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Decision No. 688

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April 22 1993
In Re: Meaning, Application, and Effect of Paragraphs 703.1, 2503, 2542, and 2548 of the 1988 Discipline With Regard to Restrictions on Use of Funds for Church Property.

Digest of Case

Church properties that have been abandoned or discontinued under the provisions of the Discipline shall be administered and/or disposed of under the authority of the Annual Conference through the annual Conference Board of Trustees. All actions concerning merger of churches shall follow Pars. 2542, 2543, and 2546 of the 1988 Discipline (Pars. 2543, 2544, and 2547, 1992 Discipline).

Statement of Facts

The California-Pacific Annual Conference, in its 1992 session, requested a declaratory decision as to the meaning, application, and effect of certain disciplinary paragraphs, as follows: 1. Does the voluntary placement of a "Trust Clause" on the title deed of real property, which is used as a place of Divine Worship or as a Parsonage, in accordance with Paragraphs 2503.1, 2503.2, or 2503.3 of the 1988 Book of Discipline, in conjunction with obtaining title to or construction on said property, constitute an implied promise (or trust) to the donors of funds for such purchase or construction that the funds would be used solely for the purpose of obtaining or constructing said place of Divine Worship or Parsonage; and that if the need for that particular place for Divine Worship or Parsonage ceases to exist, that the funds will be used for a similar capital purpose (as opposed to budget or current expenses purposes) in another location in the annual Conference? 2 . Do the "Restriction(s) on Proceeds of Mortgage or Sale" of real property on which a church building or parsonage is located, as found in Paragraph 2542 of the 1988 Book of Discipline (and in previous editions of the Book of Discipline) apply only to the Board of Trustees of a Local Church or Charge during the time that particular Local Church or Charge is in its organized existence (per Paragraph 703.10); or do these restrictions similarly bind any successor-in-title Annual Conference and/or District Boards of Trustees who may subsequently hold title to said church building or parsonage resulting from the discontinuance of a local church (Paragraph 2548.1), or the abandonment of a local church (Paragraph 2548.2)? 3. In the case of a merger of two or more organized local churches or the relocation of one organized local church, in which property formerly used as a place for Divine Worship or as a Parsonage, is held in title by the Board of Trustees and is surplus to the foreseeable needs of the Charge: Do the "Restriction(s) on Proceeds of Mortgage or "Sale" of real property on which a church building or parsonage is located, as found in Paragraph 2542 of the 1988 Book of Discipline (and in previous editions of the Book of Discipline) restrict the title-holding Board of Trustees from giving a "contribution" from the proceeds of the sale of such property to another entity in the United Methodist Church, such as in Paragraph 2542.2, for capital purposes only; or may contributions be made from the proceeds of the sale of such property for unrestricted purposes, such as payment of current (or budget) expenses at another level of the church, such as District or Annual Conference? JURISDICTION The Judicial Council has jurisdiction under Par. 2616 of the 1992 Discipline . ANALYSIS Pars. 703.1 and 2548 of the 1988 Discipline (Pars. 704.1 and 2549, 1992 Discipline) clearly delineate the authority of the Annual Conference and the Board of Trustees of the Annual Conference. These provisions of the 1988 Discipline state in part: 703. Powers and Duties. 1. The Annual Conference for its own government may adopt rules and regulations not in conflict with the with the Discipline of The United Methodist Church; provided that in exercise of its powers each Annual Conference shall act in all respects in harmony with the policy of The United Methodist Church with respect to elimination of discrimination on the basis of race. 2548. Discontinuation or Abandonment of Local Church Property. 1. Discontinuation. - a) When, in the judgment of the district superintendent in consultation with the appropriate agency assigned the responsibility of the conference parish and community development strategy, a local church should be discontinued, the district superintendent may recommend its discontinuation. Such a recommendation shall include recommendations as to where the membership (Par. 231) and the title to the property of the local church shall be transferred. On such recommendation that a local church no longer serves the purpose for which it was organized and incorporated (Pars. 201-204), with the consent of the presiding bishop and of a majority of the district superintendents and the district Board of Church Location and Building of the district in which the action is contemplated, the Annual Conference may declare any local church within its bounds discontinued. b) If a church has been discontinued by the Annual Conference without direction concerning the disposition of property, the property shall be disposed of as if it were abandoned local church property (P. 2548.2). 2. Abandonment. - When a local church property is no longer used, kept, or maintained by its membership as a place of divine worship, the property shall be considered abandoned, and when a local church no longer serves the purpose for which it was organized and incorporated (Pars. 201-204), with the consent of the presiding bishop, a majority of the district superintendents, and of the district Board of Church Location and Building, the Annual Conference trustees may assume control of the property. If circumstances make immediate action necessary, the conference trustees giving first option to the other denomination represented in the Commission of Pan-Methodist Cooperation, may sell or lease said property, retain the proceeds in an interest bearing account, and recommend the disposition of the proceeds in keeping with Annual Conference policy. It shall be the duty of the Annual Conference trustees to remove, insofar as reasonably possible, all Christian and church insignia and symbols from such property. In the event of loss, damage to, or destruction of such local church property, the trustees of the Annual Conference are authorized to collect and receipt for any insurance payable on account thereof, as the duly and legally authorized representative of such local church. The California-Pacific Conference cites the provisions of Par. 2542 as though they are governing. However, the provisions of this paragraph apply only to local church actions. The Council cannot give specific answers to the three questions other than to say that it has long been the history and tradition of The United Methodist Church and its predecessor bodies that once local church property is either discontinued or abandoned, the governance, administration, and disposition of such property is to be determined by the Annual Conference and the legal agency for handling those matters is the Conference Board of Trustees. See Decisions 119, 138, 143, 399, 456, and 464. In Decision 456, in particular, we stated: Upon discontinuance of a local church, all records shall be collected by the District Superintendent of that District and placed with the Secretary of the Annual Conference. (Par. 2441.2) Any funds that become available to the discontinued local church shall become the property of the trustees of the Annual Conference. In the event of the sale or lease of the property, the trustees of the Annual Conference shall recommend to the Annual Conference the disposition of the proceeds from such sale or lease. (See Pars. 2441.3, 4) This procedure has been previously upheld in Judicial Council Decisions 119, 138, and 143. All actions concerning merger of churches shall follow Pars. 2542, 2543, and 2546 of the 1988 Discipline (Pars. 2543, 2544, and 2547, 1992 Discipline).

Decision

Church properties that have been abandoned or discontinued under the provisions of the Discipline shall be administered and/or disposed of under the authority of the Annual Conference through the annual Conference Board of Trustees. All actions concerning merger of churches must shall follow Pars. 2542, 2543, and 2546 of the 1988 Discipline (Pars. 2543, 2544, and 2547, 1992 Discipline). Note: This copy subject to final editing and corrections.

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