Opinion ID: 1059541
Heading Depth: 2
Heading Rank: 3

Heading: regent's participation in the bond financing program

Text: Having established that Regent is a pervasively sectarian institution, we must consider whether it nonetheless is permitted to participate in the VCBA bond program without offending the Establishment Clause. We turn to the remaining interrelated questions unique to this case: whether the aid results in government indoctrination, whether the aid program defines its recipients by reference to religion, and whether the aid program constitutes an endorsement of religion. It is important to distinguish at the outset the unique nature of the governmental aid involved in the VCBA bond program. Because the bond proceeds are the funds of private investors, the bond proceeds are not governmental aid received by the institution. No taxpayer dollars are transferred directly or indirectly to a participating institution. No taxpayer dollars are pledged or utilized as surety for bond obligations. Unlike the aid programs reviewed in many of the cases that define Establishment Clause jurisprudence, there is no government money utilized for construction or maintenance of buildings, for provision of bus transportation, for reimbursement of educational expenses, for provision of teachers on or off private school premises, or for the provision of books or materials of any kind. The aid does not involve usage of governmental funds and, in the traditional sense in which the terms have been used, the terms direct aid or indirect aid are simply inapplicable. The Court acknowledged this unique difference in footnote seven of its opinion in Hunt. The nature of this aid is properly defined as the granting of tax exempt status to the bonds which has the incidental result of permitting a qualifying institution to borrow funds at an interest rate lower than conventional private financing. The South Carolina Supreme Court in Hunt, 187 S.E.2d at 650, characterized the role of the state as a mere conduit, and the New Jersey Supreme Court in a similar case called the bond provisions a governmental service. Clayton, 267 A.2d at 507. The program is available to all qualifying institutions of higher education in the Commonwealth, without regard to religious affiliation. There is no financial incentive to undertake religious indoctrination in the provision of this unique aid because: This incentive is not present ... where the aid is allocated on the basis of neutral, secular criteria that neither favor nor disfavor religion, and is made available to both religious and secular beneficiaries on a nondiscriminatory basis. Under such circumstances, the aid is less likely to have the effect of advancing religion. Agostini, 521 U.S. at 231, 117 S.Ct. 1997. See Widmar v. Vincent, 454 U.S. 263, 274, 102 S.Ct. 269, 70 L.Ed.2d 440 (1981). It cannot be disputed that an interest rate or tax exemption has exclusively secular content. Because no government funds flow to Regent, it cannot be said that government funds are utilized for indoctrination of religious belief or that there is diversion of government funds for religious activity or that government funds are utilized for any programs, supplemental or otherwise. Additionally, Regent receives these funds because of the genuinely independent choices of investors. Only the purchase money of private investors flows to Regent. If no private investors purchase bonds issued on behalf of Regent, no funds flow to Regent. Thirty-five such bond issues preceded the proposed bond issue on behalf of Regent. An investor's choice between VCBA bond issues or between VCBA bonds and other securities is a choice presumably based upon market factors and personal circumstances. In any event, such a choice cannot be attributed to state decision making. Zobrest, 509 U.S. at 10, 113 S.Ct. 2462; see also Witters, 474 U.S. at 493, 106 S.Ct. 748. As Justice O'Connor stated in Mitchell: [W]hen government aid supports a school's religious mission only because of independent decisions made by numerous individuals to guide their secular aid to that school, no reasonable observer is likely to' draw from the facts . . . an inference that the State itself is endorsing a religious practice or belief. Witters, supra, at 493 [106 S.Ct. 748] (O'CONNOR, J., concurring in part and concurring in judgment). Rather, endorsement of the religious message is reasonably attributed to the individuals who select the path of the aid. 530 U.S. at ___, 120 S.Ct. at 2559 (O'Connor, J. concurring). The issuance of VCBA bonds on behalf of Regent does not result in governmental indoctrination because it determines eligibility for aid neutrally. Any funds that Regent receives are from the private choices of investors. The aid has no impermissible content. No government funds ever reach Regent's coffers. No government funds are used or pledged for any purpose and this carefully constrained program also cannot reasonably be viewed as an endorsement of religion. Agostini, 521 U.S. at 235, 117 S.Ct. 1997. We hold that, with the exception of the School of Divinity, allowing Regent's participation in the VCBA bond financing program does not offend the Establishment Clause.