OAG 1-15

Analysis by the Legislative Reference Bureau, LRB-2980/1, LRB Drafting File to 1987 Wis. Act 399. This analysis emphasizes that the new statute is more than just a clarification of the old statute. The analysis treats the term “fire protection” as permitting charges related to the costs of fire protection as distinct from the cost of a fire call at a particular property.

¶ 12.   Therefore, I conclude that Wis. Stat. § 60.55(2)(b) allows a town to assess a fire protection special charge for making fire protection services available without actually making a fire call. Because I conclude that the ordinance was properly adopted under section 60.55(2)(b), I do not address whether it was legally implemented under section 66.0627(2).

¶ 13.   You ask whether a town may assess this special charge against a county. County property is exempt from property tax, but that exemption does not extend to fees. See Wis. Stat. § 70.11(2). Thus, whether a town can assess the special charge against a county depends on whether it is a tax imposed on property owners or a fee assessed for services provided.  

¶ 14.   “A tax is an enforcement of proportional contributions from persons and property, imposed by a state or municipality in its government capacity for the support of its government and its public needs.” City of River Falls v. St. Bridget’s Catholic Church of River Falls, 182 Wis. 2d 436, 441, 513 N.W.2d 673 (Ct. App. 1994) (citing Buse v. Smith, 74 Wis. 2d 550, 575, 247 N.W.2d 141 (1976)). The River Falls court explained the difference between taxes and fees: “the primary purpose of a tax is to obtain revenue for the government, while the primary purpose of a fee is to cover the expense of providing a service or of regulation and supervision of certain activities.” Id. at 441-42 (citing State v. Jackman, 60 Wis. 2d 700, 707, 211 N.W.2d 480 (1973)).

¶ 15.   The legislature appears to have recognized this distinction in drafting Wis. Stat. § 60.55(2), creating separate funding mechanisms designated “taxes” or “fees.” “One of the basic tenets of statutory interpretation is that the legislature is presumed to act with full knowledge of existing laws, including prior statutes.” Milwaukee Fed’n of Teachers, Local No. 252 v. Wis. Emp’t Relations Comm’n, 83 Wis. 2d 588, 598, 266 N.W.2d 314 (1978). Section 60.55(2) gives the town four options for funding fire protection services. Two specifically authorize the town to levy taxes to pay for those services. See § 60.55(2)(c), (d). In contrast, section 60.55(2)(b) allows the town to “[c]harge property owners a fee for the cost of fire protection.” The legislature presumably provided these funding options with full knowledge of the difference between a tax and a fee. It seems reasonable that the legislature would provide a mechanism for towns to recover the cost of fire protection services from counties and other tax-exempt entities. The fire protection fee explicitly set forth in section 60.55(2)(b) provides such a mechanism.

  ¶ 16.   The legislature’s use of the term “fee” does not end the inquiry; the amount charged must also function as a fee. Importantly, a fee is not limited to charges for “commodities actually consumed.” City of River Falls, 182 Wis. 2d at 442. In City of River Falls, a church appealed a judgment ordering it to pay the city charges associated with the cost of providing water for public fire protection under Wis. Stat. § 196.03(3)(b) (1993-94). Id. at 438. Among the services the city provided were water production, storage, and transmission for public fire protection. Id. at 439. The city elected to collect fire protection charges as part of each utility customer’s water bill as calculated by the customer’s property value, and the church argued that the statute improperly imposed a tax, not a fee, on tax-exempt properties. Id. at 438-39, 441-43.

¶ 17.   The court of appeals concluded that the public fire protection charge, which covered the expense of making water available, storing the water, and ensuring the water would be delivered in case it was needed to fight fires, was a fee, not a tax. The court discussed several relevant factors in assessing whether a special charge was a fee or a tax, including whether the statute’s administration was an integral part of the property taxing process, whether the municipality was carrying out a governmental or a proprietary function, and whether nonpayment of the charge resulted in a lien on the property. Id. at 442-43. Ultimately, however, the court emphasized that the dispositive question for determining whether a charge is a fee or a tax is whether the charge raises revenue or recoups costs for “services, supervision or regulation.” Id. at 442.

¶ 18.   Here, the legislature classified the special charge under Wis. Stat.
§ 60.55(2)(b) as a fee, not a tax. Based on the information you have supplied, the town has adopted an ordinance pursuant to this statute which has as its primary purpose the recoupment of services to cover the expenses of providing fire protection to property in the community and is not designed to raise general revenue. Although the charge might have some of the qualities of a tax discussed by the City of River Falls court, such as the imposition of a lien for nonpayment, on balance it appears to be a fee not a tax.

¶ 19.   Finally, I decline to answer your third question concerning the purpose for which the town may use the fire protection special charge funds. As discussed above, Wis. Stat. § 60.55(2)(b) allows a town to charge a fee for making fire protection generally available. And section 66.0627(2) permits the town to “impose a special charge against real property for current services rendered by allocating all or part of the cost of the service to the property served.” You have not provided any facts which indicate that the town is not abiding by these standards. Accordingly, this question is premature.

¶ 20.   I conclude that Wis. Stat. § 60.55(2)(b) authorizes a town to assess a charge for fire protection services based on the property owned, even if no fire calls are made. The charge is a fee and may be assessed against tax-exempt entities.

            Sincerely,

            J.B. VAN HOLLEN

            Attorney General

 

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