FOURTH D I VI SI ON

BA RNES, P. J.

, RA Y and M CM I LLI A N, JJ.

N O T IC E : M otions for r e c ons i de r a tion m us t be

ph y sic a l ly r e ce iv ed i n our c le r k ’s offic e w ithin te n

da y s of the da te of de c is ion to be de e m ed tim e ly file d.

http://w w w .ga a ppe a l s .us /r ule s

M ar ch 22, 2016



# I n th e Co u r t o f

A p p eals o f

G eo r g ia

A1 5 A2 40 7

. COLUM BUS, G E O RGIA, BOARD OF TAX

ASSESSORS v

. THE M EDI C AL CENTER H OSPITAL

AUTHORITY.

B A R N E S , Pres i d i n g J ud g e.

Th e Bo ard of Tax As ses s o rs fo r Co l u m b u s, Geo rg i a (“ Tax Bo ard ”) ap p eal s t h e

t ri al co u rt ’ s g ran t o f s u m m ary ju d g m en t t o Th e M ed i cal Cen t er Ho s p i tal Au t h o ri t y

.

Th e t ri al co u rt fo u n d t h at ei g ht parcel s o f real es t at e own ed b y t h e Ho s pi tal Au t h o ri t y

were ex em

pt fro m ad v al o rem p ro p ert y t ax es fo r t h e y ears 2 0 0 9 t h ro u g h 2 0 1 2

. Th e

Tax Bo ard arg ues t h at th e t ri al co u rt erred i n co n cl ud i n g th at th e parcel s were “ p u b l i c

p ro p ert y ” ex em

p t fro m t ax at i o n reg ard l es s o f h o w t h e p ro p ert y w as b ei n g u s ed

. Fo r

t h e reas o n s t h at fo l l o w, we affi rm

.

Th e M ed i ca l C e n t er Ho s p i t al Au th o ri t y i n Co l u m bu s s u b m i t t ed t o t h e

M u s co gee Co u n t y Bo ard o f Tax As s es s o rs a “ Req u es t fo r N o n -Tax ab i l it y ” fo r ei g ht

p arcel s o f real es t at e fo r t h e y ears 2 0 0 9 t h ro u g h 20 1 2. Th e Tax Bo ard den i ed t h ereq u es t s

. Th e Ho s p i t al Au t h o ri t y ap p eal ed t h e d en i al o f no n -t ax ab i l i t y t o t h e

M u s co gee Co u n t y Bo ard o f Eq u al i zat i o n

, wh i ch gran t ed th e req u es t as t o o ne p arcel

,

an d d en ied i t as t o t he ot h er sev en p arcel s

. Th e Tax Bo ard ap p eal ed t h e s i ng l e g ran t

o f no n -t ax ab i l it y to t h e s up eri o r co u rt an d t he Ho s p i tal Au t h o ri t y ap p eal ed t he d en i al

o f t he o t h er s ev en p arcel s t o t h e s u p eri o r co u rt

, wh i ch co n s ol i d at ed al l o f t h e act i o n s

.

Fo l l o wi ng a h eari ng

, t he s u peri o r co u rt g ran t ed th e Ho s p i t al Au t h o ri ty ’ s m ot i o n fo r

s u m m ary ju d g m en t

, h o l d i n g th at “ [a] l l ei g h t o f th e p arcel s o f real p ro pert y

. . . wh o s e

t ax ab i l i t y fo r ad v al o rem p ro p ert y t ax p u r p o s e s was p ro p erl y b efo re t h i s co u rt

, are

d et erm i n ed t o b e ex em

p t fro m ad v al o rem

p ro p ert y t ax at i o n .”

Th e T ax Bo ard arg u es t h at t he t ri al co u rt erred b y h o l d i n g t h at al l o f t h e p arcel s

at i s s u e were “ ‘ p ub l i c p ro p ert y ’ ex em p t fro m ad v al orem p ro p ert y t ax at i o n

, reg ard l es s

o f h o w th es e p arcel s are u sed b y th e Au t h o ri t y

, i t s les s ee Do ct o rs Ho s pi t al

, an d a

p ri v at e, fo r-p ro fi t su b les see.” Th e Bo ard al s o arg u es t hat t h e t ri al co u rt erred in

h o l d i n g t h at t he m ed i cal o ffi ce b u i l d i n g o ccu p i ed b y a fo r-p ro fi t cl i n i c w as t ax

ex em p t

.

Th e t ri al co u rt ’ s h o ld i n g was n o t as s p eci fi c as t h e Tax Bo ard ’ s d es cri p t i o n,

h o wev er. W h i l e t h e co urt o u t l i ned th e p art i es ’ arg um en t s

— th e H o s p it al Au t h o ri t y ’ s

t h at i t s real p ro p ert y was ex em p t as “ p ub l i c p ro p ert y ” u n d er OCGA § 4 8 -5 -4 1 (a) (1 )

2(A), an d ex em p t fo r th e o p erat i o n o f faci l i t i es s i m i l ar t o th o se o f ci ti es an d co u n ti es

u n d er OCGA § 3 1 -7 -7 2 (e) (1 ), an d th e Tax Bo ard ’ s arg u m en t t hat t h e p ro pert y was

n o t bei n g u s ed fo r a h o s p i t al o r rel at ed p u rp o s e

— t h e co u rt s im pl y co n cl u d ed t h at t h e

p ro p ert i es were ex em

p t fro m ad v a l o r em p ro p ert y tax at i on wi t h o u t ex pl i cat i n g i t s

reas on s

.

W e co n d u ct a de n o v o rev i ew o f t h e l a w an d t he ev id en ce wh en co n s i d eri n g

a t ri al co u rt ’ s g ran t o r d en ial o f a m o t i o n fo r s u m m ar y j u d g m en t

, an d affi rm t h e

co u rt ’ s g ran t o f th e m ot i o n i f it is ri g h t fo r an y reas o n

. Al t a An es t h es i a As s o cs

. o f Ga

.

v. Bo u h a n

, W

i l l i a ms & Levy

, 2 68 Ga. Ap p

. 1 3 9

, 1 4 2-1 4 3 (1 ) (6 0 1 SE2 d 5 0 3 ) (2 0 0 4 ).

As ear l y a s 1 8 7 7

, Geo rg i a’ s co ns t i t u t i o n al l owed o u r l eg is lat u re t o ex em pt

“ p u b l i c p r o p ert y ” fro m t ax at i o n

. Pen i ck v. F o s t er

, 1 2 9 Ga. 21 7

, 2 2 2 (5 8 SE 7 7 3 )

(1 9 0 7). T h i s ex em

p t i on “ res t s u p o n t h e m os t fu n d am en t al p ri n ci p l es of g o v ern m en t

,

b ei n g n eces s ary in o rd er t h at t h e fu n ct i o n s o f g o vern m en t b e no t u n d u l y i m p ed ed

, an d

t h at t h e g o v ern m en t be n o t fo rced i n t o t h e i n co ns i s t en cy o f t ax i n g i t s el f i n o r d er to

rai s e m o ney t o p ay o v er to i t s el f, wh i ch m o n ey co u l d b e r a i s e d o n l y b y o t h er

t ax at io n .” Id . at 2 25

.

Th e 1 9 8 3 Geo rg i a Co n s t i t u t i o n p r e s erv ed al l ex i s t i n g ad v al o rem t ax

ex em p t i o n s “ u n t i l o t h erwi s e p ro v i ded fo r b y l aw.” Ga. Co n s t

. Art

. VII, § II, Para. IV.

3On e s u ch p re-e x i s t i n g s t at ut o ry ex em p t i o n in th e G eo rg i a Pu b l i c Rev en u e Co d e

p ro v id es t h at “ al l p ub l i c p ro pert y ” i s ex em p t fro m “ al l ad v al o rem pro p ert y t ax es in

t h i s s tat e.” OCGA § 4 8 -5 -4 1 (a ) ( 1 ) ( A )

. Th e Ho s p it al Au th o ri t y Law co n t ai n s

an o th er p re-ex i s ti ng st at ut o ry ad v al o rem t ax ex em p t io n

, gran t i n g to A u t h o ri t i es “ t h e

s am e ex em

p t i o n s an d ex cl u si o ns fro m t ax es as are no w gran t ed to ci t i es an d co u n ti es

fo r t h e o p erat io n o f faci l i t ies si m i l ar t o faci l i t i es t o b e o p erat ed b y h os p it al au t h o ri ti es

as p ro v i d ed fo r u n d er t h i s t it l e.” OCGA § 3 1 -7 -7 2 (e) (1 ).

Th e fi rs t qu es t io n fram ed b y t h e Tax Bo ard i n t h i s ap p eal i s w h e t h e r a l l real

p ro p ert y own ed by a h osp i t al au t h o ri t y i s au t o m at i cal l y ex em p t fro m ad v al o rem t ax es

“ r e ga r d l es s o f t h e fact ual ci rcu m s t an ces s u rro u n d i n g h o w t h es e p arcel s are u sed .” T he

s eco n d q u es t i o n i s wh et h er a m ed i c a l o ffi ce b u i l d in g l eas ed to a fo r-p ro fi t cl i n i c,

wh i ch i s l o cat ed o n t h e s am e p arcel o f p ro p ert y o ccu p i ed b y a n o n -p ro fi t h o s p i t al

, was

s u b ject t o ad v al o rem tax es

. To an s wer t h es e q u es t i on s

, we m u s t rev iew t h e s t at u t es

an d cas e l aw.

Ho s p i t al au th o ri t i es are q u as i -g o v ern m en t al en t i t i es fi rs t creat ed b y s t at u t e 7 5

y ears ag o

.

In 1 9 4 1

, t h e St at e o f G eo rg i a am en ded i t s Co n s t i t ut i o n t o al l o w po l i t i cal

s u b d i v is i on s t o p ro vi d e h eal t h care s erv i ces

. 1 94 1 Ga. Laws p

. 5 0

. T he

4St at e co n cu rren t l y en act ed t h e Ho s pi t al Au t h ori t i e s L aw

. .., Ga. Co de

An n

. § 3 1 -7 -7 0 et seq

. (2 0 1 2 ), ‘ t o p ro v i d e a m ech an i s m fo r t h e op erat i o n

an d m ai n t en an ce of n eed ed h eal th care faci l i t ies i n t h e s ev eral co u nt i es

an d m u n ici p al i t i es o f t h e s t at e. ’ § 3 1 -7 -7 6 (a). Th e p u rp o s e o f th e

co n s t i t ut i o n al p ro v is i o n an d t h e s t at u t e b as ed t h ereo n w as t o crea t e an

o rg an i zat i o n wh i ch co ul d car r y o u t an d m ak e m o re wo rk ab l e t h e d u t y

wh i ch t he St at e owed t o i t s i nd i gen t s i ck

. As am en d ed

, t h e Law

au t h ori zes each co u n t y an d m u n i c i p al i t y

, an d cert ai n co m b i nat i on s o f

co u n t i es o r m

un i ci p al i t i es

, t o cre a t e “ a p u b l i c b o d y co rp o rat e an d

p o l i ti c” cal l ed a “ h os p i t al au th o ri t y .” § § 3 1-7 -7 2 (a), (d ). H o s p i t al

au t h ori t i es are g o v ern ed by 5

- t o 9 -m em b er b oard s t h at are ap p o i n t ed b y

t h e g o vern i n g b o d y of t h e co u n t y o r m u n i c i p al it y i n t h ei r area o f

o p erat i o n . § 3 1 -7 -7 2 (a).

(Ci t at i o n an d p u n ct u a t i o n om it t ed .) Fed er a l Tr ad e Co mmi s s io n v. Ph o eb e Pu t ney

Hea lt h Sys t e m

, I

n c

. ,

_ _ _ U .S.

_ _ _ (1 3 3 SCt 1 0 03

, 1 0 0 7 ; 1 8 5 LE2 d 4 3 ) (2 0 1 3 )

(h o l d i n g t h at St at e’ s g ran t o f g en eral co rp o rat e p owers t o h o s p i tal au t h o ri t i es d o es n ot

i n cl u d e p erm is s i o n t o u s e t h o s e p o wers an t i-co m pet i t i v el y ).

In 1 9 6 4

, t h e Geo rg i a l eg i s l at u re am en d ed t h e Ho sp i t al Au t ho ri t i es Law t o g ran t

t o h o s p it al s ru n b y h o s p i t al au t h o ri t ies t h e sam e t ax rel i ef g ran t ed t o h o s p i t al s ru n by

t h e g o v ern m en t

. Un d

er co f l er v. Ho s p i t a l Au t h

., 2 2 1 Ga. 5 0 1

, 5 0 3 -5 0 4 (1 ) (1 4 5 SE2 d

4 8 7 ) (1 9 6 5 ) (s peci fi cal l y ad d res s i n g ex em p t i o n fro m s al es an d u s e t ax ); OCGA § 3 1

-

7 -7 2 (e) (1 ). Ou r Su p rem e Co u rt d et erm i n ed t h at t h e 1 9 6 4 l eg i s lat i o n “ was i n t en d ed

5as a rem ed y fo r t h e ev il o f t h e l aw as [p rev i o us l y ] co n st ru ed b y t h e Co u rt o f Ap p eal s

wh ereb y t h i s m ean s o f p ro tect i n g t h e heal t h o f ci t i es an d co un t i es [, (s erv i ces p ro v i d ed

b y h o s pi t al au t h o ri t i es ),] was m ad e t o p ay tax es wh i l e t h e i d en ti cal s erv i ces b y ci ti es

an d co u n t i es were ex em

p t .” Un d er co fl er , 2 2 1 Ga. at 5 0 4 (1 ).

Fi v e y ears l at er, t h e Geo rg i a Su p rem e Co u rt fo u n d n o co ns t i t u ti o n al res t rai nt

u p o n a h o s p i tal au th o ri t y ’ s ab i l i t y t o i s s u e rev en u e an t i ci p at i o n cert i fi cat es to fi n an ce

t h e co n s t ru ct io n o f a n e w h o s pi t al

, t h en l eas e i t t o a no n -p ro fi t h o s pi t al t h at wo u ld

rep ay t h e d eb t fro m i t s rev en u e. Br a d f i el d v. H o s p it a l Au t h o r i t

y o f Mu s co g ee Co u n t

y

,

2 2 6 G a. 57 5 (1 7 6 SE2 d 9 2 ) (1 9 7 0 ). Th at y ear, t h e co urt al s o ad d res s ed t h e i s s u e

s q u a r e l y b efo re u s in t hi s cas e, an d h el d th at real p ro p ert y o w n ed b y a h o s p i t a l

au t h o ri t y t h at p ro d u ces i nco m e u s ed t o fu rt h er t h e au t ho ri t y ’ s m i s s i o n i s ex em p t fro m

ad v al o rem t ax es

, i n Ho s

p i t al Au t h o r i t

y o f Al b a n y v. S t ewa r t

, 2 2 6 Ga. 5 30 (1 7 5 SE2 d

8 5 7 ) ( 1 97 0). Sp eci fi cal l y

, t h e Su prem e Co u rt co ns i d ered t h e fo l l o wi ng cert i fi ed

q u es ti o n fro m

t h e Co u rt o f Ap p eal s : wh et her

real p r o pert y hel d an d o wn ed b y a p u b l i c h o s p i t al au t h o ri t y

, creat ed

u n d er an d by v i rt ue of t h e Ho s p i t al Au t h o ri t i es

, [i s ] “ p u b l i c p ro p ert y ”

wi t h in t h e m ean i n g o f t h e Co n s t i t u t i o n o f 1 9 4 5

, Art

. V II, Sec. I, Par. IV

(Co d e An n . § 2 -5 40 4 ) an d Ga. L. 1 9 4 6 , p . 1 2 , as am en d ed (Co d e An n

.

§ 9 2 -2 0 1 ) s o as t o b e ex em pt fro m ad v al orem t ax at i o n

, w h e r e t h e

p ro p ert y i t s e l f i s n ot a part o f t h e h o s p i t al b u t i t s i n co m e i s pro p erl y

6d ev o t ed to p u b li c p u rp os es (h o s p i t al o p erat i o n s ) i n t h e fu rthe r a n ce o f th e

l eg i t i m at e fu nct i o n s o f t he h o s pi t al au t h o ri ty

.

Id . at 5 3 1 -5 3 2

.

Co m p ari n g t he si t uat i o n b efo re i t t o t h at i n Un d er c o f l e r

, 2 2 1 Ga. 5 0 1

, t h e

Su p rem e Co u rt i n S t ewa rt reas o n ed as fo l l o ws : “ W hi l e th at cas e d eal t wi t h t h e Sal es

an d Us e Tax Act [,] t h e s am e reas o n i n g wo u l d a p p l y a s to ad v al o rem t ax es

. Th e

ex em p t i o n t o ci ti es an d co u n t i es i s b ecau s e t h e i r p r o p ert y i s p u b l i c pro p ert y

. Th e

s am e ex em

p t i o n fo r a h os p i t al au t h o ri t y o f n eces s i t y wo u l d b e becau s e i t s p ro p ert y

i s p u b l i c p ro p ert y .” 2 2 6 Ga. at 5 3 8 ; OCGA § 3 1 -7 -7 2 (e) (1 ).

Th e Tax Bo ard i n t hi s cas e p o in t s o u t t h at S t ewa r t d o es no t ex p res s l y h o l d t h at

a h o sp i tal au t h o ri t y ’ s u s e o f i t s pro p ert y was wh o l l y i rrel ev an t to i t s t ax ex em p t s t at u s

.

W h i l e we ag ree t h at St ewa r t d o es n o t ex p res s ly s o h o l d , i t d oes h o ld t h at a h o s p i t al

au t h o ri t y ’ s u s e o f i n co m e fro m p ro p ert y t h at was n o t p art o f t h e h o s p i tal is rel ev an t

t o t h e t ax ab i l i t y of th at p ro p ert y

. Th e o p in io n i t s el f co n tai n s l i t t l e i nfo rm at i o n ab o ut

t h e n at u re o f t h e p r o p e r t y a t i s s u e, b u t t h e cert i fi ed qu es t io n i n d i cat ed t h at t h e

p ro p ert y was no t p art o f t h e h o s p i t a l

, an d th at i t s i n co m e w as “ d ev o t ed t o p u b l i c

p u rp os es (h o s p it al op erat i o n s) i n t h e fu rt h eran ce o f t h e l eg i t i m at e fu n ct i o n s o f t h e

7h o s p it al au th ori ty .” 2 2 6 G a. at 5 3 1

. 1 Th e Su p rem e Co urt co n cl u d ed t h at

, b ecau s e t h e

i n co m e was u s ed t o o p erat e t h e h o s p i t al

, t h e pro p ert y fro m wh i ch th e i n c o m e was

d eri v ed was “ p u b l i c p ro p ert y ” ex em p t fro m ad v al o rem

t ax es

.

In t h i s cas e, th e reco rd es t ab l i s h e s t h a t o n l y on e o f t h e ei g h t p arcel s at i s s u e

g en erat ed an y i n co m e du ri n g t h e t ax y ears i n q ues t i o n

, t h at b ei n g t h e parcel o n wh i ch

b o t h Do ct o rs Ho s pi t al an d t h e Co l u m b u s Cl i ni c were lo cat ed

. Th e Ho s p i t al Au t h o ri t y

l eas ed t h e p ro p ert y t o th e no n -p ro fi t Do ct o rs Ho s p it al

, wh ich s u b l eas ed a p o rt i o n to

t h e fo r-p ro fi t Co l u m

bu s Cl in i c. Th e i ss u e a s t o t hat p arcel was wh et her, co n s i s t en t

wi t h St ewa r t

, t h e i n co m e i t p ro d u ced was d ev o ted t o h o s p i tal op erat i o n s “ i n t h e

fu rt heran ce o f t h e l eg it i m at e fu n ct io n s o f t he h o s p it al au t ho ri t y .” S t ewa r t

, 2 2 1 Ga. at

5 3 1 . If i t was , t h e p arcel was n o t t ax ab l e.

Th e ot h er s ev en p arcel s pro d u ced n o i n co m e. Th e i s s ue as t o t h o s e p arcel s was

wh et h er t h ei r u s e, r a t h e r th an an y i n co m e d eri v ed fro m t h ei r u s e, was d ev o t ed to

p u b l i c p u rp o s es i n fu rt h er a n ce o f t he H o s p i t al Au t h o ri ty ’ s l eg i t i m at e fu n ct i o n s

. If

1 Th e Su p rem e Co urt rev eal ed i n a l at er cas e t h at t h e h o s p i t al au t h o ri t y p ro p ert y

fo u n d ex em

p t fro m t ax at i o n i n S t ewa rt co n s i st ed of “ s ev eral ci ty l o t s

, s o m e p ecan

g r o v e s a n d s o m e farm i n g acreag e.” Tea ch er s’ Ret i r emen t S

ys tem o f Ga

. v. Ci t

y o f

At l a n t a

, 2 4 9 Ga. 1 9 6 (2 8 8 SE2 d 2 0 0 ) (1 9 8 2 ). In Tea ch er s ’

, t he Co u rt h el d t h at

p ro p ert y o wn ed b y a p ub l i c co rp o rat i o n fo r i n co m e-p ro d uci n g p urp o s es was p u b l i c

p ro p ert y ex em pt fro m t ax at io n

.

8t h ey w ere, t h en t h e au t h o ri t y o wed n o ad v al o rem t ax es t o t he Tax Bo ard an d t h e t ri al

co u rt d i d n o t err.

1

. W h il e t h e Tax Bo ard arg u es t h at t h e s up eri o r co u rt g ran t ed s u m m ary

ju d g m en t “ wi t h o u t an y co ns i derat i o n o f h ow t h e Au t h o ri t y i s u s i n g an y o f t h e ei g ht

p arcel s at is s u e” an d th at “ fact i s s u es ex is t ” as t o t h e Au t h o ri t y ’ s u s e, it h as n ot

i d en t i fi ed wh at t h o s e fact u a l i ss u es m i g h t be. In it s m o t io n fo r s u m m ary ju d g m en t

,

t h e Ho s p i t al Au t h o ri t y a r g u e d t h at “ real p ro p ert y o wn ed b y a Geo rg i a h o s p i t al

au t h o r i t y i s wh o l ly ex em pt fro m ad v al o rem p ro p ert y t ax at i o n b ecau se i t i s ‘ p u b l i c

p ro p ert y ,’ ” b u t i t al s o s u bm i t t ed ev i d en ce d es cri b i n g h ow t h e p arcel s were u s ed

. Th e

Tax Bo ard p ro d u ced n o ev i d e n c e t h at t h e pro p ert i es w ere b ei ng u s ed i n a d i fferen t

m an n er.

To s u p p o rt i t s m o t i o n fo r s u m m ary ju d g m en t

, t h e Ho s p i t al A u t h o ri ty s u b m i t t ed

t h e affi d av i t o f i t s as s i st an t t reas u rer, wh o s t at ed t h at t h e Au t h ori t y h as n o em p l o y ees

an d do es n o t act i v el y m an ag e o r o p erat e t h e h eal th care faci li t ies i t o wn s

, b u t i n s t ead

l eas es t h em t o en t i t i es wh o are t h en res p o n s i b le fo r t h e faci l i t i es ’ m an ag em en t

. Th e

Au t ho ri ty i s ex em

p t fro m fed eral i n co m e tax es as bo t h a g o v ern m en t al en t i t y an d a

n o n -p ro fi t co m

p an y un d er § 5 0 1 (c) (3 ) o f t h e In tern al Rev en u e Co d e. T he Ho s p i t al

Au t ho ri ty fi n an ced t h e 20 0 8 p u r ch as e o f t h es e ei g ht p arcel s of real p ro p ert y by

9i s su i ng i n co m e-t ax -ex em p t d eb t i n s t ru m en t s. Sev en o f th e p arcel s were p u rch as ed

fro m Co l um

b u s Do ct o rs Ho s p it al

, In c. On e parcel

, wh i ch t h e Au t ho ri t y l eas es t o t h e

n o n -p ro f it D oc tor s H o s p it al

, In c., co n t ai ns b o t h Do ct ors Ho s p i t al an d a m ed i cal o ffi ce

b u i l d i n g co n t ai n in g t h e fo r-p ro fi t Co l u m b u s Cl i n i c. Do ct o rs Ho s p i t al

, In c., m an ag es

an d o perat es t h e h o s p it al an d s u b l et s t h e m ed i cal o ffi ce b u i l d i n g t o t h e Co l u m bu s

Cl i n i c. A m

u l t i -l ev el p ark i ng d eck i s l o cat ed o n fo ur o f th e par c el s

, p ro d u ces n o

i n co m e, an d i s av ai l ab l e t o p at i en t s

, v is i t o rs

, an d em p lo y ees of bo t h t h e h o s p i t al an d

cl i n i c. Th e l as t t wo p arcel s are p av ed p ark in g lo t s t h at are al s o av ai l ab l e at n o ch arg e

t o p at i en t s , v i s i t o rs

, an d em p lo y ees

.

Th e ei g h th p arcel at is s u e i s o n e o f t h ree co n v ey ed to th e Ho sp i t al Au t h o r i t y

wh en i t b o u g h t Hu g h st o n Ho s p i t al i n 2 0 08 an d i s a wo o d ed area wi t h wal k i n g t rai l s

t h at i s p art o f t h e h o s p i t al g ro un d s

. Th at p arcel g en erat es n o i n co m e. Acco rd i n g t o t h e

a s s i s t an t t reas u rer, t h e Tax Bo ard g ran t ed t h e Ho s p i t al Au t h o ri t y ’ s Req u es t fo r

No n t ax i bi l i t y o n t he ot h er two p arcel s, o ne co n t ai ni n g Hu g h s t o n H o s p i t al it s el f an d

t h e o t h er al s o co n tai n i n g t h e wo o d ed wal k i n g t rai l s

.

In i t s m o t i on fo r s u m

m ary ju d g m en t, t h e Ho s p i t al Au th o ri t y arg u ed i t s p ro p ert y

was ex em p t fro m ad v al o rem t ax at i o n as lo ng as t h e p ro p ert y o r an y i n co m e p ro d u ced

b y i t was “ p ro p erl y d ev o ted t o p u b l i c p u rp os es

, an d t o t h e fu rt h eran ce o f t h e

10l eg i t i m at e fu n ct io n s o f a h os p it al au t ho ri t y .” T h e Au t h o ri t y al s o arg u ed t h at al l o f t h e

p arcel s s u p p o rt ed an d co m p l em en t ed t h e p ro v i s io n an d recei p t o f m ed i cal s erv i ces

,

al t h o u g h i t al s o arg u ed t h at t hei r u s e n eed n o t b e rel at ed to t h e p ro v i s io n of m ed i cal

s erv i ces t o be ex em

p t

. In res p o n s e, t h e Tax B o ard arg ued t h at ex em p t i on s fro m

t ax at io n m

us t b e s t ri ct l y co n s t ru ed

, an d t h at t h e Au th o ri t y h ad fai l ed t o d em o n s t rat e

t h at t h e p arcel s

— wh i ch i n cl u d ed “ u nd ev el o p ed acreag e” n ex t t o Hu gh s to n Ho s p i t al

o r t h e rem ot e p a r k i n g l o t s n ear Do ct o rs Ho s pi t al

— were b ei n g u s ed t o fu rt h er i t s

l eg i t i m at e fu n ct i o n s

.

Cl earl y

, t h e m ere fact t hat p ro p ert y i s o wn ed by a Ho s p it al Au t ho ri t y d o es n ot

ex em p t i t fro m p ro p ert y t ax es

. Al s o cl earl y

, u n d e r S t e wa r t

, 2 26 Ga. at 5 3 1

, t h e

p ro p ert y n eed n o t act u al l y co n t ai n a h eal t h care faci l i t y t o b e ex em p t

, as l o ng as t h e

u s e o f t h e p r o p ert y o r i t s i n co m e fu rt h ers “ t h e l eg i t i m at e fu nct i o n s o f t he h o s p i t al

au t h o ri t y .” Id

. Th e Tax Bo ard en d o rs es a read i n g of t h e l aw th at wo ul d req u ire a

Ho s pi t al A u t h o ri t y t o ju s t i fy i t s u s e of p ro p ert y as a free ben efi t t o p at i en ts t h at m i g ht

o t h erwi s e g en erat e in co m e, bu t t h at i s n o t req u i red

. No ev i d en ce i n t h e reco rd creat es

an i s s u e o f fact reg ard i n g th e u s a g e o f t h e pro p ert i es

, b u t rat h er t h e ev i d en ce

es t ab l i s h e s a s a m a tt er o f l aw th at al l o f t h e p arcel s at i s su e i n t h i s cas e fu rt h er t h e

l eg i t i m at e fu n ct i o n o f t h e Ho s p i t al Au t ho ri t y

. No n e o f t h e p ro p ert i es are u s ed fo r a

11p u rp os e “ wh ol l y u nrel at ed ” t o t h e Ho s p i t al Au t h o ri t y ’ s fu n ct i o n. Th e p a r k i n g l o t s

o b v i o u s l y fu rt h er th e fu n ct i o n of t he h o s p i t al b y p ro v i d i n g free p ark i n g fo r Do ct o rs

Ho s pi t al pat i en t s

, v i s i t o rs

, an d em p l o y ees

, an d o n e p arcel co n t ai n s t h e h o s pi t al i t s el f.

Fu rt h er, t h e wal k in g t rai l s i n t he wo od ed lo t o n th e Hu g h s t o n Ho s p it al g ro u n d s are

av ai l ab l e t o p at i en t s

, v i s i t o rs

, an d em p l o y ees

. Th e t ri al co u rt di d n o t err i n fi n d i n g t h at

t h e p arcel s were ex em

p t fro m ad v al o rem t ax at i o n

.

2

. Th e Tax Bo ard al s o arg u es t h at t h e t ri a l c o u r t s h o u l d n o t h av e g ran t ed

s u m m ary ju d g m en t t o th e H o sp i t al Au t h o ri t y o n t h e t ax ab i l i t y o f t h e p arcel o n wh i ch

b o t h Do ct o rs Ho s p i t al an d t h e Co l u m b u s Cl i n i c were l o cat ed

.

W h i l e OCGA § 3 1-7 -7 2 (e) (1 ) g ran t s t he pro p ert y t ax ex em p t i o n t o h o s p i t al

au t h o r i t ies as d es cri b ed earl i er, § 3 1 -7 -7 2 (e) (2 ) p ro v id es t h at t he p ro p ert y t ax

ex em p t i o n d o es n o t ap p l y t o an y real p ro p ert y i n wh i ch 5 0 p ercen t o r m o r e o f t h e

fl oo r s p ace i s l eas ed to a fo r-p ro fi t en t i t y

. Th e Tax Bo ard arg u es t h at i f t h e Au t h o ri t y

h ad co m p l i ed wi t h i ts req u es t t o d i v i d e t h e parcel co n t ai n i ng b o t h t h e h os p i tal an d t h e

cl i n i c wh en i t b o u g h t t h e pro pert y

, t hen t h e p o rt i o n o n wh i ch t h e cl i n i c was l o cat ed

wo u l d cl earl y h av e b een tax ab l e, b ecau s e 1 0 0 percen t of t he fl o o r s p ace was o ccu p i ed

b y a fo r-p ro fi t co m

p an y

.

12Bu t wh en t h e Ho s p it al Au t h o ri t y b o u g ht t he p arcel

, i t al read y co n t ai n ed b o th

faci li t i es

. Th e Au t h ori ty d i d n o t m erg e t wo p arcel s an d t hen arg u e t h at it was en t i t l ed

t o an ex em

p t i o n b ecau s e t h e cl i n i c was l es s t h an h al f th e s i ze o f t h e h o s p i t al

. An d to

s u p p o rt i t s m o t i o n fo r s u m m ary ju d g m en t

, t h e H o s p it al A u t h o ri t y i n cl u d ed t h e

affi d av i t o f a reg is t ered l an d s u rv ey o r es t ab l i s h i n g t h at th e s q u are fo o t ag e o f t h e cl i n i c

was l es s th an h al f o f th e h os p i t al ’ s s qu are fo ot ag e. W h i l e t h e T ax Bo ard arg u es t h at

t h e t wo b u i ld in g s are s ep arat e an d t hat t h e A u t h ori t y sh o ul d n o t b e al lo wed t o ex cl u d e

t h e p ro p ert y fro m t ax at i o n b y “ art fu l l i n e

- d r a w i n g ,” i t ci t es t o no reco rd ev i d en ce

reg ard i n g t hat is s u e. An d u n d er t h e p l ai n term s o f t h e st at ut e, t h e ex em p t i o n was n ot

l o s t

, b ecau s e l es s t h an 5 0 p ercen t o f t h e fl oo r s p ace o n t h at p arcel o f l an d was l eas ed

t o a fo r-p ro fi t co m

p an y

. Acco rd i n g l y

, t h e t ri al co u rt d id n o t err i n fi n d in g th e p arcel

ex em p t fro m ad v al o rem

p ro p ert y t ax es

.

Ju d g men t a f f i r m ed . Ra y a n d McMi l l i a n , JJ. co n cu r

.

13