December 17, 2014 – El Castillo Retirement Residences v. Domingo Martinez, Assessor, Santa Fe County, No. 31,704

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: _____________
Filing Date: December 17, 2014
NO. 31,704
EL CASTILLO RETIREMENT
RESIDENCES,
Petitioner-Appellee,
v.
DOMINGO MARTINEZ, ASSESSOR,
SANTA FE COUNTY,
Respondent-Appellant.
APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Barbara J. Vigil, District Judge
Jones, Snead, Wertheim & Clifford, P.A.
Carol A. Clifford
Santa Fe, NM
for Appellee
Bridget A. Jacober
Santa Fe, NM
for Appellant

1We recognize that this opinion reaches a different result from our opinion in
La Vida Llena v. Montoya, 2013-NMCA-048, 299 P.3d 456. Llena, however,
proceeded only statutorily pursuant to this Court’s analysis of Section 7-36-7(B). Id.
¶8. There was no constitutional challenge asserted by the Assessor.
OPINION
ZAMORA, Judge.
{1} 	Domingo Martinez, Santa Fe County Assessor (the Assessor), appeals a district
court order granting El Castillo Retirement Residences (El Castillo) a charitable
property tax exemption pursuant to Article VIII, Section 3 of the New Mexico
Constitution and the New Mexico Property Tax Code, NMSA 1978, Section 7-36-
7(B)(1)(d) (2008). As a result of the Assessor’s failure to perfect his appeal as to the
statutory exemption, we do not have jurisdiction to review whether El Castillo is
entitled to a charitable property tax exemption under Section 7-36-7(B). We further
conclude that El Castillo does not meet the constitutional requirements for a charitable
property tax exemption, and therefore reverse on this issue. 1
BACKGROUND
{2} 	El Castillo, a Santa Fe continuing care retirement community, filed a claim for
a charitable property tax exemption that was denied by the Assessor. El Castillo
appealed that decision to the Santa Fe County Valuation Protests Board (the Protests
Board), claiming a charitable property tax exemption under Section 7-36-7(B) and
under Article VIII, Section 3. The Protests Board determined that El Castillo was

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ineligible for the exemption under Section 7-36-7(B). The Protests Board, however,
declined to decide whether El Castillo qualified for the exemption under Article VIII,
Section 3, citing a lack of jurisdiction.
{3} 	El Castillo appealed to the district court, requesting that the Protests Board’s
decision to deny El Castillo’s claim for a charitable property tax exemption under
Section 7-36-7(B) be reversed. El Castillo also requested that the district court
exercise its original jurisdiction to grant El Castillo’s constitutional claim for a
charitable property tax exemption. At the time, the Assessor agreed to the district
court’s exercise of original jurisdiction over El Castillo’s constitutional property tax
exemption claim.
{4} 	The parties stipulated that the record made before the Protests Board would
substitute for the presentation of evidence and testimony to the district court. El
Castillo’s appeal was briefed and argued based on evidence presented to the Protests
Board. After making original findings of fact, the district court determined that El
Castillo qualified for a charitable property tax exemption under both Article VIII,
Section 3 and Section 7-36-7(B). The district court’s judgment was entered on
September 29, 2011. The Assessor filed a notice of appeal on October 25, 2011, and
a docketing statement on December 28, 2011.
DISCUSSION

3
{5} 	Due to the procedural posture of this case, we first discuss whether the Assessor
properly perfected his appeal. We then turn to the Assessor’s jurisdictional challenge.
And finally, we consider the merits of the Assessor’s constitutional claim.
I. 	Perfection of the Appeal
{6} 	The Protests Board’s decision and order addressed the statutory aspect of El
Castillo’s claim for a charitable property tax exemption but, based on a lack of
jurisdiction, did not address the constitutional aspect of the claim. As a result, El
Castillo’s claim was separated into two distinct appellate procedural paths: (1) the
statutory claim, reviewable by the district court in its appellate jurisdiction; and (2) the
constitutional claim, reviewable by the district court in its original jurisdiction. See
NMSA 1978, § 7-38-28(A) (1999) (“A property owner may appeal an order made by
the director or a county valuation protests board by filing an appeal pursuant to the
provisions of [NMSA Section 39-3-1.1 (1999)].”); see also § 39-3-1.1(A) (stating that
agency decisions placed under the authority of the section by specific statutory
reference, are appealable to the district court); Rule 1-074(A) NMRA (stating that
“appeals from administrative agencies [may be heard by] the district courts when there
is a statutory right of review to the district court”); Victor v. N.M. Dep’t of Health,
2014-NMCA-012, ¶ 24, 316 P.3d 213 (“Constitutional challenges that exceed the
scope of [an administrative agency’s] review are subject to the original jurisdiction of
the district court.”).

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{7} 	“[W]hen 	a 	district 	court 	has 	exercised 	both 	its 	appellate 	and 	original
jurisdiction, the appellant should pursue an appeal by filing a Rule 12-505 [NMRA]
petition to address issues stemming from the exercise of the district court’s appellate
jurisdiction, and a direct appeal to address issues stemming from the exercise of the
district court’s original jurisdiction.” 	Victor, 2014-NMCA-012, ¶ 18 (internal
quotation marks and citation omitted). An appeal to this Court from a judgment of the
district court in its original jurisdiction is perfected by filing a notice of appeal and a
docketing statement. See Rule 12-202(A) NMRA (stating that a notice of appeal shall
be filed with the district court); Rule 12-208(A) NMRA (stating that the docketing
statement shall be filed in the Court of Appeals). This Court’s review of an
administrative decision appealed to the district court is by writ of certiorari. Georgia
O’Keefe Museum v. Cnty. of Santa Fe, 2003-NMCA-003, ¶ 25, 133 N.M. 297, 62 P.3d
754; see § 39-3-1.1(E) (permitting a party to petition the Court of Appeals for a writ
of certiorari to review the district court’s decision in an administrative appeal); Rule
12-505(A)(1) (stating that the Court of Appeals reviews district court decisions that
address administrative proceedings pursuant to Rule 1-074, Rule 1-077 NMRA, or
Section 39.3.1.1); see Rule 12-505(B) (“A party . . . may seek review of the [district
court’s] order by filing a petition for writ of certiorari with the Court of Appeals.”).
{8} 	In this case, the Assessor filed a notice of appeal and a docketing statement
which were sufficient to perfect the appeal of the constitutional issue heard by the

2The thirty-day deadline would have run on October 29, 2011. The Assessor
filed an unopposed request for an extension of time in which to file the docketing
5
district court in its original jurisdiction. However, the Assessor failed to file a petition
for writ of certiorari to perfect his appeal as to the statutory issue first decided by the
Protests Board and reviewed by the district court in its appellate jurisdiction.
{9} 	In some instances, a non-conforming document may be accepted as a petition
for writ of certiorari, if it provides sufficient information. Wakeland v. N.M. Dep’t of
Workforce Solutions, 2012-NMCA-021, ¶ 7, 274 P.3d 766. While a notice of appeal
will not suffice, “[a] docketing statement will generally substantially comply with
Rule 12-505 so as to permit this Court to review it as a substitute for a petition for writ
of certiorari.” Wakeland, 2012-NMCA-021, ¶ 16. In order to be considered as a timely
non-conforming petition for writ of certiorari, the docketing statement must be filed
within thirty days of the district court’s judgment or order because “the time
requirement for filing a petition for writ of certiorari is a mandatory precondition to
the exercise of an appellate court’s jurisdiction to review a petition on its merits.” Id.
¶ 18.
{10} 	In light of Wakeland, we construe the Assessor’s docketing statement as a non-
conforming petition for writ of certiorari. However, the Assessor filed his docketing
statement on December 28, 2011, which was ninety days after the district court
entered its order dismissing the complaint.2 Therefore, although we accept his

statement on November 17, 2011, which was also untimely.
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docketing statement as a non-conforming petition for writ of certiorari, it was
untimely under Rule 12-505(C).
{11} 	When a petition for writ of certiorari is untimely, this Court will not excuse
untimely filing “absent a showing of the kind of unusual circumstances that would
justify an untimely petition.” Wakeland, 2012-NMCA- 021, ¶ 20. Untimely filing of
a petition for writ of certiorari may be justified by unusual circumstances such as:
“when (1) there is error on the part of the court[;] or (2) when the filing is not very
late, and there are other unusual circumstances that were not caused by the court
system but that were not within the control of the party seeking appellate review.”
Mascareñas v. City of Albuquerque, 2012-NMCA-031, ¶ 23, 274 P.3d 781 (internal
quotation marks and citation omitted). The Assessor does not argue the existence of
unusual circumstances that would justify an untimely petition, and we are aware of
none.
{12} 	Accordingly, we deny the Assessor’s petition for writ of certiorari. As a result,
we do not have jurisdiction to review the question of whether El Castillo is entitled
to a charitable property tax exemption under Section 7-36-7(B). This appeal is
therefore limited to the constitutional issue decided by the district court in the exercise
of its original jurisdiction. See Mascareñas, 2012-NMCA-031, ¶ 24 (“This Court

7
lacks jurisdiction to address the merits of [the] administrative appeal because the
appeal was untimely and unusual circumstances do not justify the untimeliness.”).
II. 	Assessor’s Constitutional Issue
{13} 	The Assessor’s remaining issue is whether El Castillo meets the constitutional
requirements for a charitable property tax exemption. Within that issue, the Assessor
argues that the district court did not have original jurisdiction to consider the
constitutional exemption and that subject matter jurisdiction is fundamentally
encompassed within that determination. Initially, we note that our district courts are
recognized to be courts of general jurisdiction. Ottino v. Ottino, 2001-NMCA-012, ¶
6, 130 N.M. 168, 21 P.3d 37. Each has “original jurisdiction in all matters and causes
not excepted in [the Constitution of the State of New Mexico], and such jurisdiction
of special cases and proceedings as may be conferred by law, and appellate
jurisdiction of all cases originating in inferior courts and tribunals in their respective
districts.” N.M. Const. art. VI, § 13. Whether a court has jurisdiction to hear a
particular matter is a question of law that we review de novo. Smith v. City of Santa
Fe, 2007-NMSC-055, ¶ 10, 142 N.M. 786, 171 P.3d 300. We review constitutional
issues of law de novo. State v. Druktenis, 2004-NMCA-032, ¶ 14, 135 N.M. 223, 86
P.3d 1050.
A. 	The District Court’s Original Jurisdiction

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{14} 	Initially, we must address the question of whether the district court had subject
matter jurisdiction to hear El Castillo’s constitutional claims. The Assessor had
consented to the district court’s exercise of original jurisdiction. It was not until he
appealed to this Court that the Assessor first raised the issue of whether the district
court had subject matter jurisdiction over the constitutional claims. An objection to
the district court’s subject matter jurisdiction may be raised at any time during the
proceedings and may be raised for the first time on appeal. Chavez v. Valencia Cnty.,
1974-NMSC-035, ¶ 15, 86 N.M. 205, 521 P.2d 1154. “Subject matter jurisdiction
cannot be conferred by consent of the parties.” Id. ¶ 14. Because a challenge to subject
matter jurisdiction calls into question the power of the district court to hear and decide
the case before it, it is now well-settled that a lack of subject matter jurisdiction cannot
be waived or cured by the consent of the parties. Gonzales v. Surgidev Corp., 1995-
NMSC-036, ¶ 11, 120 N.M. 133, 899 P.2d 576. “The question of whether a court has
subject matter jurisdiction is a question of law which we review de novo.” Palmer v.
Palmer, 2006-NMCA-112, ¶ 13, 140 N.M. 383, 142 P.3d 971.
{15} 	“Without question, the district court has the authority to consider constitutional
claims in the first instance.” Maso v. State of N.M. Taxation & Revenue Dep’t, Motor
Vehicle Div., 2004-NMCA-025, ¶ 14, 135 N.M. 152, 85 P.3d 276, aff’d 2004-NMSC-
028, 136 N.M. 161, 96 P.3d 286. In the context of administrative appeals, this Court
has held that constitutional questions outside the scope of an administrative agency’s

9
review are “subject to the original jurisdiction of the district court.” Victor, 2014-
NMCA-012, ¶ 24.
{16} 	Before we can address the original jurisdiction question, our analysis at this
juncture is to ascertain whether it is within or outside the scope of the Protests Board’s
review to decide if El Castillo qualified for the exemption under Article VIII, Section
3. Thirty-nine years ago, this Court was presented with the question of whether
protests boards possess the authority to decide constitutional claims. In re Miller,
1975-NMCA-116, 88 N.M. 492, 542 P.2d 1182, rev’d on other grounds by 1976-
NMSC-039, 89 N.M. 547, 555 P.2d 142. The Miller taxpayers argued that there were
unequal assessments between their properties and comparable properties, as well as
violations of the Equal Protection and Due Process clauses of the Fourteenth
Amendment to the U.S. Constitution and Article II, Section 18 of the New Mexico
Constitution (1953). Miller, 1975-NMCA-116, ¶¶ 41, 42. The protests board took the
position that it did not have the statutory authority to decide constitutional questions.
Id. ¶¶ 43, 45. At the time of the Miller decision, the protests board’s duties were to
“hear and decide protests from persons protesting valuations of property for property
taxation purposes made by county assessors and protested under [NMSA 1953,
S]ection 72-2-37.” Miller, 1975-NMCA-116, ¶ 44; NMSA 1953, § 72-2-38(D) (Cum.
Supp. 1973). NMSA 1953, Sections 72-2-37(A), (B) (Cum. Supp. 1973) allowed a
person to protest the valuation placed upon his property by the assessor by filing a

10
petition with the assessor and stating why they believed the valuation was incorrect,
and what they believed to be the correct valuation. See also Miller, 1975-NMCA-116,
¶ 44. This Court found that the then existing statutory language gave the “boards the
duty to hear a protest of valuation of a taxpayer’s property on any grounds
whatsoever[,]” including “allegedly unconstitutional discrimination.” 	Id. 	¶ 46
(emphasis added). In Miller, we reasoned that to hold otherwise would prevent a party
“from arguing before the board that the valuation was incorrect because it was . . .
unconstitutional.” Id. ¶ 45.
{17} 	Interestingly, ten months prior to our decision in Miller, our Supreme Court
noted that the Constitution was the “supreme law” of the land and held that it is the
judiciary’s “function and duty to say what the law is and what the Constitution
means.” Dillon v. King, 1974-NMSC-096, ¶¶ 27, 28, 87 N.M. 79, 529 P.2d 745. The
Dillon plaintiff was challenging the constitutionality of an election statute and the
legislative process of its successor. We view this to indicate our Supreme Court’s
directive that constitutional determinations rest exclusively within the purview of the
judiciary, and not entities such as protests boards. Miller did not discuss or address
Dillon, and we are today left to reconcile the seeming disparity in these two outcomes.
With this in mind, we turn to other cases in which administrative agencies have been
presented with constitutional questions, as well as the current statutory appellate
process for protests boards.

11
{18} 	New Mexico appellate decisions which include cases where subject matter
jurisdiction was not expressly provided by statute and where our Supreme Court
interpreted the statute in a manner that allowed for the exercise of subject matter
jurisdiction in a given tribunal or administrative proceeding do not give a clear
direction in this case. See Schuster v. State of N.M. Taxation & Revenue Dep’t, Motor
Vehicle Div., 2012-NMSC-025, ¶ 19, 283 P.3d 288 (holding that the motor vehicles
division, within the course of the administrative hearing, must make a determination
as to the constitutionality of the police activity leading to an arrest, as well as a
determination as to the constitutionality of the arrest itself); see also Maso, 2004-
NMCA-025, ¶ 12 (holding that the motor vehicle division, as an administrative body,
did not have subject matter jurisdiction to consider the constitutional question raised,
as it was a matter that exceeded the scope of the enacting statute). Other New Mexico
cases in which similar analyses were undertaken reached opposite conclusions
regarding subject matter jurisdiction, such as where an administrative agency was
presented 	with 	questions 	of 	the 	constitutionality 	of 	a 	legislative 	act 	or 	the
constitutionality of the process set forth by an act. See Madrid v. St. Joseph Hosp.,
1996-NMSC-064, ¶ 1, 122 N.M. 524, 928 P.2d 250 (noting that the Workers’
Compensation 	Administration 	did 	not 	have 	the 	authority 	to 	determine 	the
constitutionality of the Act); Victor, 2014-NMCA-012, ¶ 24 (holding that if applicable
regulations do not expressly support the inference that a hearing officer can consider

12
or rule upon the issue of the constitutionality of the process provided by the
regulations, such an inquiry exceeded the hearing officer’s scope of review). Given
these divergent rulings within our own appellate case law, a clear direction is not
found for the purpose of our immediate inquiry. Therefore, we closely examine the
enacting legislation applicable to protests boards.
{19} 	The current statutory process for appealing the county assessor’s denial of a tax
exemption is set forth in the Administration and Enforcement of Property Taxes.
NMSA 1978, § 7-38-1 to -93 (1973, as amended through 2013). A property owner
may appeal the county assessor’s denial of a claim for an exemption. Section 7-38-
24(A). The current statutory provision has expanded the petition requirements from
just the valuation protests. It now includes protests of incorrect denials of an
exemption claim and what the property owner believes should be the exemption.
Section 7-38-24(B)(3). Each county valuation protests board consists of three voting
members, all qualified electors of the county, with at least one of them possessing
demonstrated experience in the field of property valuation. Section 7-38-25(A). An
additional member is required to be a property appraisal officer employed by the
department as well as the chairman of the board. Section 7-38-25(A)(3).
{20} 	Pursuant to § 7-38-25(D), the county valuation protests board’s duties are to
“hear and decide protests of determinations made by county assessors and protested
under Section 7-38-24” (“protesting values, classifications, allocation of values and

13
denial of exemption or limitation on increase in value determined by the county
assessor”). The protest hearings before the board are not subject to the rules of
evidence or the rules of civil procedure. Section 7-38-27(A). The board is required to
enter an order, and that order has the same force and effect as a judgment from a court.
Section 7-38-27(B), (D); Petersen Props. v. Valencia Cnty. Valuation Protests Bd.,
1976-NMCA-043, ¶ 18, 89 N.M. 239, 549 P.2d 1074.
{21} 	As stated earlier, the question before us is whether the statutory language of
Sections 7-38-24(B)(3) and 7-38-25(D) allows for constitutional interpretation by a
county protests board. “Statutory interpretation is a question of law, which we review
de novo.” State v. Smith, 2009-NMCA-028, ¶ 8, 145 N.M. 757, 204 P.3d 1267
(internal quotation marks and citation omitted). “Our primary goal when interpreting
a statute is to give effect to the Legislature’s intent, which is determined by looking
at the plain language used in the statute, as well as the purpose of the underlying
statute.” State v. Parrish, 2013-NMCA-066, ¶ 6, 304 P.3d 730, cert. denied, 2013-
NMCERT-004, 301 P.3d 858. “When the words used are plain and unambiguous, we
give a statute its literal reading, unless that reading would lead to an injustice,
absurdity, or contradiction.” Id. (internal quotation marks and citation omitted).
{22} 	Based on the statutory language that identifies the responsibilities of protests
boards, considered alongside the cases we have examined, we conclude that it would
be inappropriate to hold that, because the protests boards have the general duty to hear

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and decide protests of a denial of a claim of exemption, this duty automatically
includes substantive constitutional issues that have the same force and effect as a
judgment of the court. To the contrary, by identifying the judiciary’s function as the
determinant 	of 	that 	which 	constitutes 	the 	supreme 	law 	of 	the 	land—the
Constitution—the Dillon court guaranteed constitutional litigants that judges, and not
protests board members with realty backgrounds, hear and decide constitutional
issues. In those instances where the parties present constitutional issues outside of the
protests board’s statutory authority and topical expertise, they retain the opportunity
to present their argument to the district court. We therefore agree with and adhere to
the principle advanced by the Dillon court: it is the duty of the judiciary to interpret
the Constitution, the supreme law of the land, and to set forth the law. 1974-NMSC-
096, ¶ 28.
{23} 	While protests boards certainly have the professional competence to make
decisions as to property valuations, classifications, or statutory exemptions, they lack
the 	professional 	expertise 	to 	make 	legal 	determinations 	involving 	our 	state
Constitution, especially where we have held that the decisions of a protests board shall
have the same force and effect as a court-issued judgment. Petersen Props., 1976-
NMCA-043, ¶ 18. We conclude that El Castillo’s constitutional claims exceeded the
Protests Board authority of review and that it was appropriate for the district court to
exercise its original jurisdiction over such claims. As a result, we further conclude that

15
Miller is overruled. See Trujillo, 1998-NMSC-031, ¶ 34, 125 N.M. 721, 965 P.2d 305
(noting, in relevant part, that before overturning precedent, we must consider “whether
the principles of law have developed to such an extent as to leave the old rule no more
than a remnant of abandoned doctrine[ ]” and “whether the facts have changed in the
interval from the old rule to reconsideration so as to have robbed the old rule of
justification” (internal quotation marks and citation omitted)).
{24} 	The Assessor further argued that the district court did not have jurisdiction to
make original findings of fact. Relying on Smith v. City of Santa Fe, 2007-NMSC-
055, 142 N.M. 786, 171 P.3d 300, the Assessor argues that El Castillo’s request that
the district court exercise its original jurisdiction to decide the constitutional issue not
reached by the Protests Board was tantamount to a request for a declaratory judgment
and that the district court lacked jurisdiction to make original findings of fact. We
disagree. The Assessor’s reliance on Smith in support of his argument is misplaced.
In Smith, one set of plaintiffs filed an administrative action, the other set of plaintiffs
did not. Id. ¶ 4. All the plaintiffs filed a declaratory judgment action in district court
four months after the unfavorable administrative decision. Id. ¶ 5. The Supreme Court
held that those plaintiffs that pursued the administrative relief were required to pursue
a timely appeal under Rule 1-075 or, at a minimum, initiate a declaratory action within
the same time frame. Smith, 2007-NMSC-055, ¶ 24. The Court further held that those
plaintiffs that did not pursue administrative relief presented the district court with a

16
pure question of law and the declaratory judgment action was therefore appropriate.
Id. ¶ 27.
{25} 	El Castillo’s unopposed request that the district court exercise its original
jurisdiction to decide the constitutional issue not reached by the Protests Board does
not circumvent the administrative process. The issue was appealed to the district court
through 	the 	appropriate 	administrative 	process 	and 	there 	are 	procedural 	and
substantive differences between jurisdiction to address administrative claims and
original jurisdiction to address constitutional claims. See Victor, 2014-NMCA-012,
¶ 26 (stating that a direct appeal of constitutional issues did not circumvent the
procedure established by the applicable rules, instead it followed the rules).
{26} 	Where a district court exercises its original jurisdiction, it, as fact finder, is
within its purview to enter original findings of fact and conclusions of law. See
Moriarty Mun. Sch. v. N.M. Pub. Sch. Ins. Auth., 2001-NMCA-096, ¶ 29, 131 N.M.
180, 34 P.3d 124 (“Original jurisdiction here means general jurisdiction, which means
those matters known to the common law and equity practice . . . . As to those matters,
as well as matters in which jurisdiction is conferred by statute, district courts may take
evidence, adjudicate facts, apply law, and decide the merits of a dispute in favor of
one party or another.” (internal quotation marks and citations omitted)).
{27} 	Accordingly, we conclude here that the district court had both the authority to
exercise its original jurisdiction and subject matter jurisdiction over the constitutional

17
questions raised by El Castillo’s claim for a charitable property tax exemption.
Therefore the district court, acting as fact finder, did not err by making original
findings of fact.
B. 	Requirements for Constitutional Charitable Property Tax Exemptions
{28} 	We now address whether El Castillo meets the constitutional requirements for
a charitable property tax exemption under our Constitution. “The most important
consideration for us is that we interpret the [C]onstitution in a way that reflects the
drafters’ intent.” State v. Lynch, 2003-NMSC-020, ¶ 24, 134 N.M. 139, 74 P.3d 73.
The rules of statutory construction also apply to the construction of constitutional
provisions. Id. We must, however, remember that the rules of statutory construction
only assist in the determination of the drafters’ intent and purpose. Id. When we
interpret constitutional provisions, we must also be ever mindful of the intrepretation’s
present and future applications and make the interpretation accordingly.
{29} 	Article VIII, Section 3 of the New Mexico Constitution states that “all property
used for educational or charitable purposes . . . shall be exempt from taxation.” “The
purpose of the charitable exemption is to encourage charitable activities by providing
them with tax relief, and to thereby promote the general welfare of society.” Sisters
of Charity v. Cnty. of Bernalillo, 1979-NMSC-044, ¶ 13, 93 N.M. 42, 596 P.2d 255.
However, “[t]he countervailing consideration is to limit the exemption within

18
reasonable bounds so as to minimize the shift of the tax burden to non-exempt
property owners.” Id.
{30} 	The determinative factor for property tax exemptions is the use of the property;
“[t]he declared objects and purposes of the owner are not determinative.” Georgia
O’Keefe Museum, 2003-NMCA-003, ¶ 40. “The fact that the purpose of an
organization may be charitable . . . is not conclusive of whether the entity is entitled
to an exemption from taxation.” Cottonwood Gulch Found. v. Gutierrez, 1985-
NMCA-042, ¶ 18, 102 N.M. 667, 699 P.2d 140. In evaluating the plaintiff’s
exemption claim, the court will consider “[t]he direct and immediate use of the
property rather than the remote and consequential benefit derived from its use.” Pecos
River Open Spaces, Inc. v. Cnty. of San Miguel, 2013-NMCA-029, ¶ 10, ___ P.3d___
(internal quotation marks and citation omitted).
{31} 	To qualify for the charitable property tax exemption, the property must be “used
primarily and substantially for charitable . . . purposes in a manner that benefits the
public.” Id. ¶ 9 (omission in original) (internal quotation marks and citation omitted).
“Although our constitutional provision does not require property to be used
exclusively for charitable purposes in order to come within the exemption, the uses
for these purposes must be substantial and must be the primary uses made of the
property.” Retirement Ranch, Inc. v. Curry Cnty. Valuation Protest Bd., 1976-NMCA-
010, ¶ 7, 89 N.M. 42, 546 P.2d 1199 (internal quotation marks and citation omitted).

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{32} 	“The exemption granted [to] . . . charitable institutions proceeds upon the theory
of the public good accomplished by them and the peculiar benefits derived by the
public in general from their conduct.” Pecos River, 2013-NMCA-029, ¶ 9 (internal
quotation marks and citation omitted). “[B]ecause property which is exempt from
taxation does not share in the burden of paying for the cost of government . . . in
exchange for its exempt status, such property must confer a substitute substantial
benefit on the public.” Id. ¶ 10 (omission in original) (alterations, internal quotation
marks, and citation omitted). “A substantial public benefit means a benefit of real
worth and importance to an indefinite class of persons who are a part of the public,
which benefit comes to these persons from the use of property.” Id. (alterations,
internal quotation marks, and citation omitted).
{33} 	In Mountain View Homes, Inc. v. State Tax Commissioner, 1967-NMSC-092,
¶ 15, 77 N.M. 649, 427 P.2d 13, our Supreme Court held that a housing development
built by a non-profit corporation for moderate to low income families, was not entitled
to a charitable property tax exemption. Though the development did not generate a
profit, its residents were not sick or indigent and did not receive welfare. Id. The
development was self-supporting, generating enough rental income to cover its costs.
Id. “It is clear that rents are fixed at an amount necessary to pay the interest, amortize
the principal and pay all expenses of maintaining the property.” Id. The Court
concluded that the development “was intended to be self-supporting, without any

20
thought that gifts or charity were involved” and that property used in such an
operation “would not have been considered charitable when our [C]onstitution was
adopted.” Id.
{34} 	In the context of charitable property tax exemptions for nursing homes, this
Court has held that a nursing home was entitled to a charitable property tax exemption
because “a facility used for the purpose of caring for the aged sick and infirm would
traditionally fall within the category of charitable purpose.” Retirement Ranch, 1976-
NMCA-010, ¶ 6. In that case, the nursing home claiming the charitable property tax
exemption served a “sick and largely indigent” population. Id. Fifty-five percent of
the home’s residents were Medicare and Medicaid patients. Id. ¶ 9. The payments
collected from Medicare and Medicaid “never covered the cost of the services
rendered.” Id. And, although the home’s board of directors could have lessened the
home’s annual deficit by admitting a greater percentage of private-pay patients, it
chose not to as a matter of policy “because of the large number of [M]edicare and
[M]edicaid recipients in the area who needed care.” Id. We held that these facts were
sufficient to establish the home was being substantially utilized for the public to
benefit from its charitable purpose and we reversed the protests board’s denial of the
charitable property tax exemption. Id. ¶ 10.
{35} 	Here, El Castillo argues that through donations and subsidies to its residents,
it relieves the larger community of the cost of their care, thereby conferring a benefit

21
to the public sufficient to qualify it for a charitable property tax exemption. El Castillo
purports to donate or subsidize its residents in three ways: (1) by donating its facilities
for educational, religious, and cultural activities; (2) by subsidizing costs for residents
who cannot afford the cost of their residency and care; and (3) by providing support
for resident monthly fees from a Resident Assistance Fund. We are not persuaded that
these acts qualify for the tax exempt status provided for within the Constitution.
{36} 	El Castillo is structured to be a self-sustaining retirement community. It is self-
contained, funded entirely by resident fees. Residents, for the most part, enter El
Castillo through “independent living” which is comparable to living in an apartment.
As residents age, El Castillo provides graduated levels of care, including assisted
living and nursing facilities.
{37} 	El Castillo exclusively serves individuals who meet certain physical, mental,
and financial requirements. El Castillo’s prospective applicants must disclose health
issues that create “an unacceptably high risk that [the resident] will require a degree
of care that may jeopardize the financial soundness of the [c]ommunity’s self-insured
health program.” El Castillo does not accept Medicare or Medicaid recipients; it limits
admittance to individuals that have a net worth of at least $300,000, independent of
any social security benefits. Once accepted for admission, El Castillo residents pay
entry fees ranging from $100,000 to $300,000 in addition to monthly fees ranging
from $1,800 to $3,200. In its residence agreement, El Castillo agrees to provide

22
services and amenities to its residents, including coordinated social and recreational
activities, as well as use of the dining room, resident lounge, multipurpose facilities,
library, patios, fitness, laundry, and landscaped areas. Payment for these services and
amenities is covered by the residents’ monthly fees. 1. 	Facilities Donation
{38} 	El Castillo claims that use of its facilities is donated to residents because by
allowing its residents to use the facilities, El Castillo is foregoing income it could
generate by renting the facilities to outside groups for meetings or other types of
activities. To calculate the value of the facilities donated, El Castillo contacted hotels
near the El Castillo campus to determine the hourly rates for which these hotels rented
their meeting rooms and facilities. Then El Castillo calculated the total number of
hours its residents used its common facilities, and multiplied the number of hours by
hourly rates comparable to the local hotels’ rates. Using this method, El Castillo
determined that in 2009, the tax year for which it seeks the exemption, it had foregone
possible rental income for those facilities in the amount of $40,730. Yet we note that
El Castillo residents are entitled to the use of El Castillo’s facilities as part of the
residence agreement. Their resident fees are used to provide amenities such as the use
of facilities by the residents. It is therefore disingenuous and contrary to reason for us
to contemplate that a resident’s use of El Castillo’s facilities is a donation. We
conclude that a resident’s use of El Castillo’s facilities is not a donation, but rather an
amenity paid for as part of their residential agreement with El Castillo.

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2. 	Resident Subsidies
{39} 	El Castillo also claims that it charitably subsidizes the cost of residency and
care for residents that can no longer afford these costs. Prior to admittance, each
resident’s entry fee and monthly fees are actuarially calculated based on the type of
unit the resident will occupy, the level of care required, and the life expectancy of the
resident. When a resident lives longer than anticipated by the actuary, the overall cost
of that resident’s residency and care may exceed the revenues El Castillo receives
from the resident. El Castillo claims that in 2009, it donated services to 28 such
residents.
{40} 	To determine the total amount of the claimed subsidy, El Castillo calculated its
total operating costs per year. It then divided this figure by the number of total
residents to determine the average cost per resident, per year. For 2009, that amount
was $45,308. The number of long-term residents who generated less than $45,308 of
amortized income for El Castillo were considered to be subsidized. For 2009, El
Castillo claims it subsidized $903,922 of resident costs in this way. However, El
Castillo failed to include or consider in its calculations the amount of revenue it
received from residents who died sooner than anticipated by the actuary, and whose
entry fees and monthly fees paid exceeded the cost of residency and care. Because no
moneys in the Resident Assistance Fund were used during the 2009 tax year to assist
residents in financial need, it can only be presumed that the overall cost per resident

24
calculation balanced out the actuary model being utilized by El Castillo. As a result,
we conclude that El Castillo’s claimed resident subsidy of $903,922 was neither
complete nor accurate and we will not speculate as to what amount, if any, of El
Castillo’s subsidy calculation can be considered a charitable donation.
3. 	Resident Assistance Fund
{41} 	El Castillo’s third claimed donation to residents is financial aid for residents
who are unable to pay their monthly fees. For this purpose, El Castillo has established
a Resident Assistance Fund which consists of funds set aside from entrance fees and
monthly fees. El Castillo claims that from 2004 to 2009, it donated $61,826 to
residents from the Resident Assistance Fund. However, in 2008 and 2009, El Castillo
did not assist any residents from this fund.
{42} 	El Castillo is providing a limited general type of public benefit because it
provides housing, health care services and other amenities to its aging sick and infirm
residents. However, similar to the development in Mountain Homes, El Castillo is
designed to be a self-supporting enterprise, with both admission and monthly fees
calculated to generate enough income to cover all of its operating costs, plus
additional reserves that are placed in the Resident Assistance Fund. As a result, when
El Castillo provides what it describes as a subsidized benefit to a resident, it has
already attempted to calculate this short-fall within the paid financial structure of its
overall actuarial business model. To the extent that El Castillo argues that it benefits

25
the public by caring for residents who would otherwise receive public assistance, we
disagree. The evidence establishes that it caters instead to predominately wealthy
individuals who pay substantial admission fees as well as substantial monthly fees for
the time period that they are anticipated to be living at the retirement facility. No
evidence was presented to show that any of its residents were qualified to receive
public assistance, particularly during the tax years that it sought a property tax
exemption.
{43} 	El Castillo argues that by paying for those residents who can no longer pay for
their housing and care, the Resident Assistance Fund will prevent the cost of care for
that individual from shifting to the general public. To the contrary, if El Castillo were
given the tax exemption for the years of 2008 and 2009, such an exemption would far
exceed the actual charitable contribution amount paid on behalf of residents from the
fund during that time period, which was zero. See Pecos River, 2013-NMCA-029,
¶ 10 (holding that in exchange for not sharing in the cost of government, the direct and
immediate use of the property must confer a substitute substantial benefit to an
indefinite class of persons of the public).
{44} 	We conclude that during the tax years at issue El Castillo did not directly and
immediately use its property primarily and substantially for a charitable purpose
recognized under Article VIII, Section 3 of the New Mexico Constitution because it

26
does not confer a substantial benefit of real worth and importance to an indefinite
class of persons who are members of the general public.
CONCLUSION
{45} 	For the foregoing reasons, we reverse the district court.
{46} 	IT IS SO ORDERED.
_______________________________
M. MONICA ZAMORA, Judge
WE CONCUR:
__________________________________
TIMOTHY L. GARCIA, Judge
__________________________________
J. MILES HANISEE, Judge