In Asher, a panel of this Court held that a building owned by the Asher Student Foundation and housing Michigan State University students did not qualify for a charitable-institution exemption because its purpose, "to provide living quarters for certain Christian Science students," was not "sufficiently beneficial to the general public."Summary of this case from Second Impressions Inc. v. City of Kalamazoo
Docket No. 77-3469.
Decided February 20, 1979. Leave to appeal applied for.
Dykema, Gosset, Spencer, Goodnow Trigg (by Jack C. Radcliffe, Jr.), for plaintiff.
McGinty, Rosewarne, Halverson, Brown Jakubiak, P.C. (by Dennis E. McGinty and Thomas M. Hitch), for defendant.
Before: M.J. KELLY, P.J., and J.H. GILLIS and M.F. CAVANAGH, JJ.
Plaintiff appeals from a decision of the Michigan Tax Tribunal entered on August 26, 1977, which held that plaintiff's property was not exempt from ad valorem real property taxes assessed for the years 1974 through 1977.
Asher Student Foundation is a Michigan nonprofit corporation. It owns Asher House, a building located in the City of East Lansing which houses approximately 90 Michigan State University students of the Christian Science faith. The building contains living quarters for men and women, dining, kitchen and laundry facilities, lounges, administrative offices, libraries containing literature pertaining to the Christian Science religion, and two rooms set aside for the study of Christian Science and prayerful meditation. Residents are charged fees comparable to those charged by the university for dormitory rooms. These fees are the primary source of plaintiff's funding.
Article 9, § 4 of the 1963 Michigan Constitution provides that:
"Property owned and occupied by nonprofit religious or educational organizations and used exclusively for religious or educational purposes, as defined by law, shall be exempt from real and personal property taxes."
It has been held that this section is not self-executing. Rather, it is up to the Legislature to define what these particular institutions are. American Youth Foundation v Benona Twp, 8 Mich. App. 521; 154 N.W.2d 554 (1967).
Pursuant to its authority to grant exemptions, the Legislature has enacted MCL 211.7; MSA 7.7 which provides, in pertinent part, as follows:
"The following property shall be exempt from taxation:
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"Fourth, Such real estate or personal property as shall be owned and occupied by nonprofit theater, library, benevolent, charitable, educational, or scientific institutions and memorial homes of world war veterans incorporated under the laws of this state with the buildings and other property thereon while occupied by them solely for the purposes for which they were incorporated.
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"Fifth, All houses of public worship, with the land on which they stand, the furniture therein and all rights in the pews, and also any parsonage owned by any religious society of this state and occupied as such."
Current version at 1978 West's Michigan Legislative Service, 126.
Plaintiff concedes that Asher House is not a house of public worship or a parsonage. Instead, it is claimed that the purpose of Asher House is to promote the cause of Christian Science by providing a supportive living environment for certain Michigan State University students of that faith. Plaintiff argues that the advancement of religion is a charitable purpose and that Asher Student Foundation, therefore, is a charitable institution under § 7, ¶ 4, supra.
Because exemption is the antithesis of tax equality, exemption statutes are to be strictly construed in favor of the taxing unit. Michigan Baptist Homes Development Co v Ann Arbor, 396 Mich. 660; 242 N.W.2d 749 (1976).
Relief of the poor is not the sole charitable objective. Traditionally, the advancement of religion has also been considered "charity".
"`Probably the most comprehensive and carefully drawn definition of a charity that has ever been formulated is that it is a gift, to be applied consistently with existing laws, for the benefit of an indefinite number of persons, either by bringing their hearts under the influence of education or religion, by relieving their bodies from disease, suffering, or constraint, by assisting them to establish themselves for life, or by erecting or maintaining public buildings or works or otherwise lessening the burdens of government.'" The Salvation Army v Hoehn, 354 Mo 107, 114; 188 S.W.2d 826 (1945). (Citations omitted.) (Emphasis supplied.) See also The Presbyterian Homes of the Synod of New Jersey v Division of Tax Appeals, 55 N.J. 275; 261 A.2d 143; 37 ALR3d 1181 (1970).
Michigan has recognized that the advancement of religion may come within the definition of "charity". In Gull Lake Bible Conference Ass'n v Ross Twp, 351 Mich. 269; 88 N.W.2d 264 (1958), the Supreme Court held that a nonprofit corporation which was organized to promote and conduct gatherings for the study of the Bible and for inspirational and evangelical addresses was a charitable corporation. The Court held that the property in question was exempt under the fourth paragraph of MCL 211.7. Gull Lake Bible Conference Ass'n v Ross Twp, supra, at 273.
In American Concrete Institute v State Tax Comm, 12 Mich. App. 595, 610; 163 N.W.2d 508 (1968), lv den, 381 Mich. 782 (1968), then Judge LEVIN, in a concurring opinion, referred to three traditional charitable objectives, "providing relief to persons unable to care for themselves, education and religion".
While we agree with plaintiff that the advancement of religion is a traditional charitable objective, we note Michigan has placed further limits on what constitutes a charitable institution for purposes of property tax exemptions. In Michigan Baptist Homes, supra, at 671, the Court stated: "Basically, it may be said that charity or benevolence benefit the general public without restriction." In Auditor General v R B Smith Memorial Hospital Ass'n, 293 Mich. 36, 38; 291 N.W. 213 (1940), the Court indicated that nondiscrimination as to race, color or creed in the conferral of benefits was necessary for an organization to be considered "charitable" within the meaning of the tax-exemption statutes. Quoting from 34 ALR 635 the Court stated the following:
"In general, it may be said that any body not organized for profit, which has for its purpose the promotion of the general welfare of the public, extending its benefits without discrimination as to race, color, or creed, is a charitable or benevolent organization within the meaning of the tax exemption statutes." 293 Mich at 38-39.
The above case concerned the status of a hospital, not a religious organization. However, it appears that even where the advancement of religion is concerned, to be considered "charitable" the benefits should be offered to persons irrespective of race, color or creed. Thus, in determining whether a Bible camp was a charitable institution, the Court in Gull Lake Bible Conference Ass'n v Ross Twp, supra, specifically noted that no such discrimination was practiced:
"`The plaintiff corporation was organized as a nonprofit corporation. The proofs show conclusively that it is not operated for profit. It has no stockholders. Aside from modest salaries paid to necessary employees, no individual receives any pecuniary benefit from its operation. It practices no discrimination as to race, creed or color. Having in mind the purpose for which it was formed as set forth in article 2 of its articles of association, the conclusion is inescapable that it is a charitable organization and such is the decision of this court.'" 351 Mich at 274. (Emphasis supplied.)
We conclude that merely because an organization is religiously oriented does not, by that fact alone, mean it is "charitable" within the meaning of § 7, ¶ 4. To qualify under that provision the organization must confer a benefit upon society in general. Where, as in the instant case, the purpose of the organization is to benefit only a few select members of a particular sect there is not a sufficiently widespread benefit to society to characterize this as a charitable institution under § 7, ¶ 4. While such an objective may be sufficient for purpose of income tax exemptions, the taxable status of plaintiff's property is determined by the much more strict provisions of the Michigan general property tax law. American Concrete Institute, supra, at 606.
Furthermore, it is the duty of the Court, as far as practicable, to reconcile the different provisions of a statute so as to make them consistent and harmonious, and to give a sensible and intelligent effect to each. Rohde v Wayne Circuit Judge, 168 Mich. 683; 131 N.W. 253 (1912), King v Director of the Midland County Dep't of Social Services, 73 Mich. App. 253; 251 N.W.2d 270 (1977).
If we were to hold that any religious purpose constitutes a charitable objective under § 7, ¶ 4, then § 7, ¶ 5 would be rendered superfluous, for it can certainly be said that the primary purpose of houses of public worship is to advance the cause of religion. Therefore, had the Legislature intended to include any organization whose purpose was the advancement of a particular religion within the definition of "charitable institution", there would have been no need to add ¶ 5 to § 7. The fact that the Legislature did so evidences an intent contrary to plaintiff's position.
In light of our discussion we conclude that Asher Student Foundation is not a charitable institution within the meaning of MCL 211.7, ¶ 4. Plaintiff's purpose is to provide living quarters for certain Christian Science students. This is not sufficiently beneficial to the general public. See also, St Mathew Lutheran Church v Delhi Twp, 76 Mich. App. 597; 257 N.W.2d 183 (1977), where this Court held that § 7, ¶ 4, has no application to property owned by a church and occupied by church employees.
Our review of the decision of the tax tribunal indicates it contains no material error of law and is supported by competent, material and substantial evidence.
Affirmed. No costs, a public question being involved.