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IN THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT
FRANKLIN COUNTY, ILLINOIS
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THREE ANGELS BROADCASTING
NETWORK, INC.,
Plaintiff,
and
THE DEPARTMENT OF REVENUE
OF THE STATE OF ILLINOIS,
Defendant,
and
THOMPSONVILLE COMMUNITY HIGH
SCHOOL DISTRICT NO. 112, and
THOMPSONVILLE SCHOOL DIST. NO. 62
Intervenors,
and
FRANKLIN COUNTY BOARD OF
REVIEW,
Intervenor.
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No. 04-MR-15
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OPENING BRIF OF APPELLANT THREE ANGELS BROADCASTING
NETWORK, INC.
[page ii]
TABLE OF CONTENTS
| Heading | Page Number |
| |
| INTRODUCTION | 1 |
| |
| QUESTIONS PRESENTED | 2 |
| |
| STATEMENT OF THE CASE | 3 |
| |
- Undisputed Factual Background
| 4 |
| |
| | - Three Angels Structure and Organization.
| 4 |
| |
| | - The Three Angels' Properties and Their Religious Uses.
| 5 |
| |
| | - Three Angels Promotion of Seventh-day Adventist Gospel Beliefs.
| 6 |
| |
| | - Three Angels Cooperation with the Seventh-day Adventist Church.
| 7 |
| |
| | - Three Angels Promotion of Free or Reduced Fee Programming and Airtime.
| 8 |
| |
| | - The Religious Content of Three Angels Programming.
| 9 |
| |
| | - Pricing and Revenue of Religious Material.
| 9 |
| |
| | - Salaries and Issues of Personal Inurement
| 10 |
| |
- Disputed Factual Findings
| 11 |
| |
| | - Issue of Inurernent and Board Makeup
| 13 |
| |
| | - Issue of Sheltons' Salary and Alleged Linda Shelton Royalty
| 16 |
| |
| | - Donated Items and Other Giveaways
| 18 |
| |
| | - Officers Directly Involved in Religious Ministry and Teaching
| 21 |
| |
| [page iii] |
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- Excluded Factual Evidence
| 24 |
| |
| | - Elder Ted Wilson and Dr. Denis Fortin
| 25 |
| |
| | - Evidence as to Tri-State Christian TV Relating to Equal Protection Claims
| 28 |
| |
| ARGUMENT | 30 |
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- Contrary to the hearing judge's legal conclusions, the property used by Three Angels to
undertake its religious broadcasting ministry is used for exclusively religious purposes and is exempt
from property taxes under 35 ILCS 200/15-40 and 35 ILCS 200/15-65
| 30 |
| |
| | - The lower court's rejection of Three Angels' view
of its own religious purposes and the court's use of a rigid
and narrow definition of religious purpose is contrary to Illinois
law and constitutes reversible error
| 31 |
| |
| | - The lower court erred in concluding that Three Angels
did not use its property primarily for religious purpose, as
revenues from its properties do not inure to any private person,
it supports a wide range of missionary activities, and it provides
its broadcast services at or below cost
| 36 |
| |
| CONCLUSION | 47 |
| |
| REQUESTED RELIEF | 48 |
[page 1]
INTRODUCTION
This case is about whether the main broadcast,
programming and administrative facilities of Three Angels Broadcasting
Network, Inc., should be exempt from Illinois property taxes.
Three Angels is a religious broadcast ministry based in southern
Illinois that beams its Christian, Bible-based programming to
literally every populated continent of the globe using satellite
technology. Three Angels creates and produces much of the programming
it airs, but also airs the programming of other Christian ministries,
some at no cost, and some at a nominal fee. The vast majority
of its operating revenue comes from charitable donations.
All the programming aired by Three Angels is supportive
of and advances the Bible-based doctrines and beliefs of the
Seventh-day Adventist Church. The programming consists of Bible-based
preaching, teaching, and worship music, as well as segments on
Christian lifestyle, including the importance of treating the
body as the temple of the Holy Spirit by promoting fitness, health
and a Biblically-based vegetarian diet.
Three Angels is operated by an independent board
consisting of eleven members of the Adventist church, a number
of whom are present or former church leaders. None of the donor
funds that support Three Angels ministries goes to the inurement
of any private person. Three Angels has operated in this fashion
for about twenty years, and during this time has been recognized
as a not-for-profit, tax-exempt organization by both federal
and state authorities. It holds a 501(c)(3) charitable and religious
entity exemption from the IRS, and is treated as a not-for-profit
by the State of Illinois for sales tax purposes.
[page 2]
For its first fifteen years or so, Three Angels
was also treated as exempt for property tax purposes. It paid
no property taxes on its operations and administrative properties
until it was assessed, with no real explanation for the change,
in the year 2000, and then again in 2001. It challenged these
assessments to the Board of Review based on Three Angels' religious
character and religious use of its properties, but to no avail.
Three Angels then challenged these findings to the Department
of Revenue, and an administrative hearing was held between September
23 and 25, 2002. On January 28, 2004, Administrative Law Judge
Barbara S. Rowe held that applicant is a "non-religious and commercial
enterprise, and that, with the exception of two small pastoral
offices, the buildings at issue are "used with a view to profit."
Three Angels takes strong exception to Judge Rowe's
conclusions, both to her findings of fact and conclusions of
law, regarding the religious nature of Three Angels, and its
religious use of the subject properties. Three Angels filed a
motion for reconsideration, and when this was substantially denied,
it filed this timely appeal for a review of these issues.
QUESTIONS PRESENTED
While there are a number of factual questions
presented below, the primary legal questions presented by this appeal are:
1. To qualify for property tax exemption, must
a religious organization use its property only for worship services
and Sunday school lessons, or may it also engage in other kinds
of religious communication and instruction, including the creation,
distribution and broadcasting of religious services, instruction
and programs related to a Biblical lifestyle?
[page 3]
2. Does the accrual of 1 to 2 months operating
expenses in the form of net revenue by a religious organization
disqualify that organization from being a not-for-profit entity?
3. Does the receipt of a de-minimis amount of a royalty,
i.e., $20, from an unrelated third party, based on the licensing
of personal property, by an officer of a religious organization,
equal the same thing as a disqualifying personal inurement from
the religious organization?
4. Should an applicant for religious property tax exemption
be allowed to present witnesses and evidence regarding the religious
nature of its beliefs and activities?
STATEMENT OF THE CASE
The factual statement of this case comes in three parts. The
first section will outline those facts as to which there is no
substantive dispute or disagreement. These will include findings
made by the trial judge, as well as those facts in the record
that are otherwise undisputed. The second section will consist
of findings of fact, and applications of fact to law, made by
the trial judge that Three Angels believes are not supported
and/or are contradicted by the record. Three Angels is asking
this Court to reverse these particular findings and conclusions.
The final section consists of facts and testimony that the
trial judge entirely excluded from the hearing, but that Three
Angels preserved through offers of proof, and now asks this court
to consider as the basis for a reversal. The legal argument section
will then reference each of these sections. Certain legal arguments
will provide a basis for reversal based on the
[page 4]
undisputed facts, while other arguments will be
based on this Court overruling the trial judge on certain legal
and factual issues, or to allow in evidence or witnesses excluded below.
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