Opinion ID: 2302502
Heading Depth: 1
Heading Rank: 1

Heading: Whether RSA 72:23, III Fully Exempts Houses of Worship from Taxation

Text: The statutory provision setting forth the tax exemption at issue states in pertinent part: The following real estate and personal property shall, unless otherwise provided by statute, be exempt from taxation:... . . . Houses of public worship, parish houses, church parsonages occupied by their pastors, convents, monasteries, buildings and the lands appertaining to them owned, used and occupied directly for religious training or for other religious purposes by any regularly recognized and constituted denomination, creed or sect, organized, incorporated or legally doing business in this state and the personal property used by them for the purposes for which they are established. RSA 72:23, III. Assembly argues that, pursuant to the last antecedent rule of statutory construction, see Gen. Insulation Co. v. Eckman Constr., 159 N.H. 601, 610, 992 A.2d 613 (2010), courts should construe statutes so that a modifying clause is confined to the last antecedent unless there is something in the subject matter or dominant purpose which requires a different interpretation. Mt. Valley Mall Assocs. v. Municipality of Conway, 144 N.H. 642, 652, 745 A.2d 481 (2000) (quotation omitted). Thus, it urges us to read RSA 72:23, III as creating five religious use exemptions that are not modified by the clause owned, used and occupied directly for religious training or for other religious purposesthat is, [h]ouses of public worship, parish houses, church parsonages occupied by their pastors, convents, and monasteries. It argues that the clause modifies only the last category of propertythat is, buildings and the lands appertaining to them. Thus, once a structure is determined to be among the first five enumerated categories, it is automatically exempt from taxation, and any analysis of the extent to which it is owned, used and occupied for religious purposes is improper. Moreover, Assembly maintains that qualification as one of these first five enumerated structures is essentially definitional: [I]f the building, owned by the church, is its `house of public worship[,]' it is used and occupied for a religious purpose, and room-by-room scrutiny is inappropriate, unworkable, and unconstitutional. The City counters that, reading the statute as a whole, the qualifying phrase owned, used and occupied directly for religious training or other religious purposes is intended to modify all of the enumerated properties set forth in RSA 72:23, III, including houses of public worship. In matters of statutory interpretation, we are the final arbiters of the legislature's intent as expressed in the words of the statute considered as a whole. Appeal of City of Nashua, 155 N.H. 443, 445, 924 A.2d 418 (2007). When examining the language of a statute, we ascribe the plain and ordinary meaning to the words used. Id. We interpret legislative intent from the statute as written and will not consider what the legislature might have said or add language that the legislature did not see fit to include. Id. In construing a religious exemption statute, we adopt neither a liberal attitude because it is a charity, nor a hostile attitude because it seeks exemption from taxation. Id. We review legislative history to aid our analysis when the statutory language is ambiguous or subject to more than one reasonable interpretation. First Berkshire Bus. Trust v. Comm'r, N.H. Dep't of Revenue Admin., 161 N.H. 176, 180, 13 A.3d 232 (2010). Both the City's and Assembly's constructions of RSA 72:23, III are reasonable. Accordingly, the language of RSA 72:23, III is ambiguous. See id. We implicitly construed a prior version of the statute as urged by the City. In Alton Bay Camp Meeting Association v. Town of Alton, 109 N.H. 44, 242 A.2d 80 (1968), the version of RSA 72:23, III then in effect exempted from taxation houses of public worship, parish houses, church parsonages occupied by their pastors, convents, monasteries, buildings used principally for religious training or for other religious purposes, and the lands thereto appertaining owned and occupied by any regularly recognized and constituted denomination. (Quotation omitted; emphasis added.) We held that the statute required the applicant to establish that the purportedly exempt land be `appertaining' to one or more of the types of buildings specified as exempt in RSA 72:23[,] III. Alton Bay, 109 N.H. at 49, 242 A.2d 80 (emphasis added). By considering the modifying clause, lands thereto appertaining to govern exemptions for land appertaining to one or more of the enumerated types of buildings specified as exempt in RSA 72:23, id., we implicitly interpreted RSA 72:23, III as setting forth a list of properties all of which are subject to a subsequent modifying clause. We now explicitly adopt the statutory construction we impliedly adopted in Alton Bay. We recognize that the statute has been amended since our holding in Alton Bay, and we consider those amendments in our analysis of legislative intent. As we have previously noted: Examining the legislative history of the statute, we discover there have been no significant changes in its wording since our ruling in Alton Bay. In 1994, RSA 72:23, III was amended from exempting buildings used principally for religious training or for other religious purposes, and the lands thereto appertaining owned and occupied by [a religious organization] to exempting buildings and the lands appertaining to them owned, used and occupied directly for religious training or for other religious purposes. This language merely clarifies that land owned by religious organizations must be used and occupied directly for religious purposes. Accord N.H.H.R. Jour. 579-80 (1994). E. Coast Conf. of the Evangelical Covenant Church of America v. Town of Swanzey, 146 N.H. 658, 663, 786 A.2d 88 (2001) (quotations omitted; emphasis added). Assembly points to our holding in St. Paul's Church v. Concord, 75 N.H. 420, 75 A. 531 (1910), to support its argument that a house of public worship is, by definition, exempt from taxation in its entirety. When we issued our opinion in St. Paul's Church, the religious exemption statute provided: Real estate ... is liable to be taxed, except houses of public worship. St. Paul's Church, 75 N.H. at 421, 75 A. 531 (quotation omitted). In analyzing the legislative intent underlying that version of the statute, however, we held: If the house serves all the religious purposes for which it was designed and is not appropriated to other uses in the sense of a substantial exclusion of the religious use from any part of it, no reason is apparent why it does not promote all the uses which the legislature had in mind when it was exempted as a house of public worship. In this view, it is exclusively used as such a house. So long as the church organization occupies it for such public services of a religious character as it deems useful and desirable and as the building is adapted to subserve, to the exclusion of all secular uses, it is used exclusively as a house of public worship. Id. at 425, 75 A. 531 (emphases added). Thus, even in that case, before intervening amendments, we recognized that applying the statutory tax exemption required analyzing the religious and secular uses of various portions of a building purported to be a house of public worship. Nor are we persuaded by Assembly's analysis of the legislative history of the current statute. Assembly contends that the 1994 statutory amendments were not intended to change the application of the exemption to `houses of public worship' or any of the other specifically listed properties, and that, therefore, the legislative history supports its contention that a house of public worship is entitled to a blanket exemption from taxation. The legislature enacted amendments in 1994, relative to the tax exempt status of certain properties, N.H.H.R. Jour. 579 (1994), which increased restrictions on the granting of property tax exemptions on property owned by churches. Id. at 580. As the report from the House Municipal and County Government Committee explained: While this bill touches a lot of nerves, testimony confirmed the base argument: exemption laws, as they now exist, leave a great deal of uncertainty for those who have to enforce them. The bill, as amended, intends to remove those uncertainties without removing the traditional exemptions for which there is broad public support. Its effect will be to close loopholes and protect against abuse. Id. at 579. The amendments included adding the following provision: The exemptions afforded by RSA 72:23 ... shall be construed to confer exemption only upon property which meets requirements of the statute under which exemption is claimed. The burden of demonstrating the applicability of any exemption shall be upon the claimant. Id. at 580. Other amendments also undermine Assembly's argument that a tax assessing body should simply accept a religious entity's assertion that a particular building represents a house of public worship and is, thus, exempt. Before the 1994 amendments, the statute required religious entities to submit a list of properties for which a tax exemption was claimed. However, pursuant to the amendments, City assessors... and other officials having power to act under the provisions of this chapter to grant or deny tax exemptions to religious... organizations shall have the authority to request materials concerning the organization seeking exemption, as well as the nature of the property for which the exemption is claimed, and such other information as shall be reasonably required to make determinations of exemption of property under RSA chapter 72. RSA 72:23-c, II (2003). The amendments also provide that an organization's failure to provide such information within thirty days of a reasonable written request shall result in a denial of exemption. Id. The legislative scheme therefore does not support Assembly's argument that a church's assertion that a building constitutes a house of public worship is sufficient to place it beyond investigation. The statute provides that the City must determine whether a building owned by a religious entity is entitled to exemption because it is used and occupied directly for a religious purposean interpretation that our precedent, including St. Paul's Church and Alton Bay, supports. Accordingly, in light of the evidence that the legislative intent of the statute is to render all of the buildings specified in RSA 72:23, III subject to the modifier owned, used and occupied directly for religious ... purposes, the last antecedent rule does not require a contrary interpretation. See DeVere v. Attorney General, 146 N.H. 762, 768, 781 A.2d 24 (2001) (declining to apply the last antecedent rule where such an interpretation would be counter to legislative intent, as apparent from the statutory scheme). Having determined that the legislative intent supports the BTLA's interpretation of the statute, we turn to the question of apportionment. We have previously directly addressed this question. In this case, as in Appeal of Emissaries of Divine Light, [t]he taxpayer ... argues that the statute does not allow apportionment between exempt and non-exempt uses in religious exemption cases. Appeal of Emissaries of Divine Light, 140 N.H. 552, 556, 669 A.2d 802 (1995). As we explained in Emissaries of Divine Light, this assertion is unsupported by our case law. Id. We have previously recognized that certain property may be exempt, while other property, not used for religious activity, would not be exempt from taxation. Id. Additionally, in considering other statutory exemptions, we have consistently utilized apportionment when appropriate. We find nothing in the language of the religious exemption statute to suggest that the legislature intended to treat religious exemptions differently than other tax exemption statutes. Id. (citations omitted). Assembly seeks to distinguish Emissaries of Divine Light on the ground that the structures in that case were not among those enumerated in RSA 72:23, III. This argument is foreclosed by our holding today that the legislature did not intend that a house of public worship be evaluated differently from any other church-owned property; to be entitled to exemption any church-owned property must be owned, used and occupied directly for religious... purposes. The apportionment of exempt and non-exempt uses within a single building is also supported by our precedent. In Trustees Exeter Academy v. Exeter, we noted that a building partly used for exempt purposes and partly for taxable purposes clearly may receive a proportional division of value according to the parts assigned to the different uses. Trustees Exeter Academy v. Exeter, 90 N.H. 472, 503, 27 A.2d 569 (1940); see also Appeal of City of Concord, 161 N.H. 344, 353-54, 13 A.3d 186 (2011). We agree with the BTLA, however, that an apportionment inquiry must not be taken to an absurd extreme so that every square foot of a building is rigidly scrutinized. Rather, ... judgment is the touchstone.