Rutland County Parent Child Center, Inc. v. City of Rutland

         On Appeal from Superior Court, Rutland Unit, Civil Division Mary Miles Teachout, J.

          John J. Kennelly and Shannon E. Lamb of Pratt Vreeland Kennelly Martin & White, Ltd., Rutland, for Plaintiff-Appellee.

          Charles A. Romeo, City Attorney, and John G. Pritchard and Alexander M. Dean, Law Clerks (On the Brief), Rutland, for Defendant-Appellant.

          PRESENT: Reiber, C.J., Dooley, Skoglund, Robinson and Eaton, JJ.

          DOOLEY, J.

         ¶ 1. The City of Rutland appeals a superior court decision that two buildings owned by the Rutland County Parent Child Center (RCPCC) are exempt from property taxation. The City argues that neither property meets the requirements of the public use tax exemption in 32 V.S.A. § 3802(4). We affirm.

         ¶ 2. RCPCC is one of fifteen parent-child centers in Vermont. In 1990, the Legislature enacted a law defining "parent-child center" and directing the agency of human services to provide grant funding for eligible centers. 1989, No. 269 (Adj. Sess.), § 2 (codified at 33 V.S.A. § 3701). Under the statutory definition, a parent-child center is a "community-based organization established for the purpose of providing prevention and early intervention services such as parenting education, support, training, referral and related services to prospective parents and families with young children." 33 V.S.A. § 3701(a). The statute directs a parent-child center to "[r]epresent a designated geographic catchment area" and "provide leadership in the coordination of services for families with other community service providers." Id. § 3701(c)(4), (d)(1).

         ¶ 3. RCPCC owns two properties in the City, both of which are at issue in this case. In these two properties, RCPCC offers a variety of programs dedicated to providing support services to pregnant and parenting youth, the families of young children, and young children themselves. Many of these programs are administered and funded by the state, although some participants in one of the programs pay for the services they receive. Residents of Rutland County may contact RCPCC, and RCPCC will determine whether they are eligible for any of the services offered according to each program's eligibility criteria. The programs offered include: (1) Learning Together, a program that serves a maximum of twenty-five parenting or pregnant persons under the age of twenty-four who are actively seeking a high school diploma; (2) Pregnant and Parenting Teens, which provides parenting classes and pregnancy prevention under contract with the Department for Children and Families' (DCF) Child Development Division; (3) Reach Up, a program administered by DCF's Economic Services Division that provides case-management services, financial incentives, parenting education and support, as well as childcare for individuals and families transitioning from public assistance to self-sufficiency; (4) Intensive Family Based Services/Strengthening Families, a service providing educational supports for families with the goal of preventing placement in foster care; (5) Children's Integrated Services Early Intervention/Family Support, a program funded in part through a grant from DCF's Child Development Division that provides early intervention services, including speech, physical, occupational, and mental-health therapy for children under the age of three with developmental or social-emotional delays; (6) Building Bright Futures Direct Services Program, a service available to all families in Rutland County with children ages birth to six, which provides community education, support for new parents, and coordination services for home and center-based early education providers, including playgroups and welcome baby bags for babies born at Rutland Regional Medical Center; (7) Parenting On Our Own in a Safe Environment (POISE), a program that provides off-site shelter for homeless pregnant and parenting persons ages sixteen to twenty-two and provided under contract with the Washington County Youth Services Bureau Boys & Girls Club, which is overseen by DCF; and (8) Early Education, a program available to all families in Rutland County with children aged six weeks to six years old that assesses each child's educational needs and prepares children to succeed in school. Some of these programs have very specific targeted recipient groups. For example, (1) to be eligible for Intensive Family Based Services/Strengthening Families, a family must have an open case with DCF, a mental-health or substance-abuse issue, a child under the age of three, and recent or current involvement with the Department of Corrections; (2) for Reach Up, RCPCC's contract with DCF requires it to give priority to parents under the age of eighteen when selecting participants; and (3) for Early Education, RCPCC's contract with the state requires that at least twenty-five percent of enrolled children receive a state subsidy. In each case, this targeting is required by the state agency that provides funding.

         ¶ 4. In late 2013, RCPCC sought a property tax exemption for the two properties that house the programs listed above. In early 2014, the City's tax assessor determined that neither property qualified for the exemption. After exhausting its administrative remedies, RCPCC filed for declaratory judgment in superior court pursuant to Vermont Rule of Civil Procedure 75, initially arguing that the properties qualified for a property tax exemption under either the public use or public school statutory exceptions. The superior court determined on summary judgment that RCPCC's properties did not qualify for the public school tax exemption but, after a bench trial, decided that RCPCC's use of the properties in question met the three-prong public use exemption test outlined by this Court in American Museum of Fly Fishing, Inc. v. Town of Manchester, 151 Vt. 103, 110, 557 A.2d 900, 904 (1989), and that, accordingly, both properties were exempt from property tax assessment. The City appeals this decision.

         ¶ 5. In reaching our decision, we review the superior court's factual findings in the light most favorable to the party prevailing below and will set those findings aside only upon a showing of clear error. Our Lady of Ephesus House of Prayer, Inc. v. Town of Jamaica, 2005 VT 16, ¶ 10, 178 Vt. 35, 869 A.2d 145. Our review of the court's conclusions of law is plenary and nondeferential-we will affirm the court's conclusions if they agree with the applicable law and are supported by the court's factual findings. Sigler Found. v. Town of Norwich, 174 Vt. 129, 130, 807 A.2d 442, 443-44 (2002).

         ¶ 6. RCPCC claims a property tax exemption under 32 V.S.A. § 3802(4), which exempts "[r]eal and personal estate granted, sequestered or used for public, pious or charitable uses." The statute does not define public use, but we have held that a property qualifies for a public use exemption only where it satisfies three criteria:

(1) the property must be dedicated unconditionally to public use; (2) the primary use must directly benefit an indefinite class of persons who are part of the public, and must also confer a benefit on society as a result of the benefit conferred on the persons directly served; and (3) the property must be owned and operated on a not-for-profit basis.

Am. Museum of Fly Fishing, Inc., 151 Vt. at 110, 557 A.2d at 904. The party claiming an exemption bears the burden of showing eligibility for the claimed exemption, and we construe exemptions strictly against the party claiming the exemption. Vt. Studio Ctr., Inc. v. Town of Johnson, 2010 VT 59, ¶ 7, 188 Vt. 223, 5 A.3d 904.

         ¶ 7. The parties agree that RCPCC's property meets the first and third elements of the American Museum of Fly Fishing test. While these elements are not in issue, it is helpful to our analysis of the second element to review why RCPCC meets the first element. The superior court concluded that RCPCC satisfied American Museum of Fly Fishing's first element because the properties at issue are each used for "government-funded social programs" conferring a "direct and immediate, rather than remote or incidental, benefit upon the public." The court also found that RCPCC "has used its properties in Rutland for the exclusive purpose of its mission and purposes since the dates of purchase."

         ¶ 8. We add that benefit to the public is addressed and acknowledged within the Legislature's statutory recognition of parent-child centers. See 33 V.S.A. § 3701. In recognizing the ...