Opinion ID: 1268867
Heading Depth: 3
Heading Rank: 2

Heading: Spatial Apportionment is Required

Text: The exclusive use requirement means that property cannot be apportioned by time into exempt and nonexempt uses. The City believes that, except for religious residences, [20] property cannot be apportioned by space into exempt and nonexempt portions. It bases its argument on the statute's use of the specific words structure and lots to describe exempt property. The superior court held that spatial apportionment is proper, and we agree. The question is one of first impression for this court. Previous appellants have used but never litigated spatial apportionment. See Sisters of Charity, 553 P.2d at 468-69; Sisters of Charity v. Greater Anchorage Area Borough, 8 Alaska L.J. 272, 273 (Nov. 1970). Although the City's reading of the statute is reasonable, it conflicts with the Alaska Constitution, art. IX, § 4. This section states: All, or any portion of, property used exclusively for nonprofit religious, charitable, cemetery, or educational purposes, as defined by law, shall be exempt from taxation. (Emphasis added). Minutes from the Constitutional Convention shed the determinative light on this provision: [T]he intent of the Committee [on Finance and Taxation] here is to allow for tax exemptions on property used for religious, charitable, cemetery, or educational purposes, to be exempt from taxation, but to provide for taxation of income-producing property, and furthermore, to allow for proration of such income-producing property. For example, if a religious organization should own an office building, a part of which is rented out, a part of which is used for its own purposes, the intent here is to allow the taxation of the income-producing part of that office building and exemption on the non-income producing part. 2 Proceedings of the Alaska Constitutional Convention 1112 (December 19, 1955). We conclude that the [a]ll, or any portion of, property language of art. IX, § 4 mandates the spatial apportionment of all property into exempt and nonexempt portions. Because we must construe a statute as constitutional when reasonable to do so, we hold that AS 29.53.020 mandates spatial apportionment of applicable property, residences, structures, and lots. [21]