vs. ) CASE NO. 78-142RX
Respondent. )
This matter came on for hearing in Tallahassee, Florida, before the Division of Administrative Hearings, by its duly designated Hearing Officer, Robert T. Benton, II, on April 27, 1978. The parties were represented by counsel:
For Petitioner: Jon H. Anderson, Esquire
For Respondent: Cecil L. Davis, Jr., Esquire
By petition filed pursuant to Section 120.56, Florida Statutes (1977), on January 10, 1978, petitioner alleged that Subsections (b) and (c) of Rule 12A-1.01(4), Florida Administrative Code, "represent an invalid exercise of delegated legislative authority, or, in the alternative, . . . that the Rules .
. . are inconsistent with the clear language of Florida Statutes 212.08(7)(c)1." Pending concurrently is petitioner's unconsolidated petition pursuant to Section 120.57(1), Florida Statutes (1977).
The subsections of the rule challenged by the petition provide:
"Church" shall mean a religious institution having an established physical place of worship in this state with a membership roll.
Religious organizations without membership rolls whose functions are radio broadcasting or conducting services for short periods of time at temporary locations are not considered to be churches.
Counsel for the parties stipulated that these provisions were authorized, if at all, by Section 212.18(2), Florida Statutes (1977), which provides that the department of revenue "is authorized to make and publish such rules and regulations not inconsistent with this chapter, as it may deem necessary in enforcing its provisions . . ."; and by Section 212.08(7), Florida Statutes (1977), which provides, in pertinent part:
(a) Religious, charitable and educational. - There shall be exempt from the tax imposed by this chapter articles of tangible personal property sold or leased direct to or by churches or sold or leased to, nonprofit religious, nonprofit educational, or nonprofit charitable institutions and used by such institutions in carrying on their customary nonprofit religious, nonprofit educational, or nonprofit charitable activities, including church cemeteries.
* * *
(c) Restrictive definitions. --The provisions of this section authorizing exemptions from tax shall be strictly defined, limited and applied in each category as follows:
1. "Religious institutions" shall mean churches and established physical places for worship in this state at which nonprofit religious services and activities are regularly conducted and carried on.
In accordance with Section 212.08(7)(a), Florida Statutes (1977), churches are eligible for exemption from the tax both on sales to them and sales by them, while nonprofit religious and charitable institutions only qualify for exemption from tax on sales to them. Both of the challenged rule provisions serve to define the word "churches" within the meaning of the statute.
The pleading in the file and the evidence adduced by petitioner at the hearing established that petitioner was a nonprofit corporation organized to operate a television station for broadcasting principally religious programs; that it had applied for exemption from sales tax; and that its application for exemption had been denied; that it anticipated purchases of equipment valued at one million dollars ($1,000,000.00); that it anticipated the sale of air time to other religious groups; and that it intended to build a television studio with a chapel. Petitioner demonstrated that it has standing to attack Rule 12A- 1.01(4)(b) and (c), Florida Administrative Code.
The statutory exemptions that are implemented by the rule provisions which are at issue in the present case must be construed in light of the Free Exercise and Establishment Clauses of the First Amendment to the United States Constitution and the provisions of Article I, Section 3 of the Florida Constitution, the express legislative intent with respect to tax exemptions created by Chapter 212, Florida Statutes (1977), is that they be limited to "such exemptions [as] are in accordance with the provisions of the constitution of the state and of the United States." Section 212.21(3), Florida Statutes
(1977). Since, however, Rule 12A-1.01(4)(b) and (c), Florida Administrative Code, is a rule and not merely a proposed rule, See, Department of Environmental Regulation v. Leon County, 344 So.2d 297 (Fla. 1st DCA 1977), no hearing officer has power to adjudicate its constitutionality as such. State, Department of Administration v. Stevens, 344 So.2d 290, 295 n.2 (Fla. 1st DCA 1977); State, Department of Administration, Division of Personnel v. State, Department of Administration, Division of Administrative Hearings, 326 So.2d 187 (Fla. 1st DCA 1976). Proceedings, like the present one, brought pursuant to Section 120.56, Florida Statutes (1977), are limited to the question whether "the rule is an invalid exercise of delegated legislative authority." Section 120.56(1), Florida Statutes (1977). In general, administrative rules "must be consistent with the provisions," Dethorne v. Beck, 280 So.2d 448, 449 (Fla. 44th DCA 1973), of the statutes they implement. Otherwise stated, "an administrative agency may not adopt a rule which conflicts with or modifies an existing statute." State, Department of Transportation v. Pan American Construction Company, 338 So. 2d 1291, 1293 (Fla. 1st DCA 1976) (quoting with approval from final order being affirmed; emphasis supplied).
In the present case, Rule 12A-1.01(4)(b), Florida Administrative Code, defines church as "a religious institution . . . with a membership roll." The only possible statutory basis for the rule's requirement of a membership roll is the word church itself. In some religious traditions, the idea of a membership roll may be central; there is, after all, a hymn with the refrain "When the roll is called up yonder . . ." But in a least one sect, "[t]here is no membership in the church as such." Founding Church of Scientology of Washington, D.C. v. United States, 409 F.2d 1146, 1152 (D.C. Cir. 1960). cf. Matthew 18:20 ("For where two or three are gathered together in my name, there am I in the midst of them.") (King James) No dictionary, legal or general, and no case law that has come to the attention of the hearing officer mentions membership rolls in defining "church." Like the rule invalidated in State, Department of Transportation v. Pan American Construction Company, 338 So.2d 1291 (Fla. 1st DCA 1976), Rule 12A-1.01(4)(b), Florida Administrative Code, by adding the membership roll requirement, "enlarge[s] the statutory formula by adopting [an] additional criteri[on] . . . ." 338 So.2d at 1293. As written, Rule as 12A- 1.01(4)(b), Florida Administrative Code, would result in the denial of a sales tax exemption for a cathedral if its membership roll should be lost or destroyed or if there were no membership roll to begin with. This is contrary to the clear statutory intent and Rule 12A-1.01(4)(b), Florida administrative Code, is therefore invalid to the extent it purports to add a membership roll requirement as a condition for sales tax exemption for churches.
Petitioner urges the invalidity of Rule 12A-1.01(4)(b), Florida Administrative Code, in its entirety, on the additional grounds that it:
Calls for a preliminary determination that the applicant is a "religious institution," while the statute requires a finding that nonprofit religious services are regularly conducted . . . [and] the rule eliminates the conjunctive language of the statute in an apparent attempt to make a "church" a limited class of organizations knows an "religious institutions."
Pursuant to Section 212.08(7)(c), Florida Statutes (1977), however, churches are defined as a subclass of religious institutions. Accordingly, Rule 12A-
1.01(4)(b), Florida Administrative Code, is valid except for the final phrase "with a membership roll."
Citing Founding Church of Scientology of Washington, D.C. v. United States, 409 F.2d 1146, 1152 (D.C. Cir. 1969); Washington Ethical Society v. District of Columbia, 249 F.2d 127 (D.C. Cir. 1957); Maumee Valley Broadcasting Ass'n v. Porterfield, 29 Ohio St. 2d 95 279 N.E. 2d 863 (1972); Fellowship of Humanity v. County of Alameda, 315 P.2d 394 (Cal. 1st DCA 1957) and Annot., 54
A.L.R. 3d 1204 (1973), petitioner urges the invalidity of Rule 12A-1.01(4)(c), Florida Administrative Code, in its entirety. Most of the authority cited stands for the proposition that "any type of statutory exemption that discriminates between types of religious belief-that discriminates on the basis of the content of such belief-would offend . . . constitutional provisions." Fellowship of Humanity v. County of Alameda, 315 p.2d 394, 406 (Cal 1st DCA 1957). But subsection (c) is not concerned with the content of religious belief. It simply excludes from the statutory term church (but not the statutory term "religious institution") "organizations without membership rolls whose function are radio broadcasting or conducting services for short periods of time at temporary locations . . ."
For the reasons developed above, the presence or absence of membership rolls should have no bearing on which groups qualify as churches for purposes of sales tax exemption. The statute does not authorize this additional criterion to be laid down by administrative rule.
Petitioner does not attack the clause "conducting services for short periods of time at temporary locations") and did not demonstrate that this portion of the rule pertains to its situation), but petitioner vigorously assails the validity of other clause "whose functions are radio broadcasting." Nobody contends that a conventional church whose services are occasionally broadcast must for that reason lose its exempt status on account of Rule 12A- 1.01)4)(c), Florida Administrative Code. The language of the rule is intended to apply to organizations whose overriding purpose and practically only function is broadcasting. So construed, the rule interprets the word church, as used in Section 212.008(7), Florida Statutes (1977), to mean something other than radio station. This is the commonly accepted meaning of the word church, and this language of Rule 12A-1.01(4)(c), Florida Administrative Code, does not constitute "an invalid exercise of delegated legislative authority." Section 120.56(1), Florida Statutes (1977). In Maumee Valley Broadcasting Ass'n v. Porterfield, 29 Ohio St. 2d 95, 279 N.E.2d 863 (1972), the case on which petitioner relies most heavily, a sales tax exemption was upheld for a religious corporation that "demonstrated by evidence the necessary attributes of a church." 279 N.E.2d at 865. The Maumee Court opined that the tax authorities' "isolation of the radio station from the total picture [was] unwarranted," 279 N.E.2d at 865, the clear implication being that a radio production company or a radio station without more, which is what Rule 12A-1.01(4)(c), Florida Administrative Code, addresses, could properly be excluded from the category of church.
DONE AND ORDERED in Tallahassee, Leon County, Florida, this 22nd day of May, 1978.
ROBERT T. BENTON, II
Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304
Jon H. Anderson, Esquire Suite 414
Cecil L. Davis, Jr., Esquire Assistant Attorney General The Capitol
Administrative Procedures Committee Room 120, Holland Building Tallahassee, Florida 32304
