No. 57 September 15, 2016 257

IN THE SUPREME COURT OF THE

STATE OF OREGON

HABITAT FOR HUMANITY OF

THE MID-WILLAMETTE VALLEY,

Plaintiff-Appellant,

v.

DEPARTMENT OF REVENUE,

State of Oregon,

Defendant-Respondent,

and

MARION COUNTY ASSESSOR,

Intervenor-Respondent.

(TC 5234, SC S063542)

En Banc

On appeal from Oregon Tax Court.*

Argued and submitted June 14, 2016.

Gina Anne Johnnie, Sherman, Sherman, Johnnie & 

Hoyt, LLP, Salem, argued the cause and filed the brief for 

appellant.

Robert M. Wilsey, Assistant Attorney General, Salem, 

argued the cause and filed the brief for respondent 

Department of Revenue. With him on the brief were Ellen F. 

Rosenblum, Attorney General, and Paul L. Smith, Deputy 

Solicitor General.

No appearance on behalf of respondent Marion County 

Assessor.

WALTERS, J.

The judgment of the Tax Court is reversed. The case is 

remanded to the Tax Court for further proceedings.

______________

* 22 OTR 102 (2015).
258 Habitat for Humanity v. Dept. of Rev.

Case Summary: Taxpayer sought direct judicial review of a decision by the 

Tax Court denying taxpayer’s eligibility under ORS 307.130(2)(a) for exemption 

from property taxes on a vacant lot upon which taxpayer intended to construct 

low-income housing. Held: taxpayer’s primary charitable purpose and integrated 

activities as a property developer established that the vacant lot at issue was 

actually and exclusively “used in the literary, benevolent, charitable or scientific 

work carried on” by taxpayer, as required by ORS 307.130(2)(a).

The judgment of the Tax Court is reversed. The case is remanded to the Tax 

Court for further proceedings.
Cite as 360 Or 257 (2016) 259

WALTERS, J.

In this direct appeal from the Regular Division 

of the Tax Court (Tax Court), we consider whether taxpayer, Habitat for Humanity of the Mid-Willamette Valley 

(Habitat), is entitled to an exemption from property taxes 

assessed on a vacant lot that it owned. During the relevant 

time, Habitat intended to build a home on the lot but had 

not yet started construction. The Marion County Assessor 

(the county) denied Habitat’s application for a tax exemption under ORS 307.130(2)(a), which provides nonprofit 

institutions with a tax exemption on “such real or personal 

property, or proportion thereof, as is actually and exclusively occupied or used in the literary, benevolent, charitable or scientific work carried on by such institutions.” The 

Tax Court affirmed, holding that Habitat was not using the 

vacant lot to carry out its charitable work at the time of the 

assessment. For the reasons stated below, we disagree and 

reverse the Tax Court’s ruling.

The parties do not dispute the relevant facts. 

Habitat is a nonprofit corporation. According to the stipulated facts, Habitat’s articles of incorporation state that one 

of its purposes is to acquire vacant lots and build affordable 

housing on those lots. Consistent with that, in September 

2012, Habitat acquired a residentially zoned vacant lot in 

Marion County for “the sole purpose of later building a residential home on it using volunteer labor and selling it to a 

low-income family at a price below market.” In August 2013, 

Habitat applied to the county for an exemption from 2013-14 

property taxes under ORS 307.130(2)(a), which provides,

“[T]he following property owned or being purchased by 

art museums, volunteer fire departments, or incorporated 

literary, benevolent, charitable and scientific institutions 

shall be exempt from taxation:

“(a) *** [O]nly such real or personal property, or proportion thereof, as is actually and exclusively occupied or 

used in the literary, benevolent, charitable or scientific 

work carried on by such institutions.”

Later that month, the county denied Habitat’s exemption 

application, stating that the lot was not being “‘actually and 

exclusively occupied or used’ for the charitable purpose of 
260 Habitat for Humanity v. Dept. of Rev.

providing homes to the needy.” In September 2013, Habitat 

applied for a building permit. Upon receiving the building 

permit in October 2013, Habitat began constructing a home 

on the property.

Habitat appealed the denial of the exemption request 

to the Magistrate Division of the Tax Court. “The burden of 

establishing entitlement to an exemption is on the taxpayer 

claiming the exemption.” Dove Lewis Mem’l Emergency 

Veterinary Clinic, Inc. v. Dept. of Rev., 301 Or 423, 426-27, 

723 P2d 320 (1986). The magistrate held that, as a matter of law, Habitat failed to establish its entitlement to an 

exemption; accordingly, it denied Habitat’s motion for summary judgment and granted the cross-motion for summary 

judgment filed by the county and intervenor Department of 

Revenue (the department). Habitat for Humanity of the MidWillamette Valley v. Marion Cty. Assessor, TC-MD 130518C, 

2014 WL 3890325 (Or Tax M Div, Aug 8, 2014). Habitat then 

appealed to the Regular Division of the Tax Court, which 

also denied Habitat’s motion for summary judgment and 

granted the department’s cross-motion for summary judgment. Habitat for Humanity v. Dept. of Rev., 22 OTR 102 

(2015).

In reaching that result, the Tax Court relied on this 

court’s case law interpreting ORS 307.130(2)(a), which the 

Tax Court read as precluding an exemption for vacant land. 

Id. at 104 (citing Emanuel Lutheran Charity Bd. v. Dept. of 

Rev., 263 Or 287, 502 P2d 251 (1972)). Further, the Tax Court 

contrasted the statutory language in ORS 307.130(2)(a), 

which refers to real property being “occupied or used,” with 

other exemption statutes that distinguish between “using” 

property and “holding” property. Id. at 104-05. Based on 

that analysis, the Tax Court entered a general judgment 

in favor of the department, reasoning that Habitat did not 

qualify for an exemption under ORS 307.130(2)(a) because 

Habitat was merely holding its land rather than using it.

Habitat directly appealed that decision to this 

court. See ORS 305.445 (authorizing such appeals). This 

court’s review of a Tax Court decision is “limited to errors or 

questions of law or lack of substantial evidence in the record 

to support the tax court’s decision or order.” ORS 305.445. 
Cite as 360 Or 257 (2016) 261

Because this is an appeal from a grant of summary judgment, the issue presented is a question of law: whether the 

Tax Court erred in concluding that there was no genuine 

issue of material fact and that the department was entitled to judgment as a matter of law. TCR 47 C (standard 

for granting summary judgment); see also Tektronix, Inc. v. 

Dept. of Rev., 354 Or 531, 533, 316 P3d 276 (2013) (applying 

standard). As noted above, the parties do not dispute the relevant facts. The question before us is whether, under those 

undisputed facts, the Tax Court correctly interpreted and 

applied the relevant exemption provision, ORS 307.130(2)(a),

in determining that the department was entitled to judgment as a matter of law.

On that question, the parties dispute whether, 

the lot at issue was “actually and exclusively occupied or 

used” by Habitat in carrying on its charitable works. ORS 

307.130(2)(a). That is a question of statutory interpretation. 

In attempting to resolve questions of statutory interpretation, our goal is to discern what the legislature intended a 

provision to mean by reviewing the text in context as well as 

any pertinent legislative history. Comcast Corp. v. Dept. of 

Rev., 356 Or 282, 295, 337 P3d 768 (2014). If the legislature’s 

intent remains unclear, then we resolve any ambiguity by 

applying appropriate canons of statutory construction. State 

v. Gaines, 346 Or 160, 172, 206 P3d 1042 (2009).

However, “[w]e also consider this court’s prior construction of the statutes at issue.” State v. McAnulty, 356 Or 

432, 441, 338 P3d 653 (2014), cert den, 136 S Ct 34, 193 L Ed

2d 48 (2015); see also Liberty Northwest Ins. Corp., Inc. v. 

Watkins, 347 Or 687, 692, 227 P3d 1134 (2010) (“As part of 

the first level of analysis, this court considers its prior interpretations of the statute.”). This court has construed the relevant exemption provision in numerous previous decisions. 

See YMCA v. Dept. of Rev., 308 Or 644, 651, 784 P2d 1086 

(1989) (so stating and examining history of the tax exemption statute).1

 When a prior construction implicates the

1 In reaching those prior constructions, the court has frequently stated that 

tax exemption statutes are subject to the rule of “strict but reasonable construction.” See, e.g., Emanuel Lutheran, 263 Or at 291 (applying rule); Willamette Univ. 

v. Tax Com., 245 Or 342, 344, 422 P2d 260 (1966) (same); Multnomah School of 

Bible v. Multnomah Co., 218 Or 19, 28, 343 P2d 893 (1959) (same). The rule of 
262 Habitat for Humanity v. Dept. of Rev.

interpretative question before us, “the court may consider 

itself bound to follow a prior construction as a matter of stare 

decisis.” Halperin v. Pitts, 352 Or 482, 492, 287 P3d 1069 

(2012); see also Farmers Ins. Co. v. Mowry, 350 Or 686, 695-

96, 261 P3d 1 (2011) (discussing common considerations that 

arise when determining the weight of a previous decision).

According to the department, the Tax Court correctly concluded that our case law resolves the dispute presented by this case. Like the Tax Court, the department 

maintains that this court’s decision in Emanuel Lutheran, 

263 Or 287, establishes a bright-line rule precluding a property tax exemption, under ORS 307.130(2)(a), for vacant lots 

and requiring at least that the taxpayer have a building 

under construction on the property before the taxpayer may 

be eligible for the exemption.

In Emanuel Lutheran, the taxpayer operated a nonprofit hospital and had purchased lots around the hospital 

for future expansion of the existing hospital. 263 Or at 288-

89. There was no dispute that once those new buildings 

were completed, the hospital could receive a tax exemption 

for those properties. Nevertheless, the department argued 

that the hospital was not yet entitled to an exemption on the 

surrounding lots because the lots were vacant at the time of 

the assessment.

The hospital countered that the tax exemption 

provision extended to property being prepared to serve a 

charitable purpose. The hospital based that argument on 

Willamette Univ. v. Tax Com., 245 Or 342, 422 P2d 260 

(1966), in which the court held that a university was entitled to a property tax exemption for four parcels of land 

strict but reasonable construction is generally in accord with the methodology 

noted above. “Strict but reasonable means merely that the statute will be construed reasonably to ascertain the legislative intent, but in case of doubt will 

be construed against the taxpayer.” Emanuel Lutheran, 263 Or at 291. In other 

words, the court starts by attempting to ascertain legislative intent because “the 

intention of the legislature must be the primary objective sought.” Willamette 

Univ., 245 Or at 344. But if the court cannot discern the legislative intent, then 

the court resolves any ambiguity by applying appropriate canons of statutory 

construction. One canon available in tax exemption cases is the canon “that statutes providing exemption from taxation are to be strictly construed” against the 

taxpayer and in favor of the state. Id.
Cite as 360 Or 257 (2016) 263

upon which the university had begun constructing student

housing buildings.2 Id. at 344. In doing so, the court determined that the phrase “actually occupied and used,” as 

it appears in the tax exemption statute, is not limited to 

property that directly carries out the taxpayer’s charitable 

purposes but also includes property “then being prepared 

to carry out the purposes of the exempt charity.” Id. at 349. 

Because the university was in the process of constructing 

buildings intended to advance its educational purposes, 

there was no dispute that the property met that standard—

i.e., that the property was “being prepared to carry out the 

purposes of the exempt charity.” Id. As a result, the court 

held that the property at issue was “being occupied and 

used” to carry on the university’s educational purposes. Id.

at 346.

Like the taxpayer in Willamette Univ., the hospital 

in Emanuel Lutheran sought a tax exemption for property 

that it was not yet occupying or using to directly carry out 

its charitable purposes—namely, providing medical services to patients as well as teaching and research services. 

Emanuel Lutheran, 263 Or at 288-89. Nevertheless, the hospital argued that, like the taxpayer in Willamette Univ., it 

was entitled to an exemption because it was preparing the 

property to serve those purposes. However, unlike the taxpayer in Willamette Univ., the hospital in Emanuel Lutheran

had not yet begun construction of the new buildings that 

would serve its charitable purposes. Instead, the hospital 

was “preparing” the property to serve its charitable purposes only “in the sense that it was taking steps under its 

master plan to procure detailed plans and financing.” Id. at 

291. Thus, at the time of the assessment, the hospital’s lots 

remained “vacant awaiting future use.” Id. at 289.

This court rejected the hospital’s argument and 

refused to extend the holding of Willamette Univ. to preparations so far removed from a taxpayer’s charitable purpose:

2 There was also in dispute a fifth parcel of land that provided parking to 

those working on the construction project. Whether the parking lot justified 

tax exemption depended on whether the buildings under construction justified 

a tax exemption, because the tax exemption statute provided a separate paragraph exempting parking lots used in conjunction with charitable works. ORS 

307.130(1)(b) (1955), renumbered as ORS 307.130(2)(b).
264 Habitat for Humanity v. Dept. of Rev.

“By requiring that exempt property be actually occupied for 

charitable or other exempt purposes the legislature must 

have meant something more than mere ownership or even 

ownership with an intent to put the land to an exempt use 

in the future. Actual occupancy must mean as a minimum 

that the land be occupied by a building under construction.”

Id. at 291-92. According to the court, “land merely being 

held for future use is not being actually occupied or used 

for the benevolent or charitable work carried on by [the hospital].” Id. at 292. The court therefore concluded that the 

hospital was not entitled to tax exemption on the vacant lots 

at issue in that case.

In this case, as noted above, the department reads 

Emanuel Lutheran as creating a bright-line rule: To be eligible for the exemption, property must at least have a building 

under construction. The department concludes that, because 

Habitat had not yet started construction at the time of the 

assessment at issue in this case, Habitat’s property is like 

the nonexempt lots in Emanuel Lutheran rather than the 

exempt lots in Willamette Univ., thus preventing Habitat 

from establishing its eligibility for exemption.

Habitat does not ask us to overrule Emanuel Lutheran.

Instead, it contends that the department misreads Emanuel 

Lutheran as turning entirely on the fact that the property 

in that case was vacant, rather than considering how the 

vacant property fit within the hospital’s charitable works. 

Habitat insists that the scope of the exemption statute 

should be defined by the specific works carried on by a specific taxpayer. Thus, according to Habitat, whether property 

is “actually and exclusively occupied or used in the literary, 

benevolent, charitable or scientific work carried on by such 

institutions” will differ depending on the nature of the work 

that a taxpayer carries on and the relationship between that 

work and the property at issue. ORS 307.130(2)(a).

On that point, Habitat is correct. As this court said 

in Multnomah School of Bible v. Multnomah Co., 218 Or 19, 

28, 343 P2d 893 (1959), the scope of the exemption statute is 

defined by

“the primary purpose for which the institution was organized and includes any property of the institution used 
Cite as 360 Or 257 (2016) 265

exclusively for any facility which is incidental to and reasonably necessary for the accomplishment and fulfillment 

of the generally recognized functions of such a charitable 

institution.”

Id. at 36-37.

In Multnomah School of Bible, a county refused to 

exempt two properties that a college was using as residences 

for its dining hall supervisor and superintendent of buildings. Id. at 37. The court held that, although the school did 

not use the property to directly provide educational instruction, the school was entitled to an exemption. Id. In reaching 

that result, the court avoided broad categorical rules and, 

instead, attempted to follow “a road distinguished for its 

appreciation of common sense and reason.” Id. at 33. The 

court reasoned that because the taxpayer was a college, the 

exemption extended to “‘any facilities which are reasonably necessary for the fulfillment of a generally recognized 

function of a complete modern college.’” Id. at 30 (quoting 

Church Divinity Sch. of Pac. v. Alameda Cty., 152 Cal App 

2d 496, 502, 314 P2d 209 (1957)). One reasonably necessary 

function of a college, the court said, is “the continuance of 

the health, safety and comfort of its students while under 

its domain and to the extent reasonably necessary to afford 

such protection by the proper maintenance of its plant and 

without interruption or delay in the use of its institutional 

facilities.” Id. at 37. And, according to the court, that function was advanced by having staff live near the facilities 

that they served. Id. (“[I]t [is] highly expedient that they 

should reside where they do and not elsewhere.”).

Thus, the court’s decision in Multnomah School of 

Bible turned on the specific charitable purposes of the taxpayer and the function of the property to serve those purposes. Similarly, in Emanuel Lutheran, the court defined the 

scope of the exemption with reference to the hospital’s charitable works. 263 Or at 289 (“The simple issue is whether the 

property on the assessment date was ‘actually and exclusively occupied or used’ by Emanuel in the benevolent and 

charitable work carried on by it.” (Emphasis added.)); id. at 

292 (“[L]and merely being held for future use is not being 

actually occupied or used for the benevolent or charitable 
266 Habitat for Humanity v. Dept. of Rev.

work carried on by [the hospital].” (Emphasis added.)). Just 

as a taxpayer’s entitlement to an exemption for staff residences turns on the taxpayer’s charitable purposes, so too 

does a taxpayer’s entitlement to an exemption for vacant 

land. A different taxpayer having charitable purposes different from those of the college in Multnomah School of 

Bible, would not necessarily be entitled to an exemption 

for staff residences. And, similarly, just because the court 

determined in Emanuel Lutheran that a hospital was not 

occupying or using vacant land in carrying on its charitable 

works does not mean that a different taxpayer with different 

charitable purposes also must be denied an exemption for its 

vacant land.

In Emanuel Lutheran, the court held that the hospital’s primary charitable purposes were medical, research, 

and teaching services. The hospital’s charitable work was 

not building a hospital facility, but operating a hospital. The 

purpose of the hospital facility was to provide a location for 

the hospital’s future charitable works. Thus, developing land 

to add more hospital space might allow a hospital to do more 

charitable work, but the development of the land was not 

itself the hospital’s charitable work. Nevertheless, the court 

did not require that the hospital actually complete development of the land and conduct medical, research, and teaching services on the land in order to obtain the exemption 

it sought. Rather, the court required only that the hospital 

take a preparatory step toward completing the development 

of its land and toward conducting its charitable activities; 

the court required that the hospital demonstrate that the 

facility be under construction.

In contrast, here, Habitat’s charitable work is

the acquisition and development of land. As noted above, 

Habitat’s primary charitable purpose is to acquire vacant 

lots and to build housing on those lots for sale to low-income 

families at below market prices. Habitat does not use buildings that it constructs to house its charitable operations. 

Instead, the land that Habitat acquires and the buildings 

that it constructs are Habitat’s charitable works. Thus, 

unlike the hospital in Emanuel Lutheran, Habitat directly 

performs its charitable works when it acquires and develops 
Cite as 360 Or 257 (2016) 267

property. Once the development is completed, Habitat sells 

homes to individuals, who then pay property taxes on them. 

Said another way, Habitat does not acquire land as a preparatory step in completing a facility that it will use in the 

future for its charitable activities; when Habitat acquires 

and develops land it is presently using that land to conduct 

its charitable activities.

To a property developer, like Habitat, vacant lots 

are its stock in trade. It maintains a stock of vacant lots 

to be developed as resources become available. To continue 

the comparison with a hospital, Habitat uses vacant lots 

the same way that a hospital uses medications. A hospital 

makes present use of medications not only when its physicians or nurses administer them to specific patients, but 

also when the hospital acquires and maintains them as part 

of its inventory. Similarly, Habitat makes present use of its 

vacant lots not only when it sells homes to low-income families, but also when it acquires and maintains those lots, 

even if it cannot immediately begin construction on each of 

them.

Although each lot is assessed individually, the court 

determines exemption eligibility—that is, whether the property is being occupied or used to carry on a taxpayer’s charitable works—by considering how each lot fits within the taxpayer’s entire charitable enterprise. In Multnomah School of 

Bible, this court instructed that “‘[t]he integrated activities 

[of an institution] as a whole must be examined.’” 218 Or 

at 30 (quoting Serra Retreat v. Los Angeles Cty., 35 Cal 2d 

755, 757, 221 P2d 59 (1950)). The charitable use of the staff 

residences in that case could only be established by looking 

at the role of those residences in the overall operations of the 

college.

When we correctly consider Habitat’s integrated 

activities as a property developer, as well as its primary 

charitable purpose, it is apparent that the real property 

at issue was actually and exclusively “used in the literary, benevolent, charitable or scientific work carried on” by 

Habitat. ORS 307.130(2)(a). As a result, we hold that, at the 

time of the assessment, Habitat was entitled to receive the 

tax exemption that the county denied.
268 Habitat for Humanity v. Dept. of Rev.

The Tax Court, therefore, erred by denying Habitat’s 

motion for summary judgment and by granting the department’s cross-motion for summary judgment.

The judgment of the Tax Court is reversed. The 

case is remanded to the Tax Court for further proceedings.