Religious Restrictions on Capital Financing for Historically Black Colleges And Universities
| Decision Date | 15 August 2019 |
| Docket Number | 19-6 |
| Citation | 43 Op. O.L.C. 1 |
| Court | Opinions of the Office of Legal Counsel of the Department of Justice |
| Parties | Religious Restrictions on Capital Financing for Historically Black Colleges And Universities |
The restriction in 20 U.S.C. § 1066c(c) on the Department of Education's authority to guarantee loans for capital improvements at historically black colleges and universities “in which a substantial portion of its functions is subsumed in a religious mission” violates the Free Exercise Clause of the First Amendment.
The remaining restrictions in the statute can, and must, be construed to avoid further conflict with the Free Exercise Clause. We thus read section 1066c(c) and 20 U.S.C. § 1068e(1) to deny loans under the program only for facilities that are predominantly used for devotional religious activity, or for facilities that are part of an HBCU, or part of a department or branch of an HBCU, that offers only programs of instruction devoted to vocational religious education.
HENRY C. WHITAKER Deputy Assistant Attorney General Office of Legal Counsel.
MEMORANDUM OPINION FOR THE ACTING GENERAL COUNSEL DEPARTMENT OF EDUCATIONUnder the Historically Black Colleges and Universities Capital Financing Program, the Department of Education guarantees loans that fund capital improvements at historically black colleges and universities (“HBCUs”). See 20 U.S.C. ch. 28, subch. III, pt. D, §§ 1066-1066g (“Part D”). Congress provided, however, that such loans may not be made “for any educational program activity or service related to sectarian instruction or religious worship or provided by a school or department of divinity or to an institution in which a substantial portion of its functions is subsumed in a religious mission.” Id. § 1066c(c). Congress separately barred the Department of Education from using appropriations for HBCU programs, including the capital-financing program, for “a school or department of divinity or any religious worship or sectarian activity.” Id. § 1068e(1).
Your office has asked whether those restrictions are consistent with the Free Exercise Clause of the First Amendment. See Letter for Steven A. Engel, Assistant Attorney General, Office of Legal Counsel, from Steven Menashi, Acting General Counsel, Dep't of Education at 1 (Dec. 11, 2017) (“ED Letter”).[1] The Supreme Court set forth the framework for reviewing such restrictions in Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S.Ct. 2012 (2017), and Locke v. Davey, 540 U.S. 712 (2004). Those cases establish that the government may not deny generally available funding to a sectarian institution because of its religious character. Religious institutions have the right to participate in such programs on the same terms as secular institutions. At the same time, the government does have general discretion to choose what activities to fund, and that includes the discretion not to fund certain religious uses of funds, such as the training of clergy.
Applying these standards to the restrictions at issue here, we agree that the final portion of section 1066c(c), which denies loans under this program to an institution “in which a substantial portion of its functions is subsumed in a religious mission, ” discriminates based on the religious character of an institution and does not comply with the Free Exercise Clause. We also agree that the balance of the restrictions can, and must, be construed to avoid further conflict with the Free Exercise Clause. We thus read sections 1066c(c) and 1068e(1) to deny loans under the program only for facilities that are predominantly used for devotional religious activity, or for facilities that are part of an HBCU, or part of a department or branch of an HBCU, that offers only programs of instruction devoted to vocational religious education. See 20 U.S.C. § 1003(15). So construed, those restrictions do not deny loan support because of an HBCU's religious character.
The HBCU capital-financing program authorizes the Secretary of Education “to enter into insurance agreements . . . to guarantee the full payment of principal and interest on qualified bonds.” 20 U.S.C. § 1066b(a). The Secretary designates a “qualified bonding authority” to issue bonds [ 2] backed by the federal government; the bonding authority then uses the bond proceeds to fund loans to HBCUs for certain capital projects. Id. § 1066b(b). The loans are thus made directly by the bonding authority, but the Department of Education guarantees the repayment of the loan. The agreement between the Department of Education and the current bonding authority, Rice Financial Products Company (“Rice Financial”), makes Rice Financial responsible for most aspects of the program's day-to-day administration, including “all aspects of” evaluating proposals, approving construction schematics and schedules, validating cost estimates, disbursing funds, and collecting interest payments. See Agreement to Insure as Between the Department of Education of the United States and Rice Securities, LLC, d/b/a Rice Financial Products Company, Designated Bonding Authority at 21 (Aug 19, 2009) (“Bond Agreement”). Rice Financial is also responsible for ensuring that capital-improvement loans are allocated “among as many” qualifying HBCUs “as possible.” Id.
An HBCU is defined as “any historically Black college or university that was established prior to 1964, whose principal mission was, and is, the education of Black Americans, ” and that meets other accreditation standards. 20 U.S.C. § 1061(2). More than 100 institutions of higher education qualify as HBCUs. E-mail for Henry C. Whitaker, Office of Legal Counsel, from Jed Brinton Dep't of Education, Re: HBCU capital financing program (Jan. 30, 2018 10:35 AM) (“Jan. 30 Brinton E-mail”).
In establishing the HBCU capital-financing program in 1992, Congress found that “a significant part of the Federal mission in education has been to attain equal opportunity in higher education for low-income, educationally disadvantaged Americans and African Americans, ” 20 U.S.C. § 1066(1), and that “the Nation's historically Black colleges and universities . . . have an unparalleled record of fostering the development of African American youth, ” id. § 1066(2). Congress also found that, for a variety of reasons, HBCUs “often lack access to the sources of funding necessary to undertake the necessary capital improvements.” Id. § 1066(4). “Federal assistance to facilitate low-cost capital, ” Congress found, “will enable such colleges and universities to continue and expand their educational mission and enhance their significant role in American higher education.” Id. § 1066(6).
The HBCU capital-financing program funds a broad range of capital projects, including the repair, renovation, or acquisition of a classroom facility, library, laboratory, dormitory, “or other facility customarily used by colleges and universities for instructional or research purposes or for [ 3] housing students, faculty, and staff.” Id. § 1066a(5)(A). The program also covers administrative facilities, student centers, equipment, health centers, and more. Id. § 1066a(5)(B)-(H). You have informed us that recent, representative projects have included academic buildings, wellness centers, and student unions, and that loans are project-specific rather than institution-specific. E-mail for Henry C. Whitaker, Office of Legal Counsel, from Jed Brinton, Dep't of Education, Re: HBCU capital financing program (Jan. 19, 2018 5:28 PM). “[A]bout half of the more than 100 HBCUs have significant religious roots” and several are denominational seminaries. Jan. 30 Brinton E-mail.
As noted, the program is subject to two religious-funding restrictions. First, no loans may be made under Part D “for any educational program, activity or service related to sectarian instruction or religious worship or provided by a school or department of divinity or to an institution in which a substantial portion of its functions is subsumed in a religious mission.” 20 U.S.C. § 1066c(c). Second, “[t]he funds appropriated under section 1068h of [title 20] may not be used . . . for a school or department of divinity or any religious worship or sectarian activity.” Id. § 1068e(1).[2]Rice Financial's Bond Agreement entrusts it with responsibility to ensure that each qualifying institution and capital-improvement loan satisfies these statutory requirements, which are incorporated into the agreement. See Bond Agreement at 7, 10, 21.
The Religion Clauses of the First Amendment provide that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” U.S. Const. amend. I. These Clauses generally “require the state to be a neutral in its relations with groups of religious believers and non-believers, ” and mandate that government power “is no more to be used so as to handicap religions than it is to favor them.” Everson v. Bd. of Educ., 330 U.S. 1, 18 (1947). That neutrality principle is [ 4] not absolute. Government officials may publicly acknowledge religion, such as through legislative prayer, consistent with long-standing traditions and practices of this country. See, e.g., Town of Greece v. Galloway, 572 U.S. 565, 575-76 (2014). The government may also accommodate religious practice through laws that explicitly refer to, and account for, the exercise of religion. See e.g., Cutter v. Wilkinson, 544 U.S. 709, 719-20 (2005). And in some instances, the Clauses may require such an accommodation. See Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 565 U.S. 171, 188-90 (2012). But a permissible accommodation stands on a very different footing from “[a] law burdening religious practice that is not neutral or not of general application.” Church of the Lukumi Babalu Aye, Inc. v. City...
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