GOLDSBORO CHRISTIAN SCHOOLS, INC., PETITIONER V. UNITED STATES OF AMERICA BOB JONES UNIVERSITY, PETITIONER V. UNITED STATES OF AMERICA No. 81-1 No. 81-3 In the Supreme Court of the United States October Term, 1981 On Writs of Certiorari to the United States Court of Appeals for the Fourth Circuit Brief for the United States TABLE OF CONTENTS Opinions below Jurisdiction Statutes and regulations involved Statement: A. Bob Jones University -- No. 81-3 B.Goldsboro Christian Schools -- No. 81-1 Summary of argument Argument: I. The language and legislative history of Section 501(c)(3) show that the Commissioner does not have the discretion to deny tax-exempt status to otherwise exempt organizations for failure to conform to national policy with respect to racial discrimination II. Should the Court disagree with our view that the Commissioner lacked authority to deny exemptions to petitioners on national policy grounds, the exercise of such authority here did not violate petitioners' right to free religious belief and exercise under the First Amendment Conclusion OPINIONS BELOW No. 81-1. The order of the district court (Pet. App. 5a-18a) is reported at 436 F.Supp. 1314. The opinion of the court of appeals (Pet. App. 1a-3a) is not reported. No. 81-3. The opinion and order of the district court dated December 26 1978 (Pet. App. A38-A71) are reported at 468 F.Supp. 890. The opinion and order of the district court dated May 14, 1979 (Pet. App. A72-A86) are not reported. The opinion of the court of appeals (Pet. App. A1-A37) is reported at 639 F.2d 147. JURISDICTION No. 81-1. The judgment of the court of appeals (Pet. App. 53a) was entered on February 24, 1981, and the court of appeals denied a timely petition for rehearing and suggestion for rehearing en banc on April 7, 1981 (Pet. App. 55a). The petition for a writ of certiorari was filed on July 2, 1981, and was granted on October 13, 1981, to be consolidated with No. 81-3. The jurisdiction of this Court rests on 28 U.S.C. 1254(1). No. 81-3. The judgment of the court of appeals was entered on December 30, 1980 (Pet. App. A1). The order denying a petition for rehearing was entered on April 8, 1981 (Pet. App. A100-A101). The petition for a writ of certiorari was filed on July 1, 1981, and was granted on October 13, 1981, to be consolidated with No. 81-1. The jurisdiction of this Court rests on 28 U.S.C. 1254(1). STATUTES AND REGULATIONS INVOLVED The relevant statutory and regulatory provisions are Sections 170(a), 170(c), 501(a), 501(c)(3), 3121(b)(8)(B) and 3306(c)(8) of the Internal Revenue Code of 1954 (26 U.S.C.), and Section 1.501(c)(3)-1(d) of the Treasury Regulations on Income Tax (26 C.F.R.). QUESTIONS PRESENTED 1. Whether the Internal Revenue Service had authority under Section 501(c)(3) of the Internal Revenue Code of 1954 to revoke the petitioners' tax-exempt status on grounds that private schools operated by petitioners had racially discriminatory policies and practices that contradicted national policy. 2. If the Service was authorized to enforce national policy in this manner, does the fact that the petitioners' practices were based on religious doctrine prevent the revocation action under the First Amendment. /*/ STATEMENT A. Bob Jones University -- No. 81-3 1. Petitioner Bob Jones University is a nonprofit organization incorporated in 1952 under the laws of South Carolina "for the general education of youth in the essentials of culture and in the arts and sciences, giving special emphasis to the Christian religion and the ethics revealed in the Holy Scriptures * * * " (Pet. App. A2-A3, A40-A41). /1/ Petitioner provides instruction for students from kindergarten through college and graduate school, enrolling more than 5,000 students and offering more than 50 accredited degrees in secular subjects (Pet. App. A3, A41; J.A. A63, A127-A128, A153, A211-A223). At the college level, it operates a school of education, a school of fine arts, a school of religion, a college of arts and sciences, and a school of business administration (J.A. A63, A127-A128). In its graduate schools, it offers courses in art, music, speech, radio and television, cinema, religion, and education (J.A. A227). Petitioner also offers a separate nondegree, noncredit program entitled Institute of Christian Service, for persons who do not wish to undergo the rigors of academic pursuit (J.A. A75). The purpose of that program is to teach the principles of the Bible and to train Christian character (Pet. App. A3, A41). All courses are taught in accordance with the dictates of Biblical Scripture. Teachers are required to be "born again" Christians. Students are screened as to their religious beliefs and their conduct is strictly regulated (Pet. App. A3-A4). However, more than 100 denominations are represented in the student body (J.A. 84). Petitioner maintains a racially restrictive policy forbidding its students to engage in interracial dating and interracial marriage. This policy is based upon the belief that God intended the various races to live apart, and that intermarriage of different races is contrary to God's will and to the Scriptures (Pet. App. A43). Prior to 1971, petitioner excluded blacks entirely from enrollment. From 1971 until 1975, married blacks and members of other minority races or ethnic groups were not excluded from enrollment, but petitioner continued to deny admission to unmarried blacks unless the applicant had been a staff member of the university for at least four years (id. at A4 A43). See Bob Jones University v. Johnson, 396 F.Supp. 597, 600 & n.9 (D.S.C. 1974), aff'd without published opinion, 529 F.2d 514 (4th Cir. 1975). At that time, it was petitioner's judgment that, while a policy of excluding blacks altogether was not doctrinally required, denying admission to unmarried black was the best means of implementing its prohibition against interracial dating and marriage (Pet. App. A43; J.A. A71-A72, A81-A82, A250; A. 209-210, 212). /2/. In response to decisions of the court of appeals in Bob Jones University v. Johnson, 529 F.2d 514 (4th Cir. 1975), and of the Supreme Court in McCrary v. Runyon, 515 F.2d 1082 (4th Cir. 1975), aff'd, 427 U.S. 160 (1976), petitioner revised its admissions policy to permit unmarried blacks as well as married blacks to matriculate (Pet. App. A4, A43-A44; J.A. A250-A253). It continued to deny admission, however, to any applicant known to be a partner in an interracial marriage, and it established disciplinary rules requiring the expulsion of any student who: (1) was a partner in an interracial marriage; (2) was affiliated with a group or organization advocating interracial marriage; (3) engaged in interracial dating; or (4) encouraged others to violate petitioner's rules and prohibitions against interracial dating (Pet. App. A4, A43-A44; J.A. A53-A54, A77-A80, A197-A198, A208-A209, A277). The university required each student to attend a "rules meeting" at which the several disciplinary rules were reviewed, and further required each student to sign a statement promising to abide by these racial restrictions (Pet. A A42-A43; J.A. A132-A133). 2. Prior to 1970, the Internal Revenue Service ("Service") recognized petitioner as a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1954 ("1954 Code") (26 U.S.C.). See Bob Jones University v. Simon, 416 U.S. 725, 735 (1974). On July 10, 1970, the Service announced that it would no longer accord tax-exempt status under Section 501 to private schools maintaining racially discriminatory policies, and that it would not continue to treat gifts to such schools as deductible contributions under Section 170. /3/ See Rev. Rul. 71-447, 1971-2 Cum.Bull. 230. In November 1970, the Service sent letters to approximately 5,000 organizations operating private schools, including petitioner, announcing its new policy and requesting proof of nondiscriminatory admissions practices (J.A. A232-A234). Petitioner responded that it did not admit black students and, in September 1971, further stated that it had no intention of altering that policy. The Service therefore commenced administrative proceedings leading to the revocation of petitioner's tax exemption and of its advance assurance of deductibility. In January 1976, after petitioner's attempt to enjoin the administrative proceedings had failed in the Supreme Court (see Bob Jones University v. Simon, supra, 416 U.S.at 735), /4/ the Service issued a final notice of revocation, effective as of December 1, 1970 (Pet. App. A40, A87-A88, A89). 3. Seeking reinstatement of its tax exemption, petitioner initiated suit in the United States District Court for the District of South Carolina for refund of $21 in federal unemployment taxes for the year 1975 (Pet. App. A3, A40). /5/ The government counterclaimed for approximately $490,000 in federal unemployment taxes for the years 1971 through 1975 (ibid.). Following a trial, the district court held that Bob Jones qualified for tax exemption under Section 501(c)(3) of the 1954 Code as an institution organized and operated exclusively for religious and educational purposes, and that petitioner was not required to demonstrate a nondiscriminatory racial policy in order to so qualify (Pet. App. A45-A71). /6/ The district court explained that Section 501(c)(3) does not endow the Service with authority to discipline wrongdoers or to promote social change by denying exemptions to organizations that offend federal public policy. Voicing apprehension over the breadth of such power, the district court observed (Pet. App. A67): "Federal public policy is constantly changing. When can something be said to become federal public policy? Who decides? With a change of federal public policy, the law would change without congressional action -- a dilemma of constitutional proportions. Citizens could no longer rely on the law of Section 501(c)(3) as it is written, but would then rely on the IRS to tell them what it had decided the law to be for that particular day. Our laws would change at the whim of some nonelected IRS personnel, producing bureaucratic tyranny." A majority of the Fourth Circuit Court of Appeals reversed. Relying on the three-judge district court's decision in Green v. Connally, supra, the majority agreed with the Service that Section 501(c)(3) must be interpreted as incorporating the common law of charitable trusts as a gloss on each of the separately enumerated exemptive purposes in the statute. The panel majority further agreed with the Green conclusion (330 F.Supp.at 1156-1160) that to be eligible for tax-exempt status under Section 501(c)(3), "an institution must be 'charitable' in the broad common law sense, and therefore must not violate public policy" (Pet. App. A7-A8) (footnote omitted). It observed that "(t)his view finds additional support in the statutory framework itself: Section 170 of the Code, the companion provision to Section 501(c)(3), places the separately enumerated purposes in that section under the broad heading of 'charitable'" (Pet. App. A7-A8, n.6). To buttress the conclusion that Section 501(c)(3) establishes a public policy test, the majority also relied on (Pet. App. A8) the following excerpt from a 1939 House Report explaining the theory animating Congress to exempt from taxation organizations devoted to charitable and other purposes: The exemption from taxation of money or property devoted to charitable and other purposes is based upon the theory that the Government is compensated for the loss of revenue by its relief from financial burden which would otherwise have to be met by appropriations from other public funds, and by the benefits resulting from the promotion of the general welfare. H.R. Rep. No. 1860, 75th Cong., 3d Sess. 19 (1938). /7/ Because petitioner's discriminatory practices violate clearly defined public policy rooted in the Constitution, federal prohibitions against federal assistance to racially discriminatory schools, and a federal statute (42 U.S.C. 1981) proscribing private acts of racial discrimination, the court of appeals concluded that "the Service acted within its statutory authority in revoking (petitioner's) tax exempt status * * * " (Pet. App. A10). In so holding, the majority rejected petitioner's argument that application of the Service's nondiscrimination policy to it violates the Free Exercise Clause of the First Amendment, noting that the Service's policy would neither prohibit petitioner from adhering to its teachings nor force any individual student to violate his beliefs (Pet. App. A13-A14). With respect to petitioner's Establishment Clause claim, the majority concluded that "the uniform application of the (Service's) rule to all religiously operated schools avoids the necessity for a potentially entangling inquiry into whether a racially restrictive practice is the result of sincere religious belief" (Pet. App. A16) (emphasis in original). Judge Widener dissented (Pet. App. A18-A37), concluding that "Bob Jones University is a religious organization" (Pet. App. A19) within the meaning Section 501(c)(3), and that the panel majority, the Service, and the district court in Green v. Connally, supra, had misconstrued Section 501(c)(3) by insisting that each of the eight types of organizations identified in the statute as tax-exempt must also be "charitable" organizations under the common law of charitable trusts (Pet. App. A19-A20). Section 501(c)(3), Judge Widener observed, grants tax-exempt status to each class of organization enumerated in the statute, and because petitioner falls within one of those classes ("religious"), the Service lacked authority to deny the exemption granted by Congress (Pet. App. A20). Judge Widener further asserted that the public policy favoring freedom of religion may not be subordinated to the public policy against racial discrimination on the context of private non-tax-funded religious institutions. B. Goldsboro Christian Schools -- No. 81-1 1. Petitioner Goldsboro Christian Schools, Inc., is a North Carolina nonprofit organization incorporated in 1963 "to conduct an institution or institutions of learning for the general education of Youth in the essentials of culture and its arts and sciences, giving special emphasis to the Christian religion and the ethics revealed in the Holy scriptures * * * " (Pet. App. 6a). /8/ At least since 1969, petitioner has maintained a regularly enrolled student body (750 students in 1973-1974) for kindergarten and grades one through twelve (Pet. App. 7a; J.A. 6-7), and has satisfied the requirements of North Carolina for secular education in private schools (see N.C. Gen. Stat. Section 115-255 (repl. 1978)). Submissions to the State indicate that petitioner requires its high school students to take one Bible-related course during each semester. In keeping with petitioner's overall purpose and with the desire of its founders to provide a secular private school education in a religious setting, petitioner's practice is to begin each class with a prayer (Pet. App. 6a-7a). /9/ Petitioner does not require that its students profess or subscribe to any particular belief. It does require, however, that its students adhere to certain standards of conduct that are consistent with the tenets held by petitioner (J.A. 68). Various religious denominations are represented in the student body (J.A. 69-70). Based upon its interpretation of the Bible, petitioner has maintained a racially discriminatory admissions policy since the time of its incorporation. The policy reflects a belief that God intended a "separation of the nations and races" and that it is necessary to discourage "any kind of social intermingling by * * * students that could eventually lead to intermarriage of the races and a corresponding breakdown of distinctives established by almighty God" (J.A. 10). Notwithstanding this policy, petitioner has accepted noncaucasians. Its policy in practice requires the exclusion only of members of the Negro race (Pet. App. 7a). Petitioner's president and principal believe that black students would be disinclined to abide by its tenets and practices because of the racial climate prevailing in the country and the pressures exerted by the positions of certain "militant" organizations (J.A. 81-93). 2. Pursuant to the Service's 1970 nondiscrimination ruling, the Commissioner determined that petitioner did not quality for exemption from federal social security taxes (FICA) under Section 3121(b)(8)(B) of the 1954 Code, or for exemption from federal unemployment taxes (FUTA) under Section 3306(c)(8) of the 1954 Code, and, in 1974, he assessed FICA and FUTA taxes against Goldsboro. 3. After making partial payment, petitioner instituted suit in the United States District Court for the Eastern District of North Carolina, seeking a refund of $3,459.93 of withheld federal social security and unemployment taxes for 1969 through 1972. The government counterclaimed for $160,073.96 in taxes for that period (Pet. App. 5a, 7a-8a). On the parties' cross motions for summary judgment, the district court ruled that the Service had properly denied petitioner tax-exempt status under Section 501(c)(3) and the tax benefits associated with qualification as a Section 501(c)(3) organization, because petitioner's racially discriminatory admissions policy violated the declared public policy of the United States. A majority of the Fourth Circuit Court of Appeals affirmed (Pet. App. 1a-3a). Finding the case "identical" to the Bob Jones University case, the court of appeals majority upheld the denial on the authority of that precedent. Judge Field dissented for the reasons stated by Judge Widener in his dissenting opinion in Bob Jones University (Pet. App. 3a). SUMMARY OF ARGUMENT In 1970, the Internal Revenue Service reversed its longstanding practice under Section 501(c)(3) of the Internal Revenue Code of granting tax exemption to private educational institutions, without regard to their admissions policies, and announced that such institutions would no longer receive exemptions, and related tax benefits, if they discriminated on the basis of race. While recognizing and fully subscribing to the strong national policy in this country against racial discrimination in any and all forms, it is the position of the United States that this change of position by the Service finds no support in the language of Section 501(c)(3), or in its legislative history. Under Article I of the Constitution and the Sixteenth Amendment, Congress has the power "to lay and collect" taxes, not the Executive Branch. As an exercise of that power, Congress has directed the Internal Revenue Service in Section 501(c)(3) of the Code to award taX exemptions, and related tax benefits, to private corporations pursuing any one of eight enumerated purposes, including, "educational" purposes. Nowhere has Congress qualified that grant of authority by providing that an institution eligible for exemption as "educational" can nonetheless be denied exempt status on public policy grounds, or because the institution is not also "charitable" in the common-law sense. This is not to suggest that Congress cannot legislate in such a manner, but only that it thus far has not done so. In this regard, we do not find sufficient evidence of affirmative action by Congress since 1970 to warrant the conclusion that the Service's practice now under attack has received legislative ratification. Thus, the denial of tax exemptions to Bob Jones University and Goldsboro Christian Schools is, we submit, unauthorized agency action that should not, in the absence of congressional action, be countenanced. Neither the Fourteenth Amendment, Title VI of the Civil Rights Act of 1964, nor prior case law compels a different result. In the event that the Court should disagree with the government's foregoing statutory construction argument and conclude that Section 501(c)(3) of the Code authorizes the administrative denial of tax-exempt status to private schools that engage in racially discriminatory policies and practices, we agree with the court below that such a denial violates no First Amendment rights of petitioners under either the Free Exercise Clause or the Establishment Clause. Assuming that petitioners' racial discrimination is motivated by sincere religious beliefs, the court below noted that the Internal Revenue Service's policy would not prohibit petitioners from adhering to their teachings or force any individual student to violate his beliefs (81-3 Pet. App. A13-A14). The court of appeals further concluded that "the uniform application of the (Service's) rule to all religiously operated schools avoids the necessity for a potentially entangling inquiry into whether a racially restrictive practice is the result of sincere religious belief" (81-3 Pet. App. A16; emphasis in original). The United States believes these conclusions to be correct and therefore agrees that the court of appeals properly disposed of petitioners' First Amendment claims. ARGUMENT I. THE LANGUAGE AND LEGISLATIVE HISTORY OF SECTION 501(c)(3) SHOW THAT THE COMMISSIONER DOES NOT HAVE THE DISCRETION TO DENY TAX-EXEMPT STATUS TO OTHERWISE EXEMPT ORGANIZATIONS FOR FAILURE TO CONFORM TO NATIONAL POLICY WITH RESPECT TO RACIAL DISCRIMINATION Congress, the courts, and all recent Administrations have established a firm and uncontrovertible national policy against racial discrimination. This policy continues to guide all federal activities. The question addressed in the first portion of this brief is the interaction of that policy with the administrative enforcement of the nation's revenue code. In the succeeding sections we argue -- contrary to the Government's position below -- that Section 501(c)(3) does not permit the Commissioner of Internal Revenue to withhold congressionally authorized tax exemptions from otherwise qualified "religious" and "educational" organizations based solely on an administrative determination of failure to conform to the national policy. Our contention is, not that the policy, which we fully accept and implement, is wrong, but that the Internal Revenue Code -- from which all the Commissioner's authority is derived -- neither authorizes nor contemplates this kind of broad administrative discretion. The threshold legal question presented is one of statutory construction: Did Congress intend to deny tax-exempt status under Section 501(c)(3) to nonprofit private educational institutions that maintain racially discriminatory admissions policies or other racially discriminatory practices? In answering this question affirmatively, the court of appeals, principally in reliance on the district court in Green v. Connally, supra, concluded (1) that Congress intended all eight classes of organizations listed in Section 501(c)(3) to qualify as "charitable," and (2) that Congress used the term "charitable" in Section 501(c)(3) in its common-law sense -- that is, in the sense that an organization cannot qualify as "charitable" if its purposes or practices violate public policy. This construction of Section 501(c)(3) is at odds with the statute's language, its legislative history, and other objective evidence of legislative intent, and it should not be accepted by this Court. 1. The search for congressional intent must, of course, begin with the words of the statute itself. See, e.g., Northwest Airlines, Inc. v. Transport Workers Union, 451 U.S. 77, 91 (1981); United States v. Oregon, 366 U.S. 643, 648 (1961). Section 501(c)(3) exempts from taxation "(c)orporations * * * organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, * * * or for the prevention of cruelty to children or animals * * * ." 26 U.S.C. (Supp. I 1971) 501 (c)(3) (emphasis supplied). By its very terms, the legislative enumeration of eight purposes or functions entitling nonprofit corporations to tax-exempt treatment is frame in the disjunctive, thus manifesting Congress' intent to accord tax-exempt status to any organization organized and operated for any one of the designated purposes or functions. See, e.g., Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979) ("Canons of construction ordinarily suggest that terms connected by a disjunctive be given separate meanings, unless the context dictates otherwise"). The distinct references in Section 501(c)(3) to "educational" or "charitable" organizations confirms "Congress' intent that not all educational institutions must also be charitable institutions (as that term was used in the common law) in order to receive tax-exempt status." Prince Edward School Foundation v. United States, 450 U.S. 944, 947 (1981) (Rehnquist, J., joined by Stewart and Powell, J.J., dissenting from denial of certiorari). This reading of Section 501(c)(3) assigns to the words used by Congress their ordinary meaning. It is reinforced by the settled canon of statutory construction requiring that related statutory provisions be interpreted together. Kokoska v. Belford, 417 U.S. 642, 650 (1974); United States v. Cooper Corp., 312 U.S. 600, 606 (1941). Sections 503, 504, and 513 of the 1954 Code, sister provisions of Section 501(c)(3), reiterate the separate and disjunctive purposes or functions described in Section 501(c)(3), thereby underscoring the congressional intent to recognize each category enumerated under Section 501(a)." See 26 U.S.C. (1964 ed.) 503(b)(3), 504(a)(1) and (3), and 513(a). In this regard, prior to 1969 Section 503 denied tax-exempt status to an organization otherwise qualified under Section 501(c)(3) if it engaged in certain prohibited transactions. /10/ Section 503(b) provided in pertinent part: This Section shall apply to any organization described in section 501(c)(3) * * * except -- (1) a religious organization * * * ; (2) an educational organization * * * ; (3) an organization which normally receives a substantial part of its support (exclusive of income received in the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under section 501(a)) from the United States or any State or political subdivision thereof or from direct or indirect contributions from the general public; * * * (emphasis supplied). The language underscored above, which also appeared in the pre-1969 versions of Sections 504(a)(1) and (3), /11/ and appears in the current version of Section 513(a), /12/ plainly reflects Congress' intent that "charitable" purposes be viewed as separate and distinct from "educational" purposes and any other "purpose or function" enumerated in Section 501, and (2) that each purpose or function constitute a sufficient and independent basis for exemption under Section 501(a). /13/ Nonetheless, the Fourth Circuit Court of Appeals read Section 501(c)(3) to provide tax-exempt status only to institutions that are organized and operated for one of the designated purposes and are also qualified as common-law charities. In support of this interpretation, the court cited Section 170 of the 1954 Code, which, it asserted, "places the separately enumerated purposes in (Section 501(c)(3)) under the broad heading of 'charitable' and permits deductions of contributions made to organizations serving those purposes." (81-3 Pet. App. A7 n.6). The plain terms of Section 170, however, contradict the court's construction of Section 501(c)(3). Subsection (c) of Section 170 defines "charitable contributions" in relevant part as follows: (c) Charitable contribution defined. For purposes of this section, the term 'charitable contribution' means a contribution or gift to or for the use of -- * * * * * (2) A corporation, trust, or community chest, fund, or foundation -- * * * * * (B) organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, * * * or for the prevention of cruelty to children or animals; * * * . 26 U.S.C. 170 (emphasis supplied). The definition of the term "charitable contribution" relates solely to Section 170, and derives its meaning in part on the basis of the purposes for which certain organizations are organized and created; namely, "religious, charitable, scientific, literary, or educational (or specified other) purposes." Each of these distinct purposes separately and independently qualify an organization to receive "charitable contributions." Nothing in Section 170 so much as hints at the proposition advanced below that an organization eligible to receive what the drafters of Section 170 have chosen to call "charitable contributions" must be endowed with a "charitable" purpose within the meaning of Section 501(c)(3). Nor has Congress signalled elsewhere that it intended Section 170 to be so interpreted. Reliance by the court of appeals on this particular section of the Code is therefore misplaced. /14/ Based on the foregoing, the plain language of Section 501(c)(3) and its sister provisions, the structure of the 1954 Code, and the Service's interpretive regulations (see note 13, supra) require the conclusion that Congress intended to afford tax-exempt status to any organization organized and operated exclusively for any one of the purposes or functions enumerated in Section 501(c)(3). In sum, "Congress has spoken in the plainest of words" (TVA v. Hill, 437 U.S. 153, 194 (1978)) in Section 501(c)(3), exempting from income taxation "educational" organizations that are not also "charitable" as surely as it exempted "charitable" organizations that are not also "educational." /15/ The contrary reading of the legislation by the court of appeals is incorrect. 2. Although the clarity of the language used by Congress in Section 501(c)(3) makes an examination of the statute's legislative history unnecessary, see, e.g., Ernst & Ernst v. Hochfelder, 425 U.S. 199, 201 (1976); United States v. Oregon, 366 U.S. 643, 648 (1961), a review of that history provides no support for the construction of Section 501(c)(3) endorsed by the court of appeals. The exemptions from taxation now contained in Section 501(c)(3) originated as a part of the Tariff Act of 1894, ch. 349, 28 Stat. 556, /16/ which provided in pertinent part: "(N)othing herein contained shall apply to * * * corporations, companies, or associations organized and conducted solely for charitable, religious, or educational purposes." There is no indication in the legislative history that Congress incorporated, or had reference to, the "common law of charitable trusts" in enacting this taxing statute. After ratification of the Sixteenth Amendment, Congress passed the Tariff Act of 1913, ch. 16, Section II, 38 Stat. 114, 166. Section II(G)(a) exempted from the income tax: (A)ny corporation or association organized and operated exclusively for religious, charitable, scientific, or educational purposes, no part of the net income of which inures to the benefit of any private stockholder or individual * * * . This legislation broadened the 1894 exemption to include "scientific" corporations, and added the requirement that in order for a corporation to be exempt from taxation, no part of its net earnings could inure to the benefit of any private stockholder or individual. Under the common law, however, income of a charity could not inure to the benefit of a private person. See r A. Scott, The Law of Trusts Section 376 (2d ed. 1956). There obviously would have been no need to include such a requirement in the statute if Congress had intended to condition tax exemption on satisfying the requirements of a common-law charity. In subsequent revenue acts, Congress continued to broaden the list of exempt purposes. The Revenue Act of 1918, ch. 18, Section 231(6), 40 Stat. 1076, expanded the list of exempt corporations to include those organized "for the prevention of cruelty to children or animals." The Revenue Act of 1921, ch. 136, Section 231(6), 42 Stat. 253, further expanded the statute to exempt "any community chest, fund, or foundation" and added "literary" organizations to the list of exempt purposes. These additions would have been unnecessary had Congress intended to use the word "charitable" in its broad common-law sense. Moreover, as previously noted (supra, note 15) in 1923 the Service interpreted the word "charitable" in Section 231(6) of the Revenue Acts of 1918 and 1921 in its "popular and ordinary sense" as meaning "relief of the poor," rather than in its broader common-law sense. The exemption from taxation contained in the Revenue Act of 1921 remained unchanged in the Revenue Acts of 1924, 1926, 1928 and 1932, /17/ and regulations issued by the Service under those acts continued to define the term "charitable" to mean "relief of the poor." Treas. Reg. 65, Art. 517 (1924 Revenue Act). "Corporations organized and operated exclusively for charitable purposes comprise, in general, organizations for the relief of the poor". /18/ The Revenue Act of 1934, ch. 277, Section 101(6), 48 Stat. 700, carried forward unchanged the exemption provision of prior revenue acts, but added the requirement that no substantial part of the activities of an exempt organization can involve the carrying on of "propaganda" or "attempting to influence legislation." Once again, the addition of the requirement would have been unnecessary if Congress had intended for all organizations to qualify as common-law charities in order to be exempt from taxation. See 4 A. Scott, The Law of Trusts Section 374.6 (2d ed. 1956). The Revenue Act of 1936, ch. 690, Section 101(6), 49 Stat. 1674, and the Revenue Act of 1938, ch. 289, Section 101(6), 52 Stat. 481, also carried forward the same exemption, and the regulations promulgated under these Acts continued to define the term "charitable" as "relief of the poor." See Treas. Reg. 86, Art. 101(6)-1 (1934 Revenue Act); Treas. Reg. 94 Art. 101(6)-1 (1936 Revenue Act); Treas. Reg. 101, Art. 101(6)-1 (1938 Revenue Act). In the Internal Revenue Code of 1939, ch. 2, 53 Stat. 1 ("1939 Code"), Congress exempted from taxation the identical categories of organizations that had been exempt from taxation under the Revenue Acts of 1934, 1936 and 1938. During the 15 years in which the 1939 Code remained in effect, the Service issued three sets of regulations, each of which defined the term "charitable" in its popular and ordinary sense. See Treas. Reg. 103, Section 19.101(6)-1 (1939 Code); Treas. Reg. 111, Section 29.101(6)-1 (1939 Code); Treas. Reg. 118, Section 39.101(6)-1(b) (1939 Code). /19/ Section 501(c)(3) of the 1954 Code, ch. 736, 68A Stat. 163, continued to exempt the same categories of organizations that had been exempt from taxation under the 1939 Code, and added to the list of exempt entities those organizations which are organized and operated for the purpose of "testing for public safety." In addition, Congress tightened the restrictions on political activities of tax-exempt organizations. /20/ The Report of the House Ways and Means Committee on the 1954 Code stated that Section 501 "is derived from sections 101 and 421 of the 1939 Code. No change in substance has been made except that employees' pension trusts, etc., are brought in the scope of this section." H.R. Rep. No. 1337, 83d Cong., 2d Sess. A165 (1954) (emphasis supplied). It was not until 1959 that the Internal Revenue Service undertook to expand its interpretation of "charitable." In Section 1.501(c)(3)-1 (d)(2) of its 1959 Regulations, the Service concluded: The term 'charitable' is used in section 501(c)(3) in its generally accepted legal sense and is, therefore, not to be construed as limited by the separate enumeration in section 501(c)(3) of other tax-exempt purposes which may fall within the broad outlines of 'charity' as developed by judicial decisions. Such term includes: Relief of the poor and distressed or of the underprivileged; advancement of religion; advancement of education or science; erection or maintenance of public buildings, monuments, or works; lessening of the burdens of Government; and promotion of social welfare by organizations designed to accomplish any of the above purposes, or (i) to lessen neighborhood tensions; (ii) to eliminate prejudice and discrimination; (iii) to defend human and civil rights secured by law; or (iv) to combat community deterioration and juvenile delinquency * * * . The purpose of this regulation is to clarify that the meaning of "charitable" is not "limited by the separate enumeration in Section 501(c)(3) of other tax-exempt purposes"; for to so limit the term would render it redundant in the statute. Notably, the regulation does not suggest that organizations devoted to other purposes enumerated in Section 501(c)(3), such as "educational" and "religious" purposes, must also serve "charitable" purposes. /21/ Indeed, the same regulation defines "educational" without reference to the notion of charity: The term 'educational', as used in section 501(c)(3), relates to -- (a) The instruction or training of the individual for the purpose of improving or developing his capabilities; or (b) The instruction of the public on subjects useful to the individual and beneficial to the community. 26 C.F.R. 1.501(c)(3)-1(d)(3) (1959) (emphasis supplied). The record is thus overwhelming that, since 1894, Congress has consistently and repeatedly manifested an intent to exempt from income taxation corporations organized for purely "educational" or "religious" purposes, as well as corporations organized for purely "charitable" purposes. The Commissioner of Internal Revenue so construed Section 501(c)(3) and its predecessors until 1970 -- some 57 years after Congress' initial enactment of the relevant statutory language in the Tariff Act of 1913. An administrative reversal of position so many years later provides no legal basis for ascribing to a much earlier Congress an intent patently at odds with the very words of the statute. /22/ 3. The court of appeals, following the district court in Green, held otherwise largely on the strength of Tank Truck Rentals, Inc. v. Commissioner, 356 U.S. 30 (1958), which is said to stand for the proposition that "tax benefits such as deductions and exclusions generally are subject to limitation on public policy grounds" (Pet. App. A8). In Tank Truck, the taxpayer urged that fines paid for violating state maximum weight laws were "ordinary and necessary" expenses and thus allowable as deductions from gross income under the predecessor to Section 162(a) of the 1954 Code. /23/ The Supreme Court affirmed the Commissioner's disallowance of the deduction, holding that an expense is not "necessary" to the operation of a business "if allowance of the deduction would frustrate sharply defined national or state policies proscribing particular types of conduct, evidenced by some governmental declaration thereof." 356 U.S.at 33. Observing that "(d)eduction of fines and penalties uniformly has been held to frustrate state policy in severe and direct fashion by reducing the 'sting' of the penalty prescribed by the state legislature, the Court concluded that Congress did not intend to allow income tax deductions for fines incurred to punish violations of state penal laws. 356 U.S.at 35-36. Unlike the explicit limitation placed by Congress on the deductibility of business expenses (i.e., that they be "ordinary and necessary"), tax-exempt status under Section 501(c)(3) is accorded to "corporations * * * organized * * * for * * * educational purposes" simpliciter. No similar "ordinary and necessary" standard applies under the exemption statute so as to warrant the court of appeals' reference in this context to the wholly separate statutory construction question involved in Tank Truck. Indeed, even in the context of "ordinary and necessary" business deductions under Section 162(a), this Court has admonished that the "public policy" exception to the general rule of deductibility is "sharply limited and carefully defined." Commissioner v. Tellier, 383 U.S. 687, 691, 693-694 (1966). As the Tellier Court noted (ibid.): (T)he federal income tax is a tax on net income, not a sanction against wrongdoing. That principle has been firmly imbedded in the tax statute from the beginning. One familiar facet of the principle is the truism that the statute does not concern itself with the lawfulness of the income that it taxes. Moreover, Congress circumscribed the denial of tax deductions on grounds of public policy in the aftermath of Tank Truck. In 1969 and 1971, Congress enacted rules explicitly limiting the public policy doctrine of nondeductibility to fines paid for violations of law and to illegal bribes, kickbacks, and similar payments. See 26 U.S.C. 162(c) and (f). The Senate Finance Committee's report (No. 91-552) accompanying the 1969 enactment stated: "Public policy, in other circumstances, generally is not sufficiently clearly defined to justify the disallowance of deductions." 1969-3 Cum.Bull. 423, 597. See Bittker and Kaufman, Taxes and Civil Rights: "Constitutionalizing" the Internal Revenue Code, 82 Yale L.J. 51, 75 (1972). In light of these subsequent developments, the public policy doctrine announced in Tank Truck -- even if transferable in its severely narrowed form to the present situation (which it is not) -- provides no meaningful support for the result reached below. Instead, resolution of the statutory issue depends on the language of Section 501(c)(3) and its history. We have already shown where the legislative analysis leads, and that reading of the statute must prevail until amended or altered by explicit congressional action. 4. No such subsequent legislation has been passed, and, to the extent that Congress has visited the tax exemption question since 1970, there is no basis to conclude that it has ratified or otherwise acquiesced in the construction given Section 501(c)(3) by the Green court and the court of appeals. a. As Judge Widener noted in dissent (81-3 Pet. App. A28-A31). Congress has expressed misgivings regarding the Service's recent activities in the area of tax exemptions to private schools. In 1978 and 1979, the Service sought to supplement its procedures for verifying whether the actual practices of private schools conformed to the schools' announced policies of nondiscrimination. 43 Fed.Reg. 37296-37298 (1978); 44 Fed.Reg. 9451-9455 (1979). The controversial nature of those proposals prompted congressional hearings. Tax Exempt Status of Private Schools: Hearings Before the Subcomm. on Oversight of the House Comm. on Ways and Means, 96th Cong., 1st Sess. Sess. (1979). While some of the witnesses testifying at those hearings assumed that Section 501(c)(3) authorized the Service to deny tax exemptions to private schools with racially discriminatory policies (see, e.g., id. at 1176), other witnesses indicated that the Service had no such power (see e.g., id. at 586). In response to the controversy over the proposed revenue procedures, Congress acted to prevent the Service from enforcing its proposed regulations and from devising any additional procedures for enforcing its policy of denying tax-exempt status to racially discriminatory private schools. The Dornan Amendment, Section 615 of the Treasury, Postal Service, and General Government Appropriations Act of 1980 ("1980 Appropriations Act"), Pub. L. No. 96-74, 93 Stat. 577, prohibited use of funds made available by the Act to carry out the 1978 and 1979 proposed revenue procedures. The Ashbrook Amendment, Section 103 of the 1980 Appropriattions Act, 93 Stat. 562, specified that the funds appropriated could not be used "to formulate or carry out any * * * procedure, guideline * * * or measure which would cause the loss of tax-exempt status to private, religious, or church-operated schools under Section 501(c)(3) of the Internal Revenue Code of 1954 unless in effect prior to August 22, 1978." The House Report on the 1980 Appropriations Act summarizes the Committee's misgivings concerning the proposed 1978 and 1979 revenue procedures: This Committee * * * is concerned about the Internal Revenue Service issuing revenue procedures in an area where legislation may be more appropriate. The responsibility of the Internal Revenue Service is to enforce the tax laws. The purpose of the Internal Revenue Service revenue procedures ought to be to clarify these laws, not to expand them. The issue of tax exempt status of schools is a matter of farreaching social significance and the Service ought to issue revenue procedures in this area only when the legislative intent is fairly explicit. The Appropriations Committee is unsure that the proposed revenue procedures issued by the Service are the proper expression of that legislative intent. The Committee believes that the Service ought not issue these revenue procedures until the appropriate legislative committees have had a chance to evaluate them and make the determination that the proposed revenue procedures are a proper expression of the tax laws. H.R. Rep. No. 96-248, 96th Cong., 1st Sess. 14-15 (1979) (emphasis supplied). Thus, the Report eschews any definitive conclusion with regard to the Service's authority, stating that the Committee is "unsure" whether the 1978 and 1979 procedures accord with legislative intent. The Report also counsels that action be taken by the Service in the area of tax exemptions for private schools "only when the legislative intent is fairly explicit." /24/ Moreover, the sponsors of the amendments in both the House and Senate indicated their belief that the Service lacks statutory authority to deny tax exemptions to racially discriminatory schools /25/ and that the appropriations limitations were necessary to allow Congress time to act in the area. /26/ In passing the Ashbrook and Dornan Amendments, Congress called a halt to the Service's effort to establish stricter and more detailed procedures for implementing its 1970 policy of denying tax-exempt status to schools which discriminate on the basis of race. /27/ The debates on these amendments, however, provide little assistance in divining Congress' view concerning the proper interpretation of Section 501(c)(3). Some legislators, including the Amendments' sponsors, expressed the view that the Service lacks statutory authority to deny tax exemptions to educational organizations, such as petitioners, while others expressed the opposite view. /28/ Even if a clear congressional consensus regarding the proper interpretation of Section 501(c)(3) emerged from a reading of the debates on the Ashbrook and Dornan Amendments, little insight into the legislative intent of Section 501(c)(3) would be gained. It is well settled that "the views of one Congress as to the construction of a statute adopted many years before by another Congress have 'very little, if any, Significance.'" Rainwater v. United States, 356 U.S. 590, 593 (1958); United States v. Price, 361 U.S 304, 313 (1960); Haynes v. United States, 390 U.S. 85, 87 n.4 (1968); United States v. Southwestern Cable Co., 392 U.S. 157, 170 (1968). This point was underscored in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977). There, the Court rejected a statutory construction based on "subsequent legislative history," noting that the post-passage remarks of legislators, however explicit, cannot serve to change the legislative intent of Congress expressed before the Act's passage. * * * Such statements 'represent only the personal views of these legislators, since the statements were (made) after passage of the Act.' (Regional Rail Reorganization Act Cases, 419 U.S. 102, 132 (1974), quoting National Woodwork Manufacturers Association v. NLRB, 386 U.S. 612, 639 n.34 (1967).) Accord, Oscar Mayer & Co. v. Evans, 441 U.S. 750, 758 (1979), quoting United Air Lines, Inc. v. McMann, 434 U.S. 192, 200 n.7 (1977); see also Consumer Product Safety Commission v. GTE Sylvania, 447 U.S. 102, 118 n.13 (1980). b. Nor do the instant cases come within the familiar rule of statutory construction that "(s)ubsequent legislation declaring the intent of an earlier statute is entitled to great weight in statutory construction." Red Lion Broadcasting Co. v. FTC, 395 U.S. 367, 380-381 (1969) . In Red Lion, this Court rejected a radio broadcaster's contention that the FCC's "fairness doctrine," which requires that public issues be broadcast and that opposing viewpoints on those issues be given fair coverage, was without statutory authorization in the Communications Act. Although the FCC had been applying the fairness doctrine since 1929 under dubious statutory authority, the Act was amended in 1959 to "make() it very plain that * * * the phrase 'public interest,' which had been in the Act since 1927, imposed a duty on broadcasters to discuss both sides of controversial public issues." Id. at 380. Thus, through subsequent "positive legislation" (id. at 382), Congress 'ratified" (id. at 381) the FCC's longstanding administrative construction of the Act. Here, Congress has enacted no such subsequent legislation. The pertinent language of Section 501(c)(3) has not been altered, amended, or in any respect modified since it was enacted in 1954. In 1976, Congress enacted Section 501(i) of the 1954 Code, which denies tax-exempt status to Section 501(c)(7) organizations -- private social clubs and similar organizations -- whose charter or other written policy statements provide for "discrimination against any person on the basis of race, color, or religion." 26 U.S.C. 501(i). The 1976 statute is by its terms confined to Section 501(c)(7) organizations and, therefore, provides no guidance as to the meaning of the terms "charitable," "educational," and "religious" in Section 501(c)(3). Indeed, the only mention of Section 501(c)(3) organizations in any part of the 1976 statute or its legislative history is contained in a single footnote to the accompany committee reports of both Houses. /29/ This single footnote reference to Section 501(c)(3) in no way indicates approval of or acquiescence in the Service's 1970 policy, but merely acknowledges the district court's decision in Green v. Connally, supra, and this Court's summary affirmance thereof. /30/ Similarly, neither the Ashbrook Amendment nor the Dornan Amendment purports to alter, amend, or otherwise affect the definition of any statutory term in Section 501(c)(3). The amendments are negative in effect, refusing to fund certain proposed revenue procedures. Moreover, in acting on appropriations measures, legislators are entitled to assume that the funds appropriated will be used lawfully without foreclosing a later finding -- congressional or judicial -- that the agency funded has in fact been acting unlawfully. As this Court noted in TVA v. Hill, 437 U.S. 153, 190-191 (1978), "(w)ithout such an assurance, every appropriations measure would be pregnant with prospects of altering substantive legislation." Accordingly, the Ashbrook and Dornan Amendments afford no basis for ascribing to Congress an intent contrary to that reflected in the plain language and legislative history of Section 501(c)(3). A similar question of statutory construction was involved in SEC v. Sloan, 436 U.S. 103 (1978), which involved a reenactment in 1964 of Section 12(k) of the Securities Exchange Act of 1934, 15 U.S.C. 78l(k). /31/ In the Senate committee report accompanying the 1964 legislation, the Commission's interpretation of Section 12(k) was endorsed. /32/ The Court rejected the argument that this later expression of congressional intent should prevail over the plain, and contrary, meaning of the statute, declaring (436 U.S.at 121): Even if we were willing to presume such general awareness on the part of Congress, we are not at all sure that such awareness at the time of re-enactment would be tantamount to amendment of what we conceive to be the rather plain meaning of the language of Section 12(k). On this point the present case differs significantly from United States v. Correll, (389 U.S. 299, 304 (1967)) where the Court took pains to point. out in relying on a construction of a tax statute by the Commissioner of Internal Revenue that 'to the extent that the words chosen by Congress cut in either direction, they tend to support rather than defeat the Commissioner's position * * * .' Like the statute at issue in Sloan, the meaning of Section 501(c)(3) is clear from its language. Indeed, the instant cases present much less compelling reasons than those in Sloan to construe subsequent legislative activity as indicative of a particular statutory interpretation. As previously discussed, the congressional activity relating to the 1976 enactment of Section 501(i) and to passage of the Ashbrook and Dornan Amendments generated no committee report or other meaningful legislative expression endorsing or otherwise approving of the interpretation given Section 501(c)(3) by the district court in Green and adopted by the Service. /33/ c. There remains only the question whether, notwithstanding the foregoing discussion, the Service's practice since 1970 of denying tax-exempt status to petitioners and other racially discriminatory private schools should be regarded as authorized by Section 501(c)(3) on the ground that Congress has allowed it to continue for some eleven years. Such a proposition arguably follows from the principle of statutory construction, noted in Red Lion Broadcasting Co. v. FCC, supra, 395 U.S.AT 381, that "the construction of a statute by those charged with its execution should be followed unless there are compelling indications that it is wrong, especially when Congress has refused to alter the administrative construction". This principle has in practice been invoked by the courts with great care, since its logic would make an administrative construction unassailable in a very few years so long as Congress remains silent. In Red Lion itself, "the Congress ha(d) not just kept its silence by refusing to overturn the administrative construction, but ha(d) ratified it with positive legislation." 395 U.S.at 381-382. And in Zemel v. Rusk, 381 U.S. 1 (1965), which is relied on in Red Lion, the administrative construction in question was uninterrupted for 26 years, and the Congress had not merely "refuse(d) to overturn the administrative construction," but had reenacted the legislation without change. Id. at 12. Subsequent cases have also emphasized that a long-standing administrative interpretation is particularly persuasive when Congress has reenacted or otherwise "revisited" the pertinent legislation without changing it. See NLRB v. Bell Aerospace Co., 416 U.S. 267, 274-275 (1974); United States v. Rutherford, 442 U.S. 554, 554 n.10 (1979); Saxbe v. Bustos, 419 U.S. 65, 74 (1974); Board of Governors v. First Lincolnwood Corp., 439 U.S. 234, 248 (1978). Recently, however, the Court rejected the argument that the Securities Exchange Commission's interpretation of the Securities Exchange Act of 1934 should be adopted "where Congress was expressly informed of the Commission's interpretation on two occasions when significant amendments to the securities laws were enacted * * * and on each occasion Congress left the administrative interpretation undisturbed." Aaron v. SEC, 446 U.S. 680, 694 n.11 (1980). As the Court explained (ibid.): (S)ince the legislative consideration of those statutes was addressed principally to matters other than that at issue here, it is our view that the failure of Congress to overturn the Commission's interpretation falls far short of providing a basis to support a construction of Section 10(b) so clearly at odds with its plain meaning and legislative history. Similarly, although Section 501(c)(3) has been amended since 1970, /34/ the Service's policy regarding the tax-exempt status of discriminatory private schools was not directly addressed by Congress. And, while the Green court's decision was acknowledged in congressional reports accompanying enactment of Section 501(i) in 1976, that legislation was concerned solely with the tax treatment of private social clubs. Nor was discussion of the Service's 1970 revenue ruling in connection with the Ashbrook and Dornan Amendments equivalent to a failure to alter administrative construction. As noted above, when voting on appropriations measures, legislators are entitled to operate under the assumption that the agencies funded are operating within the law. See TVA v. Hill, 437 U.S. 153, 190 (1978). Thus, as in Aaron, the failure of Congress to act on the Service's 1970 revenue ruling falls far short of supporting a construction of Section 50B(c)(3) "so clearly at odds with its plain meaning and legislative history." This point bears emphasis, for even where the agency's statutory construction has been consistent an longstanding, and even where Congress, having been informed of the agency's construction, has reenacted the statute without overturning that construction, the courts will reject an agency interpretation unsupported by the language of the statute and its legislative history. SEC v. Sloan, supra, 436 U.S.at 119-120, 122-123. Indeed, Sloan involved an agency construction which had stood consistently for 34 years, during which time the statute had been reenacted with a legislative history indicating approval of the agency construction. 436 U.S.at 117. In contrast, the Service's construction of Section 501(c)(3) regarding discriminatory schools has stood for only 11 years and represents a litigation-inspired reversal of the agency interpretation given the statute for more than a half centure preceding 1970. Moreover, here there has been neither statutory reenactment nor a process of amendment which focused congressional attention on the Service's construction without changing it. In these circumstances, congressional silence cannot override the intent reflected in plain statutory language. /35/ 5. There are two final points to be made. In affirming the Service's authority to deny tax-exempt status to petitioners, the court of appeals hinted in Bob Jones University that its interpretation of Section 501(c)(3) was guided, at least in part, by equal protection considerations. Citing Norwood v. Harrison, 413 U.S. 455 (1973), the court stated (81-3 Pet.App. A11 n.7): "The Constitution commands that government not provide any form of tangible assistance to schools which discriminate on the basis of race. * * * (G)overnment must 'steer clear' of affording significant tax support to educational institutions that practice racial discrimination." To the extent that the court of appeals was suggesting that the granting of a tax exemption to these schools would be constitutionally impermissible under the Fifth Amendment, we strongly disagree. A facially neutral statute affronts equal protection norms protecting against racial discrimination only if its enactment or operation can be said to have been animated by a discriminatory purpose. E.g., Washington v. Davis, 426 U.S. 229, 239-244 (1976); Personnel Administrator of Massachusetts v. Feeney, 442 U.S. 256, 279 (1979). /36/ Such is plainly not the case with regard to Section 501(c)(3). Nothing in its language or legislative history suggests a congressional purpose to afford tax-exempt status to educational organizations in order to foster racial discrimination by private schools. /37/ Nor does the tax exemption conferred by Section 501(c)(3) make the government a partner or joint venturer in petitioners' enterprises. See Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 176-177 (1972); Burton v. Wilmington Parking Authority, 365 U.S. 715 (1961). Moreover, Norwood condemned material state resources provided to segregated private schools. The existence of a tax exemption for certain organizations is simply not the same kind of material support. Rather, it is a decision by Congress to refrain from collecting taxes from certain classes of organizations, including all bona fide educational ones. See Walz v. Tax Commission, 397 U.S. 664, 675 (1970). The policies of an organization do not change its basic character. Indeed, in Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d), Congress considered the danger of the federal government's involvement in the kind of activity at issue in Norwood and forbade it from doing so. But in taking such action, Congress gave no indication that it was thereby limiting the entitlement of educational institutions to tax exemptions. Although some have contended that Title VI itself should be interpreted to achieve this result, the language of Title VI -- which prohibits racial discrimination in any program or activity receiving "Federal financial assistance" -- and its legislative history render unpersuasive the contention that tax exemptions constitute federal financial assistance under Title VI. Congress defined "Federal financial assistance" in the statute as "assistance to any program or activity by way of grant, loan, or contract other than a contract of insurance or guaranty." 42 U.S.C. 2000d-1. The Department of Justice's interpretative regulations are to the same effect. 28 C.F.R. 42.102(c). Nowhere in the statute is there an indication that Congress intended tax exemptions to be among the particular types of assistance enumerated. Nor is there any mention in its legislative history of the possibility that tax exemptions could be the basis for triggering federal coverage under Title VI. /38/ Moreover, the proposition that income tax exemptions constitute "Federal financial assistance" is inconsistent with the overall structure of the Civil Rights Act of 1964. /39/ In light of the far-reaching implications of including federal tax exemptions within the meaning of "Federal financial assistance" under Title VI (see note 39, supra), and in the absence of any indication in the statute's language or legislative history that Congress considered tax exemptions to constitute federal financial assistance, such a construction of Title VI does not withstand scrutiny. /40/ II. SHOULD THE COURT DISAGREE WITH OUR VIEW THAT THE COMMISSIONER LACKED AUTHORITY TO DENY EXEMPTIONS TO PETITIONERS ON NATIONAL POLICY GROUNDS, THE EXERCISE OF SUCH AUTHORITY HERE DID NOT VIOLATE PETITIONERS' RIGHT TO FREE RELIGIOUS BELIEF AND EXERCISE UNDER THE FIRST AMENDMENT If the Court agrees with the preceding argument, it need not reach petitioners' claims under the First Amendment. Assuming arguendo that the Court finds the Commissioner is in fact clothed with the requisite authority to withdraw petitioners' exemptions, its action was not prohibited by the First Amendment. Both Goldsboro Christian Schools (Br. 31-44) and Bob Jones University (Br. 23-34) contend that because their racially discriminatory practices are the outgrowth of sincere religious faith, the Religion Clauses of the First Amendment prohibit the government from denying them tax-exempt status. But, as the court of appeals correctly held (81-3 Pet.App. A13-A14; footnote omitted), "the government's rule would not prohibit (petitioner) from adhering to (their) policy. Abandonment of the policy would not prevent (petitioners) from teaching the Scriptural doctrine of nonmiscegenation. Nor is any individual student * * * forced to personally violate his beliefs; no student is forced to date or marry outside of his race." Moreover, the Service's policy, applied evenhandedly to sectarian and nonsectarian schools, avoids government entanglement in matters of church doctrine, and does not involve preference of one sect or doctrine over another. Hence, the court of appeals concluded that "(t)he nondiscrimination policy also passes muster under the Establishment Clause" (id. at A14). Since all that is at issue here is tax-exempt status, rather than a governmental prohibition of any of petitioners' practices, analysis begins with the principle that, while exemption from nondiscriminatory application of generally applicable tax laws is a constitutionally permissible accommodation of charitable organizations including churches themselves (see Walz v. Tax Commission, supra), it presumably is not constitutionally required. Once such exemptions have been granted, however, very serious First Amendment problems would be presented by any attempt to differentiate among churches or other religious organizations on the basis of their beliefs or religious practices. A grave constitutional problem would be presented, for example, if an exemption were to be denied solely because of admissions practices in a seminary or because the tenets of a faith disqualify certain classes of persons from eligibility for its clergy. Thus, in a news release issued nine days after its ruling with respect to private schools, the Service stated that "(s)electivity of students, as by a religious seminary, having no relation to racial discrimination, would not be inconsistent with the IRS statement of position" (81-3 J.A. A239). On the other hand, some religious practices (even as part of a worship service), such as human sacrifice, may constitutionally be prohibited and, a fortiori, may constitutionally serve as a basis for denial of tax-exempt status. Here, we submit that there is no constitutional impediment to basing denial of tax-exempt status on petitioners' discriminatory practices (which involve commercial dealings with the public). 1. a. It is, of course, well settled that the Free Exercise Clause of the First Amendment affords substantial protection for the diverse religious beliefs and practices in this country. Thus, this Court has held that the Free Exercise Clause prohibits governmental regulation of religious beliefs as such (Cantwell v. Connecticut, 310 U.S. 296, 303 (1940)), governmental interference with the dissemination of religious ideas (see Fowler v. Rhode Island, 345 U.S. 67 (1953); Follett v. McCormick, 321 U.S. 573 (1944)), or use of secular governmental programs "to impede the observance of one or all religions or * * * to discriminate invidiously between religions, * * * even though the burden may be characterized as being only indirect." Braunfeld v. Brown, 366 U.S. 599, 607 (1961). But as the Court has also noted, "neutral prohibitory or regulatory laws having secular aims" may impose certain "incidental burdens" on free exercise when "the burden on First Amendment values is * * * justifiable in terms of the Government's valid aims." Gillette v. United States, 401 U.S. 437, 462 (1971); see, e.g., United States v. Lee, No. 80-767 (Feb. 23, 1982); Wisconsin v. Yoder, 406 U.S. 205 (1972). Thus, a person is not protected from every burden on the exercise of his religion resulting from the implementation of a neutral, secular governmental interest. Braunfeld v. Brown, supra, 366 U.S.at 603; Johnson v. Robison, 415 U.S. 361, 383-386 (1974); Gillette v. United States, supra, 401 U.S.at 461-462; see Prince v. Massachusetts, 321 U.S. 158 (1944), Reynolds v. United States, 98 U.S. 145 (1878); Jacobson v. Massachusetts, 197 U.S. 11 (1905). In determining whether a particular statute is supported by a governmental interest that outweighs a free exercise claim, it is appropriate (McDaniel v. Paty, 435 U.S. 618, 635 n.8 (1978) (Brennan, J., concurring in the judgment)) to balance the importance of the secular values advanced by the statute, the closeness of the fit between those ends and the means chosen, and the impact an exemption on religious grounds would have on the State's goals, on the one hand, against the sincerity and centrality of the objection to the State's goals to the sect's religious practice, and the extent to which the governmental regulation interfered with that practice, on the other hand. See Wisconsin v. Yoder, supra, 406 U.S.at 214 (the interest of the government is subject to "a balancing process when it impinges on fundamental rights * * * such as those specifically protected by the Free Exercise Clause of the First Amendment"); Johnson v. Robison, supra; Gillette v. United States, supra. However, "(t)o strike down without the most critical scretiny, legislation which imposes only an indirect burden on the exercise of religion, i.e., legislation which does not make unlawful the operating latitude of the legislature." Braunfeld v. Brown, supra, 366 U.S.at 606. Accordingly, this Court has repeatedly observed that a generally imposed income tax does not have a prohibited coercive effect on religious practices or beliefs. Follett v. McCormick, supra, 321 U.S.AT 577-578; Murdock v. Pennsylvania, 319 U.S. 105, 112 (1943); see United States v. Lee, supra, slip op. 6-7; Braunfeld v. Brown, supra, 366 U.S.at 606. /41/ Here, despite petitioners' claims to the contrary (81-1 Br. 36; 81-3 Br. 9), the Service's rulings do not place more than an indirect and limited burden upon any person's or any corporation's right to free religious belief or exercise. Petitioners do not seek on religious grounds to limit their student body to members of a particular sect or to those who espouse particular beliefs. Rather, the focus of the policies of petitioners' at issue here is on racially discriminatory practices, not on beliefs. In requiring that petitioners maintain racially nondiscriminatory policies as a prerequisite to tax-exempt status, the Service does not purport to interfere with their right to espouse or teach a doctrine against interracial marriage, or with any student's right to adhere to such a doctrine. See Brown v. Dade Christian Schools, Inc., 556 F.2d 310, 321-322 (5th Cir. 1977) (en banc) (Goldberg, J., concurring), cert. denied, 434 U.S. 1063 (1978). /42/ Indeed, as this Court has noted (Runyon v. McCrary, supra, 427 U.S.at 176), even if the right of parents to have their children educated in schools fostering a belief in racial discrimination is assumed to be protected by the First Amendment, the First Amendment does not protect a school's practice of racial discrimination. See also Bob Jones University v. Johnson, 396 F.Supp. 597, 606-608 (D.S.C. 1974), aff'd, 529 F.2d 514 (4th Cir. 1975). b. Sherbert v. Yoder, supra, upon which petitioners rely (81-1 Br. 33-34; 81-3 Br. 23 et seq.), are therefore distinguishable. In both of these cases, the infringement on the exercise of the individual's religion was far more burdensome than here. In Sherbert, a member of the Seventy-Day Adventist Church was discharged by her employer because she would not work on Saturday, the Sabbath Day of her faith. She was unable to obtain other employment in the vicinity where she lived because of her religious belief that she could not work on Saturday. South Carolina denied the appellant's claim for unemployment benefits on the ground that she failed without reasonable cause to accept available employment. This Court held that disqualification of a Seventy-Day Adventist from unemployment compensation solely because of her refusal to accept employment in which she would have to work on Saturday violated the Free Exercise Clause. The appellant in Sherbert was faced with a constitutionally unacceptable choice. She had to give up either her Sabbath Day or her economic means of survival. A similar choice was involved in Thomas v. Review Board, Indiana Employment Security Division, 450 U.S. 707 (1981), in which the petitioner terminated his employment when he was assigned to armament production. Petitioners face no similar choice here. Similarly, in Yoder, this Court upheld the claim of members of the Old Order Amish sect that enforcement against them of a state compulsory formal education requirement after the eighth grade would violate the free exercise of their religion. The interest of the state in requiring an additional one or two years of formal high school attendance was deemed insufficient against the claim that state formal education during the crucial adolescent years would expose the children to worldly influences, and thereby threaten the religious survival of the Old Order Amish parents as well as their children. The choice faced by the Amish parents in Yoder thus was either to risk losing their children from their faith or to violate the law. No such choice need be made here. Although petitioners claim that their discriminatory practices are the product of religious belief, they are free to continue to maintain their racial restrictions and relinquish their claim to tax exemption and deductible charitable contributions. Alternatively, petitioners can eliminate their racially restrictive admissions policies and other rules but continue to teach their religious belief in the separation of races. Unlike Sherbert and Yoder, the Service's policy therefore does not threaten the integrity of petitioners' religious beliefs or observances. See also McDaniel v. Paty, supra; Torcaso v. Watkins, 367 U.S. 488 (1961). 2. Finally, the court of appeals correctly held (81-3 Pet.App. A15-A16) that the Service's policy did not transgress Establishment Clause values because it avoids excessive entanglement with religion by applying its policy to all religiously operated schools (as well as non-religious schools). Thus, contrary to petitioner Bob Jones University's contention (81-3 Br. 32), the Service's policy does not have "the effect of creating a religious preference" and "official hostility toward non-preferred religions." In enforcing its ruling, the only inquiry that the Service uniformly undertakes is the relatively narrow inquiry whether the school maintains racially nondiscriminatory policies. Such an inquiry does not involve the government in preferring one religion over another, or even concerning itself with whether racial discrimination is motivated by religious belief. All private schools must demonstrate compliance with the nondiscrimination principle. Hence, the Service's policy does not violate the Establishment Clause. As the court of appeals pointed out (81-3 Pet.App. A15-A16), "the principle of neutrality embodied in the Establishment Clause does not prevent government from enforcing its most fundamental constitutional and societal values by means of a uniform policy, neutrally applied." See Gillette v. United States, 401 U.S. 437, 454-458 (1971). "And, the uniform application of the rule to all religiously operated schools avoids the necessity for a potentially entangling inquiry into whether a racially restrictive practice is the result of sincere religious belief" (81-3 Pet.App. A16; emphasis in original). Cf. Brown v. Dade Christian Schools, Inc., supra, 556 F.2d at 323-324 (Goldbert, J., concurring); Fiedler v. Marumsco Christian School, 631 F.2d 1144 (4th Cir. 1980); Bob Jones University v. Johnson, supra, 396 F.Supp.at 606. Accordingly, the minimum intrusion occasioned by the Commissioner's nondiscrimination policy does not violate the Establishment Clause. CONCLUSION The judgments of the court of appeals should be reversed. Respectfully submitted, LAWRENCE G. WALLACE Acting Solicitor General /**/ WM. BRADFORD REYNOLDS Assistant Attorney General CHARLES JUSTIN COOPER Special Assistant to the Assistant Attorney General February 1982 /*/ This brief sets forth the position of the United States on both questions presented. The Acting Solicitor General fully subscribes to the position set forth on question number two, only. His views on question one are set forth in the Brief for the United States filed in this Court in September 1981 in response to the petitions for certiorari in these cases. Those views are more fully developed in a draft brief on the merits which was ready to be printed for timely filing in early January 1982. Copies of that draft brief were furnished by the Department of Justice in late January 1982, pursuant to request, to the Senate Finance Committee and the House Ways and Means Committee, along with other documents requested by those committees. /1/ Unless otherwise indicated, "Pet. App." and "J.A." references in this portion of the Statement are respectively to the appendix to the petition and the joint appendix in Bob Jones University (No. 81-3). /2/ "A." refers to the separately bound record appendix filed in the court of appeals, Nos. 79-1215 and 79-1216. /3/ The Service's interpretation of Section 501(c)(3) was spurred by litigation. In Green v. Connally, 330 F.Supp. 1150 (D.D.C.), summarily aff'd per curiam sub nom. Coit v. Green, 404 U.S. 997 (1971), parents of black public school students sued to enjoin the United States from according tax-exempt status under Section 501(c)(3) to private schools in Mississippi that discriminated against blacks. The Service initially took the position that racially segregative private schools were entitled to tax exemption under Section 501(c)(3), but reversed its legal position "in the midst of (the) litigation." 330 F.Supp.at 1156. As subsequently observed by this Court, the Court's summary affirmance of Green "lacks the precedential weight of a case involving a truly adversary controversy," and leaves open the question of whether a racially discriminatory private school is eligible for tax exemption under Section 501(c)(3). Bob Jones University v. Simon, 416 U.S. 725, 740 n.11 (1974). /4/ While the administrative proceedings preliminary to the revocation of its exemption were pending, petitioner sought injunctive relief to prevent the Service from taking final action on the revocation. Bob Jones University v. Simon, supra. This Court unanimously held that the action was barred by the Anti-Injunction Act (26 U.S.C. (& Supp. III) 7421(a)) and by the Declaratory Judgment Act (28 U.S.C. (& Supp. III) 2201), but suggested (416 U.S.at 746) the refund suit procedure ultimately employed by petitioners here. /5/ Petitioner's qualification for an exemption from federal unemployment taxes (FUTA) under 26 U.S.C. 3306(c)(8) turns on its entitlement to status as a tax-exempt organization under Section 501(c)(3). See Bob Jones University v. Simon, supra, 416 U.S.at 727-728. /6/ In a separate suit against the Secretary of the Treasury and the Commissioner of Internal Revenue instituted by petitioner, the district court thereafter ordered those officials to restore petitioner's tax-exempt status and to publish advance assurances of deductibility of contributions to petitioner (Pet. App. A72-A86). /7/ The majority miscites the House Report as "H.R. Rep. No. 1820, 75th Cong., 3d Sess. 19 (1939)" (Pet. App. A8). /8/ Unless otherwise indicated, "Pet. App." and "J.A,' references in this portion of the Statement are respectively to the appendix to the petition and record appendix in Goldsboro Christian Schools (No. 81-1). /9/ Although the Second Baptist Church of Goldsboro was active in petitioner's founding and operation, petitioner was incorporated as a separate legal entity (Pet. App. 6a-7a; J.A. 5-6). /10/ References to organizations described in Section 501(c)(3) were deleted from Section 503 in 1969. /11/ Section 504(a)(1) and (3) provided for the denial of tax-exempt status to any organization whose retained income during the taxable year is unreasonable in amount of duration in order to carry out the charitable, educational, or other purpose or function constituting the basis for exemption under section 501(a) of an organization described in section 501(c)(3): or * * * * * * * * (3) * * * invested in such a manner as to jeopardize the carrying out of the charitable, educational, or other purpose or function constituting the basis for exemption under section 501(a) of an organization described in section 501(c)(3). Substantially identical language was contained in Section 3814 of the 1939 Internal Revenue Code (26 U.S.C. 1952 ed.)). This Section 504 was repealed by Congress in 1969. Pub. L. No. 91-172, Section 101(j)(15), 83 Stat. 527. /12/ Section 513(a) provides, in pertinent part, that the term "unrelated trade or business" in the context of Section 511 (which imposes a tax on unrelated business income of otherwise tax-exempt organizations) means "any trade or business the conduct of which is not substantially related * * * to the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under Section 501 (or, * * * to the exercise or performance of an purpose or function described in section 501(c)(3)), * * * ." Substantially identical language appeared in Section 422(b) of the 1939 Internal Revenue Code. /13/ Regulations promulgated by the Internal Revenue Service also reflect an interpretation of the statutory language as affording tax-exempt status any organization qualifying under one of the categories enumerated in Section 501(c)(3), without regard to whether it also accords with the characteristics of a common-law charity. Under Section 1.501(c)(3)-1(d)(1)(i) of the regulations, an organization may be exempt "if it is organized and operated exclusively for one or more of the following purposes: (a) Religious, (b) Charitable, (c) Scientific, (d) Testing for public safety, (e) Literary, (f) Educational, or (g) Prevention of cruelty to children or animals." 26 C.F.R. 1.501(c)(3)-1(d)(1)(i)(emphasis supplied). The regulations state further that (s)ince each of the purposes specified in subdivision (i) of this subparagraph is an exempt purpose in itself, an organization may be exempt if it is organized and operated exclusively for any one or more of such purposes. * * * For example, if an organization claims exemption on the ground that it is 'educational', exemption will not be denied if, in fact, it is 'charitable'. 26 C.F.R. 1.501(c)(3)-1(d)(1)(iii)(emphasis supplied). /14/ Moreover, if all organizations which receive "charitable contributions" were required to conform to common-law notions of charity, the requirement of Section 170(c)(2)(C) -- that no part of the earnings of an organization which received "charitable contributions" may "inure() to the benefit of any private shareholder or individual" -- would be superfluous. See page 20, infra. /15/ Even if one assumes that Congress did intend all tax-exempt organizations to qualify as "charitable" under Section 501(c)(3), it is doubtful that Congress used the term "charitable" in its common-law sense. As Lord McNaughten observed in Commissioners of Income Tax v. Pemsel, (1891), A.C. 531, 583, the word "charitable" at common law encompassed "trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads." Had Congress intended the word "charitable" to have its common-law meaning, separate references in Section 501(c)(3) to "educational" and "religious" organizations would have been unnecessary, for the latter two terms would have been included in the first. Such an interpretation of the word "charitable" in Section 501(c)(3) would thus betray a fundamental axion of statutory construction: statutes are to be construed to give effect to each word, and no one part of a statute should be interpreted so as to render another part of the statute redundant. Jarecki v. G.D. Searle & Co., 367 U.S. 303, 307-308 (1961); United States v. Menasche, 348 U.S. 528, 538-539 (1955). Notably, the Service followed this axiom during the initial period of Section 501(c)(3)'s history and, accordingly, interpreted "charitable" in its "popular and ordinary sense" rather than in its common-law sense. See, e.g., I.T. 1800, II-2 Cum.Bull. 152, 153 (1923) (discussing the intended meaning of the word "charitable" as used in Section 231(6) of the Revenue Acts of 1918 and 1921 (Section 501(c)(3)' s predecessor)). This contemporaneous administrative interpretation of the statute clearly is not without significance. Power Reactor Development Co. v. Electricians, 367 U.S. 396, 408 (1961). See NLRB v. Boeing Co., 412 U.S. 67, 75 (1973) ("a consistent and contemporaneous construction of a statute by the agency charged with its enforcement is entitled to great deference * * * "). See also discussion in text at pages 19-22, infra. /16/ This income tax act was later declared unconstitutional by the Supreme Court in Pollock v. Farmer's Loan & Trust Co., 158 U.S. 601 (1895). /17/ Revenue Act of 1924, ch. 234, Section 231(6), 43 Stat. 282; Revenue Act of 1926, ch. 27, Section 231(6), 44 Stat. 40; Revenue Act of 1928, ch. 852, Section 103(6), 45 Stat. 813; Revenue Act of 1932, ch. 209, Section 103(6), 47 Stat. 193. /18/ Treas. Reg. 69, Art. 517 (1926 Revenue Act); Treas. Reg. 74, Art. 517 (1928 Revenue Act); Treas. Reg. 77, Art. 527 (1932 Revenue Act). /19/ The House Report on the 1939 Code explained that tax exemptions are granted by Congress to certain types of organizations in recognition of the performance of functions that promote the general welfare and that might otherwise be provided by the government. See page 7, supra. Contrary to the court of appeals' suggestion in the Bob Jones University case (Pet. App. A8 the Report does not indicate that Congress intended to endow the Internal Revenue Service with authority to disqualify a designated organization from tax-exempt status upon an agency determination that one or more of the organization's practices affront an agency concept of federal public policy as informed by the "general welfare." To the contrary, Congress made a determination that organizations within the terms of Section 501(c)(3) advance the general welfare, and did not invest the Service with authority to determine on a case-by-case basis whether particular practices of a bona fide qualifying organization sufficiently detracted from the general welfare to warrant denial of a tax exemption. /20/ The 1954 Code does not permit tax-exempt organizations to "participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office." /21/ Were the Service's regulations to be so interpreted they would be inconsistent with the plain language of Section 501(c)(3) and would have to fall. The Supreme Court outlined the limits of the Executive's interpretive powers in Manhattan General Equipment Co. v. Commissioner, 297 U.S. 129, 134 (1936): The power of an administrative officer or board to administer a federal statute and to prescribe rules and regulations to that end is not the power to make law -- for no such power can de delegated by Congress -- but the power to adopt regulations to carry into effect the will of Congress as expressed by the statute. A regulation which does not do this, but operates to create a rule out of harmony with the statute, is a mere nullity. /22/ Obviously, the Commissioner's 1970 revenue ruling does not even arguably qualify as "a substantially contemporaneous construction of the statute by those presumed to have been aware of congressional intent." National Muffler Dealers Association v. United States, 440 U.S. 472, 477 (1979). /23/ The fines assessed against the taxpayer were for violations of penal statutes enacted to protect state highways from damage and to ensure the safety of highway users. /24/ That the Ashbrook and Dornan Amendments suspended only those revenue procedures promulgated after August 1978 in no way indicates congressional approval of the Service's pre-August 1978 policies. /25/ Congressman Ashbrook, in discussing his amendment on the House floor, stated: So long as the Congress has not acted to set forth a national policy respecting denial of tax exemptions to private schools, it is improper for the IRS or any other branch of the Federal Government to seek denial of tax-exempt status. * * * * * For an agency to permit itself to be guided by pressures of pending legal action, other Federal agencies, outside pressure groups, or changes in an administration is to confuse its own role as tax collector with that of legislator, jurist, or policymaker. (125 Cong.Rec. H5879-H5880 (daily ed. July 13, 1979).) Senator Helms, sponsor of the Ashbrook Amendment in the Senate, was even more explicit, stating: Mr. President, the IRS has responded to the absence of specific statutory authority from Congress by constructing a theory which substantially distorts the legislative intent and clear meaning of section 501(c)(3) of the Internal Revenue Code. IRS asserts that for a private school to qualify for tax-exempt status under section 501(c)(3) it must be both a charitable and an educational organization. However, section 501(c)(3) lists the exempt purpose as being independent and separate. Nowhere in the statute can it be inferred that an organization seeking exemption must be both 'charitable' as well as meet their requirements of one of the other listed purposes. (125 Cong.Rec. S11835 (daily ed. Sept. 5, 1979).) See also 125 Cong.Rec. H5980 (daily ed. July 16, 1979) (remarks of Congressman Dornan). /26/ In introducing the Ashbrook Amendment in the Senate, Senator Helms stated: 'My amendment is necessary to allow Congress the time to consider the numerous legislative proposals which have been introduced to deal with this problem." 125 Cong.Rec. S11980 (daily ed. Sept. 6, 1979); see 125 Cong.Rec. H5980 (daily ed. July 16, 1979) (remarks of Congressman Dornan). /27/ The Ashbrook and Dornan Amendments have been extended in subsequent fiscal years. In the Appropriations Act for fiscal 1982 the Ashbrook Amendment was extended with the addition of language which prohibits use of appropriations to carry out any court order which would cause the loss of tax-exempt status unless in effect prior to August 22, 1978. 127 Cong.Rec. H5392, H5395 (daily ed. July 30, 1981). /28/ Compare 125 Cong.Rec. H5981 (daily ed. July 16, 1979) (Congressman Philip M. Crane); id. at H5982 (daily ed. July 16, 1979) (Congressman Goldwater); id. at H5884 (daily ed. July 13, 1979) (Congressman Grassley); id. H5885 (daily ed. July 13, 1979) (Congressman Duncan); id. at S11837 (daily ed. Sept. 5, 1979) (Senator Thurmond); id. at S11852 (daily ed. Sept. 5, 1979) (Senator Stennis) with id. at H5982 (daily ed. July 16, 1979) (Congressman Miller); id. at S11984 (daily ed. Sept. 6, 1979) (Congressman Schmitt); id. at S11833 (daily ed. Sept. 5, 1979) (Senator Javits); id. at S11835 (daily ed. Sept. 5, 1979) (Senator Metzenbaum); id. at S11851 (daily ed. Sept. 5, 1979) (Senator Levin). /29/ Worded identically in both Reports, the pertinent portion of the footnote provides: Also, the Supreme Court has affirmed (Coit v. Green, 404 U.S. 997 (1971)) a decision (Green v. Connally, 330 F.Supp. 1150 (D.C., D.C. 1971)) that discrimination on account of race is inconsistent with an educational institution's tax-exempt status (sec. 501(c)(3)) and also with its status as a charitable contribution donee (sec. 170(c)(2)). (S. Rep. No. 94-1318, 94th Cong., 2d Sess. 7-8 & n.5 (1976); H.R. Rep. No. 94-1353, 94th Cong., 2d Sess. 8 & n.5 (1976).) In floor debate on Section 501(i), there was no indication of congressional approval of the Service's policy regarding racially discriminatory private schools. Congressmen Ullman and Frenzel, who spoke in support of the bill, explained the nondiscrimination provision regarding private social clubs as "a new requirement" and a "major change in the tax law * * * with regard to social organizations." 122 Cong.Rec. 27452 (1976). /30/ Even if this singular footnote reference to Section 501(c)(3) organizations had clearly expressed approval of Green, it could not be read as an authoritative expression of congressional will. In Consumer Product Safety Commission v. GTE Sylvania, 447 U.S. 102, 118 n.13 (1980), this Court cautioned that "(a) mere statement in a conference report * * * as to what the Committee believes an earlier statute meant is obviously less weighty" than subsequent legislation interpreting an earlier statute. "Thus, * * * subsequent legislative history will rarely override a reasonable interpretation of a statute that can be gleaned from its language and legislative history prior to its enactment." Ibid. The Court in GTE Sylvania, accordingly, gave no weight to statements contained in a conference committee report because the legislation which was the subject of the report did not deal with the issue discussed in the statements in question, because the interpretation espoused by the conferees was not mentioned by the committee that drafted the amending act, and because the interpretation espoused in the report was not debated on the floor of Congress. Similarly, here, the 1976 enactment of Section 501(i) did not purport to interpret Section 501(c)(3) and, indeed, concerned Section 501(c)(7) organizations only. The Senate and House Reports use virtually identical language, which suggests the absence of independent consideration of the proper scope of Section 501(c)(3), and the footnote reference to Green (again, assuming arguendo that it expressed approval of Green) was not debated on the floor of Congress. Thus the conclusion of the Court in GTE Sylvania applies equally here: "the statement of the Conference Committee is far from authoritative as an expression of congressional will * * * ." 447 U.S.at 120. /31/ Section 12(k) permits the SEC "summarily to suspend trading in any security * * * for a period not exceeding ten days" under certain specified circumstances. /32/ The Senate committee report stated: The Commission has consistently construed section 19(a)(4) as permitting it to issue more than one suspension if, upon reexamination at the end of the 10-day period, it determines that another suspension is necessary. (S. Rep. No. 379, 88th Cong., 1st Sess. 66 (1963).) /33/ Shortly after the Service announced its new position with regard to the tax-exempt status of racially discriminatory schools, the Commissioner appeared to testify before the Senate Select Committee on Equal Educational Opportunity. The Commissioner explained the Service's new policy and proposed modes of enforcement. The Chairman of the Select Committee urged him to monitor attendance records rather than to accept a private school's assurance of a nondiscriminatory admissions policy. Equal Educational Opportunity: Hearings Before the Senate Select Comm. on Equal Educational Opportunity, 91st Cong., 2d Sess. 1992-2028 (1970). This colloquy amounted to no more than a reiteration of the Service's recent policy and an expression of approval by an individual Senator. No legislation pertaining to the tax laws was proposed or considered. /34/ In 1976 Congress amended Section 501(c)(3) to confer tax-exempt status upon organizations devoted to fostering national or international sports competition. See Pub. L. No. 94-455, Section 1313(a), 90 Stat. 1730. /35/ This conclusion is in no way altered by the fact that several bills have been introduced in Congress, seeking in a variety of ways to legislate with regard to the tax-exempt status of private schools. None of the bills reached the floor of either House of Congress. More importantly, the courts have accorded this type of evidence of congressional inaction virtually no weight in the effort to illuminate the intent of an earlier Congress. See United States v. Wise, 370 U.S. 405, 411 (1962); Waterman Steamship Corp. v. United States, 381 U.S. 252, 269 (1965). This Court's decision in Runyon v. McCrary, 427 U.S. 160 (1976), does not suggest otherwise. That case construed 42 U.S.C. 1981 to apply to private acts of racial discrimination, and based that interpretation on an earlier Court decision, Jones v. Alfred H. Mayer Co., 392 U.S. 409 (1968). Subsequent to the Jones decision, Congress considered and rejected an amendment to the Equal Employment Opportunity Act of 1970 which would have repealed the interpretation accorded the statute in Jones insofar as it gave private sector employees a right of action based on racial discrimination in employment. In light of this "indication of congressional agreement with the view that Section 1981 does reach private acts of racial discrimination" (427 U.S.at 175 (emphasis in original)), the Court found "no basis for deviating from the well-settled principles of stare decisis applicable to this Court's construction of federal statutes." Ibid. Here, however, the doctrine of stare decisis is inapplicable, for "(t)he question of whether a segregative private school qualifies under Section 501(c)(3) has not received plenary review in this Court * * * ." Bob Jones University v. Simon, supra, 416 U.S.at 740 n.11. Moreover, the extent to which the Runyon Court relied upon this congressional inaction in deciding the case is unclear. Presumably the Court did not give that factor much weight since "unsuccessful attempts at legislation are not the best of guides to legislative intent." Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 382 n.11 (1969); see also United States v. Wise, supra, 370 U.S.at 411; Waterman Steamship Corp. v. United States, supra, 381 U.S.at 269. In any event, Runyon is distinguishable from the situation with regard to Section 501(c)(3) because no legislation which would have disapproved of or overruled the interpretation given to Section 501(c)(3) by the Green court and by the Service in 1970 has ever been considered on the floor of either House of Congress. /36/ Norwood v. Harrison, supra, is not to the contrary, having arisen in the context of state and municipal programs in Mississippi that "benefitted private schools engaging in racially discriminatory admissions practices following judicial decrees desegregating public school systems,' Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 163 (1978). See also Gilmore v. Montgomery, 417 U.S. 556, 568 570-571 n.10 (1974). To the extent that the Court's decision in Norwood can be read to reject the proposition that discriminatory purpose is a necessary element of a constitutional violation, it should be noted that Norwood was decided prior to the Court's ruling in Washington v. Davis, supra, which held unequivocally to the contrary. /37/ Commentators have suggested that if tax exemptions were deemed to impose constitutional obligations on the recipient, no one would be immune, since, for example, individual taxpayers receive "subsidies" in the form of interest deductions, charitable contribution deductions, and medical expense deductions, while corporations receive a surtax exemption. Bittker and Kaufman, supra, 82 Yale L.J.at 68-74. "(T)he Internal Revenue Code is a pudding with plums for everyone." Ibid. /38/ A list of covered federal programs prepared by the Deputy Attorney General in connection with hearings on Title VI does not include tax exemptions as triggering coverage, even though the list referred to such minor instances of federal financial assistance as payments to three counties in Minnesota from the national forest fund and payments to the National Board for Promotion of Rifle Practice. Hearings on H.R. 7152 as amended by Subcomm. No. 5 Before the House Comm. on the Judiciary, 88th Cong.: 2d Sess., Pt. VI, 2773 (1964). See generally, Bittker and Kaufman, supra, 82 Yale L.J.at 83-84. "(I)f 'tax subsidies' were embraced by the statutory language (of Title VI), the legislators were unaware of that fact." Id. at 83. /39/ For example, Title II of the Act, relating to public accommodations, exempts from nondiscrimination requirements "an establishment located within a building * * * which is actually occupied by the proprietor of such establishment as his resident * * * ." 42 U.S.C. 2000a(b)(1). However, if the proprietor claimed an investment tax credit on purchasing a new stove, and if such a tax subsidy were deemed "Federal financial assistance," the Title II exemption would be nullified. Similarly, under this conception of "Federal financial assistance" the exclusion of contracts of insurance and guaranty from coverage under Title VI would be cancelled if the contract recipient were a corporation which took advantage of the corporate surtax exemption. Bittker and Kaufman, supra, 82 Yale L.J.at 81. /40/ The reasoning of the three-judge federal district court in McGlotten v. Connally, 338 F.Supp. 448 (D.D.C. 1972), which equated tax exemptions with "Federal financial assistance," is unpersuasive. While conceding that neither the language, nor agency interpretations, nor legislative history of Title VI of the Civil Rights Act evidenced a congressional intent to include Section 501(c) tax exemptions within the ambit of federal financial assistance under Title VI, the district court insisted that the "plain purpose" of the statute to promote nondiscrimination should override its plain language in determining whether federal tax exemptions constituted federal financial assistance. 338 F.Supp.at 461. The nondiscrimination purpose of Title VI would be advanced, the district court concluded, if some tax exemptions were equated with a distribution of federal funds, property, or use of federal personnel, and were thus treated as federal financial assistance. McGlotten contravenes the maxim that the plain language rather than the general purpose of a statute should govern its interpretation, absent contrary congressional direction. See, e.g., Burns v. Alcala, 420 U.S. 575, 580-581 (1975). In addition, the district court's equation of tax exemptions with the distribution of federal funds seems premised on the idea that the government is entitled to all property and earnings of private parties, and thus a failure of Congress to tax constitutes federal financial assistance. The Supreme Court rejected that concept in Walz v. Tax Commission, 397 U.S. 664 (1970), holding that a tax exemption reflects only government restraint from demanding private financial support for the government, not a flow of assistance or revenues from the government to the exempt organization. /41/ We submit, for example, that the First Amendment would not immunize a church from the tax on unrelated business income (see Sections 511-513 of the 1954 Code) if the church believed that it was its religious duty to conduct a business in competition with a particular company. See particularly Sections 512(b)(14) and 7605(c) of the 1954 Code. /42/ Nor do the Service's actions implicate the interests of a church in maintaining the intimacy of its activities, as petitioner Bob Jones University urges (81-3 Br. 23-25). Petitioners offer to the public on a commercial basis educational services that compete with programs of instruction in other schools and colleges (81-3 Pet.App. A3; J.A. A88-A89). Hence, "'Their actual and potential constituency * * * is more public than private.'" Runyon v. McCrary, 427 U.S. 160, 172 n.10 (1976) (quoting 515 F.2d 1082, 1089 (4th Cir. 1975)). /**/ The Solicitor General is disqualified in these cases.