Institute in Basic Life Principles, Inc. v. Watersmeet Tp.

Decision Date31 May 1996
Docket NumberDocket No. 174822
Citation551 N.W.2d 199,217 Mich.App. 7
PartiesINSTITUTE IN BASIC LIFE PRINCIPLES, INC., Petitioner-Appellant, v. WATERSMEET TOWNSHIP, Respondent-Appellee (After Remand).
CourtCourt of Appeal of Michigan — District of US

Stroup & Tresidder, P.C. by Nathaniel W. Stroup, Petoskey and Jordan Lorence, Paeonian Springs, VA, for petitioner.

Geissler, Dean & O'Dea, P.C. by Frederick K. Geissler, Ironwood, for respondent.

Before CORRIGAN, P.J., and BANDSTRA and CRANE, * JJ.

AFTER REMAND

CORRIGAN, Presiding Judge.

Petitioner Institute in Basic Life Principles, Inc., appeals of right an order of the Tax Tribunal denying it an exemption from ad valorem property taxes as a house of public worship. We reverse.

I Underlying Facts

Petitioner is a not-for-profit corporation that owns sixteen contiguous properties, totaling 1,800 acres, in respondent Watersmeet Township, Gogebic County. Four parcels are developed. Petitioner protested its Michigan property tax assessment for the years 1987 through 1990, arguing that it was exempt from taxes as a nonprofit, charitable, religious, and educational organization. 1

In 1961, petitioner's founder, Reverend William Gothard, 2 incorporated petitioner's predecessor organization, which was designed to explain, primarily to young people, how the Bible can provide guidance. Petitioner accomplished this goal by conducting seminars on the Bible at Wheaton College in Illinois. In later years, petitioner expanded its work to include adults. When petitioner's seminars outgrew their original quarters, petitioner rented auditoriums across the country. Petitioner now conducts seminars around the world.

Petitioner holds some seminars on its Watersmeet Township property. The property contains Eagle's View Lodge, with fifteen rooms, and Northwoods Conference Center, which has ninety rooms, an auditorium for 350 people where worship services are held, a dining room for guests, and a gymnasium. Petitioner also uses the property to write religious materials for its seminars and for its home-schooling program, which petitioner established ten years ago. Six thousand Michigan families participate in the home-schooling program.

Petitioner is not a church and does not represent a religious denomination. Petitioner's board members and lecturers represent various denominations, including Baptist, Reformed Presbyterian, and Lutheran. Those involved with petitioner believe that the literal truth of the Bible is the inspired word of God.

In 1991, the Tax Tribunal granted respondent township's motion to dismiss. When petitioner appealed, this Court affirmed the tribunal's decision on the claimed exemptions for educational and charitable organizations. 3 Institute in Basic Life Principles, Inc, v. Watersmeet Twp, unpublished opinion per curiam of the Court of Appeals, issued December 29, 1992 (Docket No. 140633). The panel remanded the case to the tribunal for further proceedings on whether petitioner qualified for an exemption as a house of public worship. 4

On remand, the Tax Tribunal ruled that petitioner's property was not exempt because petitioner was not a religious society as defined in Hamsher v. Hamsher, 132 Ill. 273, 23 N.E. 1123 (1890), or in MCL § 450.186; MSA § 21.187. The tribunal reasoned that petitioner was not a religious society because it had no members and prescribed no form of worship. As an initial matter, we note that Hamsher is distinguishable from this case because it involved, not a tax exemption, but the right of an Illinois religious corporation to hold real property. Further, we reject the reasoning in Hamsher regarding the membership requirement, as will be explained.

II The Definition of a Religious Society

In its present posture, this case presents an issue of first impression: whether the house of public worship tax exemption statute requires that a religious society have members. This Court's usual review of the Tax Tribunal's decisions is limited to deciding if the tribunal's factual findings are supported by competent, material, and substantial evidence. In the absence of fraud, this Court reviews whether the Tax Tribunal made an error of law or adopted an incorrect legal principle. Gillette Co. v. Dep't of Treasury, 198 Mich.App. 303, 306, 497 N.W.2d 595 (1993). Statutory interpretation, however, is a question of law subject to review de novo on appeal. DeKoning v. Dep't of Treasury, 211 Mich.App. 359, 361, 536 N.W.2d 231 (1995). Additionally, this Court generally defers to the longstanding construction of statutory provisions by a particular department of government. Bachman v. Dep't of Treasury, 215 Mich.App. 174, 182, 544 N.W.2d 733 (1996). Nonetheless, where the agency's interpretation is clearly wrong, the longstanding interpretation of a statute by the agency that administers it does not control. Id.

When courts construe statutory meaning, their primary goal is to ascertain and give effect to legislative intent. Farrington v. Total Petroleum, Inc., 442 Mich. 201, 212, 501 N.W.2d 76 (1993); State Treasurer v. Schuster, 215 Mich.App. 347, 547 N.W.2d 332 (1996). This Court should first look to the specific statutory language to determine the intent of the Legislature. House Speaker v. State Administrative Bd., 441 Mich. 547, 567, 495 N.W.2d 539 (1993). The Legislature is presumed to intend the meaning that the statute plainly expresses. Vargo v. Sauer, 215 Mich.App. 389, 547 N.W.2d 40 (1996). Judicial construction of a statute is not permitted where the plain and ordinary meaning of the language is clear. Tryc v. Michigan Veterans' Facility, 451 Mich. 129, 545 N.W.2d 642 (1996); Dep't of Treasury v. Comerica Bank, 201 Mich.App. 318, 322, 506 N.W.2d 283 (1993).

Courts should strictly construe exemption provisions in favor of the taxing unit because an exemption removes the burden on the exempt landowner to share in the support of local government; in essence, "exemption is the antithesis of tax equality." Michigan Baptist Homes & Development Co. v. Ann Arbor, 396 Mich. 660, 670, 242 N.W.2d 749 (1976); Chauncey & Marion Deering McCormick Foundation v. Wawatam Twp. (After Remand), 196 Mich.App. 179, 182, 492 N.W.2d 751 (1992). A strict construction, however, does not require a strained construction, contrary to the legislative intent. St. Paul Lutheran Church v. Riverview, 165 Mich.App. 155, 158, 418 N.W.2d 412 (1987).

Petitioner argues on appeal that the tribunal erred in interpreting the exemption for a house of public worship to require that a religious society have a formal membership roster and that it supervise or discipline its members. We agree.

The statute provides:

Houses of public worship, with the land on which they stand, the furniture therein and all rights in the pews, and any parsonage owned by a religious society of this state and occupied as a parsonage are exempt from taxation under this act. Houses of public worship includes [sic] buildings or other facilities owned by a religious society and used predominantly for religious services or for teaching the religious truths and beliefs of the society. [M.C.L. § 211.7s; M.S.A. § 7.7(4p).] [ 5

Under the language of this statute, petitioner's property is exempt from taxation provided that petitioner is a religious society and provided that the property is used predominantly for religious services or for teaching the religious truths and beliefs of the society.

The statute does not define the term "religious society," although the usage of the term in the second quoted sentence suggests that the key test is whether an organization or association engages in teaching religious truths and beliefs. This same inference can be drawn from the general corporation act, which also uses the term:

Any 3 or more persons may incorporate a Sunday school society, or other special religious society or union, not being a church, but having for its object the teaching of religious principles, or the associating together for religious work. The incorporators shall subscribe articles similar to those prescribed for non-profit corporations generally, which articles shall also contain any special conditions or distinguishing principles upon which such corporation is founded, and, if connected with some organized church, the name of the church and a statement of the extent to which such church may exercise superintendence over the affairs of or discipline of the members of such Sunday school or other corporation. The corporations referred to in this section as Sunday schools or special religious societies, shall have all the rights, privileges, immunities and powers granted by this act to non-profit corporations generally in their secular affairs; and in their religious affairs they shall be governed solely by their articles and by-laws, and the system of discipline therein adopted. [M.C.L. § 450.186; M.S.A. § 21.187.]

We conclude from these statutory provisions that an association or organization qualifies as a "religious society" for purposes of the house of public worship tax exemption if its predominant purpose and practice include teaching religious truths and beliefs. 6

Petitioner has for its object the teaching of religious principles. Petitioner was incorporated in Michigan in 1974, and its corporate bylaws set forth its purposes as follows:

The purposes of this Corporation as stated in its Certificate of Incorporation are to introduce youth and parents to God's basic way of life through the Gospel of the Lord Jesus Christ; to give clear instruction on how to apply God's basic principles of life as revealed in the Scriptures, to develop meetings, seminars, radio broadcasts, television productions, printed literature, teaching curriculum, books, and other forms of media, producing or otherwise obtaining same as required; and to establish, organize and operate facilities for the training...

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