Opinion ID: 1712275
Heading Depth: 1
Heading Rank: 3

Heading: facts

Text: At the time Bethesda filed its application, § 77-202(1)(c) provided for an exemption from property taxes if a property was owned by educational, religious, charitable, or cemetery organizations and used exclusively for educational, religious, charitable, or cemetery purposes, when such property is not (i) owned or used for financial gain or profit to either the owner or user, (ii) used for the sale of alcoholic liquors for more than twenty hours per week, or (iii) owned or used by an organization which discriminates in membership or employment based on race, color, or national origin.... For purposes of this subdivision, charitable organization shall mean an organization operated exclusively for the purpose of the mental, social, or physical benefit of the public or an indefinite number of persons[.] The property for which Bethesda sought an exemption for the 2000 tax year is an assisted living facility known as Cambridge Court, located at 4107 Central Avenue in Kearney, Nebraska. The state-licensed facility includes 41 residential units, a common dining room, a multipurpose room, an activities area, business offices, a nurses' station, and lounge areas. The staff includes licensed practical nurses who are on duty full time on the day and evening shifts, nurses' aides who are on duty 24 hours daily, a full-time night med-aide, and a licensed practical nurse who provides management services. Each room is equipped with an emergency call system. Residents receive assistance with bathing, dressing, and ambulation, and medications are monitored. Three meals are provided each day, as well as an evening snack. Bethesda also provides personal laundry service, weekly housekeeping, activities, transportation, and utilities, except for telephone service. Bethesda was formed in 1967 to own and operate nonprofit nursing homes. It later sold its nursing home assets and converted to the ownership and operation of assisted living facilities. Of the nine assisted living facilities owned by Bethesda in Arizona, Colorado, Missouri, and Nebraska, five have received property tax exemptions. Bethesda qualifies as a § 501(c)(3) organization as described in the Internal Revenue Code. In its application for an exemption, Bethesda asserted that Cambridge Court is operated exclusively for the mental, social, or physical benefit of the public because it provides care for elderly persons who are less than totally self-sufficient. Seven of the 41 units at Cambridge Court are set aside for residents who require rent subsidies through the state Medicaid waiver program. These residents pay $400 to $500 per month less than do those who have their own financial resources. Monthly rates are $2,190 for upstairs rooms and $2,135 for downstairs rooms. Cambridge Court's administrator testified at the hearing before the Board that the State pays $1,675 per month for the seven Medicaid residents. Bethesda claimed that Cambridge Court should be considered to be in the same category as a nursing home because most of its residents would be in a nursing home if they were not living at Cambridge Court. After a hearing on May 9, 2000, the Board voted to deny the exemption request. Bethesda appealed the denial to TERC, which found that the Board's decision to deny the application for an exemption was not unreasonable or arbitrary. TERC concluded that Bethesda did not meet the statutory definition of a charitable organization and that the facility was not exclusively or predominantly used for charitable purposes. TERC affirmed the denial of the exemption, and Bethesda appealed.