the campus to be conveyed by the College to the Authority and
leased back is the same as that being financed, but, in any event,
it too must be part of the Project and subject to the same
prohibition against use for religious purposes. In addition, as we
have indicated, every lease agreement must contain a clause
forbidding religious use and another allowing inspections to
enforce the agreement. [
Footnote
6] For these reasons,
Page 413 U. S. 745
we are satisfied that implementation of the proposal will not
have the primary effect of advancing or inhibiting religion.
[
Footnote 7]
C
The final question posed by this case is whether, under the
arrangement, there would be an unconstitutional degree of
entanglement between the State and the College. Appellant argues
that the Authority would become involved in the operation of the
College both by inspecting the project to insure that it is not
being used for religious
Page 413 U. S. 746
purposes and by participating in the management decisions of the
College.
The Court's opinion in
Lemon and the plurality opinion
in
Tilton are grounded on the proposition that the degree
of entanglement arising from inspection of facilities as to use
varies in large measure with the extent to which religion permeates
the institution. In finding excessive entanglement, the Court in
Lemon relied on the "substantial religious character of
these church-related" elementary schools. 403 U.S. at
403 U. S. 616.
MR. CHIEF JUSTICE BURGER's opinion for the plurality in
Tilton placed considerable emphasis on the fact that the
federal aid there approved would be spent in a college setting:
"Since religious indoctrination is not a substantial purpose or
activity of these church-related colleges and universities, there
is less likelihood than in primary and secondary schools that
religion will permeate the area of secular education."
403 U.S. at
403 U. S. 687.
Although MR. JUSTICE WHITE saw no such clear distinction, he
concurred in the judgment, stating:
"It is enough for me that . . . the Federal Government [is]
financing a separable secular function of overriding importance in
order to sustain the legislation here challenged."
403 U.S. at
403 U. S.
664.
A majority of the Court in
Tilton, then, concluded
that, on the facts of that case inspection as to use did not
threaten excessive entanglement. As we have indicated above, there
is no evidence here to demonstrate that the College is any more an
instrument of religious indoctrination than were the colleges and
universities involved in
Tilton. [
Footnote 8]
Page 413 U. S. 747
A closer issue under our precedents is presented by the
contention that the Authority could become deeply involved in the
day-to-day financial and policy decisions of the College. The
Authority is empowered by the Act:
"(g) [g]enerally, to fix and revise from time to time and charge
and collect rates, rents, fees and charges for the use of and for
the services furnished or to be furnished by a project or any
portion thereof and to contract with any person, partnership,
association or corporation or other body public or private in
respect thereof;"
"(h) [t]o establish rules and regulations for the use of a
project or any portion thereof and to designate a participating
institution for higher education as its agent to establish rules
and regulations for the use of a project undertaken for such
participating institution for higher education. . . ."
S.C.Code Ann. § 22-41.4 (Supp. 1971). These powers are sweeping
ones, and were there a realistic likelihood that they would be
exercised in their full detail, the entanglement problems with the
proposed transaction would not be insignificant.
As the South Carolina Supreme Court pointed out, 258 S.C. at
107, 187 S.E.2d at 651, the Act was patterned closely after the
South Carolina Industrial Revenue Bond Act, and perhaps for this
reason appears to
Page 413 U. S. 748
confer unnecessarily broad power and responsibility on the
Authority. The opinion of that court, however, reflects a narrow
interpretation of the practical operation of these powers:
"Counsel for plaintiff argues that the broad language of the Act
causes the State, of necessity, to become excessively involved in
the operation, management and administration of the College. We do
not so construe the Act. . . . [T]he basic function of the
Authority is to see . . . that fees are charged sufficient to meet
the bond payments."
Id. at 108, 187 S.E.2d at 651. As we read the College's
proposal, the Lease Agreement between the Authority and the College
will place on the College the responsibility for making the
detailed decisions regarding the government of the campus and the
fees to be charged for particular services. Specifically, the
proposal states that the Lease Agreement
"will unconditionally obligate the College (a) to pay sufficient
rentals to meet the principal and interest requirements as they
become due on such bonds, [and] (b) to impose an adequate schedule
of charges and fees in order to provide adequate revenues with
which to operate and maintain the said facilities and to make the
rental payments. . . ."
App. 18. In short, under the proposed Lease Agreement, neither
the Authority nor a trustee bank would be justified in taking
action unless the College fails to make the prescribed rental
payments or otherwise defaults in its obligations. Only if the
College refused to meet rental payments or was unable to do so
would the Authority or the trustee be obligated to take further
action. In that event, the Authority or trustee might either
foreclose
Page 413 U. S. 749
on the mortgage or take a hand in the setting of rules, charges,
and fees. It may be argued that only the former would be consistent
with the Establishment Clause, but we do not now have that
situation before us.
III
This case comes to us as an action for injunctive and
declaratory relief to test the constitutionality of the Act as
applied to a proposed -- rather than an actual -- issuance of
revenue bonds. The specific provisions of the Act under which the
bonds will be issued, the Rules and Regulations of the Authority,
and the College's proposal -- all as interpreted by the South
Carolina Supreme Court -- confine the scope of the assistance to
the secular aspects of this liberal arts college and do not
foreshadow excessive entanglement between the State and religion.
Accordingly, we affirm the holding of the court below that the Act
is constitutional as interpreted and applied in this case.
Affirmed.
[
Footnote 1]
At various points during this litigation, appellant has made
reference to the Free Exercise Clause of the First Amendment, but
has made no arguments specifically addressed to violations of that
Clause except insofar as this Court's approach to cases involving
the Religion Clauses represents an interaction of the two
Clauses.
[
Footnote 2]
As originally submitted by the College and approved by the
Authority, the proposal called for the issuance of "not exceeding
$3,500,000 of revenue bonds. . . ." 255 S.C. 71, 75,
177 S.E.2d
362, 364. As indicated by a stipulation of counsel in this
Court, the College subsequently secured a bank loan in the amount
of $2,500.000 and now proposes the issuance of only $1,250,000 in
revenue bonds under the Act, the proceeds to be used:
"(i) to repay in full the College's Current Fund for the balance
(approximately $250,000) advanced to the College's Plant Fund as
aforesaid; (ii) to refund outstanding short-term loans in the
amount of $800,000 whose proceeds were to pay off indebtedness
incurred for
capital improvements, and (iii) to finance
the completion of the dining hall facilities at a cost of
approximately $200,000."
App. 49. (Emphasis in original.)
[
Footnote 3]
Gross income for federal income tax purposes does not include
interest on "the obligations of a State, a Territory, or a
possession of the United States, or any political subdivision of
any of the foregoing. . . ." 26 U.S.C. § 103(a)(1). For state
income tax purposes, gross income does not include interest "upon
obligations of the United States or its possessions or of this
State or any political subdivision thereof. . . ." S.C.Code Ann. §
65-253(4) (Supp. 1971).
[
Footnote 4]
Rule 4 relating to the Lease Agreement provides in part
that:
"If the Lease Agreement contains a provision permitting the
Institution to repurchase the project upon payment of the bonds,
then in such instance the Lease Agreement shall provide that the
Deed of reconveyance from the Authority to the Institution shall be
made subject to the condition that so long as the Institution, or
any voluntary grantee of the Institution, shall own the leased
premises, or any part thereof, that no facility thereon, financed
in whole or in part with the proceeds of the bonds, shall be used
for sectarian instruction or as a place of religious worship, or
used in connection with any part of the program of a school or
department of divinity of any religious denomination."
258 S.C. 97, 101-102,
187
S.E.2d 645, 647-648. The Rule goes on to allow the institution
to remove this option in the case of involuntary sales:
"The condition may provide, at the option of the Institution,
that, if the leased premises shall become the subject of an
involuntary judicial sale, as a result of any foreclosure of any
mortgage, or sale pursuant to any order of any court, that the
title to be vested in any purchaser at such judicial sale, other
than the Institution, shall be in fee simple and shall be free of
the condition applicable to the Institution or any voluntary
grantee thereof."
258 S.C. at 102, 187 S.E.2d at 648.
See n 6,
infra.
[
Footnote 5]
In
Board of Education v. Allen, 392 U.
S. 236 (1968), this Court commented on the importance of
the role of private education in this country:
"Underlying these cases, and underlying also the legislative
judgments that have preceded the court decisions, has been a
recognition that private education has played and is playing a
significant and valuable role in raising national levels of
knowledge, competence, and experience."
Id. at
392 U. S.
247.
[
Footnote 6]
Appellant also takes issue with the Authority's rule allowing a
purchaser at an involuntary sale to take title free of restrictions
as to religious use.
See n 4,
supra. Appellant's reliance on
Tilton v.
Richardson, 403 U. S. 672
(1971), in this respect is misplaced. There, the Court struck down
a provision under which the church-related colleges would have
unrestricted use of a federally financed project after 20 years. In
the present case, by contrast, the restriction against religious
use is lifted not as to the institution seeking the assistance of
the Authority nor as to voluntary transferees, but only as to a
purchaser at a judicial sale. Because some other religious
institution bidding for the property at a judicial sale could
purchase the property only by outbidding all other prospective
purchasers, there is only a speculative possibility that the
absence of a use limitation would ever afford aid to religion. Even
in such an event, the acquiring religious institution presumably
would have had to pay the then fair value of the property.
[
Footnote 7]
The "state aid" involved in this case is of a very special sort.
We have here no expenditure of public funds, either by grant or
loan, no reimbursement by a State for expenditures made by a
parochial school or college, and no extending or committing of a
State's credit. Rather, the only state aid consists not of
financial assistance directly or indirectly which would implicate
public funds or credit, but the creation of an instrumentality (the
Authority) through which educational institutions may borrow funds
on the basis of their own credit and the security of their own
property upon more favorable interest terms than otherwise would be
available. The Supreme Court of New Jersey characterized the
assistance rendered an educational institution under an act
generally similar to the South Carolina Act as merely being a
"governmental service."
Clayton v. Kervick, 56 N.J. 523,
530-531,
267 A.2d
503, 506-507 (1970). The South Carolina Supreme Court, in the
opinion below, described the role of the State as that of a "mere
conduit." 258 S.C. at 107, 187 S.E.2d at 650. Because we conclude
that the primary effect of the assistance afforded here is neither
to advance nor to inhibit religion under
Lemon and
Tilton, we need not decide whether, as appellees argue,
Brief for Appellees 14, the importance of the tax exemption in the
South Carolina scheme brings the present case under
Walz v. Tax
Comm'n, 397 U. S. 664
(1970), where this Court upheld a local property tax exemption
which included religious institutions.
[
Footnote 8]
Although the record in this case is abbreviated and not free
from ambiguity, the burden rests on appellant to show the extent to
which the College is church related,
cf. Board of Education v.
Allen, 392 U.S. at
392 U. S. 248,
and he has failed to show more than a formalistic church
relationship. As
Tilton established, formal denominational
control over a liberal arts college does not render all aid to the
institution a violation of the Establishment Clause. So far as the
record here is concerned, there is no showing that the College
places any special emphasis on Baptist denominational or any other
sectarian type of education. As noted above, both the faculty and
the student body are open to persons of any (or no) religious
affiliation.
MR. JUSTICE BRENNAN, with whom MR JUSTICE DOUGLAS and MR.
JUSTICE MARSHALL join, dissenting.
The question presented in this case is whether South Carolina's
assistance to the Baptist College at Charleston under the South
Carolina Educational Facilities Authority Act constitutes
constitutionally impermissible aid by the State for this sectarian
institution. [
Footnote 2/1] The
test to which I adhere for determining such questions is whether
the arrangement between the State and the
Page 413 U. S. 750
Baptist College is foreclosed under the Establishment Clause of
the First Amendment as being among
"those involvements of religious with secular institutions which
(a) serve the essentially religious activities of religious
institutions; (b) employ the organs of government for essentially
religious purposes; or (c) use essentially religious means to serve
governmental ends, where secular means would suffice."
Abington School District v. Schempp, 374 U.
S. 203,
374 U. S. 295
(1963) (BRENNAN, J., concurring);
Walz v. Tax Comm'n,
397 U. S. 664,
397 U. S.
680-681 (1970) (BRENNAN, J., concurring);
Lemon v.
Kurtzman, 403 U. S. 602,
403 U. S. 643
(1971) (
Lemon I) (separate opinion of BRENNAN, J.).
Because under that test it is clear to me that the State's proposed
scheme of assistance to the Baptist College is violative of the
Establishment Clause, I dissent.
The act authorizes a financing arrangement between the Authority
[
Footnote 2/2] and the Baptist
College at Charleston, a South Carolina educational corporation
operated by the South Carolina Baptist Convention. Under that
arrangement, the College would convey a substantial portion of its
campus to the Authority, and the Authority would lease back the
property to the College at an agreed rental. The Authority would
then issue revenue bonds of the State of South Carolina in the
amount of $3,500,000, which bonds would be payable, principal
Page 413 U. S. 751
and interest, from the rents paid by the College to the
Authority under the lease. The proceeds of the sale of the bonds
would be used to pay off outstanding indebtedness of the College
[
Footnote 2/3] and to construct
additional buildings and facilities for use in its higher education
operations. Upon payment in full of the principal and interest on
the bonds, the arrangement requires that the Authority reconvey
title to the campus properties to the College free and clear of all
liens and encumbrances. The arrangement does not, however, amount
merely to a mortgage on the campus property. The Authority is also
empowered,
inter alia, to determine the location and
character of any project financed under the act; to construct,
maintain, manage, operate, lease as lessor or lessee, and regulate
the same; to enter into contracts for the management and operation
of such project; to establish rules and regulations for the use of
the project or any portion thereof; and to fix and revise from time
to time rates, rents, fees, and charges for the use of project and
for the services furnished or to be furnished by a project or any
portion thereof. In other words, the College turns over to the
State Authority control of substantial parts of the fiscal
operation of the school -- its very life's blood.
It is true that the Act expressly provides that State financing
will not be provided for
"any facility used or to be used for sectarian instruction or as
a place of religious worship nor any facility which is used or to
be used primarily in connection with any part of the program of a
school or department of divinity for any religious denomination.
"
Page 413 U. S. 752
S.C.Code Ann. § 22-41.2(b) (Supp. 1971). And it is also true
that the Authority, pursuant to granted rulemaking power, has
adopted a rule requiring that each lease agreement contain a
covenant
"obligating the Institution that neither the leased land, nor
any facility located thereon, shall be used for sectarian
instruction or as a place of religious worship, or in connection
with any part of the program of a school or department of divinity
of any religious denomination."
258 S.C. at 101, 187 S.E.2d at 647.
But policing by the Authority to insure compliance with these
restrictions is established by a provision required to be included
in the lease agreement allowing the Authority to conduct on-site
inspections of the facilities financed under the act.
Thus, it is crystal clear, I think, that this scheme involves
the State in a degree of policing of the affairs of the College far
exceeding that called for by the statutes struck down in
Lemon
I, supra. See also Johnson v. Sanders, 319 F.
Supp. 421 (Conn.1970),
aff'd, 403 U.S. 955 (1971).
Indeed, under this scheme, the policing by the State can become so
extensive that the State may well end up in complete control of the
operation of the College, at least for the life of the bonds. The
College's freedom to engage in religious activities and to offer
religious instruction is necessarily circumscribed by this
pervasive state involvement forced upon the College if it is not to
lose its benefits under the Act. For it seems inescapable that the
content of courses taught in facilities financed under the
agreement must be closely monitored by the State Authority in
discharge of its duty to ensure that the facilities are not being
used for sectarian instruction. The Authority must also involve
itself
Page 413 U. S. 753
deeply in the fiscal affairs of the College, even to the point
of fixing tuition rates, as part of its duty to assure sufficient
revenues to meet bond and interest obligations. And should the
College find itself unable to meet these obligations, its continued
existence as a viable sectarian institution is almost completely in
the hands of the State Authority. Thus, this agreement, with its
consequent state surveillance and ongoing administrative
relationships, inescapably entails mutually damaging Church-State
involvements.
Abington School District v. Schempp, 374
U.S. at
374 U. S. 295
(BRENNAN, J., concurring);
Lemon I, 403 U.S. at
403 U. S. 649
(separate opinion of BRENNAN, J.).
In support of its contrary argument, the Court adopts much of
the reasoning of the plurality opinion in
Tilton v.
Richardson, 403 U. S. 672
(1971). I disagreed with that reasoning in
Tilton because,
as in this case, that reasoning utterly failed to explain how
programs of surveillance and inspection of the kind common to both
cases differ from the Pennsylvania and Rhode Island programs
invalidated in
Lemon I. What I said in
Tilton is
equally applicable to the present case:
"I do not see any significant difference in . . . telling the
sectarian university not to teach any nonsecular subjects in a
certain building, and Rhode Island's telling the Catholic school
teacher [in
Lemon I] not to teach religion. The vice is
the creation, through subsidy, of a relationship in which the
government polices the teaching practices of a religious school or
university."
403 U.S. at
403 U. S. 660
(separate opinion of BRENNAN, J.).
In any event,
Tilton is clearly not controlling here.
The plurality opinion in
Tilton was expressly based on the
premise, erroneous in my view, that the Federal Higher Education
Facilities Act contained no significant
Page 413 U. S. 754
intrusions into the everyday affairs of sectarian educational
institutions. Thus, it was said in the plurality opinion:
"[U]nlike the direct and continuing payments under the
Pennsylvania program [in
Lemon I], and all the incidents
of regulation and surveillance, the Government aid here is a
one-time, single-purpose construction grant. There are no
continuing financial relationships or dependencies, no annual
audits, and no government analysis of an institution's expenditures
on secular, as distinguished from religious, activities."
403 U.S. at
403 U. S. 688.
But, under the South Carolina scheme, "continuing financial
relationships or dependencies," "annual audits," "government
analysis," and "regulation and surveillance" are the core features
of the arrangement. In short, the South Carolina statutory scheme,
as applied to this sectarian institution, presents the very sort of
"intimate continuing relationship or dependency between government
and religiously affiliated institutions" that, in the plurality's
view, was lacking in
Tilton. Ibid.
Nor is the South Carolina arrangement between the State and this
College any less offensive to the Constitution because it involves,
as the Court asserts, no direct financial support to the College by
the State. The Establishment Clause forbids far more than payment
of public funds directly to support sectarian institutions. It
forbids any official involvement with religion, whatever its form,
which tends to foster or discourage religious worship or belief.
The cases are many in which we have struck down on establishment
grounds state laws that provided not direct financial support to
religious institutions, but various other forms of assistance.
McCollum v. Board of Education, 333 U.
S. 203 (1948) ("release time" program);
Engel v.
Vitale, 370 U. S. 421
(1962)
Page 413 U. S. 755
(prayer reading in public schools);
Abington School District
v. Schempp, 374 U. S. 203
(1963) (Bible reading in public schools). Moreover, any suggestion
that the constitutionality of a statutory program to aid sectarian
institutions is dependent on whether that aid can be characterized
as direct or indirect is flatly refuted by the Court's decisions
today in Committee for
Public Education & Religious Liberty
v. Nyquist, post, p.
413 U. S. 756, and
Sloan v. Lemon, post, p.
413 U. S. 825. In
those cases, we went behind the mere assertion that tuition
reimbursement and tax exemption programs provided no direct aid to
sectarian schools and concluded that the "substantive impact" of
such programs was essentially the same as a direct subsidy from the
State.
The South Carolina arrangement has the identical constitutional
infirmities. The State forthrightly aids the College by permitting
the College to avail itself of the State's unique ability to borrow
money at low interest rates, and the College, in turn, surrenders
to the State a comprehensive and continuing surveillance of the
educational, religious, and fiscal affairs of the College. The
conclusion is compelled that this involves the State in the
"essentially religious activities of religious institutions" and
"employ[s] the organs of government for essentially religious
purposes." I therefore dissent, and would reverse the judgment of
the Supreme Court of South Carolina.
[
Footnote 2/1]
No one denies that the Baptist College at Charleston is a
"sectarian" institution --
i.e., one "in which the
propagation and advancement of a particular religion are a function
or purpose of the institution."
Lemon v. Kurtzman,
403 U. S. 602,
403 U. S. 659
(1971) (separate opinion of BRENNAN, J.).
[
Footnote 2/2]
The South Carolina Educational Facilities Authority is composed
of the members of the State Budget and Control Board, who are the
Governor, the State Treasurer, the State Comptroller General, the
Chairman of the Finance Committee of the State Senate, and the
Chairman of the Ways and Means Committee of the State House of
Representatives. The Act states that
"all the functions and powers of the Authority are hereby
granted to the State Budget and Control Board as an incident of its
functions in connection with the public finances of the State."
S.C.Code Ann. § 221.3 (Supp. 1971).
[
Footnote 2/3]
This outstanding indebtedness pertains to certain unspecified
"capital improvements." App. 49. Thus, it may be that the
indebtedness was incurred for improvements to facilities used for
religious purposes.