Catholic Health Initiatives v. CITY OF PUEBLO, DEPT. OF FINANCE

HEALTH INITIATIVES CATHOLIC Towers,

COLORADO, d/b/а Petitioner/Cross-Respondent Colorado, PUEBLO, DEPART

CITY OF FINANCE; and Lara Barett

MENT OF Director, Respondents/Cross-Peti

tioners.

No. 07SC905. Colorado,

Supreme Court Banc.

En 30, 2009.

March Rehearing on Denial

As Modified 1, 2009.*

June * grant petition. Hobbs, Justice Justice Justice Eid Rice, appealed the assessment Revenue, Department upheld

to the appealed then it. Catholic Health Court, Arapahoe County which also District exempt was not from tax found Villa Pueblo appeals court of reversed the ation. The court, operation of holding trial Villa and, thus, activity a Pueblo was LLP, Denver, Sabey, Kutak Rock L. Mark exempt from sales and use taxes. Catholic Colorado, Attorney for Petitioner/Cross-Re- Pueblo, Health Initiatives Colo. v. spondent. (Colo.App.2007). 183P.3d 612 Jagger, Jagger, Robert P. Thomas E. now reverse granted We certiorari and Colorado, Pueblo, Attorneys Respon- for appeals. Applying judgment of the court of dent/Cross-Petitioner. plain language Pueblo tax of the Krumholz, LLP, Peter J. Hale Friesen code, Pueblo, although a reli- we find Villa Denver, Colorado, Westfall, At- Richard A. gious organization, is not entitled to a tax torneys Amicus Curiae The Catholic for interpretation exemption under our States. Health Association the United plain code. Our is based on the LLP, Holme & Owen Stuart J. Roberts code, by meaning supported of the but Colorado, Lark, Attorneys Springs, Colorado way obligation interpret it in a that does of Christian for the Amici Curiae Association unnecessary con- not cause constitutional International, Azusa Pacific Univer- Schools understanding Utilizing flicts. this of the Ministries, Camp Christian sity, Bеthesda code, we find Catholic Health's Establish- Association, and Colorado Chris- Conference argu- ment Clause and Free Exercise Clause International, University, Compassion tian merit. therefore ments to be without We Ministries, Denver Cook Communications appeals, judgment reverse the of the court of Mission, Family, Focus on the HCJB Reseue give an additional but remand to Students, Inc., ilobal, International opportunity to raise that were not issues Foundation for the Roman Catholic Catholic previous, incorrect in- addressed under Colorado, in Northern The Christian Church terpretation present and to evi- Alliance, Missionary Navigators, and support dence of those issues. Vision, Youth for Christ and YMCA of World the Rockies. Stipulated II. Facts and History Procedural Opinion MARTINEZ delivered the

Justice not-for-profit organi- a of the Court. Catholic Health is zation with Roman affiliated Catholic I. Introduction exempt from federal income tax Church Initiatives Colorado under section of the Internal Reve- ("Catholic Health"), non-profit Health, providing nue Code. To Church, affiliated the Roman housing elderly and care for the ("Villa operates Villa Pueblo Towers Pueb- activity by religious motivated belief. Catho- 10"), facility providing housing for care provides lic Health services and advocates Pueblo, elderly Colorado. mission, elderly in accordance with its ultimately Pueblo audited Villa Pueblo and provides housing elderly care $22,587.68 issued a Notice of Assessment for part as mission of the Catho- in unpaid sales and taxes. Catholic use lic Church. assessment, challenged arguing this end, all To Health owns and Villa Pueblo is from sales and use this Catholics 14-4-76, Pueblo, facility operates providing taxes virtue of Villa section Colo., (2008), housing elderly. provides Mun.Code care and Residents average age eighty Pueblo have an for certain charitable Villa elderly Villa Pueblo is a full service tions. seven.

$15 consisting independent right Agree- to terminate and cancel this community care units, units, living any payment and a nurs- if living assisted ment such shall be de- itself out to facility. Villa Pueblo holds (90) ninety days fault more than without money religious organization. obligation to make refunds of public as a here- general to re- employees required Villa paid pursuant thereto. so tofore uphold mission spect and long financially the Home is able adhere to Catholic Church Pueblo and cost, Occupant's residency no assume the directives. inability shall be terminated because of Occupant pay monthly care chapel facilities include Villa Pueblo's charge payments other service Services are conducted use residents. provided Agreement. for in this bi-weekly chapel on a basis. Villa Pueblo chaplain who is available pays for an on-site оpen general public, is Villa Pueblo day, days twenty-four hours a seven a week. target its advertisements individuals who but completes spiri- chaplain interviews and The have sufficient income and assets to the bear of, plans spiritual and care tual assessments monthly Marketing fee. brochures describe for, all residents. "everything you Pueblo as want in a Villa pay an at Villa Pueblo must Residents "affordable," lifestyle," retirement and with endowment," monthly well as a "entrance as many finding residents the cost to be "less consists of an fee. The entrance endowment owning maintaining" than the cost of and money in individually specified amount single family their former home. privilege occupancy for the life consideration living apartment. independent of an City of Pueblo a tax conducted audit 1,092 square in range units size from period of Villa Pueblo for the of June independent liv- Monthly fees for the feet. through May 2000. that As result of $1,180 $2,847, range from ing facilities audit, City issued a the Notice Assessment desirability the of the unit and depending on $106,931.33 unpaid in the amount in taxes. in of residents the unit. Month- the number protested Catholie Health the assessment ly living nursing care rates for assisted and provided City documentation to the higher. From mid-1997 facilities resulted in a reduction in the assessment."1 mid-2000, approximately half through of Vil- review, Upon City the maintained la residents were on life-care con- Pueblo's $22,587.68 Health owed in taxes.2 Catholic tracts, paying their below market rates for any challenges imposition as- losing accommodations. Villa Pueblo is mon- sessment, believing Villa Pueblo to be entire- ey program. life-care contract on its Villa ly exempt from sales and use tax under accepts some residents who are un- City section 14-4-76 of the of Pueblo tax customary charges. pay able to normal and exempts organiza- "in tions" from sales or use taxes incurred occupancy agreement Catholic Health's states: regular religious the conduct of their or char- §$ itable functions and activities."

Occupant agrees pay 14-4-76, further said (2008). Pueblo, Colo., monthly charge at Mun.Code The Pueblo the time and organiza- code specified upon manner the Home and defines "charitable municipal so, failure to do the Home shall have the tion": parties stipulated rely pre- ment counsel." We on the

1. The that the reduced facts as tax, stip- facts, stipulated assessment of Catholic Health's but the sented in the statement of regarding contain no ulated facts information proceed explanation thus without an for the re- argument, par- reason for decrease. duction. suggest for the reduction. ties different reasons "a While the refers to the reduction as controversy is as The amount in follows: argues partial exemption," Catholic Health "[tlhere is no evidence record absolutely City granted partial exemption $17,154.73 Usé Tax activities," failed to "[the [Clity $3,731.95 Interest present to the Court below evidence about $22,587.68 Total reduced and the reasons assessment was by argu- appeal introduce new facts on cannot Thus, any entity organization suggest of Pueblo means seemed Charitable although Catholic Health failed to which: meet organization, the definition of a charitable not-for-profit certified a. Has been as partial was still entitled to least a sales 501(c)(8) of organization under Section Code; and and use tax the Internal Revenue organiza- or charitable b. Is City's appealed assess- tion. ment to the Executive Director of the De- definition, a As used in this partment of Revenue of the State of Colora- which ex- do, 29-2-106.1(8), provided section clusively, a manner consistent (2008). Department C.R.S. of Revenue existing of an laws and benefit operate held Health did not persons, freely indefinite number of religious activity, Pueblo as nor did it fall men- voluntarily ministers to within the definition of "charitable spiritual persons, tal or needs of and which forth in tion" as set of Pueblo's tax thereby govern- lessens burdens Department code. of Revenue ment. providing characterized the tax code as two 14-4-21(5) (italies Pueblo, Colo., § Mun.Code exemptions: distinct forms of one for reli- , original). gious organizations undertaking religious ac- tivity, and organizations one for charitable May In a letter dated Catholic undertaking activity charitable argument eligibility that met the Health outlined its exemption City requirements paragraph of the third under the for the of Pueblo of the organization" Finance Director. Health Catholic claimed definition. "charitable definition, part begins ofthis which Utilizing interpretation, Depart this the "(als only applied used this definition" ment of Revenue found Catholic Health was thereby organizations, exempting charitable category not entitled to either of religious organizations many from its re- Regarding religious the exemption, the De quirements. interpretation, Under this partment purpose found "the of Villa Pueblo Catholic Health claimed it was entitled to a provide housing, provide is to not to religious aspects sales and use tax for all of services," falling "regular thus outside of reli (1) operation of Villa Pueblo because: gious ... functions and activities." Final (2) status, Health Catholic has DD-578, 4, Dept. Determination of Revenue religious organization, Catholic Health is . Colo., Turning State Mar. 2004 (8) operation of Villa Pueblo is exemption, to the Department regular Catholic Health's functions heavily opinion relied on our in United Pres or activities. byterian County Association v. Board City of Pueblo Director of Finance County Jefferson, Commissioners rejecting request Catholic Health's repliеd, (1968), 167 Colo. 448 P.2d 967 and held exemption,. explained for the City operation of Villa Pueblo was not charita operation of Villa Pueblo had several charac- Noting ble in nature. residents "[nlew for-profit teristics of a enterprise, suggesting resources; targeted based on financial it did not meet the third are based on fees amenities and services organization" the "charitable definition be- provided; subject change; fees are accom "freely cause it did not offer its services touted; and, obligation modations are voluntarily," in a manner consistent with attenuated," highly financial assistance is charity. However, went on to state Department quid pro quo "a per found "[tlangible personal property or taxable operation meates the of Villa Pueblo." entire services sold or used in the charitable activi- DD-578, Final Determination ties of Villa Pueblo are from tax," implying appealed Pueblo sales and use Catholic Health this administra- partial exemption, pre- finding Health received Arapahoe County some tive District sumably on the basis of their satisfaction of Court. The waived trial and submit- "charitable definition. ted the case to the district court on based Health, believing organization" as defined "charitable stipulated facts. Catholic types City created two distinct of Pueblo tax code. City's tax code Waiver, seek- еxemptions, filed a Notice petitioned this Catholic Health court exemption exclu- its claim for ing "to base certiorari, grant arguing the court a writ of operation of ‍‌‌​‌​​​‌‌‌​‌​‌​​‌‌‌​​‌​‌​​‌​​​​‌‌‌‌‌‌‌​‌​‌‌‌‌​​‌‍Villa sively its claim that the on appeals applied an incorrect and unconsti- religious activity of a is a activity. test for tutional interpreted The trial court organization." appeals Health the court of erred in contends limiting Catholic Health's this waiver as determining is en- whether to the issue of appeal "claim on gaged religious activity by examining exemp- exemption, opposed to charitable seope organization's nature or activi- tion." Rather, argues ties. review- court, therefore, did not consider The trial may only bright courts utilize line test municipal defining the section of the code to evaluate whether the activities of an or- Rather, organizations." ad- ganization sincerely are motivated held oper- dressed whether Catholic religious belief. "in conduct of their ated Villa Pueblo eross-petition, of Pueblo filed a functions and regular religious or charitable arguing does not fall Villa Pueblo within the activities," pursuant to section 14-4-76 of the tax code's definition of charitable religion The trial court found did code. exemp- tions entitled to a sales and use tax pervade operation of Villa Pueblo and tion. The of Pueblo сontends the code not, whole, Pueblo was as a thus Villa single creates a for "charitable religious function. The trial court held Villa organizations," either functions, typical religious such as Pueblo's interpretation, or secular. Under all necessary operation of the purchases comply require- must with the taxation, exempt from while its chapel, were in ments set forth functions, purchase secular such as definition order stoves, refrigerators or were not qualify exemption. a tax to sales and use from sales and use taxes. granted petitions3 certiorari on both We again appealed. Continu and now reverse. question of ing the trial court's focus on the activity," "religious what constitutes Analysis III. appeals relied on our decision court of (Colo. Young Life, P.2d 1317

Maurer v. 779 A. of Review Standard 1989), holding every aspect of Pueblo Villa appeals tax We review assess and, result, religious activity as a was 29-2-106.1(7), § CRS. ments de novo. facility enjoyed complete from exemption (2008). exemptions "construe tax nar We City of sales and use tax under the Colorado,rowly, taxing authority." in favor of tax code. Catholic Health Initiatives Denver, County Gen. Motors reaching 83 P.3d at 612-13. 1 (Colo.1999). 59, general 990 P.2d 70 As a determination, the court focused on the activ rule, presumption against exemp "the undertaken as well as ities claiming tion and the is on the one facility operating at a burden the fact that was clearly exemption right to establish to appeals Id. at 617-19. court of did loss. Maurer, 779 P.2d at n. 20. address whether Catholic Health was a such relief." 1833 not granted following appeals 3. Whether the court of erred in its 3. We certiorari on the issues: City's application appeals apphed the 1. Whether the court of religious activity. proper test for sales and use tax activity ap- organizations by applying 2. Whether the test for a rule of broad appeals, plied court of with which and liberal construction which has hereto- comply continually Catholic Health must exemp- property tax fore been limited to exemption, and to retain its tax Constitution, X, art. tions under Colorado subsequent apply must of Pueblo § 5. audits, is unconstitutional and creates an ongoing chilling entangling effect. doubt should be resolved "Every reasonable array groups of nonsectarian as well as reli exemption. Presby- against" the tax United gious organizations pursuit legiti of some 496, end, 448 P.2d at terian 167 Colo. mate secular the fact Assoc., 972-78. groups incidentally" benefit does violate However, the Establishment Clause. Id. Applicable B. Constitutional Standards government subsidy "when directs a exclu sively religious organizations" way in a Amendment of the The First United that "either burdens mark provides government nonbeneficiaries Constitution States "shall edly reasonably cаnnot respecting no law an establish or be seen as remov make religion, prohibiting ing significant state-imposed ment of the free exer deterrent thereof," I. religion," exemp cise U.S. Const. amend. Both the free exercise of the tax unjustifiable "provide[s] tion awards of assis and the Ex the Establishment Clause Free religious organizations tance to and cannot implicated by appli can ercise Clause convely] message but religious organiza of endorsement4 of cation of tax statutes (internal omitted). religion. Id. citations tions. Thus,.in exemp order for a sales tax 1. The Establishment Clause comply tion to with the Establishment Establishment man Clause Clause, pur it must serve a broad secular equal dates treatment of different pose. religious organization -If the work of a A tax and secular actors. which makes dis- purpose, may falls within secular tinetions based on belief would vio enjoy properly the tax late the Establishment Clause. "The risk not be awarded to governmental approval some dis religious organizations simply they because approval perceived of others will be as favor religious. Id. religion important one over another anis designed risk the Establishment Clause was A statute or ordinance also violates Lee, preclude." United States v. U.S. the Establishment Clause when it fosters n. 102 S.Ct. 71 L.Ed.2d 127 government "'an entanglement excessive (1982) (Stevens, J., concurring). Kurtzman, religion"" Lemon v. U.S. S.Ct. 29 L.Ed.2d 745 Supreme The United States Court ad (1971)(quoting Walz v. Tax Comm'n impact tax exemptions dressed the of on this of York, 664, 674, New 397 perception Monthly, in U.S. 90 S.Ct. impartiality of Texas of 1409, (1970)); Corp. 25 L.Ed.2d 697 see Bullock, 1, 890, Inc. v. 489 U.S. 109 103 S.Ct. of (1989) (Brennan, J., Presiding Bishop plurality opin L.Ed.2d 1 the Church Jesus of of Amos, Latter-Day ion). Monthly, In Texas the state of Christ Saints v. Texas 483 of 2862, U.S. 107 S.Ct. 97 L.Ed.2d 273 exempted religious periodicals and books (1987) ([It tax, imposing from significant sales while tax on is a burden on a nonreligious 5, it, publications. religious organization other Id. at 109 require pain on of Court, noting "[elvery liability, predict S.Ct. 890. The substantial which of its tax exemption subsidy a that af constitutes activities a secular court will consider reli gious."). precedents attempted Our have nonqualifying fects taxpayers," held the tax exemption type entanglement by violated Establishment of adopting avoid this 14, Id. at 109 S.Ct. 890. The Court view, exempting "necessarily a broad inciden Clause. proper, went on to outline the property religious constitutional tal" and activities of the ly approach religious exemptions. valid tax entitled to a tax We 14-15, that, Id. at 109 S.Ct. 890. It held Maurer, adopted reasoning 779 P.2d subsidy 1317, upon when a "is a interpreted similarly conferred wide where we a word- Dist., 418, (6th Although plurality Cir.2004); opinion, 4. this is the we read School 379 F.3d 423 C.I.R., 1119, Justice (9th Blackmun's concurrence as consistent Warren 282 v. F.3d 1121 Cir. majority with the rationale on this This is courts, issue. 2002); Legal Duty, Children's Healthcare is a Inc. interpretations by сonsistent with other Parle, 1084, (8th v. Min De 212 F.3d 1095 Cir. plurality's reasoning which understood the to be 2000). See, controlling. eg., Rusk v. Crestview Local

819 practice religion. A state or property con den on the of religious tax ed In local Constitution. required in the Colorado the Free government tained is not exempt religious organi Maurer, Exercise Clause to religious organization was we held a and use taxes. Texas zations from sales proper for that to an also entitled (Bren 19, Monthly, 109 S.Ct. 890 exempted "necessarily ty incidental 5 nan, J., opinion) (recognizing a Id. at 1335. primary uses." plurality state obligation is under no to make individualized exemption will generally, a tax taxes, if a exemptions from sales even reli when the Establishment Clause comply with successfully gious group capable is of demon standards, which secular it sets forth broad tax strating payment of that sales religious organizations charitable or either tenets). their violate organization is may satisfy. qualifying If ‍‌‌​‌​​​‌‌‌​‌​‌​​‌‌‌​​‌​‌​​‌​​​​‌‌‌‌‌‌‌​‌​‌‌‌‌​​‌‍the Supreme that "[even Court has stated nature, taxing authority religion] a burden would be [on substantial exempt or activities that are should uses justified by public the 'broad interest "necessarily primary func incidental" to maintaining system,' tax free of sound to avoid organization, order tion of 'myriad exceptions flowing from wide vari taxing entanglement between excessive ety beliefs"" Hernandez authority organization. and the Revenue, 680, Internal 490 Comm'r U.S. 699-700, 2136, S.Ct. 104 L.Ed.2d 766 The Free Exercise Clause (1989) Leg, (quoting U.S. If a tax code meets standards Ministries, 1051); Jimmy Swaggart S.Ct. see also Monthly, violate the it does not of Texas ("[I]t 3 U.S. at 110 S.Ct. 688 49 if Exercise Clause even or Free generally applicable that a undeniable exemp ganization cannot meet the secular purpose and neither has secular advances in the tax code. tion standards contained religion, very nor inhibits essence of tax does not imposition The mere sales such a tax is that it is neutral and nondis type create the of untenable burden on the belief."). criminatory questions on religion by the Free forbidden exercise type government Exercise Clause. The Our state constitution does not the Free Exercise intrusions violate religious organizations require are "far more invasive than the level Clause Rather, from sales and use taxes. sales and created the administration of of contact exemptions granted at the use discre Jimmy Swaggart tax laws."6 Min neutral taxing authority. Young tion of the Life Cal., Equalization v. Bd. istries Employment Training, v. Division of 395-96, 110 S.Ct. 107 L.Ed.2d U.S. (Colo.1982), 515, 525 we held the 650 P.2d (1990). imposition unemployment posed only taxes Moreover, religious organi imposition of a an "incidental burden" to a regu upon religious organiza explained, zation. As we the state "[ilf sales and use not, itself, by enacting general in and of violate the Free lates conduct law with tion does by placing power, purpose an untenable bur- in its and effect of which Exercise Clause entanglement, inapplicable Young tempt avoid 5. Maurer v. addresses a constitutional to it is to Life exempting "[p]roperty, per provision this case. real and sonal, exclusively solely is used and taxation, worship" property from City 6. The of Pueblo's charitable sales and use (Colo. 1317, is here. 779 P.2d 1331 inapplicable "[fJa- is neutral on its face. While 1989) 5). (examining § Colo. Const. art. X We neutrality the Free cial is not determinative" of consistently interpreted Const. have Colo. art. X analysis, Exercise Church the Lukumi Babalu of property imposed applying § 5 as taxes Hialeah, 520, 534, Inc. v. City Aye, of Appeals state. See Bd. v. Assessment of (1993), 472 113 S.Ct 124 L.Ed.2d Intern., (Colo.1997); 940 P.2d AM/FM any record is devoid evidence that the of of Presbyterian County v. United Bd. of Assoc. applied discriminatory has its code in a Pueblo County Jefferson, Comm'rs 167 Colo. such, (1968). 448 P.2d As not, Catholic Health has addition, way. argued any point proceedings, in these the code beyond utility example adopt an of courts its discriminatory religious activity applied in an at was in a fashion. a broad view of state, goals of the of Trial and permissible is to advance Waiver Submission of Case Facts, despite Stipulated statute be valid its indirect bur Based on 2-3. Catholic stipulated observance." Id. at 524. Health believes these facts are den on imposition effectively stipulating fоund the of a akin to We have never broad, pur with a secular sales and use tax Health meets "charitable type of "coercive effect definition. pose interpre to inflict Under Catholic Health's definition, religion," practice religious organiza tation of the against [the] Destefano (Colo.1988), Grabrian, 501(c)(8) P.2d tion with is a status charitable or ganization. constituting a violation of Free Exercise believes paragraph, variety third which sets forth a Clause. requirements organization additional an must and organiza C. Pueblo's Sales Use meet to be deemed a "charitable Exemption tion," applies only organizations Tax to charitable (b) definition, in as listed subsection of the Pueblo has elected to The inapplicable religious organiza and is thus organizations" from sales and use "charitable tions. regu- taxes incurred "in the conduct of their lar or charitable functions and activ- under its definition, 14-4-76, Pueblo, interpretation of the § reaches an ities." Colo. Mun.Code. entirely different conclusion based on the goes The tax code on to define "charitable stipulated same organization": facts. reads third of the definition as orgamization any entity means Charitable applying to all charitable under which: definition, including religious organiza- not-for-profit a. certified as a Has been Thus, interpretation, tions. under this even 501(c)(8) organization under Sеction of the if Catholic Health is Code; Internal Revenue organization, "exelusively, it must still organiza- b. Is a or charitable existing a manner consistent with laws and tion. of an benefit indefinite number definition, As used a charitable persons, freely voluntarily [minister] is which ex- physical, mental spiritual needs of clusively, a manner consistent with persons, [thereby lessening] the burdens of existing laws and for the benefit of an government" qualify in order to for a sales persons, freely indefinite number of 14-4-21(5). exemption. § and use tax

voluntarily ministers to the men- explain we examine the code and our spiritual persons, tal or needs of and which understanding of the sales and use tax ex- thereby govern- lessens the burdens emption. ment. 14-4-21(5) (italics Pueblo, Colo., § Mun.Code Interpretation Exemption circular, in original). This definition plain language of the tax ex phrase that it uses the emption supports tion" to define itself. organization, including religious organiza parties' assumptions regarding the in- tions, requirements must meet terpretation of this definition caused this paragraph in third order to be entitled develop way. case to in a somewhat confused exemption. argued by parties Both agreed stipulated have to the Health, religious organiza that all level, facts set forth at the trial court but 501(c)(8) enjoying tions status are entitled to they adopt significantly nonetheless different exemption, First, an has one of two еffects. facts, interpretations of these which lead to essentially it can para eliminate the third conflicting logical conclusions. Second, graph of reading the definition. this example,

For stipulated premised the on applicability be the limited "Catholic religious organization" paragraph, applying organi Health is a of the third 501(c)(8)" "not-for-profit requirements only with status. zational Joint to "charitable or- (b) reach this conclusionfor three reasons. paragraph of the We as used ganizations" First, drafting the tax definition, overarching defini- rather than the made the affirmative decision em- essentially exempts religious or- tion; and the third instances phasize the first programmatic re- ganizations from these phrase organization," thereby Nonetheless, proceeding from quirements. 501(c)(8) equating phrases indicating the two religious all premise that the flawed requirements paragraph of the third were exemption, to a tax organizations are entitled reviewing court apply organiza- question for a intended to to all charitable operative tions, nonreligious rather than those operation of Villa be whether organizations. charitable religious activity. Finding no was a religious activity in the definition of Second, the use of the "or" in sub- word code, the trial court and the court Pueblo tax (b) part of the definition indicates there are principles of constitu- appeals turned categories organizations- of charitable two attempt scope in an to define the tional law religious-which may satisfy activity. religious May Dep't the definition. See Stores Co. v. Woodard, State ex rel. 863 P.2d disagree in we with this (Colo.1993) (interpreting demareating "or" as statute, construing a terpretation. When we words, In categories). different other chari whole,"ascribing analyze it as a to each word religious organizations table and are cat two accept phrase generally its familiar and egories overarching group within an of "char meaning," assuming drafters intended ed organizations," itable as defined the code. meaning given "that should be to each word." purposes, organization For our whether an Dep't Transp. Stapleton, 97 P.3d or charitable in nature is immateri (Colo.2004). give full order mean al, they way because are treated the same phrases all in the tax code's ing words under the code. definition, paragraph believe the third we Third, actually of the code section set- Rather, idly not eliminated. must ting exemption that "charita- forth the states overarching paragraph third sets forth the organizations" exempt from ble sales and operational characteristics all "charitable or "in use taxes incurred the conduct of their including religious organiza ganizations," regular or charitable functions and tions, eligible to be must have order § 14-4-76. It does not activities." words, exemption. In other we be religious organizations" "charitable or from to modi lieve the third is intended plain those sales and use taxes. The mean- fy of the definition. the first sentence organiza- require seems to requirements which meet tions definition, interpretation, Under our are a subset of charitable definition language, incorporates require two plain its tions, group, separately rather than a distinct First, organization be a ments. must exemption. entitled to a tax 501(c)(8) that is either or charitable Second, organization must in nature. a. Catholic Health's "waiver" "exclusively, in manner with consistent of charitable existing laws and for the benefit of an indefi Health's self- persons, freely and voluntari We do believe Catholic nite number of exemp- "waiver" of its charitable ly spiri mental or described [minister] persons," thereby lessening tion claim tual needs of requires adopt interpreta- us to its 14-4-21(5) § government." tion of the tax "the burdens of Pueblo, Colo., offering organiza interprets the code as two distinct Mun.Code. religious organ- automatically qualify types exemptions-one for a sales tion does not 501(c)(8) which, status, they enjoy if exemption simply because it is a izations for all taxes sta are entitled to or charitable Rather, regular "in the conduct of their must be en incurred tus. аctivities," religious ... functions and and a gaged qualifying in activities in order to be organiza- separate exemption for charitable eligible exemption. 501(c)(8) which, tions, being state-imposed in addition to deterrent to the free exercise far organizations, religion provide[s]) unjustifiable must also meet the stricter of the defi- guidelines of religious organiza awards of assistance to they exemp- conve[ly] message will entitledto tions and cannot nition before but religion, endorsement" of violation of the "regular ... charitable func- tions for their Monthly, Catholic Health tions and activities." Establishment Clause. Texas 14-15, (Brennan, J., electing pursue to understood its waiver U.S. 109 S.Ct. 890 (internal omitted). only religious exemption plurality opinion) claim. citations interpretation Catholic Health's would carve under Pueblo's inter- exemption religious organiza out a tax code, pretation proble- of its such a waiver is solely religious tions as a result of their First, matic, for one of two reasons. nature, organiza rather than the work of the code disallow waiver of the charita- exemption put tion. Such an other argument, exemp- all exemption ble because organizations, engaged exceedingly secular religious organizations fall within tions for activities, competitive similar at a marked category the broader disadvantage. Second, exemptions. tion the code could be waiver, seen to accommodate but inso- Many arguments of the in constitutional signifies party's far as it self-identification interpreta volved in this case arise from an type with one entitled to an reject. contrast, tion of the code we exemption necessary prerequisites if the are interpretation adopt today complies we with case, opting identify met-in this as a requirements. constitutional In order for a Eg- religious organization, recognizing while still exemption comply sales tax with the applicability para- of the definition's third Clause, tablishment it must serve a broad graph. purpose. If secular the work of a purpose, falls within that secular Catholic Health's waiver is based on its may properly enjoy exemption. the tax interpretation incorrect of the tax code. Giv- The tax code's definition of "charitable or understanding en pre- our of the we broad, ganization" properly has the secular sume intended its waiver to purpose lessening govern the burdens of merely clarify its identification as a U.S., ment. See Bob Jones v. Univ. organization, rather than a waiver of en- its S.Ct. L.Ed.2d 157 tire claim. (1983) (explaining exemptions that charitable justified they society by, where benefit b. Constitutional considerations example, supplementing advancing interpretation public already the work of sup institutions Although our of the revеnue). ported by tax The tax code ex plain meaning, code stems from its our view exemption tends the tax organi supported by obligation also our to "avoid satisfy purpose, this secular zations interpretations that invoke constitutional de bestowing exemptions rather than tax upon County ficiencies." Adams Sch. Dist. No. 50 religious organizations simply by virtue of Heimer, (Colo.1996). By 919 P.2d their nature. adopting plain language interpretation definition, the "charitable we tax exemptions comply We have held potential avoid a constitutional conflict creat the Establishment scope Clause where "the interpretation. ed exemption Health's is instrumental in facilitat- organi system" contends all fair administration of the zations with status should be enti where "the makes distinctions tled to a sales and How pur- use based on real differences related to the ever, the United Supreme poses system." Young Life, States Court has 650 P.2d Here, subsidy, exclusively held such a directed at 521. of Pueblo created a religious organizations, which "either bur to benefit those markedly engaged dens non-beneficiaries cannot charitable work. It sets forth reasonably concrete, removing significant be seen as secular standards which it will

823 itself, tax, sincerely in and of violates its held organizations, including re- whether evaluate Rather, eligible religious argues impo the tax beliefs. it are ligious organizations, necessary, incidentally of a sales and use tax exemption. These standards sition City objec- an they provide the with in that ability practice burdens Catholic Health's eligibili- by to determine which tive measure religious an unrelated tenet of its belief. exemption. However, The criteria are ty arguments roundly the tax have been such differences," type such as rejected by Supreme based on "real States the United by organization, work undertaken failing to constitute a of Court as violation Hernandez, that work is transactional well as whether Clause. See Free Exercise City hold the of Pueblo charitable. we 700, (rejecting 490 109 S.Ct. 2136 U.S. written, incrementally complies with argument larger applied as that an tax the Establishment Clause. religious with activities and burden interferes stating argument "knows no further such However, argues ap limitations"). tax code of the of Pueblo's plication However, payment if even the of sales and violates Establishment nonetheless creating improper entangle by Clause aspect religious use tax violates some of a belief, A government religion. organization's religious held ment between sincerely violates the Establish or ordinance statute this would still not violate the Free Exercise it "'an excessive when fosters ment Clause government A state or local is not Clause. entanglement religion."" with government required by the Free Exercise Clause to Kurtzman, Lemon exempt religious organizations from sales (1971) (quoting 29 L.Ed.2d 745 S.Ct. Monthly, and use taxes. Texas 489 U.S. at N.Y., v. Tax Comm'n Wale (Brennan, J., plurality opin- 109 S.Ct. 890 664, 674, 90 25 L.Ed.2d 697 ion) S.Ct. U.S. (recognizing a state is under no obli- (1970)). alleges excessive exemptions gation to make individualized entanglement has occurred here because taxes, if group from sales even Pueblo be forced to examine Villa will capable successfully demonstrating pay- operation order to determine ment of that sales tax would violate their Pueblo's qualify for aspects of the which tenets); Hernandez, see also ("[Elven the tax 699-700, U.S. S.Ct. religion] jus- would be [on substantial burden judge's trial order would have created public tified the 'broad interest in main- type entanglement because held this system," 'myriad taining a sound tax free of regularly "religious exemptions ‍‌‌​‌​​​‌‌‌​‌​‌​​‌‌‌​​‌​‌​​‌​​​​‌‌‌‌‌‌‌​‌​‌‌‌‌​​‌‍apply will exceptions flowing variety from a wide functions, than [related] other Lee, (quoting 455 U.S. at beliefs"" that, refriger for all secular functions like 1051)). 260, 102S.Ct. stoves, pay VillaPueblo must sales ators City of when and use tax to the Operation of Villa Pueblo Does Order, applicable." Trial Ct. 2-8. While Satisfy Requirements Not contrary, holding replaced was this Exemption incorrect, similarly holding court of yet Having interpretation judge's reasoning find the trial appeals, we adopted of an order that would representative be of the charitable definition lan Clause. See violatе the Establishment guage, requires organiza all charitable Amos, tions, 483 U.S. at 107 S.Ct. 2862. including religious organizations, comply para the terms of adopt of the code we "The graph, we turn now to whether Catholic complies with Exercise today also the Free Health meets the definition imposition of Pueblo's of a Clause. The organization." upon religious organiza- sales and use itself, not, trial court held Pueblo's in and of violate the Free tion does by placing an untenable bur- Exercise Clause from sales and activities should taxes, religion. use while secular activities could be practice on the den appropriately taxed. we believe argued payment of sales Health has 824 by activity

the trial court arrived this conclusion tion for that meets the "charitable City misapplying of Pueblo's tax code. organization" definition. provide not an The tax code does operation of Villa Pueblo is not a religious organizations engaged in for all organization" City "charitable under the activity," "regular religious their as Catholic code, principal Pueblo's for two reasons. Rather, suggests. pro the tax Health code First, ministry physical, Villa Pueblo's organizations,

vides a tax which mental, spiritual and needs of residents is not may religious, may or not be that "exclusive Second, exclusively voluntary free and ly, existing in a manner consistent with and exclusively work of Villa Pueblo does and for the benefit of an indefinite laws government." "lessen the burden freely persons, voluntarily number of physical, spiritual mental [minister] to the or facts, stipulated Based on the it is clear persons, thereby [lessen] needs of operates Villa Pueblo in order care 14-4-21(5). § government." burdens spiritual residents' mental 501(c)(3) Thus, needs; services, nursing social and recre- operational require does not meet these facilities, delivery, ational meal and a multi- exemption, will not be entitled to a tax ments chapel provided denominational are for resi- regardless organization's of whether ac However, dents. these services are not ex- by sincerely tivities are motivated held clusively provided "freely voluntarily." religious belief. Rather, they provided quid on a pro quo appeals similarly We believe the court of transactional If requires basis. a resident misunderstood the of Pueblo's "charita care, nursing more intensive that care is organization" Starting ble definition. from provided an Similarly, additional cost. incorrect same requiring private living quarters resident or definition, the court pay facilities with more amenities must appeals determined Catholic Health was a higher monthly fee. it because was reli interpret phrase "freely We do not gious organization with tax status. voluntarily" synonymous to be with "free of Colorado, Catholic Health Initiatives 183 Reviewing cost." the definition in the result, P.3d at 612-13. As a the court of code, Pueblo's striking bears a resem- appeals only question remaining believed blance to a definition of adopted "charitable" operation to be resolved "whether the was by Presbyterian this court United Associ- religious activity Villa Pueblo is a or func ation: Colo., tion." Catholic Health Initiatives 183 Relying opinion sense, P.3d at 615. our charity, legal on A in the be more Maurer, appeals proceeded Gift, the court of fully applied defined as a to be consis- by tently laws, assess the nature of Villa Pueblo existing for the benefit of examining the nature of the activities under an indefinite persons, by number of either taken Catholic Health.7 bringing their or minds hearts under the Colo., (citing Initiatives 183 P.3d at 617 religion, by influence of education or re- Maurer, 1330-31). However, disease, 779 lieving P.2d at suffering their bodies from constraint, under the of Pueblo's tax by assisting we or them to estab- question activity life, reach the of whether lish by erecting themselves or or religious if organization seeking exemp maintaining public buildings works, or art, § (Colo.App.2007). Maurer addresses Colo. Const. X appeals 5. We the court of While consistently interpreted have Colo. Const. art. X guidance seemed to find in this constitutional applying only § property imposed 5 as taxes have not asserted it con- provision, Appeals the state. See Bd. Assessment v. trols our in this case. whether analysis Intern., (Colo.1997); 940 P.2d AM/FM language provision constitutional is suffi- Ass'n, Presbyterian United 167 Colo. at ciently language similar to the of section 14-4- appeals recognized P.2d at 971. The court of 76, Pueblo, Colo., Mun.Code to warrant such a this, but nonetheless found the constitutional direct is not an issue we need to comparison provision by analogy. to be instructive address here. Colo. Initiatives 183 P.3d govern- minister to some residents. lessening the burdens of otherwise requires organ- City of Pueblo's definition ment. "exelusively" provide services in a ization to (in- 494-95, P.2d at 971-72 167 Colo. voluntary qualify in order to free and manner omitted). the simi- Given quotations ternal organization and for the charitable sales use definitions, believe the we larity in the two pro- long tax As as Villa Pueblo "freely and phrase of the City of Pueblo's use nursing to housing vides or services residents encapsulate general voluntarily" to is meant basis, quid pro quo on a transactional or charitability. residents, charity despite its to some it will charitability Presby- in United Considering satisfy City of fail to Pueblo's definition. Association, we stated: terian ("The P.2d at 975 See Id. at furnish- necessarily not charging fees would While homes to older adults is not in itself a category plaintiff from the remove Thus, purpose."). charitable while Catholic ..., it the fact that charitable institution may operate Villa Pueblo in order to standpoint living space from allocates spiritual or meet residents' mental desirability and size on the of location needs, exclusively "freely not do so it does by monthly charges paid of ... basis voluntarily." and lacking in the warmth resident seems to us City Pueblo does not fall within the Villa of charitable im- spontaneity indicative of "charitable Rather, Pueblo's definition to pulse. it seems more related exemp- tax tions" entitled to sales use place. bargaining of the market exelusively provide tion because it does not The same rea Id. at 448 P.2d 974. voluntary its services a free and manner. pricing Pueblo's soning applies here. Villa City exemption complies of Pueblo's tax transactional, structure indicate the and fee requirements with the of the Establishment charitable, nature of the services rather than broad, by serving purpose Clause secular id. at provided to residents.8 See promotion religion. Fur- unrelated to the ("[Where reciprocity material P.2d at 976 ther, imposition of sales and use taxes alleged alleged recipients and their between poses only an incidental on burden not."). charity does donor exists-then religious practice and therefore does Health's Thus, exclusively not offer Villa Pueblo does not violate the Free Exercise Clause. voluntary manner. in a free and its services clear, does, however, understanding under our of the maintain some It is Villa Pueblo code, organizations between pay who аre unable to distinctions residents immaterial-they does not must be treated they receive. Yet this services same, are secular analysis this definition. whether their motivations change our under misunderstandings "freely voluntarily" religious.9 or Given the Pueblo does fact, major was a argument, 8. In Villa Pueblo's fee structure counsel for at oral organizations may City of Pueblo stated City of Pueblo's initial denial of a factor in the subject different treatment than charitable be to exemption. Responding Health's to Catholic qualifying the code. While under request a charitable sales initial for provide organizations must their ser charitable exemption, of Pueblo stated: use voluntarily," argued "freely vices he reli provided or If Villa residential care gious organizations engaged activity in the same charge nursing without sort of home care required to offer their services for free. be fee, substantially for a fee which is less or statement, We whether this made in do not know profit than fee for charged response question argument enterprises to a at oral services, providing then Villa Pueblo similar attorney was not involved in this case before who clearly engaged in a "charitable subjected religious appeal, implies that Pueblo 'However, charges Villa Pueblo function." organizations to a different standard than other fees to its residents for its various substantial orgаnizations. The record is devoid of appears charged by that the fees relating discriminatory services ... it evidence to the issue comparable to the fees application Villa Pueblo are and Catholic Health has profit enterprises subject discriminatory charged by alleged similar it treat was discriminatory applica services. ment. whether a tion of the code violated the Free Exercise Clause Finance, Barett, Director Letter from Lara Further, us at this time. if Kozik, to Mark Counsel to Catho- is not an issue before gives partial exemptions 2001). of Pueblo (Aug. Young & LLP Health, lic Erost case, instead, permeated exemption; this the focus has grants exemp- that have such engaged Catholic Health is been on whether long tions as as the question activity, loss, operates at a rather than on the Villa Pueblo does. applied has thus its tax code in such question of whether threshold way against discriminates Health is a "charitable under organizations in violation of the Free Exer- the code's definition. We therefore reverse cise Clause the United States Constitution. holding appeals. court of By upholding U.S. Const. amend. 1.1 fairness, we also interest of elect to remand case, City's denial of an in this case, provide order majority eyes closes its discriminatory present opportunity to raise issues and I respectfully treatment. thеrefore dissent. may appropriate additional evidence as new, given understanding clarified I.

definition. Section 14-4-76 of the Pueblo tax code IV. Conclusion exempts organizations" "charitable from sales and use taxes incurred "in the conduct Accordingly, judgment we reverse the regular their or charitable func- appeals court of and remand the case to tions and activities." Pueblo Mun.Code appeals the court of to return to the trial (2008). 14-4-21(5) § 14-4-76 Section defines court holding with direction. Because our organizations" "charitable as follows: impacts stipulations and waivers of the organization Charitable entity means parties level, at the trial court which: present raise issues and additional evi- a. Has been not-for-profit certified as a dence, dispute and the court shall resolve the organization under Section in opinion. a manner consistent with this Code; of the Internal Revenue Is a or organiza- charitable dissents, Justice EID and Justice HOBBS tion. join and Justice RICE in the dissent. definition, As used in this a charitable organization is an which ex- The of Pueblo's tax code allows "reli- clusively, and in a manner consistent with gious or organizations charitable" to obtain existing laws and for the benefit of an an exemption from sales and use taxes. persons, freely indefinite number of 14-4-21(5) (em- (2008) § Pueblo Mun.Code voluntarily ministers to the men- added). phasis majority's first mistake spiritual tаl persons, or needs of and which require religious organizations, such as thereby govern- lessens the burdens of to meet the tax code's definition ment. organizations," thereby "charitable render- "religious" the code's organi- (emphasis reference to in original). interpretive question in this case is whether the definition superfluous. importantly, zations But more organization" of "charitable appearing after majority holds that Villa Pueblo was (b) (the subsection paragraph") applies "third properly denied an in this case organiza- the use of the term "charitable because, though provides even it some resi- 14-4-21(5), tion" the first line section charge, dents with provides services free of it City argues, or whether it applies to others with services "on a transactional or (b), that term's use in subsection as Catholic quid pro quo Maj. op. basis." at 825. Yet argues. City's admission, own require it does not nonreligious charitable to offer majority adopts City's interpreta- their entirely tion, services holding for free to obtain an that the definition of "charita-

non-religious organizations, majority it interprets only 1. The the federal First give par- violate Free Exercise Clause to opinion. Maj. op. Amendment in its at 818. exemptions tial to Catholic Health. case-namely, whether a in the third appears in this question ble must meet the re- religious organization of section first line governs the parаgraph qualify paragraph to 14-4-21(5). of the third quirements under Maj. op. at 821. organization"-without an- all as a interpretation, majority's swering under it. religious" tions, "charitable or either (b), satisfy the defini- first must subsection majority's importantly, it is the But most they their ser- offer requirements tion's Health's, interpretation, not Catholic manner consis- "exclusively, in a

vices statutory language. Under "idly eliminates" and for the benefit existing laws tent interpretation, Health's Catholie freely and persons, number an indefinite eliminated; simply ap- is not physical, mental voluntarily minister[ ] the term "charitable only to the use of plies persons, [and] spiritual needs (b). contrast, In organization" in subsection govern- burdens lessen[] thereby satisfy organizations to by requiring religious majority this inter- bases Id. The ment." majority renders paragraph, third the term charita- fact that on the pretation "religious organization" superfluous the term first both the is italicized ble (b). words, other as used subsection 14-4-21(5) first section line of to "reli- line no reason to refer there would be majority also Id. The definition. in subsec- organizations" gious or of the word to the use significance attaches (b) meet the organizations if all had to tion (b), to the fact that in subsection "or" organization" set requirements of "charitable organi- exempts "charitable 14-4-76 section (b) paragraph. third Subsection forth the tax, than use rather sales and zations" from merely refer to "charitable would orgаnizations." Id. or "charitable "religious and omit reference to tion" majority suggests that Finally, the at 821. (b)-by sepa- Yet subsection organization." "idly elimi- interpretation Health's "religious" "charitable" and rating the terms at 821. paragraph. Id. the third nate[s]" "or"-plain- connector organizations with the "religious or- ly contemplates that the term majority's interpreta- the disagree I meaning separate and ganization" given a language, the code's tion of organization. While apart from a charitable defining the paragraph as the third read "religious organization" is unde- the term organization" under the "religious seope of a code, meaning it in the tax must have fined view, straightforward my more In code. term "charitable independent that is indeed, interpreta- interpretation-and, superfluous. it organization," or is rendered courts below-confines adopted tion both paragraph third application of the stipulated that In this case, organization" within subsec- "charitable term "religious organization" as is a Villa Pueblo (b). tion that term is used the code. under organization" "charitable Pueblo is a majority's ground, response first In 14-4-21(5) a "reli- because it is both section fairly slim reed that italicization is a I note (b) subsection gious organization" under especially interpretation, on which to base (a). 501(c)(8) It under subsection has status forty-five defined 21's since each of section аnd use taxes therefore from sales is italicized, only or- yet terms are regular reli- incurred "in the conduct of [its] para- the third ganization" is restricted and activities" under see- gious ... functions lan- in this definition" graph's used "als tion 14-4-76. majority's ground is second guage. agree I with the similarly unpersuasive. IL. term "or" indi- majority that the use of the. my with the setting But aside differences types of are two different

cates that there code, language of the majority "charita- over qualify as a organizations that can majority's opin- aspect troubling 14-4-76 of more under section ble rejects 821, the fact a "reli- ion is maj. op. at and that language on of that interpretation But Health's of them. Id. gious organization" is one prob- that it raises constitutional ground majority's simply restate observations Maj. op. specifically, at 822. lems. More defined organizations as that are that, majority religious organiza- concludes if religious. either charitable or subjected para- tions are not to the third Further, majority seems to believe ‍‌‌​‌​​​‌‌‌​‌​‌​​‌‌‌​​‌​‌​​‌​​​​‌‌‌‌‌‌‌​‌​‌‌‌‌​​‌‍that graph, exemption Pueblo's tax scheme would applied third must be to reli- violate the Establishment Clause. Id. at 822. gious organizations because para- the third view, my majority avoiding In a consti- (and graph paragraph) defines infirmity tutional that does not exist. "broad, purpose" secular exemp- addition, majority's I interpreta- believe the Maj. op. tion. majority 822. What infirmity tion creates a constitutional of its overlooks, however, is the fact that own-a violation of the Free Exercise or activities be treated as Clause. category a distinct exemption purposes as long as "similar" benefits are available to

A. nonreligious organizations. See Texas 17, (Bren- Monthly, 489 U.S. at 109 S.Ct. 890 majority concludes that Catholic nan, J., plurality opinion) (noting statute's Health's would run afoul of failure to offer "similar benefits for nonreli- Bullock, 1, Monthly, Texas Inc. v. 489 U.S. gious publications groups"); or see also Walz (1989) (Brennan, 109 S.Ct. L.Ed.2d N.Y., Tax Comm'n J., plurality opinion), in Supreme which the 666-67, (1970) 90 S.Ct. 25 L.Ed.2d 697 Court struck down sales tax (upholding provision against an Establish- applied only religious periodicals. Maj. challenge ment Clause exempted "real op. case, 822.2 In that the statute in personal property exclusively used for re- question gave religious peri ligious, purposes educational or charitable religious periodicals only. odicals-and Tex by by any defined law and corporation owned 5, Monthly, 489 U.S. at 109 S.Ct. 890 organized or association or conducted exelu- (Brennan, J., plurality opinion). That there sively for one or purposes more of such opportunity nonreligious was no for periodi (internal not operating profit") quotation cals exemption to obtain a similar was fatal omitted). marks and citation 17, to the statute. Id. at 109 S.Ct. 890 (statute flawed because it bottom, failed tо offer "sim that, At majority the believes ilar nonreligious publications benefits for subjecting religious organizations to the groups"); 28, see also id. at S.Ct. 890 third paragraph, organizations such might (finding "by confining that exemption the tax preferential Maj. receive op. treatment. exclusively religious publica to the sale of specifically, More majority the con- tions, Texas engaged preferential that, in support cludes under Catholic interpre- Health's tation, the communication organizations, mes "secular engaged in ex- sages") J., concurring (Blackmun, judg activities, ceedingly similar put] [would be ment). here, But provisions the Pueblo code competitive marked disadvantage." Id. (and Catholic Health's interpretation simply This is not the case. Under section them) do not 14-4-76, suffer from this fatal flaw. On the applies only to sales contrary, the under Catholic Health's inter and use taxes "in incurred the conduct of [a pretation, eligible is for an organization's] regular charitable religious or exemption if it organization," is a "charitable (empha- activities." functions majority 2. Justices, plural relies on enjoys Justice Brennan's the assent holding of five the position the Court be viewed as that taken in Texas Inc. v. ity opinion Bullock, 489 Monthly, by those judg Members who concurred in the (1989). U.S. 1, 109 S.Ct. 890, 103 L.Ed.2d ..") (internal grounds ments on the narrowest .. 818, 819, 822, Maj. op. at Importantly, 823. omitted). quotation Accordingly, we must strive however, pro Justice Blackmun's concurrence tax-exemption to construe being] "a [as statute vides the rationale for the Court in Texas Month consistent with both [Free Exercise and Estab ly, presents grounds as it the narrowest on which lishment Clause] values." Texas Monthly, States, the decision is based. See Marks v. United (Blackmun, J., U.S. at 109 S.Ct. 890 concur 97 S.Ct. 51 L.Ed.2d 260 ring). Catholic Health's of the tax (1977) ("When fragmented Court decides a values; view, my code is consistent with both single case and explaining no rationale majority's the result the is not. exemption. and still obtain added). vices Health's under Catholic sis concession, City's not "reli- majority acknowledges the that are activities interpretation, under it because it was made discounts fall outside but in nature "charitable" gious" or by appellate, argument words, majori- pressure of oral the In other trial, Maj. op. at 825 n. counsel. rather than organization will ty's concern contrast, City's I would not dismiss In in "transactional" engage permitted to be view, my position that the nonreligious concession. activities, while maj. op. at entirely is consis- be, argument oral took at is unfounded. will not briefing this court. More before tent with its B. majority's entire decision importantly, exemption to Villa Pueblo is denying an problematic about what is most But that charitable and presumption based on fact analysis is the majority's constitutional equally by being treated religious groups are that, an Establishment attempting to avоid City's own at- City-a presumption a Free Exercise problem, it creates Clause torney wrong. is admitted interpretation of City of Pueblo's one. The majority, exemption, endorsed majori- differently, put To it somewhat argues that all whipsaw: presents a classic analysis begins and ends ty's constitutional religious, charitable and organizations, both facially tax code is the fact standards, subjected to the same must ("The See, maj. op. at n. 6 eg., neutral. inter- paragraph, but then including the third and use tax charitable sales of Pueblo's way that in such a paragraph prets face."). But the neutral on its is rarely meet its organization could analysis simply ignores the fact majority's majority permits way, In this demands. applied in a has been the ordinance religious or- against City to discriminate City's own discriminatory manner-as Exercise of the Free ganizations violation Su- conceded. As the United States counsel Clause. held: preme squarely has Court provides that "a char third neutrality not determinative. Facial organization which organization is an itable Clause, like the Estab- The Free Exercise manner consistent with exclusively, and in a Clause, beyond facial extends lishment benefit of an indefi existing laws and for the action that Official discrimination.... freely and voluntari persons, nite number religious conduct for distinctive targets spiri the mental ly ministers to by mere cannot be shielded treatment thereby whiсh persons, tual needs facial requirement of compliance with the government." lessens the burdens Exercise Clause neutrality. The Free Pueblo can argues that Villa City of Pueblo hostility government against protects it does not definition because not meet this masked, as well as overt. is quote the for free. To its services offer Aye, Inc. v. Lukumi Babalu Church of brief, charging admis concept of City's "[the Hialeah, 113 S.Ct. City spiritual or otherwise receive sion to church (1993). Under Su 124 L.Ed.2d any attendee or ministry would be odd to neutrality facial does precedent, preme Court religious to the recipient if not abhorrent discriminatory application from shield a not part what makes This is organization. Exercise Clause. challenge under the Free for in activity unique appropriate such City's discriminatory considering the By not Opening-An exemption." within the clusion majority sim its tax application of Respondent/Cross Petitioners swer Brief of eyes to the fact that the "neu ply closes its Colo., 42; 1d. et at see also City al. in fact adopts it is not tral" properly was (stating that Villa Pueblo at neutral. it not exemption because does denied "free"). for offer its services by City justification offered The sole religious discriminatory treatment of for its counsel for the argument, at oral Yet the im- nonreligious charita- simply demonstrates candidly admitted that organizations the discrimination nature of рermissible may charge for their ser- organizations ble Only religious above, its keeps City argues nature As noted case. 14-4-21(5)'s that, obtaining Pueblo from an exemption. para- under section third graph, religious organizations sum, cannot obtain In City argues or they ganizations-because an exemption unless offer their services of their fo cus-must meet interpretation only for definition of applies free. This charitable (Le., must offer their services continues, organizations, free), organizations-be but charitable definition, religious organizations, by because cause of their nonreligious focus-do not can govern- never "lessen the burdens of (and services). may charge for their This is According City, ment." thing justification, simply it is a restatement religious organizations can do is minister to discriminatory practice. City's "spiritual persons" needs of under the explanation discriminatory treatment paragraph, third ministering and such is not justification all, is thus no and falls far government a burden of that can be lessened. short of what the United States Constitution Nonreligious organizations," "charitable on 531-32, See, Lukumi, requires. e.g., 508 U.S. at hand, permitted the other charge fees (A 13 S.Ct. 2217 law that is not neutral 1 because, their activities as the con- general and of applicability justified "must be tinues, their "physical activities address the compelling governmental interest and persons," mental needs of which can narrowly must be tаilored to advance that lessen the government. burden of interest.").3 example, For counsel for the stated at not, majority any way, does ex argument oral that: pressly discriminatory condemn the position Instead, City. The definition taken simply of "free" in it the context of states nonreligious organizations city activities-the does not be- same," should be "treated the and remands lieve there is reasonable basis to con- "in provide case order to strue "free" other than that it strictly opportunity present raise issues and construed; Now, "free" means free. in the additional evidence as be appropriate activities, context of charitable the court new, given [the] clarified understanding" [nonreligious has allowed organ- paragraph third today. it announces Id. charge] izations to provid- fees for service my view, 825-39. this remand is a you ed that what take in is not more than hollow majority's one. The opinion upholds your what costs are. And the reason for the denial to Villa Pueblo. significant-is this-and this is that these specifically, More it finds that Villa Pueblo [charitable] activities lessen the burden of qualify does not organiza government. tion" under because, added). (emphasis City's Under own provides while it some residents with ser test, if Villa Pueblo a nonreligious were or- charge, vices free of provides others with ganization, it would be awarded an services "on quid pro quo transactional or it operates basis." Id. at 825.4 because Maj. if a loss. op. at even Catholic addition, City's 3. justification flatly the majority that, is in- 4. The satisfy also notes to the dic- language consistent para- with the of the third paragraph, tates of the third services do not have above, graph. paragraph As noted the third of free, entirely to be offered for but rather be 14-4-21(5) provides section organization" that a "charitable "general{ly] Maj. op. charitabl[e]." at 825. Yet "organization is an which exclu- the majority test that the apply does in fact and in a existing manner sively, consistent with "entirely amounts to an example, free" test. For laws and for the benefit of an indefinite number that, majority the although No. 08SA353. Equalization Bd. gart Ministries Cal., 110 S.Ct. 493 U.S. Colorado, Supreme Court (1990) (describing California's L.Ed.2d 796 Banc. En applicable" "generally tax as and use sales May18,2009. all retail sales neutrally" ‍‌‌​‌​​​‌‌‌​‌​‌​​‌‌‌​​‌​‌​​‌​​​​‌‌‌‌‌‌‌​‌​‌‌‌‌​​‌‍to "applies (cited maj. op. at property) tangible personal 819). appli Instead, involves the this case a manner law in facially neutral of a cation See, e.g., religion. against that discriminates 2217; 532-32,

Lukumi, 113 S.Ct. notes "Villa Pueblo persons, freely of voluntarily and ministers to the [i.e., 'freely voluntarily' does entirely free] spiritual persons, mental or needs of residents," charges minister to some it others. thereby govern- lessens the burdens of Maj. op. "(als According majority, to the added). (emphasis ment." The third long provides housing nursing as Pueblo or applies requirement the that "free[ ]" services be Villa quid services to residents on a transactional "minister[ing]"-whether to all or "physical, basis, pro quo spiritual despite persons." charity mental or Certainly needs of its to some resi- nothing dents, there language suggest in the satisfy" to paragraph. that it will fail to "spiritual" to, freely Id. needs must be ministered "physical" but or "mental" needs can be minis- price. tered to at 8381 Cent. News Club v. evidence" "additional see also Good present were Health Milford 121 S.Ct. Sch., 533 U.S. the has that on remand "raise issues" treatment, (2001) (holding public that ele discriminatory such L.Ed.2d engaged public operated a limited that mentary school majori- the on have no effect evidence after to meet community groups forum on its tax code or the interpretation ty's from religious group could not exclude school Villa interpretation of that application school). not majority should meeting at exemption. Under an request Pueblo's Exercise Free sweep the permitted entitled to is not Pueblo ruling, Villa today's discriminato Pueblo's presented problem not- treatment exemption-discriminatory an rug under of its tax code ry application withstanding. neutrality. facial repeatedly asserts majority no evidence case contains in this record HL discriminatory in a its code City applied has Hеalth fashion, that Catholic states City's denial of a upholds the majority subjected to it has been alleged that ground not Pueblo on exemption to Villa n. Maj. op. at 819 discriminatory treatment. for free. its services not offer it does above, City's Yet, as noted nonreligious n. 9. require not does Yet discriminatory ser- to offer their such charitable conceded counsel own impor- argument. More Be- at oral treatment to obtain for free vices alleged dis- has not the denial of Villa tantly, majority upholds cause because City's in this case dis- criminatory exemption despite treatment Pueblo's treatment, I dissent respectfully had no criminatory today opinion majority's until court, Indeed, district opinion. to. its reason from Health, appeals, Catholic court (until to this for certiorari petition its that Justice to state I am authorized a charitable court) Villa Pueblo treated join in this and Justice RICE HOBBS exemption from entitled to dissent. "in the conduct incurred taxes and use sales fune- religious or charitable regular their 14-4-76. under section activities" tions and today-and majority's opinion It is the permits opinion-that majority's to an subject to nonre- applied not that it has the tax code organizations. ligious Colorado, State The PEOPLE involve Ultimately, this case does Plaintiff-Appellant in law that generally applicable neutral See, e.g., Em religion. cidentally burdens v. Div., Res. Ore. Dep't Human ployment CLAYTON, Defendant- Brian Scott Smith, 110 S.Ct. Appellee. (1990); Jimmy Swag see also L.Ed.2d

Case Details

Case Name: Catholic Health Initiatives v. CITY OF PUEBLO, DEPT. OF FINANCE

Court Name: Supreme Court of Colorado

Date Published: Jun 1, 2009

Citation: 207 P.3d 812

Docket Number: 07SC905

Court Abbreviation: Colo.