No. 3--06--0656 ______________________________________________________________________________ Filed January 14, 2008 IN THE APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 2008
ACME MARKETS, INC., ) Appeal from the Circuit Court ) for the 12th Judicial Circuit, Plaintiffs-Appellants, ) Will County, Illinois ) v. ) ) Docket No. 02-TX-205 KAREN CALLANAN, County Treasurer ) and ex-officio County Collector of Will ) County, Illinois, ) ) Defendant-Appellee, ) Honorable ) Herman A. Haase, ) Judge, Presiding.
______________________________________________________________________________
JUSTICE CARTER delivered the opinion of the court: ______________________________________________________________________________
Plaintiff taxpayer Acme Markets, Inc., filed an objection over a 2001 property tax levy
imposed by defendant Karen Callanan, county treasurer and ex-officio county collector of Will
County, to help pay for the operation of the Will County detention facility. At a hearing the trial
court found against plaintiff, denying plaintiff relief on its tax objection. The trial court later
denied plaintiff’s petition for a rehearing. Plaintiff now appeals the finding of the trial court and
we affirm.
FACTS
In 1997, the Will County Board voted to impose a property tax levy to help pay for
1 “Detention Home - Operations” purposes under section 5 of the County Shelter Care and
Detention Home Act (55 ILCS 75/5 (West 2004)). Will County was, at the time of the levy,
subject to the provisions of the Property Tax Extension Limitation Law (hereinafter PTELL). (35
ILCS 200/18-185 et seq. (West 2004)). Prior to the enaction of the levy in 1997, no referendum
was held and the levy was never submitted for approval to the voters of Will County. The levy
was imposed every year between 1997 and 2001 and was never submitted for voter approval at a
referendum. Plaintiff objected to the 2001 levy under PTELL, contending that since this was a
“new rate,” the law required that the county submit the levy to a referendum to be approved by
the voters of Will County pursuant to section 18-190 (35 ILCS 200/18-190 (West 2004)).
Plaintiff contended that since the levy was imposed in 1997 only by a vote of the county board
and not by referendum, the levy was void. At a hearing before the trial court in June 2006, the
court rejected plaintiff’s notion that the levy was a “new rate” requiring a referendum. Further,
the court found that any objections plaintiff had to the imposition of the levy without referendum
should have been raised at the time the levy was imposed in 1997, not four years later. The trial
court later denied plaintiff’s petition for rehearing on the matter, and this appeal follows.
ANALYSIS
On appeal, this court must determine whether or not the “Detention Home - Operations”
levy (hereinafter the levy) was a “new rate” for the purposes of the statute, thereby requiring a
referendum before imposition. Further, if this court determines that the levy was a “new rate,” we
must then decide whether the failure to hold a referendum on the tax’s imposition acts to void the
prior tax levies imposed in 1997, 1998, 1999, and 2000, not just 2001.
On appeal, both sides have stipulated as to the facts and the standard of review. There is
2 no factual dispute. Rather, the issues before this court rest entirely on statutory and case law
interpretation. As this is purely a question of law and statutory interpretation, our standard of
review is de novo. Central Illinois Light Co. v. Department of Revenue, 336 Ill.App.3d 908, 911,
784 N.E.2d 442, 445 (2003).
Plaintiff contends that defendant erred by not submitting the levy to a voter referendum
before enacting the tax. In support of this contention, plaintiff argues that as a “new rate” under
section 18-190, defendant was required to submit the levy to voter consideration and that
defendant’s failure to do so results in the levy being void. Defendant counters that the levy is not
a “new rate” under the statute and case law, and as a result, no voter referendum was required.
Rather, defendant contends that only the approval of the Will County Board, which was sought
and obtained, was required.
The levy was imposed to pay for the operations of the detention home and was authorized
under section 5 of the County Shelter Care and Detention Home Act (55 ILCS 75/5 (West
2004)). The Act states in part:
“[I]n counties with over 300,000 but less than 1,000,000 inhabitants that establish
a shelter care or detention home by majority vote of their county boards, taxes for
construction and maintenance of the home may be extended without adoption of
this Act by the legal voters of the counties and without a referendum.” 55 ILCS
75/5 (West 2004).
This provision then falls under PTELL, which states in relevant part:
3 “If a new rate or a rate increase is authorized by statute to be imposed without
referendum or is subject to a backdoor referendum, as defined in Section 28-2 of
the Election Code [10 ILCS 5/28-2 (West 2004)], the governing body of the
affected taxing district before levying the new rate or rate increase shall submit the
new rate or rate increase to direct referendum under the provisions of Article 28 of
the Election Code [10 ILCS 5/28-1 et seq. (West 2004)].” 35 ILCS 200/18-190
(West 2004).
Will County falls under the provisions of PTELL. It is also a county with between
300,000 and one million inhabitants. Further, the levy may be extended without a referendum.
Therefore, if it is a “new rate,” it will be subject to voter approval of a referendum under PTELL.
35 ILCS 200/18-190 (West 2004).
Whether a tax of the type imposed by defendant is considered new under PTELL was first
examined in In re Application of the Du Page County Collector for the Year 1993, 288 Ill.App.3d
480, 681 N.E.2d 135 (1997) (hereinafter 1212 Associates). In 1212 Associates, property owners
brought an action against a county collector where they objected to a tax levied by a public library
district for building and equipment purposes. 1212 Associates, 288 Ill.App.3d at 481, 681 N.E.2d
at 136. The objectors argued that the 1993 Glenside Public Library District levy violated section
18-190(a) of the Tax Cap Act (35 ILCS 200/18-190(a) (West 1994)) because it had not been
approved by a direct referendum. 1212 Associates, 288 Ill.App.3d at 481, 681 N.E.2d at 136.
(The statute concerned in this case was the Property Tax Extension Limitation Act, or “Tax Cap
4 Act,” a prior version of PTELL that operated in the same manner.) The trial court, siding with
the objectors, ruled that the tax was invalid because section 18-190(a) required a referendum be
held before a “new rate” or “rate increase” was imposed. 1212 Associates, 288 Ill.App.3d at 481,
681 N.E.2d at 136. In reversing the trial court’s ruling invalidating the tax , the Second District
Appellate Court, Justice McLaren, wrote:
“After reviewing the terms ‘new rate’ and ‘rate increase’ in context with
the entire provision, we determine that the terms do not apply to the 1993
Glenside Public Library District building and maintenance rate. When read in
context, the terms are clear and unambiguous. The terms ‘new rate’ and ‘rate
increase’ are followed by the phrase ‘authorized by statute.’ Thus, section 18-
190(a) of the Tax Cap Act applies only to rates that have been newly authorized by
statute or rate limits that have been increased by statute. Since 1978 public library
districts have been authorized to levy a building and maintenance tax at a rate of
0.02%. Pub. Act. 80-1152, eff. July 1, 1978. Because the tax was authorized
before 1993, the 1993 Glenside Public Library District building and maintenance
tax is not a ‘new rate.’ Further, because the tax rate limit of 0.02% has not been
increased, the 1993 Glenside Library District building and maintenance tax is not a
‘rate increase.’ Thus, section 18-190(a) does not apply and a direct referendum
was not required. Accordingly, the trial court erroneously granted the Objectors’
motion for judgment on the pleadings.” 1212 Associates, 288 Ill.App.3d at 483,
681 N.E.2d at 137-38.
5 1212 Associates, however, was later called into question by a subsequent decision from
the Second District also written by Justice McLaren, Allegis Realty Investors v. Novak, 356
Ill.App.3d 887, 827 N.E.2d 485 (2005). In Allegis Realty, property taxpayers filed objections to
a tax imposed by the Naperville Township Road District, alleging:
“[T]he county clerk extended a hard-road tax levy of $248,000 for 1997, at a rate
of $0.0127 per $100 of assessed valuation, by including that amount in an annual
certificate of levy. The purported authority for the extension was a referendum
held at the annual township meeting in 1979. That referendum authorized a
‘special tax rate of $0.167 on the [sic] $100 of assessed valuation.’ However, the
1979 referendum was void because notice was not provided as specified in section
6-601 of the Illinois Highway Code (Ill.Rev.Stat.1977, ch. 121, par. 6-601).”
Allegis Realty, 356 Ill.App.3d at 888, 827 N.E.2d at 486-87.
In Allegis Realty, the relevant section under the Township Code (hereinafter Code)
required that before establishing or increasing any township tax rate that may be established or
increased by the electors at the annual township meeting, the township clerk must be presented
with a petition authorizing that action signed by not less than 10% of the township’s registered
voters. 60 ILCS 1/30-20(b) (West 1996). The objectors contended that section 30-20(b)
applied, and since the petitions presented at the 1997 meeting contained only 50 signatures, far
less than the 10% of registered voters required, the referendum violated the Code. In reply, the
6 township road district contended that section 30-20(b) did not apply, asserting that section 30-
20(b) was limited to establishing or increasing a tax rate but that the district’s hard-road fund tax
levy had been authorized and extended for many years before 1997 and thus the tax was not
established or increased for 1997. Allegis Realty, 356 Ill.App.3d at 889, 827 N.E.2d at 487-88.
The trial court granted the district’s motion for summary judgment.
In reversing the trial court, the appellate court found that section 30-20(b) did apply. The
district, on appeal, tried to use the decision in 1212 Associates to argue that the 1997 referendum
did not establish or increase a township tax rate because, regardless of the district’s prior actions,
the General Assembly had long before authorized the tax rate, and the referendum was based on
this long-standing grant of legislative authority. Allegis Realty, 356 Ill.App.3d at 891, 827
N.E.2d at 489. The appellate court disagreed, and distinguished 1212 Associates, stating:
“[T]he statutes are distinguishable. In 1212 Associates, we held that, in section
18-190(a), the phrase ‘authorized by statute’ directly modified ‘new rate or rate
increase.’ Thus, a ‘new rate or rate increase’ meant a rate or increase brought
about by the General Assembly, not by the local taxing body. However, section
30-20(b) contains no such limitation.” Allegis Realty, 356 Ill.App.3d at 891-92,
827 N.E.2d at 489.
The court reasoned that 30-20(b) applied whenever the electors at an annual township
meeting vote on whether to establish or increase township taxes, as the body doing the increasing
or establishing, based on the statutory language, is the township, not the General Assembly.
7 Allegis Realty, 356 Ill.App.3d at 892, 827 N.E.2d at 489. Thus, 1212 Associates was
distinguishable based on the applicable statutes. However, the court went on to cast doubt on the
continued validity of its ruling in 1212 Associates. The court stated:
“We also agree with plaintiffs that the legislative history of section 18-
190(a) casts great doubt on the precedential value of 1212 Associates. Before we
issued our opinion there, the legislature amended the statute to specify that ‘[r]ates
required to extend taxes on levies subject to a backdoor referendum in each year
there is a levy are not new rates or rate increases under this Section if a levy has
been made for the fund in one or more preceding 3 levy years. ***[These changes]
are declarative of existing law and not a new enactment.’ Pub. Act 89-718, § 5,
eff. March 7, 1997. Therefore, the legislature intended that there could be a ‘new
rate or rate increase’ even without action by the legislature, e.g., when the local
taxing district enacts a levy after having made no levy in the preceding three years.
As a result, even could we analogize section 30-20(b) of the Township Code to
section 18-190(a) of the tax cap act, we doubt whether that would help the District
here, as the latter might apply even if the legislature has not acted recently.”
(Emphasis in original.) Allegis Realty, 356 Ill.App.3d at 892, 827 N.E.2d at 490.
Allegis Realty was eventually taken up and reversed by our supreme court, albeit on
grounds different from those presented in the instant case. See Allegis Realty Investors v. Novak,
223 Ill.2d 318, 860 N.E.2d 246 (2006). The supreme court never passed judgment on the dicta
8 contained at the end of Allegis Realty where Justice McLaren questioned the validity of his earlier
opinion in 1212 Associates regarding whether “new rate” meant only new taxes authorized by the
General Assembly, as opposed to existing statutorily authorized taxes imposed for the first time
by a local taxing body.
The regulations of the Department of Revenue construe “new rate” or “new tax” as
meaning a tax imposed for the first time by the taxing body, not just the General Assembly, which
supports plaintiff’s position. In the technical manual “Property Tax Extension Limitation Law”
published by the Department of Revenue, the Department defines a “new rate” as one not
previously levied, as opposed to one newly authorized by the legislature after PTELL became
effective. However, the regulations of the Department of Revenue in the Administrative Code or
its manuals are not binding on this court if they conflict with the governing statute. See United
Technical Corp. v. Department of Revenue, 107 Ill.App.3d 1062, 1067, 438 N.E.2d 535, 539
(1982).
In the instant case, the question of whether or not the levy is void is dependent on whether
the tax was considered “new” under section 18-190. This court must determine whether the
interpretation in 1212 Associates was correct or if as the dicta in Allegis Realty suggests, 1212
Associates was wrongly decided.
What section 18-190 defines “new rate” to be is a matter of statutory interpretation.
When presented with an issue of statutory construction, the role of the court is to ascertain and
give effect to the intent of the legislature. General Motors Corp. v. State of Illinois Motor
Vehicle Review Board, 224 Ill.2d 1, 13, 862 N.E.2d 209, 219 (2007). Legislative intent can be
determined from the language of the statute, which, if unambiguous, should be enforced as
9 written. General Motors Corp., 224 Ill.2d at 13, 862 N.E.2d at 219. When considering the intent
behind the statute, the court should look to the reason for the law, the problems the law remedies,
and the objects and purposes sought, not just the statutory language. General Motors Corp., 224
Ill.2d at 13, 862 N.E.2d at 219.
In examining the construction of section 18-190, we find that it meant to subject only
taxes newly authorized by statute to the popular referendum requirement. We concur with the
analysis conducted by the court in 1212 Associates. The terms are clear and unambiguous. “New
rate” and “rate increase” are followed by the phrase “authorized by statute.” The phrase
“authorized by statute” modifies the “new rate” and “rate increase” phrases. 1212 Associates, 288
Ill.App.3d at 483, 681 N.E.2d at 137-38.
As to the criticism of 1212 Associates in Allegis Realty, it should be remembered that the
court in Allegis Realty did not specifically overrule its earlier decision in 1212 Associates, but
rather chose instead to distinguish the two statutory sections at issue and only criticized 1212
Associates in dicta. Further, that criticism related mostly to subsequent amendments dealing with
“backdoor referendums.” The levy at issue in the present case does not have a backdoor
referendum and thus does not fall under that portion of the statute. Since the “Detention Home-
Operations” levy is not subject to a backdoor referendum, whether it is a new rate is still
determined by whether its statutory authorization, not use, predates the effective date of section
18-190. Regarding the Department of Revenue regulations, those regulations are persuasive but
not binding and this court does not have to follow those regulations if it finds them in conflict
with the plain meaning of the statute, as those rules can neither limit nor extend the scope of the
statute. See United Technical Corp., 107 Ill.App.3d at 1067, 438 N.E.2d at 539; Accord Du-
10 Mont Ventilating Co. v. Department of Revenue, 73 Ill.2d 243, 247, 383 N.E.2d 197, 200
(1978).
Based on the above, we find that “new rate” under the statute means only those new taxes
newly authorized by statutes enacted after the effective date of section 18-190, which was January
1, 1994 (Pub. Act 88-455 (1993)). Therefore, as the “Detention Home-Operations” levy was
authorized by statute as far back as 1907 and updated as recently as 1967, no referendum was
required before it could be imposed. 55 ILCS Ann. 75/5, Historical & Statutory Notes (West
2004). Since we have found that the levy was not a “new rate,” the county was not required to
hold referendums on the tax imposition. The decision of the trial court is affirmed.
Affirmed.
JUSTICE SCHMIDT, specially concurring:
I agree with the dissent, that a "new rate" is a tax that
has not previously been assessed in a particular jurisdiction. I
disagree with the Second District's interpretation of section 190
pronounced in In re Application of the Du Page County Collector
for the Year 1993, 288 Ill. App. 3d 480 (1997). The definition
created by the Second District is at odds with the plain and
ordinary meaning of "new rate" and seems stretched to accommodate
the tax challenged in that case. Department of Revenue
publication PTAX 1800 is not binding law, but it is ample
evidence that the ordinary meaning of "new rate" is "any rate for
a fund for which the district has never levied in the past."
Department of Revenue, Property Tax Extension Limitation Law
Technical Manual, 8 (2001).
11 Unlike Justice Carter, I believe a referendum was clearly
necessary to impose this tax in 1997. It was "new" then.
Paying a tax one year does not, in and of itself, foreclose
contesting its validity later. People ex rel. v. Tarman v.
Cincinnati, Indianapolis & Western R.R. Co., 261 Ill. 582, 104
N.E. 252 (1914). But each year's tax bill represents a different
cause of action with its own liabilities and defenses. People ex
rel. Lloyd v. University of Illinois, 357 Ill. 369, 192 N.E. 243
(1936). Consequently, an objection that was relevant in 1997 and
only in 1997 cannot be made in 2001. Plaintiffs do not allege a
"rate increase" since 1997.
Plaintiffs' arguments that they are acting as private
attorneys general to save the citizens of Will County from an
improper tax is disingenuous and belied by the record. The
record shows that plaintiffs contested this tax when it was new.
Instead of seeing their protest through to a court judgment for
the common good, they eked out a settlement in their own self-
interest. They did the same thing in following years. Now the
tax is no longer a new rate and plaintiffs have lost their basis
for objection.
The tax was new in 1997, it was not new in 2001. Therefore,
I concur with the judgment above.
PRESIDING JUSTICE McDADE, dissenting:
The majority affirms the decision of the Will County Circuit Court denying plaintiff Acme
Markets, Inc. Relief on its tax objection. For the reasons that follow, I respectfully dissent.
12 I would tend to agree with the majority and with the second district in In re Application of
the Du Page County Collector for the Year 1993, 288 Ill. App. 3d 480, 681 N.E.2d 135 (1997)
(hereinafter 1212 Associates), that the language of section 18-190 of the Property Tax Extension
Limitation Law (PTELL) (35 ILCS 2000/18-190 (West 2006)) is plain and unambiguous.
However, I think we would all be wrong in reaching that conclusion because I believe plaintiff is
correct that it, in fact, has a completely different meaning than that advanced by the majority.
That different reading is, in my opinion, at least equally reasonable, thus rendering the language
ambiguous..
The majority finds, as did the court in 1212 Associates, that "authorized by statute" refers
to and somehow serves to define "new rate or a rate increase." I think plaintiffs are correct and
that it refers to the language that follows it, so that it reads "authorized by statute to be imposed
without referendum..."rather than "[i]f a new rate is authorized by statute...".
I believe that what the statute says and means is: if a taxing body wants to levy a "new
rate" after January 1, 1994, pursuant to a statute that had authorized levying such a tax without
referendum or had made it subject to a backdoor referendum, it must now submit the proposed
new rate to direct referendum.
First, such an interpretation makes perfect syntactical sense. Section 18-190 does not
refer to a "new tax," but rather a "new rate." The applicable section of the County Shelter Care
and Detention Home Act (55 ILCS 75/5 (West 2006)) originally authorized the annual levy and
collection of "a tax not exceeding .015% or the rate limit in effect on July 1, 1967, whichever is
greater...for the purpose of...providing, establishing, supporting and maintaining such a shelter
care or detention home." Counties with more than 300,000 but less than 1,000,000 inhabitants
13 were authorized to levy and collect a larger tax (.04% for construction and .02% for operation)
"without adoption of this Act by the legal voters of the counties and without a referendum." The
statute then authorizes increases to "a rate not exceeding .10%." The interpretation developed by
1212 Associates and adopted by the majority in this case appears to require a new taxing statute
for section 18-190 to apply, and I do not believe that. that is what the legislature either said or
intended.
Second, the purpose of the PTELL is to provide greater citizen control over the levy of
the taxes they are required to pay. It would be contrary to that purpose (or would at least not be
fully consistent with it) to exclude from its protection any new increases under previously-
authorized taxing statutes that allow their imposition without referendum.
Third – and this is a logical extension of the second – section 18-190 would be
unnecessary if it does not apply to legislation pre-dating its enactment. The legislature could
simply make all new taxing statutes subject to referendum; there would be no need for a remedial
provision such as PTELL.
Fourth, submitting as I do that the statute must be ambiguous because reasonable minds
differ on what it actually says, I would find that the Illinois Department of Revenue’s definition of
a "new rate" is fully consistent with the reading of the plaintiffs (and mine) and should be
dispositive of the question before us. The department’s definition states:
"4. When a levy for a specific fund is made for the first time, this is
a new rate under Section 18-190 without regard to whether it is a
new statutory authorization." (Emphasis added.) Technical
Manual, Illinois Department of Revenue, 86 Ill. Adm. Code
14 110.190
The majority acknowledges that the regulations of the Department of Revenue construing
"new rate" or "new tax" as well as the section just cited from the manual support the statutory
construction advanced by plaintiff in this action and which I am advocating by way of this dissent.
The majority discounts these regulations and directions, however, saying: "the regulations of the
Department of Revenue in the Administrative Code or its manual are not binding on this court if
they conflict with the governing statute. See United Technical Corp. V. Department of Revenue,
107 Ill. App. 3d 1062, 1067, 438 N.E.2d 535, 539 (1982)." Slip op. at 9. It appears, however,
that Justice McLaren’s uncertainty about the continued validity of 1212 Associates is similarly
based.
The regulatory/statutory conflict on which the majority relies is only with what I believe to
be a flawed construction of the statute, not the statute itself. In the face of what seems to be a
clear ambiguity, we should be able to utilize those regulations to inform our decision on how the
language of the statute is properly construed to effect the legislative intent.
In summary, I believe that: the statutory language is ambiguous, the construction of that
language in 1212 Associates is flawed, the interpretation of the department charged with the
implementation of the statute is available to us for consideration, and that interpretation is quite
persuasive and should be followed by this court. Because this analysis differs from that of the
majority, I dissent.