{ "id": 2588517, "name": "AMERICAN COLLEGE OF CHEST PHYSICIANS, Plaintiff-Appellant, v. THE DEPARTMENT OF REVENUE et al., Defendants-Appellees", "name_abbreviation": "American College of Chest Physicians v. Department of Revenue", "decision_date": "1990-07-18", "docket_number": "No. 1-89-1253", "first_page": "59", "last_page": "69", "citations": [ { "type": "official", "cite": "202 Ill. App. 3d 59" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "227 N.E.2d 7", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "36 Ill. 2d 340", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5378010 ], "weight": 2, "pin_cites": [ { "page": "348" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/36/0340-01" ] }, { "cite": "133 N.E.2d 269", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "8 Ill. 2d 141", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2715038 ], "opinion_index": 0, "case_paths": [ "/ill-2d/8/0141-01" ] }, { "cite": "233 N.E.2d 537", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "39 Ill. 2d 149", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2857505 ], "weight": 2, "pin_cites": [ { "page": "157" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/39/0149-01" ] }, { "cite": "160 N.E.2d 763", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "17 Ill. 2d 125", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5334663 ], "weight": 2, "pin_cites": [ { "page": "129" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/17/0125-01" ] }, { "cite": "171 N.E.2d 620", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1959, "opinion_index": 0 }, { "cite": "21 Ill. 2d 219", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2731181 ], "weight": 3, "year": 1959, "pin_cites": [ { "page": "223" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/21/0219-01" ] }, { "cite": "507 N.E.2d 1331", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "155 Ill. App. 3d 272", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3464723 ], "weight": 2, "pin_cites": [ { "page": "283" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/155/0272-01" ] }, { "cite": "494 N.E.2d 485", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1987, "opinion_index": 0 }, { "cite": "112 Ill. 2d 542", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5539312 ], "weight": 2, "year": 1987, "pin_cites": [ { "page": "547" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/112/0542-01" ] }, { "cite": "146 N.E.2d 73", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "12 Ill. 2d 387", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2780023 ], "weight": 3, "pin_cites": [ { "page": "392-93" }, { "page": "401" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/12/0387-01" ] } ], "analysis": { "cardinality": 845, "char_count": 21161, "ocr_confidence": 0.747, "pagerank": { "raw": 1.0595509570794734e-07, "percentile": 0.5561806885266284 }, "sha256": "f37202c5c173791142467b5270cc7007129ffa27738fdb55b35081f729ea18e6", "simhash": "1:f4c14e88e091dac2", "word_count": 3319 }, "last_updated": "2023-07-14T20:29:37.094110+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "AMERICAN COLLEGE OF CHEST PHYSICIANS, Plaintiff-Appellant, v. THE DEPARTMENT OF REVENUE et al., Defendants-Appellees." ], "opinions": [ { "text": "JUSTICE WHITE\ndelivered the opinion of the court:\nPlaintiff, the American College of Chest Physicians, appeals from an order of the circuit court affirming the finding of defendant, the Illinois Department of Revenue (Department), that real property owned by plaintiff and located at 911 Busse Highway in Park Ridge, Illinois, was not exempt from taxation for the year 1986. Plaintiff argues that it is entitled to a property tax exemption under sections 19.1 and 19.7 of the Revenue Act of 1939 (Ill. Rev. Stat. 1985, ch. 120, pars. 500.1, 500.7).\nIn 1974, the Department exempted plaintiffs property from taxation. The property remained exempt for the following 11 years. In 1987, the Cook County Board of Appeals approved plaintiff\u2019s application for a tax exemption for the year 1986. However, on August 10, 1987, the Department reversed the Board\u2019s decision on the ground that the property was not in exempt ownership or use.\nPlaintiff requested a formal hearing on the Department\u2019s denial of its request for an exemption. Dr. Alfred Soffer, plaintiff\u2019s executive director, was the only witness called at the hearing. Soffer testified that plaintiff is an international, not-for-profit medical society for 13,000 members in the United States, Canada, and overseas. Soffer stated that plaintiff\u2019s major purpose is to provide continuing education to the practicing specialist in heart and lung disease and to physicians who treat patients with heart and lung diseases. Soffer further stated that plaintiff was the primary source of post-graduate education in pulmonary medicine.\nSoffer testified that in 1986 one-third of plaintiff\u2019s funds came from membership dues; one-third from fees for its courses and annual meeting; and one-third from advertising in Chest, plaintiff\u2019s monthly journal. Soffer stated that plaintiff also received $500,000 in grants.\nSoffer testified that the building in Park Ridge was staffed by 42 full-time employees and that the employees were divided into four administrative categories: seven were employed in the education division, 11 in the publications division, three in the convention and audiovisual division, and 21 in the membership division. The building also housed a scientific library staffed by a full-time librarian. The library contained the major heart and lung journals in the world, textbooks relating to heart and lung disease, and facilities for computerized data bases for the National Library of Medicine. Soffer stated that the library received requests from laymen and physicians and members and nonmembers all over the world and that there was no charge for library research.\nIn response to a question by the administrative law judge, Soffer stated that he did not know what number of laypersons used the library and he indicated that the library was primarily used by plaintiff\u2019s staff to respond to inquiries in letters and phone calls. When asked whether people came to the building to use the books, Soffer replied that the books were for staff use in responding to inquiries and performing research for high schools, schools, physicians and laymen. When asked if a layperson would be prohibited from going to the library to look at the books, Soffer stated\n\u201cNo, no. It\u2019s not a prohibition. It\u2019s just that it\u2019s a national \u2014 it\u2019s a national responsibility, and I and my staff usually we are asked questions but not from Illinois. However, its available. There is \u2014 it\u2019s not \u2014 we would welcome all visitors.\nAnd we\u2019d like to expand this service. Because especially with our own computer base soon, I would hope we would be able to offer that availability.\u201d\nSoffer testified that plaintiff also maintained a video tape library, and that video tapes from the library were rented to the public at the cost of mailing. In addition, plaintiff produced audio tapes on the diagnosis, treatment, and prevention of heart and lung diseases, which were available for purchase by physicians and members of the public who were not physicians.\nSoffer testified that plaintiff maintained an educational fund, created by voluntary donations from plaintiff\u2019s members, and that each year three $18,000 grants were \u201cprovided by industry.\u201d Soffer also testified that plaintiff provided $70,000 a year for a teaching research grant.\nSoffer further testified that each year plaintiff offered between 12 and 22 continuing medical education courses for physicians. The courses lasted from two to five days and the standard fee for a three-day course was $300. The courses were not conducted at the building in Park Ridge, but were presented at hospitals and medical centers across the country. The courses included lectures and workshops, and class sizes ranged from 100 to 1,000 students. Although the majority of the courses offered were for physicians, plaintiff also offered at least one course a year for nurses and allied health professionals, such as respiratory therapists.\nSoffer testified that the State of Illinois did not offer any continuing medical education. Soffer also testified that, while continuing medical education was necessary for continued licensure and certification in 20 States, it was not required in the State of Illinois.\nFollowing the hearing, the administrative law judge concluded that plaintiff did not qualify as a school or a charitable organization. The Department adopted the law judge\u2019s conclusions, and plaintiff\u2019s request for a property tax exemption was denied.\nPlaintiff filed a complaint in administrative review with the circuit court of Cook County. Following a hearing, the court affirmed the Department\u2019s decision. The court held plaintiff\u2019s property did not qualify for an educational property tax exemption because the courses offered by plaintiff were not mandated by the State of Illinois, because the courses did not relieve any State burden, and because the State did not have any responsibility to educate physicians on new techniques in chest medicine.\nThe court found that plaintiff existed primarily for the education of its dues-paying members and that, while the courses offered passed down some indirect benefit to the members\u2019 patients, this did not constitute a direct economic benefit to the State. The court also found that plaintiff did not qualify for a charitable exemption because the property was not used to relieve the public from disease, suffering, or constraint, or for some other activity which lessened the financial burden on the State. This appeal followed.\nSection 19.1 of the Revenue Act (Ill. Rev. Stat. 1985, ch. 120, par. 500.1) provides that all property of schools used for school purposes is exempt from taxation. In Coyne Electrical School v. Paschen (1957), 12 Ill. 2d 387, 146 N.E.2d 73, the supreme court stated that two things are necessary to qualify property owned by a private institution for exemption from tax: (1) a course of study which fits into the general scheme of education founded by the State and supported by public taxation; and (2) a course of study which substantially lessens what would otherwise be a governmental function and obligation. (Coyne, 12 Ill. 2d at 392-93.) The burden of proving the right to exemption is upon the party seeking it, and in determining whether property is included within the scope of an exemption, all facts are to be construed and all debatable questions resolved in favor of taxation. Board of Certified Safety Professionals of the Americas, Inc. v. Johnson (1986), 112 Ill. 2d 542, 494 N.E.2d 485; Highland Park Hospital v. Department of Revenue (1987), 155 Ill. App. 3d 272, 507 N.E.2d 1331.\nIn the present case, plaintiff points out that in 1986, section 5a of the Medical Practice Act (Ill. Rev. Stat. 1985, ch. Ill, par. 4411a) provided that the Department of Registration and Education \u201cshall promulgate requirements of continuing education for persons licensed under this Act\u201d and that regulations requiring continuing medical education had been proposed pursuant to this section. Plaintiff also points out that in 1986, amendments to the'Medical Practice Act requiring continuing medical education had been proposed. Plaintiff acknowledges that the proposed regulations were never enacted and were subsequently withdrawn. However, plaintiff contends that the proposed regulations and the proposed amendments indicate that in 1986, State policy mandated continuing medical education. Plaintiff therefore argues that it satisfied the first requirement that the course of study offered fit into the general scheme of education by the State.\nPlaintiff further argues that because State policy required continuing medical education, plaintiff\u2019s courses substantially lessened the tax burden on the public by providing educational training that, otherwise, the State would have to furnish. Thus, plaintiff contends that it also satisfied the second requirement that its course of study substantially lessen a governmental function and obligation.\nIn support of its contentions, plaintiff relies on Illinois College of Optometry v. Lorenz (1961), 21 Ill. 2d 219, 171 N.E.2d 620, and Association of American Medical Colleges v. Lorenz (1959), 17 Ill. 2d 125, 160 N.E.2d 763, two cases in which the supreme court found that the plaintiff organizations qualified for educational property tax exemptions. Plaintiff argues that its activities are similar to those of the organizations in the above-cited cases and claims that, therefore, a similar conclusion must be reached in this case.\nWe disagree with plaintiff\u2019s arguments that it satisfies the requirements for exemption set forth in Coyne, and we find that both Illinois College of Optometry and Association of American Medical Colleges are distinguishable.\nIn Illinois College of Optometry, that school was held to be exempt from taxation because the courses taught there duplicated those taught by the tax-supported University of Illinois and its medical school. Although the supreme court stated that there was no requirement that the courses offered by a private school duplicate the program of a public school to qualify for a tax exemption, the court also stated that the course of study provided must fit within the general scheme of education provided in tax-supported schools. (Illinois College of Optometry, 21 Ill. 2d 219.) Because the courses taught at the College of Optometry were \u201cequally as comprehensive and exacting\u201d as those taught in State-supported universities and were required before one could become qualified to practice optometry, the court concluded that they fit into the general scheme of education established by the State and substantially lessened the tax burden by providing instruction that otherwise would be provided at government expense. 21 Ill. 2d at 223.\nIn Association of American Medical Colleges, plaintiff was a not-for-profit corporation whose members included medical schools throughout the country. The Association\u2019s functions included publishing a directory containing admission requirements and other information about member schools; sponsoring admission tests; performing placement functions; and appraising the curricula of medical schools and colleges. In allowing the tax exemption for the Association\u2019s property, the supreme court noted that the functions to which the property was devoted were identical to those that would afford exemption if conducted separately by the member institutions. The court concluded that where the functions themselves qualify for exemption, it did not matter that they were performed by a separate organization rather than by the respective members. Association of American Medical Colleges, 17 Ill. 2d at 129.\nIn the present case, plaintiff did not function on behalf of tax-exempt entities, as did the Association of American Medical Schools; nor did it provide the comprehensive course of study presented by the College of Optometry. While plaintiff\u2019s executive director testified that plaintiff was the primary source of post-graduate education in pulmonary medicine, he also testified that plaintiff\u2019s courses lasted only two to five days and that they were not required in order to be licensed in Illinois.\nWe are not persuaded by plaintiff\u2019s argument that its courses fit within the general scheme of education in 1986 because in that year the Department of Registration had proposed regulations requiring continuing medical education. As we stated above, in determining whether property is included within the scope of an exemption, all facts are to be construed in favor of taxation. In construing the facts in this case, we note that the Department\u2019s proposed regulations were never enacted and that in 1986 there was no Illinois law requiring continuing medical education. It follows that if there was no requirement of continuing medical education, there was no burden on the State to furnish such education and, thus, no burden for plaintiff to lessen. Accordingly, we conclude that plaintiff\u2019s property does not fall within the statutory exemption for property used for schools or other educational purposes.\nWe now turn to plaintiff\u2019s contention that its activities qualify it for a charitable tax exemption under section 19.7 of the Revenue Act. Section 19.7 provides an exemption from tax for all property of institutions of public charity. Ill. Rev. Stat. 1985, ch. 120, par. 500.7.\nIn Methodist Old Peoples Home v. Korzen (1968), 39 Ill. 2d 149, 233 N.E.2d 537, the supreme court enunciated the following guidelines and criteria to be applied in determining whether a use is for charitable purposes: (1) the use is for the benefit of an indefinite number of persons, persuading them to an educational or religious conviction, for their general welfare \u2014 or in some way reducing the burdens on government; (2) the charitable institution has no capital, capital stock, or shareholders, earns no profits or dividends, but rather derives its funds mainly from public and private charity and holds them in trust for the objects and purposes expressed in its charter; (3) the charitable institution dispenses charity to all who need and apply for it, does not provide gain or profit in a private sense to any person connected with it, and does not appear to place obstacles of any character in the way of those who need and would avail themselves of the charitable benefits it dispenses; (4) the statements of the agents of an institution and the wording of its governing legal documents evidencing an intention to use its property exclusively for charitable purposes do not relieve such institution of the burden of proving that its property actually and factually is so used; and (5) the term \u201cexclusively used\u201d means the primary purpose for which property is used and not any secondary or incidental purpose. 39 Ill. 2d at 157.\nAfter applying these guidelines to facts in the present case, we conclude that plaintiff does not qualify for a charitable tax exemption.\nTo meet the first of the guidelines, it must be established that the benefits accrued to mankind directly; it is not sufficient that incidental benefits may come to the public as a result of the property\u2019s use. (International College of Surgeons v. Brenza (1956), 8 Ill. 2d 141, 133 N.E.2d 269.) Although plaintiff argues that the public was directly benefitted by its courses, it seems clear that plaintiff\u2019s activities benefitted a particular class of people, i.e., its members and other doctors who took plaintiff\u2019s courses, and any benefit accruing to the general public was indirect. Further, as we stated above, plaintiff\u2019s activities did not reduce the burdens of government, because there was no burden on the government to provide continuing medical education. Thus we find that plaintiff failed to meet the first guideline.\nTurning to the second guideline, it appears that plaintiff was a not-for-profit corporation with no capital stock or shareholders. However, plaintiff\u2019s executive director testified that one-third of plaintiff\u2019s income was derived from membership dues, one-third from the courses and annual meeting, one-third from advertising, and an additional $500,000 a year from grants. The income and expense statements included in the record reveal that in fiscal year 1986, plaintiff derived $1,424,931 in membership dues, $998,521 from its courses and annual meeting, and $1,851,178 from advertising. Thus, it is clear that the $500,000 in grants was not the main source of plaintiff\u2019s funds.\nWe also find that plaintiff did not meet the third guideline that charity be dispensed to all who need and apply for it with no obstacles put in the way of those who need and would avail themselves of plaintiff\u2019s benefits. Plaintiff argues that it met this guideline through the fellowships and grants it provided for research, its teaching and training, and its library whose publications and tapes were available to anyone.\nWe have already held that plaintiff\u2019s teaching and training benefit-ted only a limited class of people. We now hold that there is no evidence that plaintiff\u2019s fellowships and grants or its library provided benefits to the general public.\nUnder the fourth guideline, the statements of the agents of an institution do not relieve the institution of the burden of proving that it actually used its property for an exclusively charitable purpose. In the present case, the only evidence that plaintiff\u2019s library was available for use by the public was the statement of plaintiff\u2019s director. When plaintiff\u2019s director was questioned about the public\u2019s use of plaintiff\u2019s library, he was unable to state what number of laypersons used the library; he stated that the library was used primarily by plaintiff\u2019s staff in responding to inquiries; and his reply to the hearing officer\u2019s question of whether laypersons would be allowed to visit the library to examine plaintiff\u2019s books, at best, could be described as equivocal.\nThe director\u2019s testimony concerning plaintiff\u2019s grants and fellowships was similarly ambiguous. He stated that five grants were awarded annually: three of these were provided by \u201cindustry\u201d and a fourth in the amount of $70,000 was provided by plaintiff itself; no details were given concerning the fifth grant.\nThe burden of proving the right to an exemption is upon the party seeking it and a plaintiff meets this burden by demonstrating that charity is the primary purpose for which the property is used. (Board of Certified Safety Professionals of the Americas, Inc. v. Johnson, 112 Ill. 2d at 547; Highland Park Hospital v. Department of Revenue, 155 Ill. App. 3d at 283.) In the present case, the testimony of plaintiff\u2019s director concerning plaintiff\u2019s fellowships and grants and the public\u2019s use of plaintiff\u2019s library did not establish with the required conclusiveness and clarity that the primary purpose for which plaintiff\u2019s property was used was a charitable one. See Coyne Electrical School v. Paschen, 12 Ill. 2d at 401.\nIn arguing that it is entitled to a charitable exemption, plaintiff claims that its situation is factually indistinguishable from that of the plaintiff in American College of Surgeons v. Korzen (1967), 36 Ill. 2d 340, 227 N.E.2d 7. We disagree.\nIn American College of Surgeons, the supreme court held that although many of the college\u2019s programs were attended primarily by members of the medical profession, the college made its benefits available to the public to the greatest degree possible and that the college\u2019s activities relieved, to some extent, the burden on the State to advance the interest of its citizens. (36 Ill. 2d at 348.) Unlike the present case, there was evidence in American College of Surgeons that the library and museum operated by the college were used by the public; that the college formulated standards for and inspected and accredited State, municipal, and private hospital facilities at no charge; and that the college conducted programs for the education of doctors, laymen, hospital administrators, and the general public. Here, plaintiff took no part in the accreditation of hospitals; its programs were directed toward its members and other doctors; and as we stated above there was no clear and convincing evidence that plaintiff\u2019s facilities were used by the general public. Accordingly, we find that plaintiff has failed to meet its burden of establishing that it is entitled to a charitable tax exemption.\nFor the foregoing reasons, we find that plaintiff did not qualify for an educational property tax exemption or a charitable exemption and, therefore, we affirm the judgment of the circuit court of Cook County.\nAffirmed.\nRIZZI and FREEMAN, JJ., concur.", "type": "majority", "author": "JUSTICE WHITE" } ], "attorneys": [ "Neistein, Richman, Hauslinger, Young & Rosen, Ltd., of Chicago (Harry A. Young, Jr., Alan Rosen, and Marcia Topper Wolf, of counsel), for appellant.", "Neil E Hartigan, Attorney General, of Springfield (Robert J. Ruiz, Solicitor General, and Daniel N. Malato, Assistant Attorney General, of Chicago, of counsel), for appellees." ], "corrections": "", "head_matter": "AMERICAN COLLEGE OF CHEST PHYSICIANS, Plaintiff-Appellant, v. THE DEPARTMENT OF REVENUE et al., Defendants-Appellees.\nFirst District (3rd Division)\nNo. 1\u201489\u20141253\nOpinion filed July 18, 1990.\nModified on denial of rehearing September 12, 1990.\nNeistein, Richman, Hauslinger, Young & Rosen, Ltd., of Chicago (Harry A. Young, Jr., Alan Rosen, and Marcia Topper Wolf, of counsel), for appellant.\nNeil E Hartigan, Attorney General, of Springfield (Robert J. Ruiz, Solicitor General, and Daniel N. Malato, Assistant Attorney General, of Chicago, of counsel), for appellees." }, "file_name": "0059-01", "first_page_order": 81, "last_page_order": 91 }