This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. sec. 480A.08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

C5-96-2311

Kristine D. Gentilini,

Respondent,

vs.

Union Gospel Mission,

Relator,

and

Commissioner of Economic Security,

Respondent.

Filed May 6, 1997

Reversed

Randall, Judge

Department of Economic Security

File No. 156 T 96

Kristine D. Gentilini, 4130 East Superior St., Upper, Duluth, MN 55804 (pro se).

Thomas F. Andrew, Brown, Andrew, Signorelli, & Zallar, P.A., 300 Alworth Bldg., Duluth, MN 55802 (for relator).

Kent E. Todd, Minnesota Department of Economic Security, 390 North Robert St., St. Paul, MN 55101 (for respondent Commissioner of Economic Security).

Considered and decided by Willis, Presiding Judge, Randall, Judge, and Klaphake, Judge.

U N P U B L I S H E D O P I N I O N

RANDALL, Judge

Relator challenges the Commissioner's representative's determination that it is not exempt under Minnesota's Economic Security laws and, therefore, argues that compensation paid to respondent Gentilini constitutes wages for reemployment insurance tax and benefits purposes. We reverse.

FACTS

The Union Gospel Mission is a nonprofit corporation under 501(c)(3) of the Internal Revenue Code. The Mission has 21 housing units and provides nightly housing for 21 people. It serves approximately 2500 meals per week in its food program. The Mission also provides facilities where area churches can, and do, perform religious services. From 1988 until 1992, the Mission had a full-time chaplain. This position was reduced to part-time until finally, due to financial constraints, the Mission was forced to eliminate the paid chaplain position in March 1996. Now, the Mission utilizes the services of a part-time volunteer chaplain. Also, the president of the Mission and others on the Board of Directors conduct Bible studies and counseling for the clients of the Mission.

Kristine Gentilini worked for the Mission as a full-time client services director from October 1, 1994 to September 30, 1995. On April 10, 1996, a Minnesota Department of Economic Security claims examiner determined that respondent Kristine Gentilini was not entitled to reemployment insurance benefits because she performed services for her former employer, relator Union Gospel Mission, an exempt organization operated primarily for religious purposes pursuant to Minn. Stat. § 268.04, subd. 12(10)(a) (1996).

Following an evidentiary hearing in the matter, the reemployment insurance judge reversed the claims examiner and found instead that the Union Gospel Mission was not operated primarily for religious purposes, but rather primarily to provide housing and food to the poor. The reemployment insurance judge did find that the Mission is operated by an association of churches.

Union Gospel Mission appealed the reemployment insurance judge's decision to the Commissioner of Economic Security. On November 1, the Commissioner's representative concluded the Mission was not operated, supervised, controlled, or principally supported by a church or convention or association of churches and that the Mission was not operated primarily for religious purposes. He ruled that the Mission does not qualify for the employment exemption under Minn. Stat. § 268.04, subd. 12(10)(a). This appeal follows.

D E C I S I O N

When reviewing a decision of the Commissioner of Economic Security, this court must ask whether there is reasonable support in the evidence to sustain the decision of the Commissioner. Tuff v. Knitcraft Corp., 526 N.W.2d 50, 51 (Minn. 1995). This narrow standard of review requires that the findings of the Commissioner's representative be viewed in the light most favorable to the decision, and if there is any evidence reasonably tending to sustain them, they will not be disturbed on appeal. Ress v. Abbott Northwestern Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989). This court is not bound by the Commissioner's representative's conclusions of law. Id. "Given the remedial purpose of the reemployment insurance statute, broad interpretation in favor of awarding benefits is preferred." Moore Assocs., LLC v. Commissioner of Econ. Sec., 545 N.W.2d 389, 394 (Minn.App. 1996) (citation omitted).

An employer is required to contribute to the reemployment insurance fund "with respect to wages paid * * * for employment." Minn. Stat. § 268.06, subd. 1 (1996). However, "employment" does not apply to services performed

(a) in the employ of a church or convention or association of churches, or an organization which is operated primarily for religious purposes and which is operated, supervised, controlled, or principally supported by a church or convention or association of churches.

Minn. Stat. § 268.04, subd. 12(10)(a).

First, the Commissioner's representative concluded that the Mission is not an organization operated by an association of churches because control of the Mission is vested in its board of directors. However, as a nonprofit corporation, control of the Mission by a board of directors is required by law. See Minn. Stat. § 317A.201 (1996) ("The business and affairs of a [nonprofit] corporation must be managed by or under the direction of a board of directors."). Therefore, the fact that the Mission is controlled by a board of directors does not have a negative bearing on whether it is an organization operated by an association of churches.

From the record it appears that the members of the board of directors belong to various church denominations. According to the testimony of Tom Reynolds, the executive director of the Mission until November 1995, approximately eleven churches submitted written requests to have member representatives during his nine years with the Mission. This is contrary to the Commissioner's representative's finding that there are few, if any, Duluth area churches who were members of the Mission.

Second, contrary to respondent Commissioner's contention, the Mission is operated primarily for religious purposes. Article IV of the Mission's articles of incorporation specifically states that the "purpose * * * shall be that of a benevolent and missionary society, providing spiritual and material goods to the needy, desolate, poor and hungry." Respondent Commissioner has failed to present any authority that a religious organization's stated purpose must be limited solely to a religious purpose, like prayer, and be devoid of any "secular" activities, such as feeding the poor, in order to claim Minnesota's statutory exemption for religious organizations. From this record, it is clear that the Mission seeks not only to provide for the spiritual needs of its clients, but their physical needs of food and housing as well.

It has been recognized that feeding programs may serve a religious purpose in addition to providing secular benefits. As the District Court for the District of Columbia recognized in Western Presbyterian Church v. Board of Zoning Adj., 862 F.Supp. 538, 546 (D.D.C. 1994),

Many religious organizations serve food as a part of their religious functions. * * * Unquestionably, the Church's feeding program in every respect is religious activity and a form of worship. It also happens to provide, * * * a sorely needed social service. The secular benefits inure to the needy persons who partake of the free breakfasts; the members of the Church benefit spiritually by providing the service.

Likewise, providing housing to the poor has been recognized to be an expression of religious faith. See The Jesus Center v. Farmington Hills Zoning Bd. of Appeals., 544 N.W.2d 698, 703 (Mich. Ct. App. 1996) (accepting that the provision of shelter services flowed from party's religious beliefs and was an exercise of those beliefs).

Respondents seem to argue that because the Mission spends more time and energy on its food and housing program, instead of its Gospel Outreach Program, the purpose of the Mission is no longer primarily religious. We reject that analysis. That analysis fails to consider that the costs associated with providing food and housing to the needy will surpass costs associated with conducting strictly religious programs as Bible studies or prayer services. Dollar-for-dollar, "religious" outreach programs such as Bible study or a prayer service will never match the costs of missionary food and housing programs for an activist church that reaches out daily to the needy like the Union Gospel Mission.

Respondents' analysis renders the acts of providing food and shelter to the needy by the Mission barren of its primary underpinning; that being to follow the teachings of the Bible to provide for those in need.

The fact that the Mission was forced to cut back on its expenditures for Gospel outreach does not lessen the nature of the Mission's religious purpose. Many religious organizations today suffer from underfunding. They are entitled to choose between more Bible study and less food or less Bible study and more food. We note that without its religious underpinning, the Mission would likely not even be engaged in the activities of providing food and shelter to the poor and needy. The Commissioner's representative erred in concluding that the Mission was not primarily engaged in religious activity because it "preached" for less hours than the number of hours spent providing meals and beds to the Mission's clients. The Commissioner's analysis failed to credit the religious ministry of the Mission.

The record indicates that the Mission receives its primary support from individual or corporate contributions. Respondent Commissioner has failed to present any authority stating that for an organization to qualify under Minn. Stat. § 268.04, subd. 12(10), its primary financial support must be from a church or convention or association of churches. A plain reading of Minn. Stat. § 268.04, subd. 12(10)(a), indicates that the financial support of an organization is but one factor to be considered and is not the sole determining factor. Under the Commissioner's representative's reading of the statute, any organization that does not receive its largest percentage of financial support from a church or other religious organization does not qualify for exemption under Minn. Stat. § 268.04, subd. 12(10). That reading would produce questionable, and at times unsupportable, results. Qualified churches are entitled to solicit funds from big givers, if they are so fortunate. If a large corporation weighs in with funding, that cannot count against the simple proposition that a church is a church. Here, it is undisputed that the greatest percentage of financial support for the Mission is derived from individual contributions. But so what. This is true of many faiths. Few religions or religious organizations are supported by side businesses and even fewer could survive without the donations from individuals and corporations. Union Gospel Mission is no different.

Lastly, it is significant that by letter dated May 2, 1996, the Department of Economic Security informed the Mission that it was exempt from Minnesota's Economic Security laws and that the services performed for it by its employees are not covered for reemployment insurance purposes. This letter was received by the Commissioner's representative during the evidentiary hearing. Although the letter was received after the termination of Gentilini took place, the record does not indicate the Mission changed its structure, purpose, or operating procedures in any significant way between the time of Gentilini's termination and its receipt of this letter. It is anomalous that the Department of Economic Security considers the Mission exempt from the economic security laws because of a specific statute aimed at helping churches, and the Commissioner's representative does not.

Reversed.