Opinion ID: 778880
Heading Depth: 2
Heading Rank: 3

Heading: analysis

Text: 25 The issue presented in this appeal is whether the issuance of tax exempt revenue bonds violates the Establishment Clause, if the bonds are for the benefit of an institution found by the district court to be pervasively sectarian. 3 The issue has not been addressed by other Circuits or by the Supreme Court. 4 26 The First Amendment, applicable to the states through the Fourteenth Amendment, provides that Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof. U.S. Const. amend. I. The Supreme Court has consistently held that the Establishment Clause, prohibiting government establishment of religion, and the Free Exercise Clause, prohibiting government restrictions of the free exercise of religion, must function in harmony. Johnson v. Economic Development Corp., 241 F.3d 501, 509 (6th Cir.2001) citing Everson v. Bd. of Educ., 330 U.S. 1, 16, 67 S.Ct. 504, 91 L.Ed. 711 (1947); Walz v. Tax Comm'n, 397 U.S. 664, 669-70, 90 S.Ct. 1409, 25 L.Ed.2d 697 (1970).
27 The district court concluded that Lipscomb University is a pervasively sectarian institution. The district court set forth the law governing this analysis as follows: 28 The pervasively sectarian test is based on the line of cases beginning with Tilton [v. Richardson, 403 U.S. 672, 91 S.Ct. 2091, 29 L.Ed.2d 790 (1971)], and extending through Bowen v. Kendrick, 487 U.S. 589, 108 S.Ct. 2562, 101 L.Ed.2d 520 (1988). In Hunt v. McNair, the Court found that 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. 413 U.S. 734, 743, 93 S.Ct. 2868, 37 L.Ed.2d 923 (1973). Thus, the rule under the pervasively sectarian test, as stated in Roemer v. Board of Publ. Works of Maryland, 426 U.S. 736, 96 S.Ct. 2337, 49 L.Ed.2d 179 (1976), is that no state aid at all go to institutions that are so `pervasively sectarian' that secular activities cannot be separated from sectarian ones.... 426 U.S. at 755, 96 S.Ct. 2337. 29 Steele, 117 F.Supp.2d at 707 (parallel citations omitted). 30 The district court made the following finding: 31 The evidence presented in the depositions and literature of Lipscomb shows that, while Lipscomb may effectively teach a wide variety of secular courses, the central mission of the school is to inculcate and promote Churches of Christ doctrine as the true word of God. Students are taught entirely by Churches of Christ members; are informed of the importance of the Bible in all areas of their lives; are expected to attend Bible courses and chapel on a daily basis and surrounded by an environment thoroughly saturated by Churches of Christ doctrine. The school does not follow the Statement of Principles on Academic Freedom of the AAUP, and the section of the faculty handbook dealing with research states that the primary aim of every instructor should be to give superior academic instruction, emphasizing daily instruction in the Bible. Lipscomb's Board of Directors, which controls all major decisions of the school, contains only members of the Church of Christ. Christian education is one of the three principal duties of the president of the school. In this environment, the chance that religion would seep into the teaching of secular subjects, as discussed in Roemer, 426 U.S. at 751, 96 S.Ct. at 2347, seems inevitable. 32 Id. at 715 (internal citations omitted). Accordingly, the district court found that Lipscomb University is a pervasively sectarian institution. 33 The vitality of the pervasively sectarian test is questionable in light of subsequent, more recent decisions from the Supreme Court. In Mitchell v. Helms, 530 U.S. 793, 120 S.Ct. 2530, 147 L.Ed.2d 660 (2000), six of nine Justices rejected an Establishment Clause challenge to loans of educational materials directly to parochial schools. Justice Souter pointed out in his dissenting opinion that [N]o one, indeed, disputes ... that the Roman Catholic schools which made up the majority of the private schools participating, were pervasively sectarian.... In his plurality opinion, Justice Thomas responded by stating that: 34 [T]he dissent is correct that there was a period of time when this factor mattered, particularly if the pervasively sectarian school was a primary or secondary school. But that period is one that the Court should regret, and it is thankfully long past. 35 Id. at 826, 120 S.Ct. 2530. Justice Thomas went on to note that the pervasively sectarian analysis, born of bigotry, should be buried now. Id. at 829, 120 S.Ct. 2530. 36 Yet, Mitchell is a plurality opinion. Thus, the district court, and this Court, are still bound by pre- Mitchell law with regard to the pervasively sectarian doctrine. As the district court correctly noted: 37 It is well settled that in a plurality opinion, the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds. Coe v. Bell, 161 F.3d 320, 354 (6th Cir.1998) (quoting Marks v. United States, 430 U.S. 188, 193, 97 S.Ct. 990, 51 L.Ed.2d 260 (1977)); see also, Lakewood v. Plain Dealer Publishing Co., 486 U.S. 750, 764, fn. 9, 108 S.Ct. 2138, 100 L.Ed.2d 771 (1988); Reese v. City of Columbus, 71 F.3d 619, 625 (6th Cir.1995). In Mitchell, there is no single part of any opinion that commands the support of a majority of the Court. As a result, the only binding precedent of Mitchell is the holding. See Igor Kirman, Note, Standing Apart to be A Part: The Precendential Value of Supreme Court Concurring Opinions, 95 Colum. L.Rev.2083, 2084-85 (1995); Ken Kimura, A Legitimacy Model for the Interpretation of Plurality Decisions, 77 Cornell L.Rev. 593, 1596-98 (1992). 38 Steele, 117 F.Supp.2d at 706 (parallel citations omitted). 39 Further, the Supreme Court has specifically stated that the lower courts are to treat its prior cases as controlling until the Supreme Court itself specifically overrules them. Agostini v. Felton, 521 U.S. 203, 237, 117 S.Ct. 1997, 138 L.Ed.2d 391 (1997). In reaffirming its prior mandate the Court noted in Agostini that if a precedent of this Court has direct application in a case, yet appears to rest on reasons rejected in some other line of decisions, the Court of Appeals should follow the case which directly controls, leaving to this Court the prerogative of overruling its own decisions. Id. citing Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 484, 109 S.Ct. 1917, 104 L.Ed.2d 526 (1989). It is for the Supreme Court, not this Court, to jettison the pervasively sectarian test, which it has not done. 40 Regardless of whether the pervasively sectarian test is still the law, we conclude that, given the nature of the aid in question, the issue of the bonds does not offend the Establishment Clause. 41
42 The precise type of aid at issue in this appeal is virtually identical to the bonding mechanisms involved in Hunt v. McNair, 413 U.S. 734, 93 S.Ct. 2868, 37 L.Ed.2d 923 (1973). The Supreme Court described the program as follows: 43 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. The South Carolina Supreme Court, in the opinion below, described the role of the State as that of a mere conduit. 44 Hunt, 413 U.S. at 745 n. 7, 93 S.Ct. 2868. 45 This passage would seem to indicate that a public body could serve as a conduit to allow a pervasively sectarian institution to receive the benefits of tax free bonds so long as public funds were not expended. Rather than reach such conclusion, however, the Supreme Court instead found that the schools at issue were not, in fact, pervasively sectarian and found it unnecessary to address the precise issue before this Court. Since Hunt, the Supreme Court has not addressed the issue. 46 More recently, in Johnson v. Economic Development Corp., 241 F.3d 501 (6th Cir. 2001), this Court considered a case involving facts similar to Hunt, supra. In Johnson, a private Catholic school applied for and was granted an industrial revenue bond from the Michigan Economic Development Corporation, an agency of the State of Michigan. This Court held that the school, although a Roman Catholic institution, was not a pervasively sectarian institution. Id. at 515. 47 Because of this conclusion, the Court did not resolve the question of whether the granting of an industrial revenue bond to a pervasively sectarian institution is an unconstitutional form of aid. The Johnson Court did note, however, that: 48 [I]t is far from settled that the type of aid at issue in this case is direct aid within the meaning of the Establishment Clause jurisdiction. 49 Id. at 510. 50 Moreover, the Court also made the following observation: 51 Plaintiff claims that the tax-exemption under the EDC Act is the equivalent of a tax subsidy for purposes of the Establishment Clause.... The Supreme Court has expressly rejected the argument. There is a constitutionally significant difference between subsidies and tax exemptions. Camps Newfound/Owatonna, Inc. v. Town of Harrison, 520 U.S. 564, 590, & n. 25, 117 S.Ct. 1590, 137 L.Ed.2d 852 (citing Walz, 397 U.S. [664,] 690, 90 S.Ct. 1409, 25 L.Ed.2d 697 [(1970)]). The difference between subsidies and tax exemptions is that in giving tax exemptions the government does not transfer part of its revenue ... but simply abstains from demanding the [entity] support the state. Walz, 397 U.S. at 675, 90 S.Ct. 1409. Therefore, the benefit provided by the tax-exempt status of the bonds does not amount to a cash subsidy. 52 Id. at 511-12 (parallel citations omitted). 53 Judge Nelson, in a concurring opinion, was even more direct and concluded that conduit financing in the form of an industrial revenue bond does not offend the Establishment Clause, even if the benefitting institution is pervasively sectarian. Id. at 518-19. He concluded that the type of aid in question was no different than the indirect aid provided by property tax exemptions available to religious institutions and expressly approved by the Supreme Court in Walz, infra. Id. at 519. 54 In the case at bar, the Board provides pass-through or conduit financing services to a wide variety of nonreligious and religious nonprofit organizations. The Board has arranged tax exempt financing, for example, for a number of colleges and universities with and without a religious affiliation, as well as for low-income housing projects, the Country Music Hall of Fame, the Easter Seal Society, retirement centers, the Jewish Community Center, the Young Mens Christian Association, and Nashville Public Radio. (Cochran Aff. at 3-4; Pressnell Aff. at 2 & Ex. B). Further, similar conduit financing has been provided to a number of privately owned development projects. 5 Significantly, no claim is made that the Board ever favored or disfavored one religion over another.
55 Lipscomb University contends that the bonds represent indirect aid of the type the Supreme Court upheld in Walz v. Tax Commission, 397 U.S. 664, 90 S.Ct. 1409, 25 L.Ed.2d 697 (1970). The Walz Court held that a statute which provided a tax exemption for real estate owned by religious organizations did not represent an unconstitutional governmental attempt to establish, sponsor, or support religion. In language pertinent to this appeal, the Supreme Court noted: 56 The grant of a tax exemption is not sponsorship since the government does not transfer part of its revenues to churches but simply abstains from demanding that the church support the state. 57 Id. at 675, 90 S.Ct. 1409. The Supreme Court concluded that [t]here is no genuine nexus between tax exemption and establishment of religion. Id. 58 Subsequently, the Court made clear that an indirect financial benefit conferred by a religiously neutral tax does not give rise to an Establishment Clause violation. In Mueller v. Allen, 463 U.S. 388, 103 S.Ct. 3062, 77 L.Ed.2d 721 (1983), the Court upheld a tax deduction for amounts paid as school tuition, text books, and transportation. 6 The Court acknowledged that religious institutions benefit very substantially from the allowance of this kind of tax deduction. Id. at 396 n. 5, 103 S.Ct. 3062. The Court found that both parents and parochial schools received a benefit, and the assistance ultimately has an economic effect comparable to that of aid given directly to the schools attended by the children. Id. at 399, 103 S.Ct. 3062. Irrespective of this benefit, the Court acknowledged its decisions consistently have recognized that traditionally `[legislatures] have especially broad latitude in creating classifications and distinctions in tax statutes,' Regan v. Taxation With Representation of Wash., 461 U.S. 540, 547, 103 S.Ct. 1997, 76 L.Ed.2d 129 (1983), in part because the `familiarity with local conditions' enjoyed by legislators especially enables them to `achieve an equitable distribution of the tax burden.' Madden v. Kentucky, 309 U.S. 83, 88, 60 S.Ct. 406, 84 L.Ed. 590 (1940). Id. at 396, 103 S.Ct. 3062. Thus, a religious school's receipt of indirect benefits through a tax deduction does not require the conclusion that such provisions of a state's tax law violate the Establishment Clause. Id. at 396, 103 S.Ct. 3062. As long as the tax benefit is neutrally available, 7 the Establishment Clause is not violated. 59 The only evidence of record is that similar bonds have been issued to both religious and non-religious institutions in a neutral manner. The financing in question has been made available to colleges and universities in Metro, as well as throughout Tennessee and the United States, and has been provided to a number of colleges and universities with different kinds of religious affiliations, and those without any religious affiliation. 60 In Mueller, the Supreme Court distinguished its holding in Nyquist v. Committee for Public Education and Religious Liberty, 413 U.S. 756, 93 S.Ct. 2955, 37 L.Ed.2d 948 (1973). In Nyquist, the state legislation at issue included a wide range of government financial assistance in aid of private, predominately parochial education. State money was directed for maintenance and repair of private schools. In addition, the legislation provided for both direct tuition grants and tax credits payable to parents whose children attended private schools. In Mueller, the Court noted that the outright grants in Nyquist were fundamentally different from tax deductions given to all parents of public and private school students for education related expenses. 463 U.S. at 396 n. 6, 103 S.Ct. 3062. Further, unlike the deductions approved in Mueller, the deductions at issue in Nyquist were not based on actual expenses incurred. Instead, the deductible amounts were estimated and designed to equal the dollar amount of the direct aid in the form of tuition grants available only to low income families. Id. The Court concluded that these grants did not take the form of ordinary tax benefits and constituted direct aid to religious schools. 61 In Hernandez v. Commissioner of Internal Revenue, 490 U.S. 680, 688, 109 S.Ct. 2136, 104 L.Ed.2d 766 (1989), the Court held provisions of the Internal Revenue Code permitting federal taxpayers to deduct gifts or contributions made to a variety of charitable organizations, including purely religious groups did not violate the Establishment Clause. In Hernandez, members of the Church of Scientology contended that the First Amendment prevented the IRS from deeming obligatory payments for attendance of auditing sessions as something other than a charitable contribution. Id. at 680, 109 S.Ct. 2136. The IRS contended that a mandatory payment to the church for auditing and training was not a gift, but rather a quid pro quo payment for services received and therefore not deductable. The Church of Scientology contended that the disallowance of such payments as charitable deductions violated the Establishment Clause, inter alia, by creating excessive entanglement between church and state. The Supreme Court found no excessive entanglement and, in language pertinent to the issue before this Court, stated that routine regulatory interaction which involves no inquiries into religious doctrine ... no delegation of state power to a religious body ... and no `detailed monitoring and close administrative contact' between secular and religious bodies ... does not of itself violate the non entanglement command. Id. at 696-97, 109 S.Ct. 2136 (internal citations omitted). 62 Most recently, in Zelman v. Simmons-Harris, ___ U.S. at ___, 122 S.Ct. 2460, 153 L.Ed.2d 604 (2002), the Supreme Court again distinguished its holding in Nyquist. The Zelman Court found that the school voucher program in Ohio did not violate the Establishment Clause. The Court found that the program was controlled by its holdings in Mueller, Witters, and Zobrest. As to Nyquist the Court held: 63 To the extent the scope of Nyquist has remained an open question in light of these later decisions, we now hold that Nyquist does not govern neutral educational assistance programs that, like the program here, offer aid directly to a broad class of individual recipients defined without regard to religion. 64 Zelman, 122 S.Ct. at 2472.. 65 In a concurring opinion in Zelman, Justice O'Connor explained that a government program is not constitutionally infirm solely because a substantial benefit is conferred on a religious organization. 122 S.Ct. at 2473 (O'Connor, J. concurrence). She explained: 66 Although $8.2 million is no small sum, it pales in comparison to the amount of funds that federal, state, and local governments already provide religious institutions. Religious organizations may qualify for exemptions from the federal corporate income tax, see 26 U.S.C. § 501(c)(3); the corporate income tax in many States, see, e.g., Cal. Rev. & Tax. Code Ann. § 23701d (West 1992); and property taxes in all 50 States, see K. Turner, Property Tax Exemptions for Nonprofits, 12-Oct. Probate and Property 25 (1998); and clergy qualify for a federal tax break on income used for housing expenses, 26 U.S.C. § 1402(a)(8). In addition, the Federal Government provides individuals, corporations, trusts, and estates a tax deduction for charitable contributions to qualified religious groups. See §§ 170, 642(c). Finally, the Federal Government and certain state governments provide tax credits for educational expenses, many of which are spent on education at religious schools. See, e.g., § 25A (Hope tax credit); Minn.Stat. § 290.0674 (Supp.2001). 67 Most of these tax policies are well established, see, e.g., Mueller v. Allen, 463 U.S. 388, 103 S.Ct. 3062, 77 L.Ed.2d 721 (1983) (upholding Minnesota tax deduction for educational expenses); Walz v. Tax Comm'n of City of New York, 397 U.S. 664, 90 S.Ct. 1409, 25 L.Ed.2d 697 (1970) (upholding an exemption for religious organizations from New York property tax), yet confer a significant relative benefit on religious institutions. The state property tax exemptions for religious institutions alone amount to very large sums annually. 68 Id. (parallel citations omitted). 69 Similar to the benefits at issue in Walz, Mueller, Hernandez, and now, Zelman, the bonds at issue in this case are analogous to an indirect financial benefit conferred by a religiously neutral tax or deduction.
70 The method by which the tax exempt bonds are to be issued to Lipscomb University is significant. Any institution seeking a tax exempt bond must arrange the financing by locating exclusively private lenders of the funds. The purchaser of a bond has recourse for repayment against Lipscomb University only; the holder of a bond has no recourse against the Board or Metro in the event of nonpayment. No government funds are involved in the entire transaction. The interest paid to the bond holders by Lipscomb University is not subject to federal, state or local income taxes. Since the bonds are tax exempt, Lipscomb University reaps the benefit of a lower interest rate than that paid to a lender paying income taxes on the interest received. Only by the potential loss of tax revenue does the conduit financing involve any impact on public funds. 71 Initially, we note that a governmental body must issue the bonds. While at first blush such fact would indicate governmental endorsement of religion, the reason for the issuance of the bonds by a governmental agency stems from the simple fact that the Internal Revenue Code excludes from income taxation only interest paid on industrial revenue bonds issued and approved by a state or local governmental unit. 28 U.S.C. § 147(f)(2)(A). Such qualifying bonds need not finance a governmental function (such as water or sewer lines), but may be issued to promote a variety of purposes, including economic development and higher education. Further, Tennessee law requires such bonds serve the furtherance of the educational purposes of such institution, including but not limited to classroom, laboratory, housing, administrative, physical education, and medical research and treatment facilities. Tenn.Code Ann. §§ 7-53-101(11)(A)(vii). 72 The federal government has continuously provided an exemption for interest on bonds issued by or on behalf of states and localities since the inception of a federal income tax in 1913. Tariff Act of 1913, Pub.L. No. 63-16, ch. 16, 38 Stat. 114. Although states and localities first took advantage of this exception by issuing general obligation bonds, they later issued revenue bonds to help finance private business activities for the ostensible purpose of promoting economic growth. Stuart C. Johnson, Multi-Family Housing Bonds: Can the Tax Code Provide an Efficient and Effective Low-Income Housing Program, 5 Va. Tax. Rev. 497, 498-99 (1986) (citations omitted). Congress provided for an exemption from income taxation for industrial revenue bonds issued in connection with a project intended to benefit a local economy. The Internal Revenue Service explicitly legitimized this practice in 1954. Rev. Rul. 54-106, 1954-1 C.B. 28, 28-29. 8 Such bonds have been typically issued by a governmental authority, even though such authority does not actually borrow the funds nor is such authority liable for repayment. A revenue bond is repaid solely from the revenues generated by the facilities constructed with bond proceeds. In the issuance of this type of bond, the political subdivision acts solely as a conduit for issuing the bonds. It has no obligation to use its tax revenues to finance any shortfall. Zimmerman, Limiting the Growth of Tax-Exempt Industrial Development Bonds: An Economic Evaluations (1984) (Cong. Research Serv. Rep. No. 84-37E). 73 In addition, by requiring local governmental authorities to issue tax-exempt industrial revenue bonds, Congress delegated to such governmental units an element of control over local economic development. The revenue bonds serve as a means of financing local preferences. See Clayton P. Gillette, Fiscal Federalism and the Use of Municipal Bond Proceeds, 58 N.Y.U.L.Rev. 1030 (1983) (discussing Section 103 of the Internal Revenue Code, which provides a federal tax exemption for interest earned on state and municipal bonds). 9 For example, a local government might conclude that the issuance of an industrial revenue bond to a new business could give a competitive disadvantage to an existing business which had not received such conduit financing and result in economic displacement, rather than development. 74 It is clear from the record that industrial revenue bonds are issued to a wide variety of businesses, schools, universities, charities and other organizations. It is without question that a religious organization may receive general government benefits consistent with the Establishment Clause. Zobrest v. Catalina Foothills Sch. Dist., 509 U.S. 1, 8, 113 S.Ct. 2462, 125 L.Ed.2d 1 (1993). As the Supreme Court noted in Widmar v. Vincent, 454 U.S. 263, 274, 275, 102 S.Ct. 269, 70 L.Ed.2d 440 (1981), If the Establishment Clause barred the extension of general benefits to religious groups `a church could not be protected by the police and fire departments or have its public sidewalk kept in repair'. citing Roemer v. Bd. of Pub. Works., 426 U.S. 736, 747, 96 S.Ct. 2337, 49 L.Ed.2d 179 (1976). We conclude that the issuance of tax exempt bonds on a neutral basis is the conference of a generally available governmental benefit. 75
76 In her concurrence in Zelman, Justice O'Connor reaffirmed that the modified Lemon Test is still a central tool in analysis of Establishment Clause cases noting: 77 As originally formulated, a statute passed this test only if it had a secular legislative purpose, if its principal or primary effect was one that neither advance[d] nor inhibit[ed] religion, and if it did not foster an excessive government entanglement with religion. Lemon v. Kurtzman, 403 U.S. 602, 612-613, 91 S.Ct. 2105, 29 L.Ed.2d 745 (1971) (internal quotation marks omitted). In Agostini v. Felton, 521 U.S. 203, 218, 232-233, 117 S.Ct. 1997, 138 L.Ed.2d 391 (1997), we folded the entanglement inquiry into the primary effect inquiry. This made sense because both inquiries rely on the same evidence, see ibid., and the degree of entanglement has implications for whether a statute advances or inhibits religion, see Lynch v. Donnelly, 465 U.S. 668, 688, 104 S.Ct. 1355, 79 L.Ed.2d 604 (1984) (O'CONNOR, J., concurring). The test today is basically the same as that set forth in School Dist. of Abington Township v. Schempp, 374 U.S. 203, 222, 83 S.Ct. 1560, 10 L.Ed.2d 844 (1963) ( citing Everson v. Board of Ed. of Ewing, 330 U.S. 1, 67 S.Ct. 504, 91 L.Ed. 711 (1947); McGowan v. Maryland, 366 U.S. 420, 442, 81 S.Ct. 1101, 6 L.Ed.2d 393 (1961)), over 40 years ago. 78 Zelman, 122 S.Ct. at 2475 (2002) (O'Connor, J. concurring opinion) (parallel citations omitted). 79 As to the primary purpose, industrial revenue bonds advance a clear governmental, secular interest in promoting economic and educational development. Such conduit financing also promotes economic development though the underwriting of job-producing construction projects at colleges and universities. In turn, a more educated populace is better positioned to generate new development and economic opportunity. In a case involving industrial revenue bonds for a private religious high school, this Court held in Johnson v. Economic Development Corp., 241 F.3d at 512: 80 A state's decision to assist businesses in their operation in order to create and maintain jobs — regardless of the type of businesses — `evidences a purpose that is both secular and understandable', Mueller, 463 U.S. at 395, 103 S.Ct. 3062 ... Michigan could conclude that there is a strong public interest in promoting, assisting, and retaining commercial enterprises, both sectarian and non-sectarian. 81 As to the program's primary effect, tax free revenue bonds have neither the effect of advancing or inhibiting religion, or as Justice O'Connor has put it, of `endors[ing] or disapprov[ing] ... religion.' Zelman, 122 S.Ct. at 2475 (O'Connor, J. concurrence) citing Lynch v. Donnelly, 465 U.S. at 691-92, 104 S.Ct. 1355 (concurring opinion). Metro's program, as in Mueller, `[] is made available generally without regard to the sectarian-nonsectarian, or public-nonpublic nature of the institution benefitted.' Zelman, 122 S.Ct. at 2466 citing Mueller, 474 U.S. at 487, 106 S.Ct. 748. 82 The effect of Metro's program is economic and educational development. Many states and local governments have used industrial revenue bonds to entice new, or expanded manufacturing, commercial, and educational projects. These projects, privately owned, are not financed with direct government funding, but are given preferential tax treatment through conduit financing. Lipscomb University seeks the same type of financing for the expansion of its facilities as could be sought by Walmart, Sears, or educational institutions. The Loan Agreement between the Board and Lipscomb University specifically prohibits it from using any bond-financed facilities for religious purposes. The projects Lipscomb University seeks to finance would provide no less economic development than a new store or a new manufacturing facility. 83 Further, as in the school funding program the Supreme Court upheld in Zelman, Metro's industrial revenue bond program does not present the perception of endorsement to the reasonable observer. `[T]he reasonable observer in the endorsement inquiry must be deemed aware' of the `history and context' underlying a challenged program. Zelman, 122 S.Ct. at 2469 citing Good News Club v. Milford Central School, 533 U.S. 98, 119, 121 S.Ct. 2093, 150 L.Ed.2d 151 (2001). As the Zelman Court stated: 84 Any objective observer familiar with the full history and context of the Ohio program would reasonably view it as one aspect of a broader undertaking to assist poor children in failed schools, not as an endorsement of religious schooling in general. 85 Zelman, 122 S.Ct. at 2468. 86 Similarly, in the instant case, the objective observer of Metro's industrial revenue bond program, knowing the history and context of this program, would reasonably view it as one aspect of a broader undertaking to finance economic development, not as an endorsement of religious schooling in general. Metro no more endorsed Lipscomb University than it did Wal-Mart in issuing industrial revenue bonds.