Opinion ID: 1268867
Heading Depth: 2
Heading Rank: 5

Heading: religious residences

Text: All property owned by a religious organization and used as the residence of a bishop, pastor, priest, rabbi, minister or religious order of a recognized religious organization is exempt from property taxation under AS 29.53.020(b)(1). The parties raise five issues about this statute: 1) May a single parish contain more than one exempt residence? 2) May the residence of an assistant pastor be exempt? 3) Must a pastor be committed exclusively as a clergyman for a local congregation to have an exempt residence? 4) Is the residence of a religious worker not listed in AS 29.53.020(b)(1) exempt? and 5) Is the residence of a religious order's members exempt although it is not the order's monastery or motherhouse? We have twice considered the tax status of religious residences. Each time, a different statute was in effect. In Evangelical Covenant Church, 394 P.2d 882, 885, the statute then in effect exempted property used for religious purposes. The statute defined these purposes to include the residence of the pastor, priest, or minister of a religious organization, and other property of the organization not used for business rent or profit. Id. (footnote omitted; emphasis in original). We held that despite the language exempting the residence of the pastor, the residence of an assistant or lay pastor was also exempted by this broadened tax exemption [provision]. Id. We also doubted whether `[t]he almost universal rule ... that each church congregation has but one pastor' ... can be said to have any place in this day and age when many a church congregation is ministered to by more than one pastor. Id. at 886 n. 15 (quoting Griswold v. Quinn, 97 Kan. 611, 156 P. 761, 762 (1916)). An amendment replaced the statutory language relied upon in Evangelical Covenant Church with a list of exempt uses of property owned by religious organizations. This list was similar to the present statute's list. [22] In Harmon, 462 P.2d 432, we determined that this legislative change narrowed the residence exemption. We denied exemptions for the residences of two ministers who were both local assistant pastors and statewide administrators. We also held nonexempt the residence of a parochial school principal. We stated that the words `the residence of the pastor,' ... imply that only those residences may qualify that have some direct relationship to a structure used primarily as a house of worship. If the legislature desires a broader form of exemption, it may amend the statute. Id. at 439 (emphasis in original; footnote omitted). While we worded the Harmon test in terms of the relationship of the residence and the house of worship, the relationship between the inhabitant of the residence and the house of worship concerned us most. Thus, the minister  administrators' residences were not exempt since they were used by persons whose work was not exclusively and directly related to the local house of worship and associated congregation. In Harmon we left undecided whether the new statute exempted only one pastoral residence per congregation. Id. at 439 n. 3. [23]
The superior court concluded that the present wording of AS 29.53.020(b)(1) allows a single parish to contain more than one exempt residence. We agree. Years ago, we recognized that many church congregations have more than one pastor and that an exemption of more than one pastoral residence would be reasonable. Evangelical Covenant Church, 394 P.2d at 886 n. 15. Today's statute accommodates this reality. We note particularly that the current statute exempts a pastor's residence instead of the previous exemption for the pastor's residence. Thus, the superior court properly exempted the residences of two assistant Catholic pastors, although this allowed more than one exempt residence per parish.
The City maintains that several properties are nonexempt because they were residences of assistant pastors. The superior court disagreed, holding that an assistant pastor's residence is exempt as long as it has some direct relationship to a structure used primarily as a house of worship. We agree with the superior court insofar as it held that sometimes an assistant pastor's residence may be exempt. The label assistant does not preclude the exemption. As we have held today, a congregation may have more than one exempt residence and an assistant may perform essentially the same functions as the pastor.
The parties dispute exemptions for three assistant pastor residences. The City urges that these are nonexempt unless a pastor is available and committed exclusively as a clergyman for a local congregation. Two pieces of Catholic property are involved. One is the Assistant Pastor Apartment. [24] Father Grief resided in this apartment during tax years 1979 through 1982. At that time, Father Grief, an ordained priest, was an assistant pastor of the St. Joseph's Church. He spent approximately one third of the year doing pastoral work in the villages, one half of the year in Nome doing pastoral work for both the villages and the Catholic Bishop, and the summer months outside Alaska. The other property was that part of St. Joseph's Rectory where Father Poole resided during the tax years 1981 and 1982. In those years, Father Poole served both as an assistant pastor of St. Joseph's Church and as radio station KNOM administrator. The third property involved was the Lutheran Parsonage. Pastor Mark Houglum and his family resided there in tax years 1979 and 1980. The American Lutheran Church had sent him to operate the Arctic Christian Training School. This school provides leadership education among Native people within the congregation of Our Savior's Lutheran Church. In 1979, Pastor Houglum also assisted pastors in outlying villages and the pastor of Our Savior's Lutheran Church through preaching and other services. In 1980, Pastor Houglum continued his work half-time as assistant pastor of Our Savior's Lutheran Church and half-time as Director of the Arctic Christian Training School. In that year, the church had no other pastor. Pastor Houglum was also Director of Eskimo Ministries. The superior court reversed the exemption denials for these three properties and remanded some determinations for reconsideration. It exempted these residences because they have some direct relationship to a structure used primarily as a house of worship. We affirm the superior court's judgment but for different reasons. Under Harmon, the three disputed residences would not have been exempt. Harmon exempted only residences of religious leaders whose work exclusively and directly related to a local house of worship and an associated congregation. None of the three assistant pastors here were committed exclusively as clergymen for a local congregation. Today, however, we reject Harmon's exclusivity test. The present religious residence exemption statute reflects the legislature's intent to broaden the exemption beyond the residences of spiritual leaders whose work exclusively relates to a house of worship. We based our narrow exclusivity test in Harmon on the words  the residence of the pastor, and suggested that the legislature amend the statute if it desired a broader exemption. 462 P.2d at 439. Apparently the legislature took our suggestion, for the residence segment of the religious purposes list now reads the residence of a bishop, pastor, priest, rabbi, minister or religious order of a recognized religious organization. AS 29.53.020(b)(1) (emphasis added). This small change is significant here since Harmon explicitly suggested this very change. Thus, we hold that the post- Harmon amendment of AS 29.53.020(b)(1) broadened the residence exemption. The statute now exempts the residence of a pastor who is primarily a spiritual leader but who may also be responsible for other church-related activities. This broadening of the exemption permits a practical application to small congregations unable to afford or utilize a full-time spiritual leader. We conclude that Father Grief's residence (the Assistant Pastor Apartment, 1979-82) is exempt because Father Grief was an assistant pastor of St. Joseph's Church and did pastoral work in the neighboring villages. Father Poole's residence (part of St. Joseph's rectory, 1981-82) is exempt because Father Poole was a spiritual leader of St. Joseph's Church. His dual role as administrator of his church's exempt radio station does not preclude the residence exemption. Finally, Pastor Houglum's residence (the Lutheran Parsonage, 1979-80) is exempt because Pastor Houglum did pastoral work for the congregation of Our Savior's Lutheran Church and for outlying villages. His additional role as director of two pastoral organizations does not bar the exemption. [25]
A specific and inclusive list of exempt residences is delineated in AS 29.53.020(b)(1). We agree with the superior court that the policy of strict construction and the Harmon decision necessarily makes nonexempt the housing for seminary students, church volunteers and visiting pastors. [26] Nothing in the post- Harmon amendment of AS 29.53.020(b)(1) suggests a legislative intent to change the inclusiveness of the exempt residences list. We disagree with the superior court's holding that the portion of the Methodist Parsonage used for housing church volunteers during tax years 1979-82 was not exempt under the residence exemption. The Methodist Parsonage occupies part of a large structure accommodating a wide variety of church activities. The church set aside the parsonage to house the pastor and his family. Without more, this parsonage would be exempt as the residence of a pastor. The pastor's choice to allow volunteers or other guests to live in his home does not destroy the exemption. Housing guests is a use ordinarily associated with a person's residence, and the rule should be no different for a pastor's residence. Thus, we reverse the superior court's denial of the exemption for the portion of the Methodist Parsonage used for housing church volunteers during tax years 1979-82, and remand for apportionment. [27]
Residences that are not exempt under AS 29.53.020(b)(1) may still be exempt if their use was directly incidental to and vitally necessary for the exempt use of other church property. AS 29.53.020(a)(3). See discussion supra section IV, A. The superior court questioned whether on-premises housing of KNOM personnel was incidental to and reasonably necessary for the accomplishment of KNOM's charitable purposes. It found that perhaps several radio-station operators must be available immediately to broadcast disaster warnings, evacuation instructions or civil defense messages. The court remanded the exemption determinations of certain properties for findings on this issue. We reverse. The on-premises housing of KNOM personnel is exempt only if directly incidental to and vitally necessary for the accomplishment of KNOM's charitable purposes. While KNOM may some day be asked to broadcast instructions during a public emergency, this does not require housing volunteers year-round on church property near KNOM. Absolutely nothing in the record suggests that this was why the church housed the volunteers; rather, it seems that the volunteers received housing instead of pay. Thus, we hold that the charitable exemptions are denied for the following properties housing KNOM volunteers: KNOM Studio Housing (1979); Manager Apartment (1980-82); Gleeson Hall Volunteer Residence (1980-82); that part of the Girls' Dorm housing KNOM volunteers (1979-82); that part of St. Joseph's Rectory exclusively used for housing KNOM volunteers (1981-82); [28] and that part of the White House housing KNOM volunteers (1979). The superior court found that the remaining residences on the Catholic properties were nonexempt since not incidental to and reasonably necessary for the exempt use of other church property. We affirm these findings, albeit under the stricter test adopted in this opinion. See discussion supra section IV, A. The remaining Catholic residences were used primarily by nurses employed by the Norton Sound Regional Hospital; they donated their paychecks to KNOM for its operating expenses. The superior court commended their efforts but correctly ruled that their residence on church property was not directly related to or vitally necessary for the exempt use of other church property. Likewise, nothing in the record indicates that it was vitally necessary for a volunteer cook to live on church property. Therefore, we hold these properties nonexempt: KNOM Studio Housing (1980-82); that part of the Girls' Dorm housing nurses (1979-82); that part of the White House housing nurses (1979). The superior court concluded without discussion that housing for the seminary student and visiting pastors was not vitally necessary for the operation of the Lutheran Church. We agree. Therefore, we hold the Lutheran Residence (1980) nonexempt. Finally, the Seaview House Apartment was provided to a carpenter and his wife during the carpenter's volunteer work constructing the Methodists' Young Center. The superior court concluded that the apartment's use in 1979 as a volunteer's residence was not vitally necessary for the operation of an exempt activity. We affirm this finding. [29]
The residence of a religious order of a recognized religious organization is exempted under AS 29.53.020(b)(1). In a question of first impression for us, the parties dispute the definition of the residence of a religious order for purposes of the residence exemption. [30] The City argues that an order has only a single residence; this is the motherhouse, convent or monastery where the order is based. The Catholics argue that the residence of any community of an order's members is an order's residence. The superior court held that a religious order resides wherever members of the order live together as a religious community apart from the secular community. The residence, however, must be more than the occasional living quarters of individual members of the religious order. The superior court cited Midtown Church of Christ v. City of Racine, 83 Wis.2d 72, 264 N.W.2d 281 (Wis. 1978) in support of its definition. We disagree with the superior court's holding. Strict construction leads us to conclude that a religious order has only a single residence; this is the motherhouse, convent or monastery where the order is based. Section 29.53.020(b)(1) exempts  the residence of a ... religious order... . (Emphasis added.) It does not exempt all residences of all members of a religious order who dwell together while on a mission. A broader reading would be unworkable. While pastors and ministers must work primarily as spiritual leaders of a house of worship or congregation to have an exempt residence, brothers and nuns could perform any function anywhere and still qualify for a residence exemption. We distinguish Midtown Church of Christ. That case interpreted a broader statute that exempted the residence of  members of religious orders and communities. 264 N.W.2d at 284 (emphasis added). Our narrower construction is consistent with legislative intent: the final version of the legislation establishing the exemption specifically deleted references to members of religious orders. [31] The Catholics sought exemptions for two parcels of property, the White House [32] and the Brothers' Trailer Residence, [33] under the residence exemption for religious orders. The City denied a tax exemption for 1980 for the White House and the superior court reversed. The City also denied a tax exemption for the Brothers' Trailer Residence for tax years 1979-82, and the superior court again reversed. We reverse the superior court's holdings regarding the White House and the Brothers' Trailer Residence. While these properties were homes for members of religious orders, they were not the residences of the orders themselves. Accordingly, we affirm the City's denial of exemption for the White House (tax year 1980) and the Brothers' Trailer Residence (tax years 1979-82).