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Docket No. 97703-Agenda 31-September 2004.

EDEN RETIREMENT CENTER, INC., Appellee, v. THE
DEPARTMENT OF REVENUE et al., Appellants.

Opinion filed December 2, 2004.
 

JUSTICE FREEMAN delivered the opinion of the court:

Plaintiff, Eden Retirement Center, Inc., filed a complaint in thecircuit court of Madison County seeking administrative review of adecision by the Illinois Department of Revenue (Department). TheDepartment denied plaintiff's application for a charitable-use propertytax exemption for the 1996 tax year. The circuit court set aside theDepartment's decision and granted the exemption, based solely on thecourt's interpretation of section 15-65 of the Property Tax Code (35ILCS 200/15-65 (West 2000)). The appellate court affirmed. 346 Ill.App. 3d 252.

Defendants, the Department, Edwardsville Community UnitSchool District No. 7, and the Village of Glen Carbon filed a jointpetition for leave to appeal (177 Ill. 2d R. 315(a)), which we allowed.We now reverse the judgments of the appellate and circuit courts, andconfirm the decision of the Department.

BACKGROUND

The facts, as found by the Administrative Law Judge (ALJ), arenot in dispute.

Plaintiff's Business

In 1976, plaintiff was organized as a not-for-profit corporation.Plaintiff's articles of incorporation included the following corporatepurpose: "This corporation shall be organized and operatedexclusively for charitable purposes in providing housing, nursing andother related care for the aged, and in connection therewith, to buy,sell, lease, mortgage and in all manner deal with real or personalproperty." Section 6 of plaintiff's bylaws provides:

"It is the express purpose of this corporation to beorganized and operated exclusively for charitable purposes inproviding housing, nursing care, financial security and otherrelated care for the elderly. Recognizing that charitablepurpose, it is the intent of the corporation to provide housing,nursing care and other related care by limiting the charges forsuch services. To that extent, charges shall be set at anamount sufficient to amortize indebtedness, maintain reservesadequate to provide life care for the residents, and to setaside amounts sufficient for expansion to meet thecommunity's need. All reserves provided for herein shall bereasonable. It is expressly provided that it is the intention ofthe corporation to continue to provide for the maintenance ofthose residents who are financially unable to continue makingpayments due the corporation for care. In order to continueto provide such services to residents, the corporation shall beauthorized, in maintaining reserves for the care of theresidents, to provide a reserve especially for the care of thosewho may be unable to further care for themselves and tomake the payments due the corporation. It is the establishedpolicy of the corporation to continue to maintain suchpersons as residents. To the extent that charges previouslydetermined exceed amounts determined above, then chargesshall be reduced so as to maintain charges equal to theaforesaid requirements.

Further, section 7 of the bylaws provides: "All entrance fees, monthlymaintenance charges, routine service charges, nursing care charges,and non-rated charges may be waived in full, reduced in part, orliability for payment postponed based upon the individual's inabilityto pay and the Association's financial circumstances." Also, plaintiffis exempt from federal income tax pursuant to section 501(c)(3) of theUnited States Internal Revenue Code (26 U.S.C.