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Official Opinion 99-8

Official Opinion 99-8

April 29, 1999
To: 

Joint Secretary
State Examining Boards

Re: 

A church that accepts donations of used motor vehicles and resells the vehicles must be licensed as a used motor vehicle dealer in the State of Georgia, unless the church would otherwise qualify for a statutory exemption.

This is in response to your request for an official opinion concerning whether a church which sells used motor vehicles is exempt from licensure as a used motor vehicle dealer in Georgia under the First Amendment of the United States Constitution. Having reviewed the United States Constitution and the applicable statute and case law, I have concluded that a church that accepts donations of used motor vehicles and resells the vehicles must be licensed as a used motor vehicle dealer, unless the church would otherwise qualify for a statutory exemption.

The State Board of Registration of Used Motor Vehicle Dealers and Used Motor Vehicle Parts Dealers (“Board”) licenses and regulates persons who sell, exchange, rent with an option to purchase or attempt to negotiate a sale or exchange of an interest in a used motor vehicle. O.C.G.A. § 43-47-2(17). It is unlawful for any person to operate as a used motor vehicle dealer without first obtaining a license from the Board. O.C.G.A. § 43-47-7(a). The statute provides for several exemptions from the licensing law, such as for pawnbrokers, financial institutions and persons disposing of motor vehicles acquired for their own personal use. O.C.G.A. § 43-47-2(17). Further, the statute provides that the sale of five or more used motor vehicles in any one calendar year constitutes prima-facie evidence that a person is engaged in the business of selling used motor vehicles. Id. The statute does not contain an exemption for religious organizations.

The licensing scheme has been in place for over forty years, see 1958 Ga. Laws 55, and is designed to protect the public from unscrupulous and dishonest used motor vehicle dealers, see O.C.G.A. § 43-47-10 (listing grounds for disciplinary action by the Board); O.C.G.A. § 43-47-8 (requiring applicants for licensure to post a bond and maintain public liability and property damage insurance). The General Assembly’s desire to protect Georgia’s citizens from unfair business practices relating to the sale of motor vehicles in general and the sale of used motor vehicles in particular is long standing and well established. E.g., O.C.G.A. T. 40, Ch. 3 (certificates of title, security interests and liens); O.C.G.A. T. 10, Ch. 1, Art. 2 (Motor Vehicle Sales Finance Act). The resulting laws and regulations, in conjunction with the associated federal laws and regulations, e.g., 18 U.S.C. § 511 (altering or removing motor vehicle identification numbers); 49 U.S.C. § 32702 (odometers); 16 C.F.R. Part 429 (FTC Cooling-Off Rule); 16 C.F.R. Part 455 (Used Motor Vehicle Trade Regulation Rule), create a complex regulatory system with which persons selling used motor vehicles must comply. One purpose of Georgia’s licensing law is to assure that all used motor vehicle dealers are cognizant of the relevant federal and state laws and regulations and that, once licensed, all licensees comply with said laws and regulations. See O.C.G.A. § 43-47-8(d) (requiring applicants for licensure attend a seminar and take a test prior to licensure); O.C.G.A. § 43-47-10(2) (requiring compliance with certain laws); O.C.G.A. § 43-1-19(a)(8) (authorizing disciplinary action for violating any federal or state law or regulation relating to the licensed business); Ga. Comp. R. & Regs. r. 681-10-.01 (1995) (record keeping requirement for licensees).

The instant request for advice stems from a church’s inquiry as to whether it is required to obtain a used motor vehicle dealer’s license under the above discussed statutory scheme. The church has a number of ministries, including, but not limited to a street ministry of evangelism and feeding the poor, a prison ministry, a thrift shop, and a men’s transition center. As a not for profit, tax exempt ministry, the church receives both monetary and in kind donations, including used motor vehicles. The church desires to sell the used motor vehicles in lieu of keeping the used motor vehicles for its own use. Because the church is asserting that it is unconstitutional for the state to require it be licensed as a used motor vehicle dealer in order to sell donated used motor vehicles, you wrote to this office requesting an opinion. In essence, you have posed the following question: Does the failure of the used motor vehicle dealers licensing law to include an exemption for religious organizations violate the First Amendment of the United States Constitution, thus making the statute unconstitutional? I have concluded that it does not.

The First Amendment to the United States Constitution provides in pertinent part as follows: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; . . ..” U.S. Const., amend. I. Known respectively as the Establishment Clause and the Free Exercise Clause, the Religion Clauses are binding on the states through the Fourteenth Amendment. Cantwell v. Connecticut, 310 U.S. 296, 303 (1940). In interpreting the Religion Clauses, the United States Supreme Court has struggled to find a neutral course between them, as both are cast in absolute terms, and either, if expanded to its logical extreme, would result in a direct clash with the other. Walz v. Tax Comm’n, 397 U.S. 664, 668-69 (1970). As a result, the Court has developed certain tests and standards to be utilized in Establishment Clause and Free Exercise Clause analyses.

Any Establishment Clause analysis must begin with an inquiry as to whether the questioned statute, on its face, displays a denominational preference. Hernandez v. Commissioner of Internal Revenue, 490 U.S. 680, 695 (1989) (citing Larson v. Valente, 456 U.S. 228 (1982)). Since no religious preference exists in the subject statute, the inquiry proceeds to the customary three-pronged test of Lemon v. Kurtzman, 403 U.S. 602, 612-13 (1971) (citations omitted). First, does the statute have a secular purpose? Second, is its principal or primary effect one that neither advances nor inhibits religion? Third, does the statute avoid fostering an excessive governmental entanglement with religion? If the answer to all three questions is positive, the statute is not a violation of the Establishment Clause of the United States Constitution.

Licensing of used motor vehicle dealers is unquestionably for a secular purpose. The Georgia General Assembly enacted the legislation for the sole purpose of protecting the public and the statute is devoid of any language that could be deemed to support a sectarian purpose. Therefore, the answer to the first prong of the Lemon v. Kurtzman test must be answered in the positive.

The principal or primary effect of the statute is to regulate the business of selling used motor vehicles, irrespective of the religious beliefs of the sellers or buyers. This valid exercise of the state’s police powers in no way advances or inhibits religion. In fact, it is religion neutral. Therefore, the answer to the second prong of the Lemon v. Kurtzman test must be answered in the positive.

Nor does the statute foster an excessive entanglement with religion. The regulatory scheme does not attempt in any way to provide oversight of the spiritual decisions of any religious organization. It is irrelevant to the licensing Board whether the applicant for licensure is a church, a secular not for profit organization, or a for profit individual or entity. The application itself does not inquire as to the applicant’s religious affiliation and any monitoring of a licensee’s compliance with the laws and regulations governing the sale of used motor vehicles is unrelated to any religious practice. Routine regulatory interaction that does not involve an inquiry into religious doctrine cannot be said to constitute an excessive governmental entanglement with religion.

Furthermore, the idea that a church that elects to engage in a commercial activity must comply with all laws, rules, regulations and ordinances related to the commercial activity is not novel. Tony and Susan Alamo Found. v. Secretary of Labor, 471 U.S. 290, 305-06 (1985) (nonentanglement principle does not exempt religious organization from secular governmental activity such as fire inspections, building and zoning regulations, or the Fair Labor Standards Act); see also, e.g., Jimmy Swaggart Ministries v. Board of Equalization, 493 U.S. 378 (1990) (imposition of sales and use tax liability on religious organization’s retail sale of religious material does not violate Religion Clauses); First Assembly of God of Naples, Florida, Inc. v. Collier County, Florida, 20 F.3d 419 (11th Cir. 1994) ( homeless shelter run by religious organization subject to zoning ordinances); Al-Amin v. City of New York, 979 F. Supp. 168 (E.D.N.Y. 1997) (religious organization selling books, pamphlets, perfume oils, incense and bracelets subject to General Vendors Law). Therefore, the answer to the third prong of the Lemon v. Kurtzman test must be answered in the positive.

Thus, the Georgia statute is not unconstitutional as a violation of the Establishment Clause of the United States Constitution under Lemon v. Kurtzman. However, the question remains as to whether it is unconstitutional as a violation of the Free Exercise Clause.

A Free Exercise Clause analysis is controlled by the decision of the United States Supreme Court in Employment Division v. Smith, 494 U.S. 872, 886 (1990), which held that a valid generally applicable, religion neutral law that has the effect of only incidentally burdening a particular religious practice is constitutional. The subject of the instant inquiry clearly is a religion neutral law of general applicability as discussed above. The law does not in any way prohibit the church from engaging in the desired activity; it merely requires licensure to do so. It is equally clear that the law places only incidental burdens on the religion, i.e., meeting the requirements for licensure, paying the licensing fees and meeting the requirements for license renewal.

Although, as the Smith Court indicated, there may be instances in which a nondiscriminatory religious-practice exemption to a statute is permitted, it is not constitutionally required. Smith, 494 U.S. at 890. That the General Assembly has chosen to grant religious exemptions to some licensing laws, e.g., O.C.G.A. § 43-10A-7(b) (professional counselors, social workers and marriage and family therapists); O.C.G.A. § 43-39-7 (psychologists), but has chosen not to grant such an exemption under the used motor vehicle dealer’s licensing law, does not make the statute unconstitutional. The decision to grant, or not to grant, a religious exemption from licensure is a matter of public policy for the legislature to determine. Since the law’s object is not prohibiting or burdening the exercise of religion, but rather is a valid general regulation of a secular commercial activity, its incidental impact on a religious organization does not make it unconstitutional as a violation of the Free Exercise Clause of the United States Constitution.

For the reasons stated above, it is my official opinion that a church that accepts donations of used motor vehicles and resells the vehicles must be licensed as a used motor vehicle dealer in the State of Georgia, unless the church would otherwise qualify for a statutory exemption.

Prepared by:

EMILY P. HITCHCOCK
Assistant Attorney General