Pastor, Church & Law

Key point. The definition of the term "church" and the subject of accessory uses are addressed in chapter 5.

Most municipalities in the United States have enacted zoning laws. The purpose of a municipal zoning law

is to regulate the growth and development of the city in an orderly manner. Among the objectives to be served is to avoid mixing together of industrial, commercial, business and residential uses; the prevention of undue concentrations of people in certain areas under undesirable conditions; making provisions for safe and efficient transportation; for recreational needs; and for the enhancement of aesthetic values, all in order to best serve the purpose of promoting the health, safety, morals and general welfare of the city and its inhabitants.[109] Naylor v. Salt Lake City Corporation, 410 P.2d 764, 765 (Utah 1966).

Municipalities have no inherent authority to enact zoning laws. Zoning laws constitute an exercise of the police power—that is, the authority inherent in state governments to enact laws in furtherance of the public health, safety, morals, and general welfare. Unless a state specifically delegates such authority to a municipality, the municipality will have no authority to enact a zoning ordinance. Most states, however, have adopted "enabling acts" which delegate such authority to designated municipalities.

The authority of a municipality to enact a zoning ordinance is limited by the terms of the enabling statute. It is also limited by constitutional considerations, for many courts have ruled that the United States Constitution prohibits the enactment of zoning ordinances that are unreasonable, discriminatory, or arbitrary. And, since a state's delegation of zoning power to a municipality constitutes a delegation of state "police power," a municipal zoning ordinance to be valid must in fact further the public health, safety, morals, or general welfare. Further, zoning ordinances that restrict the location of churches in certain areas must not run afoul of the constitutional guarantees of assembly and the free exercise of religion.

The typical zoning ordinance divides a municipality into zones or districts in which only certain activities or uses are permitted. For example, it is common for a municipal zoning ordinance to divide a municipality into residential, commercial, and industrial districts, with the activities and uses permitted in each district described in the ordinance. Nonconforming uses and activities may be authorized in some cases through variances, special use permits, or by the fact that the nonconforming use preceded the enactment of the zoning ordinance.

Historically, churches presented few problems for municipal planners. Churches were allowed in residential districts so that they would be within walking distance of parishioners' residences. It was unthinkable to locate churches anywhere else. The vast majority of municipalities still permit churches in residential zones. With the advent of the automobile, churches became more incompatible with residential districts for two reasons. First, most parishioners drive their automobiles to church, making it less essential for churches to locate within walking distance of their membership. Second, on at least one day each week the church is the biggest source of traffic congestion, noise, and pollution in many residential neighborhoods. For a growing number of churches, this is becoming true on several days of the week due to additional church services, youth activities, weddings, funerals, child care, rehearsals, civic events, and programs for the poor and elderly. Understandably, many municipalities have reconsidered the traditional view of allowing churches in residential zones without restriction.

This process of reconsidering the proper location of churches within a modern-day community has resulted in a number of views. Most municipalities continue to allow churches in residential zones, but many require churches to obtain a permit prior to obtaining and using property in a residential zone. The permit procedure gives municipal planners greater control over the location of churches within residential zones. Some municipal zoning ordinances prohibit churches in any residential zone, and a few municipalities have attempted to bar churches altogether.

Communications Towers on Church Property

Many churches have allowed telecommunications companies to construct antennae on church property in exchange for a monthly rental fee. Such arrangements raise a number of legal and tax issues, including those listed below. It is essential for church leaders to discuss these issues with a local attorney before entering into an agreement with a telecommunications company to erect an antenna on church property.

• Zoning law. Is the construction of a telecommunications antenna on church property consistent with the classification of the property under local zoning law? The few courts that have addressed this question have suggested that zoning laws would not be violated by such a use of church property.[110] See, e.g., AT&T Wireless PCS, Inc. v. City Council, 979 F. Supp. 416 (E.D. Va. 1997).
• Property tax exemption. It is possible that the use of church property for a telecommunications antenna would jeopardize the exemption of the property from local property taxes. In many states, an exemption from property taxes is conditioned on the fact that the property is not used for the generation of income. Loss of exempt status ordinarily will be limited to the portion of a church's property that is actually being used for the production of income rather than to the entire premises. However, in some states a church may lose an exemption for all of its property though only a small amount is used for an antenna.
• Unrelated business income. Federal law imposes a tax (equal to the corporate income tax) on the net income generated by a tax-exempt organization from any unrelated trade or business that is "regularly carried on." This tax is called the unrelated business income tax (or UBIT for short). There are a number of exemptions, including rental income. However, in order to be exempt from UBIT, the rental income must be from the rental of a debt-free facility. In 1998, the IRS ruled that rental fees received by charities for the erection of telecommunications towers on their property were exempt from UBIT. However, the IRS revoked this ruling in 2001 and concluded that rents received by charities for the use of communications towers or antennae constructed on their property are subject to the unrelated business income tax. The IRS limited its ruling to "receipts attributable solely to the rental of the broadcasting tower." This suggests that the rental of a specified area of church property on which a communications tower is erected may be partially or wholly exempt from the unrelated business income tax. The IRS did not specifically address this issue in its 2001 ruling.[111] IRS Letter Ruling 200104031.