Cortez v. Independence County

David Newbern, Justice. The appellant, Robert Cortez, as a taxpayer, sought to enjoin the Independence County, Arkansas, Public Health and Education Facilities Board from issuing educational facilities bonds to finance construction and physical improvements at Arkansas College in Batesville. The appellant also sought a declaratory judgment that the board’s resolution, made pursuant to Ark. Stat. Ann. §§ 20-1701 through 20-1720 (Repl. 1962 and Supp. 1985), violated Ark. Const. art. 2, § 24; art. 12, § § 4,5; and art. 16, § 1, as well as the First Amendment to the U. S. Constitution. The issues raised by the appellant are: (1) whether the bonds lend the credit of Independence County in violation of Ark. Const. art. 12, § 5 and art. 16, § 1; (2) whether the bonds have a valid public purpose as described in Murphy v. Epes, 283 Ark. 517, 678 S.W.2d 352 (1984); and (3) whether the bonds constitute impermissible state aid to religion in view of Arkansas College’s ties with the Presbyterian Church. We hold the chancellor was correct in ruling for the appellees on each issue, and thus we affirm. 1. Pledge of Credit This point can be handled summarily by noting that the bonds state on their face that they do not pledge the faith and credit of the county. Indeed, that is a requirement of Ark. Stat. Ann. § 20-1710 (Supp. 1985) which is a part of the statutory scheme pursuant to which the bonds were issued. These bonds are to be paid by revenue (student fees and tuition) generated by the college. While the Public Facilities Board is liable on the bonds, Independence County is not. In two recent cases we have held that it is enough to assure compliance with Ark. Const. art. 16, § 1 that the bonds state they do not pledge the credit of the state or the political subdivision which created the agency issuing the bonds. Turner v. Woodruff, 286 Ark. 66, 689 S.W.2d 527 (1985); Murphy v. Epes, supra. 2. Public Purpose In Ark. Stat. Ann. § 20-1702 (Supp. 1985) the General Assembly expressed its determination that adequate “educational facilities” are essential to the public welfare and that public financing is an essential alternative means of financing them. The definition of “educational facilities” is found in § 20-1703. The General Assembly, in 1981, twice amended § 20-1703, purporting in each instance to add a subsection “u.” The first amendment, Section 2 of Act 528 of 1981, contained a long definition or description of facilities for post-secondary education. It divided them into sub-subsections entitled “Approved Private Institution” and “Approved Public Institution.” The second amendment was Section 2 of Act 827 which is now codified as § 20-1703 (v). It provides: [(v)] (u) The term “educational facilities” means real, personal and mixed property of any and every kind intended for use by an educational institution in furtherance of its educational program, including, but not limited to, dormitories, classrooms, laboratories, athletic fields, administrative buildings, utilities, equipment and other property for use therein or thereon. We need not be concerned about which of these 1981 additions is the “real” subsection “u” or “v” or which of them should have been codified. The important point is that either of them would include Arkansas College and the project to be financed there. Nor is there any indication that by creating the second amendment the General Assembly intended to withdraw participation of private colleges. If Act 827 repealed Act 528 and was substituted for it, it was substituted in place of Act 528’s references to both “Approved Private Institution” and “Approved Public Institution.” If we were to hold that private institutions were thus eliminated from participation we would have to say public institutions were eliminated as well, and that was obviously not the legislative intent. Further evidence of legislative approval of . bonds for financing higher educational facilities is found in § 20-1704.1 which empowers public facilities boards to include “facilities for post-secondary education” in public facilities projects. In addition we made it clear in Turner v. Woodruff, supra, that education, in general, is a legitimate public purpose. 3. Religious Establishment or Entanglement Arkansas College is unquestionably related to the Presbyterian Church. It was founded by that denomination, and a majority of the members of its board are Presbyterians. There is a chapel on the campus where the minister, who is employed by the College, conducts weekly religious services. A three-hour course called “Introduction to the Bible” is required for graduation. It is otherwise a typical small liberal arts college. The three-hour Bible course constitutes only 2 percent of the 128 credits required for graduation. The project to be financed by the bonds includes such items as renovating buildings, asphalting parking lots, and fencing. Perhaps the most questionable item from an “establishment” or “entanglement” perspective is that a building known as “Brown’s Chapel” will have its parking lot resurfaced. It is a building which is devoted to many educational purposes, but it contains the room with 80 seats in which weekly religious services are held. Testimony showed that weekly attendance usually amounts to six students. The building also has a 550-seat auditorium and houses other activities such as music instruction. The large auditorium is available for rental to the public for lectures, theatrical performances and other such activities. Ark. Const, art. 2, § 24, says in part, “. . . no preference shall ever be given, by law, to any religious establishment, denomination or mode of worship above any other.” Aid to Arkansas College gives no preference to the Presbyterian faith over any other. Any college sponsored by a church would be entitled to the same kind of bond issue if all statutory requirements were met. A more serious question arises under the First Amendment to the U. S. Constitution and the U. S. Supreme Court decisions interpreting it. The appellant relies on Lemon v. Kurtzman, 403 U.S. 602 (1971), for his argument that issuance of the bonds will result in “excessive entanglement” of government and religion. That case involved direct subsidies paid by Rhode Island and Pennsylvania to secular schools. The Supreme Court particularly noted the danger in supporting institutions sponsored by churches in which impressionable elementary school students are taught “secular” subjects in an atmosphere pervaded by religion. On the other hand, in Hunt v. McNair, 413 U.S. 734 (1973), the Supreme Court rejected a First Amendment challenge to South Carolina’s legislation permitting assistance to higher education institutions in financing capital improvements. At issue in that case was financial assistance to a Baptist-sponsored college through the issuance of revenue bonds by the South Carolina Educational Facilities Authority. The South Carolina legislation, which was very similar to the Arkansas legislation discussed above, stated its purpose was to assist “institutions for higher education and the construction, financing and refinancing of projects.” S. C. Code Ann. § 22-41.4 (Supp. 1971). See 413 U.S. at 736. As the appellee points out, the most significant difference between the Hunt case and this one is that Baptist College at Charleston’s student enrollment was 60 percent Baptist while the Presbyterian enrollment of Arkansas College is only 7.5 percent. It is clear to us that the U. S. Supreme Court would not regard the statutes authorizing the bonds in question here as being violative of the First Amendment. The Supreme Court’s test is: First, the statute must have a secular purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion . . . , finally, the statute must not foster “an excessive government entanglement with religion.” [Lemon v. Kurtzman, supra, 403 U.S. at pp. 612-613; Hunt v. McNair, supra, 413 U.S. at p. 741.] We do not ignore the argument that the tax savings on public revenue bonds frees money which might otherwise have to be spent on “secular” improvements for possibly “sacred” uses. Nor do we lightly put aside the argument that a building in which religious services are held will be enhanced by the project. However, we are.convinced the U. S. Supreme Court cases require us to say these arguments are insignificant in view of the primarily secular purpose of the legislation and its effect here which is to foster liberal arts higher education rather than the establishment of any particular religion or of religion in general. We have reviewed the Supreme Court’s most recent cases in this area and find them to be irrelevant as they address situations far more akin to Lemon v. Kurtzman, supra, than to Hunt v. McNair, supra, and the case before us now. See Aquilar v. Felton, No. 84-237 decided July 1, 1985, and School District of the City of Grand Rapids v. Ball, No. 83-990, decided July 1, 1985. Affirmed. Purtle, J., not participating. Hickman, J., dissents.