Present: All the Justices 

CHILDREN, INCORPORATED 

v. Record No. 950441 OPINION BY JUSTICE ELIZABETH B. LACY 

 January 12, 1996 

CITY OF RICHMOND 

 FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND 

Randall G. Johnson, Judge 

 Children, Incorporated (Children) filed an application 

pursuant to Code § 58.1-3984 for relief from tax assessments 

levied by the City of Richmond for tax years 1989 through 1993. 

 Children, a charitable organization, challenged assessments 

which taxed personal property it owned and used in its 

charitable activities. Children asserted that it was entitled 

to a tax exemption under the second clause of Article X, 

Section 6(f), of the 1971 Constitution of Virginia, generally 

referred to as the "grandfather clause." Based on stipulated 

facts and argument of counsel, the trial court determined that 

personal property owned by Children on July 1, 1971, the 

effective date of the 1971 Constitution, was exempt from 

taxation under the grandfather clause, but that personal 

property obtained after that date was not exempt. Children 

appealed, assigning error to that portion of the trial court's 

judgment holding that personal property acquired after 1971 was 

not exempt from taxation. Because we find that Children met 

its burden to show that personal property it acquired after 

July 1, 1971, was entitled to a tax exemption, we will reverse 

the judgment of the trial court. 

 The grandfather clause in Article X, Section 6(f), of the 
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1971 Constitution of Virginia provides that 

 all property exempt from taxation on the effective 

date of this section shall continue to be exempt 

until otherwise provided by the General Assembly as 

herein set forth. 

Children claims that on the effective date of the 1971 

Constitution it was entitled to a tax exemption under § 183(f) 

of the 1902 Constitution of Virginia and former Code § 58-12(6) 

for the personal property it owned and used for its charitable 

purposes.1

 The grandfather clause preserved this exemption, 

Children argues, for the personal property it acquired after 

July 1, 1971, and presently uses in its charitable activities.2

 1Section 183(f) of the 1902 Constitution provided a tax 

exemption for 

 [b]uildings with the land they actually occupy, and 

the furniture and furnishings therein belonging to 

any benevolent or charitable association and used 

exclusively for lodge purposes or meeting rooms by 

such association, together with such additional 

adjacent land as may be necessary for the convenient 

use of the buildings for such purposes. 

This subsection along with the other subsections of § 183 were 

codified in former Code § 58-12. It now appears as paragraph 

(A)(7) of Code § 58.1-3606. 

 2Precisely which exemptions were preserved by the 

grandfather clause has been the subject of considerable debate. 

 The primary dispute centered on whether the word "property" as 

used in the clause meant the continuation of a tax exemption 

for the classes of property contained in § 183 of the 1902 

Constitution or whether it meant preservation of a tax 

exemption for only a specific piece of property which was 

treated as exempt under § 183 on July 1, 1971. Various 

interpretations and applications of the clause and its 

corresponding legislation have been advanced by commentators, 

legislative reports, and opinions of Attorneys General. See 

Note, Property Tax Exemptions for Charitable, Benevolent, and 

Religious Organizations in Virginia, 71 Va. L. Rev. 601 (1985), 

for an extensive description and discussion of the history of 
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 The exemptions preserved by that clause, however, continued 

only "until otherwise provided by the General Assembly." Va. 

Const. art. X, § 6(f). As pointed out and relied on by the 

parties here, the General Assembly has enacted and amended the 

relevant tax exemption statutes over the years. Thus, we must 

first determine whether the grandfather clause has been 

superseded by legislation and, if so, how such legislation 

affects the tax exemption sought by Children in this case. 

 The General Assembly amended Code § 58.1-3606 and its 

predecessors in 1972, 1973, 1974, 1984, and 1985. Acts 1972, 

ch. 667 at 887; Acts 1973, ch. 438 at 641; Acts 1974, ch. 469 

at 907; Acts 1984, ch. 675 at 1406; Acts 1985, ch. 495 at 801. 

 These amendments basically continued the codification of the 

list of property classes exempt from taxation under § 183 of 

the 1902 Constitution of Virginia. 

 The legislative changes relevant to our inquiry affected 

that portion of the statute preceding the list of exempt 

property classes. From 1972 through 1984, Code § 58.1-3606 

began as follows: 

 The following classes of real and personal property, 

which were exempt from taxation on July 1, 1971, 

shall continue to be exempt from taxation under the 

rules of statutory construction applicable to exempt 

property prior to such date: . . . . 

This language perpetuated exemptions available under the 1902 

the grandfather clause and relevant legislative reports, cases, 

and legislation. 
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Constitution and continued by the grandfather clause. As 

indicated previously, the specific contours of the exemption 

were subject to debate; nevertheless, there was agreement that 

the exemptions were available only to organizations that 

existed on July 1, 1971. Westminster-Canterbury v. City of 

Virginia Beach, 238 Va. 493, 501, 385 S.E.2d 561, 565 (1989); 

1983-84 Op. Att'y Gen. 362-63; 1977-78 Op. Att'y Gen. 416. 

 In 1985, the General Assembly amended that portion of the 

section preceding the list of exempt property classes to read 

as follows: 

 A. Pursuant to the authority granted in Article X, 

Section 6(a)(6) of the Constitution of Virginia to 

exempt property from taxation by classification, the 

following classes of real and personal property shall 

be exempt from taxation: . . . . 

Code § 58.1-3606(A). This amendment was significant because it 

stated a specific legislative intent to exercise the authority 

under Article X, Section 6(a)(6) to create new property 

exemptions by classification.3 The exemptions under this 

section were no longer limited to any specific date. Property 

qualifying under one of the listed classes "shall be exempt 

from taxation" regardless of when the organization seeking the 

exemption was created or the property acquired. See

 

 3Article X, Section 6(a)(6) authorizes the General 

Assembly to exempt by classification "[p]roperty used by its 

owner for religious, charitable, patriotic, historical, 

benevolent, cultural, or public park and playground purposes." 

 The exemption must be passed by three-fourths vote of the 

members of each house. 
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Westminster-Canterbury, 238 Va. at 498-502, 385 S.E.2d at 563-

66 (applying Code § 58.1-3606(A)(5) to post-1971 organization). 

 Thus, the 1985 amendment expanded or created new property tax 

exemptions. 

 The amendment creating the new exemptions did not alter 

the list of exempt classes of property; however, it did alter 

the standard for construing those exempted classes. Under both 

the 1902 Constitution and the grandfather clause, the 

exemptions were liberally construed. The 1971 Constitution, 

however, required that tax exemptions enacted under Article X, 

Section 6(a)(6) be strictly construed. Va. Const. art. X, 

§ 6(f). A major effect of the 1985 amendments to Code § 58.1-

3606, therefore, was the imposition of a rule of strict 

construction upon the tax exemption classifications. See

Westminster-Canterbury, 238 Va. at 501, 385 S.E.2d at 565. 

 This new canon of construction had the potential to 

seriously disrupt the exemptions granted to and enjoyed by 

numerous organizations under the 1902 Constitution and the 

grandfather clause. For example, under a liberal construction, 

an organization qualified as "charitable" if it was "organized 

and conducted to perform some service of public good or 

welfare." City of Richmond v. United Givers Fund, 205 Va. 432, 

436, 137 S.E.2d 876, 879 (1964). Property was considered to be 

used "exclusively" for the charity's purposes if charity was 

the dominant use of the property. Id. at 438, 137 S.E.2d at 
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880. A strict construction of these terms could result in a 

different conclusion. See, e.g., Westminster-Canterbury, 238 

Va. at 501, 385 S.E.2d at 565 (applying strict construction of 

"exclusively" as used in Code § 58.1-3606(A)(5)). 

 The General Assembly addressed this potential problem by 

adding subsection B to Code § 58.1-3606. That subsection 

provides: 

 B. Property, belonging in one of the classes listed 

in subsection A of this section, which was exempt 

from taxation on July 1, 1971, shall continue to be 

exempt from taxation under the rules of statutory 

construction applicable to exempt property prior to 

such date. 

Thus, the rule allowing liberal construction of exemptions was 

preserved under certain circumstances.4 Those circumstances 

are plainly and unambiguously set out, avoiding the uncertainty 

generated by the word "property" in the grandfather clause. 

Property, as used in subsection B, belongs "to a class"; it 

does not mean "a class of property." Thus, the word property 

refers to a specific piece of real or personal property. 

 Subsection B limits the use of liberal rules of 

construction to circumstances involving a specific piece of 

property that (i) belongs to one of the classes described in 

subsection A, and (ii) was exempt from taxation on July 1, 

 

 4Applying a liberal construction in this instance does not 

conflict with the constitutional requirement of strict 

construction. Subsection B does not create any new exemptions 

under the 1971 Constitution, but merely continues pre-1971 

exemptions preserved by the grandfather clause. 
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1971. Requiring a piece of property to be exempt on a specific 

date presumes that the property existed on that date. And, 

because tax exemptions do not run with property, see Code 

§ 58.1-3601, an organization must have owned the piece of 

property on July 1, 1971, to qualify for a tax exemption under 

the liberal construction allowed by subsection B. 

 In summary, the 1985 amendments to Code § 58.1-3606 under 

the authority of Article X, Section 6(f) created exemptions by 

classification for classes of property owned and used by 

certain benevolent, charitable, and other organizations. The 

exemptions must be strictly construed, unless subsection B is 

applicable to the claimed exemption. In that case, liberal 

rules of construction may be applied. 

 Subsection B is the legislative disposition anticipated in 

the grandfather clause, which "otherwise provided" for the 

exemptions initially addressed and preserved by the grandfather 

clause. Thus, while the exemption Children seeks in this case 

has its historical roots in the grandfather clause and § 183(f) 

of the 1902 Constitution, it is governed by the current 

provisions of Code § 58.1-3606. 

 Applying these principles to the present case, we conclude 

that, because the specific personal property at issue here did 

not exist and therefore could not have been exempt from 

taxation on July 1, 1971, the tax exemption sought by Children 

is not entitled to liberal rules of statutory construction 
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under subsection B. Nevertheless, Children may be entitled to 

an exemption for that property if the property belongs to one 

of the classes in subsection A, applying a strict construction. 

 As mentioned earlier, Children's exemption is based on the 

class of property currently contained in paragraph 7 of Code 

§ 58.1-3606(A). That paragraph provides a tax exemption for 

the following: 

 Buildings with the land they actually occupy, and the 

furniture and furnishings therein belonging to any 

benevolent or charitable organization and used by it 

exclusively for lodge purposes or meeting rooms 

. . . . 

The parties in this case have stipulated that Children is a 

charitable organization and that its personal property "has 

continuously been used since it was acquired as a part of 

[Children's] charitable operation, . . . [that] the tangible 

personalty is used in the various facets of the charitable 

operation . . . . [and that it] is used for meetings and 

conferences" of the organization with staff, donors, and 

prospective donors. There is no evidence that the personal 

property was used for any purpose other than Children's 

charitable purposes. Therefore, we conclude that Children met 

its burden of establishing that it was entitled to a tax 

exemption for personal property acquired after July 1, 1971, 

which it used exclusively for its charitable purposes pursuant 

to Code § 58.1-3606(A)(7). 

 Accordingly, we will reverse that part of the judgment of 
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the trial court holding that personal property acquired after 

July 1, 1971, was not exempt from property tax by the City of 

Richmond. 

 Affirmed in part,

reversed in part,

and final judgment.