In re Spring Brook Farm Foundation, Inc.
Annotate this Case
IN_RE_SPRING_BROOK_FARM_FDN.94-332; 164 Vt 282; 671 A.2d 315
[Filed 27-Oct-1995]
NOTICE: This opinion is subject to motions for reargument under
V.R.A.P. 40 as well as formal revision before publication in the Vermont
Reports. Readers are requested to notify the Reporter of Decisions,
Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
any errors in order that corrections may be made before this opinion goes
to press.
No. 94-332
In re Spring Brook Farm Supreme Court
Foundation, Inc.
On Appeal from
Environmental Board
February Term, 1995
Arthur Gibb, Chair
Stephen R. Crampton and Dennis R. Pearson of Gravel and Shea, Burlington,
for appellant
John D. Hansen, Rutland, for appellee
Jeffrey L. Amestoy, Attorney General, and Mary L. Borg, Assistant Attorney
General, Montpelier, for amicus State of Vermont
PRESENT: Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.
JOHNSON, J. Today, we conclude that the exchange element of the
commercial purpose test for determining Act 250 (10 V.S.A. §§ 6001-6108)
jurisdiction incorporates projects where a third person pays the provider
of the facility goods or services for the benefit of another. Accordingly,
we affirm the Environmental Board's decision requiring Spring Brook Farm
Foundation, Inc. (Foundation), a charitable organization, to obtain an Act
250 land use permit prior to constructing a dormitory/residence hall on a
44.5-acre tract.
The Foundation is a New York not-for-profit corporation recognized by
the Internal Revenue Service (IRS) as a public charitable foundation. The
Foundation was formed "to receive and administer funds for scientific,
educational, and charitable purposes within the meaning of Section
501(c)(3) of the Internal Revenue Code . . . and in this connection to
bring underprivileged children to a rural setting." The Foundation is
registered to do business in Vermont for the purpose of providing
inner-city children "the opportunity to visit a working
farm and observe animal husbandry, crop cultivation and harvesting
and, through this, to expose the children to usable, practical skills in
farming and related areas." In 1992, consistent with its stated purpose,
the Foundation purchased the 569.5-acre Spring Brook Farm from the Vermont
Land Trust with the intent of establishing its "Farms For City Kids"
program there.
Members of the Hagedorn family, the owners of Stern's Miracle-Gro
Products, Inc., provided most of the initial funding for the Foundation.
The president of the Foundation's Board of Directors, James Hagedorn, is
also the Executive Vice-President of Stern's Miracle-Gro Products.
Intending to become self-supporting, the Foundation plans to solicit
charitable donations from the general public and business community. The
Foundation refuses to accept any payments or funds from the students, their
parents, or the schools involved in the program.
Because of restrictive covenants governing the farm property, the
Foundation purchased an adjacent 44.5-acre tract on which it proposes to
construct a two-story classroom/residence hall containing 5425 square feet.
The proposed building is intended to house the children and their teachers
in six four-person bedrooms, two single bedrooms, and numerous common
areas. The building would also serve as a classroom for the program.
Once in operation, the Foundation expects to bring groups of up to
twenty students, advertised in the Foundation's promotional literature as
"Miracle-Gro kids," along with two teachers, to Spring Brook Farm. The
students, primarily from grades four to six, will stay at the Farm for one
to three weeks. During this time, they will participate in the daily life
on the Farm, learning about agriculture, forestry and the environment. The
program is expected to run up to nine months each year.
In June 1993, the Foundation requested an advisory opinion from the
District 2/3 Environmental Commission Coordinator to determine whether the
proposed classroom/residence hall would be subject to Act 250 jurisdiction.
The Coordinator concluded that the project required an Act 250 permit, and
the Foundation appealed to the Environmental Board. The Board also
concluded that the project triggered Act 250 jurisdiction. It reasoned
that the project
was a development because it was a construction of improvements on a
tract of land involving more than ten acres for a commercial purpose. See
10 V.S.A. § 6001(3). The Board concluded that the commercial purpose test
was satisfied, within the language of Board Rules 2(L) and 2(M), because
the Foundation would provide facilities to the students in exchange for
contributions and donations by third parties. The Foundation appeals.
Vermont's land use law, Act 250, requires a permit prior to the
commencement of any development. 10 V.S.A. § 6081(a). A development
includes the construction of improvements on a tract of land involving more
than ten acres for commercial or industrial purposes. Id. § 6001(3). The
Board has defined "commercial purpose" as "the provision of facilities,
goods or services by a person other than for a municipal or state purpose
to others in exchange for payment of a purchase price, fee, contribution,
donation or other object having value." Environmental Board Rule 2(L). The
Board includes a commercial dwelling within the concept of a commercial or
industrial purpose. Id. 2(A)(2). A "commercial dwelling" is
any building or structure or part thereof, including but not limited
to . . . dormitories and other places for the accommodation of people, that
is intended to be used and occupied for human habitation on a temporary or
intermittent basis, in exchange for payment of a fee, contribution,
donation or other object having value.
Id. 2(M). These Board Rules were ratified by the Legislature in 1985;
therefore, they have the same force and effect as any other law passed by
the Legislature. 1985, No. 52, § 5; In re Spencer, 152 Vt. 330, 336, 566 A.2d 959, 962 (1989).
On appeal, we will defer to the Board's interpretation of Act 250 and
its own duly promulgated rules, unless there is a compelling indication of
error. In re BHL Corp., 161 Vt. 487, 490, 641 A.2d 771, 773 (1994).
Indeed, the Board's application of Act 250 to a specific project is
entitled to a presumption of validity. In re Burlington Hous. Auth., 143
Vt. 80, 83, 463 A.2d 215, 217 (1983).
The central issue in this case is whether Rules 2(L) and 2(M) require
a direct exchange between a provider and recipient of services. Because
the rules have been ratified by the
Legislature, we must follow the rules of statutory interpretation.(FN1)
The primary goal in construing a statute is to effectuate the intent of the
Legislature; and we will presume the Legislature intended the plain meaning
of the statute. Bisson v. Ward, 160 Vt. 343, 348, 628 A.2d 1256, 1260
(1993). "[W]hen the meaning of a statute is plain and unambiguous on its
face, it must be enforced according to its express terms." In re
Burlington Hous. Auth., 143 Vt. at 83, 463 A.2d at 217.
The plain language of the definition of "commercial purpose" in Rule
2(L) includes the Foundation's program. The elements of the rule require:
(1) the provision of facilities, goods or services, (2) by a person, (3)
other than for a municipal or state purpose, (4) to others, (5) in exchange
for, (6) payments of a purchase price, fee, contribution, donation or other
object having value. All of these elements are satisfied. The
classroom/residence hall is provided by the Foundation (not for municipal
or state purposes) to underprivileged children in exchange for donations
and contributions.
Similarly, the plain language of the definition of "commercial
dwelling" in Rule 2(M) also includes the Foundation's program. The
elements of Rule 2(M) require: (1) any building or structure or part
thereof, (2) intended for human habitation, (3) on a temporary or
intermittent basis, (4) in exchange for, (5) payment of a fee,
contribution, donation, or other object having value. The
classroom/residence hall is intended for the children and their teachers
during their one-to-three-week stay in exchange for donations and
contributions.
The Foundation argues that the "in exchange for" element in both
definitions is not satisfied because the beneficiaries of the facility --
the underprivileged children -- do not provide the payment. In essence,
the Foundation claims the definition implies the requirement of a direct
exchange. We disagree. Nothing in the statute or the policy of Act 250
mandates a direct
exchange.
The language of the definitions -- specifically, the words "donation"
and "contribution" -- implies that the drafters did not intend to require
a direct exchange. Donations and contributions convey the concept of
giving; "a person cannot be required to give a donation in exchange for
some consideration [because] by its very definition a gift is a voluntary
transfer without consideration." In re Baptist Fellowship of Randolph,
Inc., 144 Vt. 636, 639, 481 A.2d 1274, 1276 (1984). Any direct exchange
requirement would impermissibly render these terms superfluous. Trombley
v. Bellows Falls Union High Sch., 160 Vt. 101, 104, 624 A.2d 857, 860
(1993); Baptist Fellowship, 144 Vt. at 639, 481 A.2d at 1276 .
Moreover, the plain meaning is consistent with the purpose of the
statute, its subject matter, its effects and consequences, and the reason
and spirit of the law. Nash v. Warren Zoning Bd. of Adjustment, 153 Vt.
108, 112, 569 A.2d 447, 450 (1989). The purpose of Act 250 is "to protect
and conserve the lands and the environment of the state and to insure that
these lands and environment are devoted to uses which are not detrimental
to the public welfare and interests." 1969, No. 250 (Adj. Sess.), § 1.
The Act requires a focus on the impact of the land use, not the nature of
the institutional activity. Baptist Fellowship, 144 Vt. at 639, 481 A.2d
at 1276; see In re BHL Corp., 161 Vt. at 490-91, 641 A.2d at 773 (approving
Board's premise that proper starting point for determining Act 250
jurisdiction is actual use of land).
In determining whether activity constitutes a commercial purpose, as
defined in Rule 2(L), it is important to consider the distinction the
drafters were trying to make. Commercial development in relation to land
use implies regular use by multiple parties. By using the word "exchange,"
the Board intended to separate development for use by others from
development for personal use. In fact, the definition of "commercial
purpose" specifically requires that the services be provided "to others."
It is irrelevant whether the funding is derived from the actual
beneficiary of the project or a third party because such distinctions do
not affect land use. The Legislature apparently
recognized that funding distinctions were irrelevant to land use.
Notably, while certain land uses are specifically exempt from Act 250
jurisdiction, nonprofit uses are not so excluded. Baptist Fellowship, 144
Vt. at 640, 481 A.2d at 1276; 10 V.S.A. § 6001(3). To permit the
distinction of profit versus nonprofit, or payment by beneficiary versus
donation by a third party, to affect application of land use regulations
would allow charitable organizations, whose projects may substantially
affect land use, to escape the purview of Act 250 merely because their
funding is different from other organizations. See In re Southview
Assocs., 153 Vt. 171, 175, 569 A.2d 501, 503 (1989) (Court must avoid
construction that would render statute ineffective or irrational).
The jurisdictional determination properly focuses on the developer.
The definition requires that the developer get something of value in
exchange for providing the facilities, goods or services. In considering
the developer's activity, it is irrelevant whether the payment comes from
the beneficiary of the facilities, goods, or services or from a third
party. All that is required is some sort of exchange between the developer
and another party. Similarly, the law of contract formation requires some
sort of consideration regardless of whether it is provided by the
beneficiary of the contract or a third party. See 2 J. Perillo & H.
Bender, Corbin on Contracts § 5.12 (rev. ed. 1995).
We conclude that an indirect exchange is sufficient to satisfy the
commercial purpose test of Rule 2(L) -- that is, it is not necessary that
the person providing the payment be the person who receives the benefit
from the facility or service. The crucial element of the commercial
purpose test for determining Act 250 jurisdiction is whether the developer
provides goods or facilities to others in exchange for something of value.
In this case, the Foundation will provide a facility to underprivileged
children in exchange for donations and contributions.
Application of the commercial purpose test in this case is entirely
consistent with previous applications of the test. In BHL Corp., the
landowner provided shale to others in exchange for money and use of
excavation equipment. 161 Vt. at 491, 641 A.2d at 773-74.
In Vermont Agency of Natural Resources v. Duranleau, 159 Vt. 233,
237-38, 617 A.2d 143, 146 (1992), the landowner provided crushed rock to
the town in exchange for money and an enlarged business site. In Baptist
Fellowship, the church provided a sanctuary to its members in exchange for
donations. 144 Vt. at 639-40, 481 A.2d at 1276. In these cases, the
commercial purpose test was satisfied because the developer received
something of value in return for providing the goods or facility to others.
The Foundation contends that our reliance on a de facto exchange in
Baptist Fellowship mandates a different result. The Foundation misplaces
the emphasis of that case. While many of the contributors actually
benefitted from the Church's facilities, we specifically noted that the
church, much like the Foundation, did not require such an exchange.
Baptist Fellowship, 144 Vt. at 639, 481 A.2d at 1276. Moreover, the
determination of Act 250 jurisdiction also relied on the inclusion of the
words "donation" and "contribution" in the language of the definition and
on the policy of Act 250, favoring a focus on land use rather than the
particular institutional activity associated with that land use. Id.
The Foundation further argues that this interpretation of the rule
eviscerates the general meaning of commercial purpose -- thus impermissibly
expanding the jurisdiction of Act 250. The term "commercial," however, can
have many different meanings depending on the context in which it is used.
See 9 V.S.A. § 2351(15) (defining "commercial purpose" in context of motor
vehicle financing as "a purpose related to the production, exhibition,
marketing, transportation, processing or manufacture of goods or services
by any person, where the cash price of the motor vehicle, exclusive of any
finance charges, exceeds the sum of $20,000"); 10 V.S.A. § 1381(1)
(defining "commercial establishment" in context of the Water Pollution
Control Act to include charitable activities). In deciding Act 250
jurisdiction, we must view the term "commercial purpose" within the context
of a land use statute, not as a tax statute or trade regulation. Viewing
the language of Rule 2(L) in this context, "commercial purpose" refers to
land use by multiple parties as a result of the developer's provision of
facilities, goods or
services. We are bound by the language of that definition as adopted
by the Board and ratified by the Legislature, not by a general concept of a
commercial purpose. Having followed the language of the definition within
the spirit of a land use statute, we have not expanded the jurisdiction
beyond the intent of the Legislature. See In re Agency of Administration,
141 Vt. 68, 76, 444 A.2d 1349, 1352 (1982) (although purpose of Act 250 is
broad, it was not intended to reach all land use changes within state).
Moreover, our holding does not empty the term "commercial" of any content
in this context. A distinction remains, for example, between nonprofit
commercial development and development for personal residential or
recreational use.
The Foundation's arguments fail to consider the context of the case --
jurisdiction for land use permits. The Foundation would treat a project
funded by a wealthy philanthropist who does not directly benefit from the
project differently from the same project funded by the people who use that
project. While such distinctions may be critical for tax purposes or trade
regulation, they are irrelevant in the context of a land use statute. The
environmental impacts of a dormitory funded by third parties are exactly
the same as the impacts of a dormitory funded by the people who use that
dormitory. If, instead of building a residence hall for underprivileged
children, the Foundation proposed building an incinerator or a factory for
agricultural research, Act 250 jurisdiction would undoubtedly be less
controversial. While we applaud the ultimate purpose of the Foundation's
mission, we refuse to rely on inappropriate distinctions to create
exceptions to Act 250 jurisdictional requirements.
Affirmed.
FOR THE COURT:
___________________________
Associate Justice
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Footnotes
FN1. The Legislature's ratification of these rules defeats the
argument that the Agency exceeded its statutory authority in promulgating
the rules. Our consideration of the Legislature's intent must be based
both on the statute and on the rules.
----------------------------------------------------------------------------
Concurring
NOTICE: This opinion is subject to motions for reargument under
V.R.A.P. 40 as well as formal revision before publication in the Vermont
Reports. Readers are requested to notify the Reporter of Decisions,
Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
any errors in order that corrections may be made before this opinion goes
to press.
No. 94-332
In re Spring Brook Farm Supreme Court
Foundation, Inc.
On Appeal from
Environmental Board
February Term, 1995
Arthur Gibb, Chair
Stephen R. Crompton and Dennis R. Pearson of Gravel and Shea,
Burlington, for appellant
John D. Hansen, Rutland, for appellee
Jeffrey L. Amestoy, Attorney General, and Mary L. Borg, Assistant
Attorney General, Montpelier, for amicus State
PRESENT: Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.
ALLEN, C.J., concurring. I concur in the result because the building
which the Foundation proposes to construct comes within the definition of
"commercial dwelling" in Board Rule 2(M). It is intended to be occupied by
humans, on an intermittent basis, and in exchange for contributions and/or
donations. The legislative ratification of the rule requires that we
enforce its plain meaning. I agree with the dissent that Rule 2(L) does
not apply because the de facto exchange found to exist in In re Baptist
Fellowship, 144 Vt. 636, 481 A.2d 1274 (1984) is not present here.
According to the findings, the Foundation will construct the building using
existing resources. The Foundation's goal is for its program to become
self-supporting in the future through contributions. The construction of
the facility by the Foundation is not in exchange for donations or
contributions.
_______________________________________
Chief Justice
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Dissenting
NOTICE: This opinion is subject to motions for reargument under
V.R.A.P. 40 as well as formal revision before publication in the Vermont
Reports. Readers are requested to notify the Reporter of Decisions,
Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
any errors in order that corrections may be made before this opinion goes
to press.
No. 94-332
In re Spring Brook Farm Supreme Court
Foundation, Inc.
On Appeal from
Environmental Board
February Term, 1995
Arthur Gibb, Chair
Stephen R. Crompton and Dennis R. Pearson of Gravel and Shea,
Burlington, for appellant
John D. Hansen, Rutland, for appellee
Jeffrey L. Amestoy, Attorney General, and Mary L. Borg, Assistant
Attorney General, Montpelier, for amicus State
PRESENT: Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.
DOOLEY, J., dissenting. Today, the majority has written the
commercial purpose test out of Act 250, implementing the view that any
major development should be subject to Act 250 jurisdiction. Since the law
implemented by the majority opinion bears no relation to that enacted by
the Legislature, I dissent.
The majority opinion is clearly at odds with the legislative intent
and the words chosen to define Act 250 jurisdiction. The state defines
"development" to mean "construction of improvements on a tract or tracts of
land . . . involving more than 10 acres of land . . . for commercial and
industrial purposes." 10 V.S.A. § 6001(3). By limiting development to
that for commercial or industrial purposes, the Legislature made a
conscious decision not to regulate all land use that has environmental
impacts. We described that decision in In re Agency of Admin., 141 Vt. 68,
76, 444 A.2d 1349, 1352 (1982):
[A]lthough the purposes of Act 250 are broad, the Legislature in
passing the Act did not purport to reach all land use changes
within the state, nor to impose the substantial administrative and
financial burdens of the Act, or interfere with local control of land
use decisions, except where values of state concern are implicated
through large scale changes in land utilization. . . . The Act was
a philosophic compromise between a desire to protect and control
all the lands and environment of the State of Vermont, and the
need to avoid an administrative nightmare. . . . The importance
of this compromise aspect of the legislation to our decision here is
well illustrated by the history behind the legislative definition of
"development" now codified at 10 V.S.A. § 6001(3).
Id. (Citations omitted.)
Although we have never explored the reason for the legislative choice,
the rationale for an identical choice in the Maine environmental law has
been explained by the Maine Supreme Court:
We think that the use of the word "commercial" was intended to
describe the motivation for the development and not the type of
activity to be performed on the property after it is developed. We
consider that the Legislature chose to distinguish between
commercial and non-commercial developments for a sound reason
-- it doubtless concluded that a greater need for supervision exists
in the case of commercially motivated development where the
dominant factor is the hope for profit than in a non-commercial
development where land is being prepared for public enjoyment or
divided for family distribution or for some other purpose than
profit. In other words, commercial residential developments have
a propensity for being big, concentrated and exhausting to the
resources of the environment.
In re Spring Valley Dev., 300 A.2d 736, 742 (Me. 1973). I have no
doubt that the Vermont Legislature's rationale is similar. Act 250 is an
environmental control law because the Legislature saw that certain land
uses were "destructive to the environment and . . . not suitable to the
demands and needs of the people of the state." 1969, No. 250 (Adj. Sess.),
§ 1 (statement of findings and declaration of intent). As in Maine, the
Legislature drew a line that it thought would capture developments
particularly "big, concentrated and exhausting to the resources of the
environment" without using a more vague, discretionary and difficult-to-
administer jurisdictional standard. It is our duty to protect and enforce
this legislative choice.
Contrary to the majority's characterization, the term "commercial
activity" has a clear, commonly accepted meaning in land use regulation.
It denotes "any type of business or activity which is carried on for a
profit." Black's Law Dictionary 270 (6th ed. 1990); see Siegel v. City of
Oakland, 145 Cal. Rptr. 62, 67 (Cal. Ct. App. 1978) (term imports commerce,
trade, business, industry or enterprise having financial profit as primary
aim); Roberts Enters., Inc. v. Secretary of Transp., 699 P.2d 479, 483
(Kan. 1985) (same); Lanski v. Montealegre, 104 N.W.2d 772, 774 (Mich. 1960)
(in broad sense, commercial activity includes any type of business or
activity carried on for profit); Imbergamo v. Barclay, 352 N.Y.S.2d 337,
341 (N.Y. Sup. Ct. 1973) (term "commercial" in zoning law denotes uses for
profit); Cordell v. Codington County, 526 N.W.2d 115, 117 (S.D. 1994)
(adopting the Blacks' Law Dictionary definition). We defined it in the
context of commercial property in Lewis v. Town of Brandon, 132 Vt. 37, 42,
313 A.2d 673, 676 (1973): "The primary purpose of commercial property is to
produce an income or profit for the owner." No one could conceive that the
activity in this case would come even close to a commonsense definition of
"commercial."
The majority's answer to the obvious mislabeling of petitioner's
activity as commercial is that the Environmental Board has specially
defined the word "commercial," and the Legislature has ratified that
definition, in a way different from the normal definition. I agree that
the definition in Environmental Board Rule 2(L) expands the definition
beyond its normal limits, but cannot agree that the new definition has
somehow created a license to further expand the definition to the point
where it is defined by its antonym. This process reminds me of the
children's game where a phrase is passed from person to person to compare
its final version with that uttered originally. As here, the result is
often a distortion of the original phrase, made possible by slight
differences in restatement by persons who do not know what the original
phrase was. Only if you do not know, or apply, the Legislature's term
"commercial" can you reach a definition that includes this petitioner's
activities within it.
I agree that the critical precedent is In re Baptist Fellowship, 144
Vt. 636, 481 A.2d 1274 (1984), where we held that the Rule 2(L) definition of
"commercial purpose" is broad enough to encompass a nonprofit church
development funded by church parishioners. Id. at 639, 481 A.2d at 1276.
We agreed that the financial arrangement between the church and the
parishioners had the exchange element of a commercial transaction because
the parishioners were providing money to construct the church in order to
use that facility and take part in the religious services provided within
it. Id. Here, there is no exchange like that required in Baptist
Fellowship. Only by holding that the elements found determinative in
Baptist Fellowship are superfluous and unnecessary can we say that there is
a commercial purpose here.
The alternative theory of exchange found by the majority is present in
every charitable or nonprofit activity and result in the evisceration of
any commonsense definition of "commercial." The majority holds that
because persons who give to petitioner's charitable activities expect
something charitable to be done with the money, there is, therefore, an
exchange of the donation for the charitable activities. Since no one who
gives to a charity is uninterested in the beneficial purposes to which the
charity is dedicated, all charitable giving fits within the majority's
exchange rationale. The result of this distorted application of an
exchange is that a term which is associated with profit-making activity is
now defined to include all activity conducted on a not-for-profit basis.
As the majority states, we must defer to the Board's interpretation of
the Act and its rules, absent compelling indication of error. On the other
hand, the Board "may not use its rule-making authority to enlarge a
restrictive grant of jurisdiction from the Legislature." In re Agency of
Admin., 141 Vt. at 76, 444 A.2d at 1352. I can think of no greater
indication of error than that the Board turns a word restricting its
jurisdiction into its opposite in order to establish jurisdiction. After
today's decision, the word "commercial" is effectively deleted from the
statute. I dissent.
-----------------------------
Associate Justice
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