Three Angels Broadcasting Network v. Dept.

• Court: Appellate Court of Illinois
• Writing for the Court: Spomer
• Citation: Three Angels Broadcasting Network v. Dept., 885 N.E.2d 554, 381 Ill.App.3d 679 (Ill. App. 2008)
• Decision Date: 31 March 2008
• Docket Number: No. 5-05-0724.,5-05-0724.
• Parties: THREE ANGELS BROADCASTING NETWORK, INC., Plaintiff-Appellant, v. The DEPARTMENT OF REVENUE, Defendant-Appellee (Thompsonville Community High School District No. 112 and Thompsonville School District No. 62, Intervenors in the Administrative Proceedings, and Franklin County Board of Review, Intervenors in the Circuit Court Proceedings, Appellees).

885 N.E.2d 554

THREE ANGELS BROADCASTING NETWORK, INC., Plaintiff-Appellant, v. The DEPARTMENT OF REVENUE, Defendant-Appellee (Thompsonville Community High School District No. 112 and Thompsonville School District No. 62, Intervenors in the Administrative Proceedings, and Franklin County Board of Review, Intervenors in the Circuit Court Proceedings, Appellees).

No. 5-05-0724.

Appellate Court of Illinois, Fifth District.

March 31, 2008.

D. Michael Riva, West Frankfort, IL, David M. Macksey, Garrett L. Boehm, Jr., Johnson & Bell, Ltd., Chicago, IL, for Appellant.

Lisa Madigan, Attorney General, State of Illinois, Gary Feinerman, Solicitor General, Richard S. Huszagh, Assistant Attorney General, Chicago, IL, attorneys for The Department of Revenue.

Eugene J. Hanses, Jr., Heidi A. Katz, Joanne H. Petty, Robbins, Schwartz, Nicholas, Lifton, & Taylor, Ltd., Collinsville, IL, attorneys for Thompsonville Community High School District No. 112 and Thompsonville School District No. 62.

David O. Edwards, Christopher E. Sherer, Colin M. Haley, Giffin, Winning, Cohen & Bodewes, P.C., Springfield, IL, Thomas J. Dinn III, Franklin County State's Attorney, Benton, IL, Norbert J. Goetten, Director, Patrick Delfino, Assistant Director, State's Attorneys Appellate Prosecutor, Springfield, IL, attorneys for Franklin County Board of Review.

Justice SPOMER delivered the opinion of the court:

The plaintiff, Three Angels Broadcasting Network, Inc. (TABN), appeals the decision of the Illinois Department of Revenue (the Department) to deny its application for a property tax exemption pursuant to sections 15-40 and 15-65 of the Illinois Property Tax Code (the Code) (35 ILCS 200/15-40, 15-65 (West 2000)). TABN claims that the Department erred, inter alia, in the following respects: (1) it found that TABN failed to prove that its property was used exclusively for a religious purpose, without a view to profit, (2) it found that TABN failed to prove that its property was used exclusively for charitable or beneficent purposes, without a view to profit, and (3) the administrative law judge (ALJ) refused to consider certain items of evidence offered by TABN at the hearing on its application for a property tax exemption. Intervenor Franklin County Board of Review (the Board) raises TABN's failure to name the Board as a defendant in the proceedings before the circuit court as an additional reason to affirm the decision of the Department. For the reasons that follow, we affirm the decision of the Department.

FACTS

TABN operates a television and radio station that features an array of programming, including devotional and inspirational shows, as well as programming devoted to music, cooking, exercise, and a healthy lifestyle, all of which are consistent with the principles of the Seventh-Day Adventist Church (Adventist). In 2000 and 2001, TABN filed applications for a religious-use property tax exemption with the Department. The property at issue, located on a five-acre parcel of land at 3390 Charlie Good Road in Franklin County, consists of three buildings. The Board recommended denying the applications. TABN requested a hearing before the Department, and Thompsonville School Districts No. 112 and No. 62 (the school districts) were permitted to intervene in the proceedings. The 2000 and 2001 applications were consolidated for purposes of a joint administrative hearing.

Prior to the hearing, a subpoena duces tecum and ad testificandum was issued that required the president of Tri-State Christian TV (Tri-State), an organization located in Williamson County which TABN claims has the same or similar methods of operation, to appear at the hearing and produce certain documents. The subpoena ordered that Tri-State produce all documents evidencing correspondence with the Department of Revenue regarding its property tax exemption, its state and federal income tax returns for the years 1999 through 2001, and documents reflecting the content of Tri-State's programming. Thereafter, the Department and the school districts filed a motion to quash the subpoena and motions in limine seeking the exclusion of, inter alia, any evidence regarding other property tax exemption decisions made by the Department, including any decisions made regarding the exemption status of Tri-State. In addition, the motions in limine sought to exclude the testimony of Ted Wilson or Denis Fortin, who were to testify that the health and lifestyle programming produced and aired by TABN promotes a central tenet of the Adventist faith. On September 17, 2002, the ALJ entered an order granting the motion to quash and the motions in limine. Although TABN appeals the ALJ's exclusion of the evidence of Tri-State's property tax exemption status, which it presented as an offer of proof at the hearing on its application for exemption, it does not appeal the order granting the motion to quash the subpoena ordering Tri-State's president to appear and produce documents.

At the hearing before the Department, which began on September 23, 2002, TABN also contended that it should be entitled to a charitable-use property tax exemption. During the hearing, Danny Shelton testified that he is the president of TABN and that he is an ordained Adventist elder but is not a minister. TABN was incorporated in 1985 or 1986 as a general not-for-profit corporation. TABN's articles of incorporation were admitted into evidence during Mr. Shelton's testimony. According to the articles of incorporation, TABN's purposes are "exclusively religious, charitable[,] or educational within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1954, as amended" (26 U.S.C. § 501(c)(3) (2006)). In furtherance of these purposes, the articles of incorporation state that the corporation may engage in, inter alia, the following activities:

"(a) develop, plan, promote, produce[,] and direct in cooperation with various religious organizations, all types of religious programming for electronic transmission for television and radio broadcasting throughout the world.

(b) to [sic] buy, sell, distribute[,] and otherwise acquire or dispose of all kinds of television and radio apparatus property incidental to or connected with the purpose of this corporation.

(c) to [sic] develop, plan, promote, produce, direct[,] and distribute recorded music and video[-]recorded programs to further the purposes of the corporation.

(d) own or operate facilities or own other assets for the public's welfare.

(e) solicit support for the corporation's activities from the public generally and through a board of directors.

(f) promote, by donation, loan[,] or otherwise, the interests of any not-for-profit and federally tax-exempt organizations which are affiliated with the corporation, the purposes of which are not inconsistent with those of the corporation."

The articles of incorporation also state as follows:

"No part of the net earnings of the corporation shall inure to the benefit of, or be distributable to, its members, trustees, directors, officers, or other persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth herein."

TABN's bylaws were also admitted into evidence. Section 1.4 of the bylaws sets forth the procedure to be followed upon the dissolution of TABN. This section states as follows:

"In the event of the dissolution of the corporation, the Board of Directors[,] after paying or making provision for the payment of all of the liabilities of the corporation, shall distribute, in any proportions considered prudent, all of the assets of the corporation in such manner, or to such organization or organizations organized and operated exclusively for charitable, religious, educational[,] or scientific purposes to benefit the inhabitants of the State of Illinois, and shall at the time qualify as an exempt organization or organizations under Section 501(c)(3) of the Internal Revenue Code of 1954 (or the corresponding provision of any future United States Internal Revenue Law), as the Board of Directors shall determine. Any such assets not so disposed of shall be disposed of by a court of competent jurisdiction of the county in which the principal office of the corporation is then located, exclusively for such purposes or to such organization or organizations, as said court shall determine, which are organized and operated exclusively for such purposes. Such recipient shall be an organization whose philosophy is in harmony with the principals [sic] and teachings of the Seventh-Day Adventist Church."

Mr. Shelton testified that from its creation, TABN has been exempt from federal income taxes and Illinois sales taxes.

Mr. Shelton went on to explain TABN's operations. According to his testimony, TABN operates a broadcasting network on the subject property that works with satellite television and radio to broadcast programs to various downlink sites around the world. TABN produces most of the programs it airs, but it also sells airtime to other organizations. Mr. Shelton explained that all of the programming produced and broadcasted by TABN communicates Adventist doctrines. Although there are programs on health-related issues, such as quitting smoking, abstaining from drugs and alcohol, and lowering cholesterol and blood pressure, according to Mr. Shelton the messages contained in this health-related programming communicate a vital tenet of the Adventist faith. TABN's signal can be received by anyone with a particular kind of satellite system or cable station. It can also be received by anyone who subscribes to Sky Angel Network, which can be obtained as a special programming package through the Dish Network satellite system. The Adventist Church has 14,000 downlink sites with the ability to receive TABN programming. TABN sells the satellite-receiving equipment necessary to...