                         Application of Establishment Clause
                           to School “Voucher” Program

A draft bill proposing issuance o f compensatory education certificates to parents of eligible
  school children would not on its face violate the Establishm ent Clause even if the certificates
  w ould be redeem able at religious private schools.

                                                                                            February 2, 1987

           M   em orandum           O p in io n   for     A s s is t a n t A t t o r n e y G e n e r a l ,
                                        O f f ic e   of   L e g a l P o l ic y


   This memorandum records our comments on the draft Education Consolida­
tion and Improvement Act o f 1987. We focus on the Establishment Clause
concerns raised by the “compensatory education certificates” program which
would be created under § 106 of the bill. For the reasons set forth below, we
believe that the program is facially constitutional. We caution, however, that
the bill, as drafted, may be vulnerable to “as-applied” challenges under certain
circumstances.

                                                           I

   Section 106 of the bill would amend Chapter 1 of the Education Consolida­
tion and Improvement Act o f 1981 (the Act) by adding a new § 560. That
section would authorize a local educational agency (“LEA”) receiving Chapter
1 assistance to provide “compensatory education certificates” directly to the
parents of eligible children,1 in either of two circumstances. First, the LEA
could provide such certificates if it determined that to do so “would be more
effective . . . than direct service provided by the agency in meeting the needs of
[eligible] children.” Section 560(a)(1) (emphasis added). Second, the LEA
could issue such certificates if it determined that they were “needed to provide
equitable services to either public or private school children.” Section 560(a)(2).2
Section 560(b) provides that an LEA shall make such determinations about the
need for certificates “with respect to individual children, grades, schools,
   1 Section 560(h) defines “eligible c h ild ” as “an educationally deprived child selected to participate in a
local educational agency’s Chapter 1 p ro g ram ” in accordance with §§ 556(b)(1),(2) and 557 o f the Act
(cod ified at 20 U .S.C . §§ 3805(b)(1), (2 ), 3806).
   2 T hese tw o criteria, e ffective and equitable adm inistration, are already required o f C hapter 1 programs. See
2 0 U .S.C . §§ 3805(b)(4), (5), 3806

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attendance areas, or any combination thereof, or may make such certificates
available on a district-wide basis.” Section 560(b) further requires an LEA to
“apply the same criteria to public and private school children in determining
the extent to which it .will provide . .. certificates.”
   Section 560(d)(1) states that certificates may be redeemed by parents only
for “purchase [of] compensatory education services that meet the identified
educational needs of [an] eligible child.”3 Subsection (d)(2) provides that these
services may be purchased “from any public or private school, wherever
located, that the local education agency determines is able to provide appropri­
ate and effective compensatory educational services to the child.”4
   In sum, when an LEA, applying established and neutral criteria, determines
that its Chapter 1 program is functioning ineffectively and/or inequitably with
respect to any individual child or any group of eligible children, the LEA may
provide compensatory education certificates directly to the parents of such
children. The parents may then redeem the certificates for compensatory ser­
vices at the public or private school of their choice.

                                                       II

   The term “private school,” as used in the draft bill, clearly encompasses both
religious and non-religious private schools. Thus, it must be measured against
the Supreme Court’s Establishment Clause precedents dealing with aid to
religious schools. This is an extraordinarily tangled area of the law, and many
of the Court’s decisions, when read together, are all but unintelligible. Never­
theless, the draft bill is sufficiently close to the programs upheld in Witters v.
Washington Department o f Services fo r the Blind, 474 U.S. 481 (1986), and
Mueller v. Allen, 463 U.S. 388 (1983), that we believe that it survives facial
constitutional scrutiny.
   In Witters, the Court held that the Establishment Clause did not require a
state to deny vocational assistance to a blind student merely because the
student chose to apply the aid to religious training at a Bible college. Justice
Marshall, writing for the Court, found that “any aid .. . that ultimately flows to
religious institutions does so only as a result of the genuinely independent and
private choices of aid recipients.” 474 U.S. at 488 (footnote omitted). Conse­
quently, the Court found that the aid program did not have the primary effect of
advancing or inhibiting religion, and thus passed the second prong of the three-
part test announced in Lemon v. Kurtzman, 403 U.S. 602, 612-613 (1971). The
  3 The draft bill w ould establish some safeguards on the redem ption o f the certificates. Section 560(c)(1)
w ould require that the amount for which such certificates may be redeem ed m ust be one “that is equitable to
all children selected to participate” in the LE A ’s overall C hapter 1 program. Subsection (c)(2) would further
provide that the am ount that an individual parent may receive by redeem ing his or her certificate “shall not
exceed the cost o f com pensatory services incurred by the parent.” Section 560(g)(3) w ould require LEAs
applying for C hapter 1 funds to provide assurances that it w ill exercise due diligence to ensure that paym ents
made to parents are used only for authorized purposes, and to recover any m isused funds.
  4 Under § 560(e), an LEA w ould be perm itted to use C hapter 1 funds to provide transportation to children
w hose parents choose to purchase com pensatory services from schools outside the children’s attendance area.
That section w ould define such transportation expense to be “an adm inistrative cost.”

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Court noted that the parties had conceded the first prong of the test, a secular
purpose. 474 U.S. at 485-86. It declined to apply the entanglement prong until
after the lower court had an opportunity to do so itself on remand. Id. at 753 n.5.5
   In Mueller, the Court voted 5-4 to uphold a state tax deduction for educa­
tional expenses, despite the fact that over 90 percent of the tax benefits under
the statute flowed to religious school students. The Court readily found that the
statute had a secular purpose: “a State’s decision to defray the cost of educa­
tional expenses incurred by parents — regardless of the type of schools their
children attend — evidences a purpose that is both secular and understand­
able.” 463 U.S. at 395. Turning to the effects prong of the test, the Court again
emphasized the facial neutrality of the statute, together with the fact that
“public funds become available [to religious schools] only as a result of
numerous private choices of individual parents of school-age children.” 463
U.S. at 399.6 The Court found no excessive entanglement, despite the fact that
state officials were charged with disallowing deductions for materials used in
teaching religion. The Court stated simply that that type of decision did not
differ substantially from other types of decisions previously upheld, such as
those involved in textbook loan programs. 463 U.S. at 403.
   Like the programs upheld in Witters and Mueller, the draft bill has a clear
secular purpose. Moreover, it would dispense aid directly to parents pursuant to
a facially-neutral standard. As a consequence, whatever aid might flow to
religious schools (and, as a practical matter, it may resemble the proportions
present in M ueller) would do so only as a result of the individual choices of
parents. Thus, under Witters and Mueller, it would not have the impermissible
“primary effect” of advancing religion. Finally, whatever “entanglement” might
result from an LEA’s duty to approve programs and monitor funds would
approximate that sanctioned in Mueller. In sum, we think that the program
proposed in the draft bill would fit within the holdings of Witters and Mueller,
and hence be facially constitutional.
   However, neither Witters nor Mueller involved a state officer in the determi­
nation of eligibility. Therefore, we wish to caution that if an LEA distributes
certificates predominantly to religious school students — and especially if it

   5 Ju stice M arsh a ll's opinion also referred to the fact that only a small portion o f the state aid would in fact
end up in the hands o f religious schools. See 474 U.S. a t 488. However, this portion o f his analysis was
effectiv ely disavow ed by five Justices w ritin g separately. Justice Powell, join ed by C h ief Justice B urger and
Justice R ehnquist, stated that “ state program s that are w holly neutral in offering educational assistance to a
class defined w ithout reference to religion d o not violate the second part o f the Lemon . . . test, because any
aid to relig io n results from the private c h o ices o f individual beneficiaries.** Id. at 491 (Powe)l, J., concurring)
(footnote om itted). T his w as true, he said, regardless o f the percentage o f “private choices” which ultim ately
benefited religious institutions. See id. at 491 n.3. Justice O 'C o n n o r also d id not join the relevant portion of
Justice M arsh a ll's opinion. See id. at 493 (O ’Connor, J., concurring in the judgm ent and concurring in part).
Finally, Ju stice W hite reiterated his long-standing view that the “the C ourt’s decisions finding constitutional
violatio n s w here a state provides aid to private schools o r their students m isconstrue the Establishm ent
C lause and d isserv e the public interest.” Id. a t 490 (W hite, J., concurring). See also Mueller v. Allen, 463 U.S.
3 8 8 ,4 0 1 (1983) (“ W e w ould be loath to a d o p t a rule grounding the constitutionality o f a facially neutral law
on annual reports reciting the extent to which various classes o f private citizens claimed benefits under the law.”).
   6 T he C ourt also cited several “characteristics” o f the program , most notably the fact that the benefit was
available fo r all parents. See 463 U.S. at 3 9 6 -3 9 9 .

                                                           16
does so on a school-wide basis, then it risks an as-applied challenge. Justice
Powell’s opinion in Witters emphasized that, in his view, a program must be
“wholly neutral.” 474 U.S. at 490-91 (Powell, J., concurring) (emphasis added).
Likewise, in her separate opinion, Justice O’Connor stressed her own “reason­
able person” version of the Lemon test: “no reasonable observer is likely to
draw from the facts before us an inference that the state itself is endorsing a
religious practice or belief.” Id. at 493 (O’Connor, J., concurring in the judg­
ment and concurring in part); cf. Lynch v. Donnelly , 465 U.S. 668, 690 (1984)
(O’Connor, J., concurring). As a practical matter, a facially neutral program
like this one that nevertheless accords substantial discretion to state officials to
determine the availability of certificates (and which may then result in certifi­
cates being issued predominantly to religious school students by virtue of such
state rather than private decisions) might be insufficiently neutral in applica­
tion and run afoul of the considerations outlined by Justices Powell or O’Connor,
or both.
   The chances of an as-applied challenge would diminish considerably, in our
judgment, if the discretion of the LEA was more limited, thereby lessening the
involvement of the state in the determination of the availability of certificates.
In this regard, § 560 could provide that once the LEA determined that when a
given percentage of eligible students were not being effectively or equitably
served, certificates would be available on an area-wide or district-wide bases.
This change would preclude any argument that an LEA administrator had
favored religious schools by a determination under the effectiveness and
equitability standards that predominantly resulted in the parents of children
enrolled in religious schools being eligible for certificates.

                                                  D o u g l a s W . K m ie c
                                           Deputy Assistant Attorney General
                                               Office o f Legal Counsel




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