Appeal of City of Concord (n.H. Bd. of Tax And Land Appeals).

• Decision Date: 13 January 2011
• Docket Number: No. 2009–491.,2009–491.
• Citation: 13 A.3d 186,161 N.H. 344
• Court: New Hampshire Supreme Court
• Parties: Appeal of CITY OF CONCORD (New Hampshire Board of Tax and Land Appeals).

161 N.H. 344

13 A.3d 186

Appeal of CITY OF CONCORD (New Hampshire Board of Tax and Land Appeals).

No. 2009–491.

Supreme Court of New Hampshire.

Argued: June 10, 2010.Opinion Issued: Jan. 13, 2011.

Rath, Young & Pignatelli, P.C., of Concord (Christopher J. Sullivan and Jason M. Tanguay on the brief, and Mr. Sullivan orally), for Home Care Association of New Hampshire.Gardner Fulton & Waugh, P.L.L.C., of Lebanon (Adele M. Fulton on the brief and orally), for the City of Concord.HICKS, J.

The City of Concord (City) appeals orders of the board of tax and land appeals (BTLA) ruling that the taxpayer, Home Care Association of New Hampshire (HCA), is entitled to a charitable tax exemption under RSA 72:23 (Supp.2010) and denying the City's motion to have an attorney sit as a board member. We vacate and remand.

The following facts were found by the BTLA or appear in the record. HCA is a voluntary corporation organized under RSA chapter 292 and is a tax exempt organization under section 501(c)(3) of the Internal Revenue Code. See 26 U.S.C. § 501(c)(3) (2006). According to its articles of association, HCA's objectives are:

1. To promote not-for-profit home health care and related services.

2. To promote programs and services directed toward the prevention of illness, the encouragement of good health practices and the overall protection of the public's health.

3. To work with other groups, associations, agencies and individuals toward coordination, increased effectiveness and availability of human services for all residents of the State of New Hampshire.

HCA describes itself in its mission statement as “a membership organization.” Its bylaws provide for three categories of membership: (1) provider membership, which is open to New Hampshire licensed “providers of home health, homemaker, hospice, or other home care services exclusive of home medical equipment providers”; (2) affiliate membership, which is open to “home medical equipment providers; case management providers; organizations providing products and/or services to home care providers; non-licensed providers of home care products and/or services and other organizations doing business with home care providers or interested in [HCA's] mission ..., such as insurers, intermediaries and other trade and membership associations”; and (3) individual membership, which is open to any person, not associated with an agency eligible under another membership category, “who subscribes to the stated purpose and objectives of” HCA and pays the prescribed membership dues. The BTLA found that “[a]pproximately one-quarter of the members of HCA are for-profit agencies.”

[13 A.3d 188 , 161 N.H. 347]

HCA's mission statement states that HCA is an “organization which enhances the ability of agencies providing home health care to deliver quality services to New Hampshire residents.” The statement further provides that HCA performs its “mission through education, networking, research, leadership, and public policy advocacy.” The BTLA found that HCA “provides home health care related education and training programs, which are open to the general public, that are intended to further [HCA's] stated objectives.” The BTLA also found that HCA maintains a website through which users, including the general public, can obtain “information about home care and its role in health care delivery, ... search for home care providers, and ... learn about education programs designed to further [HCA's] objectives.” The website lists only home care providers that are members of HCA. In addition, HCA maintains a toll free telephone number for inquiries from the general public about home health care.

HCA has a wholly-owned subsidiary, Granite State Home Health Association (GSHHA), that lobbies the state legislature on behalf of HCA's members. The BTLA found that “[t]he governance, staffing and activities of HCA and GSHHA, as well as their use of ... [office space], are interdependent and inextricably intertwined.”

HCA owns a building at 8 Green Street in Concord, which it uses as its only office. It shares that office space with GSHHA. It leases the second floor, or approximately half of the space, to a third party not eligible for a tax exemption. From 1984 to 2005, HCA was given a property tax exemption for the half of the property that it uses.

In 2006, however, the City denied HCA's request for tax exemption. HCA unsuccessfully sought an abatement from the Concord Board of Assessors, and then appealed to the BTLA. See RSA 72:34–a (Supp.2010). The BTLA concluded that HCA “met its burden to prove it satisfies the requirements for and is entitled to receive a charitable tax exemption for that portion of the Property it occupies pursuant to RSA 72:23, V and RSA 72:23–1.”

During the course of the appeal before the BTLA, the City filed a motion requesting that an attorney sit as a board member. The City believed that the only attorney member of the BTLA “ha[d] been recusing himself ... based on his residency in Concord.” The City offered that if residency were the sole reason for the attorney's recusal, it would waive that cause. Otherwise, the City requested that the BTLA appoint another attorney as a temporary member to sit on cases involving the City. The BTLA denied the motion, noting that the attorney member was involved as a plaintiff in litigation against the City. The City unsuccessfully moved for reconsideration of the BTLA's decisions, and then brought this appeal.

On appeal, the City “has the burden of showing that the ... decision is clearly unreasonable or unlawful, and all findings of the [BTLA] upon all questions of fact shall be deemed to be prima facie lawful and reasonable.” Appeal of Kiwanis Club of Hudson, 140 N.H. 92, 93, 663 A.2d 90 (1995) (quotation and ellipsis omitted); RSA 541:13 (2007); see RSA 71–B:12 (2003) (providing BTLA decisions may be appealed in accordance with RSA chapter 541). We will not set aside or vacate a BTLA decision “except for errors of law, unless [we are] satisfied, by a clear preponderance of the evidence before [us], that such order is unjust or unreasonable.” RSA 541:13. “The interpretation of a statute is to be decided ultimately by this court. Therefore, if we find that the board misapprehended or misapplied the law, its order will be set aside.” Appeal of Town of Wolfeboro, 152 N.H. 455, 458, 879 A.2d 1137 (2005).

The City first challenges the BTLA's conclusion that HCA satisfies the requirements for a charitable tax exemption. We begin by reviewing those requirements. RSA 72:23, V provides that the following property is exempt from taxation:

The buildings, lands and personal property of charitable organizations and societies organized, incorporated, or legally doing business in this state, owned, used and occupied by them directly for the purposes for which they are established, provided that none of the income or profits thereof is used for any other purpose than the purpose for which they are established.

RSA 72:23, V. The term “charitable” as used to describe a corporation, society or other organization within the scope of RSA 72:23 is defined to mean:

a corporation, society or organization established and administered for the purpose of performing, and obligated, by its charter or otherwise, to perform some service of public good or welfare advancing the spiritual, physical, intellectual, social or economic well-being of the general public or a substantial and indefinite segment of the general public that includes residents of the state of New Hampshire, with no pecuniary profit or benefit to its officers or members, or any restrictions which confine its benefits or services to such officers or members, or those of any related organization. The fact that an organization's activities are not conducted for profit shall not in itself be sufficient to render the organization “charitable” for purposes of this chapter....

RSA 72:23– l (2003).

In ElderTrust of Florida, Inc. v. Town of Epsom, 154 N.H. 693, 919 A.2d 776 (2007), we set forth four factors that an organization seeking a charitable tax exemption under RSA 72:23, V and RSA 72:23– l must satisfy; namely, whether:

(1) the institution or organization was established and is administered for a charitable purpose; (2) an obligation exists to perform the organization's stated purpose to the public rather than simply to members of the organization; (3) the land, in addition to being owned by the organization, is occupied by it and used directly for the stated charitable purposes; and (4) any of the organization's income or profits are used for any purpose other than the purpose for which the organization was established. Under the fourth factor, the organization's officers or members may not derive any pecuniary profit or benefit.

ElderTrust, 154 N.H. at 697–98, 919 A.2d 776.

The City contends that in finding the first factor satisfied, the BTLA erred “when it decided that HCA has charitable goals but ignored how those goals are administered.” The City argues that the evidence fails to support a finding that HCA operates in a manner that bestows a public benefit. For example, the City challenges the BTLA's specific finding of fact that “[t]he general public benefits through the education and training of home health care providers who are responsible for serving those who use or who may use home care services.” Citing program materials contained in the record, the City argues:

The average individual in the general public providing care to a family member would not have any reason to take a seminar entitled “ICD–9 CM Coding: Update and Review” for “diagnosis coding” which is “a key element in determining accurate payments and driving outcome improvement”; “HCS–D Certification Examination”; “Introducing Financial Thinking to Clinical Minds”; “PPS Billing Bootcamp” which is a “step by step process to ensure an agency is properly reimbursed”; or “Marketing Home Care, HME and Hospice...