Cramer & Anderson Partner Dan Casagrande provided testimony to a Feb. 25 public hearing in support of a bill pending before the Connecticut General Assembly.
An Act Concerning Property Tax Exemptions for Property Used For Charitable Purposes (H.B. 5168), under review by the Joint Planning and Development Committee, was raised for four principal purposes:
- Require the Office of Policy and Management to develop and provide a form for (A) filing certain tax exemption applications, and (B) making determinations on such applications
- Specify that payments made by federal, state or local governments for the treatment, support or care of certain individuals shall not constitute housing subsidies for the purposes of determining what is a charitable purpose
- Require assessors to state the rationale for the denial of a property tax exemption for charitable purposes on their records
- Authorize owners of certain property to apply for relief from the Superior Court in the event that such an exemption is wrongfully denied by assessors.
Attorney Casagrande submitted testimony on behalf of The Caring Community of Connecticut, Inc., which he represents in a pending appeal of the Town of Colchester’s denial of charitable purpose exemptions for seven properties Caring Community owns in town.
Prior to the 2015 grand list, Attorney Casagrande explained in his testimony, Colchester had given all of these properties charitable purpose exemptions. As of the 2015 grand list, the Colchester assessor determined the properties are not exempt because they constitute “subsidized housing” that is not temporary, making them subject to taxation under § 12-81(7)(B). The case is scheduled for trial this spring.
Caring Community, recognized by the IRS as a tax-exempt charitable organization, owns and operates 19 “community living arrangement” homes (“CLAs”) in Eastern Connecticut in total. They house individuals who would otherwise require care in long-term, state-funded and operated CLAs or other institutional programs.
In providing community living opportunities to its clientele, who suffer from severe intellectual disabilities, Caring Community helps them develop and maintain healthy relationships with others, and empowers them to take responsibility for managing their own lives. This involves providing 24-7 intensive care and rehabilitative services.
Attorney Casagrande testified that the CLAs relieve the state of a legal and financial burden because they discharge the state’s responsibility to care for these individuals at a cost less than what it would cost the state to provide the services in state-operated CLAs and other programs.
The average length of stay of individuals in Caring Community’s CLAs is several years, and as Attorney Casagrande explains in his testimony, the Town of Colchester seized on the non-temporary nature of Caring Community’s CLA programs to claim under § 12-81(7)(B) that they are not exempt from taxation.
The Town of Colchester, in reversing its position on the properties tax exempt status, erroneously relies on a provision in § 12-81(7)(B) saying that “housing subsidized, in whole or in part by … state … government” and “housing for persons … of low and moderate income shall not constitute a charitable purpose under this section.”
“ … the fundamental flaw in the Town’s argument is that Caring Community’s CLAs are not housing within any common sense definition of the term. Each of these facilities provides round-the-clock, comprehensive medical, developmental and rehabilitative services to its patients,” Attorney Casagrande said in the testimony, explaining that the main purpose of the CLAs is not shelter but providing people with intellectual and developmental disabilities with care, treatment, and training in a small private-home setting that maximizes their interaction in the community.
H.B. 5168 also would remove the term “temporary” from § 12-81(7)(B)’s exemption for housing falling into five subcategories of charitable activities that include housing as a component, according to Attorney Casagrande, who notes that Colchester likely would not have revoked the charitable exemption if it had not been reserved for “temporary housing.”
“I also respectfully request that, in adopting this bill, the Legislature explicitly find that it is intended as a clarification of existing law, thus giving it retroactive effect,” Attorney Casagrande wrote in his testimony. “This would put an end to the costly pending appeals which several CLAs, including Caring Community, have had to prosecute in order to protect their properties from assessments imposed upon them to date.
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