Document: 413 U.S. 734 93 S.Ct. 2868 37 L.Ed.2d 923 Richard W. HUNT, Appellant,v.Robert E. McNAIR, Governor of South Carolina, et al. No. 71—1523. Argued Feb. 21, 1973. Decided June 25, Syllabus In this action for injunctive and declaratory relief appellant challenges the Carolina Educational Facilities Authority Act as violative Establishment Clause First Amendment insofar it authorizes a proposed financing transaction involving issuance revenue bonds benefiting Baptist-controlled college. The establishes an to assist (through bonds) higher educational institutions in constructing projects, such buildings, facilities, site preparation, but not including any facility sectarian instruction or religious worship. Neither State nor is obligated, directly indirectly, pay principal interest on bonds; State's taxing power pledged implicated. All expenses also must be paid solely from revenues projects. gave preliminary approval application submitted by college, only 60% whose students are Baptists. As subsequently modified, requests used refinancing capital improvements completing dining hall. Under statutory scheme project would conveyed Authority, which lease back with reconveyance college full payment bonds. agreement contain clause obligating institution observe Act's restrictions use enabling conduct inspections. provision restrict non-sectarian use. trial court denied relief, Supreme Court affirmed. After had vacated judgment remanded case reconsideration light Lemon v. Kurtzman, 403 602, 91 2105, 29 745, other intervening decisions, adhered its earlier decision. Held: construed does not, under guidelines supra, at 612—613, S.Ct., 2111, violate Clause. Pp. 741—749. (a) purpose secular, benefits statute being available all education State, whether they have affiliation. 741 742. (b) primary effect advancing inhibiting religion. involved has no significant orientation confined secular purpose, agreement, enforced inspection provisions, forbidding 742—745. (c) foster excessive entanglement record here show that religion so permeates insure purposes necessarily lead entanglement. Authority's participate certain management decisions effect, view narrow construction Court, limiting insuring college's fees suffice meet bond payments. Absent default, leave responsibility regarding general operations. 745—749. 258 S.C. 97, 187 S.E.2d 645, Robert McCormick Figg, Jr., Columbia, S.C., appellant. Huger Sinkler, Charleston, appellees. Mr. Justice POWELL delivered opinion Court. 1 Appellant, taxpayer, brought challenge (the Act), S.C.Code Ann. § 22— 41 seq. (Supp.1971), benefit Baptist College Charleston College).1 court's denial was affirmed Carolina. 255 71, 177 362 (1970). This Earley DiCenso, Robinson 745 (1971); Tilton Richardson, 672, 2091, 790 (1971), 945, 2276, 854 (1971). On remand, position. 645 (1972). We affirm. 2 * begin setting out structure Act. established 'the Authority), 'to construction, projects . .,' 22—41.4 primarily through terms Act, may encompass related items, include 3 'any place worship connection part program school department divinity denomination.' 22—41.2(b) (Supp.1971). 4 Correspondingly, accorded powers over project, determine charged establish regulations See infra, 747—749. 5 While issued quite explicit shall obligations indirectly: 6 'Revenue provisions chapter deemed constitute debt liability political subdivision thereof pledge faith credit subdivision, payable funds herein provided therefor revenues. face statement neither obligated same thereon except portion indirectly contingently obligate levy form taxation whatever make appropriation their payment.' 22—41.10 7 Moreover, since various participates, 22—41.5 none support project. 8 January 6, 1970, proposal, issue proceeds campus designated Project) within meaning return, convey Project, without cost, then property College. bonds, Project reconveyed granted 16, 76, S.E.2d, 365. 9 present form, totaling $1,250,000, $1,050,000 applied refund short-term $200,000 completion hall facilities.2 advantage state-created authority derives relevant federal state income tax laws provide subject taxation.3 income-tax-exempt status enables instrumentality market significantly lower rate than forced if borrowed money conventional private financing. 10 Because College's one, details arrangement yet been fully worked out. But Rules Regulations adopted govern aspects. Jurisdictional Statement, Appendix C, pp. 47—51. Every between 11 'obligating Institution leased land, located thereon, worship, 101, 647. 12 To covenant honored, each allow inspections, restriction against purposes.4 further simultaneously execution trustee bank enter into Trust Indenture create, bondholders, foreclosable mortgage lien 'right, title Lease Agreement.' p. 50. 13 Our consideration appellant's claim extends proposal approved preliminarily additions contemplated Rules, courts below. II 14 we reaffirm today Committee Public Education & Religious Liberty Nyquist, 756, 2955, 948, principles our statutes three: 15 'First, legislative purpose; second, one advances inhibits .; finally, 'an government religion." U.S., 2111. 16 With recognition these more helpful signposts, consider three 'tests': A. 17 manifestly one. having legislature's declaration always fair guide true intent, makes suggestion introductory paragraph represents anything good-faith purpose: 18 'It hereby declared people increase commerce, welfare prosperity improvement health living conditions essential future generations youth given fullest opportunity learn develop intellectual mental capacities; appropriate additional means achieving required levels learning development measure assistance alternative method enable facilities structures sorely needed accomplish chapter, public good, extent manner herein.' 22—41 19 State.5 academic year 1969—1970, there were 1,548 enrolled College, addition approximately 600 night students. Of students, 95% residents who thereby receiving financial B 20 identify 'primary effect,' focus whole presently before us. Whatever initial appeal, proposition prohibits some aids affiliation consistently rejected. E.g., Bradfield Roberts, 175 291, 121, 44 L.Ed. 168 (1899); Walz Tax Comm'n, 397 664, 90 1409, 25 697 (1970); Stated another way, accepted recurrent argument aid forbidden because aspect frees spend resources ends. 21 Aid normally thought when flows pervasive substantial functions subsumed mission specifically activity otherwise substantially setting. refused strike down direct grant four colleges universities Connecticut. Chief Burger, plurality, concluded despite institutional rhetoric, pervasively sectarian, held open possibility cases: 22 'Individual can properly evaluated arise respect particular recipients evidence presented fact possess characteristics.' Id., 682, 2097. 23 Appellant introduced placing category. It members Board Trustees elected Convention, Convention transactions, charter amended Convention. likewise 'governed Catholic organizations.' 686, 2099. What little concerning qualifications faculty membership student admission, body Baptist, percentage roughly equivalent Baptists area 85, 369. basis conclude operations oriented towards rather education. 24 Nor will position providing opposed activities scope 'projects,' states 'shall include' buildings purposes. absence contrary, assume relates delimited clear financed, event too prohibition addition, indicated, every allowing inspections enforce agreement.6 For reasons, satisfied implementation religion.7 C final question posed unconstitutional degree argues become operation both inspecting participating 26 Court's plurality grounded arising varies large institution. finding entanglement, relied 'substantial character church-related' elementary schools. 616, 2113. Burger's placed considerable emphasis spent setting: 27 'Since indoctrination church-related universities, less likelihood secondary schools permeate education.' 687, 2100. 28 Although White saw distinction, he concurred judgment, stating: enough me Federal Government (is) separable function overriding importance order sustain legislation challenged.' 2136. 30 A majority Tilton, then, facts did threaten indicated above, demonstrate instrument Tilton.8 31 closer precedents contention could deeply day-to-day policy empowered Act: 32 '(g) (g)enerally, fix revise time charge collect rates, rents, charges services furnished contract person, partnership, association corporation thereof; 33 '(h) (t)o rules designate agent undertaken .' 34 These sweeping ones, realistic exercised detail, problems insignificant. 35 pointed out, 107, 651, patterned closely after Industrial Revenue Bond perhaps reason appears confer unnecessarily broad Authority. court, however, reflects interpretation practical powers: 36 'Counsel plaintiff language causes necessity, excessively operation, administration do construe (T)he basic see sufficient payments.' 108, 651. read Agreement making detailed services. Specifically, 38 'will unconditionally rentals requirements due (and) impose adequate schedule operate maintain said rental payments ..' App. 18. 39 short, Agreement, justified taking unless fails prescribed defaults obligations. Only unable take action. event, might either foreclose hand rules, charges, fees. argued former consistent Clause, now situation III 40 comes us test constitutionality proposed—rather actual—issuance specific issued, proposal—all interpreted Court—confine aspects liberal arts foreshadow Accordingly, affirm holding below constitutional case. Affirmed. 42 BRENNAN, whom DOUGLAS MARSHALL join, dissenting. 43 Carolina's constitutes constitutionally impermissible institution.1 I adhere determining questions foreclosed among 'those involvements serve essentially institutions; employ organs purposes; governmental ends, where suffice.' Abington School District Schempp, 374 203, 295, 83 1560, 1609—1610, 844 (1963) (Brennan, J., concurring); 680—681, 1417, (1970) 643, 2126, (1971) (Lemon I) (separate Brennan, J.). 45 dissent. 46 act Authority2 operated arrangement, agreed rental. amount $3,500,000, payable, interest, rents lease. sale off outstanding indebtedness College3 construct Upon requires reconvey properties free liens encumbrances. merely property. empowered, inter alia, location financed act; construct, maintain, manage, operate, lessor lessee, regulate same; contracts project; fees, thereof. words, turns control parts fiscal school—its very life's blood. 47 expressly provides 48 49 And pursuant rule-making power, rule requiring 50 S.E., 51 policing compliance included on-site act. 52 Thus, crystal clear, think, involves affairs far exceeding called struck I, supra. Johnson Sanders, 319 F.Supp. 421 (Conn.1970), aff'd, 955, 2292, 865 Indeed, extensive well end up complete least life freedom engage offer circumscribed involvement upon lose seems inescapable content courses taught monitored discharge duty ensure instruction. involve itself even point fixing tuition assure should find obligations, continued existence viable almost completely hands Thus consequent surveillance ongoing administrative relationships, inescapably entails mutually damaging Church-State involvements. 1609 649, 2129 53 contrary argument, adopts much reasoning disagreed because, case, utterly failed explain how programs kind common cases differ Pennsylvania Rhode Island invalidated I. equally applicable case: 54 'I difference telling university teach nonsecular subjects building, Island's teacher (in vice creation subsidy relationship polices teaching practices university.' 660, 2134 55 clearly controlling here. based premise, erroneous my view, Higher contained intrusions everyday institutions. opinion: 56 '(U)nlike continuing I), incidents regulation surveillance, one-time, single-purpose grant. There relationships dependencies, annual audits, analysis institution's expenditures distinguished activities.' 688, 57 'continuing dependencies,' 'annual audits,' 'government analysis,' 'regulation surveillance' core features arrangement. presents sort 'intimate dependency religiously affiliated institutions' plurality's lacking Ibid. 58 offensive Constitution involves, asserts, State. forbids official religion, tends discourage belief. many establishment grounds provided, institutions, forms assistance. McCollum Education, 333 68 461, 92 649 (1948) ('release time' program); Engel Vitale, 370 421, 82 1261, 601 (1962) (prayer reading schools); (Bible schools). dependent characterized indirect flatly refuted Sloan Lemon, 825, 2982, 939. those cases, went behind mere assertion reimbursement exemption 'substantive impact' 59 identical infirmities. forthrightly permitting avail unique ability borrow low turn, surrenders comprehensive educational, religious, conclusion compelled 'essentially 'employ(s) purposes.' therefore dissent reverse At points during litigation, made reference Free Exercise Amendment, addressed violations approach Religion Clauses interaction two Clauses. originally 'not $3,500,000 75, 362, 364. stipulation counsel secured loan $2,500,000 proposes $1,250,000 used: '(i) repay Current Fund balance (approximately $250,000) advanced Plant aforesaid; (ii) loans $800,000 incurred improvements, (iii) finance cost $200,000.' 49. (Emphasis original.) Gross Territory, possession United States, foregoing U.S.C. 103(a) (1). purposes, gross 'upon States possessions 65—253(4) Rule relating that: 'If contains repurchase instance Deed condition long Institution, voluntary grantee own premises, thereof, 101—102, 647—648. goes remove option involuntary sales: 'The provide, premises judicial sale, result foreclosure mortgage, vested purchaser fee simple thereof.' 102, 648. n. infra. Allen, 392 236, 88 1923, 1060 (1968), commented role country: 'Underlying underlying judgments preceded played playing valuable raising national knowledge, competence, experience.' 247, 1928. takes 4, Appellant's reliance misplaced. There, unrestricted federally years. contrast, lifted, seeking transferees, sale. bidding purchase outbidding prospective purchasers, speculative limitation ever afford Even acquiring presumably value 'state aid' special sort. expenditure funds, loan, parochial extending committing credit. Rather, consists, implicate credit, Authority) security favorable available. New Jersey rendered generally similar 'governmental service.' Clayton Kervick, N.J. 523, 530—531, 267 A.2d 503, 506—507 below, described 'mere conduit.' 650. afforded advance inhibit need decide whether, appellees argue, Brief Appellees 14, brings (1970), upheld local abbreviated ambiguity, burden rests church related, cf. 248, 1929, formalistic relationship. established, formal denominational render violation So concerned, showing places type noted persons (or no) No denies 'sectarian' institution—i.e., 'in propagation advancement institution.' 659, 2134, composed Budget Control Board, Governor, Treasurer, Comptroller General, Chairman Finance Senate, Ways Means House Representatives. 'all incident finances State.' 22—41.3 pertains unspecified 'capital improvements.'

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