City of Austin v. University Christian Church
768 S.W.2d 718
Tex.
1988
Check Treatment

*1 al., Petitioners, CITY OF et AUSTIN

UNIVERSITY CHRISTIAN

CHURCH, Respondent.

No. C-6294.

Supreme Court of Texas.

Nov. 1988.

Rehearing Denied Jan. Kathy Boutchee, Oden

Ken D. Tra- Office, Austin, County vis Attorney’s petitioner. Bloch,

Thomas H. Uatkins and Elizabeth Hilgers Watkins, Austin, & respondent. RAY, Justice. Austin, Independent Austin County

School District and Travis sued University Christian Church to collect de- linquent ad valorem taxes levied two lots which had leased been to a commercial company. ex- church claimed that empt. 11.20(a)(1) Code Tex.Tax Ann. § (Vemon 1982). jury findings, Based judgment trial court in favor of rendered ap- authorities. peals reversed the trial court’s *2 719 property was used judgment sively of the established the in favor and rendered religious primarily purposes. for the church. 724 S.W.2d 94. We reverse appeals the and re- judgment of court of decision, ap- reaching its the court of In further mand the cause that court for of the first peals approved the submission consideration. inquired: issue which a of the you preponderance find from Do University owns two Christian Church the owned real evidence from the parking lots across the street Church, including University Christian sanctuary The Univ- adjacent church lots, sanctuary and is used parking the 1977, campus. ersity of Texas In October worship? place religious as a of Allright leased Park- the church the lots to is- taxing objected to this The authorities lease, the ing. the Under terms of the of only tax-exempt the status sue because Sundays use church retained of the lots on taxing The parking lots was at issue. the certain other The church and on occasions. tax-exempt dispute did not the authorities monthly of percentage received a and a fee Despite the erro- sanctuary. for the status Allright’s gross rent for the use receipts as issue, jury of the neous submission property. of its taxing in favor of the authorities. found con 11.20 of Texas Tax Code Section the judgment in favor The trial court limited its a reli trols the determination of whether taxing parking lots the authorities to the of gious organization’s property is at issue. from ad valorem taxation. Subsection answer issue should The to this (a)(1) religious organization provides harmless, it the error but have rendered to an from taxation is entitled appeals the fo- not because court of does by the real that is owned “the “no support its sanctuary cused on the organization, primarily as religious is used holding. The court of evidence” regular religious worship, and is place a of wrote: necessary engaging in reli reasonably a of the reveals A review record below Ann. gious Tex.Tax Code support of complete absence evidence 11.20(a)(1) (Vernon 1982). The church § the finding primary use of proving of had the burden that its worship. religious not sanctuary was tax-exempt status. met criteria at 95. Of course no evidence 724 S.W.2d (Tex. Meyer, v. 541 S.W.2d 827 Davies regard- dispute There found. was no was 1976). why sanctuary. precisely ing the owned stipulated that the church issue taxing objected It was to the authorities place. so issues were sub- two in the first (1) proper- jury: whether the mitted to however, authorities, taxing regu- place a of ty was “used as they argument far when take their too (2) religious worship,” whether lar lot parking definition a suggest en- “reasonably necessary for property was worship religious be a cannot be Tex.Tax religious worship.” gaging on worship acts occur no actual cause 1982). 11.20(a)(1) (Vernon Ann. Code § tax For of the parking lot. “rea- found that the jury worship in religious exemption, a necessary” worship, religious sonably also sanctuary, but cludes property was to find that the failed surrounding but grounds and those structures worship. used” for “primarily necessary for the sanctuary which are prove one City failed to Because church. See enjoyment use and exemption, 671, elements for the 673 Cohen, the essential v. 204 S.W.2d Houston of (Tex.Civ.App. 1947, ref’d judgment court rendered writ the trial — Galveston appeals, n.r.e.); Trinity authorities. The court Antonio, 201 S.W. trial however, judgment reversed the San Church Antonio (Tex.Civ.App. and rendered — San ref’d). this definition Under church, holding conclu- writ that the evidence qualify lot be as to property’s use. worship. Whether used in income” test of refers § regular religious connection with worship the secular use puts to which the church however, (1) exempt, depends is tax its property and not resulting or religious organization profit whether property by owns made other (2) property, entity. The church’s secular use in our *3 (3) primarily religious, present use is and whether is its Allright case lease with Park- reasonably the is necessary ing. undisputed pay- use It is that all rent religious worship. to the go ments under this lease to the church appropriately and are used the church. dispute There regarding was no at trial ownership. Regarding the element of say the We do not the that church’s lease jury park- third element arrangement Allright Allright’s the found that the with and “reasonably necessary” profit lots were property from the church is irrele- religious worship. taxing The Any advantage gained authorities vant. commercial finding do contest is longer not this so it no the use of property secular a church’s is dispute. a matter in highly The issue re- to “primary relevant the use” issue. maining is the parking say whether use of the We is church not foreclosed primarily lot was or from attempting prop- secular. Per- to establish that its 11.20(d) erty’s religious, tinent to this is of the primarily issue Tax use is some when § occasional, explains Code which property produces that sec- other use of secular the use of property ular church does not dis- income some entity other than the qualify property tax-exempt the from sta- church. “the property tus if use of the is appeals We hold that the court of religious worship and all income from law, in concluding, erred as a matter of exclusively the other use is devoted to the parking primari that the church’s lots were development maintenance the prop- and of ly religious worship. used for The nature erty as of place religious worship.” a enterprise and of the extent commercial (Vernon

Tex.Tax Code Ann. § operating property on the church’s is some 1982). support jury’s to evidence to the failure taxing argue “pri The authorities that find for church on Issue the the 11.20(d)requires mary a of Despite determination that the use” issue. the efforts § tax-exempt taxing “all the is not because in- the authorities and law, the come” from the secular use is not “devoted resolve this issue as a matter of is, remains, exclusively an develop- property’s primary to the maintenance and use and jury. of the as a of ment issue of fact the argument This premised is Whether the that failure find Allright the that profit fact makes a from primarily the lot reli parking was used parking its commercial of the church’s use gious weight against great is the Allright lots. Because has from income its preponderance and of the evidence we can property, taxing secular use of say, jurisdiction not our extends because authorities conclude that the church cannot questions Cropper of Cat law. v. property’s primary use is claim Co., (Tex. erpillar S.W.2d 646 Tractor disagree. religious. We 1988). say We also cannot ruling court of has a appeals made This of the statute vir construction complaint jury’s response church’s that the tually eliminates secular weight great to this issue regard without to the church’s preponderance of the evidence. a property’s primary use. Such construc ruling mixes is unclear because it court’s inquiry proper from how the tion shifts legal concepts of and factual traditional the church ty is used whether appeals writes: insufficiency. court contrary use. is controls the secular overwhelming weight of the legislature, Because the intent of the which clear appellant’s inquiry in evidence demonstrates ly expressed 11.20, in case all in- undisputed It is this right to under we § property’s use as commer- come from the a the trial should hold court have directed go not into cial lot does granting exemption. them the a verdict Parking, pri- Allright a church’s coffers. this is construed 724 S.W.2d at Even corporation, for-profit receives over vate factually ruling that the evidence is to be half total income from the insufficient, we must remand to court certainly income it does and the receives comply appeals it has failed because developing not go toward reviewing guidelines for such with the Therefore, as religious worship. questions expla most of fact. Our recent law, being is not matter in guidelines is Pool nation those found religious wor- used as a (Tex. Co., 715 S.W.2d 629 Ford Motor ship, authorities are entitled 1986). to collect the taxes due. I ambiguity do read *4 is to that reversed and the cause remanded 11.20(d). language of section income” for court it to consider whether However, exists, assuming ambiguity some parking lot to find that was failure long any statutory held ex we have that religious purposes used was strictly emption from taxation must be con preponder- against great weight and Hilltop Village, strued. Inc. v. Kerrville ance the evidence. District, Independent 426 S.W.2d School (Tex.1968); Trinity 943 see also MAUZY, J., dissents, joined by Antonio, Church San SPEARS, and ROBERTSON (Tex.Civ.App. 201 Antonio S.W. 669 — San KILGARLIN, JJ. 1918, ref’d). The today writ refuses Justice, MAUZY, dissenting. by rule to this of strict construction abide the statute so as to and instead construes 11.20(d) of the Tax Code Section Texas exemption from favor taxation. provides statutory guidelines for decid- ing is used wrong it wrong, is and is not as worship. religious It states: construction; statutory it a matter of is qualifies

Use of that for the Un- wrong under the Texas Constitution. exemption prescribed Section 11.- VIII, [under 2 of the Texas der article section 20(a)(1) for occasional secular Constitution, religious ] places actual religious worship other than does not may worship exempted from taxation. be exemption result in loss The court has construed section so use of the is reli- that land possibility as to allow for gious worship from and all income enterprise may be used for commercial exclusively other use is devoted so, In it ef- exempt doing from taxation. development maintenance and fectively unconstitu- renders worship. as permits a com- tional and state-subsidized petitive advantage given the commer- be provision, property used oc- Under enterprise. cial purposes may secular still be ex- casional long as empt from taxation so “all income” Providing equal uniform taxation and exclusively from the secular is devoted major of the 1875 Constitution- was a focus development of the to the maintenance and 1 al in Texas. The Consti- Convention See worship. property as a Texas: An Annotat- tution State (G.Bra- Analysis, today hedge Comparative on these ed The court tries ed.). legislature previously guidelines by stating den had statutory clear exemptions taxa- granted unpopular refers from “all income” test 1875, and, strong tion there was feel- church’s income and not income id. at entity exemptions. derive from such which some other Therefore, 565, delegates However, wrote property. what the statute of 1876 that taxation says is income.” into the Constitution “all “equal must be VIII, and uniform” and 2, Under article section exempting laws property other than expressly such a statute is “null and void.” constitutionally authorized would be void. I would construe the statute in a manner Const, VIII, 1, Tex. art. 2. This consti- §§ consistent with the constitution and would prohibition tutional is the reason behind the hold that income” includes those reve- rule of applicable strict construction to tax gen- nues which the secular use exemptions; rule premised on the for a private for-profit corporation. erates recognition exemptions that tax are “the Such preclude a construction would equality antithesis of uniformity.” possibility that commercial could Inc., Hilltop Village, 426 S.W.2d at 948. be exempt. tax Because there is no fact strong against exemptions sentiment question remaining, I would reverse the because, apparently continued in adopting judgment of the court of and ren- VIII, amendment to the 1906 article section der in favor of the author- people of Texas an drove extra nail1 ities. into the coffin. The amendment provided exemptions, that all other than SPEARS, ROBERTSON and constitution, those authorized would JJ., KILGARLIN, join in this dissent. void, just be not but “null and void.” Id. at provision 596. In this constitutional again so amended allow

parsonages to be from taxation. *5 adopted

Id. amendment was re-

sponse to the court’s decision in the Trini- that,

ty Episcopal Methodist Church case regardless say, might what STATE FARM COUNTY MUTUAL residence not an minister’s “actual INSURANCE OF COMPANY religious worship” under the con- TEXAS, Petitioner, exempt therefore could not stitution and be from taxation. 201 S.W. at 670. OLLIS, D.C., Phillip Respondent. Dr. C.

Given minister’s residence I worship, an actual am No. C-7955. hard-pressed park- to see how a commercial Supreme Court of Texas. ing people is. If the of this state want park- church-owned commercial Jan. 1989. taxation, ing they lots from then can Rehearing Denied Feb. so, just the constitution to do amend However, they parsonages. did

legislature cannot statute authorize exemption

such an because the constitution

prohibits it. language

No matter what of the stat- be, language it is the of the consti-

ute exemp- fixes

tution that the boundaries Trinity

tions from taxation. Church, 201 S.W. at 670. The 11.20(d) ef-

court’s construction of section

fectively renders the statute unconstitu- prop- It allows for

tional.

erty that is not an “actual solidify man- nail mean- their desire to the constitutional

1. Whether this extra added real does, It however reflect the can be debated. date them. people’s exemptions distaste continued