Opinion
No. CV 08 4031321 S
June 10, 2011
MEMORANDUM OF DECISION RE MOTIONS FOR SUMMARY JUDGMENTS #111 and #116
FACTS
The plaintiff, the Trustees under the Restatement Agreement and Declaration of Trust, filed a one-count application on May 16, 2008, appeals the denial of its application for tax exempt status as an educational institution under General Statutes § 12-81(7) by the defendants, the town of Wallingford and the Wallingford Board of Assessment Appeals. In its application, the plaintiff alleges the following facts.
The plaintiff, "is a trust fund created by and among Local 777 of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada AFL-CIO, CLC, the Joint Apprentices Committee of Local 777 of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada and the Mechanical Contractors of Connecticut, Inc., as well as Employer Signatories to Collective Bargaining Agreements with the Union and the Union Trustees and Employer Trustees" that established the "Connecticut Plumbers Pipefitters Apprenticeship School and Training Fund." "The sole purpose of the trust fund is for such training, retraining, improvement of skill[s] and other educational benefits for apprentices and Journeymen." The plaintiff is exempt from federal income tax under the Internal Revenue Code, 26 U.S.C. § 501(c)(3), which includes funds organized and operated exclusively for educational purposes. The plaintiff's facilities are located at 66 North Plains Highway in Wallingford and consist primarily of classrooms and shop rooms in which students can study to become licensed plumbers and pipefitters.
The plaintiff further alleges in the application that in April 2002, it applied to the Wallingford assessors' office for tax exempt status under General Statutes § 12-81(7). The status was approved by letter on January 27, 2004, effective for the October 1, 2004 grand list. On August 22, 2005, the plaintiff received a letter from the town assessor stating that it would have to submit an application to maintain its tax exempt status. This process was completed on December 6, 2005. By letter dated February 8, 2008, the plaintiff was notified that "the status of [the] property will change from tax-exempt to taxable effective for the October 1, 2007 Grand List." The value of the property on the grand list was $254,590. The plaintiff claims that the valuation and change of status was unlawful as the property is used exclusively for educational purposes as defined in § 12-81(7). The plaintiff appealed this change in status to the Wallingford board of assessment appeals, which, by letter dated March 19, 2008, affirmed the change in status of the facility to taxable property. This appeal to the Superior Court follows.
On October 29, 2010, the defendants filed a motion for summary judgment on the ground that, since the parties agreed to proceed by way of a "Joint Stipulation of Facts Not in Dispute" in lieu of an evidentiary hearing, the court can determine as a matter of law whether the property is entitled to an exemption from property taxes pursuant to 12-81(7) as a corporation organized exclusively for educational purposes. The defendants submitted a memorandum of law in support of their motion. In its motion for summary judgment dated October 29, 2010, the plaintiff moved on the ground that there is no genuine issue as to any material fact in the complaint as to the tax status of the property, and, therefore, it is entitled to judgment as a matter of law. The plaintiff submitted a memorandum of law, the affidavit of Frank DaCato, the training coordinator of the school, and numerous other exhibits, some of which were included as a part of the stipulation. On November 29, 2010, the plaintiff filed a memorandum of law in response to the defendants' motion, and on November 30, 2010, the defendants filed a memorandum in reply to the plaintiff's motion. This matter was heard at short calendar on March 7, 2011.
Although dated on October 29, 2010, the plaintiff's motion has a stamped file date of January 10, 2011.
These include copies of (1) a letter dated December 4, 1996, from the internal revenue service exempting the plaintiff from federal income tax; (2) the plaintiff's tax exempt quadrennial application and report to Wallingford for 2003; (3) a letter from the town of Wallingford approving tax exempt status for the school and training facility dated January 27, 2004; (4) a letter from the Wallingford assessors' office dated August 22, 2005 to reapply for its tax exempt status; (5) the plaintiff's tax exempt quadrennial application and report filed on November 30, 2005; (6) a letter dated February 8, 2008, from the assessor notifying the plaintiff of its loss of tax exempt status beginning on October 1, 2007; (7) a letter of appeal by the plaintiff to the board of assessment appeals dated February 15, 2008, with its application and a copy of the minutes from the hearing of the board on March 12, 2008; (8) notification of assessment from the board of assessment appeals dated March 19, 2008; (9) documents filed with the Superior Court and (10) the Connecticut Commissioner of Labor's Work Training Regulations for Apprenticeship and Training Programs, effective as of January 22, 1980.
Discussion
"Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." (Internal quotation marks omitted.) Sherman v. Ronco, 294 Conn. 548, 553-54, 985 A.2d 1042 (2010).
Summary judgment motions may be filed in tax appeals because, unlike other administrative appeals, these are "trials de novo." Millward Brown, Inc. v. Commissioner of Revenue Services, 73 Conn.App. 757, 763-64, 811 A.2d 717 (2002).
"In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact. The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle [the movant] to a judgment as a matter of law . . . When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue . . . Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue." (Internal quotation marks omitted.) Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 10-11, 938 A.2d 576 (2008).
The parties have agreed to proceed by way of a "Joint Stipulation of Facts Not in Dispute" in lieu of an evidentiary hearing "together with Interrogatories and responses thereto." Thus, the issue is whether, as a matter of law, the plaintiff is entitled to an exemption from property taxes pursuant to § 12-81(7) as a corporation organized exclusively for educational purposes.
Summary judgment may be granted on stipulated facts. See, e.g., Moncrease v. Chase Manhattan Auto Finance Corp., 98 Conn.App. 665, 667, 911 A.2d 315 (2006) (affirming grant of summary judgment by trial court based on stipulated facts); see also Labor Dept. v. America's Cup, Superior Court, judicial district of Hartford, Docket No. CV 92 0516750 (April 21, 1994, Hennessey, J.) [ 11 Conn. L. Rptr. 379] (summary judgment granted on basis of stipulation of facts submitted in lieu of affidavits).
General Statutes § 12-81(7) exempts from taxation the real property of a corporation held exclusively for scientific, educational, literary, historical or charitable purposes. Regarding this exemption from taxation, our Supreme Court has stated: "It is . . . well established that in taxation cases . . . provisions granting a tax exemption are to be construed strictly against the party claiming the exemption, who bears the burden of proving entitlement to it . . . Fanny J. Crosby Memorial, Inc. v. Bridgeport, [ 262 Conn. 213, 220, 811 A.2d 1277 (2002)]. Exemptions, no matter how meritorious, are of grace . . . [Therefore] [t]hey embrace only what is strictly within their terms . . . We strictly construe such statutory exemptions because [e]xemption from taxation is the equivalent of an appropriation of public funds, because the burden of the tax is lifted from the back of the potential taxpayer who is exempted and shifted to the backs of others . . . Id. [I]t is also true, however, that such strict construction neither requires nor permits the contravention of the true intent and purpose of the statute as expressed in the language used." (Internal quotation marks omitted.) St. Joseph's Living Center, Inc. v. Windham, 290 Conn. 695, 707, 967 A.2d 188 (2009).
In St. Joseph's Living Center, our Supreme Court stated that "regarding the strict construction of tax exemption statutes, specifically, [§ 12-81(7)] and its predecessors, has not always been applied in cases involving educational, scientific or charitable organizations. In fact, the property of such organizations was treated rather uniformly as being subject to `a rule of nontaxability.' . . . Consequently, [§ 12-81(7)] [did] not come within the rule that tax exemption statutes must be construed strictly against the taxpayer." (Citations omitted; internal quotation marks omitted.) St. Joseph's Living Center, Inc. v. Windham, supra, 290 Conn. 708 n. 22. The court then noted that although "this approach has seemingly become extinct . . . it [is not] particularly clear whether [the rule of nontaxability] is applicable beyond the educational context." Id.; accord University of Hartford v. Hartford, 2 Conn.App. 152, 157, 477 A.2d 1023 (1984). For example, in Arnold College v. Milford, 144 Conn. 206, 210, 128 A.2d 537 (1957), the requirement under § 12-81(7) that the property be "used exclusively for carrying out one or more of such purposes" was interpreted liberally with respect to educational institutions. The court in St. Joseph's Living Center questioned, without answering, whether the rule that tax exemption statutes must be construed strictly against the taxpayer should be applied to educational institutions or whether those institutions should continue to follow the more liberal rule. It appears in light of precedent and until our appellate courts articulate more clearly which rule of law should be followed in construing tax exemptions involving educational institutions, the liberal rule is the law. See Loomis Institute v. Windsor, 234 Conn. 169, 176, 661 A.2d 1001 (1995), and cases cited therein.
In St. Joseph's Living Center, the court applied the rule of strict construction against the plaintiff claiming a charitable exemption for the nursing home facility under § 12-81(7).
In sum, "to qualify for a property tax exemption under the relevant portions of § 12-81(7), the property must be owned by, or held in trust for, `a corporation organized exclusively for scientific, educational, literary, historical or charitable purposes or for two or more such purposes and used exclusively for carrying out one or more of such purposes,' and no `officer, member or employee' may `receive any pecuniary profit from the operations thereof, except reasonable compensation for services in effecting one or more of such purposes . . .'" St. Joseph's Living Center, Inc. v. Windham, supra, 290 Conn. 708, quoting General Statutes § 12-81(7).
The framework for determining the tax status involving the charitable exclusion of § 12-81(7) is set forth in St. Joseph's Living Center, Inc. v. Windham, supra, 290 Conn. 713. Therein, the court set out three factors to be considered in determining the tax exemption: (1) the most important factor is an examination of the corporate entity itself to determine if it is organized to carry out exclusively the purpose for which it is claiming an exemption is the most important factor; (2) to a lesser extent, whether the entity claiming the tax exemption status is self-supporting; and (3) whether an organization's activities serve to relieve a burden on the state. Id. The court further divided the first element — whether the real property held in trust for a corporation is organized exclusively for the purpose under which it is claiming an exemption — into (a) the purposes for which a particular corporation has been `organized' and (b) whether that purpose is, in fact, charitable. Id. The defendants argue that this court should use this test for determining the tax status involving the educational exclusion. It is not clear, however, whether that framework would be equally relevant to the educational exclusion in the present case.
The plaintiff argues that the court should apply the factors set forth in the cases involving the educational tax exemption. In Loomis Institute v. Windsor, supra, 234 Conn. 169, the court required for the educational tax exemption, that the property held in trust for the corporation: (1) is organized exclusively for educational purposes; and (2) used exclusively for carrying out such purposes. Id. 175. "[T]he statutory requirement [that the property exempt from taxes be used exclusively for carrying out educational purpose] . . . extends to all of the property the use of which is incidental to education . . ." (Internal quotation marks omitted.) Id., 177. For carrying out an educational purpose, "[i]t is the nature of the use, and not the frequency of use and the number of students, which is controlling." Red Top, Inc. v. Board of Tax Review, 181 Conn. 343, 353, 435 A.2d 364 (1980). In addition, in Arnold College v. Milford, supra, 144 Conn. 206, the court stated: "The real test is whether the property is sequestered for educational purposes and whether the corporation, or any person, can secure any profit from its operations." See also Edgewood School, Inc. v. Greenwich, 131 Conn. 179, 183, 38 A.2d 792 (1944) (same). Thus, based on the cases involving the educational tax exemption, which have not been overruled, it appears that the requirements set out in them should be applied to the present case. Nonetheless, the requirements for the educational exemptions appear to be essentially similar to those in numbers one and two of the three factors set forth in St. Joseph's Living Center, Inc. v. Windham, supra, 290 Conn. 713-14.
"The determination of whether property is used exclusively for carrying out an educational purpose is . . . governed by the specific facts in the individual case." (Internal quotation marks omitted.) Loomis Institute v. Windsor, supra, 234 Conn. 177. As a result, the plaintiff's foundational and related documents are relevant in determining the purposes for which the entity was formed. As part of the joint stipulation provided by the parties is the document entitled "Restated Agreement and Declaration of Trust Establishing the Connecticut Plumbers and Pipefitters Apprenticeship School and Training Fund." This trust agreement creates the school and fund and the plaintiff is the trustee of the fund. Further, this trust agreement states that it was entered into with the "Local 777 of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada AFL-CIO, CLC, the Joint Apprentices Committee of Local 777 of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada and the Mechanical Contractors of Connecticut, Inc., as well as Employer Signatories to Collective Bargaining Agreements with the Union and the Union Trustees and Employer Trustees." "The Union has entered into, and expects to continue to enter into, collective bargaining agreements which, among other things, require employer payments . . . to the [Local 777 Apprentice and Journeymen Training Fund]. . ." The trust agreement further states: "The sole purpose of the plaintiff is for such training, retraining, improvement of skills and other educational benefits for apprentices and Journeymen as the Trustees in their discretion may from time to time determine and to defray the expenses related thereto." The plaintiff is responsible to collect and administer employer contributions to the trust fund to provide the benefits intended for employees and to set up and promote an apprenticeship school and other training programs.
Further, the joint stipulation includes the following facts. "The Joint Apprenticeship Committees of Locals 39, 84, 173 and 305, and their Trustees have all consolidated into the Joint Apprenticeship Committee of Local 777." Local 777 is the labor union "responsible for the administration of the apprenticeship training program being conducted at 66 North Plains Highway in Wallingford, Connecticut, owned by the [p]laintiff . . ." Local 777 supplies a trained workforce of plumbers, pipefitters and HVAC (heating and air conditioning) service personnel to employers who have collective bargaining agreements with local 777. Local 777, which set up the apprenticeship school and training fund, has received a federal income tax exemption under the Internal Revenue Code for the purpose of establishing and promoting the apprenticeship program. The apprenticeship school is accredited by the Connecticut Department of Labor, office of apprenticeship training for teaching and training persons to become licensed plumbers and pipefitters. It is not accredited by the Connecticut department of education.
"Local 777 assigned to the Trustees and to the Local 777 Joint Apprenticeship Committee the sole right to receive the Employer Contributions." The apprenticeship school is funded by the employers who are signatories of the collective bargaining agreement with Local Union 777. They are obligated to make tax exempt contributions to the fund and to make contributions on behalf of the apprentices and journey persons to the fund. Employer contributions are calculated by multiplying the rate of payment by the total number of employees of an employer covered by the bargaining agreement with Local 777. The fund is administered by ten trustees, five of whom are selected by Local 777 and five selected by the Mechanical Contractors of Connecticut, Inc. The rights, powers, duties and liabilities of the trustees are set forth in the trust agreement.
The school's instructors are selected by reviewing resumes submitted by interested persons in response to advertised notice on the Local 777 union's website or by notice at union meetings that it is accepting resumes. The instructors then attend the United Association's Instructor Training Program at Washenaw Community College. There are three full-time instructors who are paid a weekly salary and receive benefits. The twenty-seven part-time instructors are paid hourly and receive no benefits. As attested to by DaCato in his affidavit, no officer, member or employee receives a pecuniary profit from the school's operation.
The students who qualify for the school must be at least eighteen years of age, a high school graduate or its equivalent, have a Connecticut driver's license and pass a substance abuse test. Upon admission, students are required to become members of local 777 and must maintain their availability for job referrals by local 777. The program, which teaches plumbing, pipefitting and HVAC takes five years. During that time, the apprentices attend the requisite classes and work the required hours of on the job experience. Apprentices are not charged tuition but they buy their own books. The classroom and shop lab portions of their training are conducted Monday through Friday from 7:45 a.m. to 3:30 p.m. for six weeks a year for each of the five years it takes to complete the apprenticeship program. In his affidavit, DaCato attests that the building is comprised of 10,000 square feet consisting of four large classrooms and four instructors' offices in 5,580 square feet and a training area for practical demonstrations and training in 4,120 square feet. Plumber and pipefitter apprentices each spend 1,240 hours in classroom and shop lab activities and 8,500 hours of on the job training and HVAC persons spend 1,330 hours in classroom and shop lab activities and 10,000 hours of on the job training. In DaCato's affidavit, he testified that in the first two years of school, students take all of the same classes and participate in all of the same practical training; that these classes, consist of lectures, classroom discussion of applicable theories, techniques and new developments, homework assignments, quizzes and exams; that during the third, fourth and fifth years, the curriculums are trade specific; and that the students may only advance to the next apprenticeship level after attending and passing all of their courses for that year and accumulating the requisite number of on the job training each year.
In the joint stipulation, the facts further state that the apprentices over time are provided health and dental care, pension, prescription drug reimbursement and life insurance benefits. The rate of pay for apprentices while on the job training is controlled by the bargaining agreement and is paid for by the employer. Apprentices earn a percentage of an established journeymen's wage rate by classification. Plumbing and pipefitter apprentices coming off a period of on the job training who return to classroom and shop lab activities are given lay off slips and can apply for and receive unemployment compensation while in class and shop lab. HVAC trainees do not get laid off and work on the job and go to school at the same time. Upon successful completion, the apprentices are awarded a certificate of completion by the Connecticut state apprenticeship council and are eligible to sit for the Connecticut Department of Labor office of apprenticeship training examination, which upon passage enables them to become licensed in their craft. The students can also apply thirty-two credits earned from the relevant apprenticeship program toward a Washtenaw Community College certificate or toward a bachelor's degree at the National Labor College or Ferris State College.
The defendants also maintain in their memorandum in support of their motion for summary judgment that, because of the plaintiff's cash surplus, it is not organized exclusively for educational purposes but these surpluses are evidence of the plaintiff business, purpose calculated to provide employers with a controlled supply of highly trained plumbers, pipefitters and heating and air conditioning personnel, all of which cannot be interpreted to be a benevolent educational purpose. In response to the defendants' interrogatories, the plaintiff stated that it had a cash surplus from 2005 through 2007, of more than $1M in each year. The plaintiff argues that the "reserve monies of the Fund are used only in the interest of and to allow the educational interests of the . . . school to be furthered. The reserve monies pay for additional classes, buy equipment necessary for the classes and practical training within the . . . school and pay for additional classroom space for the . . . school located in Meriden, Connecticut." No evidence has been submitted to indicate that the surplus money is not being used for a purpose other than for the educational interests of the school.
In further support that the plaintiff is not entitled to a tax exemption as an educational institution, the defendants rely on a number of out-of-state cases. For example, in County Assessor v. United Brotherhood of Carpenters Joiners of America, Local No. 329, 202 Okla. 162, 211 P.2d 790 (1949), the United Brotherhood, Local 329 argued that the lots with improvements owned by the union were entitled to tax exemption as an educational institution under the Oklahoma constitutional provision. The exemption was for the "grounds and buildings of library, scientific, educational, benevolent and religious institutions, colleges or societies, devoted solely to the appropriate objects of these institutions, not exceeding ten acres in extent, and not leased or otherwise used with a view to pecuniary profit." Id. 165. The educational work was the training of the apprentices which was accomplished through direct instruction by a carpenter member with whom the apprentice worked and through school instruction. Id., 164. The schooling was accomplished through the joint efforts of the union and the Department of Labor providing the amount necessary to employ school instructors to give the technical training, but classes were held at night in the Central High School in Oklahoma City. Id. The court denied the tax exemption on the grounds that neither the manual nor technical training of the apprentices was pursued upon the premises involved; the main purpose of the school, based on the evidence, was not for educational advantages but incidental and subservient; that as testified to by the union, the purpose was to assist their own members in means of employment for the betterment of the trade and to improve labor relations or help them to elevate the trade and benefit the membership as a whole. Id., 167. Not only does this case differ on the facts from the present case, but also it is readily distinguishable on the basis of the language in the tax exemption provision, the type of curriculum offered and where it was taught and that the educational training was incidental to the overall purpose of the property for which a tax exemption was being sought.
A case similar to the present one, also relied on by the defendants, is New Jersey Carpenters Apprentice Training Education Fund v. Borough of Kenilworth, 147 N.J. 171, 685 A.2d 1309 (1996), cert. denied, 520 U.S. 1241, 117 S.Ct. 1845, 137 L.Ed.2d 1048 (1997). Therein, the plaintiff claimed an exemption from real property taxes under N.J.S.A 54:4-3.6, which states in pertinent part: "The following property shall be exempt from taxation under this chapter: All buildings actually used for colleges, schools, academies or seminaries . . . provided, in case of all the foregoing, the buildings, or the lands on which they stand, or the association, corporations or institutions using and occupying them as aforesaid are not conducted for profit." Id., 178. Tax exemption statutes in New Jersey are strictly construed against those claiming the exemption. Id., 177. Although the rule of strict construction did not require "a rigid scholastic interpretation," the court reiterated that "taxation is the rule, and the claimant bears the burden of proving an exemption." Id. The fund in New Jersey Carpenters was created the same way as in the present case and likewise, the employers in that industry, the construction industry, were under an obligation to make contributions to the fund by virtue of their respective collective bargaining agreements. Id. The fund was established for apprentice training and educational purposes and no part of the earnings or assets of the fund were to inure to the benefit of any private shareholder or individual or any employer or union. Id., 174. The fund's assets were to be used only to pay reasonable expenses for the educational benefits and the trust was exempt under federal income taxes. Id. The premises were used as a training facility for apprentice carpenters. Id., 175. The program was open to anyone, without any requirement of union membership; the only requirement being that students had a high school diploma or equivalency degree. Id. The fund recruited apprentices from union locals, by advertising at high school career days, from vocational schools, and through advertising at unemployment offices. Id. The students were not charged for tuition, books, or supplies. Id.
In describing the curriculum, the court stated: "The training center is not a traditional school with lectures and classrooms, but instead takes a `hands-on' approach. Students must master several skills in order to become journeyman carpenters. For each skill, students watch a slide show or video. After viewing the slide show, the students attempt the skill. Instructors, who are qualified carpenters and full-time employees of the Fund, are available to answer questions, but they do not teach in a traditional manner. No academic programs are offered. Students do not receive grades, but those who fail a skill are not allowed to proceed to the next level of carpentry and may not receive accompanying raises. The school is not accredited by the New Jersey Department of Education, the Middle States Association, or any similar agency. Nor is the program established, maintained, or supervised by the New Jersey Commissioner of Education as required for vocational schools operated by school districts or county vocational school boards. The United States Department of Labor, however, monitors the program, and all those who complete the program are awarded a journeyman's certificate by the Department as well as from the national union's office in Washington." New Jersey Carpenters Apprentice Training Education Fund v. Borough of Kenilworth, supra, 147 N.J. 175-76.
The court reasoned that under the plain meaning of the tax exemption statute in New Jersey, the fund could only be exempt if it conducted a not-for-profit school and that the training center was a "school, academy, college or seminary." Id., 178. Without a precise definition of school in the context of the statute, however, the court noted that the fund was not a traditional school, did not teach children, was not accredited, did not award a degree but did award certificates of completion and was monitored by the United States Department of Labor. Id., 180.
The court next examined whether the plaintiff's school could be considered a "college" as used in that same statute. Id., 181. Although stating that "[t]he concept of a college is an organic one, taking on a varying aspect in different times and places," the court explained that "`college' has different meanings in different historical periods, and that this institution of scholars and research fit into the broad definition of an institution for learning." Id., 181-82. For example, the court did not view a particular institution as a college because it determined that "the word `college' does not embrace an organization which is controlled by a particular profit-making segment of society and which is devoted principally and primarily to research for the benefit of that industry." Id., 183. The court discussed another case in which an exemption had been granted based on the evidence that the organization was a nonprofit, altruistic, beneficent organization contributing to the general health and welfare of the community and had not competed with private enterprise nor primarily aided one segment of private enterprise. Id., 184. The court concluded that in the present case, "[t]he fund [was] controlled by and operated primarily for the benefit of the construction industry. Students from outside the industry [were] educated in carpentry, and their education [was] intended to encourage them to join that industry." Id.
In determining whether the school was conducted for profit, the court explained that the nature of the board membership was relevant. Id., 185. The court pointed out that because the trustees were appointed by the construction industry, the employees and the union, their primary role was to benefit that industry by providing more skilled workers for the employers and more union members for the union. Id. Thus, the training center was primarily for the benefit of the unions and companies in the construction industry rather than for the public. Id. In addition, the court stated that the source of revenue resulted in the fund having assets of over $9 million, $5 million of which was in cash and marketable securities and, upon termination of the fund, the assets would be distributed only for apprentice training and educational purposes and none of the assets would be distributed for educational use in any other industry. Id. The court concluded that this evidence "indicate[d] that the Fund primarily benefit[ted] the construction industry; i.e., the employers, the Union, and the employees." Id., 186.
"Although a close case," the court stated that in construing the exemption laws strictly against the taxpayer, "the Fund ha[d] not convinced the Court that the statutory exemption for `school' was intended to cover its training facility." Id., 189. "Moreover . . . the Fund [was] not a traditional school and [did] not benefit our society in the way the Legislature contemplated when it enacted [N.J.S.A, 54:4-3.6, the exemption statute]." Id. "Thus, [the court concluded] that the training facility [was] not a school" and further stated that, "because the Fund was operated primarily to benefit a particular profit-making sector of the economy," it would not be granted a tax exemption. Id.
Notwithstanding some factual similarities between the present case and the New Jersey Carpenters Apprentice Training Education Fund v. Borough of Kenilworth, supra, 147 N.J. 171, the differences are notable and include, inter alia, the language of the New Jersey exemption statute requiring the facility to be a "school," the rules of construction requiring exemption statutes to be strictly construed, the lack of an academic curriculum at the training school and evidence that the revenues generated were not related to the cost of providing an education.
The other out-of-state cases relied on by the defendants are each distinguishable as to the language of the tax exemption statute or a constitutional provision, the rule of strict construction applied to tax exemptions, the exclusivity of the purpose of the organization and the type of curriculum offered. See, e.g., Johnson v. Sparkman 159 Fla. 276, 31 So.2d 863 (1947) (en banc) (lodge hall and business office of union not exempt as property used for charitable or educational purposes because education incidental, not the dominant use); Chicago Northeast Illinois District Council of Carpenters Apprentice Trainee Program v. Dept. of Revenue, 293 Ill.App.3d 600, 688 N.E.2d 721 (1997) (tax statute strictly construed denied exemption for property used as labor organization's carpentry training program because it lacked courses in traditional academic subjects, except for math, and did not substantially lessen governmental function), cert. denied, 177 Ill.2d 568, 698 N.E.2d 542 (1998); Pipefitters Joint Educational Training Fund v. Revenue Cabinet, Kentucky Court of Appeals, Docket No. 2002-CA-002537-MR (January 30, 2004) ( 2004 WL 178944) (court denied exemption based on constitutional provision, which strictly limited exemption "from taxation [to] `institutions of education not used or employed for gain by any person or corporation, and the income of which is devoted solely to the cause of education,'" because courses taught were geared to the pipefitters trade only, students did not receive services that the state could not provide and the students received no college credits applicable to a Kentucky college); Lundberg v. Alameda, 46 Cal.2d 644, 298 P.2d 1 (1956) (inapplicable to the present case because it was decided on principle of separation of church and state and involved the exemption of property for a school used for educational purposes owned and operated by religious organization), app. dismissed, 352 U.S. 921, 77 S.Ct. 224, 1 L.Ed.2d 157 (1956); PIPA Foundation for Education Research v. Board of Finance Revenue, 535 Pa. 67, 634 A.2d 187 (1993) (based on tax statute which required a public benefit, court disallowed charitable exemption for a nonprofit organization established for purpose of encouraging education and research in accounting because organization only benefitted individuals who had professional or occupational interests in accounting subjects); State v. Northwestern Vocational Institute, Inc., 232 Minn. 377, 45 N.W.2d 653 (1951) (where tax exemption provision required private educational institutions to provide at least some substantial part of the educational training which otherwise would be furnished by the publicly supported schools to lessen the tax burden imposed on the citizens, the court denied tax exemption to defendant as a seminary of learning because it offered only elementary training in radio and electric repair and maintenance service, and did not provide courses similar to or capable of being assimilated by those provided in a public educational system).
Although there is no Connecticut case that has discussed the claim raised by the plaintiff, the cases involving educational institutions and whether they are exempt under § 12-81(7) are instructive. Whether a property is tax-exempt has been determined to be a fact intensive inquiry. A plaintiff must prove that the property belongs to or is held in trust for a tax-exempt organization for an educational purpose as stated in § 12-81(7) and that it does not produce any income to the organization, other than what is needed to provide reasonable compensation for services effectuating the educational purpose. Further, the requirement that the property is to be "used exclusively for carrying out one or more of such purposes" has been interpreted liberally with respect to educational institutions and extends to all of the property, the use of which is incidental to education. Applying this framework and the "rule of nontaxability" to the present case, the evidence demonstrates that the plaintiff should be granted tax exemption as an educational organization for the real property located at 66 North Plains Road in Wallingford.
CONCLUSION
The defendants' motion for summary judgment is denied as they failed to prove that the plaintiff is not entitled to an exemption from taxation. The plaintiff's motion for summary judgment is granted.