Can Tennessee bar religious and political nonprofits from partnering with the state Department of Safety without violating the Constitution?

Subject

Opinion No. 12-29, Exclusion of Religious or Political Nonprofit Organizations from Certain State Contracts, March 2, 2012

Plain-English summary

In 2012, the Tennessee General Assembly was considering Senate Bill 2237 / House Bill 2375. The bill would have authorized the Department of Safety and Homeland Security to enter into "partnership agreements" with nonprofits to support law enforcement, safety education, motorist services, disaster preparedness, and marketing. The bill imposed significant strings on these "nonprofit partners," including governor-approved board elections, annual reports to the legislature, Comptroller audits, open board meetings, and pre-adoption review of the nonprofit's charter.

A proposed amendment would have excluded religious organizations, organizations affiliated with religious organizations, political organizations, and organizations affiliated with political organizations from being these nonprofit partners. Representative Terri Lynn Weaver asked whether that exclusion was constitutionally defensible. The AG said yes.

The opinion's reasoning for religious organizations leaned on the Establishment Clause's anti-entanglement principle. Because the bill imposed ongoing state oversight (board approval, audits, charter review), letting a religious nonprofit participate would arguably create excessive entanglement between the state and religion. Excluding them avoided that. For political organizations, the analysis turned on equal protection's rational basis test, because political organizations are not a suspect class and the regulation did not, on the AG's read, impair a fundamental right. The state had a rational basis for not wanting to be heavily involved in a partisan organization's governance.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical background and statutory framework

The proposed partnership statute

SB 2237 / HB 2375 authorized the Department of Safety and Homeland Security "to enter into partnership agreements with nonprofit organizations for the purpose of promoting and supporting the goals and objectives of the agency including, but not limited to, law enforcement, safety education, motorist services, disaster preparedness and prevention, and marketing opportunities."

The bill imposed numerous requirements on partnering nonprofits:

• Section 1(2): boards of directors elected by a process approved by the governor or governor's designee
• Section 1(4): incorporated under Tennessee law and recognized as a 26 U.S.C. § 501(c)(3) tax-exempt entity
• Section 1(5): annual reports to the governor and speakers of both legislative chambers
• Section 1(6): annual audits by the Comptroller of the Treasury (or a Comptroller-approved CPA)
• Section 1(7) and (8): board meetings open to the public (with exceptions), expenditures available for public inspection
• Section 1(9): proposed charter and amendments submitted to the Comptroller for review before adoption

The proposed amendment

A pending amendment would have excluded from partnership any nonprofit that was tax-exempt under specified sections of the Internal Revenue Code as a religious organization, an organization affiliated with a religious organization, a political organization, or an organization affiliated with a political organization.

Religious organization analysis

The opinion walked through the Establishment Clause cases — Roemer v. Bd. of Pub. Works of Md., 426 U.S. 736 (1976); Lemon v. Kurtzman, 403 U.S. 602 (1971); Agostini v. Felton, 521 U.S. 203 (1997). Under Lemon's three-part test, a statute must have a secular legislative purpose, must neither advance nor inhibit religion, and must not foster excessive entanglement with religion. The third factor was the AG's hook.

The proposed legislation's ongoing oversight regime, including governor-approved board elections, charter review, audits, and reports, would have constituted "comprehensive, discriminating, and continuing state surveillance" of a religious nonprofit if one were allowed to participate. That's the entanglement concern Lemon warned about. Lemon, 403 U.S. at 619-20. The opinion also cited Locke v. Davey, 540 U.S. 712 (2004), where the Supreme Court upheld Washington State's exclusion of devotional theology from a state scholarship program against a Free Exercise challenge. And Roemer itself, 426 U.S. at 755-59, said a state may exclude "pervasively sectarian" institutions from publicly funded aid programs to maintain Establishment Clause compliance.

The conclusion: the exclusion was facially neutral toward religion (treated all religious nonprofits the same), not motivated by hostility toward religion, and aimed at avoiding entanglement. That made it defensible.

Political organization analysis

For political organizations, the Religion Clauses don't apply. The relevant question was equal protection. Because political organizations are not a suspect class and (in the AG's view) no fundamental right of the organization was substantially impaired by being excluded from this specific contracting program, rational basis review applied. Heller v. Doe, 509 U.S. 312, 320 (1993).

The opinion identified a rational basis: it would be problematic for the state to specify how a politically affiliated nonprofit elected its board, to review and comment on the nonprofit's charter, and to require detailed annual reports on its operations, particularly since the reviewing officials might belong to a competing political party. Avoiding those entanglements was rational.

The opinion noted in passing that regulating political organizations could "raise first amendment or assembly concerns, thereby triggering a heightened scrutiny of the regulatory statute." But it concluded there was no evidence of such impact in this exclusion.

Common questions

Could the legislature have written this exclusion narrower, like only excluding "pervasively sectarian" religious groups?

In theory, yes. The Roemer line of cases would have permitted a narrower exclusion targeted at organizations whose central purpose was religious. But the legislature opted for a blanket rule covering all § 501(c)(3) religious organizations and any affiliated organizations. The AG didn't object to that breadth; the bright line was easier to administer and arguably reduced administrative entanglement on the front end.

Did the opinion say a state must exclude religious nonprofits from these partnerships?

No. The opinion only said the exclusion was constitutionally defensible. The Establishment Clause didn't require the exclusion; the legislature could have, with appropriate structuring, allowed religious nonprofit partners. But because the bill's particular oversight regime threatened excessive entanglement, the legislature was free to head off that risk by excluding religious entities entirely.

Did the AG worry about Free Exercise objections from religious groups being excluded?

The opinion touched on Free Exercise via Locke v. Davey, where the Court upheld a state's choice not to fund devotional theology even though it funded other post-secondary studies. That decision supported the proposition that a state can decline to fund or partner with religious entities to maintain its own constitutional separation, without violating Free Exercise. The opinion did not dwell on this point.

What about excluding "affiliated" organizations? Wasn't that overinclusive?

The proposed amendment reached not just religious and political organizations themselves but any organization "affiliated with" them. The AG did not flag overinclusiveness as a problem; the opinion treated the affiliation language as part of the blanket exclusion it found defensible.

Did the opinion address whether the underlying bill, with all its oversight strings, was itself constitutional?

Only obliquely. The opinion took as a given that the bill's oversight requirements were what they were, and used them as the reason entanglement concerns existed for religious nonprofits. The opinion did not separately evaluate, for example, whether requiring governor approval of a nonprofit's board elections might raise constitutional questions in its own right.

Citations

• 26 U.S.C. § 501(c)(3) (tax-exempt charitable organizations)
• U.S. Const. amend. I (Establishment and Free Exercise Clauses)
• U.S. Const. amend. XIV (Equal Protection)
• Roemer v. Bd. of Pub. Works of Md., 426 U.S. 736 (1976)
• Lemon v. Kurtzman, 403 U.S. 602 (1971)
• Agostini v. Felton, 521 U.S. 203 (1997)
• Cantwell v. Connecticut, 310 U.S. 296 (1940)
• Cnty. of Allegheny v. ACLU, 492 U.S. 573 (1989)
• Lee v. Weisman, 505 U.S. 577 (1992)
• Bowen v. Kendrick, 487 U.S. 589 (1988)
• Widmar v. Vincent, 454 U.S. 263 (1981)
• Locke v. Davey, 540 U.S. 712 (2004)
• Strout v. Albanese, 178 F.3d 57 (1st Cir. 1999)
• Columbia Union College v. Clarke, 159 F.3d 151 (4th Cir. 1998)
• Heller v. Doe, 509 U.S. 312 (1993)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2012/op12-029.pdf

Original opinion text

Exclusion of Religious or Political Nonprofit Organizations from Certain State Contracts

QUESTION

Would the exclusion of all religious or political nonprofit organizations, including any affiliated organizations, from entering into partnership or contractual agreements with the Department of Safety and Homeland Security, as set forth in Senate Bill 2237/House Bill 2375 of the 107th General Assembly, be constitutionally suspect?

OPINION

No. The blanket exclusion of all religious or political nonprofit organizations, including any affiliated organizations, from entering into a partnership or contractual agreement with the Department of Safety and Homeland Security is constitutionally defensible.

ANALYSIS

This request concerns pending legislation that would authorize the Department of Safety and Homeland Security "to enter into partnership agreements with nonprofit organizations for the purpose of promoting and supporting the goals and objectives of the agency including, but not limited to, law enforcement, safety education, motorist services, disaster preparedness and prevention, and marketing opportunities." Senate Bill 2237/House Bill 2375 of the 107th General Assembly (hereinafter "SB2237").

This legislation imposes numerous restrictions upon the "nonprofit partners." Id. Section 1, Subsections (2) - (9). For example, "the nonprofit partners shall have their boards of directors elected by a process approved by the governor or the governor's designee." Id. Section 1, Subsection (2). The nonprofit partners must be "properly incorporated under the laws of this state," and be approved as an organization that is exempt from federal income tax under 26 U.S.C. § 501(c)(3). Id. Section 1, Subsection (4). Furthermore

[t]he nonprofit partners shall annually submit to the governor, the speakers of the senate and the house of representatives, within ninety (90) days after the end of their fiscal year, a complete and detailed report setting forth their operation and accomplishments.

Id. Section 1, Subsections (5). (On its face, subsection (5) does not limit the detailed report solely to information regarding any grant or contract issued pursuant to this legislation).

SB2237 provides that the "annual reports and all books of accounts and financial records of all funds received by grant, contract or otherwise from state, local or federal sources shall be subject to audit annually by the comptroller of the treasury" or, with specific approval of the comptroller, by a licensed independent public accountant. Id. Section 1, Subsection (6). The "full board meetings of a nonprofit organization concerning activities authorized by this section shall be open to the public, except for [certain specified] executive sections." And "the expenditures of a nonprofit organization relating to activities authorized by this section shall be open for public inspection upon specific request to the nonprofit organization." Id. Section 1, Subsection (7) & (8). Finally, "[t]he proposed charter and any proposed amendments of a nonprofit organization shall be submitted to the comptroller of the treasury for review and comment prior to the adoption of any such charter or amendments." Id. Section 1, Subsection (9). The legislation does not specify sanctions for a nonprofit partner's failure to comply with any of the foregoing requirements.

A proposed amendment to this pending legislation would add to Section 1 an exclusion that no partnership or contractual agreement shall be entered into with any nonprofit entity that is tax exempt under specified sections of the United States Internal Revenue Code as a religious organization, an organization that is affiliated with a religious organization, a political organization, or an organization that is affiliated with a political organization. This request addresses whether this exclusion would be constitutionally suspect.

With regard to the exclusion of religious organizations, the constitutional provisions most probably implicated would be the Religion Clauses — the Establishment and the Free Exercise Clauses — of the First Amendment to the United States Constitution, which provide: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof." These clauses apply equally to state legislatures under the due process clause of the Fourteenth Amendment to the United States Constitution. See Roemer v. Board of Public Works of Maryland, 426 U.S. 736, 743 n.6 (1976); Cantwell v. Connecticut, 310 U.S. 296, 303 (1940). The Establishment Clause prevents the government from promoting any religious doctrine or organization or affiliating itself with one. County of Allegheny v. American Civil Liberties Union, 492 U.S. 573, 589 (1989). The Establishment Clause "is a specific prohibition on forms of state intervention in religious affairs." Lee v. Weisman, 505 U.S. 577, 591 (1992). The United States Supreme Court has enforced a scrupulous neutrality by the State, as among religions, and also between religious and other activities, but a hermetic separation of the two is an impossibility it has never required. . . . Neutrality is what is required. The State must confine itself to secular objectives, and neither advance nor impede religious activity. Roemer, 426 U.S. at 745-46.

Typically the provision of state funds to support a religious activity or entity is challenged as violative of the Establishment Clause. See id. at 745-67. In the context of addressing the constitutionality of statutes affording state aid to church-related schools, the Court utilizes a three-part test for the validity under the Establishment Clause:

First, the statute must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion. Board of Education v. Allen, 392 U.S. 236, 243, 88 S. Ct. 1923, 1926, 20 L. Ed.2d 1060 (1981); finally the statute must not foster 'an excessive governmental entanglement with religion.' Walz, supra at [397 U.S. 664], at 674, 90 S.Ct. 1414 [1970].

Lemon v. Kurtzman, 403 U.S. 602, 612-13 (1971). See also Glassman v. Arlington County, 628 F.3d 140, 146 (4th Cir. 2010). In Agostini v. Felton, 521 U.S. 203, 222-24 (1997), the Court modified the Lemon test by determining that entanglement also could be considered an aspect of the second prong's "effect" inquiry, and finding that to be valid a governmental program must not create excessive entanglement. The Court has noted that the factors in Lemon are "no more than helpful signposts" and has at times looked to other factors, such as a balancing test between the tradition of religion in our nation's history versus our nation's stated desire to maintain a division between church and state. Van Orden v. Perry, 545 U.S. 677, 684-85 (2005) (quoting Hunt v. McNair, 413 U.S. 734, 741 (1973)). The Court nonetheless has generally continued to recognize and utilize the Lemon "helpful signposts" in evaluating claims that government action violates the Establishment Clause. McCreary County v. Am. Civil Liberties Union, 545 U.S. 844, 859-60 (2005).

In assessing excessive entanglement, the Court looks to the "character and purposes of the institutions that are benefited [or involved], the nature of [any] aid that the State provides, and the resulting relationship between the government and the religious authority." Lemon, 403 U.S. at 615 (emphasis added). Excessive entanglement may exist when a program imposes a scheme of "comprehensive, discriminating, and continuing state surveillance" that requires the government to stay enmeshed in the religious entity's affairs on an ongoing basis. Id. at 619-20. See also Agostini, 521 U.S. at 233; Bowen v. Kendrick, 487 U.S. 589, 615-17 (1988).

Preventing excessive entanglement with religion may be characterized as a compelling state interest. Widmar v. Vincent, 454 U.S. 263, 271 (1981). But see Hartmann v. Stone, 68 F.3d 973, 979-83 (6th Cir. 1995). A state's decision to not fund devotional theology instruction as part of post-secondary student aid was found not to violate the Free Exercise Clause. Locke v. Davey, 540 U.S. 712, 718-26 (2004). See also Strout v. Albanese, 178 F.3d 57 (1st Cir. 1999); Columbia Union College v. Clarke, 159 F.3d 151 (4th Cir. 1998), cert. denied, 527 U.S. 1013 (1999) (finding that a state's compelling interest in enforcing the Establishment Clause allowed it to exclude a "pervasively sectarian" college from receiving publicly funded financial aid).

The application of these principles to the proposed amendment at issue leads this Office to conclude the amendment is constitutionally defensible under the Establishment Clause. The proposed amendment excludes any religious organization or any organization affiliated with a religious organization from being a "nonprofit partner" with the Department of Safety and Homeland Security for the activities authorized by SB2237. All religious and religious-affiliated nonprofit organizations are treated the same and are excluded. On its face, this exclusion does not appear to be based upon any hostility toward religion, but rather can be characterized as an attempt to avoid an excessive entanglement or improper affiliation with religion. As set forth above, the pending legislation mandates numerous requirements applicable to the "nonprofit partners," including requirements for oversight of the appointment process for the board of directors, open board meetings in certain circumstances, review of any charters and charter amendments, annual reports on the entities operations and accomplishments, and annual audits. These on-going requirements could be construed as being an excessive entanglement or improper affiliation between the Department of Safety and Homeland Security and a religious or religious-affiliated organization if allowed to operate as a "nonprofit partner" for the activities authorized by this legislation.

Furthermore, the exclusion of any political or politically affiliated organization from entering into partnership or contractual agreements will be upheld under a Fourteenth Amendment equal protection analysis if there is any conceivable rational basis for the classification, given the classification of political organizations in this proposed amendment free speech impacts neither a fundamental right nor suspect class. See Heller v. Doe, 509 U.S. 312, 320 (1993). While it is true that the regulation of political organizations could raise first amendment or assembly concerns, thereby triggering a heightened scrutiny of the regulatory statute, in this case there is no evidence of any such impact. Thus, in light of the restrictions on the "nonprofit partners" in SB2237, there is a rational basis for excluding political and politically affiliated nonprofit organizations from participating in a program with the oversight and reporting requirements set forth above, which could involve oversight by a competing political party. For example, it could be problematic for the government to specify the procedures for a politically-affiliated nonprofit organization to elect its board of directors, to preview and comment upon any charter enactments or amendments of that organization, and to require the filing of a detailed annual report setting forth the politically affiliated organization's operation and its accomplishments.

This Office perceives of no further constitutional infirmity to this proposed amendment. Thus, as discussed herein, it is the opinion of this Office that the proposed amendment which would add an exclusion providing that no partnership or contractual agreement shall be entered into with any religious or political organizations, or any affiliate organizations, is constitutionally defensible.

ROBERT E. COOPER, JR.
Attorney General and Reporter

WILLIAM E. YOUNG
Solicitor General

STEVEN A. HART
Special Counsel

Requested by:
The Honorable Terri Lynn Weaver
State Representative
105 War Memorial Building
Nashville, TN 37243