Court Opinion

ID: 9711460
Source: CourtListenerOpinion
Date Created: 2023-08-26 04:32:21.18351+00
Date Added: 2024-06-11T18:23:05.204506
License: Public Domain

LEVY, J.,
with whom SAUFLEY, C.J.,
and CALKINS, J.,
join, dissenting.
[¶ 43] I respectfully dissent.
[¶ 44] The Christian Fellowship and Renewal Center (CFRC) carried the burden to prove to and persuade the York County Commissioners that it came “‘unmistakably within the spirit and intent’ of the charitable tax exemption.” Credit Coun*299seling Ctrs., Inc. v. City of S. Portland, 2003 ME 2, ¶ 10 n. 3, 814 A.2d 458, 461; see also Episcopal Camp Found., Inc. v. Town of Hope, 666 A.2d 108, 110 (Me. 1995). The record evidence paints an uncertain picture, however, regarding both CFRC’s organizational purpose and its actual conduct in providing its facilities and real estate to houses of religious worship and other religious groups at low rates. Faced with such uncertainty, the County Commissioners properly concluded that CFRC failed to establish that it is “organized and conducted exclusively for benevolent and charitable purposes” as is required under our statutory scheme for exemption from property taxation. 36 M.R.S. § 652(1)(C)(1) (2005). The County Commissioners’ decision should be affirmed.
I. DISCUSSION
[¶ 45] As the Court explains, to qualify for an exemption as a benevolent and charitable institution pursuant to 36 M.R.S. § 652(1)(A) (2005), an institution must, among other things, comply with the standard set forth in section 652(1)(C)(1) that requires that the institution “claiming exemption ... be organized and conducted exclusively for benevolent and charitable purposes.” In determining whether an institution or organization meets both the organizational and conduct requirements, the reviewing authority must undertake a thorough analysis of the facts. In Green Acre Baha‘i Institute v. Town of Eliot, we stated that
[i]n 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.
150 Me. 350, 354, 110 A.2d 581, 584 (1954).
A. Organization Prong of 36 M.R.S. § 652(1)(C)(1)
[¶ 46] We examine an institution’s stated purpose when evaluating whether it satisfies the organization prong of the exemption statute. See Cushing Nature & Pres. Ctr. v. Town of Cushing, 2001 ME 149, ¶10, 785 A.2d 342, 345-46. Here, the Court emphasizes that “CFRC’s ‘purposes are limited to providing religious, charitable and/or educational services within the meaning of § 501(c)(3) of the Internal Revenue Code,’ ” and therefore ultimately concludes that CFRC’s organizational purpose is charitable.
[¶ 47] Simply asking whether an organization claims to be exempt from federal income taxation under 26 U.S.C.A. § 501(c)(3) (West Supp.2005) to determine whether it has a stated charitable purpose grossly oversimplifies the issue for two reasons. First, § 501(c)(3) affords tax exempt status for a variety of institutional purposes. Unlike our property tax exemption statute, § 501(c)(3) does not treat differently religious, charitable, scientific, and literary institutions. To say that an organization qualifies under § 501(c)(3) says nothing more than that it might qualify for one of the property tax exemptions recognized in 36 M.R.S. § 652(1) (2005).
[¶ 48] Second, § 501(c)(3) status only illustrates an institution’s assertion that it is entitled to exemption from income, not property, taxation; it provides no insight into the institution’s claimed charitable purpose. Accordingly, we must look beyond the general reference to the federal income tax exemption statute to determine an organization’s stated purpose. See *300Harrison v. Barker Annuity Fund, 90 F.2d 286, 289 (7th Cir.1937) (stating that “[t]he character of the corporation and the purpose for which it [is] organized must be ascertained by reference to the terms of its charter”). Our case law is consistent with this approach in that we focus on what the stated purpose of the institution actually is, not on its asserted tax status. For example, in Episcopal Camp, we noted that the organization had a multi-facet-ed purpose, which was “to maintain camps for both men and women which will 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 (internal quotations omitted). Similarly, in Camp Emoh Associates v. Inhabitants of Lyman, we observed that “[t]he main purpose and design of [Camp Emoh] ... [was] that of acquiring and holding real and personal property for the erection and support of a camp, or camps, to be conducted without profit, for the care, maintenance, and assistance of poor and indigent Jewish children.” 132 Me. 67, 69, 166 A. 59, 60 (1933).
[¶ 49] The statement in CFRC’s articles of incorporation that its purpose is “limited to providing religious, charitable and/or educational services within the meaning of § 501(c)(3) of the Internal Revenue Code” provides little insight as to whether CFRC satisfies the organizational prong of section 652(1)(C)(1). A more revealing expression of CFRC’s organizational purpose appears in the parties’ stipulations: “CFRC’s purpose and reason for existence was to help fundamentalist, bible-believing churches and individuals both physically and spiritually, including but not limited to pastors and church members.” Similarly, in its application for § 501(c)(3) status that was submitted to the County Commissioners as an exhibit, CFRC represented that it “plan[ned] to contact churches and let them know of the religious activities that [it] will be conducting, and also [to] let them know that [its] facilities are available for rent so that they can conduct their own religious activities [t]here.”
[¶ 50] Accordingly, CFRC does not satisfy the organizational prong necessary to qualify for the charitable exemption simply because it qualifies as a tax exempt organization under the Internal Revenue Code. Organizational purpose under section 652(1)(C)(1) is a broader concept. The record establishes that CFRC is organized to provide physical and spiritual assistance to churches and individuals and to rent its facilities so that others “can conduct their own religious activities.” Whether this should be construed as “charitable” or “religious" can be fairly debated. To the extent that CFRC purports to be organized to provide physical and spiritual assistance to others, its purpose can be construed as charitable, as is seen in cases involving missionary societies. Bee Green Acre, 150 Me. at 353, 110 A.2d at 583; Ferry Beach Park Ass’n of the Universalist Church v. City of Saco, 136 Me. 202, 204-05, 7 A.2d 428, 429 (1939); Maine Baptist Missionary Convention v. City of Portland, 65 Me. 92, 94 (1876) (“It has been repeatedly decided that missionary societies ... are, in a legal sense, charitable institutions.”). On the other hand, to the extent that CFRC asserts that it is organized to provide physical and spiritual assistance in the form of providing a venue for the conduct of religious activities, its purpose can be described as religious. See Pentecostal Assembly of Bangor v. Maidlow, 414 A.2d 891, 893-94 (Me.1980) (noting that “[i]t is well settled that for purposes of exemption from property taxation, religious purposes are not to be equated with benevolent and charitable purposes.”). *301Our statutory scheme also reflects this distinction between charitable and religious purposes in that it considers houses of religious worship and religious societies for exemption under a different provision than benevolent and charitable institutions. See 36 M.R.S. § 652(1)(A), (G) (2005); Osteopathic Hosp. of Me. v. City of Portland, 139 Me. 24, 29, 26 A.2d 641, 643 (1942) (acknowledging that a statutory predecessor to section 652 “place[d] benevolent and charitable institutions in a different category from purely religious institutions”).
[¶ 51] The Court’s reliance on the Town’s decision to grant a partial exemption for CFRC’s main building and the surrounding three acres as additional proof that CFRC satisfies the organizational requirement for the remaining buildings and acreage is misplaced. The law does not compel a town to grant a taxpayer an exemption for all of its property if the town determines, for whatever reason, that only a portion of the taxpayer’s property qualifies for the exemption. The main building and the surrounding three acres were not part of the abatement request that was considered by the County Commissioners,4 and the County Commissioners did not conduct a de novo review of the partial exemption granted by the Town to CFRC. Therefore, the County Commissioners, despite that CFRC’s distribution of food to the needy constituted a charitable purpose, “voted to deny the pending property tax abatement denial appeal petition.”
[¶ 52] The record in this case can be construed to support a determination that CFRC is organized to serve a charitable purpose, a religious purpose, or both. CFRC carried the burden to establish that it comes “unmistakably within the spirit and intent” of the organizational prong of the benevolent and charitable property tax exemption statute. The record does not compel the conclusion that the County Commissioners erred when they determined that CFRC is “primarily organized ... for religious purposes.”
B. Conduct Prong of 36 M.R.S. § 652(1)(C)(1)
[¶ 53] In addition to being organized for a benevolent and charitable purpose, an institution must also establish that it is conducted exclusively for a benevolent and charitable purpose. 36 M.R.S. § 652(1)(C)(1). Again, we must undertake a careful review of the facts in making such a determination. See Green Acre, 150 Me. at 354,110 A.2d at 584.
[¶ 54] Just as a stated purpose can be both charitable and religious, an institution’s conduct may be both charitable and religious. See Episcopal Camp, 666 A.2d at 109 (noting that the organization provided religious instruction through a “Faith Development” class but also “conducted]
... traditional summer camp activities”). Nevertheless, section 652(1)(C)(1) requires that the institution be conducted exclusively for charitable purposes. Whether “exclusively” should be strictly construed in accordance with its plain meaning is not settled by our decisions. Compare Credit Counseling Ctrs., Inc., 2003 ME 2, ¶ 12, 814 A.2d at 462, with Town of Poland Spring v. Poland Health Inst., Inc., 649 A.2d 1098, 1100 (Me.1994). In considering the nature of an institution’s conduct, we *302look to the institution’s ultimate beneficiaries because they illuminate the nature and scope of that institution’s charitable conduct. See Credit Counseling Centers, Inc., 2003 ME 2, ¶ 12, 814 A.2d at 462.
[¶ 55] Here, CFRC primarily provided its facilities and real estate to houses of religious worship and other religious societies at a low rate. None of the users of CFRC’s property for retreat and renewal in 1996 were individuals. Moreover, the record does not provide an adequate basis to determine how the organizations that rented the property in 1996 actually used the facilities. Indeed, the findings and stipulations that the Court quotes at length leave one guessing as to what actually occurred at CFRC’s facilities in 1996. Consequently, one can only speculate whether those uses were primarily for recreation or primarily for religious observance. What is certain, however, is that the County Commissioners, after a careful review of the record, could reasonably have been unpersuaded that CFRC’s conduct in 1996 was exclusively, or even predominantly, for a benevolent and charitable purpose.
C. Quid Pro Quo
[¶ 56] The Court’s analysis relies heavily on the suggestion that the County Commissioners and the Superior Court erred by placing too much emphasis on the lack of a quid pro quo in determining whether CFRC qualifies for an abatement. However, we review the County Commissioners’ decision directly, and it is clear from their decision that although the County Commissioners treated quid pro quo as a factor in their decision, it was not the sole factor.5 The Court’s suggestion that too much emphasis was placed on the quid pro quo factor is incorrect, and its focus on the Superior Court’s application of quid pro quo is inapposite to our review. See Peregrine Developers, LLC v. Town of Orono, 2004 ME 95, ¶ 9, 854 A.2d 216, 219.
D. Conclusion
[¶ 57] The Court concludes that the County Commissioners committed an error of law by denying the exemption because they viewed CFRC’s religious affiliation, the Religious nature of any recreational activities on its property, the lack of a quid pro quo, and incidental, non-charitable activities on the property, as/being an absolute bar to CFRC qualifying for a charitable exemption. Although the County Commissioners’ findings and conclusions lack precision, there is no language in their written decision to support the Court’s characterization that the County Commissioners treated any or all of the foregoing factors as an absolute bar to qualify for a charitable exemption. Rather, the County Commissioners denied the exemption because, as they stated, CFRC was “primarily organized and conducted for religious purposes” and had “failed to demonstrate that it is organized and conducted solely for benevolent and charitable purposes.”
*303[¶ 58] The Court’s effort to clarify the law governing the charitable exemption in support of its decision to remand this proceeding is unwarranted because the County Commissioners committed no error of law. CFRC bore the burden to prove to the County Commissioners that it came within the spirit and intent of the charitable tax exemption statute. Credit Counseling Ctrs., Inc., 2003 ME 2, ¶ 10 n. 3, 814 A.2d at 461. By providing the County Commissioners with an ambiguous statement of its organizational purpose and an amorphous portrait of its actual conduct, CFRC faded to meet its burden. We should affirm the judgment.

. It is noteworthy, however, that CFRC’s initial exemption request to the Town represented that its real estate and personal property were used for the following purposes: "As a house of worship (Title 36 M.R.S.A. § 652(g)) and/or for benevolent and charitable purposes (Title 36 M.R.S.A. § 652(A)).” Accordingly, it is possible that the Town viewed the main building and surrounding three acres as exempt as a house of worship pursuant to 36 M.R.S. § 652(1)(G) (2005).

. Although the County Commissioners stated that CFRC "failed to demonstrate that it provides any significant benefit to the general public or the local community or that it provides a service or benefit that the government would otherwise provide,” the County Commissioners concluded that CFRC was "primarily organized and conducted for religious purposes to benefit certain religious groups and individuals, ... and [CFRC's] primary use of its property is as rental property for the benefit of such religious groups and individuals.” Moreover, the County Commissioners concluded that CFRC "failed to demonstrate that it is organized and conducted solely for benevolent and charitable purposes or that the real estate for which it seeks an exemption is used solely for charitable and benevolent purposes.”