The opinion
STATE OF MAINE SUPERIOR COURT
CIVIL ACTION
YORK, ss. DOCKET NO. AP-12-.41
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FRANCIS SMALL HERITAGE
TRUST, INC.,
Plaintiff/ Appellant
v. ORDER AND DECISION
THE TOWN OF LIMINGTON and
ASSESSORS OF THE TOWN OF
LIMINGTON,
Defendants/ Appellees
I. INTRODUCTION
The Francis Small Heritage Trust, Inc. (Trust) has appealed from a decision of the
Maine Board of Property Tax Review (Board) of August 22, 2012, which denied its
appeal from decisions of the Town of Limington (Town), which denied its requests for
tax exemption status for 11 lots which it owns in Limington. The Board and the Town
also denied the Trust's alternative request to further abate its property taxes on 8 lots
that are under the Open Space classification. See 36 M.R.S. §§1101-et seq.
The Board, the parties to the appeal and The Maine Coast Heritage Trust, which
was given leave to file an amicus curiae brief, have all acted most professionally and
been very helpful in presenting and clarifying the issues in this dispute. The appeal
has likewise been ably argued.
II. CONTEXT
It is important to place this dispute in a broader context. Congress and the
Maine Legislature have made numerous decisions in enacting a variety of tax laws.
Our federal and state income tax laws contain a wide array of exemptions, deductions
and credits for both corporations and individuals. Maine's sales tax law, at 36 M.R.S.
§1760, contains exemptions 1 through 94, many with multiple sub-parts. Likewise,
there are numerous exemptions from property taxes or provisions which reduce local
real estate taxes. See, for example, the exemptions listed at 36 M.R.S. §§651-661 and
the benefits given to support open space, 36 M.R.S. §1106-A, farmland, 36 M.R.S. §1108
and tree growth properties, 36 M.R.S. §§571 - et seq. These are just some of the many
examples. Both Congress and the Legislature have determined that individuals or
corporations with certain characteristics or activities will have their taxes reduced.
That means that others will pay more, services will be cut, or, in the case of recent
federal budgets, a larger deficit will exist. There is nothing unusual about a legislative
decision to grant a tax benefit.
For decades states and municipalities have competed for jobs by offering
reduced price or free land, infrastructure improvements, tax breaks, job training and a
host of incentives to attract businesses. Similar competition exists at an international
law. Just recently the government of Ireland received substantial attention for its
extremely favorable treatment of corporations. Tax burdens or the exemption from
taxes are widely used as a tool to effectuate public policy.
The decision to grant or deny a property tax exemption to a benevolent or
charitable institution must be placed in this broader context.
III. STATUTORY HISTORY AND CASE LAW
The property tax exemption at issue here is the exemption from taxation for "the
real estate and personal property owned and occupied or used solely for their own
purposes by benevolent and charitable institutions incorporated by this State .... " 36
2
M.R.S. §652(1)(A). The full text of §652 is attached as Exhibit A. This is an ancient
exemption.
Analogous provisions go back to at least 1819. See Hebron Academy, Inc. v. Town
of Hebron, 2013 ME 15, <][14. As early as 1845 the Maine legislature provided an
exemption for "the real and personal property of all literary, benevolent, charitable and
scientific institutions incorporated by this state." P.L. 1845, c. 159, §5(2). With
modification this exemption, along with multiple others, has continued to exist and
remains in effect.
Dozens of cases involving this exemption have gone to the Law Court including
such early cases as Marsh River Lodge of Free and Accepted Masons v. Inhabitants of Brooks,
61 Me. 585 (1873) which dealt with whether the Marsh River Lodge was incorporated
by Maine.
Over the last 140 years the Law Court has developed a substantial body of law
which will be applied to the facts of the current dispute. In The Maine Baptist
Missionary Convention v. The City of Portland, 65 Me. 92, 93 (1876) the Court noted that,
"It may be difficult to say what a 'benevolent' institution is, if it differs from one that is
merely charitable." Since then the Law Court has consistently stated that "benevolent"
and "charitable" are synonymous.
The Maine Baptist case continued with a definition that has appeared in more
recent cases. It stated, at 93, that "The word 'charity,' as found in our decisions and
statutes, is not to be taken in its widest sense, denoting all the good affections which
men ought to bear to each other, nor in its restricted and usual sense, signifying relief to
the poor, but it is to be taken in its legal signification as derived chiefly from the statute
of 43 Eliz., C. 4. Those purposes are deemed charitable which are enunciated in that
act, or which by analogy are deemed within its spirit and intendment."
3
The Elizabethan Charitable Uses Act of 1601 with references to " ... Maintenance
of sicke and maymed Souldiers and Marriners, Schooles of Learninge . . . some for
Educacion and prefemente of Orphans ... some for Mariages of poore Maides (and the)
Ayde and Helpe of younge tradesmen ... " makes, not surprisingly, no reference to open
space preservation, wildlife protection or outdoor recreation.
Another case, which was cited by the Board at page 4 of its decision, is Johnson v.
South Blue Hill Cemetery Association, 221 A.2d 280, 7 (Me. 1966) which stated, "A
charity in the legal sense, may be more fully described as a gift, to be applied
consistently with existing laws, for the benefit of an indefinite number of persons, either
by bringing their minds or hearts under the influence of education or religion, by
relieving their bodies from disease, suffering, or constraint, by assisting them to
establish themselves in life, or by erecting or maintaining public buildings or works or
otherwise lessening the burdens of government." It quoted a 1932 case which referred
to still older cases.
In City of Bangor v. Rising Virtue Lodge No. 10, 73 Me. 428, 433 (1882) what would
become a consistent principle emerged. The Law Court stated, " ... still taxation is the
general rule; exemption from taxation the exception. Statutes violating the general
rule are to be construed strictly." At 434, the Court indicated that a charitable use is to
be public in the "sense of being so general and indefinite in its objects as to be deemed
of common and public benefit." "The essential features of a public charity, are, that it
is not confined to privileged individuals, but is open to the indefinite public."
In addition to the broader exemption for "benevolent and charitable institutions"
there is a separate exemption for "Houses of religious worship ... and property owned
and used by a religious society as a parsonage up to the value of $20,000 ... " See 36
M.R.S. §652(1)(G). The case Ferry Beach Park Association of the Universalist Church v. City
of Saco, 136 Me. 202, 205 dealt with the potential conflict between the more general
4
benevolent and charitable exemption and the more specific exemptions. The Law
Court stated, "There is also insistence that the Association is purely a religious
corporation and must be governed as to exemptions by the provisions of R.S., Chap. 13,
§6, Subdivision V. As this exemption applies only to houses of religious worship and
parsonages, it is urged that consequentially there is no exemption here. A careful
review of the cases cited as to distinctions between religious, benevolent and charitable
societies ... indicates no real conflict with the decisions in support of our present
holding, which found that the church was entitled to an exemption as a benevolent and
charitable institution."
An earlier case involving the same property, Ferry Beach Association of
Universalists v. City of Saco, 127 Me. 136, 138 (1928) had no concerns, "If the stern and
rigid limitations of Puritanism are relaxed to permit the inclusion of some of the
recreational pleasures of life in the gatherings of this Association." These were
however incidental to the main purpose of "developing the missionary power of the
Universalist Church". This case, as with many others, again noted that taxation is the
rule and exemptions are the exceptions.
In City of Lewiston v. All Maine Fair Association, 138 Me. 39, 42 (1941) the Law
Court considered the tax-exempt status of the Lewiston fairgrounds. It reaffirmed the
principle that incidental use that did not fit the statutory exemption would not deprive
the benevolent and charitable institution of its property tax exemption. However, the
land that was rented to a "victualer" and a "riding master" for revenue "were clearly
not occupied by the Association for its own purposes". Likewise the incidental use of
hospital property by a doctor did not defeat the hospital's entitlement to an exemption
in Calais Hospital v. City of Calais, 138 Me. 234 (1942). Also see Episcopal Camp
Foundation, Inc. v. Town of Hope, 666 A.2d 108. 109 (Me. 1995), Salvation Army v. Town of
5
Standish, 1998 ME 75, 709 A.2d 727, City of Lewiston v. Salvation Army, 1998 ME 98, 710
A.2d 914 and Hebron Academy, Inc. v. Town of Hebron, 2013 ME 15, Cj[Cj[22-et seq.
In 1954 the Law Court decided a York County case involving the refusal of the
Town of Eliot to grant a tax exemption. In Green Acre Baha'i Institute v. Town of Eliot,
150 Me. 350 (1954) at page 354 the Law Court established a test that continues to be
used, "In each situation where exemption is claimed, there must be a careful
examination to determine whether in fact the institution is organized and conducting its
operation for purely benevolent and charitable purposes in good faith, whether there is
any profit motive revealed or concealed, whether there is any pretense to avoid
taxation, and whether any production of revenue is purely incidental to a dominant
purpose which is benevolent and charitable. When these questions are answered
favorably to the petitioner for exemption, the property may not be taxed." The
institute conducted educational and religious programs and, at 353, had "facilities for
recreation." Also see Maine AFL-CIO Housing Development Corporation v. Town of
Madawaska, 523 A.2d 581, 4 (Me. 1987) and Town of Poland v. Poland Spring Health
Institute, 649 A.2d 1098, 1100 (Me. 1994).
Several cases address the strict requirements for obtaining tax-exempt status or
the relationship between different types of exemptions or tax reductions. In Silverman
v. Town of Alton, 451 A.2d 103 (Me. 1982) the charitable exemption was not available
because the applicants were not incorporated in Maine. The applicants, as trustees of a
wildlife trust maintained for the sole benefit of the University of Maine, also failed to
obtain an exemption as a scientific institute as the University did not have "practical
ownership." See page 106. The opinion also indicated, at 106, that " ... a wildlife
refuge or sanctuary, ... in and of itself is not a scientific institution or organization."
Whether the property would qualify for a tax reduction under current tree growth or
open space provisions was obviously not decided.
6
A slightly earlier case from Lincoln County is The Nature Conservancy of the Pine
Tree State, Inc. v. Town of Bristol, 385 A.2d 39 (Me. 1978). The plaintiff was a Maine non-
profit corporation that acquired and administered property for the "promotion and
advancement of conservation, educational, scientific and literacy purposes." See 40.
The Nature Conservancy's stated purposes also included, the preservation of all types
of wild nature, the establishment of natural reserves . . . to be used for scientific,
educational and esthetic purposes; (and) promoting the conservation and proper use of
our natural resources. See 40.
In the Nature Conservancy case the Law Court decided that the property did not
qualify for an exemption as a charitable institution because the former owners of the
parcels had reserved private rights in the property making it subject to private
noncharitable uses. See 43. The Court did hold, at 43, "Land held in its natural state
does not become tax exempt by transfer to a charitable institution where the grantor
retains the rights to access, passage or custodianship, more particularly since these tend
to be the only private rights of ownership exercised while land is privately being held in
its natural state." The Law Court did not determine that the Nature Conservancy was
not a charitable institution nor that land in its natural state could not be tax exempt.
As the property was not used solely as 36 M.R.S. §652 requires, for the Conservancy's
"own purposes" the claim to a charitable exemption failed. See 44.
There are three more cases that will be discussed before turning to the facts of
this case, the Board's decision and the application of Maine's statutes and Law Court
decisions to the facts and decision.
Holbrook Island Sanctuary v. The Inhabitants of the Town of Brooksville, 161 Me. 476
(1965) determined that the Holbrook Island Sanctuary was not exempt from taxation.
The Law Court stated, at 484, "First, the interested parties here endeavor to place in the
ownership of a tax exempt corporation nothing in substance more than a game
7
preserve. The purpose is plainly to benefit wild animals. We find no benefit to the
community or to the public in the proposed sanctuary within the principle relating to
charitable trusts relating to animals." The claim for an exemption was additionally
rejected as the sanctuary, at 488, sought "to create a game preserve or at most a game
management area with conditions deemed harmful by the regional game biologist of
the Fish and Game Department" by prohibiting even restricted hunters for game
management.
Cushing Nature and Preservation Center v. Town of Cushing, 2001 ME 149, 785 A.2d
342, is the most recent case directly related to the issues in this case. The Center owned
some 400 acres valued at 2.5 million dollars and contained a farmhouse and barn.
Public access, though perhaps restricted, was permitted. Some nature-related
programs were claimed to have been presented along with some educational,
recreational and scientific activities. The Superior Court had determined that an
alleged restriction to access by clammers was against public policy, like the no hunting
provisions in Holbrook Island, and the existence of the statutory open space land
program and its tax abatement provisions prevented the granting of a full exemption as
a charitable institution.
On appeal the Law Court noted that a court must determine whether the stated
purpose of the organization is charitable within the meaning of the statute and if, in
fact, the organization is actually using its property solely for purely benevolent and
charitable purposes. See CJ[10.
The Law Court resolved the issue of access by clammers by stating, at CJ[13, that if
the purpose of a charitable use violates public policy then it cannot be classified as
charitable. However, a charity may lawfully restrict the use of its property.
The Law Court did not determine that the Farm and Open Space abatement
provisions found at 36 M.R.S. §§1101-21 precluded a full tax exemption for a charitable
8
institution engaged in land conservation. The Court stated, at <[15, given the nature of
the record evidence, "Thus, we need not determine whether land conservation or
preservation, standing alone, could constitute a charitable use." The Cushing case
concluded with a discussion of whether the Cushing Nature Center was a charitable
institution, whether its activities were conducted in good faith and whether it was
created as a pretense to evade taxation. See <[18. The Superior Court decision was
vacated and the case was remanded to the Superior Court.
The final case is Christian Fellowship and Renewal Center v. Town of Limington, 2006
ME 44, 896 A.2d 287. That case involves an extensive review of Maine's charitable
exemption jurisprudence. In addition to the principles already noted the Law Court
indicated, at <[24, that "Whether a charitable activity offsets or displaces a government
service is one factor to consider, along with other evidence, in reviewing qualification
for a charitable exemption ... but the 'quid pro quo' factor alone does not control
qualification or disqualification for the charitable exemption." Lastly, at <[31, the Court
stated that " ... recreation and relaxation activities - even very minimal activities - may
qualify as charitable activities supporting a charitable exemption." "A charitable use
may qualify a property for exemption, even if the property has little human use for
recreation or relaxation." See <[31.
IV. THE BOARD'S DECISION AND THE FACTS
The Board of Property Tax Review in its decision of August 22, 2012 stated all of
the essential facts. The Trust owns 11 contiguous parcels in Limington. Three are
Tree Growth properties while the remaining eight are Open Space properties. As the
Board stated, "The Trust's purposes are to conserve natural resources and to provide
free public access to those natural resources ... [T]he properties are used and operated as
conserved wildlife habitat. The property is open to the public 365 days per year and
utilized by local schools for field trips and environmental education. The properties
9
also remain open for traditional uses such as hunting, fishing, hiking, cross country
skiing and snowmobiling." Decision at pages 2 and 3. The Trust has also sponsored
a Boy Scout troop, participated in a project involving the risk of exposure to Lyme
disease and conducted a workshop related to invasive plants.
The Trust's Articles of Incorporation, at Article Second, paragraph b, indicate
that another purpose of the trust is to " ... protect appropriate uses such as logging,
farming and other compatible commercial activities within specified areas and adjacent
areas." See decision at page 3.
The Board found that the Trust did not qualify for exempt status because its
activities are not restricted solely to benevolent and charitable purposes as the Articles
of Incorporation permit it to "engage in ... appropriate uses such as logging, farming
and other compatible commercial activities." The Board noted that a separate farm
owned by the Trust in the Town of Parsonsfield engages in commercial farming.
The Board also determined that as 8 of the 11 parcels are classified as Open Space
and enjoy reduced assessments those parcels are not eligible for a full exemption. It
based its decision on the single Superior Court decision in Cushing that was vacated by
the Law Court.
The last issues addressed by the Board dealt with the valuation of the Open
Space properties, as the Board held that the Trust was not entitled to a full charitable
institution exemption. These issues involved the interpretation of 36 M.R.S. §1106-A(2)
with its relatively complex multi-step analysis. There was also a finding that the Trust
had failed to prove that its property had essentially no market value.
The Board denied the Trust's appeal and an appeal to the Superior Court was
timely filed.
10
V. THE APPEAL
The complaint to the Superior Court contained five counts. By earlier order
Count I, which is an appeal pursuant to procedural rule 80C, M.R.Civ.P., and Count II
which is an appeal from the Open Space valuations are to be decided now following the
submission of briefs and oral argument. Counts Ill and N dealing with the 2011 and
2012 taxes respectively and Count V based on the federal civil rights act at 42 U.S.C.
§1983 were separated and are to be considered later if necessary.
VI. DISCUSSION AND DECISION
The Trust meets all of the tests set forth in the Green Acre Baha'i Institute case. It
is operated for purely benevolent and charitable purposes in good faith. There is no
profit motive revealed or concealed. There is no pretense to avoid taxes. The
production of any revenue is purely incidental to a dominant purpose which is
benevolent and charitable.
The Articles of Incorporation permit the "protection" of logging, farming and
other compatible commercial activities. The Articles do not actually authorize such
activities. Far more importantly, no such activities have taken place in Limington and,
if they had, limited activities, which are "purely incidental", are permitted. Numerous
cases over decades including the recent Hebron Academy case all support that
proposition. The minimal revenue derived from property in another town where it
holds a conservation easement does not change this conclusion.
There is nothing in the requirements of 36 M.R.S. §652(1)(C) which would
preclude the Trust from receiving an exemption. All of those requirements were met.
There is no indication that anything that the Trust does violates public policy
such as the ban on selective hunting in Holbrook Island or the Superior Court's concern
about clammers in the Cushing case.
11
The Christian Fellowship case notes that while a "quid pro quo" is not required, it
may be considered. Pursuant to 36 M.R.S. §651(1)(B) the property of the State of Maine
is exempt from local property taxation. If the State of Maine acquired the Trust
property and called it, based on its location, Sawyer Mountain State Park or Limington
State Park, the Town would receive no property taxes. The Trust provides what a park
does and even more. It preserves open spaces. It protects plants and wildlife. It
permits multiple forms of recreation and allows public access. It is open year round
and charges no fees.
It is time to directly declare that a legitimate land trust, such as this one, which
meets the statutory and case law requirements, is a benevolent and charitable
institution exempt from local property taxes. The direct and indirect value of open
space preservation particularly when, in appropriate cases, it is coupled with access for
a wide variety of recreational activity is within any modern definition of a charitable
institution. In addition to the ecological and environmental benefit of land
preservation there are numerous physical, psychological and, for some, even spiritual
benefits to having access to undeveloped land.
Whether one refers to the works and writings of President Theodore Roosevelt,
Aldo Leopold or John Muir or more current scientists or authors there is an
unmistakable value, despite the loss of tax revenues, to the preservation of open space
particularly in a state with limited public lands. An institution such as the Trust meets
the definition of a charitable institution and should have been granted an exemption.
There is nothing in the text of either the Maine Tree Growth Tax Law at 36 M.R.S.
§§571-et seq. or in the Farm and Open Space Law found at 36 M.R.S. §§1101-et seq. that
indicates that either would preclude a charitable institution from seeking an exemption
under 36 M.R.S. §652(1)(A). As the Law Court cases have indicated some land trusts
would not qualify for an exemption because they "were not incorporated by this State"
12
or private ownership rights were retained. Likewise properties in private ownership
which would qualify for a reduction in taxes under the Tree Growth or Open Space
provisions would not, given their private ownership, qualify for the exemption afforded
a charitable institution. Whether one uses the mathematical concepts of sets or the
visual depiction of a Venn diagram it is clear that charitable institution exemptions
versus tree growth or open space abatements, while sometimes having elements in
common, are distinct concepts.
It is not necessary to determine whether the Board correctly calculated any open
space abatement as the Trust is entitled to a full exemption.
The entry is:
Judgment for the plaintiff on Counts I and II of the complaint. Decision
of the Maine Board of Property Tax Review of August 22, 2012 is reversed.
The Francis Small Heritage Trust, Inc. is entitled to an exemption from
property taxation as a benevolent and charitable institution. The parties
shall inform the Clerk within 30 days how they wish to proceed with the
remaining counts.
Dated: May 30,2013
Paul A. Fritzsche
Justice, Superior Court
13
36 § 651 TAXATION Title 36
B-1. Real estate owned by the Water Resources Board of the State of New Hampshire and used for . (4) The i
the preservation of recreational facilities in this State. with the
C. All property which by the Articles of Separation is exempt from taxation. assessors
D. The property of any public municipal corporation of this State appropriated to public uses; if .(5) An e~
located within· the corporate limits and confines of such public municipal corporation. holding p
E. The pipes, fixtures, hydrants, conduits, gatehouses, pumping stations, reservoirs and darns, used' stipend fr
only for reservoir purposes, of public municipal corporations engaged in supplying water, power or (6) An eJ
light, if located outside of the limits of such public municipal corporation. .. occupied
F. All airports and landing fields and the structures erected thereon or contained therein of public Federally
municipal 'corporations whether located within or without the limits of such public municipal other thaJ
· nonprofit
corporations. Any structures or land contained within such airport not used for airr:)ort or aeron~utk- ·
cal purposes shall not be entitled to this exemption. Any public municipal corporation which is that nonp
assessed v
required to pay taxes to another such corporation under this paragraph with respect to any airport or
landing field shall be reimbursed by the county wherein the airport is situated. An exemp
of the pro
G. The pipes, fixtures, conduits, buildings, pumping stations and other facilities ofa public municipal
rental hou
corporation used for sewage disposal, if located outside the limits of such public municipal corpora~
tion. (a) Fe
R.S.1954, c. 92, § 6; 1955, c. 131; 1955, c. 399, §§ 1, 6; 1961, c. 223, § 6; 1961, c. 395, § 33; 1965, c. 125; 1967,
115; 1981,c.492,§ D,6; 1981,c.595,§ 4.
c. o:
is
I No subsec. 2 was enacted.
su
G(
§ 6 52. Property of institutions and organizations (ii
1. 1Property of institutions and organizations.
The property of institutions and organizations is exempt St
from taxation as provided in this subsection. co
A. The real estate and personal property owned and occupied or used solely for their own purposes rel
by benevolent and charitable institutions incorporated by this State are exempt from taxation. Such (ii;
an institution may not be deprived of the· right of exemption by reason of the source from which its fac
funds are derived or by reason of limitation in the classes of persons for whose benefit the funds are ··pa
applied. an'
For the purposes of this paragraph, "benevolent and charitable institutions" includes; but is ~hi ger
limited to, nonprofit nursing homes licensed by the Department of Health and Human Services anc
pursuant to Title 22, chapter 405, 2 nonprofit residential care facilities licensed by the Department of (iv:
Health and Human Services pursuant to Title 22, chapter 1663, 3 nonprofit community mental health sui:
service facilities licensed by the Commissioner of Health and Human Services pursuant to Title 34-B, pur
chapter 3 4 and nonprofit child care centers incorporated by this. State as benevolent and charitable Coc
institutions. For the purposes of this paragraph, "nonprofit" refers to an institution that has been (b) Elif
determined by the United States Internal Revenue Service to be exempt from taxation under Section subpara
501(c)(3) of the Code. 5 (i)
B. The real estate and personal property owned and occupied or used solely for their own purposes DeJ:
by literary and scientific institutions are exempt from taxation. If any building or part of a building i~, corr
used primarily for employee housing, that building, or that part of the building used for ernploy~f:J · owr
housing, is not exempt from taxation. · ~' Hur
C. Further conditions to the right of exemption under paragraphs A and B are that: mer
(1) Any corporation claiming exemption under paragraph A must be organized and (ii)
exclusively for benevolent and charitable purposes; (iii)
(2) A director, trustee, officer or employee of an organization claiming exemption may not (iv)
directly or indirectly any pecuniary profit from the operation of that organization, except that
reasonable compensation for services in effecting its purposes or as a proper be.D.'eficiary of (v) l
strictly benevolent or charitable purposes;
(7) In additic
(3) All profits derived from the operation of an organization claiming exemption and the nrt-,r.e:eo' · paragraph A
from the sale of its property must be devoted exclusively to the purposes for which it is rental housin
708
ch. tos CITIES AND TOWNS 36 § 652
(4) The institution, organization or corporation claiming exemption under this section must file
with the assessors upon their request a report for its preceding fiscal year in such deta:il as the
assessors may reasonably require;
(5) An exemption may not be allowed under this section in favor of an agricultural fair association
holding pari-mutuel racing meets unless it has qualified the next preceding year as a recipient of a
stipend from the Stipend Fund provided in Title 7, section 86;
(6) An exemption allowed under paragraph A or B for real or personal property owned and
_occupied or used to provide federally subsidized residential rental housing is limited as follows:
Federally subsidized residential rental housing placed in service prior to September 1, 199 3 by
other than a nonprofit housing corporation that is acquired on or after September 1, 1993 by a
"nonprofit housing corporation and the operation of which is not an unrelated trade or business to
that nonprofit housing corporation is eligible for. an exemption limited to 50% of the municipal
assessed value of that property.
An exemption granted under this subparagraph must be revoked for any year in which the owner
of the property is no longer a nonprofit housing corporation or the operation of the residential
rental housing is an unrelated trade or business to that nonprofit housing corporation.
(a) For the purposes of this subparagraph, the following terms have the- following meanings.
(i) "Federally subsidized residential rental housing" means residential rental housing that
is subsidized through project-based rental assistance, operating assistance or interest rate
subsidies paid or provided by or on behalf of an agency or department of the Federal
Government.
(ii) "Nonprofit housing corporation" means a nonprofit corporation organized in the
State that is exempt from tax under Section 501(c)(3) of the Code and has among its
corporate purposes the provision of services to people of low income or the construction,
rehabilitation, ownership or operation of housing.
(iii) "Residential rental housing" means one or more buildings, together with any
facilities functionally related and subordinate to the building or buildings, located on one
-··parcel of land and held in common ownership prior to the conversion to nonprofit status
and containing 9 or more similarly constructed residential units offered for rental to the
general public for use on other than a transient basis, each of which contains separate
and complete facilities for living, sleeping, eating, cooking and sanitation.
(iv) "Unrelated trade or business" means any trade or business whose conduct is not
substantially related to the exercise or performance by a nonprofit corporation of the
purposes or functions constituting the basis for exemption under Section 501(c)(3) of the
Code.
(b) Eligibility of the following property for exemption is not affected by the provisions of this
subparagraph:
(i) Property used as a nonprofit nursing home, residential care facility licensed by the
Department of Health and Human Services pursuant to Title 22, chapter 1663 6 or a
community living arrangement as defined in Title 30-A, section 4357-A or any property
owned by a nonprofit organization licensed or funded by the Department of Health and
Human Services to provide services to or for the benefit of persons with mental illness or
mental retardation;
(ii) Property used for student housing;
(iii) Property used for parsonages;
(iv) Property that was owned and occupied or used to provide residential rental housing
that qualified for exemption under paragraph A or B prior to September 1, 1993; or
(v) Property exempt from taxation under other provisions of law; and
(7) In addition to the requirements of subparagraphs (1) to (4), an exemption is not allowed under
paragraph A or B for real or personal property owned and occupied or used to provide residential
rental housing that is transferred or placed in service on or after September 1, 199 3, unless the
709
36 § 652 TAXATION Title 36 Ch. 105
pr.operty is owned by a nonprofit housing corporation and the operation of the residential rental paragraph
housing is not an unrelated trade or business to the nonprofit housing corporation. whether or
For the purposes of this subparagraph, the following terms have the following meanings. worship w
(a) "Nonprofit housing corporation" means a nonprofit corporation organized in the State H. RealE
that is exempt from tax under Section 50l(c)(3) of the Code and has among its corporate college fra
purposes the provision of services to people of low income or the construction, rehabilitation, tions for r
ownership or operation of housing. appurtenar
a building
(b) "Residential rental housing" means one or more buildings, together with any facilities
those purp'
functionally related and subordinate to the building or buildings, containing one or more
similarly constructed residential units offered for rental to the general public for use on other Further col
than a transient basis, each of which contains separate and complete facilities for living, (1) A
sleeping, eating, cooking and sanitation. receivE
(c) "Unrelated trade or business" means any trade or business whose conduct is not as reaE
substantially related to the exercise or performance by a nonprofit organization of the purpos
purposes constituting the basis for exemption under Section 50l(c)(3) of the Code. (2) All
D. Repealed. Laws 1979 ,·c. 46 7, § 3. proper
E. The n!al estate and personal property owned, occupied and used for their own purposes by posts (3) Th<
of the American Legion, Veterans of Foreign Wars, American Veterans, Sons of Union Veterans of the file wit
Civil War, Disabled American Veterans and Navy Clubs of the U.S.A. that are used solely by those asses so
organizations for meetings, ceremonials or instruction or to further the charitable activities of the I. Repeale
organization, including all facilities that are appurtenant to that property and used in connection with J. The rea
those purposes, are exempt from taxation. If an organization is not the sole occupant of the property, and E to
the exemption granted under this paragraph applies only to that portion of the property owned, organizatio.
occupied and used by the organization for its purposes.
K; Except
Further conditions to the right of exemption are that: occupied 01
(1) A director, trustee, officer or employee of any organization claiming exemption may not tion that is
receive directly or indirectly any pecuniary profit from the operation of that organization, except the operati<
as reasonable compensation for 'services i~ effecting its purposes or as a proper beneficiary of its maintenanc
purposes; beginning a
(2) All profits derived from the operation of the organization and the proceeds from the sale of its property.
property must be devoted exclusively to the purposes for which it is organized; and L. Deleted
(3) The institution, organization or corporation claiming exemption under this paragraph must An organizati•
file with the assessors upon their request a report for its preceding fiscal year in such detail as the accompanied by
assessors may reasonably require. in which the e::o:
F. The real estate and personal property owned and occupied or used solely for their own purposes would otherwisE
by chambers of commerce or boards of trade in this State are exempt from taxation. that the organiz.
basis upon whicl
Further conditions to the right of exemption are that: R.S.1954, c. 92, §
(1) A director, trustee, officer or employee cif any organization claiming exemption may not 16, 1967; 1967, c.
receive directly or indirectly any pecuniary profit from the operation of that organization, except 1979, c. 467, §§ 2
as reasonable compensation for services in effecting its purposes or as a proper beneficiary of its March 31, 1994; J
eff. April 2, 1998;
purposes; § 19; 2007, c. 627
(2) All profits derived from the operation of the organization and the proceeds from the sale of its · 1 No subsection 2 v
property must be devoted exclusively to the purposes for which it is organized; and 2 22 M.R.S.A. § 18:
3 22 M.R.S.A. § 78!
(3) The institution, organization or corporation claiming exemption under this paragraph must
4 34-B M.R.S.A. § :
file with the assessors upon their request a report for its preceding fiscal year in such detail as the
5 26 U.S.C.A. § 50!
assessors may reasonably require.
6 22 M.R.S.A. § 78C
G. Houses of religious worship, including vestries, and the pews and furniture within them; tombs
and rights of burial; and property owned and used by a religious society as a parsonage up to the
value of $20,000, and personal property not exceeding $6,000 in value are exempt from taxation, § 653. Estate
except that any portion of a ·parsonage that is rented is ~subject to taxation. For purposes of this The following (
710
CITIES AND TOWNS 36 § 653
paragraph, "parsonage" means the principal residence provided by a religious society for its cleric
whether or not the principal residence is located within the same municipality as the house of religious
worship where the cleric regularly conducts religious services.
H. Real estate and personal property owned by or held in trust for fraternal organizations, except
college fraternities, operating under the lodge system that are 'used solely by those fraternal organiza-
tions for meetings, ceremonials or religious or moral instruction, including all facilities that are
appurtenant to that property and used in connection with those purposes are exempt from taxation. If
a building is used in part for those purposes and in part for any other purpose, only the part used for
those purposes is exempt.
Further conditions to the right of exemption under this paragraph are that:
(1) A director, trustee, officer or employee of any organization claiming exemption may not
receive directly or indirectly any pecuniary profit from the operation of that organization, except
as reasonable compensation for services in effecting its .purposes or as a proper beneficiary of its
purposes;
(2) All profits derived from the operation of the organization and the proceeds from the sale of its
property must be devoted exclusively to the purposes for which it is organized; and
(3) The institution, organization or corporation claiming exemption under this paragraph must
file with the assessors upon their request a report for its preceding fiscal year in such detail as the
assessors may reasonably require.
I. Repealed. Laws 1979, c. 467, § 7.
J. The real and personal property owned by one or more of the organizations in paragraphs A and B
and E to H and occupied or used solely for their own purposes by one or more other such
organizations are exempt from taxation.
K. Except as otherwise provided in this subsection, the real and personal property leased by and
occupied or used solely for its own purposes by an incorporated benevolent and charitable organiza-
tion that is exempt from taxation under section 50 1 of the Code and the primary purpose of which is
the operation of a hospital licensed by the Department of Health and Human Services, a health
maintenance organization or a blood bank are exempt from taxation. For property tax years
beginning on or after April 1, 2012, the exemption provided by this paragraph does not include real
property.
L. Deleted. Laws 2007, c. 627, § 20.
An organization or institution that desires exemption under this section must file a written application
accompanied by written proof of entitlement for each parcel on or before the first day of April in the year
in which the exemption is .. first requested with the '!-5sessors of the municipality in which the property
would otherwise be taxable. If granted, the exemption continues in effect until the assessors determine
that the organization or institution is no longer qualified. Proof of entitlement must indicate the specific
basis upon which exemption is claimed.
R.S.1954, c. 92, § 6; 1955, c. 73; 1955, c. 399, §§ l, 4; 1957, c, 319; 1963, c. 2i9; 1965, c. 13; 1967,.c. 64, ef{ March
16, 1967; 1967, c. 372; 1971, c. 111; 1971, c. 475; 1973, c. 719; 1975, c. 771, § 402, eff. Jan. 4, 1977; 1977, c. 487;
1979, c. 467, §§ 2 to 7; 1991, c. 420; 1993, c. 286, § 1, eff. June 7, 1993; 1993, c. 422, §§ 4, 5; 1993, c. 572, § 1, eff.
March 31, 1994; 1995, c. 366, § 1; 1995, c. 560, § K-82; R.R.1995, c. 2, § 93; 1997, c. 442, § 3; 1997, c. 668, § 20,
eff. April2, 1998; 2001, c. 354, § 3; 2001, c. 596, §§ B-23, B-24; 2005, c. 563, § 16; 2005, c. 645, § 1; 2007, c. 438,
§ 19; 2007, c. 627, § 20; 2009, c. 425, § 1. .
I No subsection 2 was enacted.
2 22 M.R.S.A. § 1811 et seq.
3 22 M.R.S.A. § 780 I et seq.
4 3~B M.R.S.A. § 3001 et seq.
5 26 U.S.C.A. § SO!(c).
6 22 M.R.S.A. § 7801 et seq.
§ 6 53. Estates of veterans
The following estates of veterans are exempt from taxation:
711
ATTORNEY FOR PLAINTIFF:
DAVID A. LOURIE, ESQ.
189 SPURWINK AVENUE
CAPE ELIZABETH, ME 40107
ATTORNEY FOR DEFENDANT:
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BERGEN PARKINSON, LLC
62 PORTLAND ROAD, SUITE 25
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