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SCOPE OF REVIEW facilities. Of the nine assisted living facilities owned by
<br /> Bethesda in Arizona, Colorado, Missouri, and Nebraska,
<br /> Appellate review of a decision by TERC shall be five have received property tax exemptions. Bethesda
<br /> conducted for error on the record of TERC.Neb.Rev.Stat.§ qualifies as a §501(c)(3) organization as described in the
<br /> 77-5019(5)(Supp.2001). Internal Revenue Code.
<br /> 1640 N.W.2d 4011 When reviewing ajudgment for errors Page 457
<br /> appearing on the record,the inquiry is whether the decision
<br /> conforms to the law, is supported by competent evidence, In its application for an exemption,Bethesda asserted that
<br /> and is neither arbitrary, capricious, nor unreasonable. Cambridge Court is operated exclusively for the mental,
<br /> County of Douglas v. Nebraska Tax Equal. &Rev. Comm., social,or physical benefit of the public because it provides
<br /> 262 Neb. 578, 635 N.W.2d 413 (2001). However, in care for elderly persons who are less than totally
<br /> instances where an appellate court is required to review self-sufficient.Seven of the 41 units at Cambridge Court are
<br /> cases for error appearing on the record,questions of law are set aside for residents who require rent subsidies through
<br /> reviewed de novo on the record.Id. the state Medicaid waiver program. These residents pay
<br /> $400 to$500 per month less than do those who have their
<br /> FACTS own financial .resources. Monthly rtes are $2,190 for
<br /> upstairs rooms and $2,135 for downstairs rooms.
<br /> At the time Bethesda filed its application, §77-202(1)(c) Cambridge Court's administrator testified at the hearing
<br /> provided for an exemption from property taxes if a property before the Board that the State pays $1,675 per month for
<br /> war - the seven Medicaid residents. Bethesda claimed that
<br /> owned by educational, religious, charitable, or cemetery Cambridge Court should be considered to be in the same
<br /> organizations and used ezclusiha for educational, category as a nursing home because most of its residents
<br /> religious,charitable, or cemetery purposes, when such 1640 N.W.2d 4021 would be in a nursing home if they were
<br /> not living at Cambridge Court.
<br /> property is not(i)owned or used for financial gain or profit
<br /> to either the owner or user,(ii)used for the sale of alcoholic After a hearing on May 9, 2000,the Board voted to deny
<br /> liquors for more than twenty hours per week,or(iii)owned the exemption request. Bethesda appealed the denial to
<br /> or used by an organization which discriminates in TERC,which found that the Board's decision to deny the
<br /> membership or employment based on race, color, or application for an exemption was not unreasonable or
<br /> national origin.... For purposes of this subdivision, arbitrary.TERC concluded that Bethesda did not meet the
<br /> charitable organization shall mean an organization operated statutory definition of a charitable organization and that the
<br /> exclusively for the purpose of the mental,social,or physical facility was not exclusively or predominantly used for
<br /> benefit of the public or an indefinite number of persons[.] charitable purposes. TERC affirmed the denial of the
<br /> The property for which Bethesda sought an exemption for exemption,and Bethesda appealed.
<br /> the 2000 tax year is an assisted living facility known as ASSIGNMENTS OF ERROR
<br /> Cambridge Court, located at 4107 Central Avenue in
<br /> Kearney,Nebraska. The state-licensed facility includes 41 Bethesda assigns five errors,which can be summarized to
<br /> residential units, a common dining room, a multipurpose assert that(1)TERC's decision to affirm the denial of the
<br /> room,an activities area, business offices, a nurses' station, tax exemption is contrary to the law, is not supported by
<br /> and lounge areas. The staff includes licensed practical competent evidence, and is arbitrary, capricious, and
<br /> nurses who are on duty full time on the day and evening unreasonable; (2) TERC erroneously applied the
<br /> shifts, nurses' aides who are on duty 24 hours daily, a presumption that the Board faithfully performed its duties
<br /> full-time night "med-aide," and a licensed practical nurse and acted upon sufficient competent evidence; and (3)
<br /> who provides management services.Each room is equipped TERC erred in affirming the Board's decision, which
<br /> with an emergency call system.Residents receive assistance affirmance violated the uniformity clause of the state
<br /> with bathing,dressing,and ambulation,and medications are Constitution and denied Bethesda equal protection of the
<br /> monitored.Three meals are provided each day, as well as law under the state Constitution because similarly situated
<br /> an evening snack. Bethesda also provides personal laundry property owners have been treated differently and there is
<br /> service,weekly housekeeping,activities,transportation,and no rational justification for this disparate treatment
<br /> utilities,except for telephone service.
<br /> Page 458
<br /> Bethesda was formed in 1967 to own and operate nonprofit
<br /> nursing homes. It later sold its nursing home assets and
<br /> converted to the ownership and operation of assisted living
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