Can the Russellville Advertising and Promotion Commission give a grant to a church group for a secular tourism event without violating the Establishment Clause?
Plain-English summary
The City of Russellville's Advertising and Promotion Commission (RAPC) collects a hotel-tax revenue stream and uses it to fund tourism-promoting events through a public grant application process. Both for-profit and non-profit groups can apply, and many of the events end up making money for the host. When religious groups began applying for grants to host secular sporting and hobby events open to the public, RAPC asked whether granting them funds would violate the First Amendment's Establishment Clause.
Senator Gregory Standridge brought the question to the AG. The AG said no, with two simple anchors:
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The events have no religious theme. Standridge's setup made clear that the religious groups would hold "secular tourism events" with "no religious theme or element that would be promoted or coerced on the public participants." Government funds are buying a secular service (event hosting and tourism promotion), not religion.
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Equal treatment. RAPC would apply the same standards to religious and secular applicants and would not let the religious applicant deposit grant money as a donation to its own coffers (the funds had to be spent on the event).
Under those facts, the funding satisfies the Lemon test (and its descendants, including the endorsement and coercion tests). And critically, Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S. Ct. 2012 (decided just two months earlier, in June 2017), held that excluding an otherwise-eligible religious organization from a generally available public benefit program purely because of its religious status violates the Free Exercise Clause. So the bigger problem for RAPC, in the AG's view, would be excluding religious applicants, not including them.
The AG flagged but did not analyze a separate Arkansas-law question: Article 12, Section 5 of the Arkansas Constitution restricts municipalities from giving public funds to private entities. The opinion noted in a footnote that direct grants (as opposed to public-purpose contracts) "might offend Ark. Const. art. 12, § 5," referencing earlier opinions on that issue. RAPC was directed to consider that question separately.
Currency note
This opinion was issued in 2017. 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.
Background and statutory framework
The A&P tax structure. Russellville, a city of the first class, established RAPC in 1999 under Ark. Code Ann. § 26-75-601 et seq. and levied a gross-receipts tax on hotels. RAPC receives only the dedicated hotel tax revenue and uses it to grant funds for events that "promote and advertise the City and its environs." Applicants describe the event, the expected out-of-town tourism, and how the funds will attract tourism. Profitability is not part of the analysis.
The Establishment Clause framework as it stood in 2017. The U.S. Supreme Court has applied at least three tests at various times to government action challenged on Establishment Clause grounds:
- The Lemon test (Lemon v. Kurtzman, 403 U.S. 602 (1971)): government action must (a) have a secular legislative purpose, (b) have a primary effect that neither advances nor inhibits religion, and (c) not foster excessive government entanglement with religion.
- The endorsement test (Justice O'Connor's reformulation): a reasonable observer must not perceive the action as endorsing religion.
- The coercion test (Justice Kennedy's): government may not coerce participation in religious activity.
The AG had previously analyzed these in Op. Att'y Gen. 2015-098 and incorporated that discussion by reference. Multiple shifting majorities meant the Court "has not been consistent on when or how these tests apply."
The Free Exercise turn in Trinity Lutheran. Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S. Ct. 2012 (June 26, 2017), reshaped the analysis. Missouri excluded religious organizations from a state grant program that resurfaced playgrounds with rubber from recycled tires. The Court held that excluding a church from a public benefit program "solely because of its religious character" violated the Free Exercise Clause. The opinion emphasized that "the Establishment Clause of [the First Amendment] does not prevent Missouri from including Trinity Lutheran in the Scrap Tire Program."
The AG opinion was issued just six weeks after Trinity Lutheran. The opinion treats Trinity Lutheran as dispositive of the federal constitutional question.
The AG's reasoning
Pass under any test. The AG concluded that the proposed funding "would pass muster under any of these tests": Lemon, endorsement, or coercion. Two facts drove that conclusion:
- The event was secular by stipulation: "no religious theme or element that would be promoted or coerced on the public participants."
- The aid was generally available on neutral terms. Religious groups were "treated the same way and held to the same standard as secular groups." They could not deposit grant funds as personal donations; receipts had to show event expenditure.
Under Lemon: the secular purpose (tourism promotion) is plain. The primary effect is funding tourism, not religion. There is no excessive entanglement because the receipt requirement is a one-time accounting check, not an ongoing inspection of religious activity.
Under the endorsement test: a reasonable observer would not see RAPC as endorsing religion. Both religious and secular applicants are eligible on the same terms.
Under the coercion test: nobody is being compelled to participate in any religious activity.
Trinity Lutheran's role. The AG cited Trinity Lutheran for the affirmative proposition that government may include religious organizations in generally available benefit programs. But the more significant deployment was as a constraint: "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." This was a warning, not just an observation. RAPC could not solve any imagined Establishment Clause problem by carving out religious applicants, because that carve-out would create a separate Free Exercise problem.
The Article 12 § 5 footnote. Standridge had not asked about Arkansas's separate constitutional restriction on municipal expenditures of public funds. Article 12, Section 5 (as amended by Amendment 97) prohibits a municipality from being "interested in any private corporation" or appropriating money to "any corporation, association, institution, or individual." The AG flagged that direct grants, as opposed to contracts serving a public purpose, "might offend" Article 12, Section 5, referencing Op. Att'y Gen. 2017-035, 2010-114, and 2007-276. This was not the question presented, so the AG did not analyze it further.
Common questions
What if the religious group did include a religious element in the event?
The AG's answer was tied specifically to events with "no religious theme or element." If a group held an event whose primary purpose was religious (e.g., a worship service, a religious revival), the analysis changes. Government funding of religious services likely fails Lemon's "primary effect" prong even after Trinity Lutheran.
Does Trinity Lutheran require including religious applicants in every grant program?
Not unconditionally. Trinity Lutheran addressed exclusion based on "religious character." Subsequent cases (notably Espinoza v. Montana Department of Revenue, 591 U.S. 464 (2020), and Carson v. Makin, 596 U.S. 767 (2022)) extended Trinity Lutheran to exclude a religious-use distinction as well. Note these later cases postdate this opinion.
What is the practical line between a "public-purpose contract" and a "grant"?
Arkansas opinions distinguish purchases of identifiable services for public benefit (which are typically permissible under Article 12 § 5) from straight gifts of public funds (which are not). A grant for a tourism event arguably looks more like a service purchase if the event delivers measurable promotional value to the city.
Could the religious group deposit grant funds to general operations?
No. Standridge's setup specifically required the religious group to provide receipts proving the funds went to the event, not to the group's general fund. The AG's analysis assumed this safeguard.
Has the U.S. Supreme Court formally abandoned the Lemon test?
The Court substantially abandoned Lemon in Kennedy v. Bremerton School District, 597 U.S. 507 (2022), which (decided after this opinion) held that Establishment Clause analysis should look to "historical practices and understandings." But under Kennedy as well, generally available, religiously neutral public benefits programs have not raised Establishment Clause concerns.
Source
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