The Supreme Court agreed Friday to decide whether states may reject religious charter schools from receiving public funding, agreeing to hear arguments in an appeal out of Oklahoma involving the first such school in the nation.

The state’s highest court said that the religious charter school would be a “state actor” and not a private entity contracting with the state. State funding of the school would violate the U.S. Constitution’s First Amendment prohibition on government establishment of religion, the court said.

The U.S. Supreme Court agreed on Friday to hear a bid led by two Catholic dioceses to establish in Oklahoma the nation's first taxpayer-funded religious charter school in a case testing the separation of church and state.