In re Application of the Du Page County Collector

No. 2--96--1250

________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT
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In re APPLICATION OF THE ) Appeal from the Circuit Court
DU PAGE COUNTY COLLECTOR ) of Du Page County.
FOR THE YEAR 1993, )
)
Plaintiff-Appellant, )
) No. 94--TX--10028
v. )
)
1212 ASSOCIATES - MB MANAGEMENT )
COMPANY; SHAKER MANAGEMENT )
COMPANY; and UNKNOWN OTHER )
OBJECTORS, ) Honorable
) John W. Darrah,
Defendants-Appellees. ) Judge, Presiding.
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JUSTICE McLAREN delivered the opinion of the court:
The plaintiff, the Du Page County Collector for the year 1993
(Collector), appeals the trial court's judgment on the pleadings in
favor of the defendants, 1212 Associates - MB Management Company,
et al. (Objectors), in a tax objection case. We reverse and
remand.
In 1993 the Glenside Public Library District levied a tax of
$42,000 for building and equipment purposes which was extended at
the rate of $0.0108 per $100 of assessed valuation. This tax was
included in the 1994 tax bill paid by the defendant, Shaker
Management Company (Shaker), in the amount of $36.96 (valuation of
$341,180 x 0.0108%). Shaker paid the tax under protest and filed
a timely objection pursuant to section 23--10 of the Property Tax
Code (35 ILCS 200/23--10 (West 1994)).
The Glenside Public Library District was, at the time of the
levy, subject to the provisions of the Property Tax Extension
Limitation Act (35 ILCS 245/1--1 et seq. (West 1992) (now 35 ILCS
200/18--185 et seq. (West 1994))) (hereinafter Tax Cap Act). The
objection was made on the ground 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 direct referendum.
The parties and objectors in other pending cases agreed that
this matter was appropriate for consolidated disposition of the
legal issue presented by Shaker. The Objectors presented the trial
court with a test case stipulation identifying Glenside Public
Library District and 1212 Associates, et al. as the representatives
of all similarly situated taxing districts and objectors. The
Objectors agreed that the results in this case would bind the
others. The Objectors filed a motion for judgment on the
pleadings. On October 23, 1996, the trial court granted the
Objectors' motion for judgment on the pleadings. The trial judge
found that the Glenside Public Library District building and
equipment levy was invalid because section 18--190 of the Tax Cap
Act required a direct referendum before the levy could be extended.
This timely appeal followed. The Du Page Library System filed an
amicus brief in support of the Collector.
The standard guiding our review of the trial court's decision
to grant the Objectors' motion for judgment on the pleadings is
clear. Section 2--615(e) of the Code of Civil Procedure provides
that any party may move for judgment on the pleadings. 735 ILCS
5/2--615(e) (West 1994). Further, the motion may be based on
"defects in the pleadings" in that the complaint is "substantially
insufficient in law." 735 ILCS 5/2--615(a) (West 1994). On review
of the granting of a defendant's motion for judgment on the
pleadings, we must determine whether the allegations of the
complaint, when interpreted in a light most favorable to the
plaintiff, sufficiently set forth a cause of action on which relief
may be granted. Mt. Zion State Bank & Trust v. Consolidated
Communications, Inc., 169 Ill. 2d 110, 115 (1995); T&S Signs, Inc.
v. Village of Wadsworth, 261 Ill. App. 3d 1080, 1083 (1994). Our
review on appeal is de novo. Mt. Zion State Bank, 169 Ill. 2d at
115.
Section 35--5 of the Public Library District Act of 1991
(Public Library Act) (75 ILCS 16/35--5 (West 1994)) authorizes
library districts to levy taxes for two purposes: (1) for "the
establishment, maintenance, and support of a public library or
libraries within the district or for contracting library service"
(75 ILCS 16/35--5(a) (West 1994)); and (2) "for the purchase of
sites and buildings, the construction and equipment of buildings,
the rental of buildings required for library purposes, and
maintenance, repairs, and alterations of library buildings and
equipment" (75 ILCS 16/35--5(b) (West 1994)). The tax rate levied
for the first purpose may not exceed 0.15% of the value of the
taxable property within the district unless authorized by
referendum; and, if approved, the tax rate may not exceed 0.60%.
75 ILCS 16/35--5(a) (West 1994). The tax rate levied for the
second purpose may not exceed 0.02%. 75 ILCS 16/35--5(b) (West
1994). However, the 0.02% tax rate is subject to what is commonly
referred to as a "back door referendum." Section 35--5(b) of the
Public Library Act provides:
"In any year in which the board proposes to levy the
additional 0.02% tax, the board shall adopt an ordinance
determining to levy the tax. ***
***
Within 15 days after the adoption of the ordinance, it
shall be published in accordance with Section 1--30. ***
If no petition is filed with the board within 30 days
after publication or posting of the ordinance, the district
shall then be authorized to levy the tax." 75 ILCS 16/35--
5(b) (West 1994).
The Tax Cap Act limits the use of certain back door referenda. 35
ILCS 200/18--190(a) (West 1994). Section 18--190(a) of the Tax Cap
Act provides:
"(a) If a new rate or rate increase is authorized by
statute to be imposed without referendum or is subject to a
backdoor referendum, *** 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 ***." 35 ILCS 200/18--190(a) (West 1994).
On appeal, the Collector argues that the trial court erred in
finding that the 1993 Glenside Public Library District building and
equipment tax levy violated section 18--190(a) of the Tax Cap Act.
The Collector first argues that the 1993 levy of 0.0108% is not a
"new rate" or "rate increase" within the meaning of the Tax Cap
Act. The Collector claims that section 18--190(a) applies only to
new or increased statutory rate limits. The Objectors argue that
the 1993 building and maintenance tax is both a "new rate" and a
"rate increase" within the meaning of the Tax Cap Act. We agree
with the Collector.
In interpreting a statute, a court must determine and give
effect to the intent of the legislature. Nottage v. Jeka, 172 Ill. 2d 386, 392 (1996). The court must first look to the language of
the statute to determine the legislature's intent. Nottage, 172 Ill. 2d at 392. When the language is clear and unambiguous, it
must be given its plain and ordinary meaning. Nottage, 172 Ill. 2d
at 392. In addition, words and phrases must be interpreted in
context with the words and phrases surrounding them. Cooper v.
Department of the Lottery, 266 Ill. App. 3d 1007, 1017 (1994).
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 which 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.
We recognize that our interpretation of section 18--190(a) of
the Tax Cap Act differs from that of the Illinois Department of
Revenue. See 86 Ill. Adm. Code 110.190 (19__). Section 110.190
of the Administrative Code provides:
"b.) Levies subject to annual back door referendum ***
2.) Rates 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
Section 18--190 if a levy has been made for the
fund in one or more of the preceding three levy
years." 86 Ill. Adm. Code 110.190 (19__).
Our interpretation differs in that, if the legislature authorizes
a new rate limit, section 18--190(a) applies when a tax is levied
which reflects the new increase. The regulation erroneously limits
the statute to taxes that have not been levied in the preceding
three years. Nothing in the language of the statute supports this
interpretation. Because Illinois Department of Revenue regulation
2624(b)(2) limits the scope of section 18--190 of the Tax Cap Act,
we are not bound by it. Arenson v. Department of Revenue, 279 Ill.
App. 3d 355, 359 (1996).
The Objectors argue that the 1993 Glenside Public Library
District building and maintenance tax is a new rate because library
districts must pass an ordinance each year the tax is levied. See
75 ILCS 16/35--5(b) (West 1994). Thus, according to the Objectors,
the authority to impose the tax expires annually and each year's
rate is "new." We disagree with this interpretation.
The requirement of a condition does not constitute an
expiration and then a renewal of statutory authority. Section 35--
5(b) of the Public Library Act authorizes public library districts
to levy a building and maintenance tax. The fact that each year an
ordinance must be passed to levy the tax does not mean that the
authority expires and is then renewed each year. If it were true
that the imposition of conditions resulted in the annual expiration
of the authority to tax, then every tax would be a "new rate" and
would require direct referendum under section 18--190. For
example, section 18--50 of the Property Tax Code requires each
taxing district to file a certified copy of its appropriation and
budget ordinances with the county clerk every year. 35 ILCS
200/18--50 (West 1994). If a taxing districts fails to comply, the
county clerk may refuse to extend the tax levies. 35 ILCS 200/18-
-50 (West 1994). Applying the Objectors' reasoning, every rate
would be "new" every year because taxing districts must meet a
condition before the county clerk is obligated to levy on its
behalf. In addition, if the Objectors' interpretation were true,
there would be no need for the 5% extension limitation provision
contained in section 18--205 of the Tax Cap Act, because every tax
rate would be subject to referendum regardless of the amount of the
increase. 35 ILCS 200/18--205 (West 1994) (requiring a direct
referendum for a levy increase of 5% of the preceding levy year or
an increase which is greater than the percentage increase in the
Consumer Price Index). The language of sections 18--190 and 18--
205 does not support the Objectors' broad interpretation.
Further, the Objectors argue that the 1993 building and
maintenance tax is an additional tax because it is for the same
purpose provided for in section 35--3(a) of the Public Library Act.
The Objectors claim that, since it is an additional tax, any levy
constitutes a rate increase within the meaning of section 18--
190(a). After comparing the clear and unambiguous language of
sections 35--3(a) and (b) of the Public Library Act, we believe the
levies are for different purposes. A levy under section 35--5(a)
is for "the establishment, maintenance, and support of a public
library or libraries within the district or for contracting library
service." (Emphasis added.) 75 ILCS 16/35--5(a) (West 1994). In
contrast, a levy under section 35--5(b) is "for the purchase of
sites and buildings, the construction and equipment of buildings,
the rental of buildings required for library purposes, and
maintenance, repairs, and alterations of library buildings and
equipment." (Emphasis added.) 75 ILCS 16/35--5(b) (West 1994).
Thus, section 35--5(a) is for the maintenance of the entire library
system, while the tax levy under section 35--5(b) is only for the
maintenance of buildings and equipment within the system.
Accordingly, the taxes are for different purposes.
The Objectors also argue that the legislative history supports
their argument that section 18--190(a) of the Tax Cap Act requires
a direct referendum for taxes levied under section 35--5(b) of the
Public Library Act. The Objectors claim that the intent of the
legislature in passing the Tax Cap Act was to prohibit all backdoor
referenda. The Objectors claim that the legislature intended to
give the residents of the collar counties greater control over
particular tax levies. Essentially, the Objectors support their
argument with portions of the legislative debates best
characterized by Senator Dunn's statement:
"[T]his is a mad-as-hell rebellion that really has been
around for a long time to many of us. Do the homeowners feel
they're getting a good bang for their bucks? Is it really
their money? *** Quite frankly, the homeowners in my area
have had enough. And they've listened to all the reasons why
we have obscene taxes in our area; and, quite frankly, they
don't like the answers they get." 91st Ill. Gen. Assem.,
Senate Proceedings, July 18, 1991, at 12 (statements of
Senator Dunn).
The Objectors also cite the preamble to the Tax Cap Act, which
states:
"[A]n increase in the demand for basic local governmental and
enhanced facilities and services, as well as the proliferation
of special taxing districts, have all contributed to
consistent double digit increases in property tax extensions.
***
The General Assembly further finds that a reasonable and
responsible approach to containing such phenomenal increases
in property tax extensions in these affected counties is to
provide a limitation on such increases that allows [the]
taxing districts *** to increase revenues modestly over prior
years extensions and to provide citizens the opportunity to
further increase tax extensions by referendum." Pub. Act 87--
17, Preamble, approved July 25, 1991.
Initially, we note that, because we have determined the
language of section 18--190 of the Tax Cap Act as clear and
unambiguous, we need not consider legislative history. Nottage,
172 Ill. 2d at 392 ("When the statutory language is clear, no
resort is necessary to other tools of interpretation"). However,
assuming, arguendo, that we must consider legislative history,
nothing in the statements cited by the Objectors supports the claim
that the legislature intended on prohibiting all backdoor
referenda. The statements illustrate merely a general intent to
give taxpayers greater control over property tax levies. This
general intent does not allow us to expand section 18--190 beyond
its plain and ordinary meaning. Nottage, 172 Ill. 2d at 392
("courts should not, under the guise of statutory construction, add
requirements or impose limitations that are inconsistent with the
plain meaning of the enactment").
In its amicus brief, the Du Page Library System argues that
the Tax Cap Act is unconstitutional. Because we reverse on other
grounds, we need not address this issue.
Finally, the Collector urges this court to reverse and remand
with directions for the entry of an order overruling the objection
against the 1993 Glenside Public Library District building and
maintenance levy and all similarly situated districts. However,
because the Collector failed to file a motion for summary judgment,
we are unable to grant all the relief the Collector seeks.
Instead, we remand this cause for further proceedings consistent
with this opinion.
The judgment of the circuit court of Du Page County is
reversed, and the cause is remanded.
Reversed and remanded.
GEIGER, P.J., and INGLIS, J., concur.