Document: 451 U.S. 772 101 S.Ct. 2142 68 L.Ed.2d 612 ST. MARTIN EVANGELICAL LUTHERAN CHURCH and Northwestern Lutheran Academy, Petitioners,v.State of SOUTH DAKOTA. No. 80-120. Argued March 3, 1981. Decided May 26, Syllabus Petitioner Church, located in South Dakota, is a member the Wisconsin Evangelical Synod. It operates an elementary Christian day school that not separate legal entity from but financed by Church's congregation controlled Board elected congregation. Academy secondary Dakota owned, supported, Synod, it also separately incorporated. Petitioners claim exemption with respect to their employees unemployment compensation taxes imposed Federal Unemployment Tax Act (FUTA) Dakota's complementary statute. Title 26 U.S.C. § 3309(b) provides to, inter alia, "service performed—(1) employ (A) church or convention association churches, (B) organization . which operated, supervised, controlled, principally supported churches." A previous under 3309(b)(3) for service performed institution higher education was repealed 1976 when FUTA amended. After petitioners' unsuccessful administrative appeal imposition upon them successful state court, Supreme Court held petitioners subject taxes. Held : are exempt 3309(b)(1)(A). Pp. 780-788. (a) Section 3309(b)(1)(A), as enacted 1970, applies schools, like petitioners', have no existence church, Academy's case, "convention The working within these schools plainly "in churches" meaning And instead construing term "church" being limited actual house worship, construction would contradict phrasing FUTA, such must be construed referring hierarchy itself, is, authorities who conduct business hiring, discharging, directing employees. 781-785. (b) legislative history, including repeal 3309(b)(3), discloses intent Congress alter scope 3309(b)(1). 785-788. S.D., 290 N.W.2d 845, reversed remanded. E. Thomas Schilling, Washington, D. C., petitioners. Allen R. Snyder, States Alabama Nevada, amici curiae, special leave Court. Mark V. Meierhenry, Pierre, S. D., respondent. Barry Sullivan, United States, amicus Justice BLACKMUN delivered opinion 1 Petitioners, St. Martin Church (St. Martin), at Watertown, (Academy), Mobridge State, (FUTA), §§ 3301-3311 (1976 ed. Supp.III), statutes thereto, S.D. Codified Laws 61-1-1 et seq. (1978 Supp.1980). claimed on both statutory First Amendment grounds. provisions primarily issue FUTA's 3309(b)1 61-1-10.4.2 2 * A. 3 appeared originally IX Social Security 1935, 49 Stat. 639, response widespread accompanied Great Depression. called cooperative federal-state program benefits unemployed workers.3 has undergone series amendments progressively expanded coverage Nation's work force.4 4 This case concerns one more recent those amendments, namely, effected 115(b)(1) Compensation Amendments 1976, Pub.L. 94-566, 90 2670. Secretary Labor determined this statute rendered nonprofit church-related primary FUTA. went along ruling interpretation State's amended among religiously affiliated so required pay They contest statutes. argue also, however, holding violate Free Exercise Clause Establishment Amendment. B 5 Proper understanding effect amendment requires review development. From 1960 3306(c)(8), unrestrictedly excluded definition "employment" all religious, charitable, educational, other described section 501(c)(3) income tax 501(a)." 86-778, 533, 74 984.5 Under definition, course, were tax. 1970 amendment, served narrow broad organizations.6 See Employment 91-373, 104(b)(1), 84 697. generally organizations, hospitals, institutions education. Simultaneously, new narrower organizations governmental entities. So far pertinent set forth 3309(b), then provided: 6 "This shall apply performed— 7 "(1) operated religious purposes churches; 8 "(2) duly ordained commissioned, licensed minister exercise his ministry order duties order; 9 "(3) ." 10 No one, Labor, disputes church-run remained 3309(b). 11 In again Act. 115(b)(1), eliminate completely theretofore existing subsection (b)(3).7 Subsections (b)(1) (b)(2), dealing specifically employment, unchanged.8 12 1978, announced, letter made public, 13 "clearly intended result State whose constitute over 80 percent schools. light we think only services may reasonably considered exclusion permitted 3309(b)(1) strictly pursuant responsibilities schools." Letter dated April 18, Marshall Most Reverend C. Kelley, O. P., General Secretary, Catholic Conference. 14 ruled neither 3309(b)(1)(A) nor 3309(b)(1)(B) applicable He notified they took steps collection Training Administration, Department Insurance Program 39-78 (May 30, 1978), reprinted [1978 Transfer Binder] CCH Unemp.Ins.Rep. ¶ 21,522. II 15 Both members Synod and, such, federal 501(c)(3). state-certified Watertown offers kindergarten through eighth-grade school, Education local entirely finances school's operation. 4-year It, Approximately half its students go become ministers Church. According record, courses given taught point view based Synod's scriptural convictions. 16 When proposed 61-1-10.3, appeal. Appeals Referee Labor—Unemployment Division each petitioner Although finding "believes theological basis exists schools" because "holds conviction training youth involves religion two closely interwoven cannot separated," App. Pet. Cert. A-36, declined rule 61-1-10.4, analogue nn. 2, supra. eligible 61-1-10.4(1)(a) because, view, "church," used referred "individual 'house worship' maintained particular congregation." A-43. ruled, ibid., ineligible 61-1-10.4(1)(b) "the purpose education." 17 On appeal, Hughes County Circuit reversed, Referee's decision clearly erroneous. A-25. court 61-1-10.4(1)(b); "an worshippers," rather than "house worship"; propagation faith, concern. A-30 A-33. Court, divided vote, turn judgment taxes.9 re 845 (1980). Noting growing number conflicting decisions issue,10 granted certiorari. 449 950, 353, 66 214 III 18 statute, construed, if fairly possible, avoid raising doubts constitutionality. Crowell v. Benson, 285 22, 62, 52 285, 296, 76 L.Ed. 598 (1932); Machinists Street, 367 740, 749-750, 81 1784, 1789-90, 1141 (1961); Clark, 445 23, 27, 100 895, 899, 63 171 Accordingly, first itself. our reading legislation conclude reasonable exempts others similarly mandatory coverage. 19 3309 added 1970. history directly discussing limited,11 House Report had following explanation: 20 paragraph excludes persons where employer does exclude certain orientation unless (or churches). Thus, janitor excluded, incorporated college, although related, covered. college devoted preparing exempt, novitiate study candidates orders. hand, related (separately incorporated) charitable (such as, example, orphanage home aged) purposes." H.R.Rep. 91-612, p. 44 (1969). 21 Senate contained identical language. S.Rep. 91-752, pp. 48-49 (1970). 22 Respondent read discussion, majority did, mean bring education, churches operate them, except category seminaries novitiates. this, respondent extrapolates very narrowly, later 94th Congress, include educational institutions, internal structure churches. 23 above quotation 1969 Report, counterpart, susceptible simpler explanation corresponds language subsection. drew distinction between "of churches," "separately incorporated" other. 44. former uniformly while latter "operated, churches."12 To hold, us do, "organization" (b)(1)(B) includes make (b)(1)(A) redundant. 24 integrated into church's structure, incorporated, further credence statute's use specific words. interpret worship Brief Amicus Curiae 14-15.13 reading, appears deny several phrases meaning. exempting .," phrased terms nature theemployer, place employee works. defined "employer" 3306(a) "any person who—. paid wages employed least individual" (emphasis added). "employee" individual who, usual common law rules determining employer-employee relationship, status employee." 3306(i) 3121(d)(2). hold synonymous solely physical building contradicts statute.14 word instead, refer employees.15 25 We that, time enactment meant or, As found, finances, supervises, controls operations. supports Academy. Only teachers trained certified teach either teachers, male female, "receive divine, life-long call" church. A-38. Male ("teaching ministers") equal vote matters, matters doctrine, preaching ministers. Id., A-37. Neither existence. ."16 did 3309(b)(1), implication.17 eliminating old change discuss intimated unchanged. See, e. g., 94-755, 41, 55-56 (1975) (explaining then-current anticipated repeal, containing indication 3309(b)(1)). 27 places emphasis statements expressing intention, extend "on institutions," 56,18 "employees non-profit schools," id., 2. 41 ("This condition offset credit employers, thus broadening present education"); 94-1265, 9-10 (1976), U.S.Code Cong. & Admin.News 5997. 28 These references simply too general ambiguous bear weight assign them.19 There references, mind organizations. Rather, evidence demonstrates concerned then-existing secular particularly public Furthermore, reported comments implying total could taken literally true expressly noted "devoted ministry," 44, exempt. All been covered Amendments. 29 relies single statistic estimating newly 3309(b)(3). (table). statistical reference 242,000 (b)(3), much meager sustain respondent's position. Committee Report's table figure devoid any explanation, source, supporting data. relied figure, reasoning "approximates 1975,20 N.W.2d, 849, n. 5, included religious-school staff private States. Yet, repealing just full-time (custodians, cafeteria workers, nurses, part-time help, counselors, etc.). inclusion lower brought exceed table, rendering it, dubious significance issue. 30 reveal clear frequent occasion note indefinite congressional expressions negate plain implication. "In absence some affirmative showing intention permissible justification implication earlier irreconcilable." Morton Mancari, 417 535, 550, 94 2474, 2482, (1974); see Watt Alaska, 259, 1673, 80; TVA Hill, 437 153, 189-190, 98 2279, 2299, 57 117 (1978); FTC P. W. Paper Co., 328 193, 202-203, 932, 936-37, 1165 (1946); Posadas National City Bank, 296 497, 503-505, 56 349, 352-53, 351 (1936); Noce, 268 613, 618-619, 45 610, 611-12, 69 1116 (1925); Greathouse, 166 601, 605, 701, 703, 1130 (1897). long-established canon carries implied might raise constitutional questions. NLRB Bishop Chicago, 440 490, 99 1313, 59 533 (1979). therefore virtue relationship bodies them. 31 makes unnecessary consider issues raised 32 remanded proceedings inconsistent opinion. 33 ordered. 34 STEVENS, concurring judgment. 35 2667, persuades me intend remove private, Not do Reports state,1 estimate additional confirms contemporaneous draftsmen Amendments.2 Nothing corresponding suggests believed extension nonprofit, applied nonparochial schools.3 36 Despite I agree Court's conclusion Congress' cover was, my judgment, clear, failed give intention. By removed exemptions terms, parochial left qualify appear provision. Marshall, 626 F.2d 366 (CA5 1980), cert. pending, 80-922. 37 confronted task character, there force should control resort appropriate itself ambiguous. duty choose words carefully drafting technical complex laws; facilitate well adhere text cases this.4 Failure follow approach led what regard manifest error summary, per curiam affirmance HCSC-Laundry 450 1, 836, 67 taxpayer's equally strong support opinion, greater here. 19-23, S.Ct., 845-847 (STEVENS, J., dissenting). Today, reaches write statement emphasize Amendments, consistent contrary resolution parallel HCSC-Laundry. 38 concur reads part: ordained, order. provides: "For 61-1-10.2 61-1-10.3 'employment' performed: "(a) "(b) prior January 1978. imposes excise "wages" "employment," 3301, statutorily defined. 3306 Supp.III). An employer, allowed up 90% "contributions" fund established federally approved law. 3302 requirements approval 3304 annually certify plan. 3304(a) (c) 50 employment security laws implementing minimum standards free expand beyond without jeopardizing certification. correspondingly retain certifications. after effective date Internal Revenue Code 1954 until 1960, 3306(c)(8) corporation, community chest, fund, foundation, organized exclusively scientific, testing safety, literary, purposes, prevention cruelty children animals, part net earnings inures benefit shareholder individual, substantial activities carrying propaganda, otherwise attempting, influence legislation." 68A 450. Inasmuch continued 501(c)(3), serve impose certification, type. 3309(a)(1)(A). Any option making regular payments reimbursing out organization's 3309(a)(2). accordingly. 1971 S.D.Laws, ch. 276 (now codified, amended, Supp.1980)). substituted unrelated (b)(3) continue herein "§ 3309(b)(3)" "(b)(3)." Following 1977 Laws, 420, 9, 10, (codified 61-1-10.4 (1978)). liable provisions. analysis depended Amendment, rest independent adequate ground. liberty literally, While courts remain construe own differently, deserve aware proper here, significant intertwined Zacchini Scripps-Howard Broadcasting 433 562, 566-568, 97 2849, 2852-53, 53 965 (1977); Air Lines, Inc. Mahin, 410 623, 630-631, 93 1186, 1191, 545 (1973); Comm'n Van Cott, 306 511, 514-515, 606-07, 83 950 (1939). addressed favor pending 80-922; Church-Missouri Bowling, 89 Ill.App.3d 100, Ill.Dec. 404, 411 N.E.2d 526 (1980); Roman Archdiocese New Orleans 387 So.2d 1248 (La.App.1980); Sant Bani Ashram, Hampshire Security, N.H., 426 A.2d (1981); Begley Comm'n, --- N.C.App. ---, 274 S.E.2d 370 Grace North Bureau, 294 767 (N.D.1980); Portland, 42 Or.App. 421, 600 P.2d 926 (1979); School Assn. Commonwealth, Pa.Cmwlth. 423 1340 But Ascension 501 F.Supp. 843 (WDNC 1980). floor, Senator Long, introducing bill became merely explained: "The require jobs [C]overage extended organization, clergymen orders [or] 116 Cong.Rec. 10575, Subsection mentioned debates. importance distinction, giving (B), heightened great diversity groups country. Stokes, 720-883 (1950); Whelan, "Church" Code: Definitional Problems, Ford.L.Rev. 885 (1977). impossible, perceived, lay down govern Our today identity establish organization) satisfy 3309(b)(1)(B): (1) "is purposes," (2) Because future. strongly urges construction, noting consistently advanced since enactment. Draft Legislation Implement 27-28. amount deference due agency's "will depend thoroughness evident consideration, validity reasoning, consistency pronouncements, factors power persuade, lacking control." Skidmore Swift 323 134, 140, 65 161, 164, 124 (1944). Carefully considering merits Secretary's interpretation, believe warrant deference. knew how limit type performed. ("if duties"); 3309(b)(4) (service facility"); 3309(b)(5) "as work-relief work-training program"). "employer," disavow intimations defining limiting constitutes provision Code. Cf. Riker Commissioner, 244 220 (CA9), denied, 355 839, 78 50, 51 (1957); Chapman 48 T.C. 358 (1967); American Guidance Foundation, 490 304 (DC 1980); De La Salle Institute 195 891 (ND Cal. 1961). That multiple overlapping precise parts remarkable. true, most clergy. 3309(b)(2). Clergy deletion specific, cannot, intent, (1981) (newly enacted, prevail earlier, detailed intent). argues intended, passed, part, replace temporary Special Assistance (established Emergency Jobs 1974, 88 1845), provided practically workers permanent provisions, 8-10. program, funded money, contribution, attempt duplicate coverage; indeed, new, group. (the government employees); 122 33274-33276 (1976) (remarks Sen. Nelson); 33277-33278 Williams). comment full: "Section 115(b) requiring institutions. law, provide expressed "substantially nation's wage salary earners," "to treatment law." Such overall reports defeat wording Helvering Bank 85, 89, 70, 72, 62 (1935); Caminetti 242 470, 192, 196, 61 442 (1917). Gooch 297 124, 128, 395, 397, 522 (1936). census figures 1975 showed 261,000 150,000 Bureau Census, Statistical Abstract 155 (1980) (reporting 268,908 these, 206,577 "church affiliation"). states: services, (1975). 6, 41. Similarly, programs (present education)." 5998. 7, 9-11. addition, contains substantially earners. supra, 1-2; 22518-22519 (1976); 22899-22900. override language, ante, 786, 19, nonetheless quoted above. estimated 8. approximated 1975. 787, 20. one-half statistic, perhaps slightly inaccurate, indicates notes, accepted argument. 787; finds reliance misplaced Ante, 787 original). observation, factually inaccurate; undercut guide intent. Whether covered, represented individuals. declining Nevada stated supplied then-available best Fed.Reg. 64378, 64380-64382, ibid. fact approximately 86% students, Rice, Conscientious Objection Public Education: Grievance Remedies, 1978 B.Y.U.L.Rev. 847, 50% failure mention exception surely significant. accurately characterized judicial function this: "If desires employees, ability amend reflect desire effect. But, responsibility perform linguistic gymnastics upset today." F.2d, 369.

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