Oregon Center for Public Policy v. Multnomah County Assessor ( 2017 )

IN THE OREGON TAX COURT
MAGISTRATE DIVISION
Property Tax
OREGON CENTER FOR PUBLIC POLICY, )
)
Plaintiff, ) TC-MD 160308G
)
v. )
)
MULTNOMAH COUNTY ASSESSOR, ) ORDER DENYING PARTIES’
) CROSS-MOTIONS FOR SUMMARY
Defendant. ) JUDGMENT
On cross-motions for summary judgment, this case concerns whether a “think tank” is a
charitable institution entitled to claim a property tax exemption under ORS 307.112 and
307.130.1,2 Plaintiff’s Complaint appealed Defendant’s denial of such an exemption to leased
property identified as Account R273096 (the subject property) for the 2016–17 tax year. Oral
argument on the parties’ motions was held March 17, 2017. Plaintiff’s Executive Director,
A. Charles Sheketoff, appeared on its behalf. Carlos A. Rasch, Assistant County Attorney,
appeared on Defendant’s behalf.
I. STATEMENT OF FACTS
The following facts are drawn from the parties’ Stipulation of Facts. Additional facts
appear where pertinent in the analysis.
According to Plaintiff’s bylaws, its primary purpose during the year at issue was “to
study issues pertinent to the needs of Oregonians for human services, to develop standards to
measure the effectiveness of human services programs, and to educate the public about these
///
1
The court’s references to the Oregon Revised Statutes (ORS) are to 2015.
2
Plaintiff’s representative described his organization as a “think tank” during oral argument.
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programs.” Plaintiff performed most of its work at the subject property—its office—which it
began leasing in March 2016.
In the words of the parties’ stipulation, “[Plaintiff’s] work explains to the public how
complex public policies impact their lives.” Plaintiff did this explaining in a variety of ways,
free of charge. It published research on its website. It sent e-mails. It accepted invitations to
speak at public events. It responded to requests for information from all inquirers, including
members of the media, government officials, and members of the public.
Plaintiff was recognized by the Internal Revenue Service as a tax-exempt organization
under IRC sections 501(a) and 501(c)(3). Plaintiff’s articles provide for distribution of its assets
upon dissolution for exempt purposes, and disallow the inurement of any part of its net earnings
to private persons. Plaintiff accounts for the funds and donations committed to its charitable use.
Defendant denied Plaintiff’s claim for property tax exemption by letter dated June 17,
2016. The reason stated for the denial in the letter was that Plaintiff did not “qualify in
accordance with ORS 307.130.” Plaintiff asks the court to overturn that denial by finding the
subject property was entitled to property tax exemption. Defendant asks the court to sustain its
denial of exemption.
II. ANALYSIS
The ultimate issue in this case is whether the subject property was exempt from taxation
under ORS 307.112. ORS 307.112(1) allows a tax exemption to property leased and used by an
organization that would be entitled to exemption for similar use of its own property, provided
that the rent reflects tax savings from the exemption, and the lease expressly agrees the rent
reflects those savings. A charitable institution is one type of organization entitled to claim tax
exemption for its own property. ORS 307.130(2).
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Here, the parties dispute whether Plaintiff is a charitable institution, whether Plaintiff’s
lease expressly agreed that its rent reflected tax savings, and whether Plaintiff’s rent actually
reflected tax savings. The court addresses each issue in turn.
A. Whether Plaintiff is a Charitable Institution under ORS 307.130
Charitable institutions under ORS 307.130 must meet certain organizational
requirements—they must be nonprofit corporations, separately accounting for funds and
donations committed to charitable use, not operating for the private advantage of the founders
and officers, and having articles or bylaws requiring their assets be used for charitable purposes
upon dissolution. OAR 150-307-0120(2).3 There is no dispute that Plaintiff met those
organizational requirements.
In addition to being properly organized, a charitable institution exhibits three traits:
“(1) [T]he organization must have charity as its primary, if not sole, object; (2) the organization
must be performing in a manner that furthers its charitable object; and (3) the organization’s
performance must involve a gift or giving.” SW Oregon Pub. Defender. Services v. Dept. of
Rev., 312 Or 82, 89 (1991). Here, Defendant disputes the presence of the first and third traits.
1. Charity as primary object
Defendant argues that Plaintiff’s object is not charitable. Defendant relies on a
Magistrate Division case, Native Forest Council v. Lane County Assessor, 17 OTR-MD 30(2001), for the proposition that “[e]ducating the public on a particular point of view is not
providing charity. Charity must be more direct and substantive to the recipient.” In Native
Forest Council, the court held that the object of an organization formed to promote a political
ideology by educating the public was not charitable; rather, it was “to educate.” 17 OTR-MD at
3
Oregon Administrative Rules (OAR)
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35–36. The case did not further analyze its unstated major premise that education is not a
charitable purpose.
The court will first consider whether education is, in fact, a charitable purpose under
ORS 307.130(2). The court will then consider the effect of the prohibition under IRC section
501(c)(3) of engaging in propaganda or attempting to influence legislation.
a. Education as charitable purpose
In light of Oregon’s broad definition of charity, this court is unable to agree with the
statement in Native Forest Council contrasting education with charitable activity. OAR 150-
307-0120(5)(c) defines a charitable object as one that is “good or beneficial for humans and
other living things.” Education, which imparts knowledge, appears to meet that definition. The
analysis in Native Forest Council did not provide authority for excluding education from the
definition of charity and the court is now unable to locate such authority.
The court considers and rejects the argument that ORS 307.130(2) excludes education
from the definition of charity because it does not include the word education. That argument
compares the text of ORS 307.130(2) with that of ORS 307.140(1), which does include
education. ORS 307.130(2) states, in pertinent part:
“(2) Upon compliance with ORS 307.162, the following property owned
or being purchased by art museums, volunteer fire departments, or incorporated
literary, benevolent, charitable and scientific institutions shall be exempt from
taxation:
“(a) Except as provided in ORS 748.414, only such real or personal
property, or proportion thereof, as is actually and exclusively occupied or used in
the literary, benevolent, charitable or scientific work carried on by such
institutions.
“* * * * *.”
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ORS 307.140(1) states that “the following property owned or being purchased by religious
organizations shall be exempt from taxation”:
“(1) All houses of public worship and other additional buildings and
property used solely for administration, education, literary, benevolent, charitable,
entertainment and recreational purposes by religious organizations, the lots on
which they are situated, and the pews, slips and furniture therein. However, any
part of any house of public worship or other additional buildings or property
which is kept or used as a store or shop or for any purpose other than those stated
in this section shall be assessed and taxed the same as other taxable property.”
(Emphasis added.) “Ordinarily, when the legislature includes an express provision in one statute,
but omits such a provision in another statute, it may be inferred that such an omission was
deliberate.” Oregon Bus. Planning Council v. Dept. of Land Conservation and Dev., 290 Or
741, 749, 626 P2d 350 (1981); see also PGE v. Bureau of Labor and Industries, 317 Or 606,
611, 859 P2d 1143 (1993) (stating principle as applying to different sections within one statute).4
The inference might be drawn that, by specifically including education among the exempt uses
of religious organizations’ property while omitting it from the list of exempt works of a
charitable institution, the legislature intended to exclude education from the purposes of
charitable institutions. However, that inference does not bear up under closer examination.
The lists in ORS 307.130(2) and 307.140(1) differ importantly—in particular,
ORS 307.140(1) is an exclusive list, while ORS 307.130(2) is not. The former statute explicitly
denies exemption to property used “for any purpose other than those stated in this section.”
ORS 307.140(1). ORS 307.130(2) lacks such a definitive statement, and Oregon Supreme Court
precedent shows that it is not an exclusive list.
If the “literary, benevolent, charitable and scientific institutions” of ORS 307.130(2) were
a simple catalog of permissibly exempt organizations, then each type of listed institution would
4
This is the canon expressio unius est exclusio alterius.
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independently qualify for tax exemption. Under that theory, a “literary” or “scientific”
institution might qualify for exemption even if it were not “charitable.” The Oregon Supreme
Court considered and rejected that possibility in Behnke-Walker Business College v. Multnomah
County, 173 Or 510, 146 P2d 614 (1944). In that case, a for-profit business school claimed a tax
exemption as a literary or scientific institution. Invoking the principle that “[a]ssociated words
explain and limit each other,” the Oregon Supreme Court quoted extensively from a
Massachusetts decision interpreting the phrase “literary, benevolent, charitable and scientific
institutions.” Behnke-Walker, 173 Or at 518–19, quoting Bd. of Assessors v. Garland Sch. of
Home Making, 296 Mass 378, 6 NE2d 374 (1937). Under the reasoning of the Massachusetts
case, references to literary and scientific institutions expand the definition of a charitable
institution by clarifying that “the exemption given by the statute is not restricted to institutions
having the narrow charitable purpose of relief of the poor or sick.” Id. at 519. Literary and
scientific institutions do not independently qualify for exemption where they are not charitable.
Id. In Oregon, therefore, only public charities qualify for exemption. Id. at 519–20.5
The list of ORS 307.130(2) thus serves a different purpose than the list of
ORS 307.140(1). The first list serves to broaden the understanding of charity. The second list
serves to restrict the uses of religious organizations’ property. The use of the word education in
ORS 307.140(1) does not imply that education is excluded from the expansive view of charity
adopted by ORS 307.130(2).
It is true that a broad definition of charity under ORS 307.130(2) creates “the potential
for disagreement as to whether a particular activity is of benefit to mankind.” Oregon Country
Fair v. Dept. of Rev., 10 OTR 200, 205 n 3 (1986). In Oregon Country Fair, the taxpayer’s
5
Because the taxpayer was organized for private profit, the court did not reach the question of whether a
nonprofit educational institution might qualify for tax exemption. Behnke-Walker, 173 Or at 526.
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purposes were “to promote the arts and crafts, the exchange of ideas, the establishment of a
community feeling of unity and enhance an earth-life harmony philosophy.” Id., 10 OTR at 205.
The court agreed that the taxpayer’s purposes were beneficial, but held those purposes were not
charitable, applying the word charitable in its “narrow and traditional sense of relieving pain,
alleviating disease or removing constraints.” Id., citing Benton County v. Allen, 170 Or 481, 485,
133 P2d 991 (1943); but see Behnke-Walker, 173 Or at 519–20. Despite the court’s concerns
about generating disagreement, the legislature acted swiftly to overturn the “narrow and
traditional” definition of charity applied in Oregon Country Fair. See Young Mens Christian
Ass’n of Columbia-Willamette v. Dept. of Rev., 308 Or 644, 652, 784 P2d 10866 (1989)
(agreeing that 1987 amendments to ORS 307.130 responded to and overturned part of Oregon
Country Fair). ORS 307.130(5) was enacted, stating: “An institution shall not be deprived of an
exemption under this section because its purpose or the use of its property is not limited to
relieving pain, alleviating disease or removing constraints.”
Although the Supreme Court has not explicitly discussed whether education is a
charitable purpose, it has held educational institutions entitled to tax exemption under
ORS 307.130. See Multnomah Sch. of the Bible v. Multnomah Co., 218 Or 19, 36–37, 343 P2d
893 (1959) (describing exempt charitable institution as “institution of learning”); Willamette
Univ. v. State Tax Comm’n, 245 Or 342, 343, 422 P2d 260 (1966), discussed in Habitat for
Humanity of the Mid–Willamette Valley v. Dept. of Rev., 360 Or 257, 263, 381 P3d 809 (2016)
(“Because the university was in the process of constructing buildings intended to advance its
educational purposes, there was no dispute that the property * * * was ‘being prepared to carry
out the purposes of the exempt charity.’ ”) The Regular Division of this court has also allowed a
tax exemption under ORS 307.130 to an organization with an educational purpose. See Lewis &
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Clark Coll. v. Comm’n, 3 OTR 429 (1969) (accepting parties’ agreement that college was
exempt institution under ORS 307.130).
Considering the broad meaning of charitable found in ORS 307.130, as well as the
definition provided in OAR 150-307-0120(5)(c) (“good or beneficial for humans and other living
things”), the court concludes that education is a charitable purpose.
b. Engaging in propaganda or attempting to influence legislation
Defendant contends that Plaintiff’s advocacy for “certain social and political issues”
detracts from any charitable value its educational efforts might have, and that Plaintiff may have
engaged in lobbying activities. Defendant does not develop its argument or cite authority.
However, the court understands Defendant to have challenged whether Plaintiff violated the
prohibition on propaganda found in Internal Revenue Code (IRC) section 501(c)(3).
Although educational purposes are charitable, an organization that engages in propaganda
or attempts to influence legislation may fail to comply with IRC section 501(c). Compliance
with IRC section 501(c)(3) is one method of meeting the definition of a “nonprofit corporation”
under ORS 307.130(c); the other method is by being organized pursuant to ORS chapter 65.
Charitable institutions must be organized as nonprofit corporations to qualify for exemption
under ORS 307.130. OAR 150-307-0120(2)(b); Behnke-Walker, 173 Or at 520 (holding only
property of nonprofit corporations may qualify for exemption under ORS 307.130).
IRC section 501(c)(3) disallows a tax exemption to organizations for which a substantial
part of their activities consists in “carrying on propaganda, or otherwise attempting, to influence
legislation (except as otherwise provided in subsection (h)).” IRC section 501(h)(2) cross-
references the definition of “influencing legislation” found at IRC section 4911(d), which states,
in pertinent part:
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“(1) General rule.—Except as otherwise provided in paragraph (2), for
purposes of this section, the term “influencing legislation” means—
“(A) any attempt to influence any legislation through an attempt to
affect the opinions of the general public or any segment thereof, and
“(B) any attempt to influence any legislation through
communication with any member or employee of a legislative body, or
with any government official or employee who may participate in the
formulation of the legislation.
“(2) Exceptions.—For purposes of this section, the term “influencing
legislation”, with respect to an organization, does not include—
“(A) making available the results of nonpartisan analysis, study, or
research;
“* * * * *.”
The exception for “nonpartisan analysis, study, or research” includes any activity that is
“educational.” 26 CFR § 56.4911–2(c)(1)(ii). The term educational is defined by 26 CFR §
1.503(c)(3)–1(d)(3):
“The term educational, as used in section 501(c)(3), relates to:
“(a) The instruction or training of the individual for the purpose of
improving or developing his capabilities; or
“(b) The instruction of the public on subjects useful to the individual and
beneficial to the community.
“An organization may be educational even though it advocates a particular
position or viewpoint so long as it presents a sufficiently full and fair exposition
of the pertinent facts as to permit an individual or the public to form an
independent opinion or conclusion. On the other hand, an organization is not
educational if its principal function is the mere presentation of unsupported
opinion.”
See also Rev Proc 86-43, 1986-2 CB 729 (IRS RPR 1986) (identifying four factors not typically
found where organization’s viewpoint advocacy is educational).
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Here, all of Plaintiff’s work submitted by the parties supports the conclusion that
Plaintiff’s viewpoint advocacy was educational within the meaning of 26 CFR § 1.503(c)(3)–
1(d)(3). Each “fact sheet” provided by Plaintiff stated a conclusion regarding a policy question
in its title. The fact sheets were supported by six to nine pages of data and analysis. That data
was sufficient to allow readers to judge the credibility of Plaintiff’s conclusions. Plaintiff’s
papers were not “mere presentation of unsupported opinion.” See id.
2. Gift or giving
While having a charitable object stated in the articles and bylaws is prima facie evidence
that an organization is charitable, “such prima facie evidence as its articles may accord can be
rebutted by evidence that the corporation has not in fact lived up to its chartered objects.”
Methodist Homes, Inc. v. Tax Comm’n., 226 Or 298, 308, 360 P2d 293 (1961).
“This is a sound and salutary rule. It is one reflecting human experience.
Unselfish declarations of intended purpose and promises of future worthy
endeavor are many times rendered meaningless by inaction and should give the
declarer no preferred status unless ultimately resolved into concrete and tangible
reality.”
Id., quoted in Dove Lewis Mem’l Emergency Veterinary Clinic, Inc. v. Dept. of Rev., 301 Or 423,
428, 723 P2d 320, 322 (1986); see also OAR 150-307-0120(4)(d) (“Declarations of worthwhile
purpose and charitable endeavors must be manifested in concrete endeavors and tangible reality
which benefits the recipient.”).
The examination of whether an organization’s performance involves gift or giving is a
way of testing whether it has “lived up to its chartered objects.” In the first place, gift or giving
involves “giving something of value to a recipient with no expectation of compensation or
remuneration.” OAR 150-307-0120(4)(d). In the second place, gift or giving involves “concrete
endeavors and tangible reality which benefits the recipient.” Id.ORDER DENYING PARTIES’ CROSS-MOTIONS
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Here, there is no dispute that Plaintiff did not expect compensation or remuneration from
those who read the information provided on Plaintiff’s web site or who invited Plaintiff to speak.
However, Defendant challenges whether Plaintiff gave “something of value to a recipient.”
Defendant points out that, while Plaintiff provided its policy research to the public at large, it
was legislators and lawmakers who decided whether to implement the policies for which
Plaintiff advocated. (Def’s Cross-Mot Summ J at 6.)
If the “something of value” that Plaintiff provided were the policies for which it
advocated, then Defendant’s argument would hold. Plaintiff cannot and did not personally
deliver new laws to the people of Oregon. However, Plaintiff does not claim to give new laws; it
claims to educate. And education is of value apart from whether any particular policy is enacted
into law. Plaintiff’s purpose was to educate, and its activities informing the public were
educational. Each person whom Plaintiff reached was thus a recipient who received “something
of value.”
Defendant further suggests that Plaintiff did not give “tangible reality” to a charitable
purpose. OAR 150-307-0120(4)(d). Defendant states that the information Plaintiff published on
its website was “to promote and educate on its ideologies and policies and is not tangible charity
for public benefit.” (Def’s Cross-Mot Summ J at 7.) If Defendant’s argument is that education
is not tangible enough to be a charitable purpose, the court disagrees for the reasons given in the
section above. While the root meaning of tangible is “capable of being touched,” the word by
extension also means “substantially real,” and in that latter sense is applied to realities that
cannot actually be touched. See Webster’s Third New Int’l Dictionary 2337 (unabridged ed
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2002). Furthermore, the exemption of ORS 307.130(2) is not limited to institutions performing
“corporeal” works of charity. See ORS 307.130(5); Behnke-Walker, 173 Or at 519.
Plaintiff’s work accorded with its stated purpose of educating the public and was
performed without expectation of compensation or remuneration. Plaintiff therefore manifested
its charitable purpose in tangible reality benefiting a recipient. Plaintiff’s performance involved
gift or giving.
B. ORS 307.112
The remaining issue is whether Plaintiff qualifies for exemption under the “tax savings”
provision of ORS 307.112. Defendant’s argument is twofold. First, Defendant contends that
Plaintiff’s lease did not expressly agree that Plaintiff’s rent reflected tax savings below market
rent. See ORS 307.112(1)(b). Second, Defendant contends that Plaintiff did not provide
sufficient documentary proof of tax savings and is now barred from providing more evidence
because such evidence could only be provided “at the time of application.” Cf. OAR 150-307-
0060(7).
1. Express agreement in lease
ORS 307.112(1)(b) imposes the following as a condition of receiving a tax exemption on
property leased from a taxable owner:
“It is expressly agreed within the lease, sublease or lease-purchase
agreement that the rent payable by the institution, organization or public body has
been established to reflect the savings below market rent resulting from the
exemption from taxation.”
In the present case, the lease of the subject property provided for a rent credit in the amount of
any property tax savings:
“LESSEE is responsible for filing all necessary forms with the required
government entities with respect to LESSEE’S 501(c)(3) status for property tax
reduction to LESSOR. Any property tax savings LESSOR receives due to
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LESSEE’S occupancy and 501(c)(3) status will be passed on monthly to LESSEE
in the form of a rent credit. Should LESSEE no longer qualify for 501(c)(3) tax
status, any advanced property tax rent credit the LESSEE received shall be
reimbursed to the LESSOR.”
(Ptf’s Resp Def’s Mot Summ J at 12–13.) Under that provision, the rent payable by Plaintiff was
not necessarily the stated monthly rent obligation (the “lease rent”). Rather, it was the lease rent
reduced by a rent credit equal to the property tax savings.
Defendant’s challenge to the language of the lease is a legal question. At the stage of
evaluating the lease, the court does not consider whether Plaintiff’s rent payable actually
reflected tax savings below market rent, but only whether such savings were expressly agreed.
Therefore, the language of the lease it is not a question of proof. Cf. OAR 150-307-0060(10)
(statement that lessee is responsible for taxes does not prove tax savings).
An express agreement is one manifested by words, just as an express contract (as
opposed to an implied contract) is manifested by words. Cf. Staley v. Taylor, 165 Or App 256,
262, 994 P2d 1220 (2000) (regarding express and implied contracts). Nevertheless,
ORS 307.112(1)(b) is “not a commandment to parrot the exact statutory words.” The Young
Mens Christian Ass’n of the Columbia-Willamette v. Clackamas County Assessor, TC-MD
020920B, WL 21716480 (Or Tax M Div July 10, 2003) (holding lease provision making lessee
responsible for property taxes satisfied requirement for express agreement to tax savings).
Here, Plaintiff’s lease presumably did not state that the agreed rent was equal to “market
rent.”6 If it did, those words in conjunction with the words of the lease quoted above would
unquestionably satisfy ORS 307.112(1)(b). The question then is whether the above-quoted lease
provision, in conjunction with a provision for monthly rent, expresses an agreement that Plaintiff
would receive tax savings below market rent.
6
The court has not been provided with a copy of the entire lease.
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The court finds that the lease’s provision that “property tax savings” be “passed on” to
Plaintiff is an express agreement that satisfies ORS 307.112(1)(b). Given the words in the lease,
it is possible that the parties agreed to a rent above the market rate, such that even with the rent
credit Plaintiff’s rent payable was not sufficiently below market rent. However, that possibility
would require a strained understanding of passing on property tax “savings.” A savings is “a
reduction in cost.” Webster’s Third New Int’l Dictionary 2020 (unabridged ed 2002). In
context, a property tax savings is a reduction in cost due to tax exemption. If those savings are
“passed on” to the lessee, then the lessee receives those savings. Yet if the lessee were paying
above market rent, the lessee would not really receive savings from property tax exemption;
instead, the lessee would be paying more and assuming more risk than it would have if it rented
equivalent space elsewhere. It is unrealistic to suppose that a lessee would agree to such
“savings.” Considering that a lease is a real agreement between real parties—not a logic
exercise—the court finds that the quoted provisions express agreement that Plaintiff’s rent
payable was reduced below market rent by the amount of the property tax savings.
2. Documentary proof of tax savings
Although a lease expresses an agreement regarding tax savings, such an agreement does
not necessarily end the inquiry. A lease in the right form may still state a rent that does not
reflect tax savings below market rent. A factual determination is necessary.
The initial factual determination is made by the assessor. ORS 307.112(3) obliges lessors
(not lessees) to provide “documentary proof” of such savings if the assessor is not satisfied:
“If the assessor is not satisfied that the rent stated in the lease, sublease or
lease-purchase agreement has been established to reflect the savings below market
rent resulting from the tax exemption, before the exemption may be granted the
lessor must provide documentary proof, as specified by rule of the Department of
Revenue, that the rent has been established to reflect the savings below market
rent resulting from the tax exemption.”
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The “rule of the Department of Revenue” specifying the documentary proof is found at
OAR 150-307-0060(7) to (10). OAR 150-307-0060(7) provides: “Sufficient documentary proof
must be submitted at the time of application.” OAR 150-307-0060(8) lists acceptable
documentary proof as including current and historic rental data for the subject property’s
building, the rental rate used to appraise the subject property, and a rent study of comparable
similar properties.
Defendant argues that Plaintiff cannot qualify for property tax exemption because it did
not submit the documentary proof listed in OAR 150-307-0060(8) at the time it made its
exemption claim. In Defendant’s view, Plaintiff is now barred from submitting additional
evidence to this court regarding market rent and tax savings.
Defendant’s argument is not well taken because a taxpayer’s right under ORS
305.275(1)(a)(C) to appeal an assessor’s “denial of a claim for exemption” includes a right to a
new factual determination by this court based on evidence. The Oregon Tax Court has
jurisdiction “for the hearing and determination of all questions of law and fact arising under the
tax laws of this state.” ORS 305.410 (emphasis added). The question of whether the rent stated
to reflect tax savings in Plaintiff’s lease actually did reflect tax savings is a factual question
arising out of Defendant’s denial. As Defendant rightly points out in response to Plaintiff’s
charge that it had never raised the issue of documentary proof before, appeals to this court are
heard de novo. No statute limits the scope of the court’s review of Defendant’s denial. Plaintiff
is therefore entitled to present new evidence of the pertinent facts.7
7
Plaintiff raises a significant objection to Defendant’s position based on due process grounds. Plaintiff’s
concern about notice and a right to be heard are cured by its ability to present new evidence to this court.
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Because at present the parties are separated by an issue of material fact—whether
Plaintiff’s lease actually reflected tax savings below market rent—the court cannot grant either
party’s motion for summary judgment. See TCR 47 C. Because under Plaintiff’s lease tax
savings are passed on through a rent credit, the lease will reflect tax savings below market rent if
the stated rent is no greater than market rent.
IV. CONCLUSION
The court concludes that Plaintiff’s educational purpose was charitable and Plaintiff was
a charitable institution under ORS 307.130(2). The provision in Plaintiff’s lease passing tax
savings on to Plaintiff was an express agreement satisfying ORS 307.112(2)(b). The question of
whether the lease actually reflected tax savings below market rent is a factual question on which
the parties may present evidence at trial if they are unable to agree. Now, therefore,
IT IS ORDERED that the parties’ cross-motions for summary judgment are denied.
IT IS FURTHER ORDERED that the parties shall confer and, within 14 days, file a
status report proposing next steps to resolve this appeal.
Dated this day of September, 2017.
POUL F. LUNDGREN
MAGISTRATE
This interim order may not be appealed. Any claim of error in regard to this
order should be raised in an appeal of the Magistrate’s final written decision
when all issues have been resolved. ORS 305.501.
This document was signed by Magistrate Lundgren and entered on
September 19, 2017.
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