Tuesday, June 20, 2006

MWCD -- Tax or Assessment?

Several Independent Baptist churches located within the Muskingum Water Conservancy District (MWCD) in Ohio contacted LLM Attorney Terry Lee Hamilton about whether the efforts of the district to tax church real estate is in violation of the state constitutional ban on real estate taxes on church property. The legal analysis is fairly straightforward:

• If the district is taxing the church property,
then the taxation is unconstitutional.
• On the other hand, if the district is merely
placing an assessment on church property
for specific services, and those assessments
are placed in a specific fund, then such an
assessment is not unconstitutional.

The current statutory language describes what the district is doing as an assessment, while earlier statutes call it a tax. On behalf of three Independent Baptist churches in Ohio, LLM recently filed a brief (see excerpts below) in support of the contention that the MWCD assessment is really a tax. In addition, LLM is working with Dan Whisner at Ohio Legislative Watch and with other preachers to seek a legislative solution, which would be far better than years of inconclusive litigation. Please be in prayer!


STATE OF OHIO, TUSCARAWAS COUNTY
IN THE COURT OF COMMON PLEAS
(CONSERVANCY DIVISION)


IN THE MATTER OF THE :
MUSKINGUM WATERSHED
CONSERVANCY DISTRICT :


EXCEPTORS' MEMORANDUM IN OPPOSITION TO
MWCD'S MOTION FOR SUMMARY JUDGMENT AS TO SPECIFIC EXCEPTIONS

NOW COMES Attorney Terry Lee Hamilton, on behalf of Exceptors First Baptist Church of Ashland, Calvary Baptist Church of Ashland, and Twin Rivers Baptist Church of Marietta, and files this Memorandum in Opposition to MWCD's Motion for Summary Judgment as to Specific Exceptions.

I. ISSUE - WHETHER THERE REMAINS A GENUINE ISSUE FOR TRIAL, WITH RESPECT TO THE TAX EXEMPT STATUS OF CHURCHES, SUCH THAT THE MOTION FOR SUMMARY JUDGMENT SHOULD NOT BE GRANTED . . .

. . . As explained below, Exceptors maintain that there is a genuine issue of material fact as to whether the maintenance assessment is truly an assessment or a tax. Accordingly, the motion for summary judgment should not be granted.

II. TAX EXEMPTION FOR CHURCHES IN THE OHIO CONSTITUTION AND OHIO REVISED CODE

From the early days of Ohio's history, churches and religion have held a special legal status.

A. Northwest Ordinance of 1787. The governing principles of this ordinance, which included the territory of Ohio, contained the following language in Article III: "Religion, morality, and knowledge, being necessary to good government and the happiness of mankind, schools and the means of education shall forever be encouraged."

B. Ohio Constitution. The Ohio Constitution continues to place a special legal status upon churches and religion.

1. Article I - Bill of Rights, § 7 - Rights of conscience; education; the necessity of religion and knowledge. The Ohio Bill of Rights expands upon the legal protections afforded in the Northwest Ordinance, as follows:

"Religion, morality, and knowledge, however, being essential to good government, it shall be the duty of the general assembly to pass suitable laws to protect every religious denomination in the peaceable enjoyment of its own mode of public worship, and to encourage schools and the means of instruction."

2. Article VII - Finance and Taxation, § 2 - Limitation of tax rate; exemption. With respect to taxation of real property, this section of the Ohio Constitution, cognizant of the special legal status of churches as found in Article 1, once again affords special legal protection for churches, as follows: "Without limiting the general power, subject to the provisions of Article I of this constitution, to determine the subjects and methods of taxation or exemption therefrom, general laws may be passed to exempt . . . , houses used exclusively for public worship, . . . "

As noted below, the General Assemby has passed legislation exempting "houses used exclusively for public worship."

C. Ohio Revised Code, § 5709.07 - Exemption of schools, churches, and colleges. In accordance with the above provisions of the Ohio Constitution, the General Assembly has exempted churches from real estate taxation, as follows:

" (A) The following property shall be exempt from taxation: . . .

(2) Houses used exclusively for public worship, the books and furniture in them, and the ground attached to them that is not leased or otherwise used with a view to profit and that is necessary for their proper occupancy, use, and enjoyment."

III. NATURE OF TAX VS. ASSESSMENT

Despite the special status of churches under the Ohio Constitution and statutes, resulting in their exemption from real estate tax, nonetheless churches are not exempt from special assessments. The distinction between a tax and a special assessment is addressed at 93 Oh Jur Water § 231, as follows:

"Observation: Although "tax" and "assessment" are similar concepts in that they are government-imposed financial burdens for a public or quasi-public purpose, Ohio maintains a functional distinction between the two: a tax is a burden levied on citizens for the general operation of the government, and by contrast, an assessment is a narrower burden levied on specific property owners to cover the cost of benefits bestowed on the property by public improvements.

Notice the functional distinction:
• Tax. " ... a tax is a burden levied on citizens for the general operation of the government,..."
• Assessment. "... an assessment is a narrower burden levied on specific property owners to cover the cost of benefits bestowed on the property by public improvements."

If MWCD passes a levy "on specific property owners to cover the cost of benefits bestowed on the property by public improvements," then that levy is an assessment. On the other hand, if MWCD passes a levy "for the general operation of the government," then that levy is a tax.

IV. THE PROPOSED MAINTENANCE ASSESSMENT IS REALLY A TAX

Notice again the legal conclusion made by MWCD at page 8 of its motion: "Any tax exemption provided to political subdivisions, churches, schools and other entities, does not equate to a similar exemption from a maintenance assessment." MWCD argues in support of its motion for summary judgment that churches are not exempt from maintenance assessments, thus raising the issue as to whether the maintenance assessment is an assessment or a tax.

• If the maintenance assessment meets the definition of an assessment, then churches would not be exempt from such assessments.
• However, if the maintenance assessment is truly a tax, then churches would be exempt as set forth above in the Ohio Constitution and statutes.

Is the maintenance assessment "a narrower burden levied on specific property owners to cover the cost of benefits bestowed on the property by public improvements"? MWCD's own motion belies its assertion that its purported maintenance assessment is really an assessment.

A. The Affidavit. Whereas an assessment is aimed at "specific property owners to cover the cost of benefits bestowed on the property by public improvements," according to the affidavit of Michael F. Lawrence (the only affidavit attached to MWCD's motion), the purported maintenance assessment would benefit all properties within the Muskingum Watershed, as follows:

"7. Benefits are conferred on each parcel of property situated within the Muskingum Watershed as a result of the Offical Plan of the MWCD. This is true of the parcels which are located on higher ground not subject to flooding, as well as those in low lying areas."

The affidavit clearly demonstrates that the maintenance assessment is not for specific property owners, but rather for "each parcel of property situated within the Muskingum Watershed;" therefore, as a general "burden levied on citizens for the general operation of the government," the purported maintenance assessment is really a tax.

B. Official Amended Plan. As noted on page 4 of its motion for summary judgment, the MWCD notes that "an Amended Official Plan was completed and approved by both the Board of Directors of the Conservancy District and the Conservancy Court in 2005." The Amended Official Plan is clearly aimed at all parcels of land in the MWCD, not specific property owners, as follows:

• Page 3 -- "Based on preliminary estimates, it is expected that the amended Official Plan will result in a total yearly assessment cost of approximately $12 per parcel for residential and agricultural property located in the jurisdiction of the MWCD. . ."
• Page 17 -- "The cost of the work to be performed as described in this plan will be assessed to the benefited owners of real property located within the jurisdictional boundaries of the MWCD as determined by the Board of Appraisers . . ."

If the maintenance assessment is really a tax on real estate, then clearly churches would be exempt from such taxation.

V. CHANGING THE NAME DOESN'T CHANGE THE NATURE. MWCD's first argument with respect to tax exemption of churches is stated again (see page 8 of its motion): "Any tax exemption provided to political subdivisions, churches, schools and other entities, does not equate to a similar exemption from a maintenance assessment." Certainly, relevant provisions of the Ohio Revised Code in Chapter 6101 specifically referenced assessments, not taxes.

However, it musts be noted that HB 617, passed in 2000, amended out the word "tax" or "taxes" in numerous sections. For most of the history of MWCD, it was authorized to levy both taxes and assessments, depending on whether the project was for specific property owners (assessment) or for the general operation of MWCD (tax). Changing the name from tax to assessment, or deleting the name tax, does not change the nature of the levy.

VI. CONCLUSION

There remains a genuine issue of material fact -- whether the maintenance assessment is really an assessment, in which case churches are not exempt, or whether the maintenance assessment is really a tax, in which case churches would be exempt. Accordingly, MWCD's motion for summary judgment with respect to churches should not be granted.



Terry Lee Hamilton (0030755)
1813 East 45th Street
Ashtabula, OH 44004
Telephone: (440) 964-0236
Attorney for Exceptors

Friday, June 16, 2006

Beware of NEW State Education Form!

TELEPHONE CALLS STARTED POURING IN!!!

On June 9, 2006, the Ohio Department of Education sent out its annual letter to church schools which are non-chartered and non-tax supported. On June 14, telephone calls started pouring into the LLM office from church schools all over the state -- Bucyrus, Toledo, Dayton, and Conneaut. The state's annual letter raised two significant concerns. But first, a little background.

ANNUAL REPORTING REQUIRED

All church schools in Ohio are subject to the state Minimum Standards set forth in the Ohio Administrative Code, Rule 3301-35-08.
The reporting information contained at the top of the new state form, "Non-Chartered, Non-Tax Supported School Annual Certification Report," is correct, as follows:

"Rule 3301-35-08 of the Ohio Administrative Code (OAC) requires that a school, which is not chartered or seeking a charter from the State Board of Education because of truly held religious beliefs, shall annually certify in a report to the parents of the pupils that the school meets Ohio minimum standards for non-chartered, non-tax supported schools cited in paragraphs (A) to (H) of this rule. A copy of said report shall be filed with the Department of Education on or before the thirtieth of September of each year."

For many years, LLM has recommended (1) that such church schools send the state an annual letter which provides only the information required in the Minimum Standards (see sample below) and (2) that such church schools not use any form supplied by the state since such form might ask for more information than is required by the Minimum Standards. Alas, such advice is needed again.

BEWARE OF STATE EDUCATON FORM!!! IT IS NOT MANDATORY!

The form which the state submitted this year is especially egregious with respect to two matters:
1. "Please list or attach the truly held religous beliefs." The Minimum Standards do not require such a statement. Do not provide it.
2. Boxes asked for "Administrator/Teacher Name, Degree, and Institution Granting Degree." The Minimum Standards do not require church schools to submit such information.
Don't use the state form. IT IS NOT MANDATORY!

SUGGESTED LETTER

The following letter is suggested. If you have any questions, please call LLM Attorney Hamilton at 440-964-0236.

The Church School’s Suggested Annual Report to Parents,
with a copy to the Ohio Department of Education


To: The Parents of Students attending ***************** School

From: **************************, Administrator
(Name and Address of School)

Re: Annual Report to Parents

Date: (Please include date letter is sent)


Our school, which is not chartered or seeking a charter from the State Board of Education because of truly held religious beliefs, is reporting to you that we meet all standards required by the state for operating a non-chartered, non-tax supported school. These rules are as follows:

(A) School year. The school shall be open for instruction with pupils in attendance for not less than one hundred eighty-two days each school year according to section 3313.48 of the Revised Code.

(B) School day. The school day for pupils in grades one through twelve shall be no less than five hours exclusive of the noon recess according to section 3313.48 of the Revised Code.

(C) Pupil attendance. Pupil attendance shall be reported to facilitate administration of the laws relating to compulsory education and employment of minors. Parents shall be responsible for reporting their child’s school enrollment or withdrawal. An individual in charge of the non-chartered, non-tax supported school may, as a matter of convenience, provide the report for the parent.

(1) The attendance report shall include the name, age, and place of residence of each pupil below eighteen years of age.

(2) The report shall be made to the treasurer of the board of education of the city, exempted village, or local school district in which the pupil resides.

(3) The report shall be made within the first two weeks of the beginning of each school year. In the case of pupil withdrawal or entrance during the school years, notice shall be given to the treasurer of the appropriate board(s) of education. Such notice shall be given within the first week of the next school month.

(D) Teacher and administrator qualifications. Teachers and administrators shall have received a bachelor’s degree or the equivalent thereof from a recognized college or university.

OR ALTERNATIVELY

(D) Teacher and administrator qualifications. The teachers are qualified to teach in their respective areas.

(E) Courses of study. Each non-chartered, non-tax supported school shall have courses of study for the following subjects:

(1) Language arts;
(2) Geography, the history of the United States and Ohio, and national, state, and local government;
(3) Mathematics;
(4) Science;
(5) Health;
(6) Physical education;
(7) The fine arts, including music;
(8) First aid, safety, and fire prevention;
(9) Other subjects as prescribed by the non-chartered, non-tax supported school.

(F) Pupil promotion. Each non-chartered, non-tax supported school shall follow regular procedures for promotion from grade to grade of pupils who have met the school’s educational requirements.

(G) Pupil health and safety. Each non-chartered, non-tax supported school shall comply with state and local health, fire, and safety laws.

(H) Pupils attending a non-chartered, non-tax supported school are not entitled to pupil transportation as provided pursuant to section 3327.01 of the Revised Code, and pupils attending a non-chartered, non-tax supported school are not entitled to auxiliary services as provided pursuant to section 3317.06 of the Revised Code.

A non-chartered, non-tax supported school is not entitled to nonpublic administrative cost reimbursement provided pursuant to section 3317.063 of the Revised Code.

Monday, June 05, 2006

POLYGAMY!?! HOLM Sweet HOLM . . . Sweet HOLM . . . Sweet HOLM

Let me give you another good reason to support President Bush's renewed call for a Marriage Amendment aimed at defining marriage as between one man and one woman. While the President is primarily aiming at undermining legal arguments in favor of same sex marriage, the Marriage Amendment would also undermine renewed legal arguments for polygamy.

POLYGAMY!?!

You thought it was dead, didn't you? If you have any historical perspective, you probably thought that polygamy died in the late 1800s when (1) the U.S. Supreme Court ruled that polygamy was unconstitutional and (2) the ruling elders in the Church of the Latter-day Saints (Mormons) received new revelation that their previously held doctrine of polygamy was wrong, in order for the Territory of Utah to become a state.

Well, it turns out that polygamy never died, but rather went into hiding, upheld as solid doctrine by fundamentalist Mormons who did not believe that God changed His mind about allowing multiple wives! One of those fundamental Mormon groups came out of the closet in a May 16, 2006, decision by the Utah Supreme Court, "Utah v. Holm."

HOLM SWEET HOLM . . . SWEET HOLM . . . SWEET HOLM!

Rodney Holm, a member of the Fundamentalist Church of Jesus Christ of Latter-day Saints (Fundamentalist Mormons) was legally married to Suzie in 1986. Subsequent to that marriage, he participated in a religious marriage ceremony with Wendy. Subsequent to that, he participated in another religious marriage ceremony with Ruth, the sixteen-year-old sister of Suzie. Got all that?

PROSECUTING POLYGAMY

Poor Rodney Holm! He couldn't catch a break.
• He was arrested and charged with bigamy and with unlawful sexual conduct with a sixteen- or seventeen-year old.
• One month before his trial was scheduled in 2003, the U.S. Supreme Court issued its infamous decision in "Lawrence v. Texas," which declared that it was unconstitutional for Texas to criminalize homosexual behavior. Why not argue, Mr. Holm's trial attorney cleverly deduced, that if criminalizing sexual behavior between consenting homosexuals was unconstitutional, then criminalizing sexual behavior in a consenting polygamous relationship was likewise unconstitutional.
• Mr. Holm also argued that since he did not obtain a state marriage license for both Wendy and Ruth, he really did not violate the bigamy statute.

Upon his conviction on both counts, Mr. Holm appealed. The Utah Supreme Court upheld the convictions, ruling that the state constitution specifically prohibits polygamy and that the federal constitution does not protect polygamy.

DISSENTING OPINION

The Utah case would not even merit a blog posting except for the 37-page dissenting opinion by Chief Justice Christine M. Durham, who wrote that the "Lawrence v. Texas" decision has overturned settled law on matters of consensual sexual relationships between adults.
• "I do not agree that the state can constitutionally criminalize private religiously motivated consensual relationships between adults."
• Chief Justice Durham concluded that the First Amendment Free Exercise Clause is violated when the state criminalizes such a religiously based polygamous relationship.
• Chief Justice Durham lent credence to Mr. Holm's argument that the 1879 U.S. Supreme Court decision in "Reynolds v. U.S.", which held that polygamy was unconstitutional, was "nothing more than a hollow relic of bygone days of fear, prejudice, and Victorian morality." The chief justice noted that the "Reynolds" case was based upon a fear that the "practice of polygamy threatened American democracy." She concluded that those "same fears . . have since been discounted by many as grounded more in bias than in fact."
• Chief Justice Durham compared the social damage of polygamous marriages such as Mr. Holm's marriages to the social damage caused by an unmarried cohabitating couple or by a married man who had a mistress on the side. None of those relationship should be governed by the state since none "can plausibly be said to threaten marriage as a social or legal institution."

CONCLUSION

The legal arguments raised by Chief Justice Durham are based fully upon the Supreme Court rationale in "Lawrence." If the case is appealed to the Supreme Court, will that court hear the case? With the departure of Justice O'Connor and the arrival of Justices Roberts and Alito, would the Supreme Court shift to the right in favor of one man-one woman marriage, or would the freewheeling, liberal spirit of "Lawrence" be upheld?

A better solution to this continued attack on the sanctity of marriage is the Marriage Amendment. The founding fathers would never have dreamed that such an amendment would be necessary; likewise, thirty-three years ago, when my wife Jan and I were married, we would never have dreamed that such an amendment would be necessary. But it is necessary now. Support the Marriage Amendment by contacting your senator.