Under the Rainbow Early Educ. Ctr. v. Cnty. of Goodhue

• Decision Date: 24 August 2022
• Docket Number: A21-1349
• Citation: 978 N.W.2d 893
• Parties: UNDER THE RAINBOW EARLY EDUCATION CENTER, Relator, v. COUNTY OF GOODHUE, Respondent.
• Court: Minnesota Supreme Court

978 N.W.2d 893

UNDER THE RAINBOW EARLY EDUCATION CENTER, Relator,
v.
COUNTY OF GOODHUE, Respondent.

A21-1349

Supreme Court of Minnesota.

Filed: August 24, 2022

Ryan R. Simatic, Biersdorf & Associates, P.A., Minneapolis, Minnesota, for relator.

Stephen F. O'Keefe, Goodhue County Attorney, Carol K. Lee, Assistant County Attorney, Red Wing, Minnesota, for respondent.

OPINION

ANDERSON, Justice.

The Minnesota Constitution, art. X, § 1, provides that "academies, colleges, universities, [and] all seminaries of learning ... shall be exempt from taxation." This requirement is further codified in Minn. Stat. § 272.02, subd. 5 (2020), which states that "[a]ll academies, colleges, and universities, and all seminaries of learning are exempt [from property taxes]." Our prior decisions concerning the meaning of "seminaries of learning" concerned secondary or postsecondary institutions. Relator Under the Rainbow Early Education Center (Rainbow), an early childhood education center, petitioned for a property tax exemption, claiming status as a seminary of learning, citing licensure, facilities, programming, and rating by a government-administered

978 N.W.2d 897

best practices program as support for its claim. Both relator and respondent Goodhue County (the County) sought summary judgment. The tax court denied Rainbow's summary judgment motion and granted summary judgment to the County, citing our decision in State v. Northwestern Preparatory School , 249 Minn. 552, 83 N.W.2d 242 (1957). Although Northwestern Preparatory controls whether relator is exempt from taxation, the tax court did not correctly apply the Northwestern Preparatory standard. Because we hold that an institution is a tax-exempt seminary of learning when it (1) is educational in nature, and (2) teaches a general curriculum, (3) in a thorough and comprehensive manner, and because relator presented undisputed evidence that it met each of these criteria, we reverse the tax court and conclude that relator was entitled to summary judgment.

FACTS

Rainbow is a childcare center operating as a 501(c)(3) nonprofit.¹ Business Record Details , Minnesota Secretary of State, https://mblsportal.sos.state.mn.us/Business/SearchDetails?filingGuid=2dbe7d17-a6d4-e011-a886-001ec94ffe7f (last visited August 16, 2022) [opinion attachment]. Rainbow provides care for children beginning as infants and continuing through 12 years of age, although Rainbow's president states that children typically stop attending before age 10. In its parent handbook, Rainbow describes itself as a "childcare provider" and states that its mission is "[o]pening the pathway to allow children to grow, learn, and develop to their full potential."

The Rainbow facility that is the subject of this property tax dispute opened in 2003. Rainbow's property contains eight "classrooms" divided between infants, toddlers, preschoolers, and school-age children. See Minn. R. 9503.0005, subp. 2 (2020) (defining the age categories). One of the classrooms is a "large room designed to simulate a kindergarten environment" for children ages three through five. Rainbow's president described the large room as containing "all the typical features of a kindergarten classroom," such as desks and a smart whiteboard. The facility also has four playgrounds.

Rainbow manages activities through individual written lesson plans based on the age group of each child. These lesson plans are based on a third-party-developed "Creative Curriculum." The Creative Curriculum provides guidance on topics such as setting up a physical environment; methods of instruction, including "Language and Literacy," math, science, relationship building, and behavioral development; and how to encourage learning through play with toys. And three times per year, Rainbow performs written evaluations of children in its care. These evaluations are recorded on the Minnesota Department of Human Services (DHS) "Early Childhood Indicator of Progress" form and assess "Social & Emotional Development," "Language Development & Communication," "Cognitive Development," and "Physical and Motor Development." Rainbow staff meet with the parents in biennial conferences to discuss these evaluations.

As a childcare facility, Rainbow is required by law to be licensed by the State of Minnesota. Minn. R. 9503.0170, subp. 1

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(2020) (requiring licensure of all childcare facilities in Minnesota). Rainbow is licensed by DHS as a childcare center and may provide care for up to 123 children, including no more than 24 infants, 49 toddlers, 71 preschoolers, and 5 school-age children. To maintain this license, Rainbow must comply with the applicable DHS regulations concerning childcare centers. DHS refers to these childcare center regulations as "Rule 3," and the regulations are found in Minn. R. 9503.0005 – .0170 (2020).

Rule 3 regulations cover topics such as facilities and transportation, Minn. R. 9503.0150 – .0155 ; food and water, Minn. R. 9503.0145 ; recordkeeping, Minn. R. 9503.0110 – 0125 ; and parent access, Minn. R. 9503.0090 – .0095. Rule 3 also governs the maximum allowable staff-to-child ratios. Minn. R. 9503.0040. These ratios vary by child age group; for example, one staff person may supervise seven toddlers but only four infants. Id. , subp. 1. The rules also govern the minimum qualifications required for the staff, who may be categorized as either a "teacher," "assistant teacher," or "aide." Minn. R. 9503.0032 – 0034. Staff are qualified on a sliding scale balancing education and experience. See Minn. R. 9503.0032 – 0033. For example, a person with only a high school diploma must have 4,160 hours of relevant work experience and 24 quarter credits of relevant education to qualify as a teacher, but a person with a license from the Minnesota Department of Education for teaching prekindergarten/nursery may qualify as a teacher without meeting additional requirements. Minn. R. 9503.0032, subp. 2; see also Minn. R. 9503.0030 (defining what constitutes acceptable experience and educational credit). The rules govern what duties may be performed by teachers, assistant teachers, and aides. See, e.g. , Minn. R. 9503.0040, subp. 2.

Rule 3 also requires that each childcare center develop a written childcare program plan. Minn. R. 9503.0045, subp. 1. Program plans describe the supervision of children and delineate the size and hours of the program. Id. Program plans must also "describe the general educational methods to be used by the program and the religious, political, or philosophical basis, if any." Id. The plan must state goals "to promote the physical, intellectual, social, and emotional development of the children." Id. Plans must specify activities that will be provided and must include activities that vary based on location, activity level, level of direction from adults, and materials used. Id. Specifically, childcare programs like Rainbow that operate more than three hours a day must include daily activities in eight categories: "creative arts and crafts," "construction," "dramatic or practical life activities," "science," "music," "fine motor activities," "large muscle activities," and "sensory stimulation activities." Id. , subp. 2. Childcare centers must offer parent conferences at least twice a year to keep the parents informed of "the status of the child's intellectual, physical, social, and emotional development." Minn. R. 9503.0090, subp. 2.

DHS last inspected Rainbow in 2021 and found it to be "in compliance." The president of Rainbow specifically averred that Rainbow complies with Rule 3 requirements.

In addition to its licensure, Rainbow has a four-star rating through the Parent Aware program. Parent Aware is a program established by DHS. It provides rating, certification, and information services for early childhood care. Participation in Parent Aware by childcare centers is voluntary. Parent Aware is supported by federal block grants, and every state in the nation has a similar program to support early childhood education. The program

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has two functions. First, the program is designed to help childcare providers keep abreast of current best practices. Second, Parent Aware provides a public rating of childcare facilities that parents can use to find quality...