Opinion ID: 2074724
Heading Depth: 1
Heading Rank: 3

Heading: our charitable exemption jurisprudence

Text: [¶ 12] To qualify for a benevolent and charitable property tax exemption, an applicant for exemption must demonstrate that two criteria are met. First, the property must be owned and occupied or used solely for their own purposes by benevolent and charitable institutions. 36 M.R.S. § 652(1)(A). Second, the institution claiming the exemption must be organized and conducted exclusively for benevolent and charitable purposes. 36 M.R.S. § 652(1)(C)(1) (2005). [¶ 13] In reviewing benevolent and charitable exemption issues, the word benevolent is construed as synonymous with the word charitable. Me. AFL-CIO Hous. Dev. Corp. v. Town of Madawaska, 523 A.2d 581, 584 (Me.1987). Accordingly, for purposes of analysis, the exemption at issue will be referred to as the charitable exemption. [¶ 14] We addressed the meaning of charitable or charity in Episcopal Camp Foundation, Inc. v. Town of Hope, 666 A.2d 108, 110 (Me.1995). There, quoting Johnson v. South Blue Hill Cemetery Ass'n, 221 A.2d 280, 287 (Me.1966), we stated that an activity, to be charitable, should be for the benefit of an indefinite number of persons, either by bringing their minds or hearts under the influence of education or religion, by relieving their bodies from disease, suffering, or constraint, by assisting them to establish themselves in life, or by erecting or maintaining public buildings or works or otherwise lessening the burdens of government. Episcopal Camp, 666 A.2d at 110. This language, while sounding somewhat stilted today, indicates that a religiously-affiliated activity may qualify as charitable when it benefits `an indefinite number of persons... by bringing their minds or hearts under the influence of ... religion, by relieving their bodies from disease, suffering, or constraint, by assisting them to establish themselves in life, or by ... otherwise lessening the burdens of government.' Id. (quoting Johnson, 221 A.2d at 287). [¶ 15] The reference to an indefinite number of persons is not a mandate that the activity be open to the public at large. The charitable exemption statute states that the right of exemption may not be denied by reason of limitation in the classes of persons for whose benefit such funds are applied. 36 M.R.S. § 652(1)(A). Thus, an exemption may be available to an organization that limits its benefits to a class of persons defined by a religious affiliation. A religious affiliation or religious purpose of an organization does not contradict its benevolent and charitable purpose, if its activities would otherwise qualify for the charitable exemption. Salvation Army v. Town of Standish, 1998 ME 75, ¶ 5, 709 A.2d 727, 729. [¶ 16] In reviewing whether a particular organization qualifies for a charitable exemption, we have indicated that the first issue to resolve is whether the organization's stated purpose is charitable within the meaning of the statute creating the exemption. Cushing Nature & Pres. Ctr. v. Town of Cushing, 2001 ME 149, ¶ 10, 785 A.2d 342, 345. Where an organization's stated purpose is deemed to be charitable, our analysis proceeds to an examination of the facts related to the organization's activities to determine if those activities qualify as charitable in nature. See id. ¶ 10, 785 A.2d at 346. [¶ 17] In Town of Poland v. Poland Spring Health Institute, Inc., 649 A.2d 1098, 1100 (Me.1994), we characterized an earlier opinion, Green Acre Baha'i Institute v. Town of Eliot, 150 Me. 350, 110 A.2d 581 (1954), as the seminal case for the determination of factual findings required to support a decision of entitlement to a property tax exemption. In Green Acre, we outlined the questions to be addressed for a religious organization's qualification for the charitable exemption as follows: In each situation where exemption is claimed, there must be a careful examination to determine whether in fact the institution is organized and conducting its operation for purely benevolent and charitable purposes in good faith, whether there is any profit motive revealed or concealed, whether there is any pretense to avoid taxation, and whether any production of revenue is purely incidental to a dominant purpose which is benevolent and charitable. When these questions are answered favorably to the petitioner for exemption, the property may not be taxed. 150 Me. at 354, 110 A.2d at 584. Among the properties ruled exempt in Green Acre, were two undeveloped woodland areas that were used for walks, prayer, meditation, outdoor meetings and recreation. Id. The property was used only in the summer. 150 Me. at 352, 110 A.2d at 583. [¶ 18] We have applied the criteria articulated in Green Acre to approve charitable exemptions in Poland Spring Health Institute, 649 A.2d at 1100, and Maine AFL-CIO Housing Development Corp., 523 A.2d at 584-85. In three recent opinions applying those criteria, organizations allowing use of property at reduced rates for recreation, retreat, and renewal activities, including organizations with a religious affiliation, have been deemed to qualify, or potentially qualify, for the charitable exemption. See Cushing Nature & Pres. Ctr., 2001 ME 149, 785 A.2d 342; Salvation Army, 1998 ME 75, 709 A.2d 727; Episcopal Camp, 666 A.2d 108. [¶ 19] Cushing Nature & Preservation Center involved an exemption request by a non-profit corporation organized to own, operate and preserve land as a nature center and/or center for programs for environmental education. 2001 ME 149, ¶ 2, 785 A.2d at 343-44. The property involved was 400 acres of coastal property previously owned by a corporation that had sought and been denied tax-exempt status. Id. ¶¶ 2-3, 785 A.2d at 344. The applicant supported its application by asserting that several nature-related educational programs occurred on the property in 1998 and 1999. Id. ¶ 5, 785 A.2d at 344. The total of uses asserted by the Cushing Nature & Preservation Center in support of its application was minimal: approximately twenty-five days of children's groups camping over a two-year period, a few nature walks, and use of the property by a hospital to study issues relating to Lyme Disease. Id. ¶¶ 5-6, 785 A.2d at 344-45. We held that these facts were enough to create a factual dispute entitling the Center to a trial to determine if these minimal uses qualified its 400 acres for a charitable exemption or if, as the Town asserted, the land was really held for non-charitable investment purposes by the individuals who controlled the corporation. Id. ¶¶ 16-19, 785 A.2d at 347. [¶ 20] In Salvation Army, we held that a religious organization that operated a summer camp, and allowed its officers and their families, for a nominal fee, to use the camp facilities when not being used as a summer camp, could qualify for a benevolent and charitable exemption. 1998 ME 75, ¶¶ 2, 5, 709 A.2d at 728-29. We determined that allowing Salvation Army officers to use the facilities for personal recreation and lodging was an incidental use that did not compromise the overall charitable uses of the property. Id. ¶¶ 6-7, 709 A.2d at 729. [¶ 21] In Episcopal Camp, a nonprofit corporation operated a summer camp with a corporate purpose to carry on moral, cultural, religious and recreational training and education, instruction in arts and crafts and nature lore, good citizenship, social living and civic responsibility, and to cooperate in community welfare enterprises. 666 A.2d at 108. The camp's weekly schedule was patterned after the Order for Celebrating the Holy Eucharist. Id. at 109. In addition to the camp tuition, operating costs for the camp were supported by charitable donations and income generated by leasing the property in the off-season. Id. This income-generating activity on the property in the off-season was not viewed as compromising the benevolent and charitable purposes of the camp or the solely for their own purposes limitation in section 652(1)(A). Id. at 109-11. [¶ 22] None of these opinions indicated that a charitable exemption could be denied because the recreational activities supported by the religious or preservation organizations did not provide a service or benefita quid pro quoto offset a government service or benefit. [¶ 23] The charitable exemption was created in an age when government provided few services and religious institutions and charities provided many services that government neither provided nor subsidized. See Me. Baptist Missionary Convention v. City of Portland, 65 Me. 92, 93-94 (1876). Then and now, organizations need not displace government programs in order to serve the common good and qualify for the charitable exemption by providing charitable services to defined groups or to the public at large. One legislative study indicated that the original purposes of the charitable exemption were to promote not only providing services in lieu of government services, but also providing a service in which the state has a genuine interest. Report of the Joint Standing Committee on Taxation on the Statutory Review of the Property Tax Exemptions Contained in Title 36, Sections 652 & 656, 14-15 (Feb.1979). [¶ 24] Whether a charitable activity offsets or displaces a government service is one factor to consider, along with other evidence, in reviewing qualification for a charitable exemption, see Episcopal Camp, 666 A.2d at 110 (quoting Johnson, 221 A.2d at 287) (`or otherwise lessening the burdens of government'), but the quid pro quo factor alone does not control qualification or disqualification for the charitable exemption.