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Alabama, Texas rank highest in nation for religious, regulatory freedom; Michigan, Nevada among worst: Study

A new report evaluates how each state in the U.S. protects the freedoms of faith-based nonprofits and found every state had room for improvement.

EXCLUSIVE – A newly released report that looks at how each state in the country protects freedoms for faith-based groups found Texas and Alabama are among the best in the country, while Michigan and Nevada rank the lowest.

Napa Legal Institute released its first annual "Faith and Freedom Index" Wednesday and shared it first exclusively with Fox News Digital. It ranks the 50 states and the District of Columbia on how their laws protect faith-based, tax-exempt nonprofits' ability to operate successfully and efficiently. The group awarded scores to each state based on 14 factors in the categories of religious freedom and regulatory freedom.

The report examined practical factors affecting faith-based groups in each state. States with explicit constitutional provisions for religious freedom were awarded more points in this category, while states that had "well-developed nonprofit religious corporation laws" received more points in the regulatory category. 

Taxes and audit requirements to fundraise were examples of "red tape" items that would detract points on the regulatory freedom side. States with modern nondiscrimination laws, which incorporate sexual orientation and gender identity, lost points on the religious freedom side.

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No state received a positive ranking of 80% or higher in both categories, according to the legal organization. While 32 states received scores of 40% or lower for religious freedom, states were more friendly to these groups in ensuring freedom from burdensome regulations.

Alabama and Texas received the best scores overall while Michigan received the lowest overall. Maryland, Nevada, Wisconsin, Massachusetts, Maine, Hawaii, Utah, Virginia, Vermont and West Virginia all followed with the lowest overall combined scores.

Texas and Alabama also scored the highest in protecting religious freedom. Alabama received an 86% score and earned the distinction as the only state earning over 80%.

Napa Legal Executive Director Mary Margaret Beecher told Fox News Digital that Alabama had a constitutional amendment that offered "significant protection" for religious organizations.

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Texas followed in the second place slot for religious freedom. The report cites similar reasons such as "strong constitutional protections for free exercise of religion, constitutional language protecting religious exercise during a state of emergency, strong protections for directors to rely on guidance from religious figures, and a broad exemption from charitable registration laws."

The Lone Star state is currently contesting an Obama-era anti-discrimination rule known as "SOGI," which requires faith-based adoption and foster groups that receive federal funding to not discriminate based on sexual orientation, gender identity, and same-sex marriage.

Alabama Gov. Kay Ivey, R., signed similar adoption reform legislation in May protecting adoptive and foster care families with religious beliefs. In January, Ivey signed an executive order enforcing the state's Religious Freedom Amendment passed in 1998.

However, 32 states received poor scores for protecting religious freedom. 

Nevada received an 18% score, the lowest score in the nation for protecting religious freedom. Like several other states, Nevada has a Blaine Amendment which prohibits public funds from going to religious schools, and no Religious Freedom Restoration Act, lowering its score.

Michigan's regulatory laws burdened faith-based nonprofits the most of any state in the nation according to the report. The deep blue state earned a 39% score, while Oregon received the highest score for regulatory freedom at 90%.

Missouri, Iowa, Wyoming, Montana and Indiana also were given high scores in this category. 

Beecher said the report shows an "opportunity" for states to make protecting these freedoms a legislative priority.

States should minimize the burdens and focus their oversight and enforcement on wrongdoers, Beecher argued. 

"So we don't want to go in with this attitude of guilty until proven innocent," she added. She urged states should collaborate with nonprofits and clarify laws to make these protections unambiguous. 

"We're in an era of problems, we're in an era of division, and faith-based nonprofits offer solutions," Beecher said. 

Fox News' Bradford Betz contributed to this report.

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