Grand County Board of Commissioners and Larimer County Board of Commissioners, Petitioners-Appellants,
Colorado Property Tax Administrator, Respondent-Appellee, and YMCA of the Rockies, Intervenor-Appellee, and Board of Assessment Appeals, Appellee.
Colorado Board of Assessment Appeals Case Nos. 44667, 44670, 44672, 44674, 44677, 44681, 44682, 44683, 53058, 53173, 53475 & 53476
Alan N. Hassler, County Attorney, Robert Franek, Assistant County Attorney, Hot Sulphur Springs, Colorado, for Petitioner-Appellant Grand County Board of Commissioners.
George H. Hass, County Attorney, Fort Collins, Colorado, for Petitioner-Appellant Larimer County Board of Commissioners
Cynthia H. Coffman, Attorney General, Robert H. Dodd, Senior Assistant Attorney General, Grant T. Sullivan, Assistant Solicitor General, Denver, Colorado, for Respondent-Appellee Colorado Property Tax Administrator.
Bryan Cave LLP, Stuart J. Lark, Brent E. Rychener, Richard R. Young, Colorado Springs, Colorado, for Intervenor-Appellee YMCA of the Rockies.
Cynthia H. Coffman, Attorney General, Emmy A. Langley, Assistant Attorney General, Denver, Colorado, for Appellee Board of Assessment Appeals.
¶ 1 This is the second appeal to this court of an order of the Board of Assessment Appeals (the Board) in a property tax exemption case. In the first appeal, the Young Men's Christian Association of the Rockies (YMCA) appealed the Board's orders denying its requests for religious purposes and charitable use tax exemptions. A division of this court reversed, concluding that the Board had applied an incorrect legal standard. Larimer Cty. Bd. of Comm'rs v. Colo. Prop. Tax Adm'r, 2013 COA 49M (cert. denied, Dec. 9, 2013) (YMCA I).
¶ 2 On remand, the Board applied the standard articulated by the YMCA I division, and it determined that the YMCA was entitled to the religious purposes exemption. The boards of county commissioners for the counties in which the YMCA's properties are located appeal, arguing that the YMCA I division misconstrued the law and directed the Board to apply an incorrect legal standard to determine the YMCA's entitlement to the exemption. We disagree and affirm.
A. The Initial Administrative Proceedings
¶ 3 In December 2003, the YMCA, a nonprofit organization, applied for religious purposes and charitable use property tax exemptions for two properties. The first, Snow Mountain Ranch, consists of 40 cabins, 12 vacation homes, and 61 campsites located on 2187 acres of land in Grand County. The second, the Estes Park Center, consists of 179 cabins, 25 vacation homes, and 451 lodge rooms located on 860 acres of land in Larimer County, near Rocky Mountain National Park. Each of the properties has a chapel, conference facilities, dining halls, a swimming pool, a laundromat, and maintenance and administration buildings.
¶ 4 The properties offer a variety of recreational activities, including hiking, fishing, biking, horseback riding, cross-country skiing, tennis, roller skating, ropes courses, and fitness rooms. The properties also offer special activities and family programs such as Bible study, worship services, arts and crafts, story time at the library, and games. The YMCA provides guests with a schedule of activities, but it does not require guests to participate in any of the activities or religious services.
¶ 5 After reviewing the YMCA's application for property tax exemptions, the state property tax administrator (tax administrator) determined that the properties were being used exclusively for religious purposes and granted a religious purposes exemption. The Grand and Larimer County Boards of Commissioners (the Counties) appealed the tax administrator's determination to the Board, contending that the YMCA's use of the properties was not sufficiently religious to entitle it to the exemption.
¶ 6 Following a hearing conducted in August 2006, the Board concluded that the properties were not used exclusively for religious purposes. The Board noted that the properties were open to the general public regardless of faith, the properties were marketed without reference to religion, and many guests did not participate in any "overtly Christian" activities. The Board also found that the YMCA operated public school programs that were devoid of religious content, and that the YMCA had accepted bond funds which could not be used for "pervasively sectarian purposes." The Board upheld an exemption for the properties' chapels and the religious activities center at Snow Mountain Ranch, finding that these areas were used for religious purposes, but otherwise reversed the grant of an exemption.
B. YMCA I
¶ 7 The YMCA appealed and a division of this court reversed. The division concluded that the Board failed to apply the proper legal standard because it did not address the YMCA's declaration of religious purposes contained in its application for tax exemption, the effect of the declaration's presumed validity, or whether the presumption had been overcome. YMCA I, ¶ 60.
¶ 8 The division began with an overview of the constitutional and statutory framework for analyzing the propriety of a religious purposes property tax exemption. Article X, section 5 of the Colorado Constitution provides, "[p]roperty, real and personal, that is used solely and exclusively for religious worship . . . shall be exempt from taxation." Under section 39-3-106(2), C.R.S. 2015, "many activities of religious organizations are in the furtherance of the religious purposes of such organizations, " and "activities of religious organizations which are in the furtherance of their religious purposes constitute religious worship for purposes of section 5 of article X of the Colorado Constitution." YMCA I, ¶¶ 39-40 (quoting § 39-3-106(2)).
¶ 9 Consistent with these constitutional and statutory mandates, section 39-2-117, C.R.S. 2015, which sets forth the process for requesting a religious purposes exemption, instructs that a property owner must include on the application a declaration of its religious mission and religious purposes, as well as the uses of the property that are in furtherance of such mission and purposes. The declaration is "presumptive as to the religious purposes for which such property is used, " meaning the stated uses of the property are presumed to further the religious mission and purposes of the property owner. § 39-2-117(1)(b)(II). This presumption gives effect to the legislative pronouncement that the "constitutional guarantees regarding establishment of religion and the free exercise of religion prevent public officials from inquiring as to whether particular activities of religious organizations constitute religious worship." § 39-3-106(2). In other words, the legislature has determined that neither tax officials nor courts should evaluate the religiousness of the use of the property because that kind of intrusive inquiry could lead to excessive entanglement with religion, in violation of the Establishment Clause. See YMCA I, ¶¶ 41-43 ("[I]t is a significant burden on a religious organization to require it, on pain of substantial liability, to predict which of its activities a secular court will consider religious." (quoting Catholic Health Initiatives Colo. v. City of Pueblo, 207 P.3d 812, 818 (Colo. 2009))) (alteration in original).
¶ 10 Still, the applicant's declaration may be challenged on three grounds: (1) the religious mission and purposes are not religious beliefs sincerely held by the applicant-property owner; (2) the property being claimed as exempt is not actually used for the purposes set forth in the application; or (3) the ...