Summary
finding the board's decision to be unreasonable and unlawful because it relied on cases decided prior to the adoption of R.C. 5709.121
Summary of this case from Grandview Hospital v. ZainoOpinion
No. 76-306
Decided November 24, 1976.
Taxation — Real property — Conservation center — Houses used as residences by employees — Exempt from taxation, when — R.C. 5709.121(B), applicable.
Houses located on the tax-exempt property of a nonprofit nature center which serve as residences for employees of the center and which are used "in furtherance of or incidental to its [the center's] charitable, educational or public purposes and not with the view to profit" are exempt from taxation under R.C. 5709.121.
APPEAL from the Court of Appeals for Clermont County.
The Cincinnati Nature Center Association (Nature Center) is a nonprofit Ohio corporation organized and operated to educate the public about ecology and the natural environment. Approximately 9,000 students and 500 public school teachers receive instruction annually at the center. As part of its educational efforts, the Nature Center maintains a conservation center which includes a working farm and several miles of nature trails on 750 acres in Clermont County.
This Clermont County acreage includes several houses, two of which are used by the Nature Center as residences for two employees responsible for carrying out programs on, and taking care of, the nature preserve property. These naturalists are employed full-time and are required to live in the houses as a condition of employment. They are on call 24-hours-a-day in order to prevent damage to the property by hunters, motorcyclists and other trespassers. The Nature Center receives no rental from these employees.
In December 1973, the Nature Center filed applications with the Board of Tax Appeals for (1) exemption of two parcels of its Clermont County property, consisting of the houses used as residences by the center's employees and adjoining acreage, from taxation for the tax year 1973, and (2) remission of unpaid taxes and penalties on those parcels for the tax year 1972.
The board granted the applications as to the acreage, but denied them as to the residences. The Nature Center appealed the board's decision to the Court of Appeals, which reversed the board's determination on the grounds that "the use of the two houses by employees of the Nature Center was in furtherance of and incidental to its charitable purpose and was not with a view to profit" under R.C. 5709.121.
The cause is now before this court pursuant to the allowance of a motion to certify the record.
Messrs. Taft, Stettinius Hollister, Mr. Robert E. Rich and Mr. William J. Graham, Jr., for appellee.
Mr. William J. Brown, attorney general, and Ms. J. Elaine Bialczak, for appellant.
The issue before this court is whether the decision of the Board of Tax Appeals that the houses owned by the Nature Center and used as residences for its employees are not exempt from tax as property "used exclusively for charitable [or public] purposes" under R.C. 5709.12 and 5709.121 is reasonable and lawful.
R.C. 5709.12 provides, in pertinent part:
"Real and tangible personal property belonging to institutions that is used exclusively for charitable purposes shall be exempt from taxation."
R.C. 5709.121 defines property "used exclusively for charitable or public purposes," and not "used by such institution * * * under a lease, sublease or other contractual arrangement," in subdivision (B), which provides exemption for property:
"Otherwise made available under the direction or control of such institution, the state or political subdivision for use in furtherance of or incidental to its charitable, educational, or public purposes and not with the view to profit." (Emphasis added.)
In its decision not to grant an exemption for the houses used as residences by the Nature Center's employees, the Board of Tax Appeals failed to consider the definition of the phrase "used exclusively for charitable or public purposes," provided by R.C. 5709.121, and relied upon cases decided prior to the adoption of that statute in 1969. In Galvin v. Masonic Toledo Trust (1973), 34 Ohio St.2d 157, 160, this court stated that in enacting R.C. 5709.121, the General Assembly had undertaken to define the phrase "used exclusively for charitable purposes" in R.C. 5709.12. It stated further that "any prior inconsistent decisions of the courts interpreting that phrase must yield."
Given the ruling of the Galvin case, the board's reliance on case law developed prior to the legislative definition of "exclusive use" promulgated in R.C. 5709.121 was not proper, and its decision in that regard was unreasonable and unlawful.
The next question raised by this cause is whether the board's denial of exemption for the Nature Center's employee residences is reasonable and lawful in view of R.C. 5709.121 and cases decided after its adoption. The board argues that R.C. 5709.121 applies "only when two or more charitable organizations use the same property" or, in the alternative, when the subject property is made "available for use by the public."
Both contentions are based upon information not included in the language of the statute. In paragraph five of the syllabus in Wachendorf v. Shaver (1948), 149 Ohio St. 231, this court, in pertinent part, stated:
"The court must look to the statute itself to determine legislative intent, and if such intent is clearly expressed therein, the statute may not be resticted, constricted, qualified, narrowed, enlarged or abridged * * *."
The board, in effect, argues that legislative intent is not "clearly expressed" in R.C. 5709.121 because the statute fails to answer the question "to whom must this property be `otherwise made available.'"
In fact, the statute does answer that question. To fall within the terms of R.C. 5709.121, property must (1) be under the direction or control of a charitable institution or state or political subdivision, (2) be otherwise made available "for use in furtherance of or incidental to" the institution's "charitable * * * or public purposes," and (3) not be made available with a view to profit. Since the statute is clear as to what property is deemed under it to be "used exclusively for charitable or public purposes," the board's contentions that exempt property must be made available to another charitable institution or to the public are without merit.
The phrase "otherwise made available" refers to property used "in furtherance of * * * its charitable * * * or public purposes." The pronoun "its" refers, in turn, to the phrase "such institution." The majority in the two prior cases which have applied R.C. 5709.121 has not found it necessary to look beyond the language of the statute to determine legislative intent. See Galvin v. Masonic Toledo Trust (1973), 34 Ohio St.2d 157, and White Cross Hospital Assn. v. Bd. of Tax Appeals (1974), 38 Ohio St.2d 199.
Applying the "clearly expressed" terms of R.C. 5709.121 to this cause, this court finds the decision of the board that the employee residences located on the Nature Center's property are not exempt from taxation to be unreasonable and unlawful. The board itself found that "in the main" the use of the Nature Center's property is "a charitable use." The Court of Appeals, correctly applying R.C. 5709.121, found that "the use of the two houses by employees of the Nature Center was in furtherance of and incidental to its charitable purpose, and was not with a view to profit," because they were not rented or used "for private business or professional activity." We see no reason to disturb the findings of fact of the tribunal below. The judgment of the Court of Appeals is affirmed.
Judgment affirmed.
O'NEILL, C.J., HERBERT, CORRIGAN, STERN, CELEBREZZE and P. BROWN, JJ., concur.