Court Opinion

ID: 9733421
Source: CourtListenerOpinion
Date Created: 2023-08-26 17:07:22.879173+00
Date Added: 2024-06-11T18:26:41.391645
License: Public Domain

EICH, J.
(dissenting). I agree with the majority that tax exemption statutes are to be construed strictly against the exemption; but our construction must also be reasonable. “[A] strict construction is nonetheless a construction, and an exemption statute need not be given an unreasonable construction or the narrowest possible construction.’' Columbia Hospital Asso. v. Milwaukee, 35 Wis. 2d 660, 668, 151 N.W.2d 750, 754 (1967).
Tax exemptions are grounded in public policy; they are granted by the legislature on the theory that, by encouraging good works, they will benefit the public generally. United States v. Department of Revenue of State of Ill., 202 F. Supp. 757, 759 (N.D. Ill. 1962), aff’d, 371 U.S. 21 (1962). So viewed, exemption statutes, while construed strictly, should also be given a reasonable, natural and practical construction to effectuate the purposes for which they were created. National College of Business v. Pennington County, 146 N.W.2d 731, 734 (S.D. 1966).
The exemption at issue is found in sec. 70.11(19), Stats. It covers: “All the real and personal property of any children’s institution licensed for the care of dependent, neglected . . . delinquent (or) mentally deficient children . . . while the same is actually used (for such purpose) . . . .” By enacting this section, the legislature expressed its intention to foster and encourage the care and treatment of needy children by exempting all property used for such purposes from taxation. There is no question that the property here is being devoted exclusively to the uses specified in the statute. The case turns on whether the property, which is leased, rather than owned by Chileda, may be considered “property of” Chileda within the meaning of sec. 70.11 (19), Stats.
Chileda argues that the words “property of” do not require outright ownership, and that the exemption ap*562plies to leased property which is devoted to the eleemosynary purposes of the statute. The city argues that the statutory language requires absolute ownership. By holding that leased property cannot be “property of” Chileda within the meaning of the statute, the majority has adopted the City’s construction in substance, if not in form; and I consider the construction unreasonable in light of the statute’s manifest purpose.
I note, too, that where the legislature has intended to restrict exemptions to “owned” property, it has so stated —even in the statute under consideration here — by specifically confining the exemption to property “owned,” or “owned and used (or ‘operated’ or ‘occupied’) by” the particular institution or entity. See, e.g., secs. 70.11 (4), (4m), (5), (7), (9), (10), (10m), (12), (13), (16), (17), (20), (22), (25) and (28), Stats.
Finally, I do not believe that construing the statute to allow an otherwise eligible lessee to benefit from the exemption poses a danger that, in this or other cases, lease interests could be manipulated so as to permit the non-exempt lessor to retain the tax benefit, thus thwarting the legislative purpose to have the benefit inure to the institution or entity performing the public service. How directly a “favored” taxpayer is to be benefited is a matter of legislative policy, and “[a] 11 that a court need determine is that the legislature could have reasonably determined that the tax exemption would inure directly or indirectly to the benefit of a taxpayer who could legitimately be favored as a matter of public policy.” Madison General Hospital Asso. v. Madison, 92 Wis. 2d 125, 131, 284 N.W.2d 603, 606 (1979). I believe such is the case here.
Under the facts of this case, I would, like the majority, hold that Chileda has standing to seek the declaratory judgment, and that the statutory language is ambiguous. Unlike the majority, however, I would hold *563that the only strict and reasonable construction of that language is that it does not condition the availability of the exemption on the taxpayer’s title to the property.
The question then becomes whether Chileda has standing to seek recovery of the illegally-collected taxes under the claims procedure established by sec. 74.73(1), Stats. The majority does not reach this issue.
The statutory procedure is available to “any person aggrieved by the levy and collection of any unlawful tax assessed against him . . .” (emphasis supplied). Chileda argues that it has a “legally protectible interest” in the property, and that this is sufficient to allow it to pursue the statutory remedy, citing Madison General Hospital Asso. v. Madison, supra. Madison General, however, dealt with the declaratory judgments act, sec. 806.04, Stats., which, because of its expansive language and the legislative mandate that its terms are to be liberally construed, clearly confers standing on Chileda to seek declaratory relief.
The primary source for construction of sec. 74.73(1), Stats., is the language of the statute itself. Northwest General Hospital v. Yee, 115 Wis. 2d 59, 63, 339 N.W. 2d 583, 585 (1983). That language admits of only one construction: one must be the person (or entity) against whom the tax is assessed in order to invoke the statutory remedy. While Chileda, as lessee of the property, pays the taxes, there is nothing in the record to indicate that they were assessed against anyone other than the owner, St. Francis Medical Center. Chileda lacks standing to pursue a claim under sec. 74.73(1), and must look elsewhere for redress.
For the reasons stated, I would reverse and grant the declaratory judgment prayed for.