January 11, 2013 – Pecos River Open Spaces, Inc., a New Mexico Non-Profit Corporation v. County of San Miguel and San Miguel County Assessor, No. 30,865

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number:

Filing Date: January 11, 2013

NO. 30,865

PECOS RIVER OPEN SPACES, INC.,
a New Mexico non-profit corporation,

Plaintiff-A ppellee,
V.

COUNTY OF SAN MIGUEL and
SAN MIGUEL COUNTY ASSESSOR,

Defendants-A ppellants.

APPEAL FROM THE DISTRICT COURT OF SAN MIGUEL COUNTY
Eugenio S. Mathis, District Judge

Rothstein, Donatelli, Hughes,

Dahlstrom, Schoenburg & Bienvenu, LLP
Richard W. Hughes

Santa Fe, NM

for Appellee

Jesus L. Lopez, San Miguel County Attomey
Las Vegas, NM

for Appellants

OPINION
HANISEE, Judge.
{1} 	This case presents us with an issue of first impression as to whether, as a matter
of law, conservation of property can constitute a charitable use, thereby exempting the
land from property taxes under Article VIII, Section 3 of the New Mexico
Constitution. We conclude that conservation is a charitable use under Article VIII,
Section 3 if conservation of the particular land at issue provides a substantial benefit
to the public. We affirm the district court’s order that the land at issue is exempt from
taxation under Article VIII, Section 3.
I. 	BACKGROUND
{2} 	Pecos River Open Spaces, Inc. (Plaintiff) is a New Mexico non-profit
corporation that has the primary and sole purpose of acquiring and holding vacant,
undeveloped, and unimproved land located in the vicinity of the Pecos River Canyon
in San Miguel County. Plaintiff’s objective in acquiring land is to preserve it in its
natural state and thereby contribute to the preservation of the environment and
ecology of the Pecos River Canyon for the benefit of New Mexico and its citizens.
{3} 	In October 2008, Genevieve Coonley deeded a completely vacant and
undeveloped sixty-acre parcel of land (the Property) located in the Pecos River
Canyon to Plaintiff. The Property, which exists in a generally natural and undisturbed

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state about a quarter mile from the Pecos River, is subject to a strict conservation
easement granted to the Santa Fe Conservation Trust. 	The easement prevents, in
perpetuity, development or construction of any kind on the Property. 	Plaintiff’s
intention in acquiring and holding the Property is exclusively to preserve the Property
in its natural state, to enforce and adhere to the terms of the conservation easement,
and to take seasonable steps to enhance the natural qualities of the Property, such as
reduction of erosion and the repair of damage to the Property.
{4} 	Upon receiving a tax assessment on the property, Plaintiff filed a protest,
claiming that the Property was tax exempt under Article VIII, Section 3 of the New
Mexico Constitution because it was used solely for the charitable purpose of
conservation. 	The San Miguel Assessor (Defendant) denied the claim for the tax
exemption, and Plaintiff appealed to the San Miguel County Valuation Protests Board
(the Board). 	The Board affirmed D9998efendant’s decision to deny the claimed
exemption, concluding that conservation was not a charitable use of the Property.
Plaintiff then appealed to the district court, which reversed the Board’s decision and
granted the charitable-use property tax exemption.
{5} 	Also in reversing, the district court accounted for the aforementioned facts, as
well as the Board’s findings, which noted that the Secretary of New Mexico Energy,
Minerals, and Natural Resources Department determined that the Property is an

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“certiori” to “certiorari”
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important habitat area or contains significant natural, open space, or historic resources
under the New Mexico Land Conservation Incentives Act, NMSA 1978, §§ 75-9-1 to
-6 (2003). Because of the Secretary’s finding in 2008, Coonley was given a credit for
the donation on her income taxes under NMSA 1978, § 7-2-18.10 (2007) equal to fifty
percent of the fair market value of the Property.
{6} 	Defendant now petitions for review of the district court’s reversal. We granted
the petition for writ of certiorari because this case involves a significant question of
constitutional law and an issue of substantial public interest. 	See 	Rule 12-
505(D)(2)(d) NMRA (listing the four grounds upon which this Court has discretion
to grant a petition for a writ of certiorari); Rio Grande Chapter of the Sierra Club v.
N.M. Mining Comm’n, 2003-NMSC-005, ¶ 16, 133 N.M. 97, 61 P.3d 806 (2002)
(“The critical issue under Rule[] . . . 12-505 is whether the case presents issues of
significant importance to justify the granting of a writ of certiorari, and that
determination is not dependent on the standard of review applied [] below, nor does
it limit the standard of review [applied] on appeal.”).
II. 	DISCUSSION
{7} 	The sole issue we address is whether conservation of the Property is a charitable
use, justifying exemption of the Property from taxation under Article VIII, Section 3
of the New Mexico Constitution. Article VIII, Section 3 provides for a number of

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exemptions from taxation, stating:
The property of the United States, the state and all counties, towns,
cities and school districts and other municipal corporations, public
libraries, community ditches and all laterals thereof, all church property
not used for commercial purposes, all property used for educational or
charitable purposes, all cemeteries not used or held for private or
corporate profit and all bonds of the state of New Mexico, and of the
counties, municipalities and districts thereof shall be exempt from
taxation.
(Emphasis added.) Although this Court and the New Mexico Supreme Court have
addressed the applicability of several of the uses that qualify property for an
exemption, neither has addressed the question regarding conservation posed by
Defendant’s appeal.
{8} 	We review constitutional issues of law de novo. 	Jicarilla Apache Nation v.
Rodarte, 2004-NMSC-035, ¶ 23, 136 N.M. 630, 103 P.3d 554. 	“We interpret the
Constitution and determine whether the law was properly applied to the facts through
de novo review.” Georgia O’Keefe Museum v. Cnty. of Santa Fe, 2003-NMCA-003,
¶ 27, 133 N.M. 297, 62 P.3d 754. We note that “[p]roperty is presumed to be subject
to taxation. It is the taxpayer’s burden to claim, apply for, and prove an exemption
based on [a] . . . charitable use.” 	Id. ¶ 32 (citation omitted). The determination of
whether the land is used for a charitable purpose “necessarily depend[s] on the uses
being made of each property which it is claimed comes within the exemption. Except
to the extent that the facts as to use are so nearly alike as to logically compel like

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results, no case can be said to constitute a controlling precedent for another case in
this area.” 	Benevolent & Protective Order of Elks, Lodge No. 461 v. N.M. Prop.
Appraisal Dep’t, 83 N.M. 445, 446, 493 P.2d 411, 412 (1972). 	The standard for
designating a use as charitable “can take shape only by the gradual process of
adjudicating this or that purpose or use on the one side of it or on the other[.]” Temple
Lodge No. 6, A.F. & A.M. v. Tierney, 37 N.M. 178, 187, 20 P.2d 280, 284-85 (1933).
{9} 	In interpreting Article VIII, Section 3, we “apply a common sense construction
rooted in the view that property used primarily and substantially for charitable . . .
purposes in a manner that benefits the public is exempt.” Georgia O’Keefe Museum,
2003-NMCA-003, ¶ 44; Ret. Ranch, Inc. v. Curry Cnty. Valuation Protest Bd., 89
N.M. 42, 44, 546 P.2d 1199, 1201 (Ct. App. 1976) (“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.” (internal quotation marks and
citation omitted)). 	“The purpose of th[e Article VIII, Section 3] exemption is to
encourage religious, charitable, scientific, literary, and educational associations not
operating for the profit of any private shareholder or individual.” Santa Fe Lodge No.
460 v. Emp’t Sec. Comm’n, 49 N.M. 149, 153, 159 P.2d 312, 314-15 (1945) (internal
quotation marks and citation omitted). 	“The exemption granted educational and

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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.”
Grand Lodge of Ancient & Accepted Masons of N.M. v. Taxation & Revenue Dep’t,
(Grand Lodge) 106 N.M. 179, 181-82, 740 P.2d 1163, 1166-67 (Ct. App. 1987). The
word “charity” “in the legal sense . . . has a much wider significance than in common
speech, it is not confined to mere almsgiving or the relief of poverty and distress, but
extends to the improvement and promotion of the happiness of man.” Mountain View
Homes, Inc. v. State Tax Comm’n, 77 N.M. 649, 654, 427 P.2d 13, 16-17 (1967).
{10} 	But, because “[p]roperty 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.” 	Grand
Lodge, 106 N.M. at 182, 740 P.2d at 1167. 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.” NRA
Special Contribution Fund v. Bd. of Cnty. Comm’rs, 92 N.M. 541, 549, 591 P.2d 672,
680 (Ct. App. 1978). The “direct and immediate use of the property” rather than the
“remote and consequential benefit derived from its use” is determinative of the
plaintiff’s exemption claim. Id. at 546, 549, 591 P.2d at 677, 680.
{11} 	There can be little question that conservation of land in its natural and

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undeveloped state generally benefits the public in the context of environmental
preservation and beautification of the State of New Mexico. The substantial benefit
derived from conservation is manifested in New Mexico’s strong public policy
encouraging conservation. 	The New Mexico Legislature has enacted the Land
Conservation Incentives Act, to incentivize and reward acts of conservation. Section
75-9-2 states that:
The purpose of the Land Conservation Incentives Act . . . is to encourage
private landowners to be stewards of lands that are important habitat
areas or contain significant natural, open space[,] and historic resources
by providing private landowners with incentives that encourage the
protection of private lands for open space, natural resources, biodiversity
conservation, outdoor recreation, farmland and forest land preservation,
historic preservation[,] and land conservation purposes.
In fact, as noted by the district court, under Section 7-2-18.10, landowners, who
convey their land for the purpose of open space, conservation, or preservation to a
public or private conservation agency, which is eligible to hold the land for
conservation or preservation purposes, receive credit for such donations on their state
income taxes.
{12} 	Additionally, San Miguel County itself has a goal of conservation within its
borders. San Miguel County’s Comprehensive Plan, adopted in 2004, states that the
county residents’ wish list includes having “Open Land, Aesthetics[,] and Views
Protected.” It also states that the San Miguel County residents want to incentivize

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preservation through “Conservation Easements [and] Transfer and Purchase of
Development Rights.” The Plan explains that the residents wish to “Keep the Pecos
River Wild and Scenic.”
{13} 	Based upon these policies, we conclude that conservation as asserted by
Plaintiff in these proceedings is a charitable use, insofar as the conservation of the
particular land at issue provides a substantial benefit to the public. 	We note that
Defendant 	does 	not 	disagree 	with 	this 	proposition. 	In 	its 	brief, 	Defendant
acknowledges that “[n]o one can reasonably dispute that the conservation of open
space is a laudable, worthy[,] and commendable endeavor[] and that land so conserved
has a beneficial and salutary effect on both humanity and the environment.”
{14} 	Here, the Board adopted Plaintiff’s proposed findings of fact in their entirety.
We note the following pertinent findings of the Board, which were subsequently
adopted also by the district court.
b. 	The primary charitable purpose of [Plaintiff] is to acquire and hold
vacant, undeveloped and unimproved land located in the vicinity
of the Pecos River Canyon in San Miguel County, for the

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“tracks” to “tracts”
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purpose of preserving such land in its natural state and
thereby contributing to the preservation of the environment
and ecology of the Pecos River Canyon, for the benefit of
New Mexico and her citizens.
c. 	The Property . . . is completely vacant and undeveloped, and
except for perimeter fencing and a primitive road it contains no
improvements and is in a generally natural, undisturbed state.
d. 	The property is situated in the Pecos River Canyon and is
approximately one-quarter mile from the Pecos River itself.
. . . .
f. 	[Plaintiff’s] intention in acquiring and holding the Property is
solely to preserve the Property in its natural state, to enforce and
respect the terms of the conservation easement granted with
respect to the Property, and to take reasonable steps to enhance the
natural qualities of the Property, consistent with [Plaintiff’s]
purposes and within the terms of the conservation easement, such
as reducing erosion and repairing other damage to the Property,
and in addition to acquire and preserve other vacant, undeveloped
tracts in the same vicinity so as to maximize the amount of
protected, undisturbed land for natural habitat and open space.
g. 	The Secretary of the New Mexico Department of Energy,
Minerals and Natural Resources has determined that the Property
is an important habitat area or contains significant natural, open
space or historic resources, under the provisions of the New
Mexico Land Conservation Incentives Act, [Sections] 75-9-1
through 75-9-6.
{15} 	The Board’s adoption of Plaintiff’s proposed findings of fact demonstrates that
it agrees that conservation confers a substantial public benefit. 	Nevertheless, the

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Board concluded as a matter of law that our prior jurisprudence did not “permit a
finding that pure conservation constitutes a charitable use of [the P]roperty.” 	On
appeal to the district court, relying exclusively on the factual findings of the Board,
the district court reached an opposite legal conclusion, namely, that owing to the
public benefit derived therefrom, conservation of the Property in this case constitutes
a “charitable purpose” and therefore qualifies the Property for a constitutional tax
exemption under Article VIII, Section 3.
{16} 	We agree that the Board’s findings support a determination that conservation
of this particular parcel confers a substantial benefit to the public. Given the land’s
proximity to the Pecos River, the natural and undisturbed quality of the land,
Plaintiff’s objective to preserve the land in its natural state, San Miguel County’s
public policy for conservation of the Pecos River, and the land’s significance as an
important habitat area or as an area containing significant natural, open space, or
historic 	resources, 	we 	conclude 	conservation 	of 	this 	parcel 	contributes 	to
environmental preservation and beautification of San Miguel County and the State of
New Mexico. Thus, this use provides a benefit of real worth and importance to the
public. It is also noteworthy that the Secretary of the New Mexico Energy, Minerals,
and Natural Resources Department permitted Coonley to claim credit for the donation
of the Property to Plaintiff on her income taxes in accordance with Section 7-2-18.10.

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{17} 	In light of our holding today, we additionally emphasize that the exemption
from property taxes pursuant to Article VIII, Section 3 in this context is not applicable
to routine activity or inactivity summarily denoted to be “conservation,” but which
benefits only the owner or a limited number of people or interested parties. Nor is
every act of conservation of a parcel or piece of property inherently suitable to be
classified as substantially beneficial to the public, and thus charitable. 	Such
determinations entail inquiries and determinations of fact by the county boards that
consider valuation protests in New Mexico.
{18} 	In reaching our holding, we reject Defendant’s specific arguments relating to
the Property. Defendant initially maintains that “conservation of open space for sound
environmental reasons and for the enjoyment of those who may choose to gaze upon
it” does not constitute a charitable purpose because conservation of the Property does
not meet the “charitable purpose” requirement of conferring a substantial benefit upon
the public. 	Defendant adds that the “environmental benefit intended by the
conservation of the land is but a remote and consequential benefit derived from its use
as a conserved open space but such use does not constitute a direct and immediate use
of the [P]roperty for a charitable purpose.” 	(Internal quotation marks omitted.)
Defendant’s 	arguments 	misapply 	our 	pre-existing 	Article 	VIII, 	Section 	3
jurisprudence.

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{19} 	Relying on Grace, Inc. v. Board of County Commissioners, 97 N.M. 260, 261,
639 P.2d 69, 70 (Ct. App. 1981), and NRA Special Contribution Fund, 92 N.M. at
545, 591 P.2d at 676, Defendant contends that “the charitable purpose exemption
should [not] be allowed for land that is idle, unimproved and not in actual use . . . or
for which there is no direct and immediate charitable use, and for which the claimed
environmental benefit—even if construed to be a charitable purpose—is, at best,
remote and consequential.” Defendant’s reliance on these two cases is unpersuasive
in the context here because both Grace, Inc., 97 N.M. at 261, 639 P.2d at 70, and NRA
Special Contribution Fund, 92 N.M. at 545, 591 P.2d at 676, deal specifically with
plaintiffs seeking property tax exemptions for religious or educational uses which are
of a category verifiable only by affirmative observation.
{20} 	In Grace, Inc., a non-profit corporation, which was owned by a church and had
the sole purpose of acquiring and holding land on which future churches would be
constructed, was denied a tax exemption for a vacant lot that it owned within the state.
97 N.M. at 260-61, 639 P.2d at 69-70. The corporation appealed, arguing that the
Article VIII, Section 3 exemption applied because the lot was church property not
used for commercial purposes. 	Id. 	This Court concluded that “church property”
within Article VIII, Section 3 meant “property required for the use of the church.” Id.
at 260, 639 P.2d at 69. Since the vacant lot was not in use by the church, it could not

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be covered by the exemption. Id. at 261-62, 639 P.2d at 70-71. The rationale behind
the holding in Grace, Inc. does not apply to the case before us. In Grace Inc., we
considered prior cases and concluded that the determination of whether a parcel was
“church property” depended not on mere ownership by a church, but rather
“affirmative, active, non-taxable use” by the church. 	Id. at 261, 639 P.2d at 70.
Under this interpretation of “use,” to qualify a parcel as church property inherently
requires some church activity to be conducted on the property. 	Id. 	Unlike
conservation, church use requires more than non-use. To apply the meaning of use
for church property to the case at bar, as Defendant proposes, takes the holding in
Grace, Inc. out of context.
{21} 	In NRA Special Contribution Fund, 92 N.M. at 545, 591 P.2d at 676, this Court
reviewed the denial of tax exempt status under Article VIII, Section 3 to the National
Rifle Association of America’s (NRA) 36,300-acre ranch, on which it claimed to
provide educational services. 	The NRA argued that it provided survival training,
outdoor education, and firearm training on the ranch that qualified the property for the
exemption. Id. at 543-45, 591 P.2d at 674-76. In concluding that we lacked sufficient
evidence to determine if the land was actually being used for educational purposes,
we noted that much of the large ranch was completely undeveloped and “unused for
any immediate or future purpose.” Id. at 550, 591 P.2d at 681. We concluded that,

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“dependant” to “dependent”
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“because of its present unsuitability to the actual activities of the use of the land, [such
unused parts of the property] will not qualify for tax exemption in the absence of
legislation.” Id. at 551, 591 P.2d at 682. The rationale behind this conclusion is that
inherent in “educational use” is the need for some educational activity to occur on the
land and a proper determination that the land be suitable for such educational
activities. 	We held that “[l]and must be an integral part of a use for educational
purposes.” Id. at 550, 591 P.2d at 681 (internal quotation marks and citation omitted).
{22} 	Thus, the interpretation of “use” in NRA Special Contribution Fund is also
inapplicable to our analysis of conservation. The fact that the land is unoccupied and
unimproved in the present case does not have the similar effect of disqualifying the
property from the Article VIII, Section 3 tax exemption. Whether the property is in
use is completely dependent upon what the proposed use is. And, we cannot expect
“use” to be characterized in the same way for different kinds of exemptions. 	The
evidence required to show that the Property is being used for purposes of conservation
for the substantial benefit of the public is very different from the proof needed to show
that a given property is used for religious or educational purposes.
{23} 	Defendant appears to contend that by not specifically performing activities on
the Property, Plaintiff cannot claim a charitable use. In making this claim, Defendant
ignores the fact that the way conservation benefits the public is through maintaining

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the Property for the public’s benefit in its natural, pristine state without any particular
human activities or construction. Our holding is consistent with Grace, Inc. and NRA
Special Contribution Fund in that we require both (1) the land to be suitable for
conservation and (2) the activities performed on the land to be consistent with
conservation.
{24} 	Moreover, application of the standards advanced in Grace, Inc. and NRA
Special Contribution Fund to the facts of this case demonstrates that our holding is
consistent with those cases. Having concluded that conservation can be a charitable
purpose, Grace, Inc. and NRA Special Contribution Fund guide us to consider (1)
whether the Property is being directly, immediately, primarily, and substantially used
for conservation, and (2) whether that use of the property is promoting the object or
purpose of conservation. 	See Grace, Inc., 97 N.M. at 260-61, 639 P.2d at 69-70
(explaining that property owned by church must be “direct[ly] and immediate[ly]”
used “to promote the object or purpose of the church” (internal quotation marks and
citations omitted)); NRA Special Contribution Fund, 92 N.M. at 548, 591 P.2d at 679
(explaining that “used for educational purposes” entails the “direct, immediate,
primary[,] and substantial” purpose of systematic instruction that confers a substantial
benefit on the public (internal quotation marks omitted)). Here, the facts found by the
Board and the district court and set out earlier in this Opinion satisfy both aspects of

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that inquiry and there is no evidence in the record to suggest that any portion of the
Property was, at any time relevant to this appeal, used for any purpose other than its
stated charitable purpose of conservation.
{25} 	In sum, owing to the substantial public benefit derived from conservation of the
Property, conservation in this case constitutes a charitable purpose that qualifies the
Property for a tax exemption under Article VIII, Section 3 of the New Mexico
Constitution. Our holding in this regard is consistent with the legal principles that
have been applied in past cases considering eligibility for tax exemption under our
Constitution. 	Defendant provides no persuasive basis for a contrary holding.
Accordingly, we see no basis for reversal of the district court’s order.
III. 	CONCLUSION
{26} 	For the reasons stated above, we affirm the district court.
{27} 	IT IS SO ORDERED.
________________________
J. MILES HANISEE, Judge

WE CONCUR:

JONATHANB. SUTIN, Judge

MICHAEL E. VIGIL, Judge

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