Court Opinion

ID: 4290146
Source: CourtListenerOpinion
Date Created: 2018-06-29 18:07:41.567539+00
Date Added: 2024-06-11T14:38:04.483561
License: Public Domain

The summaries of the Colorado Court of Appeals published opinions
  constitute no part of the opinion of the division but have been prepared by
  the division for the convenience of the reader. The summaries may not be
    cited or relied upon as they are not the official language of the division.
  Any discrepancy between the language in the summary and in the opinion
           should be resolved in favor of the language in the opinion.

                                                                   SUMMARY
                                                                June 28, 2018

                                2018COA91

No. 17CA0341 Children’s Hospital Colorado v. Property Tax
Administrator and Colorado Board of Assessment Appeals —
Taxation — Property Tax — Exemptions — Child Care Centers

     In this property tax exemption case, Children’s Hospital

Colorado appeals the denial of its property tax exemption

application for a day care center (Center) it operates. A division of

the court of appeals concludes that the Board of Assessment

Appeals properly interpreted section 39-3-110(1)(e), C.R.S. 2017,

which governs property tax exemptions for child care centers, to

conclude that the Center’s tuition discount policy did not qualify as

offering services “on the basis of ability to pay.” Because the tuition

breaks offered by the Center were static discounts as opposed to a

scale that “required the use of a graduated series of total cost for

each child based on the financial status of the recipient,” as
required by the Property Tax Administrator’s rules, the Center did

not charge “on the basis of ability to pay,” and consequently did not

qualify for tax exemption under section 39-3-110(1)(e). The division

also affirms the Board of Assessment Appeals’ decision that the

Center was not used for a strictly charitable purpose under section

39-3-108(1), C.R.S. 2017.
COLORADO COURT OF APPEALS                                          2018COA91

Court of Appeals No. 17CA0341
Colorado State Board of Assessment Appeals No. 68840

Children’s Hospital Colorado,

Petitioner-Appellant,

v.

Property Tax Administrator,

Respondent-Appellee,

and

Colorado State Board of Assessment Appeals,

Appellee.

                                ORDER AFFIRMED

                                   Division I
                        Opinion by CHIEF JUDGE LOEB
                        Vogt* and Casebolt*, JJ., concur

                           Announced June 28, 2018

Spencer Fane, LLP, Ellen Elizabeth Stewart, Ann M. Schroeder, Denver,
Colorado, for Petitioner-Appellant

Cynthia H. Coffman, Attorney General, Robert H. Dodd, Russell D. Johnson,
Assistant Solicitors General, Denver, Colorado, for Respondent-Appellee

Cynthia H. Coffman, Attorney General, Emmy A. Langley, Assistant Solicitor
General, Denver, Colorado, for Appellee

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2017.
¶1    Children’s Hospital Colorado (Hospital) appeals the final order

 of the Colorado State Board of Assessment Appeals (BAA) upholding

 the order of the Property Tax Administrator (PTA) denying the

 Hospital’s property tax exemption application for a child care center

 (Center) it owns and operates. The Hospital argues on appeal that

 the BAA exceeded its authority in interpreting section 39-3-

 110(1)(e), C.R.S. 2017, to conclude that the Center’s tuition

 discount policy did not qualify the Center for an exemption under

 that section, and that the BAA improperly concluded that the

 Center was not used for a strictly charitable purpose under section

 39-3-108(1), C.R.S. 2017. We affirm the BAA’s order.

              I.    Background and Procedural History

                           A.    The Center

¶2    The Hospital owns and operates the Center, a child care

 facility on the University of Colorado Anschutz Medical School (CU

 Anschutz) campus. The Center was developed by the Hospital with

 assistance from the University of Colorado (the University). The

 Hospital and the University entered into a contract for construction

 and operation of the Center, under which the Hospital agreed to

 operate the Center for the primary purpose of providing child care

                                   1
 services to the constituents of the Hospital and CU Anschutz. As

 acknowledged by the Hospital, both in the administrative

 proceedings and on appeal to this court, “[t]he purpose of the

 Center is to provide child care to constituents of the Hospital and

 [CU Anschutz] as an employee benefit to attract and retain quality

 employees so that the hospitals can better serve their patients.”

 Accordingly, the record shows that a vast majority of the Center’s

 available enrollment slots are reserved for children of employees,

 staff, and students at the Hospital and CU Anschutz; there are

 additional slots allotted to children of employees of Fitzsimons

 Redevelopment Authority (Fitzsimons) because the Center is located

 on the site of the old Fitzsimons Army Medical Center. In addition,

 remaining enrollment slots at the Center are prioritized for children

 of employees who work at the Center and children from other

 entities associated with the Hospital and CU Anschutz.

¶3    The Hospital contracted with Bright Horizons Children’s

 Centers LLC (Bright Horizons) to run the day-to-day operations of

 the Center. Bright Horizons is a for-profit entity and receives

 compensation from the Hospital to operate the Center; the amount

                                   2
 Bright Horizons receives from the Hospital is determined by

 contract. Parents pay tuition directly to Bright Horizons.

¶4    The Center has a written tuition assistance policy that

 purportedly defines “how enrolled families may be eligible for

 discounted tuition rates.” In this policy, families are informed that

 “[t]uition assistance, based on a family’s income, size, and the

 number of children in a family enrolled at the Center, is available.”

 The tuition assistance policies at issue in this appeal are “Income

 Assistance” and “Sibling Discount.” The income assistance policy

 gives all families with an income below 150% of the federal poverty

 level (federal poverty line) a flat 10% tuition discount. The sibling

 discount is a flat 5% discount for siblings of enrolled children,

 regardless of the family’s income.

           B.    Application Process and Appeal to the BAA

¶5    The Hospital filed an application for exemption from property

 tax for the Center under section 39-3-108(1)(b), an exemption for

 health care facilities. However, because the Center is not a licensed

 health care facility, that exemption was facially not applicable to the

 Center.

                                      3
¶6    Under the rules and regulations of the Division of Property

 Taxation (Division),1 when an application is submitted under a

 particular statute and that statute is not applicable, an investigator

 for the Division can consider whether the property qualifies for

 exemption under a different statute. Div. of Prop. Taxation Rule

 I.B.11, 8 Code Colo. Regs. 1304-2. Thus, the investigator assigned

 to the Hospital’s application considered the Hospital’s application

 under section 39-3-108(1)(a), an exemption for a nonresidential

 property operated for strictly charitable purposes, and section 39-3-

 110, an exemption for qualified child care centers.

¶7    In October 2014, the PTA issued a tentative determination

 denying the Hospital’s application, finding that the Center was not

 used for strictly charitable purposes because it did not benefit an

 indefinite number of persons; the denial was also based on the

 Hospital’s failure to show that the Center provided its services for

 free or on the basis of ability to pay under section 39-3-110(1)(e). In

 response to this tentative determination, the Hospital filed

 supplemental financial information, including information on the

 1These rules and regulations are promulgated by the PTA. § 39-2-
 117(7), C.R.S. 2017; Div. of Prop. Taxation, Legal Authority, 8 Code
 Colo. Regs. 1304-2.

                                   4
 Center’s tuition discount policy and demographics of the children

 enrolled at the Center.

¶8    In April 2016, the PTA issued a final decision denying the

 Hospital’s application for the Center. The PTA denied the

 application because the Hospital’s “financial figures arising from the

 usage of this property do not qualify it for exemption under

 subsection (1)(e) of C.R.S. 39-3-110. Furthermore, its usage of the

 property does not satisfy the requirements under Rule IV.B.1 and

 C.R.S. 39-3-108(1)(a).”2

¶9    Pursuant to section 39-2-117(5)(b), C.R.S. 2017, the Hospital

 exercised its right to appeal to the BAA. The BAA held a hearing on

 the matter in November 2016. The Hospital presented several

 witnesses at the hearing, including the Hospital’s Chief Financial

 Officer, the Hospital’s Director of Human Resource Operations, the

 Director of the Center, and CU Anschutz’s Director of Initiatives.

 These witnesses testified as to the purposes of the Center, the

 Center’s enrollment demographics, and details of the tuition

 assistance policy. Relevant to the present appeal and the BAA’s

 2 “Rule IV.B.1” refers to the Division’s rule concerning requirements
 for a property’s use for strictly charitable purposes.

                                   5
order, the Hospital presented the following information at the

hearing:

        In her opening statement, the Hospital’s counsel stated

           that the Center “is a daycare center for the faculty and

           students of the [CU Anschutz] campus. The evidence will

           show that in order for [CU Anschutz] to recruit and

           maintain exceptional faculty and students . . . it needs to

           provide a benefit, such as the [Center].” (Emphasis

           added.)

        There are 248 enrollment slots available at the Center.

        The majority of enrollment slots at the Center are

           reserved for children of employees, students, and staff at

           the Hospital and CU Anschutz.

        Enrollment slots are prioritized in the contract between

           the Hospital and Bright Horizons as follows: (1) reserved

           spaces for children of the Hospital’s employees, children

           of CU Anschutz employees, and children of Fitzsimons

           employees; (2) siblings of the Hospital’s employees’

           children enrolled at the Center; (3) children of Bright

           Horizons staff employed at the Center; (4) “other priorities

                                   6
  agreed to by” the Hospital and Bright Horizons; and (5)

  children from the community.

 According to testimony from the Hospital’s Chief

  Financial Officer, “children from the community” are

  considered to be any enrolled children from “outside [CU

  Anschutz] and then anyone outside of [the Hospital].”

  This includes children of employees of Fitzsimons;

  children of employees of the organization that provides

  billing services for physicians at CU Anschutz (UPI);

  children of employees of UC Health (UCH), the University

  of Colorado Hospital Authority; children of Bright

  Horizons staff; and children from the general community.

  Thus, “children from the community” primarily includes

  groups of children whose parents are associated with the

  Hospital or CU Anschutz, several of which are already

  included in prioritized categories for enrollment slots.

 An exhibit identifying the above groups as categories

  showed the breakdown of children enrolled at the center

  during 2014, the relevant period at issue here. Notably,

  no children from the general community were enrolled

                          7
  after children in all other prioritized categories (the

  Hospital, CU Anschutz, Fitzsimons, Bright Horizons, UPI,

  and UCH) were enrolled.

 As of November 2014, there were 305 children on the

  waiting list for enrollment at the Center: 281 from the

  Hospital and CU Anschutz, and only one from the general

  community (the 23 others were from UCH and UPI).

 The Hospital pays Bright Horizons fees to maintain and

  operate the Center. Bright Horizons receives a 3 to 5%

  profit from these fees. However, the Hospital operates

  the Center at a loss.

 The Hospital’s witnesses could not say how many

  children, if any, received the written tuition assistance

  discount based on the federal poverty line. However, four

  children received a 50% tuition discount that was not

  covered by the written policy and was based entirely on

  the discretion of the Center’s Director. There were no set

  criteria for this 50% discount, and it was not disclosed on

  the Center’s website or in the enrollment paperwork. At

                          8
             least two of the children who received the 50% discount

             were children of Bright Horizons employees.

           There are child care centers available on at least two

             other University campuses. These centers are “auxiliary”

             programs, which means that they function only on their

             ability to collect tuition from the parents. The Hospital

             witnesses could not say if these child care centers were

             available to the general community or limited to

             University students and faculty; they also could not say if

             the centers were run by the University or a third party

             such as Bright Horizons, or if the centers were “part of”

             the University.

¶ 10   Counsel for the PTA called one witness, Stan Gueldenzopf, the

  Manager of the Division’s exemption section. Gueldenzopf testified

  as to the Hospital’s application and why the investigators concluded

  that the Center was not eligible for exemption under section 39-3-

  110 or section 39-3-108(1)(a). As to section 39-3-110, Gueldenzopf

  focused his testimony on subsection (1)(e), which requires that a

  child care center offer its services at rates based on the recipient’s

                                     9
  ability to pay, because that was the basis for the PTA’s denial as

  listed on the final determination.

¶ 11   Referring to the Division’s definition of “charges on the basis of

  ability to pay” provided in its rules and regulations, Gueldenzopf

  testified that in his experience, a “scale” that would consider a

  family’s financial status and ability to pay the required tuition

  would need to be based on multiple factors, such as income and

  family size, and offer a range of several tuition rates. He concluded

  that the Center’s federal poverty line discount was not “adequate”

  because it only took into account one element — family income as

  compared to the federal poverty line. In his testimony, he provided

  examples of how the Center’s federal poverty line discount would

  actually work, which highlighted the fact that the discount was not

  “reflective of . . . [a] family’s ability to pay.” Gueldenzopf concluded

  that the federal poverty line discount offered by the Center was not

  a “scale,” as referred to in the applicable Division rules and

  regulations.

¶ 12   Throughout the hearing, the Hospital argued that the Center

  met the requirement of subsection (1)(e) because of its federal

  poverty line and sibling discount policies. The Hospital focused its

                                       10
  argument on the poverty line discount and asserted that the

  Division had not specified, through its rules and regulations or in

  its correspondence with the Hospital, a definition of the term

  “scale,” nor had it stated that a scale required a range of tuition

  options. Thus, it argued, the federal poverty line discount was a

  scale because it measured a family’s ability to pay through income.

  The Hospital also argued that the Center was used for strictly

  charitable purposes because it provided a “gift” to the public and

  because it lessened the burdens of government.

                             C.   BAA Final Order

¶ 13   In February 2017, the BAA issued an order upholding the

  PTA’s determination that the Hospital was not entitled to exemption

  from property taxes for the Center because it did not charge for its

  services based on the recipient’s ability to pay as required by

  section 39-3-110(1)(e), and because the Center was not used for

  strictly charitable purposes as required by 39-3-108(1).

¶ 14   Regarding section 39-3-110(1)(e), the BAA found that the

  Center did not charge families tuition based on their ability to pay.

  It specifically credited Gueldenzopf’s testimony discussing scales

  that charge on the basis of ability to pay, and it concluded that,

                                    11
  based on that testimony and the Division’s definition of “charges on

  the basis of ability to pay” in Division of Property Taxation Rule

  IV.E.5, 8 Code Colo. Regs. 1304-2, such scales “required the use of

  a graduated series of total cost for each child based on the financial

  status of the recipient.” The BAA found that the Center’s tuition

  assistance based on the federal poverty line did not meet that

  requirement because parents with a stronger financial status paid

  the same as parents with a significantly weaker financial status,

  and the BAA further provided examples of scenarios to illustrate

  this point.

¶ 15   Under section 39-3-108 and Colorado’s constitutional

  provision on property tax exemptions, the BAA found that, based on

  the Hospital’s own statements, the Center was operated for the

  business purposes of providing a recruitment tool and employee

  benefit for the Hospital and CU Anschutz; that the Center’s services

  were not provided to an indefinite number of persons, but were

  largely, if not solely, dependent on the recipient’s voluntary

  association with certain groups; that the minimal tuition assistance

  provided indicated that the Center was not being operated for a

  charitable purpose; that the Center was, at least in part, operated

                                    12
  for corporate profit because Bright Horizons made a 3 to 5% profit

  from the fees paid to it by the Hospital; and that the Center did not

  lessen the burdens of government because the evidence presented

  at the hearing did not show that CU Anschutz (i.e., the State of

  Colorado) would be required to provide a child care center at

  taxpayer expense if the Hospital did not operate the Center.

¶ 16   The Hospital now appeals the BAA’s final order pursuant to

  section 39-2-117(6).

             II.   Constitutional and Statutory Framework

¶ 17   We begin by summarizing the legal framework that governs

  property tax exemptions in Colorado and the issues in this case.

¶ 18   “Each claim for tax exemption must be determined upon the

  facts presented and in light of the applicable constitutional and

  statutory provisions.” Bd. of Assessment Appeals v. AM/FM Int’l,

  940 P.2d 338, 343 (Colo. 1997).

¶ 19   The state’s ability to exempt personal and real property from

  taxes derives from the Colorado Constitution: “Property, real and

  personal, that is used solely and exclusively for religious worship,

  for schools or for strictly charitable purposes . . . shall be exempt

  from taxation, unless otherwise provided by general law.” Colo.

                                     13
  Const. art. X, § 5 (emphasis added). Courts have consistently

  concluded that the language “unless otherwise provided by general

  law” gives the General Assembly the ability and power “to limit,

  modify, or abolish” constitutional exemptions. McGlone v. First

  Baptist Church of Denver, 97 Colo. 427, 431, 50 P.2d 547, 549

  (1935); Anderson Ranch Arts Found. v. Prop. Tax Adm’r, 729 P.2d
992, 994 (Colo. App. 1986) (citing McGlone, 97 Colo. at 431, 50 P.2d

  at 549).

¶ 20   The BAA concluded that the Center did not qualify for

  exemption under section 39-3-110’s requirements for child care

  centers. The BAA also determined that the Center was not used for

  strictly charitable purposes as contemplated by the Colorado

  Constitution and section 39-3-108(1)(a). Accordingly, both section

  39-3-110 and section 39-3-108(1)(a) are relevant to this appeal.

¶ 21   Section 39-3-110 provides a property tax exemption if such

  property is used

             as an integral part of a child care center:

             (a) Which is licensed pursuant to article 6 of
             title 26, C.R.S.;

                                    14
            (b) Which is maintained for the whole or part
            of a day for the care of five or more children
            who are not sixteen years of age or older;

            (c) Which is not owned or operated for private
            gain or corporate profit;

            (d) The costs of operation of which, including
            salaries, are reasonable based upon the
            services and facilities provided and as
            compared with the costs of operation of any
            comparable public institution;

            (e) Which provides its services to an indefinite
            number of persons free of charge or at reduced
            rates equal to five percent of the gross
            revenues of such child care center or equal to
            ten percent of the amount of tuition charged
            by such child care center to the financially
            needy or charges on the basis of ability to pay;

            (f) The operation of which does not materially
            enhance, directly or indirectly, the private gain
            of any individual except as reasonable
            compensation for services rendered or goods
            furnished;

            (g) The property of which is claimed for
            exemption does not exceed the amount of
            property reasonably necessary for the
            accomplishment of the exempt purpose; and

            (h) The property of which is irrevocably
            dedicated to a charitable purpose.

  § 39-3-110(1) (emphasis added).

¶ 22   Both the PTA and the BAA based their decisions to deny the

  Hospital’s application for property tax exemption for the Center

                                    15
  under section 39-3-110 entirely on the Center’s failure to meet the

  requirement in subsection (1)(e) that it “charges on the basis of

  ability to pay.”

¶ 23   Section 39-3-108 provides as follows:

             (1) Property, real and personal, which is owned
             and used solely and exclusively for strictly
             charitable purposes and not for private gain or
             corporate profit shall be exempt from the levy
             and collection of property tax if:

             (a) Such property is nonresidential . . . .

  (Emphasis added.)

¶ 24   We thus consider the Hospital’s contentions challenging both

  the BAA’s conclusion regarding the Center’s failure to satisfy

  section 39-3-110(1)(e) because its tuition is not charged “on the

  basis of ability to pay,” and its conclusion that under section 39-3-

  108(1)(a), the Center is not used for strictly charitable purposes.

                         III.   Standard of Review

¶ 25   The appropriate standard to be applied in reviewing the BAA’s

  decision is set forth in section 24-4-106(7), C.R.S. 2017. AM/FM

  Int’l, 940 P.2d at 342. Under that section, we may set aside a

  decision of the BAA only if we determine that the BAA abused its

  discretion, “or that the order was arbitrary and capricious, based

                                     16
  upon findings of fact that were clearly erroneous, unsupported by

  substantial evidence, or otherwise contrary to law.” Boulder Cty.

  Bd. of Comm’rs v. HealthSouth Corp., 246 P.3d 948, 951 (Colo.

  2011).

¶ 26   This case involves interpretation of an agency rule. The

  Division has interpreted the phrase in section 39-3-110(1)(e),

  “charges on the basis of ability to pay,” by defining that phrase in

  its Rule IV.E.5. The Hospital does not argue that the Division’s

  Rule IV.E.5 is itself improper. Instead, it argues that the BAA’s

  interpretation of Rule IV.E.5 exceeded its authority. Because the

  BAA is essentially the appellate arm of the Division, we are, thus,

  concerned with an agency’s interpretation of its own rule. Where an

  administrative body is interpreting its own rules and applying them

  to evidentiary facts, it is making an ultimate conclusion of fact.

  Nixon v. City & Cty. of Denver, 2014 COA 172, ¶ 23.

¶ 27   Conclusions of ultimate fact and an agency’s interpretation

  and application of its own rules are entitled to deference; the

  agency’s interpretation is to be accepted if it has a reasonable basis

  in the law. Id. Indeed, “an administrative agency’s interpretation of

  its own regulations is generally entitled to great weight and should

                                    17
  not be disturbed on review unless plainly erroneous or inconsistent

  with such regulations.” Jiminez v. Indus. Claim Appeals Office, 51
P.3d 1090, 1093 (Colo. App. 2002).

¶ 28   The determination of whether property is used for strictly

  charitable purposes must be made on a case-by-case basis to

  determine whether such use satisfies the statutory and

  constitutional requirements. AM/FM Int’l, 940 P.2d at 347. “[O]nly

  the judiciary may make a final decision as to whether or not any

  given property is used for charitable purposes within the meaning

  of the Colorado constitution.” Id. at 343 (quoting § 39-3-101, C.R.S.

  2017). In examining how the property is used, the property’s

  charitable purpose as an end will be strictly construed. E.g., W.

  Brandt Found., Inc. v. Carper, 652 P.2d 564, 568 (Colo. 1982). The

  determination of whether an organization is a charity for the

  purposes of qualifying for a property tax exemption is a conclusion

  of ultimate fact, involving a mixed question of law and fact. AM/FM

  Int’l, 940 P.2d at 343.

            IV.   Child Care Centers under Section 39-3-110

¶ 29   The BAA and the PTA denied the Hospital’s application under

  section 39-3-110 by analyzing whether the Center met the

                                   18
  requirement of “charges on the basis of ability to pay” under

  subsection (1)(e). Thus, we now turn to an analysis of subsection

  (1)(e), and whether the BAA erred with respect to that statutory

  provision.

                             A.   Applicable Law

¶ 30   To qualify for a property tax exemption under section 39-3-

  110, a child care center must meet eight requirements. This appeal

  concerns only one of those requirements, subsection (1)(e), which

  mandates that the property is used as an integral part of a child

  care center

               [w]hich provides its services to an indefinite
               number of persons free of charge or at reduced
               rates equal to five percent of the gross
               revenues of such child care center or equal to
               ten percent of the amount of tuition charged
               by such child care center to the financially
               needy or charges on the basis of ability to pay[.]

  § 39-3-110(1)(e) (emphasis added). The Hospital concedes that it

  does not provide its services to an indefinite number of persons free

  of charge or at reduced rates equal to the percentages required in

  the first part of subsection (1)(e). Rather, the Hospital’s central

  argument is that its policy of providing a 10% discount to all

  families with income below the federal poverty line and a 5%

                                      19
  discount for all siblings of enrolled children meets the requirement

  of subsection (1)(e) of charging “on the basis of ability to pay.”

¶ 31   Rule IV.E.5 states that, for purposes of section 39-3-110(1)(e),

  the phrase “charges on the basis of ability to pay” means “that the

  total cost for each child is determined by a scale based on the

  recipient’s financial status.” The terms “scale” and “financial

  status” are not further defined in the Division rules. Moreover,

  there is no Colorado case law interpreting the language of

  subsection (1)(e) or Rule IV.E.5.

        B.    Testimony at the Hearing and the BAA Final Order

¶ 32   At the BAA hearing, Gueldenzopf testified that generally

  “based on the ability to pay tends to be some kind of scale which

  takes into account both the income of a particular family and the

  family size.” He further testified that the 10% discount provided by

  the Center was not adequate because

             [i]t only addresses one element, really. So, for
             example, somebody who is $100 under that
             limit gets a 10 percent discount. Somebody
             whose income is a thousand dollars [under
             that limit] gets a 10 percent discount.
             Somebody whose income is $5,000 under that
             limit gets a 10 percent discount.

                                      20
             We don’t – we don’t view that as really being
             reflective of the three different family’s [sic]
             ability to pay. Certainly somebody who makes
             $5,000 less than the limit has a much tougher
             time paying the tuition for the child care center
             than somebody who is only $100 under the
             limit, but still everybody gets the same
             discount. So to our mind, that was not really
             indicating or setting their fees based on the
             ability to pay.

  (Emphasis added.)

¶ 33   On cross-examination, counsel for the Hospital asked

  Gueldenzopf about an exhibit that described the Center’s 10%

  federal poverty line discount. Gueldenzopf testified that “we

  wouldn’t really consider this a scale. I mean, one line does not

  make a scale or one – being the poverty level line. Again, certainly

  people at various spots between these numbers would likely have

  different abilities to pay and that’s not really reflected here.”3

  3 On appeal, the Hospital focuses on the fact that the Division rules
  do not expressly define what a scale must include to determine a
  recipient’s ability to pay. It further argues that, after Gueldenzopf’s
  quoted testimony above regarding the exhibit, he admitted that the
  federal poverty line discount used by the Center was a “scale.” We
  do not interpret his testimony to make such an admission. But,
  even if we agreed that Gueldenzopf testified that the federal poverty
  line discount was a “scale,” that does not mean it was a scale based
  on ability to pay or the recipient’s financial status.

                                     21
¶ 34   Based on Gueldenzopf’s testimony and the express language of

  Rule IV.E.5, the BAA concluded that the definition of “charges on

  the basis of ability to pay”

             requires the use of a graduated series of total
             cost for each child based on the financial
             status of the recipient. Under this definition,
             the total cost for each child would be greater
             for those with a stronger financial status. The
             total cost for each child would be less for those
             with a weaker financial status.

¶ 35   Using that definition and examples of families with different

  income levels below the federal poverty line, the BAA agreed with

  the PTA and found that “the Center’s written tuition discount policy

  clearly fails to meet the standard of charging on the basis of ability

  to pay as defined by the rule.” The BAA used the following

  examples to illustrate its finding:

             Under the Center’s tuition discount policy, a
             single parent with one infant child who has
             income of $23,000 per year (or $442 per week)
             would qualify for a 10% tuition discount equal
             to $31.90 per week and would pay $287.10 per
             week for child care at the Center. This
             amounts to 65% of the recipient’s income.

             Another single parent with one infant child
             who has income of $15,000 per year (or $288
             per week) would qualify for the same 10%
             tuition discount equal to $31.90 per week and
             be required to pay the same $287.10 per week

                                        22
             for child care at the Center. However, this
             amounts to nearly 100% of the recipient’s
             income.

  The BAA went on to elaborate that

             [t]he parent in the second scenario above, who
             has a much weaker financial status, pays the
             same amount per child as the parent in the
             first scenario above, who has a stronger
             financial status. The second parent has less
             ability to pay than the first parent, but the
             total cost for child care is the same for both
             parents. The Center’s written tuition discount
             policy is not designed to charge on the basis of
             ability to pay.

                              C.    Analysis

¶ 36   The Hospital contends that the BAA exceeded its authority in

  interpreting Rule IV.E.5 regarding the definition of “charges on the

  basis of ability to pay.” We disagree.

¶ 37   We look to the plain language of Rule IV.E.5 to determine if

  the BAA’s interpretation of the definition applied in its order is

  plainly erroneous or lacks a reasonable basis in the law. Nixon,

  ¶ 23; Jiminez, 51 P.3d at 1093. We construe administrative rules

  using the same rules of construction we use for construing a

  statute. Gessler v. Colo. Common Cause, 2014 CO 44, ¶ 12 (citing

  Regular Route Common Carrier Conference of Colo. Motor Carriers

                                    23
  Ass’n v. Pub. Util. Comm’n, 761 P.2d 737, 745 (Colo. 1988)).

  Because the Hospital concedes, and we agree, that the language of

  Rule IV.E.5 is unambiguous, we are limited to its plain language.

  Id. Also, because the Division rules do not define “scale,” we are

  mindful that “where, as here, the [rule] does not define a term, the

  word at issue is a term of common usage, and people of ordinary

  intelligence need not guess at its meaning, we may refer to

  dictionary definitions in determining the plain and ordinary

  meaning.” Roalstad v. City of Lafayette, 2015 COA 146, ¶ 34

  (quoting Mendoza v. Pioneer Gen. Ins. Co., 2014 COA 29, ¶ 24).

¶ 38   First, the Center’s discount for tuition based on whether a

  family’s income is above or below a single number, without taking

  into account anything more about the family’s financial status, is

  simply not a payment based on the recipient’s ability to pay, where

  the term “ability to pay” is defined by Rule IV.E.5 to mean

  “determined by a scale based on the recipient’s financial status.”

  Gueldenzopf illustrated this in his testimony with scenarios of

  parents with different income levels below the federal poverty line,

  and the BAA pointed this out with the scenarios quoted above.

  Instead, the discount provided by the Center is solely based on

                                    24
  whether a recipient’s income is below the federal poverty line. If the

  General Assembly or the PTA intended to require that child care

  centers provide services at a cost based solely on that static factor,

  it could have said so. However, the statute reads “based on ability

  to pay,” which, in our view and consistent with the language of Rule

  IV.E.5, requires a child care center to employ a more nuanced and

  less rigid approach to its tuition costs in order to qualify for an

  exemption under subsection (1)(e).

¶ 39   Second, we reject the Hospital’s arguments that the Center’s

  written discount policies qualify as a “scale” as required by Rule

  IV.E.5. Black’s Law Dictionary defines a “scale” as “1. A progression

  of degrees; esp., a range of wage rates. 2. A wage according to a

  range of rates.” Black’s Law Dictionary 1545 (10th ed. 2014)

  (emphasis added). Thus, the plain and ordinary meaning of “scale”

  is a range or progression of options; it is not a single line that one

  falls above or below, such as the federal poverty line.

¶ 40   In contrast, a discount is “[a] reduction from the full amount

  or value of something, esp. a price.” Id. at 564. More specific to

  the circumstances here, a discount is “a reduction from a price

  made to a specific customer or class of customers.” Webster’s Third

                                     25
  New International Dictionary of the English Language, Unabridged

  646 (2002).

¶ 41   By these plain and ordinary meanings, the tuition reduction

  policy of the Center based solely on whether a family’s income falls

  above or below the federal poverty line is a standard discount

  provided equally to all recipients of a certain class; it is not a scale

  that provides a range of tuition rates. The Center’s use of a single

  number to draw a hard line for those families who can receive a set,

  static discount, and those families who must pay full tuition, is not

  a scale; it does not provide a range of tuition options, and it does

  not take into account more than one factor in determining a

  family’s ability to pay.

¶ 42   The same analysis applies as well to the sibling discount. This

  tuition discount is provided to all parents with more than one child

  enrolled at the Center, regardless of income or any other factor

  indicating ability to pay. This tuition discount does not take into

  account a family’s ability to pay in any way; rather, it appears to be

  a discount for loyalty to the Center.

¶ 43   We also reject the Hospital’s argument that, essentially, the

  BAA exceeded its authority by interpreting “scale” to mean “sliding

                                     26
  scale.” The Hospital argues that if the Division or the PTA meant to

  require a “sliding scale” it would have expressly said so, citing other

  agency regulations using that term. This argument fails for two

  reasons.

¶ 44   First and foremost, the term “sliding scale” does not appear in

  the record of the BAA hearing or in the BAA’s order. Instead, the

  BAA refers to a scale that includes a “graduated series of total cost

  for each child . . . .” In fact, the only time the term “sliding scale”

  appears in the court file for this case is in the Hospital’s amended

  notice of appeal and in its own briefs on appeal. Second, the rules

  and regulations cited by the Hospital are from other agencies.

  Whether, when, and how such other agencies may use the term

  “sliding scale” in their regulations is, in our view, not instructive in

  defining what a “scale” means in Rule IV.E.5 at issue here.

¶ 45   In sum, we cannot say that the BAA interpreted its own rule in

  a way that was plainly erroneous or inconsistent with the law when

  it concluded that, for purposes of subsection (1)(e), the required

  scale must include graduated (i.e., a progression of) tuition rates.

  We, therefore, affirm the BAA’s order denying the Center’s

                                     27
  application for property tax exemption based on section 39-3-

  110(1)(e).

                      V.   Strictly Charitable Purpose

¶ 46   The Hospital also contends that the BAA erred by finding that

  the Center is not operated for strictly charitable purposes. Again,

  we disagree.

¶ 47   The PTA denied the Hospital’s application for property tax

  exemption for the Center, in part, because it did not satisfy the

  requirements of 39-3-108(1)(a), specifically finding that the Center

  did not provide a “gift.” The BAA affirmed this decision, and it

  further found that the Center did not serve an indefinite number of

  people and did not lessen the burdens of government, citing the

  Colorado Constitution, section 39-3-108(1)(a), and several of the

  Division’s rules.

¶ 48   Initially, we reject the BAA’s argument on appeal that the

  Hospital has somehow abandoned the argument that the Center

  qualifies for property tax exemption under section 39-3-108(1)(a).

  The BAA argues that the Hospital abandoned this issue because it

  does not cite to that statute in its opening brief. However, an entire

  section of the Hospital’s brief, just like one section of the BAA order,

                                     28
  is dedicated to the issue of whether the Center is a charity and is

  used for strictly charitable purposes. The BAA’s order refers to this

  issue as a “Constitutional Analysis” and cites section 39-3-108(1)(a)

  in that section of its order. The Hospital appears to have followed

  that format and labeled its “strictly charitable purposes” argument

  as a constitutional analysis. Accordingly, we see no basis for

  concluding that the Hospital has abandoned this contention on

  appeal.

¶ 49   We also reject the PTA’s argument on appeal that section 39-3-

  108 cannot apply to the Center because section 39-3-110 is the

  more specific statute that applies to child care centers. See City of

  Colorado Springs v. Bd. of Cty. Comm’rs, 895 P.2d 1105, 1118 (Colo.

  App. 1994) (“Statutes upon the same subject must be construed

  together and any conflicts reconciled if possible to give effect to the

  legislative purposes behind each section; particular statutes will

  prevail over general, and later provisions over former.”). Here, the

  statutes are not in conflict; they merely cover different uses of

  property. On the one hand, a properly licensed child care center

  operating out of a private home may be able to qualify for exemption

  under section 39-3-110(1), but it would not be able to qualify under

                                     29
  39-3-108 because the property is residential. On the other hand, a

  nonresidential child care center could qualify under 39-3-108(1)(a)

  because it operates as a charity with a strictly charitable purpose,

  but might not qualify under 39-3-110 because it does not meet one

  or more of the requirements under subsections (1)(a)-(h). We will

  not interpret these statutes to be mutually exclusive without a clear

  expression of intent from the General Assembly to do so. See Div.

  of Prop. Taxation Rule I.B.11, 8 Code Colo. Regs. 1304-2 (“The

  particular requirements for exemption under each statute will be

  applied independently.”) (emphasis added).

                           A.    Applicable Law

¶ 50   Colorado courts have consistently applied the following

  definition of a strictly charitable purpose:

             A charity, in the legal sense, may be more fully
             defined as a gift, to be applied consistently
             with the existing laws, 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.

                                     30
  AM/FM Int’l, 940 P.2d at 344 (quoting Jackson v. Phillips, 96 Mass.

  (14 Allen) 539, 556 (1867)).

¶ 51   Thus, for a property to be used for strictly charitable purposes,

  it must provide a gift for the benefit of an indefinite number of

  persons. Id. The gift must lessen the burdens of government.4 Id.

  It is the burden of the applicant to demonstrate that the use of the

  property relieves a governmental function and inures to the benefit

  of the public. Id. at 345.

¶ 52   In its rules, the Division has defined “charity” using the

  definition cited above and has further defined the terms “gift,”

  “indefinite number of persons,” and “lessening the burdens of

  government.” Div. of Prop. Taxation Rules IV.A.1, IV.B.1, .2, .4, 8

  Code Colo. Regs. 1304-2.

¶ 53   In determining whether an entity provides a gift, the Division’s

  rule provides that such determination will be made “by analyzing

  4 There seems to be a debate in the case law regarding whether
  “lessening the burdens of government” is a separate pathway to
  proving a charitable purpose or if it modifies “all of the previously
  mentioned kinds of gifts” in the definition. Bd. of Assessment
  Appeals v. AM/FM Int’l, 940 P.2d 338, 344 (Colo. 1997). Because,
  as we conclude below, the Hospital has not established that the
  Center lessens the burdens of government, we need not decide this
  issue.

                                    31
  both the beneficent objects, goals or purposes of the entity and the

  organization’s actual conduct.” Id. Rule IV.B.1. The rule then lists

  numerous factors to be considered in evaluating the entity’s objects,

  goals, and purposes. Id.

¶ 54   Another of the Division’s rules provides that

             [w]hether an “indefinite number of persons” is
             served by an organization shall be determined
             by whether the beneficiaries of the
             organization’s activities are involuntarily parts
             of the benefitted class. When the right to
             benefit depends on a voluntary association with
             a particular society then that organization does
             not benefit an indefinite number of persons.

  Id. Rule IV.B.2 (emphasis added).

¶ 55   Lastly, the PTA determines whether an entity’s work lessens

  the burdens of government by considering whether the entity’s

  charitable work, if not being done by the entity, must be

  undertaken by the government at public expense. Id. Rule IV.B.4.

  This definition is also ensconced in Colorado case law: the activities

  undertaken by the entity must be “activities for which the

  government is responsible or which the government would be forced

  to assume in the absence of [the entity]’s activities” in order to

                                     32
  lessen the burdens of the government. AM/FM Int’l, 940 P.2d at

  346.

                               B.   Analysis

¶ 56     Based on the testimony at the hearing and the exhibits

  admitted into evidence, the BAA determined that the Center was

  operating for a business purpose — namely, providing an employee

  benefit and recruitment tool — and not for a charitable purpose. It

  also found that the Center did not benefit an indefinite number of

  persons and did not lessen the burdens of government. We discern

  no error in the BAA’s findings and conclusions.

¶ 57     First, contrary to the Hospital’s arguments, the record shows

  that the Center in no way provides a “gift” within the meaning of the

  Division’s rules. As the BAA found, relying in part on the Hospital’s

  own statements, the clear purpose in providing child care at the

  Center was to provide an employee benefit and recruitment tool for

  employees of the Hospital and CU Anschutz. At the BAA hearing,

  the Hospital conceded that the Center serves “the faculty and

  students of the University of Colorado and the Anschutz campus.

  The evidence will show that in order for the University to recruit

  and maintain exceptional faculty and students at [CU] Anschutz

                                    33
  . . . , it needs to provide a benefit, such as the [Center].” Counsel

  went on to state that the Center is specifically designed for parents

  who work in the medical field. And, in its opening brief on appeal,

  the Hospital again makes clear that “[t]he purpose of the Center is

  to provide child care to constituents of [the Hospital] and [CU

  Anschutz] as an employee benefit to attract and retain quality

  employees so that the hospitals can better serve their patients.”

  (Emphasis added.)

¶ 58   These statements show that the overarching purpose and goal

  of the Center are to provide a benefit to employees of the Hospital

  and CU Anschutz, and for the Center to be used as a recruitment

  tool in its hiring process. As the BAA concluded, this demonstrates

  a pure business purpose.

¶ 59   Evidence of the actions of the Hospital and the Center further

  supports this conclusion. See Div. Prop. Taxation Rule IV.B.1, 8

  Code Colo. Regs 1304-2 (in determining whether the entity bestows

  a “gift” we consider the organization’s conduct as well as its stated

  goals and purpose). The record shows that the Center has

  dedicated the majority of enrollment spots to children of employees

  at the Hospital, CU Anschutz, and Fitzsimons. It has further

                                    34
  prioritized remaining slots for children of Bright Horizons, UPI, and

  UCH employees.

¶ 60   According to testimony at the hearing, at the beginning of an

  enrollment period, the number of spots available for children in the

  general community is limited to those spaces remaining after

  parents employed at the Hospital and CU Anschutz fill the

  contractually allotted slots. Only if the number of enrolled children

  of the Hospital and CU Anschutz employees falls short of those

  allotments would additional spaces be available to other children.

  And, as reflected in the contract between the Hospital and the

  University, the Hospital and the University have priority for any

  unused allotted spaces: “[The Hospital] and the University have

  priority for unused child care spaces prior to spaces being

  transferred to the common pool and made available to either Bright

  Horizons’ staff or the community.”

¶ 61   Moreover, the witnesses for the Hospital testified that, as a

  result of the Center’s prioritization policy, only 11 of the 248

  children enrolled in 2014 were children of parents employed by

  Fitzsimons, UPI, and UCH, all of which are themselves associated

  with the Hospital or the University. And, the record shows that this

                                     35
  prioritization policy resulted in an enrollment in 2014 of no children

  from the general community (i.e. children whose parents were not

  affiliated with the Hospital, CU Anschutz, Fitzsimons, Bright

  Horizons, UPI, or UCH).

¶ 62   The Center’s allotment of spaces to the Hospital, CU Anschutz,

  and Fitzsimons and the written prioritization policy for children of

  the Hospital, CU Anschutz, Fitzsimons, and Bright Horizons staff

  are consistent with the Hospital’s own acknowledgments that the

  Center is a recruitment tool and employment benefit, not a gift.

¶ 63   Second, the prioritization policy also shows that the child care

  services provided by the Center are not provided to an indefinite

  number of persons, because voluntary association with the

  Hospital, CU Anschutz, Bright Horizons, Fitzsimons, UPI, or UCH is

  effectively a de facto requirement for acquiring an enrollment spot

  at the Center. We cannot say that the BAA abused its discretion in

  relying on the part of Rule IV.B.2 that excludes organizations with a

  voluntary association requirement and in concluding that “the

  Center is not provided for the benefit of an indefinite number of

  persons.”

                                    36
¶ 64   Third, the Hospital argues that the Center is used for strictly

  charitable purposes because it lessens the burden on the

  government by providing a child care center for a government

  entity, CU Anschutz, that would otherwise be providing such

  services at taxpayer expense. The Hospital asserts that, because

  child care is available at the University’s Boulder and Colorado

  Springs campuses, the Center is providing a service that the state

  government would otherwise be required to provide on the CU

  Anschutz campus as well. This argument is not supported by the

  record.

¶ 65   Witnesses for the Hospital testified that the child care facilities

  on the Boulder and Colorado Springs campuses were “auxiliary

  services,” meaning that they were open and operating based only on

  the tuition collected from parents; those centers’ “ability to function

  . . . is dependent on the revenue [they] bring[] in.” There was no

  evidence that the child care centers on those campuses received

  money from the state to operate. Moreover, when questioned by the

  BAA, witnesses could not say if the child care facilities on those

  campuses were owned and operated by the University or if they

  were owned and operated by a third party like Bright Horizons.

                                    37
¶ 66   Thus, the evidence presented at the hearing shows that the

  funding of the child care centers on those campuses comes through

  revenue from tuition, not money from the University. There was

  simply no evidence presented at the hearing that the government

  would be paying for a child care center on the CU Anschutz campus

  absent the Center’s existence.

¶ 67   What is more, no evidence was presented that showed the

  state government is required to provide child care on its state

  university campuses at the state’s expense. See AM/FM Int’l, 940
P.2d at 346. The sine qua non of lessening the burdens of

  government is that the charitable work being done by the entity, if

  not being done by the entity, must be undertaken at public expense.

  Div. of Prop. Taxation Rule IV.B.4, 8 Code Colo. Regs. 1304-2.

  Similar to the entity in AM/FM International, nothing in the

  evidence adduced at the hearing in this case suggests that a child

  care center on a state university campus, such as the Center, is a

  “primary responsibility of government” or that the Center “directly

  performs any activities for which the government is responsible or

                                    38
  which the government would be forced to assume in the absence” of

  the Center’s activities.5 AM/FM Int’l, 940 P.2d at 346.

¶ 68   Therefore, we cannot conclude that the BAA abused its

  discretion in concluding that,

            [a]lthough having access to child care for [CU
            Anschutz] faculty, staff and students is a
            legitimate policy concern for the University
            from the perspective of employee retention, the
            Board was not convinced that providing a child
            care facility for the [CU Anschutz] faculty, staff
            and students is a primary responsibility of the
            University such that it would have to be
            carried on by the University at taxpayer
            expense . . . in the absence of [the Hospital]
            providing a child care center at the campus.

¶ 69   For the reasons discussed above, the Center does not provide

  its services as a gift to an indefinite number of persons and it does

  not lessen the burdens of government. Therefore, the BAA did not

  err in denying the Hospital’s tax exemption application on the basis

  that the Center does not operate for strictly charitable purposes

  under section 39-3-108(1)(a).

  5 On appeal, the Hospital argues for the first time that the Center
  also lessens the burdens of government by providing early
  childhood education. We do not address arguments made for the
  first time on appeal. E.g., Minshall v. Johnston, 2018 COA 44, ¶ 21.
  Moreover, nothing in the record shows that the State of Colorado is
  required to provide pre-school child care for all children in the state
  or for the faculty, staff, and students at the University.

                                    39
                            VI.   Conclusion

¶ 70   The BAA’s order denying the Hospital’s application for property

  tax exemption for the Center is affirmed.

       JUDGE VOGT and JUDGE CASEBOLT concur.

                                   40