In New England Forestry Foundation, Inc. v. Board of
Assessors of Hawley, SJC-11432 (May 15, 2014) http://www.socialaw.com/slip.htm?cid=22811&sid=120,
the Massachusetts Supreme Judicial Court (“SJC”), reversing a decision of the
Massachusetts Appellate Tax Board (“ATB”) http://www.conservationtaxcenter.org/article/Conservation-Easements/Case-Law/NEFF-v-Hawley/873,
ruled that taxpayer (“NEFF”), a Massachusetts nonprofit corporation, qualified
for a charitable property tax exemption under MGL Chapter 59, Section 5, Clause
Third https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter59/Section5
with respect to a 120-acre parcel of forest land owned by NEFF in the Town of
Hawley (the “Subject Property”), on the basis of NEFF’s conservation and
sustainable yield forestry activities.
The ATB in its decision had concluded that (i) because forest management
was not a traditional charitable endeavor under Massachusetts law, the ATB
needed to examine whether NEFF’s ownership and occupation of the Subject
Property served a sufficiently large and fluid class of beneficiaries to
warrant the property tax exemption, and (ii) NEFF’s public educational
activities and informing the public that the Subject Property was open for
recreation were too limited in scope to support the proposition that the
Subject Property was owned and occupied by a charitable organization in
furtherance of charitable purposes under
Massachusetts law. In ruling that
environmental conservation activities would support a property tax exemption,
the SJC reasoned in part that: “NEFF’s
charitable programs and activities, both in Hawley and throughout New England,
are of the sort that their benefit inures to an indefinite number of
people. Historically, the “benefit” provided
by land held as open space or in its natural state has been measured by the
direct access of people to that land for such purposes as recreation, scenic
views or education. . . . However, as
the science of conservation has advanced, it has become more apparent that
properly preserved and managed conservation land can provide a tangible benefit
to the community even if few people enter the land [discussion of environmental
benefits to the public at large from land conservation activities].” With respect to the occupancy requirement,
the SJC stated that: “[W]e conclude in a
case such as NEFF’s where the entry of the public onto the land is not
necessary for the organization to achieve its charitable purpose, the promotion
and achievement of public access is not required to demonstrate occupancy of
the land in order to qualify for a Clause Third exemption.” The SJC’s decision will be of major benefit
to conservation organizations desiring to focus on conservation per se. The decision also indicates the SJC’s
willingness to expand the scope of what are classified as traditional
charitable activities if there is evidence that the public as a whole is
benefitted by the activity in question.