In Mаy 2007, The Medical Center Hospital Authority (“Hospital Authority”) filed an action against the Columbus Board of Tax Assessors and related parties (together, “the Tax Board”) in which it sought a declaration that its leasehold interest in a building located on real property owned by a private entity constituted public property exempt from advalorem taxation under OCGA § 48-5-41 (a) (1). The superior court granted summary judgment to the Hospital Authority, finding that the Hospital Authority’s leasehold interest qualified as “public property,” and was thus exеmpt from ad valorem property taxation. The Tax Board appealed this decision to the Court of Appeals, which affirmed the trial court’s grant of summary judgment.
We granted certiorari to decide whether the Court of Appeals erred in determining that two prior bond validation orders conclusively determined, for purposes of OCGA § 48-5-41 (a) (1) (A), that the
1. Factual and, Procedural Background
This is a dеcade old case that has a rich and detailed factual background and procedural history. We address the pertinent parts of that history below, including the lease agreement, the bond validations, the superior court’s grant of summary judgment regarding ad vаlorem taxes, and the opinion of the Court of Appeals affirming that judgment.
(a) Creation of Lease Agreement
On June 1, 2004, Columbus Regional Healthcare System, Inc. (“Columbus Regional”),
(b) Bond Validation Orders
Later in 2004, the superior court validаted the financing of the Hospital Authority’s bonds, finding, in pertinent part, “that the purposes for which the Bonds are being issued, as described in the petition and complaint, are in furtherance of the public purposes for which Defendant Authority was established.” Following а 2007 bond refinancing, the superior court again was tasked with considering the validity of the revenue bonds, and was specifically “requested to rule on which entity did in fact build, manage and ownf ] Spring Harbor at Green Island.” In its detailed, 27-page order, the superior court bоth validated the refinancing of the bonds, and also concluded, in relevant part, that clear and convincing evidence “demonstrate[d]
Subsequently, the superior court explained that it
cannot rule as a matter of fact and as a matter of law [that] Spring Harbor is a project which originated with the [Hospital] Authority, or as one which will only benefit the [Hospital] Authority and the public, or that “no person, partnership, association, or corporation shall have any rights hereunder, or that the [Hospital] Authority will ‘own’ and ‘manage’ the Spring Harbor at Green Island project.”
The court reiterated that “the entire project is owned, manаged, and controlled by [a private entity], and once the bonds are paid, the [Hospital] Authority has agreed that [Columbus Regional] will take possession and will own everything on site ... all property of every kind, real or personal.” Nevertheless, as referеnced above, the court validated the 2007 bond refinancing, finding that the project itself served a public purpose as contemplated under the Hospital Authorities Law.
(c) Proceedings Regarding Ad Valorem Taxation
Between the validation of the 2004 and 2007 bonds, the Tax Board sent the Hospital Authority a bill fоr its Spring Harbor property tax obligation, which included taxes for all improvements made to the facility. The Hospital Authority refused to pay, contending that its property interest in Spring Harbor was exempt from ad valorem property taxation and subsequently filed for declaratory and injunctive relief in Muscogee County Superior Court.
At the request of the trial court, the parties filed cross-motions for summary judgment regarding the taxability of Spring Harbor. Specifically, the Hospital Authority contended, inter alia, that its
the validity of Plaintiff Hospital Authority’s property interest in Spring Harbor under the ground lease, and the validity of the ground lеase itself, has been established by the Superior Court of Muscogee County in two separate Bond Validation orders, one in 2004 and another in 2007. While these Bond, Validation orders did not specifically resolve the issue of taxation regarding the Spring Harbor prоperty, the orders did confirm the Hospital Authority’s ownership of Spring Harbor. [4 ]
These two Bond Validation orders also determined that Spring Harbor was a valid and proper project of the Hospital Authority that advances the Hospital Authority’s purposes .... In thе instant case, income derived from the operation of Spring Harbor would not only go toward supporting its continued operation, but would necessarily be used to satisfy the Hospital Authority’s revenue bond indebtedness. On both counts, said income would be used in furtherance of the functions and purposes of the Hospital Authority
Based on the foregoing, this Court concludes that Plaintiff Hospital Authority’s property interest in the facilities and improvements constituting Spring Harbor qualifies as public property, and therefore, it is еxempt from ad valorem property taxation.
(Emphasis supplied.) The Tax Board appealed this decision to the Court of Appeals.
(d) Court of Appeals Opinion
Relying on the 2004 and 2007 bond validation orders, which the Court of Appeals determined were conclusive on the quеstion of ownership and taxation, the Court of Appeals affirmed the trial court’s grant of summary judgment. Specifically, relying upon the bond validation’s “conclusive findings,” the court concluded that the Hospital Authority’s leasehold interest was public property bеcause, in part, “ ‘the purposes for which the (b)onds (were) being issued, as
2. Analysis
Bond validation decisions are “incontestable and conclusive.” Ga Const, of 1983 Art. IX, Sec. VI, Par. IV. See also OCGA § 36-82-78 (“[T]he judgment of the superior court confirming and validating the issuance of the bоnds and the security therefor shall be forever conclusive against the governmental body upon the validity of such bonds and the security therefor.”). However, this restriction “only attaches to those matters that are referenced and adjudicated in [the bond] рroceedings.” Sherman v. Fulton County Bd. of Assessors,
As the Tax Board argues, and the superior court correctly recognized below, the bond validation orders “[do] not specifically resolve the issue of taxation regarding Spring Harbor.” Indeed, the bond validation orders include factual determinations regarding the ownership, control, and management of the property, and the Court of Appeals appears to have misconstrued the bond validation orders in this respect.
It is well established that “[a] 11 public property is exempt from tаxation . . . but it is exempt only so long as it remains in public ownership.” Delta Air Lines, Inc. v. Coleman,
Just like the superior court below, the Court of Appeals presumed that the Hospital Authority’s leasehold interest was public property because the bonds issued were found to have a public purpose in both the 2004 and 2007 bond validatiоns. It may be that in many cases — perhaps even most cases — facts establishing that bonds have a public purpose also will tend to show that property associated with those bonds is public property, but it is not inevitably so. The question of whether a hospital authority’s property interest qualifies for ad valorem tax exemption as “public property” is a separate and distinct question from the issues presented in a bond validation proceeding. Instead, the standard to be applied in order to determine whether a hospital authority’s property interest qualifies as “public property” is set forth in our decisions in Stewart and Sigman.
Consequently, the bond validation proceedings did not conclusively establish whether the leasehold interest of the Hospital Authority is “public property” for tax purposes, and the superior court below should have drawn its own conclusions about taxability.
Judgment reversed and case remanded with direction.
Notes
The Hospital Authority further alleged that it was tax exempt because it met the requirements as a home for the aged pursuant to OCGA § 48-5-40 (2). The Court of Appeals did not reach this issue on appeal as it affirmed summary judgment on the “public property” exemption. See Columbus, Ga. Bd. of Tax Assessors v. Med. Center Hosp. Auth.,
Columbus Regional is a private non-profit organization.
The trial courts’ bond validation rulings were not appealed, and wе express no opinion on their merits.
The superior court’s conclusion regarding the Hospital Authority’s ownership of Spring Harbor is inconsistent with the lengthy factual findings made by the trial court in the 2007 bond validation order. However, the superior court order does not address these inconsistencies.
This Court of Appeals decision arose from a separate action that involved the same parties but different property.
We do not foreclose the possibility that the superior court might consider facts found in the bond validation proceedings. Indeed, because this issue was presented to the superior court in the form of a motion for summary judgment, the court should review all submitted record materials in support of and opposing the motion in order to determine whether a genuine issue of material fact existed as to the ad valorem tax exemption.