May Russellville fund a church-run tourism event, and does the grant raise an Arkansas constitutional issue?

Plain-English summary

Senator Gregory Standridge asked whether the Russellville Advertising and Promotion Commission could fund secular sporting or hobby events run by religious groups. The stated program offered religious and secular groups equal access. Event organizers had to use the funds for the event and provide receipts. The proposed events had no religious theme or element promoted or imposed on participants.

On those facts, the Attorney General answered the federal Establishment Clause question no: funding the events would not violate that clause. She said the funding would pass the Lemon, endorsement, or coercion test discussed in an earlier opinion. She also said excluding an otherwise eligible group because of its religious status would likely violate the Free Exercise Clause. Her discussion cited Trinity Lutheran Church of Columbia, Inc.

A separate Arkansas constitutional question remained open. In a footnote, the AG said that using advertising and promotion tax funds to directly fund a private entity by grant, rather than through a contract serving a public purpose, "might offend Ark. Const. art. 12, § 5." Standridge had not asked her to decide that issue, and she did not analyze it further. The federal answer therefore did not settle whether RAPC could lawfully use a direct grant under Arkansas law.

What this means for you

If you administer an advertising and promotion fund, this opinion addresses a specific federal question about a secular event and equal access for religious applicants. Check how the money will be paid and used before treating the opinion as approval of a grant. The AG expressly left the Arkansas Constitution's restriction on direct funding of private entities unresolved.

If you apply on behalf of a religious group, the opinion says exclusion based on religious status alone would likely violate the Free Exercise Clause under the facts presented. It does not guarantee a grant or resolve Arkansas's separate limit on municipal funding.

Currency note

The opinion was issued in 2017 and discusses federal law as it stood then. Check current federal and Arkansas law before relying on it for a new funding decision.

Common questions

Q: Did the AG approve grants to churches in general?
A: No. She answered whether the described funding for public secular sporting or hobby events would violate the federal Establishment Clause. The conclusion depended on the facts supplied, including equal treatment and no religious theme or element promoted or coerced on participants.

Q: May RAPC exclude a group simply because it is religious?
A: The AG said doing so would likely violate the Free Exercise Clause. She cited Trinity Lutheran and its statement that the Establishment Clause did not prevent Missouri from including a church in its public benefit program.

Q: Does a favorable federal answer settle the Arkansas grant question?
A: No. The AG warned that a direct grant of advertising and promotion tax funds to a private entity might violate Ark. Const. art. 12, § 5. She distinguished such a grant from a contract serving a public purpose but did not decide whether RAPC's proposed payment complied with that provision.

Q: What facts about the event did the AG rely on?
A: The request described secular events open to the public, religious and secular groups held to the same standard, and receipts showing that RAPC funds paid event costs rather than becoming a donation to the group.

Background and legal framework

The request described a Russellville program funded by a tax on hotel receipts. Applicants described their event, expected tourism, and use of funds. Some events generated participation fees for their organizers. The AG confined her response to the constitutional question Standridge asked.

She referred to an earlier opinion for the history of the Lemon, endorsement, and coercion tests, then said this funding would pass under any of them on the stated facts. She did not conduct a separate detailed analysis under each test here. Her footnote on Ark. Const. art. 12, § 5 identifies a question that officials must address separately from the federal Establishment Clause issue.

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2017-045
August 9, 2017

The Honorable Gregory B. Standridge
State Senator
P.O. Box 1284
Russellville, AR 72811

Dear Senator Standridge:

This is in response to your request for an opinion regarding the expenditure of local advertising and promotion funds. You have provided the following background information, which I have slightly paraphrased:

> The City of Russellville, Arkansas ("City"), is a city of the first class. Pursuant to Ark. Code Ann. § 26-75-601 et seq., the City established an Advertising and Promotion Commission in 1999 and levied a gross receipts tax on hotels. The Russellville Advertising and Promotion Commission ("RAPC") receives that specifically levied tax money and no other city or county taxes. The RAPC has developed an application system allowing a person or entity to apply for a grant or funds from the RAPC. The person or entity's application must list how the grant or funds applied for will promote and advertise the City and its environs. The way in which the vast majority of grants or funds are spent by applicants in promoting or advertising the City is through the holding of special events in the City. The RAPC application requires provision of the person's or entity's name, how the grant or funds are to be used, what type of event the applicant is intending to have and the expected amount of out of town tourism that is to be generated from the event that receives the grant or funds. RAPC also questions the representative of the applicant to get as much detail concerning how the grant or funds will specifically be used to attract tourism to the City. Some of these events are fundraisers for non-profit or for-profit entities. Whether an entity makes a profit on a special event does not factor into the RAPC analysis of providing an entity a grant or funds. RAPC analyses focus on the use of the funds provided for the proposed special event and whether the event will bring tourism to the City, which will promote and advertise the City and its environs, as required by the State's Advertising and Promotion Law ("A&P Law").
>
> Questions have arisen concerning the legality of RAPC approving applications from religious or church groups planning to hold secular tourism events that are open to the public. Specifically, some religious groups would like to have competitive sports or hobby special events in the City open to the public to participate. These events would require a participation fee for each person to pay in order to participate in the event. These religious groups have applied to RAPC for a grant or funds to be used to defray the costs of holding the special events. The special events held by the religious groups would have no religious theme or element that would be promoted or coerced on public participants. RAPC would require that the religious groups bring receipts to RAPC indicating that any monies from RAPC is used to fund the event and not deposited in the religious group's account as a donation. The money raised by the religious group in its participation fee would be kept by the group. Any group, religious or secular, has equal access and ability under RAPC to apply for and receive funds or a grant from RAPC under this application system. Any RAPC money would be used for the purpose of defraying the cost of the proposed special events, which would promote and advertise the City by having another special event in the City to attract tourism, which would have the potential of increasing the City's sales tax revenues, which is a secular purpose. In the past, secular groups have applied for a grant or funds from RAPC to defray the costs of special events and have profited from the participation fees collected. Religious groups would be treated the same way and held to the same standard as secular groups applying for and receiving RAPC funds or grants.

You have posed the following question against this background:

> Would the funding of a religious or church group by the RAPC to defray the costs of a public secular competitive sporting or hobby event as outlined above be in violation of the Establishment Clause of the First Amendment under the Lemon test as modified over time by its progeny of cases decided since Lemon? (Hunt v. McNair, 413 U.S. 734; Roemer v. Maryland Public Works Board, 426 U.S. 736; Mueller v. Allen, 463 U.S. 388; Board of Education v. Mergens, 496 U.S. 226; Lamb's Chapel v. Center Moriches Union Free School, 508 U.S. 385; Rosenberger v. University of Virginia, 115 S. Ct. 2510; and Widmar v. Vincent, 454 U.S. 263).

RESPONSE

It is my opinion, based on the stated background regarding the particular funding at issue, that the answer to your question is "no." Simply providing this funding to a sectarian (religious or church) group for the secular events outlined in your question would not violate the Establishment Clause of the First Amendment. Indeed, declaring a particular sectarian group ineligible for the funding based on that group's religious status would likely violate the Free Exercise Clause of the First Amendment.

DISCUSSION

I have previously discussed the history of the Establishment Clause and its current application by the United States Supreme Court. In Attorney General Opinion 2015-098, I extensively analyzed the discernible standards used by the Court when addressing establishment-clause questions when government action is at issue. As stated therein, shifting majorities on the Court have established at least three different, competing standards to assess whether challenged government action violates the Establishment Clause. The three standards, or tests, persist because of the Court's stated "unwillingness" to "be confined to any single test or criterion." This unwillingness has resulted in the strict separatist approach known as the Lemon test, the endorsement test, and the coercion test.

I will not further review these tests or undertake herein to analyze the Establishment Clause jurisprudence, but instead refer you to my previous opinion for the discussion. In my opinion, the proposed funding as described in your request for my opinion would pass muster under any of these tests. You state that the funding is for "secular tourism events" and that "[t]he special events held by religious groups would have no religious theme or element that would be promoted or coerced on the public participants." I believe it can reasonably be concluded under these facts that there would be no Establishment Clause violation, regardless of which test the Court employed. Indeed, the U.S. Supreme Court recently made clear that the funding you describe does not create an Establishment Clause violation. Moreover, please note that the Free Exercise Clause of the First Amendment would likely be violated if the RAPC were to declare a given sectarian group ineligible for the funding based on that group's religious status.

(Footnote: You have not asked about the Arkansas Constitution's restriction on a municipality's expenditure of public funds. Ark. Const. art. 12, § 5; see Op. Att'y Gen. 2017-003 (discussing the recent amendment to art. 12, § 5 by Amendment 97 to the Arkansas Constitution). I consequently will not undertake a discussion of that restriction, but will simply note that the use of advertising-and-promotion tax funds to directly fund a private entity by grant, as opposed to a contract serving a public purpose, might offend Ark. Const. art. 12, § 5. Accord Ops. Att'y Gen. 2017-035, 2010-114, 2007-276.)

(Footnote: See Trinity Lutheran Church of Columbia, Inc., 137 S. Ct. at 2019 (noting that "the Establishment Clause of [the First Amendment] does not prevent Missouri from including Trinity Lutheran in the Scrap Tire Program.").)

(Footnote: See Trinity Lutheran Church of Columbia, Inc.)

Sincerely,

LESLIE RUTLEDGE
Attorney General