Attorney General's Opinion
Attorney General, Richard Blumenthal
June 27, 1990
Anthony V. Milano, Secretary
Office of Policy & Management
80 Washington Street
Hartford, CT 06106
Dear Secretary Milano:
This is in response to your request for opinion dated January 10, 1990, regarding whether vacant parcels qualify for inclusion under the Private College and General Hospital Grant Program, Conn. Gen. Stat. e 12-20a, which provides municipalities with a grant in lieu of property taxes for certain educational and medical facilities located in such municipalities which provide regional and statewide benefits.
As we understand the facts, located within the Town of Woodbury are approximately twenty acres owned by Yale University. This property is presently vacant and not contiguous to another municipality where an educational structure is located. Also, in the Towns of Branford and North Branford there is vacant land owned by St. Raphael Foundation Inc. The North Branford tax assessor believes the property is being held for investment purposes.
You have requested our opinion as to whether these vacant parcels that are not located near, or being occupied by, such facilities noted in section 12-20a and that do not appear to provide Connecticut residents with any direct benefit should be included in the grant reimbursement. Our response is that the parcels in the Towns of Branford and North Branford should not be so included. The property of Yale University in the Town of Woodbury would be includable if you find that the factual circumstances fall within the statutory requirements regarding grant reimbursement and property tax exemption.
Conn. Gen. Stat. e 12-20a provides, in pertinent part:
Grants in lieu of taxes on real property of private colleges and general hospitals. Definitions. On or before January first, annually, the secretary of the office of policy and management shall determine the amount due to each municipality in the state, in accordance with this section, as a state grant in lieu of taxes with respect to real property owned by any private nonprofit institution of higher education or any nonprofit general hospital facility .... As used in this section "private nonprofit institution of higher education" means any such institution engaged primarily in education beyond the high school level, the property of which is exempt from property tax under any of the subdivisions of section 12-81; "nonprofit general hospital facility" "means any such facility which is used primarily for the purpose of general medical care and treatment" .... The grant payable to any municipalities ... shall be equal to forty percent of the property taxes which, except for any exemption applicable to any such institution of higher education or general hospital facility under the provisions of section 12-81, would have been paid....
(Emphasis added).1
Conn. Gen. Stat. e 12-81,2 regarding exemptions from property tax, exempts, in pertinent part:
(7) Property used for scientific, educational, library, historical or charitable purposes. Exception. Subject to the provisions of sections 12-87 and 12-88, the real property of, or held in trust for, a corporation organized exclusively for scientific, educational, literary, historical or charitable purposes or for two or more such purposes and used exclusively for carrying out one or more of such purposes....
(16) Hospitals and sanatoriums. Subject to the provisions of section 12-88, all property of, or held in trust for, any Connecticut hospital society or corporation....
Conn. Gen. Stat. e 12-88, in turn, provides, in pertinent part:
When property otherwise taxable may be completely or partially exempted . Real property belonging to, or held in trust for, any organization mentioned in subdivision (7), ... (16) ... of section 12-81, which real property is so held for one or more of the purposes stated in the applicable subdivision, and from which real property no rents, profits or income are derived, shall be exempt from taxation though not in actual use therefore by reason of the absence of suitable buildings and improvements thereon, if the construction of such buildings or improvements is in progress .... If a portion only of any lot or building belonging to, or held in trust for, any such organization is used exclusively for carrying out one or more of such purposes, such lot or building shall be so exempt only to the extent of the portion so used and the remaining portion shall be subject to taxation.
(Emphasis added).
The "use" requirement under this section is interpreted as referring only to the corpus, not the income from the property. Thus, a charitable organization could not claim an exemption because property owned by it, but not used for a nonexempt purpose, was producing income that was used for one or more of the requisite purposes. Property Tax, 4 Conn. L. Rev. at 242.
Connecticut case law regarding the requirement that the property be "used exclusively" provides that
[t]he statute does not require that educational activities be carried on continuously on a piece of property for it to come within the term "used exclusively" for carrying out an educational purpose. See Arnold College v. Milford, [144 Conn. 206, 211, 128 A.2d 537 (1957)].... It is the nature of the use, and not the frequency of use and the number of students, which is controlling. Of course, the property in question must actually be used in order to qualify for an exemption. If [the property] had not been used, or if the use had been abandoned prior to the years in question, the property would not be eligible for tax exemption. Klein v. Bridgeport, 125 Conn. 129, 131-32, 3 A.2d 675 (1939); see also Arnold College v. Milford, supra, 211.3
Red Top, Inc. v. Board of Tax Review, 181 Conn. 343, 353, 435 A.2d 364 (1980) (property used for maximum of 2-3 weeks per year granted exemption under section 12-81(7)) (emphasis added). This holding is consistent with section 12-88.
Thus, the general rule is that property which is vacant or unused for an indefinite, as opposed to a temporary, period is not entitled to exemption under section 12-81 and, therefore, no grant may be made under section 12-20a. The only exception would appear to be that found in section 12-88 for construction in progress. It should be noted, however, that "the conclusion in each case is '"necessarily governed by the specific facts in the individual case."'" Red Top, 181 Conn. at 354 (quoting New Canaan Country School, Inc. v. New Canaan, 138 Conn. 347, 349, 84 A.2d 691 (1951)). 4
Thus, the vacant property in the Towns of Branford and North Branford should not be included in the grant reimbursement where such property has remained vacant indefinitely. Ordinarily, the same response would apply to the vacant property in the Town of Woodbury. However, said property is owned by Yale University and Conn. Gen. Stat. e 12-815 provides:
Exemptions. The following described property shall be exempt from taxation:
. . .
(8) College property. [T]he funds and estate which have been or may be granted, provided by the state, or given by any person or persons to the Trustees of the Berkeley Divinity School, the board of trustees of Connecticut College for Women, the Hartford Seminary Foundation, Sheffield Scientific School, Trinity College, Wesleyan University or The President and Fellows of Yale College in New Haven, and by them respectively invested and held for the use of such institutions, with the income thereof; provided none of said corporations shall hold in this state real estate free from taxation affording an annual income of more than six thousand dollars.... No other provision of this section concerning exemption of property used for educational purposes shall be construed to affect any provision of this subdivision.
(Emphasis added).6 This section was intended to serve as the exclusive source of exemption for property of the named colleges used for collegiate purposes. Thus, assuming the land is used for educational purposes, if the requirements of section l2-8l(8) are met, the provisions of section l2-8l(7) and the case law interpreting the phrase "used exclusively" and vacant lands do not apply to land held by Yale University.7 Therefore, the land in the Town of Woodbury would be included in the grant reimbursement, provided the factual circumstances fall within the statutory requirements of section l2-8l(8).
We trust the foregoing answers your concerns.
Very truly yours,
CLARINE NARDI RIDDLE
ATTORNEY GENERAL
Jane D. Comerford
Assistant Attorney General
CNR/JDC/pp
1 The requirement that the property be exempt from property tax under section 12-81 also applies to general hospital facilities.
2 No legislative history can be found on section 12-81. However, for an historical perspective and detailed analysis of section 12-81(7), see, e.g., Formen Schools, Inc. v. Litchfield, 134 Conn. 1, 2-4, 54 A.2d 710 (1947); Masonic Building Association v. Stamford, 119 Conn. 53, 57-58, 174 A. 301 (1934); St. Bridget Convent Corp. v. Milford, 87 Conn. 474, 478-80, 88 A. 881 (1913), and of section 12-81(16), see, e.g., Institute of Living v. Hartford, 133 Conn. 258, 261-64, 50 A.2d 822 (1946). See also Warren, Krattenmaker & Snyder, Property Tax Exemptions for Charitable, Educational, Religious and Governmental Institutions in Connecticut, 4 Conn. L. Rev. 181, 230-45 (1971) [hereinafter cited as Property Tax].
3 In Arnold College v. Milford , 144 Conn. 206,
210, 128 A.2d 537 (1957), the court noted that during the assessment period, the property in question had been used "from time to time"
for educational purposes and thus was entitled to an exemption under section 12-81(7).
4 The rule that vacant land is not entitled to an exemption finds support in other states with statutes nearly identical to section 12-81(7). See, e.g., Young Women's Christian Ass'n v. City of New York, 217 A.D. 406, 216 N.Y.S. 248, 251-52 (1926) (and cases cited therein). See also Wildlife Preserves Inc. v. Scopelliti, 321 N.Y.S. 2d 1004, 1008-09 (1971). See generally Memphis Development Foundation v. State Board of Equalization, 653 S.W. 2d 266, 271 (Tenn. App. 1983) (Ownership of non-used property does not confer an exemption on the property); Knox College v. Board of Review , 308 Ill. 160, 139 N.E. 56, 57 (1923) (College property consisting of unimproved lots not used for school purposes is subject to taxation). But see United Way v. Douglas County Board of Equalization, 215 Neb. 1, 337 N.W. 2d 103, 107 (1983) (Vacant space in property owned by a charitable organization exempt if intended for a charitable use, dominant use of the property as a whole is for exempt purposes, and conditions under which it is held preclude its use for commercial purposes).
5 No legislative history of section 12-81(8) can be found. For a detailed analysis of this section, see Property Tax, 4 Conn. L. Rev. at 245-68.
6 "[F]unds and estate" includes real property. Yale University v. New Haven, 71 Conn. 316, 42 A. 87 (1899). The word "use" has been read to apply to income as well as corpus. New Haven v. Sheffield Scientific School, 59 Conn. 163, 166, 22 A. 156 (1890). See Hartford v. Hartford Theological Seminary, 66 Conn. 475, 483-84, 34 A. 483 (1895). Thus, property held by a college for strictly commercial purposes is exempt as long as the income is used for the college's benefit. Yale University v. Town of New Haven, 71 Conn. 316, 335, 42 A. 87 (1899). For a detailed history of Yale's tax immunity, see Property Tax , 4 Conn. L. Rev. at 213-17.
7 However, because the last sentence of this section applies, by its own terms, only to educational uses, university land set aside for non collegiate purposes would receive a section l2-8l(7) charitable exemption if the requirements of that section are otherwise met and the land is not vacant. See Property Tax, 4 Conn. L. Rev. at 265-68.