5 4 [8 8 O p . A tt ’y BOND S C ONST I T U T I ONAL L A W

– E STABL I SHM ENT C LAUSE

– A VAI L AB I L I T Y OF C ONDUIT F I NA NC I NG T O R ELI GI OUSLY A FFI L I AT E D S CHO OLS

M ar ch 17, 2003

E l izabeth A

. McKenn on , Esquir e Mc Kenn on Sh e l t on & He nn LLP A s couns el t o t he M ary l and H eal t h and H i gher Educat i onal F a c i l i t i e s Au t h o r i t y( “ M HHEF A” ) , y o u h a v e a s k e d wh e t h e rwe concurw i t h y o u r a s s es s m entof t he ext entt o w hi ch the E s t abl i s hm entC l aus e of the Fi r s t A m endment of t he U ni t ed St at es C ons t i tut i on r es t r i ct s M H H E FA ’ s act i vi t i es . I n par t i cul ar , y ou have concl uded t hatM H H E FA m ayi ssu e i t s r evenue bonds – a met hod o f p a s s - t h r o u g h o rc o n d u i tf i n a n c i n g – o n b e h a l f

o f a r e l i g i o u s l ya f f ili a ted e lem e n tar yo r se c o n d a rysc h o o l w ith o u t in q u irin g in to w hethert he s chool i s “pervas i vel ys ect ar i an. ” Y ou acc om pani ed y ourr eques t w i t h a w el l

- r es ear ched m emora ndum anal y zi ng r ece nt opi ni ons of t he Supr eme C our tand the U n it ed St at es C our tof A ppeal s fort he Four t h C i r cui tt hatcons t rue the Est abl i s hm ent C l ause i n the con t ext of dir ectgrant s t o p ri vate s cho ols

. I n ouropi ni on, t he “perv asi vel ys ect ar i an” c r i t er i on has di m i ni s hed in si gni fi canc e i n r ece ntdeci s i ons conce r ni ng t he cons t i tut i onal i t yof pr i vat e s chool ai d, and i ndeed, appea r s i r r el evant to the o u tcom e o f re ce n t case s inv o lving rev en u e bo n d s. H o w ev er, i thas no tbeen form al l ydis carded a s p a rtof E st abli shm ent C l ause anal y s i s and, t hus , t her e i s s om e r i s k t hat a cour tcoul d hol d t hatt he i s s uance of bonds on behal f of a school t hat coul d be cha r act er i zed as “pervas i vel ys ect ar i an” vi ol at es t he Est abl i s hm entC l aus e. H o w e v e r, th a t risk is lik e lyto b e m in im a l if M H H E F A c o n tin u e s to r equi r e i ns t i tut i ons t o covenan t nott o us e bond pr ocee ds for r el i gi ous act i vi t i es and t akes good fai t h s t eps t o ens ur e compl i ance w ith th a t a g re e m e n t.G en. 54] 55 I Backg r ound The G e ne r a l A s s e mbl yc r e a t e d M H H EFA i n 1 97 0 t o a ssi st nonpr ofi thos pi t al s and i ns t i tut i ons of hi ghereduca t i on i n obt ai ni ng fun ding fo r capi t al proj ect s throug h the i ssuance o f revenu e bo nd s. C h a p te r 4 0 8 , L a w s o f

M a ryla n d 1 9 7 0 , codi

f i ed at A nnot at ed C ode of M ary land, A r t i cl e 43C

. B onds i s s ued byM H H E FA do not cons t i tut e a debt or l i abi l i t yof t he St at e oranyof i t s agenc i es . N or m ayM H H E FA pl edge the fa i t h and cr edi tof t he St at e. R ather , debt s er vi ce is p aid fr om t he r evenue of t hos e i ns t i tut i ons t hatr ece i ve a s s is ta n c e u n d e r t h e p ro g ra m . In 1 9 9 8 , the G e n e ra l A ss e m b lye x ten ded M H H E F A ’s authority t o as s i s t“noncol l egi at e educ at i onal i ns t i tut i ons ” – i.e

. , elem en tary and s econda r ys chool s , i ncl udi ng pr i vat e i ns t i tut i ons . C hapt er696, L aw s of M ary l and 1998. T hi s new author i zat i on encompas s ed re lig io u s ly-a f

f ilia te d e le m e n ta ry a n d s e c o n d a ry sc h o o ls

. See A rticle 4 3 C , § 3 (f

)(2 )(ii) (d e f

in in g “ n o n c o lleg iate e d u c a tio n a l in stitu tio n ” to i ncl ude “a n i ns t i tut i on oper at ed bya bona f i de chur ch o rg a n iz a tio n ” ). I n a bi l l r evi ew l et t er concer ni ng t he 1998 amendm ent , t he At t o r n e yGen e r a l a d v i s e d t h e Gov e r n o rt h a tt h e l e g i s l a t i o n was cons t i tut i onal i n t hat t he Est abl i s hm entC l aus e does notpr eventt he St at e fr om pr ovi di ng fi nanci al as s i s t ance t o educa t i onal i ns t i tut i ons op erat ed b y rel i gious organizat i on s. L et t er of A t t orneyG eneral J. J os eph C ur r an, J r . t o G overnorPar r i s N

. G l endeni n g (M ay15, 1998)

. H ow ever , t he A t t or neyG ener al caut i oned thatthe E st abli shm ent C l ause fo rbade p ub l i c fun ding of “pervasi vely s e c ta ri a n ” in s titu tio n s . I d. at pp. 2- 3. T he A t t or neyG ener al r el i ed on t w o cas es on t he cons t i tut i onal i t yof a M ary l and gr antpr ogr am f o r p riv a te s c h o o ls: R oem erv. B oar d of P ubl i c W

or ks , 426 U

. S. 736 ( 1976) , a l eadi ng E s t abl i s hm entC l aus e dec i s i on, and C o lu m b ia U n ion Col l ege v
. C l ar ke , 9 8 8 F. Su p p . 8 9 7 ( D. M d

. 1 9 9 7 )

. T he A tto rn e yG e n e ra l co n c lu d e d th a t th e c o n d u it fin a n c in g a v a ilab le thro u g h M H H E F A co u ld n o t be p ro v id ed to insti tuti o n s tha t are p e rv a s iv e ly se c ta ri a n . I d. T he bi l l r evi ew l et t ernot ed thatt he cl as s i fi cat i on of a s chool w as a ca s e- by

- cas e det er m i nat i on t hat c o u ld b e a d d re s s e d b yM H H E F A a t a n a d m in is tr a tiv e le v e l

. I d. at p. 3.5 6 [8 8 O p . A tt ’y

This opinion focuses on the re quireme n ts of the fe deral 1 Con sti tution , a s the Mary land Con sti tution

do e s n ot p ro hib it dir e c t State grants to sec tarian e ducational institutions. HoraceMann League v

. Board of Public W

orks , 2 42 Md. 6 45 , 6 84 -9 0, 22 0 A .2 d 5 1 ( 19 66 ); c f. Truit t v. Board of Publ ic W orks, 243 Md. 375, 400, 221 A.2d 370 (1966) (loans to sec tarian hospitals). M H H E FA s ubs equent l ydevel oped admi ni s t r at i ve pr ocedur es t o gauge w hethera part i cul ari ns t i tut i on i s per vas i vel ys ect ar i an. A m ong t hos e pr ocedur es i s a r equi r em entt hatt he i ns t i tut i on compl et e a de t ai led q u esti o n n aire co n ce rnin g it s reli g iou s af fil iat ion, t he r ol e of r el i gi on i n i t s curr i cul um and s chool act i vi t i es , t he us e of r eli g ious cr i t er i a t o s el ects tudent s and fa cul t y , and other i nfor m at i on. A tt he re ques t of M H H E FA , t hi s O ffi ce r evi ew ed the q u e stio n n a ire a n d o th e r p ro c e d u re s a n d c o n c lu d e d th a t th e yw o u ld per m i tM H H E FA t o m ake the ca s e- by

- cas e det er m i nat i ons m ent i oned i n t he bi l l r evi ew l et t er . L ett erof A s s i s t antA t t or ney G ener al R obertN. M c Don a l d t o E l i zabe t h A

. M cK ennon ( D ece m ber 1 , 1 9 9 8 ). W e un derst and t hat M H H E F A has em ploy ed those p ro c e d u re s in d e ter m in in g w h e th e r to p ro v id e a s sis tan c e to rel i giousl y -affi l i at ed elem entaryand second aryschoo l s.

II A n a ly sis R e c e n t d e c isio n s o f

th e S u p re m e C o u rt a n d th e F o u rth C irc u it c a st s ig n if

ica n t d o u b t o n th e c o n tin u in g v itality o f th e “ p e rv a siv e ly s ect ar i an” cr i t er i on i n E s t abl i s hm entC l aus e ana l y s i s . O t herr ece nt 1 ap p ell ate d ec isi o n s ind icate tha t, w h atev er the role o f th at st an d ard in the an aly sis o f d ir ec t ai d to p ri v ate sc h o o ls, itis no lon g er a s i gni fi cantfac t ori n t he val i di t yof condui tfi nanci ng. T hus , t he ques t i on ari ses w hetheran age ncyl i ke M H H E FA m us tunder t ake th a t in q u ir yin o rd e r t o c o m p ly w ith th e E s ta b lis h m e n t C la u s e . A . T ax E xempt R eve nue B o nds and Perv as i vel y Sectar i an I ns tituti ons 1. Hu n t

v. McN air : The Supr e m e C our t M ake s t he I nqui r y i n a Cas e I nvo l vi ng Reve nue Bonds T hr ee d e c a d e s a g o , t h e Su p r e me Cou r tc o n s i d e r e d t h e e x t ent t o w hi ch the Est abl i s hm entC l aus e r es t r i ct ed the i s s uance of r evenueG en. 54] 57

The Court rea dily found that the authorization of revenue bonds 2 for e ducational institutions had a secula r purpose . 413 U.S. at 741-42. bonds bya governm entagenc yon behal f of a r el i gi ous l y - aff i l i at ed u n iv e rs ity. H

u n t v. Mc N

a ir , 41 3 U

. S

. 73 4 (197 3 ). T hat cas e i nvol ved a pr opos ed us e of Sout h C ar ol i na r evenue bonds fort he benef i tof a Bapt i s t

- contr ol l ed col l ege. T h e C o ur tr ei t er at ed the t hr ee- par tt es tfor appl i cat i on of t he Est abl i s hm entC l aus e thati thad announced i n Lem on v. Kur t z m an , 40 3 U

. S. 60 2 ( 19 71 )

. Th at t est l ooked t o w hether a s t atut e or pol i cy : ( 1) has a s ecul ar purpos e; ( 2) has a pr i m aryeff

ectof adva nci ng ori nh ibit i ng r el i gi on; or( 3) cr eat es an exc es s i v e e n tang lem en t betw ee n g o v ern m en t and rel i gi on.

T h e C our ti nt r oduced the “pe r vas i vel ys ect ar i an” c r i t er i on as p art of the ana l y s i s undert he ef fec tpr ong of t he Lem on t e s t

. T he 2 C o u r te x p l a i n e d t h e r a t i o n a l e f o rt h a ti n q u i r y: A i d nor m al l ym ayb e thoughtt o have a p rim a rye f

f e c t o f a d v a n c in g re lig io n w h e n it fl ow s t o a n inst i tuti on i n w hich r el i gion i s so p e rv a siv e th a t a s u b sta n tia l p o rtio n o f its funct i ons ar e s ubs um ed i n t he r el i gi ous m iss io n o r w h e n it fu n d s a sp e c if ica lly re lig io u s ac tiv ity in a n o th e rw ise su b sta n tially s e c u la r s e ttin g . 413 U

. S. at743. A not herfac t ort o be cons i der ed undert he ef fec t pr ong w as w hethert he ai d w oul d be di r ect ed t o a r el i gi ous funct i on. T hes e tw o fa ct or s w er e r el at ed. T he under l y i ng l ogi c of the p ervas i vel ys ect ar i an s t andar d, as ar t i cul at ed i n H unt , i s t hat it is i m pos s i bl e fort he governm entt o di r ecti t s ai d s ol el yt o s ecul ar funct i ons w hen a s chool i s s o s ect ar i an tha ti t s r el i gi ous m i s s i on in f u s e s a n yo th e rw is e s e c u la r a c tiv ity. See N o te , R eve nue Bonds and R el igi ous E ducat i on: The C ons t i t ut i onal i t y of C ondui tF i nanci ng I nvolvi ng P er vas i vel

y Sec t ar i an I

ns t i tut i ons , 100 M i ch. L

. R ev. 1 1 0 8 , 1 1 1 3 (20 0 2 ). I n H unt , t he C our tfound t hatt he i ns t i tut i on i n ques t i on w as not per vas i ve l ys e c t ar i an; i n addi t i on, t he agr eementbetw een the col l ege and t he bondi ng author i t y forbade r el i gi ous us e of the p roj ect fi nan ced w i t h b on d p roceeds and al l ow ed st at e i nspecti on s to e n f o r c e t h a tp r o v i s i o n . 4 1 3 U. S

. a t7 4 4

- 4 5

. I n t h e Co u r t ’ s v i e w, nei t her t he i ns pect i ons al l ow ed under t he agr eementt o ens ur e non-5 8 [8 8 O p . A tt ’y rel i gious use no r the po ssi bil i t y t hat t he st at e agen cyw ou l d fo recl ose on t he mort gage thr eat ened e xces s i ve ent angl ement – t he thi r d pr ong of t he Lem on te s t. I

d. a t 7 4 5 -4 9

. T hus , under t he hol di ng i n H u n t v. Mc N

a ir , w h e n a r e l i g i o u s l yaff i l i at ed s chool s oughtcondui tfi nanci ng t hr ough a gove rnm ent a g e n c y , the a n a ly sis u n d e r th e E sta b lis h m e n t C lau se d e p e n d e d in p a rt o n w h e th e r th e sc h o o l co u ld b e c h a ra c ter ize d a s “ p e rv a s iv e ly sec tari an . ” A p lurali tyo p inion o f the C o u rt lat er e labo rated fa ctors t o be cons i der ed t o as s es s w hethera s chool i s per vas i vel ys ect ar i an i n R oem erv. B oar d of

P ubl i c W

or ks , 4 2 6 U .S

. 73 6 (197 6), a case co n ce rni ng a M ar y l and gr antpr ogr am for pr i vat e s chool s . T he pl ur al i t yopi ni on i n R oem err e i t e r a t e d t h a t “ n o s t a t e a i d a t a l l [ m a y] go t o i ns t i tut i ons t hat are s o ‘ per vas i vel ys ect ar i an’ t hats ecul ar act i vi t i es cannotbe s epar at ed fr om s ect ar ia n ones . ” I d. at755. M H H E FA has in corpor at ed the fa ct or s out l i ned i n R oem erin its curr ent adm i nis t rat i ve p rocedu res . I n a footnot e i n H

unt , the C o u rt a d v e rte d to a n o th e r p o ss ib le bas i s foruphol di ng t he i s s uance of r evenue bonds on behal f of re lig io u sly - a f

f ili a ted sc h o o ls – a ra tio n a le r e q u irin g n o in q u iryin to w hethert he s chool s ar e per vas i vel y s ect ar i an. T he C our tnot ed the lim ited n a tu re o f

th e a id p ro v id e d to th e sc h o o l: T he “s t at e ai d” i nvol ved i n t hi s cas e i s of a verys peci al s or t. W e have her e no expendi tur e of publ i c funds , ei t herbygr antor l oan, no r ei m bu r s ement bya St at e for expen d itur es m ade bya par ochi al s chool or col l ege, and no ext endi ng orcomm i t t i ng of a S ta te ’s c re d it. R a th e r, th e o n lysta te a id cons i s t s , not of fi nanci al as s i s t ance di r ect l yor i ndi r ect l yw hi ch w oul d i m pl i cat e publ i c funds o r c re d it, b u t th e c re a tio n o f a n in stru m e n tality ( t he A ut hor i t y ) t hr ough w hi ch educ at i onal i ns t i tut i ons m aybor r ow funds on t he bas i s of t h e i ro wn c r e d i t a n d t h e s e c u r i t yo f t h e i ro wn pr oper t yupon m or e fa vor abl e t er m s t han w o u ld o th e rw is e b e a v a ila b le

....G en. 54] 59 4 1 3 U

. S

. a t7 4 5 n . 7

. T h u s , t h i s s t a t e a i d w a s i n s o m e w a ys an alog o u s to a tax ex em p ti o n fo r re li g iou s p rop erty

. B u t the C o u rt expl i ci t l ydecl i ned t o deci de w hether t ax- exempt condui tfi nanci ng came w i t hi n a pr evi ous deci s i on uphol di ng a t ax exe m pt i on for re lig io u s p ro p e rt y . I

d. ( ci t i ng W

al z v. Tax C om m is s i on , 39 7 U

. S. 6 6 4 (19 7 0 )). 2 . Mitch e ll v. He lm s : U s e of t he P ervas i vel y Sect ari an S ta n d a r d a s P a r t o f E sta b lish m e n t C la u se A n a ly sis is Q ues t i oned i n t he Sup rem e C ourt T he cont i nui ng vi t al i t y of t he “pervas i vel y s ect ar i an” c r i t er i on as par tof Est abl i s hm entC l aus e an aly si s w as r ece nt l ydi s cus s ed at s om e l ength i n a pl ur al i t y opi ni on i n Mi t c h e l lv
. He lms , 530 U

. S. 793 ( 2000) , a ca s e thatdi d noti nvol ve condui t f inan cing, butr ather d ire c t aid to re lig io u sly -a f f ili a ted sc h o o ls. A s o u tli n e d b e lo w , co u rts a n d c o m m e n tato rs h a v e sp e c u late d th a t Mitch e lls i gnal s t he end of t he “ p e r v a s i v e l y s e c t a r i a n ” s t a n d a r d , p a r t i c u l a r l y i n t h e c o n t e x tof c o n d u it f

in a n c in g f

o r r e l ig io u s ly-a f

f ilia te d s c h o o ls

. See N ot e, R eve nue B o n ds and R el igi ous E ducat i on: The C ons t i t ut i onal i t y of C ondui tF i nanci ng I

nvolvi ng P er vas i vel

y Sec t ar i an I

n s t i tu t i ons , 100 M i ch. L

. R ev. 1108 ( 20 0 2 ) ; L ar k, “P er vas i vel y Sec t ar i an” I ns t i t ut i ons M

ay N ow Q ual i f y f orTax- E

xem ptF i nanci ng , 12 J. T a x ’n E x e m p t O rg s . 1 7 3 (2 0 0 1 ). I n Mitch e ll , a fe der al pr ogr am provi ded funds foreduca t i onal m at er i al s and equi pm entt o publ i c and pr i vat e el ement aryand s econda r ys chool s v i a s t at e and l ocal educa t i on agenc i es . A l ow er f e d e r a l c o u r tc o n c l u d e d t h a tp r o v i d i n g t h i s a i d t o r e l i g i o u s l yaff i l i a t e d s c h ool s offe nded the Est abl i s hm entC l aus e and thatt he l aw w as th ere fo re u n co n sti tuti o n al. T h e S u p rem e C o u rt rev erse d in a 6 -3 deci s i on. N o opi ni on garner ed a maj or i t yof t he C our t

. R ather , four j us t i ces favor i ng r ever s al j oi ned i n a pl ur al i t yopi ni on byJ us t i ce T hom as ; and J us t i ce O ’ C onnor w r ot e a concurr i ng opi ni on j oi ned by J us t i ce Bre y er. T h r ee j us t i ces j oi ned i n a di s s ent i ng opi ni on by Ju sti ce S o u ter. T h e p lurali tyo p inion rec o u n ted the h ist o ryo f th e thre e-p art L em on t es tus ed t o eval uat e s t at e ai d t o pr i vat e s chool s , i ncl udi ng m odi fi cat i on of t he t es ti n A gos t i ni v. Fel t on , 5 2 1 U

. S

. 2 0 3 (19 9 7 ). I n A gos t i ni , t he C our thad r eca s tt he Lem on an aly sis as a tw o -pa rt testfo cu sed o n the p u rpo se a n d ef fe ct of the p rog ram . T h e third ( ent angl ement ) p rong of the Lem on t es tbeca m e one of s ever al fac t or s t o be consi der ed i n as s es s i ng t he ef f ect of a s t atut e – w hether6 0 [8 8 O p . A tt ’y
t he s t atut e r es ul t s i n governm ent al i ndoctr i nat i on, w hetheri tdefi nes r eci pi ent s byr efe r ence t o r el i gi o n , an d w hetheri tcr eat es an e x c e s s iv e e n ta n g le m e n t. 5 3 0 U .S . a t 8 0 7 -8

. T o di s t i ngui s h betw een i ndoctr i nat i on t hat i s at t r i but abl e t o t he s t at e and i ndoct r i nat i on t hati s not , the Mitch e ll p l ur al i t yopi ni on lo o k e d to th e “ p rin c ip le o f n e u tra lity ” : If the reli g iou s, irreli g iou s, an d are li g iou s are al l al i ke el i gi bl e for governm ent al ai d, no one w oul d concl ude t hatanyi ndoctr i nat i on t hat anyp a r t i c u l a rr e c i p i e n tc o n d u c t s h a s b e en d o n e a t th e b e h e s t o f

th e g o v e rn m e n t. 530 U

. S. at809. T he opi ni on also p lace d emphasi s on a r el at ed fac t ori m port an t t o t he C our t ’ s pas tdeci s i ons – w hetherany gover nm ent al ai d t hatgoes t o a r el i gi ous i ns t i tut i on does s o onl yas a re s u lt o f

in d e p e n d e n t p ri v a te c h o ic e s o f in d iv id u a ls

. Id . a t 8 1 0

. T h e p lu ra lityin d ic a te d th a t th e sa m e p rin c ip les sh o u ld a p p ly r e ga r dl e s s of w he t he r t he a i d i s di r e c t ori nd i r e c ti n n a tur e . 53 0 U. S. a t 8 1 5 -1 9

. In a d d iti o n , itc o n sid e re d th e p o ten tial d iv e rtib ili tyo f a id to reli gi ous purpos es i r r el evant , s o l ong as t he ai d i t s el f i s not im p e rm is s ib ly re lig io u s in c o n te n t. I d. at819- 25. A p p ly in g th e se p rin c ip les to th e p ro g ra m a t issu e , the p lu ra lity opi ni on concl u d ed t hati tpas s ed must erundert he Est abl i s hm ent C l aus e. 530 U

. S. at829- 35. T he pl ur al i t yopi ni on i n Mitch e ll d id n o t a p p lyth e “ p e rv a siv e ly se c tar ian ” c riter io n a s p a rt o f its o w n a n a ly sis . R a th e r, th e p lu ra lity di s cus s ed t he s t andar d i n r es pons e t o a cont ent i on byt he di s s ent i ng opi ni on t hat ai d t o “pervas i vel ys ect ar i an” s chool s w oul d offe nd t he E s t abl i s hm ent C l aus e. T he pl ur al i t yopi ni on cl ear l yr ej ect ed that cr i t er i on as a partof Est abl i s hm entC l aus e ana l y s i s , stat i ng t hat

“ [t ] hi s do ct ri ne, bo r n o f b i go t r y , s ho ul d b e bu r i e d n ow. ” 53 0 U. S. a t 8 2 9 . T h u s, f

o u r ju stic e s o f th e S u p re m e C o u rt w o u ld c o m p lete ly a b a n d o n in q u iryin to w h e th e r a re c ip ien t o f g o v e rn m e n t aid is

“ p e rv a s iv e ly se c ta ri a n .” T he pl ur al i t yopi ni on advanc ed s ever al r eas ons fornot i nqui r i ng w hetheran i ns t i tut ion is “per vas i vel ys ect ar i an”: r ece nt C our tdeci s i ons i nvol vi ng ai d t o r eli g i ous l y - aff i l i at ed s chool s had notturned on t hatcr i t er i on; t he r el i gi ous n ature of a r eci pi entof g o v e rn m e n t aid sh o u ld n o t m a tter s o lo n g a s th e re c ip ien t ad e q u a telyG en. 54] 61 fu rt h ers the g o v ern m en t’ s sec u lar pu rpo se; a g o v ern m en tal inq u iry in to a re c ip ien t’s re lig io u s v iew s c a n b e o f f e n siv e a n d is a t o d d s w ith ot h e r Cou r t d e c i s i o n s p r o h i b i t i n g d i s c r i mi n a t i o n b a s e d u pon a p e r s o n ’ s r e l i g i o u s s t a tu s o r s i n c e r i t y; o p p o s i t i o n t o a i d t o r e l i g i o u s l yaff i l i at ed s chool s coul d be tr ace d t o r el i gi ous pr ejud i ce that d o m in a te d in th e 1 8 7 0 ' s . I d. a t 8 2 6 -2 9

. J us t i ce O ’ C onnor , j oi ned byJ us t i ce Bre y er, c oncurr ed i n t he j udgm entuphol di ng t he ai d prog r am i nvol ved i n Mitch e ll , but di s t anced her s el f fr om t he “rul e of unpr ece dent ed br eadth” ar t i cul at ed byt he pl ur al i t yopi ni on foranal y s i s of Est abl i s hm ent C l aus e i s s ues . 530 U

. S. at 837. R ather , s he s i m pl yappl i ed the Lem on t es t , as m odi fi ed i n A gos t i ni , to u p h o ld th e s ta tu te

. Id

. at844- 4 9

. Ju stic e O ’C on no r i d e n tifie d tw o b a sic p o in ts o f d if f e re n c e w ith t he pl ur al i t y : ( 1) w hetherneutr al i t yi s t he s i ngl e mosti m por t ant fac t ori n as s essin g a governm entai d pr ogr am under t he E sta b lish m e n t C lau se , an d (2 ) w h e th e r d iv e rsio n o f g o v e rn m e n t aid t o rel i gious i nd octr i nati on is perm i ssi ble. W i t h respectt o the fi rs t poi nt , s he cons i der ed t he neutr al i t y of a pr ogr am o n e o f seve r al i m por t antfac t or s . 530 U

. S. at837- 40. W i t h r es pectt o t he s econd p o int, s he ar gued thata s chool ’ s us e of di r ectgovernm entai d for re lig io u s in d o c tr in a tio n is c o n s titu tio n a lly im p e rm is s ib le. Id

. at840- 4 4

. W i t houtdi r ect l yaddr es s i ng t he “pe r vas i v el ys ect ar i an” cr i t er i o n , Ju sti ce O ’ C onnori ndi cat ed herbel i ef thati tr es t s on a faul t yas s um pt i on:

. . . I w ould ad h ere t o t he rul e thatw e have a p p l i e d i n t h e c o n t e x to f t e x tb o o k l endi ng pr ogr ams: T o es t abl i s h a Fi r s t A m endment v io latio n , p lain tiff

s m u st p ro v e th a t th e a id in ques t i o n ac tua l l yi s , orhas been, us ed for re lig io u s p u rp o s e s .... I w o u ld n o w h o ld th a t ... [r ece nt ] ca ses . . . have unde r m i ned the as s um pt i ons u n der l y i ng [pr i orcas es ]

. . . and a lso sto o d f

o r

– o r a t lea st s tro n g lyp o in ted to – t he br oader p rop o si t i on t hats uch p resu m p ti o n s o f re li g iou s ind o c tr ination are nor m al l yi nappr opr i at e w hen eva l uat i ng neut r al s chool ai d pr o gr ams undert he E s t abl i s hm entC l aus e.6 2 [8 8 O p . A tt ’y 5 3 0 U .S . at 8 5 7 -5 8 . R a th e r th a n p re su m in g th a t aid to a p e rv a siv e ly s ect ar i an s chool w oul d r es ul ti n r el i gi ous i ndoctr i nat i on, J us t i ce O ’ C onnorw oul d req u ir e evi dence of di ver s i on of ai d t o t hat p u rp o s e . I

d. I n di s cu ssi ng w hetherai d i n t he Mitch e llcas e had be en di ver t ed t o r el i gi ous i ncul cat i on, J us t i ce O ’ C onnorr ej ect ed t he n o tio n th a t “ th e g o v e rn m e n t m u st h a v e a f a ilsa f e m e c h a n ism c a p a b le of det ect i ng any i ns t ance of di ver s i on. ” Id

. at861. She noted t hat t he r el evants t atut es l i m i t ed the ai d t o s ecul arpu rpo ses and a pr ohi bi t ed aga i ns ti t s us e forr el i gi ous w or s hip o ri ns t ruct i on. M or eover , r eci pi ent s w er e re qui r ed t o s ubm i ts i gned as s ur ance s t hat t he ai d w oul d be us ed onl y for s ecul ar , neutr al , and non- i deol ogi cal purpos es . I n addi t i on, s t at es r et ai ned t he pow er t o cut off ai d t o any s chool t hatbr eac hed thos e as s ur ance s . Fi nal l y , s t at e author i t i es co n d u cted p e ri o d ic m o n it o ri n g , inclu d ing sit e v isi ts, to en su re c o m p lia n c e . Id

. a t 8 6 1 -6 3

. In su m , Ju stic e O ’C o n n o r w a s w ill in g to in d u lg e a p re su m p tio n th a t sc h o o l o f f icia ls w o u ld a c t in g o o d f a ith in c a rr y in g o u t th e ir a s s u ra n c e s a n d m a k in g re p o rt s to th e s ta te

. Id

. at864. Fi nal l y , i ti s not abl e thatt he Mi t che ll d e c isio n f o rm a lly overrul ed t w o of t he C our t ’ s pr i ordeci s i ons of t he s ame vi nt age a s H u n t v. Mc N

a ir , i n w hich t he p ervasi velysect ari a n stan dard w as a deci di ng fac t or . I n par t i cul ar , bot h t he pl ur al ityand J us t i ce O ’C o n n o r a g re e d th a t th o se d e c isio n s, w h ich in v o lv e d d ire c t sta te ai d t o pr i vat e el ement aryand sec o n d arys chool s i n t he form of i n s t ru c t i o n a l ma t e r i a l s a n d e q u i p me n t , we r e n o l o n g e rg o o d l a w. 5 3 0 U .S

. a t 8 0 8 , 8 3 5 , 8 3 7 , 8 5 0 -5 3 , over r ul i ng Meek v. P i t t enger , 421 U

. S. 349 ( 1975) , and W olm an v. W

alker , 4 3 3 U

. S

. 2 2 9 (19 7 7 ). T hus , i ti s cl ear t hat t he per vas i vel ys ect ar i an s t andar d i s no l onger a d e c isiv e f

a c to r in d e ter m in in g th e c o n stitu tio n a lity o f d ire c t a id to rel i giousl y -affi l i at ed elem entaryand second aryschoo l s. 3. Colum bi a U

ni on C ol lege v. O li ver : T h e F o u r th C irc u it C onsi ders t he R el evance of t he P ervas i vel y Sect ari an St andard aft er Mitch e ll T he A t t or neyG ener al ’ s 1998 bi l l r evi ew l et t erconce r ni ng t he M H H E FA enabl i ng l aw r el i ed i n par t on a r ece nt deci s i on i n w hi ch t he fe der al di s t r i ctcour ti n M ary l and had uphe l d a deni al of as s i s t ance on t he gr ound t hatt he appl i cantpr i vat e col l ege w as perva s i vel ys ect ar i an. Subse quent l y , t hatdeci s i on w as vaca t ed by t he Four t h C i r cui t , w i t h i ns t ruct i ons t o t he di s t r i ctcour tt o conduct a “f act

- i nt ens i ve” i nqu iryi nt o w hethert he s chool i n ques t i on w asG en. 54] 63

Whil e conc edingthat the opinions in Mi tc he ll signaled the 3 Supreme Court’s re tre a

t f rom the use of the pervasively secta rian c riterion, one judge noted that, beca use the Supreme Court’s decisi o nin Roemer involved the same Ma

ryland program at issue in Columb ia Union , that c a s e r e main e d

a d ire c tly c o ntro ll in gp r e c e d e nt. 2 5 4 F

. 3 d at 5 1 0

- 1 1 ( M o tz , J ., concur ring ). She there fore limit ed her conc urre nce to a ffirmingof the district court’s findingthat the school wa s not pervasive ly secta rian. p e rv a s iv e ly se c ta ri a n . C ol um bi a U ni on C ol l ege v
. C l ar ke , 159 F. 3d 1 5 1 (4 th C ir . 1 9 9 8 ), cer t

. deni ed , 5 2 7 U .S . 1 0 1 3 (1 9 9 9 ). O n re m a n d , the d istric t co u r t c o n d u c ted a trial, a f ter w h ich it con cl ud ed t hat t he scho ol w as n o t p e rv a siv e lyse c tar ian . T h e F o u rth C ir cu itaf

firm ed that d ec isi o n . 2 5 4 F

. 3 d 4 9 6 (4th C ir

. 2 0 0 1 ). H ow ever , t he Supr eme C our t ’ s i nt er veni ng deci s i on i n Mitch e ll s i gni fi cant l yaff

ect ed t he court ’ s t r eatm entof t hati s s ue. T w o m ember s of t he thr ee- j udge pane l w oul d have found t he appl i cants cho o l el i gi bl e fora St at e gr antw i t houtengagi ng i n an an aly sis o f w h ethe r th e sch o o l w as p erv asiv elysec tari an . T h e c o u rt 3 s t at ed that“the Mitch e llcas e has s i gni fi cant l yal t er ed the E s t abl i s hm entC l aus e l ands cape byaddr essi n g t he ci r cumst ance s u n d e r w h ic h s e c ta ri a n s c h o o ls m a yb e e lig ib le f o r g o v e rn m e n t a id .” 254 F. 3d at 5 0 1

. A ft err evi ew i ng t he pl ur al i t yand conc ur r i ng opi ni ons i n Mitch e ll , t he courti dent i fi ed J us t i ce O ’ C onnor ’ s opi ni on a s “ c o n tr o ll in g ” a n d d e r iv e d “ th r e e f u n d a m e n ta l g u id e p o s ts ” f r o m it: ( 1) neutr al i t yof ai d cri ter i a i s an i m por t antfac t or ; ( 2) actual di ver s i on of gover nm ent ai d t o r el i gi ous purpos es i s pr ohi bi t ed; ( 3) t he perv asi vel ys ect ar i an cr i t er i on i nvol ves a pr es um pt i on of r el i gi ous i ndoct r i nat i on t hati s “nor m al l yinap pr opr i at e” w hen eval uat i ng a neutr al s chool ai d pr ogr am. 254 F. 3d at504. A ppl y i ng t he modi fi ed Lem on t es t , t he Four t h C i r cui tfound no di s put e thatt he M ar y l and ai d pr ogr am had a s ecul arpurpos e. 254 F. 3d at504. Second, t he courtco n cluded thatt he ai d di d nothave t he ef fec tof adva nci ng r el i gi on. I tnot ed thatthe ai d pr ogr am w as bas ed upon i ndi s put abl yneutr al cr i t er i a. T her e h ad been no di ver s i on of ai d t o r el i gi ous purpos es , as t he appl i canthad noty et rec eive d an y aid

. Id

. at505- 6. M or eover , i n acc or dance w i t h t he s t atut e cr eat i ng t he pr ogr am, t he s chool had pl edged thatt he funds w o u ld no tbe u sed fo r s ect ari an p urposes. Id

. at506. I n addi t i on, th e sc h o o l w o u ld b e r e q u ir e d to p ro v id e a n n u a l p re - a n d p o stexpen d it ur e af

fi davi t s document i ng t he i ns t i tut i on’ s actual and in te n d e d u s e o f

f u n d s . I d. T h e c o u rt c on cl ud ed thatt hese6 4 [8 8 O p . A tt ’y

sa f e g u a rd s w e re a d e q u a te to p re v e n t d iv e rsio n o f S tate f u n d s to s e c ta ri a n u s e . I

d. Fi nal l y , t he courtobs er ved thatai d t o r el i gi ous l y - aff i l i at ed coll eges an d u niver si t i es, such as C olum bia U nion, ra ise d l ess c o n c e rn th a n a id to e le m e n ta ry a n d s e c o n d a ry sc h o o ls

. I d. at507. A lth o u g h the F o u rt h C ir cu itb eli ev ed that the S u p rem e C o u rt w oul d appr ove t he ai d in t he ca s e bef or e i tw i t houtr es or tt o an analy si s of w hethe r th e schoo l w as pervasi velysect ari an, i tal so r evi ew ed t he dist ri ct cour t ’ s fi ndi ng t hatt he s chool w as not p e rv a siv e ly se c tar ian

. T h e c o u rt h e ld th a t th e f in d in g w a s n o t cle a rly err on eou s, t hu s uph oldi ng t he di stri ct cou rt on an al t ernat i ve b asi s. I d. at508- 10. E ven t hough t he pr ogr am ati s s ue i n C ol um bi a U ni on i nvol ved di r ectgr ant s r athert han rev enue bonds, t he dec i s i on i s i ns t ruct i ve b e c a u se it w a s is su e d b yth e f e d e ra l co u rt o f

a p p e a ls w ith j ur i s di ct i on overM ar y l and. T w o cour t s i n ot her j ur i s di ct i ons have a d d r e ss e d th e c o n stitu tio n a lityo f re v e n u e b o n d s f

o r p e rv a siv e ly s ect ar i an i ns t i tut i ons s i nce Mitch e ll

. 4 . P o st-Mitch e ll

C as es I nvol vi ng R evenue B onds f or Se c t ar i an I ns t i t ut i ons I n t he w ake of Mitch e ll , t w o appel l at e court s have uphe l d t he i s s u a n c e o f

r e v e n u e b o n d s f

o rth e b e n e f

i to f s c h o o l s f

o u n d t o be per vas i vel ys ect ar i an. W hi l e nei t hercour tcompl et el ydi s car ded the p e rv a siv e ly se c tar ian sta n d a rd , it a p p e a re d to b e lar g e lyirre lev a n t to t he o utcom e i n the cases.

a. Vir ginia Colle

ge Bui lding Author it y v. Lynn : R e v e n u e B o n d s a s “ P r iv a te ” A id Shor t l yaft ert he Mitch e lld ec isi o n , the V ir g inia S u p rem e C o u rt u p h e ld u se o f a sta te r e v e n u e b o n d p ro g ra m b ya p e rv a siv e ly s e c ta ri a n c o lle g e . V

i r gi ni a C ol l ege B ui ldi ng A uthor i t y v. Lynn , 260 V a. 608, 538 S. E

. 2d 682 ( 2000)

. T he V i r gi ni a courtempl oy ed the “p erv asiv elysec tari an ” stan d ard , n o t as a litm u s test fo r w h ethe r a sch o o l i s eli g ib le f

o r aid, bu t as a thre sh o ld inq u irythat tr igg ers f u rth e r a n a ly sis . In th a t ca se , a s tate trial c o u rt h a d h e ld th a t a r el i gi ous l y - aff

i l i at ed col l ege c r ea te d undert he aus pi ces of t he C hr i s t i an B r oadca s t i ng N etw or k w as i nel i gi bl e t o par t i ci pat e i n a s t at e r evenue bond pr ogr am becaus e i tw as per vas i vel ys ect ar i an and beca us e i t s pr i m arypurpos e w as r el i gi ous t r ai ni ng.G en. 54] 65 O n appea l , t he V i r gi ni a Supr eme C our t agr eed t hatt he s chool w as per vas i vel ys ect ar i an, butdeci ded, i n l i ghtof Mitch e ll , to r econs i dera pr i ordeci s i on i n w hi ch i thad hel d t hats uch a s chool wa s i n e l i g i b l e t o p a r t i c i p a t e i n a V i r gi n i a i n d u s t r i a l b o n d p r o g r a m. 538 S. E

. 2d at689- 91. T he V i r gi ni a courts t at ed thatt he Mitch e ll “pl ur al i t y ’ s obi tuary for a nal y s i s of pervas i ve s ect ar i ani s m m aybe p r e ma tu r e . ” Ho we v e r , t h e c o u r tr e v i e we d a n u mb e rof S u p r e me C our t deci s i ons appr ovi ng var i ous t ypes of ai d t o s uch school s , and concl u d ed t hatboth t he natur e of the ai d and the natur e of the i ns t i tuti on r ece i vi ng t he ai d m us tbe cons i der ed undert he E s ta b lis h m e n t C la u s e . Id

. at 693- 95. T he courtconcl uded thatt he appr opr i at e appr oach w as t o det er m i ne fi r s tw hethert he i ns t i tut i on i s per vas i vel ys ect ar i an and, i f s o, w hethert he p arti cul art ype of a s s is ta n c e is p e rm itte d u n d e r t h e E s ta b lis h m e n t C la u s e . Id

. at696- 9 7

. Us i n g t h i s a p p r o a c h i n t h e c a s e b e f o r e i t , t h e Vi r g i n i a S u p r e me C our tconcl uded t hatt he col l ege w as per vasiv elys ect ar i an. 538 S

. E

. 2 d at 69 7 -98

. H o w ev er, g iv e n the n ature o f th e a id, th e c o u rt foun d t hatt he Est abl i s hm entC l aus e di d notdi s qual i fyt he s chool fr om the pr ogr am. C i t i ng t he footnot e i n H u n t v. Mc N

a irt hat d esc ri b ed the lim it ed n ature o f co n d u it fin an cing , the V ir g inia co u rt c h a ra c te ri z e d th e b o n d p ro c e e d s a s “ th e f u n d s o f p ri v a te in v e s to rs ... no t g o v ern m ent al ai d. ” Id . at 6 9 8 . “T h e n a tu re o f th is a id is pr oper l y defi ned as t he gra nt i ng of t ax exem pt s t atus t o bonds w hi ch h a s the in c id e n tal res u lt o f p e rm itt in g a q u a lify in g in sti tu ti o n to b o rro w fun ds atan int eres trat e l ow er than con ven t i on al pri vate fi nanci ng. ” I

d. A s n o g o v e rn m e n t f u n d s f lo w e d to th e sc h o o l, i t coul d notbe s ai d t hatgovernm entfunds w er e di ver t ed forr el i gi ous i ndoct r i nat i on. R ather , t he s chool r ece i ved funds bec au s e of the

“ g e n u in e lyin d e p e n d e n t c h o ice s o f in v e sto rs,” a n d th is re su lt co u ld n o t b e a ttr ib u te d to s ta te d e c is io n m a k in g . I d. at 698- 99. T hus , t he cour tconcl uded, t he part i ci pat i on of a pe r vas i vel ys ect ar i an s chool i n t he pr ogr am di d notvi ol at e the Est abl i s hm entC l aus e.

b. S teele v. In d u stria l D ev elop m en t B o a rd : R e ve nue B o n d s a s N e u tr a l, In d ire c t A id T h is pa st y ea r, a three -j u d g e p an el o f the S ixth C ir cu it , in a 2 -1 deci s i on, uphel d the i s s uance of r evenue bo n d s fort he bene fi tof a u n iv e rs ity c h a r a c t e r i z e d a s i n d i s p u t a b l y p e r v a s i v e l y s e c ta ri a n . S tee le v. Indust ri al D evel op m ent Bo ard , 3 0 1 F .3 d 4 0 1 (6 C ir . 2 0 0 2 ), c e rt. th deni ed , 71 U

. S. L

. W

. 3455 ( February24, 2003)

. T hatcas e conc erned6 6 [8 8 O p . A tt ’y
t he i s s uance of t ax- exempt r evenue bonds under a Tennes s ee l aw for t he bene fi tof Li ps comb U n iversi t y , w hi ch i s aff i l i at ed w i t h t he C hur ches o f C hr i s t

. T he di s t r i ctcour tfound t he i s s uance of t he b o n d s f o r L ip sc o m b u n c o n stitu tio n a l, i n p a rt b e c a u se th e u n iv e rsity w a s p e rv a s iv e ly se c ta ri a n . O n appea l , t he Si xt h C i r cui t obs er ved thatcons t i tut i onal i t yof t h e i s s u a n c e o f

t a x - e x e mptr e v e n u e b o n d s f o rt h e b e n efi t of a per vasi vel ys ect ar i an i ns t i tut i on had notbeen a ddr es s ed byt he Supr eme C our tort he other ci r cui t cour t s of appe al

. 301 F. 3d at406 & n n .3 -4 . T h e c o u rt sta ted th a t “ [ t]h e v italityo f th e p e rv a siv e ly sec tari an testis qu esti o n ab le” in li g h t of rec en t Su p rem e C o u rt deci s i ons , i ncl udi ng Mitch e ll

. Id

. at408. N evert hel es s , t he cou rt s t at ed that“[i ] t i s for t he Supr eme Court , not t hi s C our t , t o j et t i s on t he pervas i vel ys ect ar i an t es t , w hi ch i thas notdone. ” I d. a t 4 0 9

. A dopt i ng t he t heorys ugges t ed i n t he f o o tno te i n H

untv. Mc N a ir , t he courtchar act er i zed “ pas s - t hr ough orcondui tf i nanci ng” as a form of i ndi r ectai d anal ogous t o a r el i gi ous l yneutr al t ax exem p ti o n forchar i t abl e or gani zat i ons . 301 F. 3d at410- 13. T he cour tno t e d tha ta n i ns t i tut i on s e e ki ng a t a x- e xe mptbo nd m ust a rra n g e f o r th e f in a n c in g b y lo c a tin g e x c lu siv e lyp riv a te le n d e rs; a pur chas er of a bond has r ecour s e onl y agai ns t t he borr ow erand not th e g o v e rn m e n t a g e n c y ; an d n o g o v e rn m e n t f u n d s a re in v o lv e d in th e tr a n s a c tio n . Id

. at413

. T he i m pactof condui tfi nanci ng on gover nm entfunds i s l im it ed t o t he pot ent i al l os s of r evenue a ttr ib u ta b le to th e ta x e x e m p tio n . I d. O bs er vi ng t hati ndus t r i al revenu e bo nd s ar e iss ued t o a w i de v ari et yof b usi nesses, schoo l s, and ot her or gani zat i ons , t he cour t not ed t hat r el i gi ous or gani zat i ons a re n o t b a rr e d f

ro m re c e iv in g g e n e ra l g o v e rn m e n t b e n e f its

. Id

. at 41 4-15. Th e cou rt reas on ed t hat such bo nd s serve a secu l ar i nter est i n pr om ot i ng econom ic and educ at i onal devel opm entand as s er t ed th a t th e yn e ith e r a d v a n c e n o r i n h ib it r e lig io n . Id

. at415- 16. T he c o u rt n o ted th a t th e lo a n a g re e m e n t u n d e r w h ich th e u n iv e rsity r ece i ved the bond pr ocee ds pr ohi bi ted t he us e of bond- fi nance d f a c iliti e s f o r r e lig io u s p u rp o s e s . 3 0 1 F .3 d a t 4 1 6

. T he co urtsum m ari zed it s anal y si s:

I n s um , t he natur e of the i ns t i tut i on i s not th e re lev a n t in q u iryin th e s p e c ial typ e o f a id a t iss u e in th is ap p e a l. T h e n a tu re o f th e a id confe r r ed byt he t ax fr ee r evenue bonds i s not di r e c ta i d

. I n s t e a d , i ti s a n a l o g o u s t o an in d ir e c t f

in a n c ia l b e n e f

it c o n f e rr e d b y aG en. 54] 67

The de cision was presag ed in a prior Six th Circuit case. Johnson 4 v. Ec onomic De velopment Corp. , 24 1 F .3 d 50 1 (6 Cir

. 20 01 ). Th at c a se th involved an Establ i s h m ent C lause c halleng e to the use of tax-ex empt re ve nu e bo nd s und e r M ic hig an law to fi na nc e a c on str uc tio n p ro

je c t at a pa ro c hial e le me nta

ry and se c on da ry sc ho ol. The c ourt found that the program satisfied thetwo prong s of a modified Lemon test, noting that the proce eds of the bonds did not support relig ious aspects of theschool. 241 F.3d at 512-14. The c ourt sug g ested that the a cc ess t o revenue bond fi na nc ingwo uld

no t bec on sid e re d “ dire c t”a id fo r E sta bli shme nt C la

us e purposes. 241 F .3d at 511 n.3. In ex ami ning thequestion whether provision of such fina

ncingwould result in excessive entang lem ent of g ov e rnme nt a

nd re lig ion , th e c ourt

fo un d th at th e sc ho ol w a s not perva sively

secta rian. Id . at 516-17. On e o f the thre e judg es on the Johnson panel c ited the plurality decision in Mi tc he ll

and pre dicted that the Supreme Court would hold that the Establishment Clause does not ba r conduit financ ing, suc h as re venue bonds, f or per vasively secta rian school s , although he found it unnec essar y to rea ch that question in the Johnson case .

r el i gi ous l yneutr al t ax or char i t abl e deduc t i on

. . . . T he fundi ng vehi cle is a vai l abl e on a neu tr al bas i s . N o governm entfunds w i l l be expende d. N ordoes anyhol der o f a bond have r ecour s e aga i ns tt h e [gover nm ent agenc y ] i n t he eve ntof nonpaym ent

. T he b e n e f it t o b e o b tain e d b y [ th e re lig io u s s c h o o l] i s t he s ame pr ovi ded t o pr i vat e compani es w hich cr eat e i den t i cal eco n o m ic o p p o rtu n iti es. T he condui tfi nanci ng advanc es a cl ear gover nm ent al , s ecul ari nt er es ti n pr om ot i ng economi c oppor tuni t y . Fi nal l y , t he rev enue bond pr ogr am does notpr es ent t he per cept i on of governm entendor s ement of r el i gi on. Id

. at 4 1 6 -17

. T h u s, g iven the n ature o f co n d u it fin an cing , the c o u rt hel d t hat t he pr ovi s i on of s uch ai d t o a s chool l i ke L i ps comb di d not vi ol at e t he Est abl i s hm entC l aus e. 4 T he di s s enti n g j udge w oul d have he l d t hati s s uance of t he r evenue bonds i s a form of di rec tgovernm entai d t hat , w hen bes t ow ed on a per vas i vel ys ect ar i an uni ver s i t y , vi ol at es t he E s ta b lis h m e n t C la u s e . Id . a t 4 1 7 -4 1

.6 8 [8 8 O p . A tt ’y B. Ap p li c a ti o n to M

HH EFA T h e re c e n t d e c isio n s o f th e S u p re m e C o u rt a n d th e F o u rth C i r cui ti ndi cat e that t he “pe r vas i vel ys ect ar i an” c r i t er i on i s nott he d ec isi v e f

ac tor t h at i t on ce w as in E stab li sh m en t C laus e an aly sis. In Mitch e ll , nei thert he four

- j us t i ce pl ur al i t ynort he tw o- j us t i ce c o n c u rrin g o p in io n a p p lied th a t cr iterio n ; in d e e d , the p lu r a li ty opi ni on l abel ed i t s appl i cat i on “off ens i ve. ” I n C ol um bi a U ni on , t wo j udges hai l ed t he demi s e of t he cr i t er i on and the thi r d j udge appe ar ed t o acknow l edge thati tw as not l i kel y t o be a f act ori n E s t abl i s hm ent C l aus e ana l y s i s i n t he futur e. It se e m s in c o n g ru o u s to in sis t th a t M H H E F A c o n d u c t a det ai l ed i nqui r yi nt o w hether a s chool i s per vas i vel ys ect ar i an t o be eli g ible fo r co n d u itfin an cing w h en six justi ce s o f th e S u p rem e C o u rt uphel d a di r ectai d pr ogr am t o r el i gi ous l y - aff i l i at ed el ement aryand s e c o n d arysch o o ls w ith o u t ana ly zing w h ethe r t h e sc h o o ls w ere pervasi velysect ari an. M oreove r, t he tw o p os t- Mitch e lla p p e llate deci s i ons conce r ni ng condui tfi nanci ng appr oved t he use of r evenue bond s for s chool s t hathad bee n found t o be pervas i vel ys ect ar i an. T hos e dec i s i ons focus ed on the natur e of the ai d rathert han the c h a ra c te r o f

th e s c h o o l. O n t he otherhand, a majorit y o f t he Supr eme C our thas not f o rm a llyc a st a sid e th e “ p e rv a siv e lyse c tar ian ” sta n d a rd . A p p a re n tly fort hatr eas on, t he Four t h C i r cui tappl i ed thats t andar d i n an al t ernat i ve hol di ng i n C ol um bi a U ni on and one m ember of t hatpanel w o u ld h a v e c o n f

in e d th e c o u rt’s r e v iew to th a t is su e . In a d d iti o n , in appr ovi ng r evenue bonds fora pervas i vel ys ect ar i an uni ver s i t y , t he V ir g inia S u p rem e C o u rtinclu d ed an inq u iryinto the s ec tari an n ature o f th e s c h o o l a s th e f

ir s t s te p in its E s ta b lis h m e n t C la u s e a n a lysis

. Fi nal l y , t he Supr eme C our t has i ns t ruct ed, i n one of i t s l eadi ng E s t abl i s hm ent C laus e ca s es , t hat“i f a pr ece dentof t hi s C our thas d ire c t ap p lica tio n in a c a se , y e t ap p e a rs to re st o n re a so n s re jec ted in s om e ot herl i ne of de ci s i ons , t he C our t of A ppeal s s houl d fol l ow t he cas e w hi ch di r ect l ycontr ol s , l eavi ng t o t he [Supr eme] C our tt he pr er ogat i ve of overrul i ng i t s ow n deci s i ons . ” A gos t i ni v. Fel t on , 521G en. 54] 69

A re cent opinion of the Attorney Gene ral of Arkansa s addre ssed 5 the questi on whether the proceeds of revenue bonds could be earma rked fo r s e c ta ria n o r p ar o c h ial s c h o o ls

. Ar k

. O p . Att

y . G e n . 2 0 0 2

- 1 37, 2002 WL2005932 (August 30, 2002 ). The Arkansa s Attorney Gene ral revie wed at length the Mi tc he ll op ini on s and the Sixth Circ uit de c isi on in Ste e le , but was unableto arrive at a firm conclusion whether such bonds would be per

missibl e under

the Establishment Clause. Id . at *8. Al tho ugh th e tw o p os t-Mi tc he ll Six th Circuit d ecisions 6 c on c e rn ing reve nu e bo nd s ma y no t bec omp le te ly

re c on c ila

ble , it is n o ta b le th at th e c o urt d is c o unte d th e p e r v a s iv e ly s e c ta

ria n c rit e rio n in a c a s e i nv o l v i n g a un i v e r s i ty ( Steele) , b ut re ta ine d it a s a fa c tor in a c a se inv olv ing an ele me nta

ry and se c on da ry sc ho ol ( Johnson) , e ve n th ou gh it found that the school in the latter casewas not per

vasively secta rian. U .S . 2 0 3 , 2 3 7 (1 9 9 7 ). T h u s, it m ig h t b e a rg u e d th a t Hun tv. Mc N a ir , whi c h p r o p o s e d a n i n q u i r y i n t o t h e s e c t a r i a n n a tu r e o f a schoo l , st i l l go verns t he assessm ent of t he u se of revenu e bo nd s. 5 T h e e x ten t to w h ich th e c o u rts s til l ap p ly th e p e rv a siv e ly s ect ar i an cr i t er i on m ay depend on t he l evel of t he s chool i nvol ved. In th e p a st, th a t cr iterio n w a s d e e m e d p a r tic u lar lyim p o rta n t w ith re s p e c t to a id to e le m e n ta ry a n d s e c o n d a ry sc h o o ls

. S e e C o lu m b ia U ni on , 254 F. 3d at 507. A l t hough t he di vi ded deci s i on i n Mitch e ll con cerned a program dir ect ed t o elem entaryand second aryschoo l s, C ol um bi a U

ni on a n d th e tw o p o st- Mitch e lldeci s i ons conce r ni ng re v e n u e b o n d s a ll i n v o lv e d p o st-s e c o n d a ryin stitu tio n s. It is conce i vabl e thata court cons i der i ng a chal l enge t o condui tfi nanci ng for a per vas i vel ys ect ar i an el ement arys chool m i ghtbe l es s i ncl i ned t o ant i ci pat e t hatt he Mitch e llp lu ra lityw ill p re v a il. 6 I tm aybe t hatt he mostappr opr i at e r eadi ng of Mitch e lli s t hat a m a jo rityo f th e S u p re m e C o u rt h a s re tain e d th e “ p e rv a siv e ly se c tar ian ” sta n d a rd , n o t a s a p re su m p tiv e d isq u a lific a tio n f o r a id in th e f o rm o f c o n d u it f

in a n c in g , b u t ra th e r a s p a rt o f a n in q u iryin to w hetheractual di ver s i on of ai d t o r el i gi ous purp o s es has occurr ed. See N o te , R eve nue Bonds and R el igi ous E ducat i on: The C o n stitu tio n a lit

y o f C o n d u it F in a n c in gIn v o lvin gP e rv a s ive ly Sectar i an I

ns t i t ut i ons , 100 M i ch. L

. R ev. at 1124 & n. 118, 1129 & n. 149. I n t hatr egar d, i ti s not abl e that t he concurr i ng and di s s ent i ng opi ni ons i n Mitch e ll – w hi ch t ogethercons t i tut ed a maj or i t yof fi ve m ember s of t he C our t – bot h i ndi cat ed thatdi ver s i on of governm ent ai d t o r el i gi ous purpos es w ould vi ol at e the Est abl i s hm entC l aus e.7 0 [8 8 O p . A tt ’y S e e Mitch e ll, 530 U

. S. at861- 64 ( O ’ C onnor , J. , co ncurr i ng) ; 530 U

. S

. at 90 3 -10 (S o u ter, J. , d issen ti n g ). T hus , adva nce a s s ur ance s t hatai d w i l l notbe di ver t ed, a c c o m p a n ied b ya g o o d f a ith m o n it o r in g p ro g ra m , ap p e a r k e yto m a i n t a i n i n g t h e p r o g r a m w i t h i n c o n s t i t u t i o n a l c o n s t r a i n t s . We under s t and t hat , as par tof t he l oan orl eas e agr eementunderw hi ch M H H E FA m akes bond pr ocee ds avai l abl e t o a s chool , t he i ns t i tut i on m u st a g re e th a t:

N o par tof t h e pr oj ect[fi nance d w i t h bond pr ocee ds ] s hal l be us ed for s ect ar i an r el i gi ous i ns t ruct i on oras a pl ace of s ect ar i an r el i gi ous w or s hi p or i n connec t i on w i t h any par tof t he p ro g ra m o f

a sc h o o l o r de p a rtm e n t o f d iv in ity foranyr el i gi ous denomi nat i on. I f M H H E FA has r eas on t o bel i eve thata fa ci l ityt o be cons t ruct ed w i t h bond pr ocee ds m aybe devot ed t o s ect ar i an r el i gi ous i ns t ruct i on or w orshi p, furt her i nq uiryw i l l be w arr anted i nto t he p roposed use o f th e f u n d s a n d th e a b ili tyo f th e a p p lica n t to e n ter in to th is covena nti n good fai t h. If M H H E FA i s s at i s fi ed thatt he appl i cant can ent er i nto t he agreem ent i n goo d faith an d is sues r even ue b on ds, i ts houl d ens ur e thatt he appl i cantabi des b y it s pr om i s e. I n t hat r egar d, w e under s t and t hat eac h agr eementgr ant s M H H E FA a r i ght t o inspecta proj ectt o m on i t or com pli ance w i t h v ari ou s coven ants , i ncludi ng t he co ven ant agai nstuse fo r s ect ari an rel i gious purpo ses. D o c u m e n tatio n o f

these assura n c e s a n d o f

f o llo w -u p m o n ito rin g w ill b e m or e i m por t antt han a de t ai l ed pr el i m i naryi nqui r yi nt o t he se c tar ian n a tu re o f

th e in s titu tio n if

M H H E F A is c a lled u p o n to d e f e n d i t s i s s u a n c e o f r e v e n u e b o n d s o n b e h a l f o f a r e l i g i o u s l ya f f ilia te d s c h o o l. III C oncl usi on I n ouropi ni on, t he “pe r vas i vel ysec tar i an” c r i t er i on has di m i ni s hed i n s ign ifi canc e i n r ece ntdeci s i ons conce r ni ng t he cons t i tut i onal i t yof pr i vat e s chool ai d , al t hough i thas notbeen f o rm a lly d isc a rd e d a s p a rt o f E sta b lish m e n t C lau se a n a ly sis

. W h ile t her e i s s om e pos s i bi l i t y t hat a cour tw oul d s t i l l empl oyt hatcr i t er i on i n r e v i e wi n g whe t h e r t h e i s s u a n c e o f r e v e n u e b o n d s v i o l a t es t he E sta b lish m e n t C lau se , ita p p e a rs u n lik e lyth a t a c o u rt w o u ld d isq u a lify e v e n a p e rv a siv e ly se c tar ian sc h o o l f ro m c o n d u itG en. 54] 71 f i nan ci ng . T hu s, i t w ou l d not be unreasonab l e for M H H E F A to tru n ca te or e li m inate the p reli m inaryd etail ed ad m inistrati v e inq u iry in to th e se c tar ian n a tu re o f a n a p p lica n t. A n yrisk th a t a c o u rt w o u ld in v a lid a te th e u se o f

re v e n u e b o n d s is lik e lyto b e m in im a l if M H H E F A con tinues t o requir e i nst i tuti on s t o co ven ant not t o u se b o n d p ro c e e d s f

o r re lig io u s a c tiv iti e s a n d tak e s g o o d f a ith ste p s to e n s u re c o m p lia n c e w ith th a t a g re e m e n t.

J. Jo sep h C u rran , Jr. A t t or ney G ener al R o b e rt N . M c D o n a ld C hi ef C ouns el O pi ni ons and A dvi ce