In Re the Appeal of Moravian Home, Inc.

EAGLES, Judge. Respondents Forsyth County and its Tax Assessor, W. Harvey Pardue, appeal an administrative decision of the Property Tax Commission ruling that all of Moravian Home’s real and personal property is exempt from ad valorem taxes. G.S. 105-322 provides the mechanism by which a taxpayer may appeal the county tax assessor’s listing and appraisal of its property to the County Board of Equalization and Review. In turn the county board’s decisions may be appealed to the Property Tax Commission. Brock v. Property Tax Comm., 290 N.C. 731, 228 S.E.2d 254 (1976). In the instant case the applicable statute governing procedure for appeals to the Commission is G.S. 105-324. We note that this statute was repealed effective 1 January 1988. The statute governing appeals to the Commission from a county board now in effect is G.S. 105-290(b). G.S. 105-324(b) provided, in part, that “[a]ny property owner of a county or member of the board of county commissioners or board of equalization and review may except to an order of the board of equalization and review entered under the provisions of G.S. 105-286,105-287,105-322, or 105-312 and appeal therefrom to the Property Tax Commission.” G.S. 105-290(b) provides that “[a]ny property owner of the county may except to an order of the county board of equalization and review.” We note that no party has the right of appeal from an administrative agency’s decision “unless the right is granted by statute.” In re Assessment of Sales Tax, 259 N.C. 589, 592, 131 S.E.2d 441, 444 (1963). See also In re Drainage, 261 N.C. 407, 134 S.E.2d 642 (1964) (per curiam). Furthermore, compliance with the statutes governing appeals from administrative bodies are conditions precedent to our review. In re Employment Security Com., 234 N.C. 651, 68 S.E.2d 311 (1951). Here both Moravian Home, a property owner within Forsyth County, and W. Harvey Pardue, Tax Assessor, appealed to the *329 Property Tax Commission. However, G.S. 105-324(b) allows only a “property owner of a county or member of the board of county commissioners or board of equalization and review” to appeal to the Commission. Mr. Pardue, the Tax Assessor, was not a member of the Board of County Commissioners or the Board of Equalization and Review. Accordingly, we hold that Forsyth County and its tax assessor could not appeal from the decision of its County Board of Tax Equalization and Review. Moravian Home was the only party here who could appeal the County Board’s decision to the Property Tax Commission. In appeals from decisions of the Property Tax Commission, G.S. 105-345(b) provides that “[a]ny party may appeal from all or any portion of any final order or decision of the [Property Tax] Commission in the manner herein provided.” Accordingly, even though the County could not appeal to the Property Tax Commission, Forsyth County’s appeal from the decision of the Property Tax Commission to the Court of Appeals is properly before us. I Forsyth County first argues that G.S. 105-275(32) is unconstitutional on its face because it violates the First Amendment’s Establishment Clause. We hold that Forsyth County does not have standing to raise constitutional issues in this proceeding. Accordingly, we need not discuss appellant’s constitutional issues. Our Supreme Court in In re Appeal of Martin, 286 N.C. 66, 75, 209 S.E.2d 766, 772 (1974), stated that in order to challenge the constitutionality of a tax statute, an appellant must be a “member of the class subject to the alleged discrimination.” G.S. 105-275(32) exempts certain homes for aged, sick, or infirm from ad valorem taxation. The County is not a member of this classification. The County also argues that it has standing because as in State v. Mems, 281 N.C. 658, 190 S.E.2d 164 (1972), the county is the only party in a position to raise the constitutional question. We disagree. There are other taxpayers within the state who are members of the affected class subject to the alleged discrimination who may still question the statute’s validity. Appeal of Martin at 75, 209 S.E.2d at 773. Accordingly, we hold that Forsyth County does not have standing to question the constitutionality of G.S. 105-275(32). *330 Forsyth County argues that two cases subsequent to Martin have allowed a city and the state, respectively, to challenge the constitutionality of a statute. We find both cases, Town of Emerald Isle v. State of N.C., 320 N.C. 640, 360 S.E.2d 756 (1987), and In re University of North Carolina, 300 N.C. 563, 268 S.E.2d 472 (1980), distinguishable. The University of North Carolina and the State appealed the listing and assessment of certain property owned by the University in In re University. The question raised there was not, as here, whether the taxing statute was unconstitutional, but whether the North Carolina Constitution exempted from taxation real and personal property belonging to the University. The Supreme Court ruled that the Constitution expressly exempted state owned property from taxation. Here Moravian Home does not argue that its exemptions are based on our Constitution but argues that the General Statutes exempt its property. The second case is also distinguishable. Town of Emerald Isle, relied on by Forsyth County, was a declaratory judgment action, not an administrative proceeding. There the Town of Emerald Isle brought a declaratory judgment action in superior court to determine the constitutionality of an act directing it and the Department of Natural Resources to acquire property near Bogue Inlet and provide public pedestrian access to the property. A declaratory judgment action is a proper method to question the construction or constitutionality of any statute. Jernigan v. State, 279 N.C. 556, 184 S.E.2d 259 (1971). The instant case arose through administrative agency appeals pursuant to Chapter 105 of the General Statutes. II Forsyth County next argues that the Commission’s decision is not supported by substantial evidence. Specifically, the County claims that sufficient evidence was not presented to establish the statutorily required “active program to generate funds ... to assist the home in serving persons who might not be able to reside at the home without financial assistance or subsidy.” G.S. 105-275(32)(vi). We disagree. G.S. 105-345.2 sets the standard for judicial review for appeals from the Property Tax Commission. In re McElwee, 304 N.C. 68, 283 S.E.2d 115 (1981). The reviewing court must “review the whole *331 record.” G.S. 105-345.2(c). In addition, if the Commission’s findings of fact or conclusions of law are not supported by “competent, material and substantial evidence in view of the entire record as submitted,” G.S. 105-345.2(b)(5), we may reverse. A taxpayer claiming an exemption from ad valorem taxation “has the burden of establishing that the property is entitled thereto.” G.S. 105-282.1(a). Additionally, if supported by substantial evidence the Commission’s findings are binding on appeal. See In re Forestry Foundation, 296 N.C. 330, 250 S.E.2d 236 (1979). Here the Commission expressly found that Moravian Home had an active program to generate funds to assist those who could not pay the fees charged by the Home. James L. Forkner, Chairman of the Board of Moravian Home, testified that the Home has established an Endowment Fund to assist the indigent. He further claimed that the Home actively solicits contributions for the fund. In addition, Mother’s Day was designated as Moravian Home Sunday with each reporting church seeking contributions specifically for the Endowment Fund on that day each year. This evidence is sufficient to support the Commission’s finding. We further hold that Moravian Home has met its burden of demonstrating that it falls within the class exempted from ad valorem taxes pursuant to G.S. 105-275(32). For the foregoing reasons we do not review the constitutionality of G.S. 105-275(32). However, we hold that the Property Tax Commission’s ruling that Moravian Home’s property should be excluded from ad valorem taxation is correct. Affirmed. Judges Parker and ORR concur.