2006 WI App 25 | Wis. Ct. App. | 2006
¶ 1. Lake Country Racquet and Athletic Club, Inc., and four other for-profit health clubs (collectively "Lake Country") appeal from a partial summary judgment and a summary judgment dismissing their constitutional challenges to the portion of Wis.
Background
¶ 2. The following facts are taken from the parties' affidavits and other materials. There are thirty YMCAs in thirty different communities in Wisconsin. Each is a separately incorporated non-profit organization, and all belong to the National Council of Young Men's Christian Associations of America (YMCA-USA). Article II, section 2(a) of the YMCA-USA Constitution provides that to maintain membership in the YMCA-USA, local YMCAs must accept the following statement of purpose: "The Young Men's Christian Association we regard as being in its essential genius a worldwide fellowship united by a common loyalty to Jesus Christ for the purpose of developing Christian personality and
¶ 3. In addition, the various YMCAs in Wisconsin offer many different types of community programming. From the YMCAs' submissions, these include: programs for persons with special needs; swimming lessons; child care services; leadership development programs for teens; after- and before-school care; fitness and social activities for seniors; pre-school programs; mentoring programs; and civic education programs for youths. YMCAs also provide financial assistance to many qualifying program participants based on financial need.
¶ 4. Prior to adoption of the 2001 Budget Bill, the property tax status of YMCAs was determined by local tax assessors' evaluation of their benevolent status under Wis. Stat. § 70.11(4) (1999-2000)
¶ 5. In late 1999, YMCAs in La Crosse, Wausau and Milwaukee were put on notice that local assessors would be re-examining their tax-exempt status. Collectively, state YMCAs sought legislative action to remove from local assessors the responsibility to determine local YMCAs' tax status and establish a statutory exemption for all YMCAs. In early 2001, companion bills were introduced in the Senate and Assembly adding YMCAs to the list of national benevolent organizations exempted from property taxation under Wis. Stat. § 70.11(12)(a). That spring, the Joint Finance Committee voted to add the YMCA exemption as an amendment to the 2001 Budget Bill. 2001 SB 55, May 16, 2001 executive session, Motion 123. The YMCA exemption was adopted by the legislature as a part of the Budget Bill and signed into law by the governor in August 2001. 2001 Wis. Act 16, §§ 2103g and 2103k.
¶ 6. Lake Country sued to challenge the constitutionality of the YMCA exemption on multiple grounds. The court permitted four YMCAs to intervene as defendants to the suit. Lake Country moved for judgment on the pleadings on its claim that the statute was prohibited "private legislation" under article iy section 18. Its motion for judgment on the pleadings included the legislative history of the bill. The YMCAs also moved for partial summary judgment on the private legislation claim. The court construed Lake Country's motion as a motion for partial summary judgment.
Analysis
¶ 7. We review a circuit court's grant of summary judgment de novo, applying the same methodology as
¶ 8. Lake Country alleges Wis. Stat. § 70.11(12)(a) is constitutionally infirm on four separate grounds, which we address in turn. A challenge to the constitutionality of a statute is a question of law subject to de novo review. Nankin v. Village of Shorewood, 2001 WI 92, ¶ 10, 245 Wis. 2d 86, 630 N.W.2d 141.
A. Article IV, section 18 of the Wisconsin Constitution
¶ 9. Lake Country contends Wis. Stat. § 70.11(12)(a) violates the state constitution's prohibition on private legislation. Article IY section 18 of the Wisconsin Constitution provides that "[n]o private or local bill which may be passed by the legislature shall embrace more than one subject, and that shall be expressed in the title." A purpose of article IY section 18 is to "guard against the danger of legislation, affecting private or local interests, being smuggled through the legislature." Davis v. Grover, 166 Wis. 2d 501, 519, 480 N.W.2d 460 (1992) (citation omitted). Section 18 also protects against "internal logrolling," the legislative practice of bundling several unrelated issues, none of which could be passed singly, and securing passage by a combination of the legislative factions who favor separate pieces of the legislation. Id. at 519, n.7 (citation omitted).
¶ 10. When deciding a challenge to legislation under article IY section 18, we employ a two-part
1. Presumption of Constitutionality
¶ 11. An article iy section 18 challenge to a legislative enactment attacks the propriety of the process used by the legislature to adopt the legislation. See Brookfield v. Milwaukee Sewerage, 144 Wis. 2d 896, 912 n.5, 426 N.W.2d 591 (1988). For this reason, courts will not afford legislation challenged on these grounds a presumption of constitutionality unless the record shows that the legislature adequately considered the legislation in question. City of Oak Creek v. Department of Natural Resources, 185 Wis. 2d 424, 437, 518 N.W.2d 276 (Ct. App. 1994). To "indulge in a presumption of constitutionality" in a challenge under article VI, section 18 without first determining that the legislature fully considered the proposal "would make a mockery of [section 18's] procedural constitutional requirement." Brookfield, 144 Wis. 2d at 912 n.5. However, if it is determined that the "legislation [was] passed after full consideration," the presumption of constitutionality should be applied so as not to "err ... by substituting our judgment for that of an attentive legislature." Id. at 918 n.6.
¶ 12. The parties dispute which facts may be considered when determining if a measure was "adequately considered." Lake Country cites the Davis
¶ 13. As we noted earlier in note 6, Lake Country concedes that the State's submissions in response to Lake Country's motion are relevant to the issue of whether the bill was adequately considered. It is on these submissions alone that we conclude that the legislature adequately considered the measure. We therefore need not decide here precisely which types of evidence are permissible under Davis.
¶ 14. We turn now to the facts of the legislature's consideration of the bill taken from the submissions of the State and Lake Country. On March 1, 2001, Representative John Gard circulated a request for legislative co-sponsors to a single-subject bill exempting from taxation property of YMCAs. The request included a Legislative Reference Bureau analysis of the proposal. Opponents of the legislation, including representatives of the Wisconsin Merchants Federation and the Alliance of Cities, circulated a two-page memo to all legislators explaining their reasons for opposing the bill. In response, Representative Gard and the bill's co-author, Senator Gary George, sent a letter to all legislators countering the arguments made in the opponents' memo.
¶ 16. During April 2001, the Legislature's Joint Finance Committee held six public hearings at various locations around the state on the 2001 State Budget Bill. In apparent anticipation that the YMCA exemption might be added to the Budget Bill, supporters and opponents of the YMCA exemption testified and/or registered their views at each hearing.
¶ 17. On May 9, 2001, the Assembly Ways and Means Committee held a public hearing on Assembly Bill 250. YMCA representatives testified in favor of the legislation, and several representatives of private health clubs, business associations and local government associations spoke in opposition.
¶ 18. During a May 16, 2001 executive session, the Joint Finance Committee approved two motions incorporating the proposed YMCA exemption into the Budget Bill. Among those voting for the YMCA exemption amendment were four senators who had not cosponsored Assembly Bill 250 or Senate Bill 98. On June 18, 2001, sections 2103g and 2103k were submitted to the legislature as a part of the amended Budget Bill. See Senate Substitute Amendment 1 to 2001 Senate Bill 55. On August 30, 2001, the two sections were enacted into law without further change as a part of 2001 Wisconsin Act 16.
¶ 19. We conclude that this record demonstrates that the legislature adequately considered the legislation for purposes of article I\£ section 18. Most signifi
¶ 20. Additionally, we note that all legislators were informed via memo by the bill's supporters and opponents of the policy reasons to oppose or support the bill. At budget hearings around the state, and at a hearing devoted to Assembly Bill 250, members of the public voiced their concerns about the YMCA exemption. We share the state supreme court's concern that multi-subject bills such as the biennial state budget "by their nature are subject to a greater susceptibility of smuggling and logrolling." Davis, 166 Wis. 2d at 519. However, "the fact that a multi-subject bill contains a program such as [the YMCA exemption] does not necessarily condemn the process in which the program was enacted as unconstitutional." Id. at 520. We therefore conclude that the legislature adequately considered the bill and, thus, that the bill is entitled to a presumption of constitutionality.
¶ 21. Lake Country correctly observes that a report on the YMCA exemption was not obtained from the Joint Survey Committee, as required by Wis. Stat.
2. Private Legislation
¶ 22. We turn to whether the statute is prohibited private legislation. We have noted that the proposal was
¶ 23. Courts apply one of two tests when determining whether a bill is private legislation, depending on whether the bill is "specific to any person, place or thing" or is instead based on "classifications." Davis, 166 Wis. 2d at 524-25. Lake Country argues, and the State concedes, that the YMCA exemption is "specific" in nature.
Although many citizens of this state and other states may drive on state trunk highway 13, or use the Soo Line, [the statute] directly and immediately affects a particular entity, the Soo Line Railroad. The Soo Line Railroad is directly affected by [the statute]. The other railroads are not. . . .[The statute] also reverses a decision reached by a specific administrative agency and affirmed by a particular court relating to a particular crossing at a particular location involving a particular railroad. This administrative agency decision was reached in compliance with and pursuant to the laws made and provided by the legislature. [The statute] is without question a legislative response to a unique problem. It is difficult to conceive of a legislative enactment more particularly addressed to a specific geographical location or a specific entity. In light of the definition of private or local law set forth in our prior cases and the rationale of sec. 18, art. TV] Wis. Const, we conclude that [the statute] is a private and local law.
Id.
¶ 25. In City of Oak Creek, 185 Wis. 2d at 442, we concluded that a statute challenged under article iy section 18 that exempted a specific project in Oak Creek from compliance with state environmental requirements did not have an immediate or direct effect on any specific statewide interest and was ultimately prohibited private legislation. We reasoned:
*518 Although it cannot be disputed that legislation which seeks to protect and regulate the state's navigable waterways is of statewide concern, the same cannot be said of legislation that exempts one particular area, and specifically one particular project, from compliance with the statewide requirements. While the overall regulatory scheme of chapter 30 has statewide significance, and was enacted in the public's interest, we conclude that the exemption granted to the City of Oak Creek for the Crawfish Creek project was not enacted for the benefit of, or in the interest of, the general public. In sum, the legislation does not have a direct and immediate effect on a specific statewide concern or interest. Any direct and immediate effect that this legislation has is upon the expenses that may be incurred by the City of Oak Creek.
Id.
¶ 26. However, in Milwaukee Brewers, 130 Wis. 2d at 118-120, the state supreme court concluded that a bill challenged under article iy section 18 directing a state agency to build a prison on a particular site was not private or local legislation. Applying the "specific" legislation test, the Milwaukee Brewers court concluded that: (1) prison construction and maintenance was a statewide responsibility of a statewide dimension; (2) the legislation affected a specific state concern or interest, prison overcrowding; (3) and would impact that concern immediately and directly by adding more prison capacity. Id. at 119-20.
¶ 27. Lake Country contends that Soo Line and Oak Creek control here. It asserts that, like the statute in Soo Line, which affected only one railroad company, the statute here affects only two organizations, YMCAs and YWCAs. Further, Lake Country argues that, as in Oak Creek, 185 Wis. 2d at 442, the legislation here "was
¶ 28. We conclude that Lake Country has not shown beyond a reasonable doubt that the statute does not relate to a state responsibility of statewide dimension, or that its passage would not have a direct and immediate impact on a statewide concern or interest. This case, unlike Soo Line and Oak Creek, concerns a benevolent organization that provides a broad range of programming to the public. See ¶¶ 2-3, supra. We have observed that by enacting exemptions for benevolent groups "[t]he legislature has recognized that some organizations actually serve a public rather than a private purpose and should be relieved of their tax burden." International Foundation of Emp. Ben. Plans, Inc. v. City of Brookfield, 95 Wis. 2d 444, 454, 290 N.W.2d 720 (Ct. App. 1980). By adding YMCAs and YWCAs to the short list of benevolent organizations that are tax exempt under Wis. Stat. § 70.11(12), the legislature has made a judgment about the benevolent mission of YMCAs and YWCAs.
¶ 29. We conclude the YMCA exemption relates to a statewide responsibility of statewide dimension. Whether to exempt property of certain benevolent organizations is a responsibility of the state. Because YMCAs and YWCAs are located in communities throughout Wisconsin and their programs serve thousands of individuals, whether these particular entities are exempt from taxation is an issue of statewide dimension.
¶ 30. We also conclude that the statute has an immediate and direct affect on a specific statewide concern or interest. Whether YMCAs are exempt from property taxation directly and immediately affects the
¶ 31. Moreover, Soo Line and Oak Creek differ from the present case in that each affected a single location, while YMCAs are located in thirty Wisconsin communities. Additionally, in both Soo Line and Oak Creek, the challenged laws provided special exemptions to lawful rules or orders of state agencies. Finally, Oak Creek determined that the statute under review was not entitled to a presumption of constitutionality, and we consequently considered whether the statute was private legislation under a much lower standard of proof. Because the challenged part of Wis. Stat. § 70.11(12) is not private legislation beyond a reasonable doubt, we therefore conclude it does not violate article iy section 18.
jB. Equal Protection Challenge
¶ 32. Lake Country contends the YMCA exemption contravenes the equal protection guarantees of the Fourteenth Amendment and article I, section 1 of the Wisconsin Constitution.
¶ 33. Before considering whether the classification is rationally related to legitimate government interest, we must answer two threshold questions: "[FJirst, did this legislation create a distinct classification of citizens; and, second, if so, did this legislation treat the class significantly differently from all others similarly situated?" Milwaukee Brewers, 130 Wis. 2d at 90. We conclude that Lake Country's equal protection claim fads at this preliminary stage.
¶ 34. The statute creates a distinct classification by exempting the YMCAs from taxation, thereby meeting the first test. However, Lake Country has not shown that for-profit health clubs and the YMCAs are "similarly situated." YMCAs are benevolent organizations; the plaintiffs are for-profit businesses. Each has a very different mission. As the YMCAs note, their eleemosynary mission sets them apart from for-profit health clubs. See again ¶¶ 2-3, supra. The for-profit health clubs and YMCAs are not sufficiently alike for Lake Country's equal protection claim to pass this threshold inquiry.
By the Court. — Judgments affirmed.
All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted.
These provisions also exempted from taxation property owned by Young Women's Christian Associations (YWCAs). However, Lake Country does not challenge the exemption for YWCAs.
Lake Country also summarily asserts that the challenged statute violates two other provisions of the state constitution, the Uniformity Clause of article VIII, section 1, and article iy section 31(6). Because these arguments are not sufficiently developed we will not address them. See Rizzuto v. Cincinnati Ins. Co., 2003 WI App 59, ¶ 21, 261 Wis. 2d 581, 659 N.W.2d 476.
Wisconsin Stat. § 70.11 (1999-2000) provided, in relevant part:
Property exempted from local property taxes is:
(4) Educational, religious and benevolent institutions; women's clubs; historical societies; fraternities; libraries. Property owned and used exclusively ... by churches or religious, educational or benevolent associations .... Property owned by churches or religious associations necessary for location and convenience of buildings, used for educational purposes and not for profit, shall not be subject to the 10-acre limitation but shall be subject to a 30-acre limitation. Property that is exempt from taxation under this subsection and is leased remains exempt from taxation only if, in addition to the requirements specified in the introductory phrase of this section, the lessee does not discriminate on the basis of race.
As amended by 2001 Wis. Act 16, Wis. Stat. § 70.11(12) provides, in relevant part:
Certain charitable organizations, (a) Property owned by units which are organized in this state of the following organizations: the Salvation Army; the Boy Scouts of America; the Boys' Clubs of America; the Girl Scouts or Camp Fire Girls; the Young Men's Christian Association, not exceeding 40 acres for property that is located outside the limit of any incorporated city or village and not exceeding 10 acres for property that is located inside the limit of any incorporated city or village; the Young Women's Christian Association, not exceeding 40 acres for property that is located outside the limit of any incorporated city or village and not exceeding 10 acres for property that is located inside the limit of any incorporated city or village; or any person as trustee for them of property used for the purposes of those organizations, provided no pecuniary profit results to any individual owner or member.
Lake Country contends the trial court erred by converting its motion for judgment on the pleadings regarding its article IY section 18 challenge to a motion for partial summary judgment. Some background is necessary here. Lake Country appended legislative history documents to its motion for judgment on the pleadings. Lake Country asserted that legislative history documents were not "material outside of the pleadings" within the meaning of Wis. Stat. § 802.06(3), citing Freedom from Religion Foundation v. Thompson, 164 Wis. 2d 736, 476 N.W.2d 318 (Ct. App. 1991). In Freedom from Religion Foundation, we stated that "[t]he phrase 'matters outside the pleadings' should not be read so broadly so as to include items of legislative history, which do not concern evidentiary facts and which could be introduced without supporting affidavits." Freedom from Religion Foundation, 164 Wis. 2d at 740 n.4.
However, the State argued in its brief that Lake Country's inclusion of legislative history documents converted Lake Country's motion for judgment on the pleadings to a motion for partial summary judgment. Consequently, the State appended numerous exhibits to its brief against Lake Country's motion. The YMCAs moved for partial summary judgment. Their combined brief opposing Lake Country's motion and supporting their motion appended additional exhibits. In its combined brief
We conclude that the circuit court properly construed Lake Country's motion for judgment on the pleadings to be a motion for partial summary judgment. This is because Lake Country does not oppose the State's submissions, and we construe these as exceeding the legislative history exception to Wis. Stat. § 802.06(3) stated in Freedom from Religion Foundation.
We also observe that the type of constitutional issue considered in Freedom from Religion Foundation, an alleged violation of the Establishment Clause, differs significantly from a challenge under article I\( section 18. The former relates to the substance of a statute; the latter implicates the procedure used by the legislature in passing a statute. As Lake Country itself acknowledges, an article IY section 18 challenge requires a court to "expand[] the limited universe of relevant facts" to consider whether the legislature "smuggled" or "logrolled" the bill. Without stating precisely which types of materials are relevant to this injury, we believe that some types of materials outside of legislative history are relevant.
Wisconsin Stat. § 13.52(6) provides:
Report. Upon the introduction in either house of the legislature of any proposal which affects any existing statute or creates any new statute relating to the exemption of any property or person from any state or local taxes or special assessments, such proposal shall at once be referred to the joint survey committee on tax exemptions by the presiding officer instead of to a standing committee, and such proposal shall not be considered further by either house until the joint survey committee on tax exemptions has submitted a report, in writing, setting forth an opinion on the legality of the proposal, the fiscal effect upon the state and its subdivisions and its desirability as a matter of public policy and such report has been printed as an appendix to the bill and attached thereto as are amendments. Such printing shall be in lieu of inclusion in the daily journal of the house in which the bill was introduced.
The YMCAs do not concede this point, however, arguing that because the thirty YMCA units in Wisconsin are separately incorporated and are united only by a common mission the legislation is not specific. We disagree. The bill is limited in its application to YMCAs, not non-profit health facilities or charitable organizations, for example. It is specific legislation for the purposes of this analysis.
Article I, section 1 of the Wisconsin Constitution provides:
*521 Equality; inherent rights. Section 1. [As amended Nov. 1982 and April 1986] All people are born equally free and independent, and have certain inherent rights; among these are life, liberty and the pursuit of happiness; to secure these rights, governments are instituted, deriving their just powers from the consent of the governed.