dissenting.
Financing of state and county government, including public education, is largely provided through ad valorem taxation. It is, therefore, important that our Court require strict compliance with our constitutional and statutory taxation scheme.
The Constitution of the State of Oklahoma tells us what can be taxed and what cannot be taxed. In my opinion the majority opinion has carved out an unauthorized exemption for a favored class. The following legal precepts compel me to dissent from the majority opinion:
(1) A leasehold for a term of years is an estate in real property. Title 60 O.S.1981 § 22.
(2) All property in Oklahoma, whether real or personal, is subject to taxation except that which is exempt. Title 68 O.S.1981 § 2404.
(3) Exemption from taxation is never allowed except by a special and definite provision in the Oklahoma Constitution. Okla. Const, art. 5, § 50.
(4) The Legislature cannot grant exemptions not recognized by the Constitution, nor enlarge exemptions recognized. Home-Stake Production Co. v. Board of Equalization, 416 P.2d 917 (Okla.1966).
(5) All property of the United States and of this State, and of counties and of municipalities of this State are exempt from taxation. Okla. Const, art. 10, § 6. While public trusts are exempt by this provision, it would take a constitutional amendment to extend this proviso to exempt a lease from a public trust to a private sector for profit.
(6) If these privately owned leaseholds are not taxable, they are a favored class of property — an unconstitutional application.
(7) In the case of Central Coal & Lumber Co. v. Board of Equalization, 70 Okl. 181, 173 P. 442 (1918), the lessee constructed 150 houses on a tract of unimproved land, which was owned by a tax-exempt entity. The Oklahoma Supreme Court held the houses were separately taxable to the lessee.
(8) Taxation must be fair and uniform upon the same class of subjects. Okla. Const, art. 10, § 5.
(9) Title 68 O.S.1981 § 2419 provides that all real property for the purpose of ad valorem taxation shall be construed to mean the land itself and all rights and privileges thereto belonging or in any wise appertaining. Certainly, a reasonable interpretation of this statute would include a leasehold estate. Identical provisions in three other states have held such statutes to include a leasehold estate. Iron Co. v. State Tax Commission, 437 S.W.2d 665 (Mo.1968); Application for Awarding of Process of Subpoena, [21 N.J.Misc. 387] 34 A.2d 239 (N.J.1943); See Moeller v. Gormley, 44 Wash. 465, 87 P. 507 (1906).
I believe when a public trust leases its property to a private person or corporation for profit it is no longer the owner of the entire fee estate. Only the reversionary interest is owned by the public trust for the duration of the lease. Consequently, the reversionary interest is the only interest which is exempt under § 6 of the Oklahoma Constitution. I therefore would reject appellants’ contention that their leasehold estates are exempt under § 6.
I am authorized to state that Chief Justice DOOLIN, Justice SIMMS and Justice ALMA WILSON join in this dissenting opinion and concur in the views herein expressed.