Michigan Supreme Court Lansing, Michigan
Chief Justice: Justices: Clifford W. Taylor Michael F. Cavanagh Elizabeth A. Weaver Marilyn Kelly 

# Opinion

Maura D. Corrigan Robert P. Young, Jr. Stephen J. Markman

FILED APRIL 2, 2008 LIBERTY HILL HOUSING CORPORATION, Petitioner-Appellant,

v No. 131531 CITY OF LIVONIA, Respondent-Appellee.

BEFORE THE ENTIRE BENCH CORRIGAN, J. Petitioner, a nonprofit organization, l eased housing to disabled and low

income individuals during the tax years at issue. In question is whether petitioner was entitled to a property-tax exemption for charitable institutions under MCL 211.7o(1), which re quires that the charitable in stitution has “occupied” the property. We affirm the Court of Appeal s holding that becau se petitioner did not occupy the property under the unambiguous language of MCL 211.7o, it was not entitled to the property-tax exemption. Petitioner did not maintain a regular physical presence on the prop erty, but instead leased the housing on the property for tenants to use for their own personal purposes. Because th e Court of Appealsreached the opposite result in Pheasant Ring v Waterford Twp , 272 Mich App 436; 726 NW2d 741 (2006), which involved similar facts, we overrule that decision.
I. FACTS AND PROCEDURAL HISTORY Petitioner is a nonprofit co rporation whose stated purpose is to “creat[e] integrated housing altern atives for low income i ndividuals and families, and persons with disabilities, to interact with the general public, and to promote the establishment of safe, affordable and accessible as necessary housing for low

income individuals and families and persons with disabilities.” 1 Petitioner owns 51 single-family homes in the Detroit area. It leases or rents these homes to qualified individuals who are referred by its parent corporation, Community Living Services. 2 Petitioner’s clients are indivi duals whose low-income or disability status qualify them to receive federal Supplemental Security Income benefits. All of petiti oner’s tenants pay rent under traditional written leases. These lease agreements include provisions for security deposits, late-payment fees, and hold-over fees. Petitioner has no ongoing day- to-day pres ence in the homes.

1 Although petitioner’s goal is to break even while providing necessary housing and services to its clients, petiti oner had operated at a deficit for the three years preceding this suit. 2 Community Living Servi ces provides the clients with additional services, such as transportation, meals, mon itoring, medical assistance, repairs, maintenance, and social activities.

2At issue in this case are five houses that petitioner owned and leased to persons who qualified under petitioner’s statement of purpose. Petitioner requested from respondent c ity of Livonia an exemptio n from property taxes under MCL 211.7o(1) for tax years 2003 and 2004, arguing that the five houses were exempt because petitioner “owned and occ upied” the houses in furtherance of its charitable purpose. After respondent denied petitioner’s request, petitioner appealed in the Michig an Tax Tribunal (MTT). The MTT affirmed, concluding that petitioner was not entitled to the property-tax exemption becau se petitioner did not occupy the houses within the meaning of MCL 211.7o(1). The MTT obs erved that the casel aw interpreting the occupancy requirement of MC L 211.7o(1) ha d held that a charitable institution “occupied” the housing when its provision of housing was incidental to the overall corporate purpose. The MT T pointed out that, in this case, petitioner’s tenants were not using the homes fo r charitable purposes. The MTT concluded that petitioner did not occupy th e properties under MCL 2 11.7o for the following

reasons: To say that Liberty Hill occu pies the properties in these instances where Liberty Hill lessees reside at the subject properties does not comport with the plain m eaning of the statute. In a landlord-tenant relations hip, the lessee is ge nerally considered the occupant and the lessor does not generally ha ve occupancy rights during the term of the lease. See Frenchtown Villa v Meadors , 117 Mich App 683[324 NW2d 133] (1982). In this case, involving single fam ily homes, it is a significant stretch to say that the non-prof it [sic] corporate owner/lessor

3occupies the properties by virtue of leasing them to tenant occupants consistent with the non-prof it’s [sic] corporate purposes. In these consolidated cases, wh ile Liberty Hill, a nonprofit charitable institution, owns the prop erties, it does not occupy any of them. The exemption is apparen tly meant for in stances where the offices and operations of the non-profit [sic] charitable institution exist. The Court of Appeals affirmed in an unpublished opinion per curiam. The panel explained that it agreed with the MTT’s reasoning and conclusion: The tribunal’s opinion points out that in a landlord-tenant relationship, the lessee is the occupant while the lessor, here petitioner, does not have occupancy rights dur ing the terms of the lease. Further, to find that the non-profit [sic] corporate owner/lessor occupies the properties by virtue of leasing them to tenant-occupants, even though the tenancy is consistent with the non-profit’s [sic] corporate purposes, requires a “significant stretch”. We agree. [ Liberty Hill Housing Corp v City of Livonia , unpublished opinion per curiam of the Court of Appeals, issued May 16, 2006 (Docket No. 258752), p 2 (emphasis in original).] The panel concluded that pe titioner did not occupy the prop erties that it leased to tenants for the tenants’ personal housing needs. While petitioner’s application for leav e to appeal the Court of Appeals decision was pending, the Court of Appeals decided Pheasant Ring, in which it held that the petitioner charitable in stitution “occupied” property under MCL 211.7o(1) when it leased hous ing to tenants in furtheran ce of its charitable purpose of providing housing to individuals with autism. No appeal was taken from the Court of Appeals decision in Pheasant Ring

. To clarify whether a charita ble institution that leases property to others in furtherance of its charitabl e purpose occupies the prop erty for purposes of the

4property-tax exemption und er MCL 211.7o(1), we ordered oral argument on the application in the instant case and directed the parties to address whether Pheasant Ring was correctly decided. 477 Mich 1018 (2007).
II. STANDARD OF REVIEW
In Wexford Med Group v City of Cadillac , 474 Mich 192, 201; 713 NW2d 734 (2006), this Court described the st andard of review for MTT decisions as follows: The standard of review fo r Tax Tribunal cases is multifaceted. Where fraud is not clai med, this Court reviews the tribunal’s decision for misapplicati on of the law or adoption of a wrong principle. Michigan Bell Tel Co v Dep’t of Treasury , 445 Mich 470, 476; 518 NW2d 808 (1994). We deem the tribunal’s factual findings conclusive if th ey are supported by “competent, material, and substantial evid ence on the whole record.” Id. , citing Const 1963, art 6, § 28 and Continental Cablevision v Roseville , 430 Mich 727, 735; 425 NW2d 53 (1988). But when statutory interpretation is involved, this Cour t reviews the tribunal’s decision de novo. Danse Corp v Madison Hts , 466 Mich 175; 644 NW2d 721 (2002). This Court has held that statutes exemp ting persons or property from taxation must be narrowly construed in favor of the taxing author ity. See, e.g., Wexford, supra
at 204.
III. LEGAL BACKGROUND
A. MCL 211.7o The statute at issue, MCL 211.7o, creates an ad valorem property-tax exemption for charita ble institutions. Wexford Med Group, supra at 199. At the relevant times, MCL 211.7o(1) prov ided: “Real or personal property owned and

5occupied by a nonprofit charitable institution while occupied by that nonprofit charitable institution solely for the purposes for whic h it was incorporated is exempt from the collection of taxes un der this act.” (Emphasis added.) 3 As a consequence of the statut ory requirements, courts sh ould consider three factors when determining whether the tax ex emption under MCL 211.7o(1) applies: (1) The real estate must be owned and occupied by the exemption claimant; (2) the exemption claimant mu st be a nonprofit charitable institution; and (3) the exemption exists only when the buildings and other property thereon are occupied by the claimant solely for the purposes for which it was incorporated . [ Wexford Med Group, supra at 203 (emphasis added).] Here, it is undisputed that petitioner owned the properties at issu e. The main point of contention is whether petitioner “occupied” the properties.
B. CASELAW INTERPRETATIONS Petitioner argues that this Court, in analyzing the exemption under MCL 211.7o(1) and its predecessors, has cons trued “occupation” to mean “charitable use” and has not required physical possess ion by the exemptio n claimant. In making this argument, petitioner relies on cas es that interpreted the third element of MCL 211.7o(1), that th e property be occupied solely for a charitable purpose ,

3 MCL 211.7o(1) was last amended by 2006 PA 681. It now provides: “Real or personal property owned a nd occupied by a nonprofit charitable institution while occupied by that nonpr ofit charitable institu tion solely for the (continued...)

6and not the first element, th at the real estate must be owned and occupied by the claimant. A review of this Court’s cas elaw yields no suppo rt for petitioner’s argument. Our first case addressing the occu pation requirement of Michigan’s statutory tax exemption fo r nonprofit institutions was Detroit Young Men’s Society
v Detroit , 3 Mich 172 (1854). 4 In that case, the plain tiff was incorporated “for the purpose of moral and intellectual improve ment” and owned a bui lding in the city of Detroit that included a library. Id. at 180. The plainti ff offered for ren t by third parties two stores on the first floor and two small offices on the second floor, but the “remainder of the building . . . was used entirely for the purposes of the society
. . . . ” Id. at 173 (opinion syllabus). Because the 1853 statute required “actual[]” occupation by the institution, 5 this Court held that the occupation must be

(...continued) purposes for which that nonp rofit charitable institution wa s incorporated is exempt from the collection of taxes under this act.” 4 1853 PA 86, § 5(8) exempted from taxation the “personal property of all library, benevolent, charitable and scientific institutions, incorpor ated within this State, and such real estate belonging to such institutions as shall actually be occupied by them, for th e purposes for which they were incorporated[.]” 5 The Legislature later amended the statute to remove the word “actually.” See 1885 PA 153, § 3, pr oviding a tax exemption for the personal property of “library, benevolent, charitable, and scientific institutions, incorporated under the laws of this State, and such real estate as shall be occupi ed by them for the purposes for which th ey were incorporated [.]” This statute was amended a few years later by 1893 PA 206 to provide a tax exemption for “[s]u ch real estate as shall be owned and occupied by library, benevolent, ch aritable, educational and scientific institutions incorpo rated under the laws of this State, with the buildings and other property thereon, wh ile occupied by them sole ly for the purposes for (continued...)

7exclusive and ruled that the property was subject to taxation, “subject to a deduction of the value of the tenements actu ally used and occupi ed by them for the purposes for which they w ere incorporated, fro m the entire value of the lot and building.” Id. at 184.
In Webb Academy v Grand Rapids , 209 Mich 523, 525; 177 NW 290 (1920), the plaintiff, an in corporated educational institu tion, sought a property-tax exemption for educat ional institutions. 6 The plaintiff conducted school business on the property, but the fo under of the school and his wi fe, a teacher at the school, lived on the property, along with a student who helped with upkeep in exchange for room and board. Id. at 532-533. This Court in dicated that the “owned and occupied” element of the ex emption statute was not at issue when it noted: “That plaintiff was in full possession and contro l of the premises, and maintained an academy there, is not questioned.” Id. at 535. It then ag reed with the trial court that the property was occupied by the educational institutio n solely for the purposes for which it was inco rporated and that the ot her minor uses, such as

(...continued) which they were incorporated . . . .” Thus, although the statute no longer stated that “actual[]” occupancy wa s required, it did require th at the property be both “owned and occupied” by ch aritable institutions and “occu pied by them solely for the purposes for which th ey were incorporated.” 6 Webb Academy involved another predecesso r of MCL 211.7o, 1915 CL 4001, that, in language esse ntially identical to that of 1893 PA 206, exempted from taxation “[s]uch real estate as sha ll be owned and occu pied by library, benevolent, charitable, educational and scie ntific institutions incorporated under (continued...)

8housing incidental to th e school uses, did not d efeat that conclusion. Id. at 539. Thus, this Court’s decision focused on whether the property was occupied solely for the purposes for which th e plaintiff was incorporated, not on whether actual occupancy was required to qu alify for an exemption. Likewise, in Gull Lake Bible Conference Ass’n v Ross Twp , 351 Mich 269, 273; 88 NW2d 264 (1958), this Court noted that there was no dispute about whether the plaintiff owned or occupied the property. In that case, the plaintiff’s stated purpose was “[t]o prom ote and conduct gatherings at all seasons of the year for the study of the Bible and for insp irational and evangelistic addresses.” Id . at 271. The plaintiff sought a property-tax exemption fo r charitable organizations. 7 Besides a tabernacle and youth chapel (for which the tax-exem pt status was not contested), the property included an old hotel building used to house employees, a fellowship center building, a trailer camps ite for persons atte nding the conference and living in trailers, cottages that were rented to persons atte nding the conference, a gravel pit, a picnic area, boat docks , a bathhouse, a b each, a playground,

(...continued) the laws of this state, w ith the buildings and other pr operty thereon while occupied by them solely for the purposes for which they were incorporated[.]” 7 Gull Lake involved another predecessor of MCL 211.7o that exempted from taxation [s]uch real estate as shall be owned and occupied by library, benevolent, charitable, educationa l or scientific institutions and memorial homes of world war vet erans incorporated under the laws of this state with the buildings and other property thereon while (continued...)

9horseshoe and badm inton courts, and parking areas. Id. at 272. This Court determined that the housing and recrea tional facilities on the property were necessary to fulfill the plaintiff’s purpose. Id. at 275. Again in terpreting the third element of the tax-exemption statute, this Court held that the property was occupied by the plaintiff solely for the purpo se for which it was incorporated. Id. at 274-275. Finally, in Oakwood Hosp Corp v State Tax Comm , 374 Mich 524, 526; 132 NW2d 634 (1965) (Oakwood Hosp I) , the plaintiff was a nonprofit corporation that owned and operated a hospital. The plaintiff claimed a tax exemption for property on which its hospital facilities were located. 8 Id. Also on the property were six houses that prov ided housing near th e hospital for the resident physicians and interns whose servi ces and availability to the hospital at all times were essential to the operation of the hospital. Id. at 527. This Court held that the plaintiff was entitled to the tax exemption for th e entire property, including the houses. This Court explai ned that housing the doctors and interns near the hospital was necess ary to the proper functio ning of the hospital. Id. at 530. Therefore, the houses were “occupied in furtherance of and for the purposes

(...continued) occupied by them sole ly for the purposes for which they were incorporated. [MCL 211.7, as amended by 1955 PA 46.] 8 At the time Oakwood Hosp I was decided, the pertinent statutory language was identical to that in effect when Gull Lake was decided. See MCL 211.7, as amended by 1961 PA 238.

10for which plaintiff wa s incorporated and for hospital and public health purposes.” Id. 9 Thus, this Court was again called on to address the third element of the tax

exemption statute: whether the property was occupied for the purposes for which the claimant was incorporat ed. This Court simply did not address the first element: whether the property was “owned and occupied.” 10
C. PHEASANT RING v WATERFORD TWP Five months after the Court of Appeal s issued its opinio n in the instant case, the Court of Appeals decided Pheasant Ring. In Pheasant Ring, supra at 440, the petitioner was a non profit corporation organize d to carry on educational

9 Later, in Oakwood Hosp Corp v State Tax Comm , 385 Mich 704; 190 NW2d 105 (1971) ( Oakwood Hosp II ), this Court reached the opposite conclusion because the Legislature had amended the statute to specifically exclude such physician housing from the property-tax exemption. 10 Since Oakwood Hosp II , the Court of Appeals has addressed the tax exemption at issue sev eral times. See, e.g., Lake Louise Christian Community v Hudson Twp , 10 Mich App 573, 580; 159 NW2d 849 (1968) (holding that the religious institution did not occupy 1,300 acres of mostly unus ed wooded property because the property was not frequently used for religious education), Nat’l Music Camp v Green Lake Twp , 76 Mich App 608, 612; 257 NW2d 188 (1977) (holding that the nonprofit edu cational institutions were entitled to a property-tax exemption for 92 acres of unspoi led sand dunes on Lake Michigan because “[t]he property was used in a manner consistent w ith the nature of the land in such a way that the purpose for which the owning ins titution is exempt, edu cation, was plainly advanced”), Kalamazoo Nature Ctr, Inc v Cooper Twp , 104 Mich Ap p 657, 665

- 667; 305 NW2d 283 (1981) (holding that the nonprof it institution “occupied” 31 acres of preserved wilderness land that it did not physically enter but used for observation and educational purposes), and Holland Home v Grand Rapids , 219 Mich App 384, 397-398; 557 NW2d 118 (1996) (holdi ng that the nonprofit association did not occupy the property wh en a retirement home on the property was under construction on the relevant tax days). The validity of some of these opinions is questionable in light of our holding in the instant case.

11and other charitable activities, including establishing an d supporting a transitional community for persons w ith autism. The petitioner sought a property-tax exemption for a building that it owned and rented to persons with autism. Id. at 441-442. Nothing in the Court of Ap peals opinion stated that any of the petitioner’s employees resided in the building to supervise or monitor the tenants. Nonetheless, the Court of Appeals held that the petitioner “occupied” the home within the meaning of MCL 211.7o(1). The Cour t looked to the dictionary definition of “occupy” and then, without discussing Detroit Young Men’s Society , Webb Academy , Gull Lake , or Oakwood Hosp I , held that the petitioner “occupied” the building because it used the building in furtherance of its charitable purpose. The panel held , in pertinent part: The Township asserts that Pheasant Ring do es not occupy the property because the location of its offices is not physically on the property at issue and it rents th e property to tenants. This interpretation of the requirements for tax exemption is too narrow and restrictive. There is no dispute that Pheasant Ring owns the property. Although Ph easant Ring does not us e the property for its own offices, the property is occupied by tenants of Pheasant Ring in furtherance of its charitable purposes. This Court, in determining whether a charitable organization “o ccupied” a property for purposes of qualifying for a tax exemption, has determined that “[t]he proper test is whether the entire property was used in a manner consistent with the purposes of the owning institution.” Holland Home v Grand Rapids , 219 Mich App 384, 398; 557 NW2d 118 (1996). Under this criterion, Pheasant Ri ng occupied the residence. [ Pheasant Ring, supra at 442.]

12IV. ANALYSIS We conclude that under the plain la nguage of MCL 211.7o(1) and this Court’s previous caselaw, the Court of Appeals correctly deci ded this case and incorrectly decided Pheasant Ring

. First, the Court of Appeals opinion in th e instant case is consistent with the statutory language, whereas Pheasant Ring is not. Webster’s Universal College Dictionary (1997) defines “occupy” as follows: 11

— v.i . 1. to have, hold, or take as a separate space; possess, reside in or on, or claim: The orchard occupies half the farm . 2. to be a resident or tenant of; dwell in. 3. to fill up, employ, or engage: to occupy time reading . 4. to engage or employ the mind, energy, or attention of: We occupied the children with a game . 5. to take possession and control of (a place ), as by military invasion. — v.i. 6. to take or hold possession. We conclude that the second meaning is the one the Legislature intended. The third, fourth, and fifth meanings in the definition are clearly not relevant here. 12

11 Justice Cavanagh attacks our use of a dictionary in interpreting the statutory language. He states: “The prac tice of reaching for a dictionary to define common words in a statute risks serving to merely co nfirm the writer’s assumed meaning of the word, rather than to actually advance the writer’s legal analysis.” Post at 3. We recognize that dictionaries are merely interpretive aids used by the court. Consumers Power Co v Pub Service Comm , 460 Mich 148, 163 n 10; 596 NW2d 126 (1999). But in a previous opinion authored by Justice Cavanagh, this Court held: “When determining the comm on, ordinary meaning of a word or phrase, consulting a dicti onary is appropriate.” Title Office, Inc v Van Buren Co Treasurer , 469 Mich 516, 522; 676 NW2d 207 (2004). 12 Although the dissent accuses us of cursorily dismissing three of the alternative meanings of “occupy,” we see no need to discuss these definitions in detail because they clearly do not apply. The dissent seem s to prefer the third meaning in the definition: “to fill up, employ, or engage; to occupy time reading .” But the dictionary’s example using this meaning clearly demonstrates that the (continued...)

13The first meaning defines “occ upy” as “to have, hold, . . . possess, . . . or claim.” These parts of the definition ar e synonymous with ownership. 13 Because the statute uses the conj unctive term “owned and occupied,” howev er, the Legislature must have intended different meanings for the words “owned” a nd “occupied.” Otherwise, the word “occupi ed” would be mere surplusa ge. “Courts must give effect to every word, phrase, and clause in a statute, and must avoid an interpretation that would rend er any part of the statute su rplusage or nugatory.” Koontz v Ameritech Services, Inc , 466 Mich 304, 312; 645 NW2d 34 (2002). Thus, the Legislature must have intende d the term “occupy” to mean the other aspect of the dictionary definition: to “reside in or on” or “to be a resident or tenant of; dwell in.” This aspect of the definition especia lly makes sense when viewed in its specific context; 14 it is “real or personal property” that must be

(...continued) third meaning does not make sense in the context of the statute. One cannot “fill up” property the way one can fill up time re ading. The fourth meaning does not apply because one cannot “engage or employ the mind, energy, or attention of” an inanimate object such as real property. Finally, it is pre posterous to suggest that the Legislature intended the exemption to apply only if a nonprofit charitable institution conducted a su ccessful military inva sion of the property. 13 Webster’s Universal College Dictionary (1997) defines “own” as “to have or hold as one’s own; possess.” 14 A word that is defined in various wa ys is given meaning by its context or setting. Koontz, supra at 318.

14“occupied.” “Reside” mean s “1. to dwell perm anently or for a considerable time; live. 2. (of things, qualities, etc.) to be present habitually; be inherent ([usually followed] by in ).” Webster’s Universal College Dictionary (1997). Thus, aided by this dictionary definiti on, we conclude that to occupy property under MCL 211.7o(1), the charitable in stitution must at a minimu m have a regular physical presence on the property. 15 Using this definition, the Court of Ap peals in the instan t case correctly held that petitioner did not occ upy property that it leased to others and did not physically reside in. 16 In this situation, the te nants, not petitioner, actually “occupied” the property. We agree with the Court of App eals that “to find that the non-profit [sic] corporate owner/lessor occupies the properties by virtue of leasing them to tenant-occupants, even though the tenancy is consistent with the non

profit’s [sic] corporate purposes, requires a ‘significant stretch’.” Liberty Hill , supra at 2 (emphasis in original.) The Pheasant Ring panel’s holding that a nonprofit corporation occupi es a property merely by virt ue of the fact that the

15 A charitable institution do es not automatically o ccupy property if it has occupancy rights to the pr operty. The term “occupy ” requires more than merely having the “right to occupy. ” As we have explained, the charitable institution must actually occupy the property, i.e., maintain a regular physical presence there. 16 Petitioner is correct, however, that the fact that it charged the tenants rent does not disqualify it from the exemption. See Wexford Med Group, supra at 215 (“A ‘charitable institution’ can charge for its services as long as the charges are not more than what is needed for its successful maintenance.”).

15property is being used in a manner consistent with the corporation’s purpose is at odds with the statute’s plain language. The Court of Appeals holding in the inst ant case is further supported by this Court’s decisions in Webb Academy, Gull Lake , and Oakwood Hosp I . Although those decisions did not focus on the oc cupancy requirement of the statute, but focused instead on the part of the statut e requiring that the property be occupied “solely for the purposes for which it was in corporated,” the plaintiffs in those cases were actually physica lly present on th e property when they engaged in activities that carried out their n onprofit goals. Here and in Pheasant Ring , on the other hand, the petitioners were not present on the property.
V. RESPONSE TO THE DISSENT The dissent and petitioner in correctly conclude that the term “occupy” is synonymous with “use.” 17 In arguing that “occupy” means “use,” the dissent selectively quotes the fifth of five suggested meanings of “occupancy” in Black’s Law Dictionary (8th ed). 18 The first definition of “occupancy” suggested,

17 Similarly, the Court of Appeals in Lake Louise Christian, supra at 578, and Kalamazoo Nature Ctr, supra at 665-667, erred in concluding that “occupy” is synonymous with “use.” 18 Justice Cavanagh’s dissent states th at it quotes Black’s Law Dictionary merely “to draw attention to the inadequa cy of a dictionary-d riven approach to statutory interpretation.” Post at 3. Yet Justice Cavana gh does not explain what interpretive aid, other than his own personal voc abulary, he would prefer us to use to define the statutory term. Further, when it comes to actua lly interpreting the statutory language, Justice Cavanagh, de spite his criticism of our reliance on a dictionary, himself turns to the dictionary definition. The dissent states that the (continued...)

16however, reads: “The act, state, or cond ition of holding, possessing, or residing in or on something; actual possession, residence, or tenancy, [ especially ] of a dwelling or land .” Id . (emphasis added). This definition is consistent with the first two meanings of “occupy” suggested in Webster’s Universal College Dictionary (1997), one of which we adopt today. We reject the dissent’s argument that interpreting “occupied” to mean “reside[d] in or on” is in congruous with the Legisl ature’s second use of “occupied” in MCL 2 11.7o(1). Contrary to the di ssent’s argument, a charitable institution may reside on prop erty for charitable purpose s, rather than simply dwelling on the property for no reason other than dwelling itself. For example, the doctors and interns in Oakwood Hosp I resided in physicians’ housing “in furtherance of and fo r the purposes for which plain tiff was incorpo rated and for hospital and public health purposes.” Oakwood Hosp I, supra at 530. The dissent argues that charitable ins titutions do not typically reside in a place because they are inanimate. Clearly, just as inanimate things may not “use” property, they may not “resid e” on property. Charitable institutions, however, are not merely inanimate bodies; they are made up of people. A charitable institution’s members, employees, or volunt eers may dwell on the property or at

(...continued) term “‘occupied’ should be understood as synonymous with ‘u sed,’ because it is the most appropriate defin ition for that context.” Post at 5. Justice Cavanagh appears to derive this d efinition from Black’s Law Dict ionary, which he quotes earlier in his opinion.

17least be habitually present on the property, which is cons istent with the meaning of “reside.” The dissent contends that a charitable institutio n may not “reside in” certain property, such as a swimming pool . Although one obv iously cannot dwell in a swimming pool, one can maintain a regular physical presence at the pool (e.g., by habitually swimming there) or on the property that co ntains the pool. Either would generally be sufficien t to occupy the property. In citing Oakwood Hosp I to support its argument that the term “occupied” means “used,” the dissent conflates the following two factors for determining whether the tax exemption un der MCL 211.7o(1) applies: (1) The real estate must be owned and occupied by the exemption claimant; * * * (3) the exemption exists only when the buildings and other property thereon are occupied by th e claimant solely for the purposes for which it wa s incorporated. [ Wexford Med Group, supra at 203.] As discussed, the Oakwood Hosp I Court addressed only the third factor. The Court held that the nonpro fit corporation occupied phy sicians’ housing for the purposes for which it wa s incorporated. The Oakwood Hosp I Court’s mention of the nonprofit corporation’s “use” of th e property was a reference to this Court’s holding in Webb Academy that housing is exempt only when it is incidental to the use of the entire property for charitable purpo ses. Further, the Court’s discussion of the “use” of property is not inconsiste nt with our interpret ation of the term “occupy.” It is certainly consistent for a charitable institution to use property on

18which it maintains a regular physical presence. Use of property is just one part of occupying it. The two terms are not mutua lly exclusive; “use” is merely narrower than “occupy.” The dissent would hold that a charita ble institution may occupy property by using it without maintaining a physical presence there. Such an interpretation leads to one of the following two unsa tisfactory conclusions: (1) a charitable institution can occupy propert y without actually being phys ically present or (2) a charitable institution need onl y use the property sporadically or perhap s even once to occupy it. Neither of thes e conclusions is consistent with proper m eaning of the term “occupy.” Rather, a charitable institution must maintain a regular physical presence on the propert y to occupy the property under MCL 211.7o.
VI. CONCLUSION Petitioner did not occupy the real property to qualify for a property-tax exemption under MCL 211. 7o(1). Although petitioner owned the housing, it leased the housing to oth ers for their own personal us e and had no regular physical presence in the housing. Thus, petitioner did not occu py the housing under the plain language of the statute and this Cour t’s interpretations of the predecessors of MCL 211.7o. Because petitioner cannot satisfy all the requirements of MCL 211.7o(1), it is not entitled to an exemption from prop erty taxes during the tax

19years at issue. Accordingly, we affirm th e judgment of the Court of Appeals in the instant case and overrule Pheasant Ring to the extent that it is inconsistent with this opinion.

Maura D. Corrigan Clifford W. Taylor Robert P. Young, Jr. Stephen J. Markman

20v S T A T E O F M I C H I G A N SUPREME COURT

LIBERTY HILL HOUSING CORPORATION, Petitioner-Appellant,
No. 131531 CITY OF LIVONIA, Defendant-Appellee.

W EAVER , J. ( concurring in the result only ). The question before this Court is whether the pe titioner is exempt under MCL 211.7o(1) 1 from paying property tax on prop erty it uses for the charitable purpose of providing housing for low-income familie s, low-income individuals, and disabled indivi duals. Specifically, does the petitioner “occupy” the subject property, as the term “occup[y]” is cont emplated as a requirement for exemption from property tax under MCL 211.7o(1)? Pursuant to MCR 7.302(G)(1), in lieu of granting leave to appeal, I concur in affirming the Court of Appeals holding that petiti oner did not occupy the

1 MCL 211.7o(1) states: “Real or p ersonal property owned and occupied by a nonprofit charitable institution while occupied by that nonprofit charitable institution solely for the purposes for which that nonprofit charitable institution was incorporated is exem pt from the collection of taxes under this act.” (continued...)subject property as contemplated under MCL 211.7o(1), and I agree with overruling Pheasant Ring v Waterford Twp , 272 Mich App 43 6; 726 NW2d 741 (2006), but would overrule it to the extent that its holding is inconsistent with my opinion.
I. FACTS Petitioner Liberty Hill is a nonprofit organization incor porated under the laws of Michigan. Petition er’s charitable purpose is to provide housing for low

income or disabled individua ls, in addition to low-income families. The tenants of the property at issue lease the housi ng under traditional landlord-tenant agreements. Petitioner collect s rent from the tenants, ch arges late fees when the deadline for rent passes, and requires security deposits. Petitioner requested a tax exemption fr om respondent city of Livonia for tax years 2003 and 2004, arguing that it qualified for exemption as a charitable organization occupying propert y in furtherance of its ch aritable purpose. The case was heard in the Mich igan Tax Tribunal (MTT), wh ich denied petitioner’s request for an exemption. Petitioner appealed in the Court of Appeals, which affirmed the MTT’s ruling in an unpub lished opinion per curiam. 2 Petitioner then sought leave to appeal in this Court.

(...continued)

2 Liberty Hill Housing Corp v City of Livonia , unpublished opinion per curiam of the Court of Appeals, issu ed May 16, 2006 (Docket No. 258752).

2While the application for leave to app eal in the instant case was pending, the Court of Appeals issued a published opinion in Pheasant Ring v Waterford Twp . The petitioner in Pheasant Ring was a nonprofit organization, similar to petitioner in this case, that leased housing to persons with autism under a traditional landlord-tenant ag reement. The petitioner in Pheasant Ring requested a property-tax exemption under MCL 211.7o(1). In Pheasant Ring , the Court of Appeals held that the petitioner did “o ccupy” the property in a manner that qualified for the exemption. The decisi on was not appealed in this Court. To clarify whether a charitable organizatio n that leases property to others as part of its charitable purpose “occupies ” the property under MCL 211.7o(1), this Court ordered oral argument on the appli cation, directing the parties to address “whether Pheasant Ring v Waterford Twp . . . was correctly decided.” 3
II. STANDARD OF REVIEW Questions of statutory constr uction are reviewe d de novo. Grimes v Dep’t of Transportation, 475 Mich 72, 76; 715 NW2d 275 (2006). “‘[E]xemption statutes are to be strictly constr ued in favor of the taxing unit.’” Ladies Literary Club v Grand Rapids , 409 Mich 748, 753; 298 NW2d 422 (1 980) (citation omitted).

3 Liberty Hill Housing Corp v City of Livonia , 477 Mich 1018 (2007).

3III. ANALYSIS To qualify for an exemption under the text of MCL 211.7o(1), the claimant must satisfy a three-part test: (1) the real estate must be owned and occupied by the exemption claimant, (2) the exemption claimant must be a nonprofit charitable institution incorporated under the laws of this state, and (3) the buildings and other property thereon must be occupied by the claimant solel y for the purposes for which it is incorporated. Wexford Med Group v City of Cadillac , 474 Mich 192, 203; 713 NW2d 734 (2006). The issue in common between Pheasant Ring and the instant case is whether the petitioners “occ upied” their respective properties in a manner that meets the first and third el ements of the exemp tion test. In both cases, the properties were leased as hous ing to tenants with special needs. With regard to the petition er in this case, the Cour t of Appeals held that petitioner did not occupy the property because it had leased the property to tenants and had thus given up its ri ght to occupy the property. The Court of Appeals in Pheasant Ring , on the other hand, cr iticized that argument as being “too narrow and restrictive.” Pheasant Ring , 272 Mich App at 442. The Pheasant Ring panel then went on to hold that , because the petitioner had used the property in furtherance of its charitable purpose, it had occupied th e property for the charitable purpose. Id

. I agree with the Court of Appeals in the instant case, a nd further conclude that the Pheasant Ring panel incorrectly interpreted th e term “occupied” to mean “used.” I note that long-established la w requires this Court to give a narrow

4construction to statutes creating tax exemptions. Ladies Literary Club , 409 Mich at 753. I interpret the term “occupied” in the narrowest sense, looking only at the language used in MCL 211.7o(1). The st atute requires a claimant to perform two actions before a charitable exemption can be granted: (1) the charitable organization must own the property and (2) the charitable organization must occupy the property. 4 The statute makes the occupa ncy requirement distinct from the ownership requirement, and it makes no mention of “using” the property. Thus, I reject the Pheasant Ring interpretation that “u sing” the property is equivalent to occupying the property beca use that interpreta tion goes beyond the text of the statute. Given the statute’s us e of the term “occupied ,” a claimant must, at a minimum, have occupancy rights to the property before it can qualify as having “occupied” that property. By leasing the property to tenants, the petitioner in this case gave up its right to occupy the property during the term of the leas e. Because petitioner could not occupy the property by reason of its own agreement, it ca nnot now claim that it “occupied” the property fo r purposes of MCL 211.7o(1). The tenants were the only occupants of the property during the tax years at issue.

4 The occupation must be in furth erance of the organization’s charitable purpose.

5IV. CONCLUSION Petitioner did not occupy the property at issue duri ng tax years 2003 and 2004 because petitioner had co ntracted away its occupanc y rights in the form of lease agreements. Thus, petitioner ca nnot satisfy the requirements of MCL 211.7o(1) for exemption from property taxes for tax years 2003 and 2004. Accordingly, I concur w ith the majority in affirm ing the Court of Appeals holding in the instant cas e and overruling the Court of Appeals opinion in Pheasant Ring v Waterford Twp , but would overrule it to the extent that it is inconsistent with my opinion.

Elizabeth A. Weaver

6v S T A T E O F M I C H I G A N SUPREME COURT

LIBERTY HILL HOUSING CORPORATION, Petitioner-Appellant,
No. 131531 CITY OF LIVONIA, Respondent-Appellee.

CAVANAGH, J. ( dissenting ). I dissent from the majority opinion, wh ich holds that Lib erty Hill Housing Corporation, a nonprofit organization that leases housing to disabled or low

income individuals, did not qualify for the charita ble-institution property-tax exemption under MCL 211.7o(1 ) because it did not occupy the properties at issue. I disagree that the Legislature intended the term “occupy,” as used in MCL 211.7o(1), to mean “reside in or on” or “to be a resident or tenant of; dwell in.” This cannot be the meaning intended by the Le gislature because it is inconsistent with the statute’s subsequent use of the term and the statute’s purpose. The key issue in this cas e is the meaning of the term “occupied” as it is used in MCL 211.7o(1), wh ich exempts from taxation “[r ]eal or personal property owned and occupied by a nonprofit charitabl e institution . . . .” The majority opinion rejects the definition of “occupied” that denotes ownership, “to have, hold,. . . possess, . . . or claim,” reasoning that the term “occupied” must mean something other than ownership because MCL 211. 7o(1) uses th e conjunctive phrase “owned and occupied.” Ante at 13-14. But there are several definitions for the term, so ruling out the meaning that denotes ownership only eliminates one alternative. The entire entr y for the term “occu py” in the dictiona ry used by the majority opinion suggests six different meanings:

— v.t . 1. to have, hold, or take as a separate space; possess, reside in or on, or claim: The orchard occupies half the farm . 2. to be a resident or tenant of; dwell in. 3. to fill up, employ, or engage: to occupy time reading . 4. to engage or employ the mind, energy, or attention of: We occupied the children with a game . 5. to take possession and control of (a place), as by military invasion.

— v.i. 6. to take or hold possession. [ Webster’s Universal College Dictionary (1997).] Moreover, consulting a different dictionary yields additional va riations of the definition, illustrating a hazard of singularly employing di ctionary definitions to discern legislative intent. For exampl e, Black’s Law Dictionary (8th ed) articulates one definition of “occupancy” as “the use to which property is put,” which bears some relation to the third Webster’s definition: “to fill up, employ, or engage.” 1 The majority cursorily dism isses three of th e alternative Webster’s

1 The other four alterna tive definitions include: 1. The act, state, or conditi on of holding, possessing, or residing in or on something; actua l possession, residence, or tenancy, [especially] of a dwelling or land. . . . 2. The act of taking possession of something that ha s no owner (such as abandoned property) so as to acquire legal owners hip. . . . 3. The period or term during which one owns, rents, or otherwise occupies property. (continued...)

2definitions as “clearly not rel evant,” but accuses me of selectively quoting from Black’s Law Dictionary. Ante at 13, 16. However, I have not presented alternative dictionary definitions to argue that “my” dictionary is more authoritative than the majority’s dictionary; rather, I raise them to draw attention to the inadequacy of a dictionary-driven a pproach to statutory interpretation. The practice of reaching for a dictionary to define common words in a statute risks serving to merely confirm the writer’s a ssumed meaning of th e word, rather than to actually advance the writer’s legal analysis. 2 While dictionaries are certainly useful tools of statutory interpretation, there are circumstances in which consulting a dictionary will not itself resolve the proper meaning of a statutory word or phrase. This case presents such a circumstance—in which consulting dictionaries yields a number of possible meanings of the term “occupied .” As a result, discerning the most appropriate meanin g requires further analysis. Several principles of statutory construction aid in determining how the term “occupied” should be understood in MC L 211.7o(1). A phrase must be construed in light of the phrases around it, not out of context. Koontz v Ameritech Services, Inc , 466

(...continued) 4.The state or condition of being occupied. [B lack’s Law Dictionary (8th ed).]

2 See Hoffman, Parse the sentence first: Curbing the urge to resort to the dictionary when inte rpreting legal texts , 6 NYU J Legis & P ub Pol’y 401 (2003).

3Mich 304, 318; 645 NW2d 34 (2002). Similarly, when construing a statute, a court must read it as a whole. G C Timmis & Co v Guardian Alarm Co , 468 Mich 416, 421; 662 NW2d 710 (2 003). Particularly relevan t here is the commonsense principle that “‘“[i]dentical language should certainly receive identical construction when found in the same act.”’” Empire Iron Mining Partnership v Orhanen , 455 Mich 410, 426 n 16; 565 NW2d 844 (1 997), quoting Tryc v Michigan Veterans’ Facility , 451 Mich 129, 155; 545 NW 2d 642 (1996) (Riley, J., dissenting). When a statute repeats terms, it is logi cal to infer that th ey have the same meaning in each instance. The statute at issue here uses the t erm “occupied” twice within the same sentence: “Real or personal property owned and occupied by a nonprofit charitabl e institution while occupied by that nonprofit charitable institution solely for the purposes for which that nonprofit charitable institution was incorporated is exempt from the collection of taxes under this act.” MCL 211.7o(1) (emphasis added). The statute’s two uses of the term “occupied” should be consistent in meaning. But interpreting “o ccupied” to relate to residency, as the majority opinion suggests, is incongruous with the statut e’s second use of the term “occupied.” That interpretation would require that an institution resided in property solely for a particular purpose. One’s residency of property does not commonly have any purpose other than residen cy, or dwelling, itself. By contrast, the use of property might be for a partic ular purpose. It would be entirely appropriate to state that an institution used pr operty solely for a particular purpose,

4such as a medical, educational, or recreat ional purpose. The second instance of “occupied” should be understood as syn onymous with “used,” because it is the most appropriate definition for that contex t. Interpreting “occupied” to relate to use would also be appropriate for the fi rst instance of the term, which confirms that the Legislature intended this meaning. Additionally, interpreting “occupied” as synonymous with “used” comports with the function of the statute, whereas interpretin g “occupied” to relate to residency does not. The exemption described in MCL 211.7o(1) applies only to nonprofit charitable institutions ; it never applies to individu als. Applying the term “reside” to an institu tion is a strained and odd inte rpretation. Unlike people, institutions are inanimate and do not typi cally reside in a pl ace. Notably, the majority articulates the followi ng definition of “reside” from Webster’s : “1. to dwell permanently or fo r a considerable time; live. 2. (of things, qualities, etc.) to be present habitually; be in herent ([usually followed] by in ).” Ante at 15. The first definition of “reside” clearly doe s not apply to institutions, because institutions do not dwell or live anywhere. The sec ond definition of “reside” does not apply because an ins titution would not be inheren t in a particular piece of property. Further, the statute applies broadly to “real or personal” property, not simply residential property. Not all property that is eligible for exemption is susceptible to being resided in. For example, if a nonprofit charitable institution owned land that contained a swimming pool , it would be inapt to state that the

5institution occupied the swim ming pool in that it resided in the pool. But it would be entirely appropriate to state that the institution occupied the swimming pool in that it operated the pool and, further, th at it operated the pool in fulfillment of its charitable purpose. 3 Thus, the term “occupied” mu st be construed so that it applies to the broad range of property that could be exempt under MCL 211.7o(1). Finally, Michigan caselaw supports interpreting the term “occupied” to mean “used” in the context of this exemption. In Oakwood Hosp Co rp v State Tax
Comm , 374 Mich 524; 132 NW2d 634 (1965), the pred ecessor of MCL 211.7o was at issue. The statute exempted fro m taxation property that was “owned and occupied” by “library, benevolent, charitable, educational or scientific institutions . . . while occupied by them solely for the purposes for which they were incorporated.” Id . at 528. This Court held th at houses owned by the plaintiff hospital, which were used fo r dwelling purposes for resi dent physicians and their families, were exempt under this provision. Id . at 530-532. The hospital charged the residents $100 a month to defray the cost of the ho using, which was located at the edge of the hospital property and fr onted a public street in a residential neighborhood. This Court reasoned that the houses were built to be necessary accessories to the hospital, because there was a shortage of housing close to the

3 Despite its devotion to the dictionary , the majority dep arts from its chosen definition when it is convenient or necess ary to do so, such as in the swimmingpool hypothetical. The shortcomings of its chosen dictionary definition lead the majority to craft its own d efinition of “occupy”—to ma intain a regular physical presence. Ante at 18.

6hospital and the resident physicians needed to be available to serve at the hospital on short notice. Id . at 527. It concluded that “[t]he houses are used as part of the hospital operation and are incidental th ereto. Exemption under the statute applies.” Id . at 532 (emphasis added). 4 Clearly, Oakwood interpreted the term “occupied” to mean th e use of the propert y. The focus in Oakwood was not simply who physically “resided in” the property, but whether the use of the property was within the hospital’s scientific purpos e. This Court viewed the resident physicians as an exte nsion of the hospital because they were so integral to the hospital’s purpose; accordingly, thei r tenancy and use of the housing was attributed to the hospital. Therefore, if the term “occupied” is und erstood to relate to the use to which property is put, the question here is whether Liberty H ill occupied the properties when it leased them to thes e particular tenants. The relationship between Liberty Hill and its tenants is anal ogous to the relationship be tween the hosp ital and the medical residents in Oakwood . A hospital’s narrow purpos e is to provide medical

care at the hospital , but Oakwood recognized that enablin g medical residents to get to the hospital quickly was necessary to th at purpose. Accordingly, even though actual medical care did not occur in the houses, the relationships between

4 The majority’s argument that Oakwood and the other cases addressing this exemption did not concern the “owned and o ccupied” element of the exemption statute is irrelevant because the term “o ccupied” should have the same meaning in both instances in the statute.

7the medical residents, their housing, and th e hospital were so int ertwined that this Court regarded housing the me dical residents as an opera tion of the hospital that was within its scientific pur pose. The fundamental pur pose of Liberty Hill is to enable low-income or disa bled people to live inde pendently, rather than in institutions or group homes . The physical manifes tation of Liberty Hill’s operations is not just its central office, but also in having Liberty Hill’s tenants occupy the houses. If Liberty Hill’s te nants do not live in the houses, Liberty Hill’s purpose is not fulfilled. Further, the tenancy arrangements demonstrate a unique relationship between Liberty Hill and its tenants. All Liberty Hill tenants are referred by Community Living Services , Liberty Hill’s parent corp oration. Liberty Hill’s sample lease appears to be a standard l ease, except that it in cludes a provision that “Community Living Services shall assist the tenant in complying with the terms of this lease.” Unlike a st andard landlord-tenant rela tionship, Liberty Hill has specifically agreed to work with the tenant to fulf ill the lease requirements. Further, Community Living S ervices contracts to provide a number of services to Liberty Hill tenants at the properties . Support services in clude transportation, personal-care assistance, support for work, recreation, community involvement, and health-care service. The aid given in a particular tenant’s home could amount to care being provided 24 hours a day, seven days a w eek, depending on the tenant’s needs. Thus, between assisting the tenant with comp lying with the lease

8and providing support serv ices, it is clear that Liberty Hill operates in the properties, even thou gh the tenants physically reside in them. In addition to the services that Liberty Hill provides through Community Living Services, the financial arrangeme nts indicate that Li berty Hill does not have a standard landlord-tenant relationship with its tenants. All of Liberty Hill’s tenants qualify for Supplemental S ecurity Income, which amounts to approximately $600 a month and is usually th e only source of income for each tenant. Tenants pay no more than one-third of their inco me to rent, usually about $200 a month. Liberty Hill receives govern mental funds and dona tions that offset the remainder of the housing-related expens es, such as the mo rtgage, insurance, and maintenance. But in fo ur of the last five years, Liberty Hill has operated at a deficit. The financial circumstances indi cate that Liberty Hill is not leasing the houses as a typical landlord, but is leasing the houses as an integral part of its mission. Just as the houses in Oakwood would not have be en exempted from taxation if they had been ren ted to people unrelated to the hospital, the Liberty Hill houses would not be exem pt if they were rented to tenants who were not referred by Community Living Servi ces and who did not meet Liberty Hill’s criteria. Leasing the properties to particular low-income or disabled tenants and maintaining a relationship with them was integral to Libert y Hill’s operation. Thus, Liberty Hill occupied the propertie s within the meani ng of MCL 211.7o(1) because it used the propertie s as part of its institutional mission. Moreover, it occupied the properties solely for the purposes for wh ich it was incorporated, as

9required by MCL 211.7o(1). I would rev erse the judgment of the Court of Appeals.

Michael F. Cavanagh Marilyn Kelly

10