GEORGE A. MCNEILL vs. BOARD OF ASSESSORS OF WEST SPRINGFIELD.

ABRAMS, J. The sole issue before us is whether the Appellate Tax Board (board) erred in its determination that a nursing home was classified properly as commercial property. See G. L. c. 59, Section 2A (b). [Note 1] The taxpayer, the owner of Riverdale

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Gardens Nursing Home (nursing home), claims that the appropriate classification is residential, not commercial. He appeals from the board's decision. See G. L. c. 58A, Section 13 (1984 ed.).

The nursing home was assessed property taxes for fiscal years 1982 and 1983 by the West Springfield board of assessors at the commercial (higher) rate. [Note 2] In doing so, the assessors applied the guidelines prepared and issued by the Commissioner of revenue (Commissioner) which classified nursing homes as commercial property. [Note 3] After paying the tax for FY 1982, the taxpayer applied for an abatement which was denied by the assessors. [Note 4] Application for abatement for FY 1983 was also denied. The taxpayer filed appeals from both denials with the Appellate Tax Board pursuant to G. L. c. 59, Sections 64 and 65 (1984 ed.). [Note 5] A decision in favor of the assessors was entered by the board on June 1, 1984, and findings of fact and report were entered on December 27, 1984. We affirm the decision of the board.

We summarize the facts as follows. The property is a one-story building located on 4.06 acres in a "Business A" zone in

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West Springfield. [Note 6] The main floor consists of two living rooms, two smoking rooms, three lounges, one examining room, one physical therapy room, three nurses' stations and sixty-six bedrooms. The bedrooms are shared by two persons and are equipped with intercom systems connected to the nurses' stations. As of January 1, 1981, there were 116 residents in the nursing home with an average stay of 2.7 years. As of January 1, 1982, there were 121 residents in the nursing home with an average stay of 2.8 years. The home is licensed to have forty one Level Two beds and eighty-four Level Three beds requiring a skilled level of care and an intermediate level of care, respectively. [Note 7] During 1981 and 1982, the nursing home employed approximately 115 persons, [Note 8] and grossed $1.5 million in 1981 and $1.65 million in 1982. The principal source of payment of the costs charged by the nursing home for more than one-half the residents was either Medicaid or Medicare. Between one-half and one-third of the remaining residents had at least partial costs reimbursed by a third-party payor.

The board found that the residents of the nursing home are individuals who should not live alone (because of infirmities associated with illness or advanced age) and who do not have a relative, friend, or the necessary help to care for them. Care and treatment and administering of medications are provided on a twenty-four hour basis. Other services include care of daily needs such as washing, bathing, feeding, changing clothes, and walking.

The thrust of the taxpayer's argument is that the nursing home falls within the statutory definition of residential property

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because it is a facility designed for "living, sleeping, cooking and eating." Further, those living in the nursing home are nontransient residents whose "continual and extended physical presence" makes the nursing home their dwelling place. [Note 9]

The taxpayer acknowledges that the statutory definition of residential is extremely broad and general and that the Legislature did not attempt to list, or specifically include, every type of residence. Nevertheless, he argues that if a property "fits" the generic description of a dwelling place, it must be classified as residential. The taxpayer asserts that the statute should be read as distinguishing between transient and nontransient persons. Thus, the taxpayer concludes that the fact that persons living at a nursing home are nontransient requires the board to classify nursing homes as residential. We do not agree.

Classification is part of a "comprehensive scheme" of property taxation which "permits an apportionment of the real property tax burden among commercial, industrial, open space, and residential property owners through usage classification." Keniston v. Assessors of Boston, 380 Mass. 888, 890, 891 (1980). G. L. c. 59, Section 2A (1984 ed.). The underlying rationale of classification is that the commercial and income-producing property owner pays more for local taxes because he receives more economic benefits from the community. See 8 P.J. Rohan, Real Estate Tax Appeals Section 3.05[3], at 3-60 to 3-61 (1984). To ensure uniformity in classification, "[t]he Commissioner has the power to issue guidelines which comprehend `the administration of all laws providing for the assessment and classification of property.'" Newton v. Commissioner of Revenue, 384 Mass. 115, 120 (1981). Macioci v. Commissioner of Revenue, 386 Mass. 752, 755-756 (1982). We may not substitute our judgment for that of the agency entrusted to implement the statutory scheme. See Johnson v. Martignetti, 374 Mass. 784, 791 (1978). Because "the board is a State agency charged with administering the tax abatement process, its determination is due some deference." French v. Assessors

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of Boston, 383 Mass. 481, 482 (1981). Applying these principles, we conclude that the board did not err in its determination that nursing homes should be classified as commercial property.

The taxpayer argues on two grounds that G. L. c. 59, Section 2A (b), must be read as distinguishing between transient and nontransient residency. First, the taxpayer points to the express inclusion of nontransient rooming houses in and the express exclusion of hotels and motels from "[c]lass one, residential." See note 1, supra. The fact that the Commissioner is given a specific statutory directive to act in a particular respect, however, does not operate to limit the Commissioner's is given a specific statutory directive to act in a particular respect, however, does not operate to limit the Commissioner's actions in other respects. See Grocery Mfrs. of Am., Inc. v. Department of Pub. Health, 379 Mass. 70, 76 (1979).

Second, the taxpayer asserts that the words "dwelling unit" and "human habitation" in the description of "[c]lass one, residential" apply to nursing homes and compel their classification as residential property. This is one possible interpretation of the statute. However, it is not the only one. The statute also may be read as distinguishing between units in which services are minimal and those in which services are essential to the habitation. Because the taxpayer's interpreation is not compelled by the statutory language, we give deference to the agency's interpretation of the tax statute. See Xtra, Inc. v. Commissioner of Revenue, 380 Mass. 277, 283 (1980).

"[T]he remaining question is whether [the] guidelines are a reasonable exercise of executive authority." Newton v. Commissioner of Revenue, supra at 121. The guidelines distinguish residential group quarters such as apartment buildings and dormitories from commercial group quarters such as nursing homes and halfway houses. We conclude that there is a reasonable basis for this differentiation. The salient distinction between nursing homes and residential group quarters is one not of transience, but of service.

The common thread of the commercial group quarters is their service-related functions and the relationship between those functions and the economic life of the enterprise. The entire economic basis for a nursing home is to provide services rather than simply to provide residential quarters. The board

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found that people enter nursing homes because they need care and treatment services and that the room and board provided is only a "necessary incident" to those services. It is clear that in the absence of these services none of the residents could use the nursing home as a dwelling place.

Moreover, the nursing home does not approximate normal family or residential living. [Note 10] The daily living routine of nursing home patients is highly supervised and closely regulated. [Note 11] The degree of supervision and regulation is incompatible with the activities normally associated with ordinary living or habitation.

In reaching its conclusion, the board also considered factors such as the average yearly cost per person ($13,000), the source of payments from health care providers, the ratio of employees to residents, and the number of employees performing functions relating to room and board. See note 8, supra. Thus, the nursing home properly could be classified as commercial.

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We conclude that the board did not err in holding that the guidelines properly classified nursing homes as commercial and that the assessors properly relied on these guideline in classifying the taxpayer's property.

The decision of the board is affirmed.

So ordered.