Oswald v. Hamer
| Decision Date | 20 September 2018 |
| Docket Number | Docket No. 122203 |
| Parties | CONSTANCE OSWALD, Appellant, v. BRIAN HAMER, Director of Revenue, et al., Appellees. |
| Court | United States Appellate Court of Illinois |
Illinois Official Reports
Supreme Court
Decision Under Review
Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Robert Lopez-Cepero, Judge, presiding.
Counsel on Appeal
Edward T. Joyce and Kenneth Flaxman, of Law Offices of Edward T. Joyce & Associates, P.C., and Joan M. Mannix, both of Chicago, for appellant.
Lisa Madigan, Attorney General, of Springfield (David L. Franklin, Solicitor General, and Carl J. Elitz, Assistant Attorney General, of Chicago, of counsel), for appellees.
Mark D. Deaton, of Illinois Health and Hospital Association, of Naperville, and Steven F. Pflaum, Tonya G. Newman, and Collette A. Brown, of Neal, Gerber & Eisenberg LLP, of Chicago, for intervenor-appellee.
Frederic M. Grosser, of Champaign, for amici curiae Cunningham Township et al.
Julia Rietz, State's Attorney, of Urbana (Joel D. Fletcher, Assistant State's Attorney, of counsel), for amici curiae Champaign County Treasurer et al.
John M. Izzo and Eugene C. Edwards, of Hauser Izzo, LLC, of Flossmoor, for amici curiae Illinois Association of School Boards et al.
Justices
¶ 1 Section 15-86 of the Property Tax Code (35 ILCS 200/15-86 (West 2012)) provides for a charitable property tax exemption specifically to eligible not-for-profit hospitals and their hospital affiliates (hereinafter hospitals). Plaintiff, Constance Oswald, filed an action in the circuit court of Cook County seeking a judgment declaring that section 15-86 of the Property Tax Code, on its face, violates section 6 of article IX of the Illinois Constitution (Ill. Const. 1970, art IX, § 6). The circuit court granted summary judgment in favor of defendants Brian Hamer, Director of Revenue,1 the Department of Revenue, and the Illinois Hospital Association. The appellate court affirmed. 2016 IL App (1st) 152691.
¶ 2 This court allowed plaintiff's petition for leave to appeal (Ill. S. Ct. R. 315 (eff. Mar. 15, 2016)). For the following reasons, we affirm the judgment of the appellate court.
¶ 4 Section 15-86(c) of the Property Tax Code provides that a hospital applicant "shall be issued" a charitable property tax exemption if the value of certain qualifying services or activities provided by the hospital in a given year equals or exceeds the hospital's estimated property tax liability for the same year. 35 ILCS 200/15-86(c) (West 2012). In her single-count complaint, plaintiff alleged that section 15-86(c) commands that the hospital applicant receive the charitable property tax exemption if the statutory criteria are satisfied. Plaintiff contendedthat section 15-86 was facially unconstitutional because the statute mandates the issuance of the charitable property tax exemption without consideration of the constitutional requirement that the subject property be "used exclusively for *** charitable purposes" (Ill. Const. 1970, art. IX, § 6). Plaintiff sought, inter alia, a judgment declaring that section 15-86 was "unconstitutional on its face" and an order enjoining defendants from granting any section 15-86 exemptions and requiring defendants to collect property tax from those hospitals that already had been granted such exemptions.
¶ 5 The complaint named as defendants the Department of Revenue and its director. The circuit court granted the Illinois Hospital Association's petition for leave to intervene as a defendant. Plaintiff and defendants filed cross-motions for summary judgment contesting solely the facial constitutionality of section 15-86. The circuit court denied plaintiff's motion for summary judgment and granted summary judgment in favor of defendants. The court found that section 15-86 does not dispense with the Illinois Constitution's requirements for charitable property tax exemption but, rather, the Department of Revenue must still evaluate a hospital applicant's claim for a section 15-86 exemption under constitutional requirements and precedent. Also, the court found that plaintiff failed to show that section 15-86 was inherently flawed in all circumstances. Accordingly, the circuit court concluded that the statute was not facially unconstitutional.
¶ 6 The appellate court affirmed. 2016 IL App (1st) 152691. The court rejected plaintiff's argument that the legislature intended the word "shall" in section 15-86(c) to be mandatory. Id. ¶ 22. Rather, the court held that the word "shall" is merely directory. Id. ¶ 26. The court observed that its construction of section 15-86(c) followed case law that construed charitable property tax exemption statutes alongside the exclusive use requirements of section 6 of article IX of the Illinois Constitution. Id. ¶¶ 27-36. Alternatively, the appellate court upheld the circuit court's conclusion that section 15-86 was facially constitutional because plaintiff failed to sustain her burden of demonstrating that there was no set of circumstances under which the statute would be valid. Id. ¶ 47.
¶ 7 Plaintiff appeals to this court. The Champaign County Treasurer et al., Cunningham Township et al., and the Illinois Association of School Boards et al. were each granted leave to submit an amicus curiae brief in support of plaintiff. Ill. S. Ct. R. 345 (eff. Sept. 20, 2010).
¶ 9 The ultimate question presented for our review is whether section 15-86 of the Property Tax Code, on its face, violates section 6 of article IX of the Illinois Constitution. This matter comes before us in the context of cross-motions for summary judgment. Summary judgment is appropriate "if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." 735 ILCS 5/2-1005(c) (West 2012). When parties file cross-motions for summary judgment, they mutually agree that there are no genuine issues of material fact and that the case may be resolved as a matter of law. Jones v. Municipal Employees' Annuity & Benefit Fund, 2016 IL 119618, ¶ 26; Irwin Industrial Tool Co. v. Department of Revenue, 238 Ill. 2d 332, 339-40 (2010); Founders Insurance Co. v. Munoz, 237 Ill. 2d 424, 432 (2010). The issues in this case involve statutory construction. Statutory construction presents questions of law that are appropriate for summary judgment. Hooker v.Retirement Board of the Firemen's Annuity & Benefit Fund, 2013 IL 114811, ¶ 15. Issues involving statutory construction and summary judgment rulings are reviewed de novo. Id. Also, the constitutionality of a statute is a question of law reviewed de novo. Irwin Industrial Tool, 238 Ill. 2d at 340; In re Parentage of John M., 212 Ill. 2d 253, 265 (2004).
¶ 10 In construing section 15-86, we are guided by familiar principles. When presented with an issue of statutory construction, a court's primary objective is to ascertain and give effect to the intent of the legislature. Murphy-Hylton v. Lieberman Management Services, Inc., 2016 IL 120394, ¶ 25. All other rules of statutory construction are subordinate to this cardinal principle. Chicago Teachers Union, Local No. 1 v. Board of Education of the City of Chicago, 2012 IL 112566, ¶ 15. The most reliable indicator of legislative intent is the language of the statute, which must be given its plain and ordinary meaning. The statute is viewed as a whole, construing words and phrases in context to other relevant statutory provisions and not in isolation. Murphy-Hylton, 2016 IL 120394, ¶ 25; J&J Ventures Gaming, LLC v. Wild, Inc., 2016 IL 119870, ¶ 25. Each word, clause, and sentence of a statute must be given a reasonable meaning, if possible, and should not be rendered superfluous. Murphy-Hylton, 2016 IL 120394, ¶ 25; Williams v. Staples, 208 Ill. 2d 480, 487 (2004). Additionally, the court may consider the reason for the law, the problems sought to be remedied, the purposes to be achieved, and the consequences of construing the statute one way or another. Murphy-Hylton, 2016 IL 120394, ¶ 25; J&J Ventures Gaming, 2016 IL 119870, ¶ 25. To understand the purpose and effect of section 15-86, we consider its constitutional and statutory foundations.
¶ 12 The constitutional backdrop of charitable property tax exemption legislation in Illinois is well established. Generally, the Illinois Constitution does not grant power to the legislature but rather restricts the legislature's power to act. The State's inherent power to tax is vested in the General Assembly. The legislature's power to tax is plenary and is restricted only by the federal and state constitutions. Article IX of the 1970 Illinois Constitution (Ill. Const. 1970, art. IX) generally subjects all real property to taxation. Eden Retirement Center, Inc. v. Department of Revenue, 213 Ill. 2d 273, 285 (2004) (). Provena Covenant Medical Center v. Department of Revenue, 236 Ill. 2d 368, 388 (2010).
¶ 13 However, section 6 of article IX limits the power of the legislature in the area of property tax exemption in pertinent part as follows:
"The General Assembly by law may exempt from taxation only the property of the State, units of local government and school districts and property used exclusively for agricultural and horticultural societies, and for school, religious, cemetery and charitable purposes." Ill. Const. 1970, art. IX, § 6.
Section 6 of article IX is not self-executing but authorizes the General Assembly to enact legislation providing for an...
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