
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, March 27, 1991                   TAG: 9103270463
SECTION: VIRGINIA                    PAGE: B7   EDITION: EVENING 
SOURCE: Associated Press
DATELINE: LYNCHBURG                                LENGTH: Medium

LIBERTY U. MAY APPEAL RULING

Liberty University is preparing to ask the U.S. Supreme Court to examine a lower court ruling that the Lynchburg school founded by the Rev. Jerry Falwell is too religious to receive tax-free bonds.

When the Virginia Supreme Court ruled in January that Liberty did not qualify for $60 million in industrial bonds, the school said it could not afford an appeal to the U.S. Supreme Court.

But now the conservative Rutherford Institute has agreed to represent Liberty in an appeal to the Supreme Court.

The Charlottesville-based institute, which had no involvement in the case at the state level, has asked the Virginia Supreme Court if it can intervene as a legal representative for Liberty at no cost.

The group also has filed for an extension to the 90-day appeal period with the nation's high court to give attorneys time to prepare.

If the Rutherford Institute is allowed to enter the case and the Supreme Court agrees to hear an appeal, it will not be heard until at least the fall, attorneys said.

The Virginia Supreme Court ruled that Liberty - unlike some religious schools - is pervasively sectarian with the primary aim of religious instruction and not liberal-arts education.

The court said that because of the school's religious nature, to allow a government body to act in support of a religious institution would violate the separation of church and state.

The Lynchburg Industrial Development Authority had approved $60 million worth of bonds for Liberty. The bonds would save the school $2 million to $3 million a year in interest, Liberty officials said.

The school was challenged in its attempt to get the bonds by two Lynchburg taxpayers who lost at the Circuit Court level but won their appeal to the Virginia Supreme Court.

The loss of the bond issue and subsequent problems securing taxable bonds have put the school in a financial bind.

by CNB