Appeal from the Circuit Court of Du Page County; the Hon.
Robert McLaren, Judge, presiding.
PRESIDING JUSTICE SEIDENFELD DELIVERED THE OPINION OF THE COURT:
The treasurer of Du Page County appeals from a judgment which found that the property of the Evangelical Teacher Training Association, an Illinois Not-for-Profit Corporation (ETTA), was not used entirely for religious purposes and thus was not entitled to tax exemption for the 1981 tax year.
Between 1977 and 1980 ETTA's headquarters in Wheaton were exempted from real estate taxes. In 1981, the supervisor of assessments for Du Page County filed a complaint with the Du Page County Board of Review challenging the exemption on the basis that the property was not used exclusively for religious purposes. (Ill. Rev. Stat. 1979, ch. 120, par. 500.2.) ETTA then filed a complaint in the circuit court to enjoin the revocation of its tax exempt status and the collection of the taxes. *fn1
ETTA was organized in 1930 by five Bible colleges. ETTA's purpose, as expressed in its charter, was to upgrade Christian education at varied academic levels including seminary studies, adult education, and Sunday school activities. Since 1930, it has grown to include 208 members. All of its members are approved schools, liberal arts and Bible colleges, seminaries and Bible institutes.
Biannual corporate meetings are attended by delegates elected from each of its member organizations. Those delegates elect members who sit on ETTA's board of directors. Those directors appoint the corporate officers, and elect an executive committee.
Dr. Paul Loth, who began his professional career as a minister, and ETTA's president since 1961, testified at the hearing.
Loth and his son, a seminary graduate and a Ph.D., who also works for ETTA, have numerous speaking engagements at local chapel services and classes, as well as at national conferences on the subject of Christian education. They lecture at member colleges and give advice to local faculty on the training and preparation of seminary students. No fee is charged for these speaking services.
In addition to speaking and lecture services, ETTA prepares materials for 14 separate Bible course offerings, which include texts, cassette tapes, overhead masters, instructor's guides and lesson plans. The course offerings stress Bible lessons as well as Christian education techniques.
The materials are designed for use in seminaries, in adult education classes in local churches, and in Sunday schools. Qualified graduates of member schools are eligible to teach the courses. ETTA and member schools jointly issue a diploma to seminary graduates, certifying the graduate's entitlement to teach the courses, often referring such individuals to local congregations who have requested personnel to teach one of ETTA's courses at their church.
The courses themselves are written by faculty members at member schools, who receive a token honorarium for their efforts. The course material is then reviewed by an editorial committee, composed of faculty at member schools, and by two editors employed by ETTA. Once the editorial process is complete, the course material is translated into eight languages and distributed worldwide.
Course material packets are sold at $14.95, to those who can afford to buy them. ETTA has annual net sales of course materials and texts of $270,000. No royalty is exacted by it from members or nonmembers, relating to the teaching of its courses. Approximately half of the sales of teaching aid materials are distributed to nonmember schools.
ETTA does not produce materials to be distributed free of charge, but often donates its course and text materials to libraries and to "mission schools" without charge. Losses from such distribution are balanced by its income from "high volume textbook" sales.
In addition to sales, ETTA receives income in the form of $75 annual membership fees, a $5 diploma fee, and a relatively small amount of private donations ($2,700 in the past 10 months of its fiscal year). Donations are placed into a Christian education scholarship fund to promote its teacher training program in Third World countries.
In the fiscal year between June 30, 1981, and June 30, 1982, ETTA encountered a net operating loss of $22,605.47, on gross income of $222,946. That loss was offset by interest income of $23,681, to yield a net income of $1,075.53. It maintains a "quasi-endowment fund" of $125,000, for use, inter alia, in the development of new course materials. The remaining ...