Justia.com Opinion Summary: Effective with 1982 legislation, a portion of each motorcycle registration fee was deposited in the state treasury to fund a motorcycle safety training program. In 1993, the amount set aside for the program was increased to be the total amount of each fee, and the monies were to be placed in a trust fund outside of the state treasury. Without amending the Act, the legislature began, in 1992, to authorize the transfer of money from the motorcycle fund and other funds into the General Revenue Fund, through budget implementation acts and amendments to the State Finance Act. A nonprofit corporation initiated a class action. Summary judgment was granted for the defense, and the appellate court affirmed. The Illinois Supreme Court affirmed, finding no evidence that the cycle fees are private. The court rejected an argument based in trust-law principles, arguing that the trust was irrevocable because no power to revoke the trust was conferred by the legislation that created it. A general assembly cannot control the actions of a subsequent elected body. It has long been recognized that the legislature has the authority to order monies collected in one fund to be transferred to a different fund.
Receive FREE Daily Opinion Summaries by Email Court description: Pursuant to 1982 legislation, portions of each motorcycle registration fee began
to be set aside and placed in the state treasury to fund a motorcycle safety training
program under the Cycle Rider Safety Training Act. Effective January 1, 1993, the
amount set aside for this purpose was increased to be the total amount of each fee,
and the monies were stated to be placed in a “trust fund outside of the State treasury.”
This statute has not been substantially changed since its last amendment in December
of 1992. However, without amending the Cycle Rider Safety Training Act, the
legislature began, in 1992, to authorize the transfer of money from the motorcycle
fund and numerous other funds into the General Revenue Fund, through budget
implementation acts and amendments to the State Finance Act. Most recently, the
latter was amended in 2004 to specifically authorize the Governor to transfer funds
held by the state treasury to the General Revenue Fund. Governor Blagojevich made
a number of such transfers, including from the motorcycle fund.
This Sangamon County class action was initiated in 2006 by A.B.A.T.E., a
nonprofit corporation whose members are motorcycle enthusiasts and by Gene
Beenenga, one of its members, challenging the transfers from the cycle fund.
Ultimately, summary judgment was granted for the defense, and the appellate court
affirmed. In this decision, the supreme court also affirmed.
The plaintiffs complained that money held in special funds should not be taken
to meet the state’s budget emergencies and that, more specifically, the cycle funds
were protected as held in a trust which was designated as outside of the state treasury.
They also theorized that the cycle funds were private, and, thus, their transfer to the
General Revenue Fund was an unconstitutional “taking.”
In rejecting these theories, the Illinois Supreme Court found no evidence in the
record that the cycle fees are private. Also, the plaintiffs relied on trust-law principles
in claiming that the trust was irrevocable because no power to revoke the trust was
conferred by the legislation which created it. This theory was rejected here because
one General Assembly cannot control the actions of a subsequent elected body. It has
long been recognized that the legislature has the authority to order monies collected
in one fund to be transferred to a different fund.
The supreme court concluded that the legislature cannot create an irrevocable
trust with public money because this would place an unconstitutional restraint upon
the legislature’s plenary power. The court, thus, found no impediment to the
legislature’s withdrawals from the cycle fund.
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2011 IL 110611
IN THE
SUPREME COURT
OF
THE STATE OF ILLINOIS
(Docket No. 110611)
A.B.A.T.E. OF ILLINOIS, INC., et al., Appellants, v. PATRICK
QUINN, Governor of Illinois, et al., Appellees.
Opinion filed October 27, 2011.
JUSTICE BURKE delivered the judgment of the court, with
opinion.
Justices Freeman, Thomas, Garman, Karmeier, and Theis
concurred in the judgment and opinion.
Chief Justice Kilbride dissented, with opinion.
OPINION
¶1
Effective January 1, 1993, the legislature amended the Cycle
Rider Safety Training Act (the Act) (625 ILCS 35/1 et seq. (West
1994)). Among other things, this amendment changed the Cycle Rider
Safety Training Fund (CRSTF) from a special fund inside the state
treasury to a “trust fund outside of the State treasury.” 625 ILCS 35/6
(West 1994). In this appeal we are asked to determine what effect this
amendment has on the legislature’s authority to order the transfer of
funds out of the CRSTF and into the General Revenue Fund (GRF);
whether the transfer of funds out of the CRSTF amounts to an
unconstitutional “taking” of private property without just
compensation; and whether, in order to transfer funds out of the
CRSTF, the legislature must first amend the CRST Act.
¶2
The appellate court held that the removal of funds from the
CRSTF was not an unconstitutional taking and that the legislature has
the authority to order a transfer of funds out of the CRSTF and into
the GRF. 401 Ill. App. 3d 326. We now affirm the judgment of the
appellate court.
¶3
¶4
BACKGROUND
On January 1, 1982, the Cycle Rider Safety Training Act came
into effect. The stated purpose of the Act is “to promote safety for
persons and property connected with the use and operation of
motorcycles, motor driven cycles and motorized pedalcycles.” Ill.
Rev. Stat. 1983, ch. 95½, ¶ 801 (now 625 ILCS 35/1). The CRSTF
was created in section 6, which initially provided as follows:
Ҥ 6. To finance the Cycle Rider Safety Training program
and to pay the costs thereof, the Secretary of State will
hereafter deposit in the State Treasury an amount equal to
$4.00 for each Annual Fee, and $2.00 for each Reduced Fee,
for the registration of each motorcycle, motor driven cycle
and motorized pedalcycle processed by the Office of the
Secretary of State during the preceding quarter, which amount
the State Comptroller shall transfer quarterly to a special fund
to be known as ‘The Cycle Rider Safety Training Fund’,
which is hereby created and which shall be administered by
the Department. Appropriations from the ‘Cycle Rider Safety
Training Fund’ shall be made by the General Assembly only
to the Department, and shall only be used for the expenses of
the Department in administering the provisions of this Act,
for funding of contracts with approved Regional Cycle Rider
Safety Training Centers for the conduct of courses, or for any
purpose related or incident thereto and connected therewith.
Whenever the total of the amount currently in the Cycle Rider
Safety Training Fund and current grants to the Department
from the federal government for cycle rider safety training in
Illinois exceed $1,200,000, the Department will notify the
Governor and the Governor may notify the State Comptroller
and State Treasurer of the amount to be transferred from the
Cycle Rider Safety Fund to the Illinois Road Fund so that said
total approximately equals $1,200,000, and, upon receipt of
such notification, the State Comptroller shall transfer such
-2-
¶5
¶6
amount to the Illinois Road Fund.” Ill. Rev. Stat. 1983, ch.
95½, ¶ 806.
The Act was amended in January 1992 through Public Act
87–838, entitled “Emergency Budget Act of Fiscal Year 1992.” This
amendment added the following language to the end of section 6:
“In addition to any other permitted use of moneys in the
Fund, and notwithstanding any restriction on the use of the
Fund, moneys in the Cycle Rider Safety Training Fund may
be transferred to the General Revenue Fund as authorized by
this amendatory Act of 1992. The General Assembly finds
that an excess of moneys exists in the Fund. On February 1,
1992, the Comptroller shall order transferred and the
Treasurer shall transfer $200,000 (or such lesser amount as
may be on deposit in the Fund and unexpended and
unobligated on that date) from the Fund to the General
Revenue Fund.” Ill. Rev. Stat. 1991, ch. 95½, ¶ 806.
Later that same year, in December 1992, the legislature passed
Public Act 87–1217 over the Governor’s veto. With this legislation,
section 6 was amended effective January 1, 1993, to provide as
follows:
“To finance the Cycle Rider Safety Training program and to
pay the costs thereof, the Secretary of State will hereafter
deposit with the State Treasurer an amount equal to each
annual fee and each reduced fee, for the registration of each
motorcycle, motor driven cycle and motorized pedalcycle
processed by the Office of the Secretary of State during the
preceding quarter as required in subsection (d) of Section
2–119 of the Illinois Vehicle Code [625 ILCS 5/2–1191],
1
At the time of this amendment, paragraph (d) of section 2–119 of the
Illinois Vehicle Code (625 ILCS 5/2–119(d) (West 1994)) provided as
follows:
“Beginning January 1, 1992 and until January 1, 1994, of the
monies collected as a registration fee for each motorcycle, motor
driven cycle and motorized pedalcycle, $7 of each annual
registration fee for such vehicle and $3.50 of each semiannual
registration fee for such vehicle is deposited in the Cycle Rider
Safety Training Fund.
Beginning January 1, 1994, of the monies collected as a
registration fee for each motorcycle, motor driven cycle and
-3-
¶7
¶8
which amount the State Comptroller shall transfer quarterly
to a trust fund outside of the State treasury to be known as the
Cycle Rider Safety Training Fund, which is hereby created. In
addition, the Department may accept any federal, State, or
private moneys for deposit into the Fund and shall be used by
the Department only for the expenses of the Department in
administering the provisions of this Act, for funding of
contracts with approved Regional Cycle Rider Safety Training
Centers for the conduct of courses, or for any purpose related
or incident thereto and connected therewith.” 625 ILCS 35/6
(West 1994).
In addition to making the CRSTF a “trust fund outside of the
State treasury,” the amended statute struck the provision which
previously permitted the regular transfer of monies out of the CRSTF
and into the Road Fund. It also struck the provision added by the
January 1992 amendment which permitted a sweep of $200,000 into
the General Revenue Fund in February 1992.
The statute has not been substantively amended since the
December 1992 amendment. However, without amending the CRST
Act, the legislature authorized the transfer of monies from the CRSTF
(and numerous other funds) into the GRF with its enactment of Public
Act 93–32, the Budget Implementation Act for fiscal year 2004 (the
FY2004 BIMP). To accomplish this, the FY2004 BIMP (which
became effective June 20, 2003), amended the State Finance Act (30
ILCS 105/1 et seq. (West 2002)), by creating sections 8.42 and 8h.
motorized pedalcycle, $8 of each annual registration fee for such
vehicle and $4 of each semiannual registration fee for such
vehicle is deposited in the Cycle Rider Safety Training Fund.”
This paragraph was later amended by Public Act 90–622, as follows:
“(d) Beginning January 1, 1999, of the monies collected as a
registration fee for each motorcycle, motor driven cycle and
motorized pedalcycle, 27% of each annual registration fee for
such vehicle and 27% of each semiannual registration fee for such
vehicle is deposited in the Cycle Rider Safety Training Fund.”
625 ILCS 5/2–119(d) (West 1998).
Paragraph (d) of section 2–119 has not been amended since Public Act
90–622.
-4-
¶9
¶ 10
¶ 11
The newly created section 8.42 of the State Finance Act provided in
pertinent part:
“In order to address the fiscal emergency resulting from
shortfalls in revenue, the following transfers are authorized
from the designated funds into the General Revenue Fund:
***
Cycle Rider Safety Training Fund ......... $ 1,000,000.
***
All such transfers shall be made on July 1, 2003, or as
soon thereafter as practical. These transfers may be made
notwithstanding any other provision of law to the contrary.”
30 ILCS 105/8.42 (West Supp. 2003).
The newly created section 8h of the State Finance Act provided:
“Notwithstanding any other State law to the contrary, the
Director of the Bureau of the Budget may from time to time
direct the State Treasurer and Comptroller to transfer a
specified sum from any fund held by the State Treasurer to the
General Revenue Fund in order to help defray the State’s
operating costs for the fiscal year.” Pub. Act 93–32 (eff. June
20, 2003) (adding 30 ILCS 105/8h).
Subsequently, the legislature enacted Public Act 93–839, the
Budget Implementation Act for fiscal year 2005 (the FY2005 BIMP),
which became effective July 30, 2004. The FY2005 BIMP, among
other things, rewrote section 8h of the State Finance Act to provide
as follows:
“[N]otwithstanding any other State law to the contrary, the
Governor may, through June 30, 2007, from time to time
direct the State Treasurer and Comptroller to transfer a
specified sum from any fund held by the State Treasurer to the
General Revenue Fund in order to help defray the State’s
operating costs for the fiscal year.” (Emphasis added.) 30
ILCS 105/8h (West 2004).
In June 2006, then-Governor Blagojevich issued a number of fund
transfer notifications directing the transfer of money from several
special funds into the General Revenue Fund. One such fund transfer
notification ordered the transfer of $296,000 from the CRSTF into the
General Revenue Fund pursuant to “Public Act 93–0032 (30 ILCS
105/8h Sec. 8h)” and the “authorization set forth in amendments to
30 ILCS 105/8h in P.A. 93–839.”
-5-
¶ 12
¶ 13
¶ 14
On June 9, 2006, A.B.A.T.E. of Illinois, Inc., and K. Gene
Beenega (plaintiffs) sought a temporary restraining order to prevent
transfers out of certain special funds from taking place in accordance
with the fund transfer notifications that the Governor had issued. The
trial court entered a temporary restraining order on June 9, 2006.
Thereafter, on June 12, 2006, plaintiffs filed a motion for
preliminary injunction, as well as a putative class action complaint
against Patrick Quinn, Daniel W. Hynes, and Alexi Giannoulias, in
their official capacities as Governor, Comptroller and Treasurer,
respectively. Plaintiffs sought declaratory judgment, permanent
injunction, and mandamus, contending that the transfer of funds out
of the CRSTF and other trust and/or special dedicated funds, pursuant
to Public Acts 93–32, and 93–839, and “all other state governmental
actions removing money from Trust/Special Dedicated Funds and
transferring it into the General Revenue Fund,” violated the
prohibition of amendment by reference, revenue, takings, uniformity,
equal protection, due process, and contracts clauses of the Illinois
Constitution, as well as the takings, equal protection, due process and
contracts clauses of the United States Constitution. As a remedy,
plaintiffs sought the return of monies already transferred from certain
identified funds, including the CRSTF, as well as an injunction to bar
defendants from transferring any additional monies out of the
identified funds.2
In an order dated July 28, 2006, the circuit court of Sangamon
County denied plaintiffs’ motion for a preliminary injunction.
Thereafter, defendants moved for the dismissal of plaintiffs’
complaint. On November 15, 2006, the trial court granted defendants’
motion, dismissing all counts except for those regarding the CRSTF.
Subsequently, on April 30, 2008, defendants moved for summary
judgment on the remaining claims, arguing that the legislative actions
authorizing the transfer of monies from the CRSTF to the GRF were
constitutional and all of plaintiffs’ arguments to the contrary were
without merit. Plaintiffs filed a cross-motion for summary judgment
on August 12, 2008, and on October 23, 2008, the trial court denied
2
Plaintiffs alleged, and it is uncontested, that pursuant to Public
Acts 93–32 and 93–839 over $1.2 million was transferred out of the
CRSTF and into the General Revenue Fund. According to the Illinois
Comptroller’s website, as of August 11, 2011, the cash balance in the Cycle
Rider Safety Training Fund is $10,775,695.46.
-6-
¶ 15
¶ 16
¶ 17
¶ 18
¶ 19
¶ 20
plaintiffs’ motion and granted defendants’ motion, upholding the
constitutionality of the BIMPs. Plaintiffs appealed.
The appellate court affirmed the lower court’s grant of summary
judgment to the defendants. 401 Ill. App. 3d 326. While assuming
that the CRSTF was a trust, the appellate court found that it was not
irrevocable and, therefore, rejected plaintiffs’ claim that the Ninetythird General Assembly did not have authority to transfer monies
from the CRSTF into the General Revenue Fund. The appellate court
also found that the funds in the CRSTF were not private and, thus,
rejected plaintiffs’ only remaining constitutional claim, i.e., that the
transfer of monies out of the CRSTF was a “taking” of private
property in violation of the takings clause of the Illinois and United
States Constitutions.
One appellate justice dissented, finding that, because the CRSTF
is a trust, once monies are deposited into the CRSTF, the beneficial
interest in the res of the trust belongs to the trust beneficiaries. Thus,
the dissenting justice agreed with plaintiffs that any sweep of funds
out of the CRSTF and into the GRF constituted an unconstitutional
taking.
Plaintiffs petitioned for leave to appeal in this court, which we
granted. Ill. S. Ct. R. 315 (eff. Feb. 26, 2010).
ANALYSIS
In this appeal we are asked to decide whether the FY2004 and
FY2005 BIMPs were unconstitutional to the extent that they
authorized the sweep of funds out of the Cycle Riders Safety Training
Fund and into the General Revenue Fund. In order to decide this
issue, we must construe section 6 of the Cycle Rider Safety Training
Act and decide whether, as plaintiffs contend, the Eighty-seventh
General Assembly took away the authority of all future legislatures
to transfer funds out of the CRSTF when it amended section 6,
making the CRSTF a “trust fund outside of the State treasury.”
At the outset, we note that neither plaintiffs, nor defendants, have
directed our attention to any Illinois case law which has interpreted
the meaning of legislation which designates a special fund as a “trust
fund outside of the State treasury.” Also, our own research has been
unsuccessful in uncovering any Illinois case law which sheds any
light on the issue before us. Thus, the issue is one of first impression
for this court.
-7-
¶ 21
¶ 22
¶ 23
¶ 24
¶ 25
¶ 26
Standard of Review
Like the appellate court below, we review the trial court’s order
granting summary judgment in favor of defendants. Accordingly, we
are presented with a question of law and the de novo standard of
review applies. Millennium Park Joint Venture, LLC v. Houlihan, 241
Ill. 2d 281, 309 (2010) (summary judgment orders are reviewed de
novo). As our Code of Civil Procedure provides, summary judgment
is proper where the “pleadings, depositions, and admissions on file,
together with the affidavits, if any, show that there is no genuine issue
as to any material fact and that the moving party is entitled to a
judgment as a matter of law.” 735 ILCS 5/2–1005(c) (West 2010).
Further, this court has held that when parties file cross-motions for
summary judgment, they indicate their mutual agreement that only a
question of law is involved and, thus, invite the court to decide the
issues based on the record. Millennium Park Joint Venture, LLC v.
Houlihan, 241 Ill. 2d at 309.
The de novo standard of review is also dictated by the fact that the
issue before us involves the construction of a statute. See Ries v. City
of Chicago, 242 Ill. 2d 205 (2011).
The Nature of the CRSTF
It has long been recognized that the legislature has the authority
to order monies collected in one fund be transferred into a different
fund. See Department of Public Welfare v. Haas, 15 Ill. 2d 204, 215
(1958) (“The fact that the legislature may provide that amounts, when
collected, shall be placed in a certain fund does not ordinarily
preclude a later General Assembly from ordering it paid into another
fund or from abolishing the fund altogether.”); see also Valstad v.
Cipriano, 357 Ill. App. 3d 905, 917-18 (2005) (the transfer of money
accumulated in special funds into a general revenue fund is generally
within the legislature’s province and authority); Terra-Nova
Investments v. Rosewell, 235 Ill. App. 3d 330, 340 (1992) (same).
While plaintiffs do not dispute the legislature’s general authority to
divert funds for public purposes, they claim that, here, because the
legislature made the CRSTF a “trust fund outside of the State
treasury,” the legislature lacks authority to sweep funds out of the
CRSTF and into the GRF.
In support of their claim, plaintiffs first argue that the CRSTF is
a trust containing funds which are private, not public. According to
plaintiffs, the portion of the registration fees paid by motorcyclists
-8-
¶ 27
¶ 28
¶ 29
and allocated to the CRSTF is a separate “surcharge” paid over and
above the fee for registering and licensing motorcycles. This
“surcharge,” plaintiffs assert, never enters or passes through the state
treasury before being placed into the CRSTF and, for this reason,
never becomes “public funds.” Plaintiffs liken the “surcharge” paid
by motorcyclists to the workers compensation premiums paid by
Kentucky insurance carriers, self-insurance groups and self-insured
employers in Thompson v. Kentucky Reinsurance Ass’n, 710 S.W.2d
854 (Ky. 1986), or the medical malpractice annual assessment paid
by health care providers in Wisconsin Medical Society, Inc. v.
Morgan, 2010 WI 94, 787 N.W.2d 22. Plaintiffs conclude that the
monies in the CRSTF are not state funds, but private money held in
trust by the state, which is acting as trustee.
Alternatively, plaintiffs argue that, even if the registration and
licensing fees are public funds when paid, they become private funds
once they enter the CRSTF. This is so, plaintiffs contend, because the
Eighty-seventh General Assembly, when it made the CRSTF into “a
trust fund outside of the State treasury,” intended to make–and
succeeded in making–the CRSTF an irrevocable private trust.
Plaintiffs contend that the trust is irrevocable because the Eightyseventh General Assembly did not reserve the power to confiscate or
revoke the trust. Further, because the trust is irrevocable, once the
funds are deposited into the CRSTF, the state no longer holds legal
title to the trust property and the beneficiaries’ interest in the trust
property is vested. As a result, plaintiffs assert that the funds in the
CRSTF are private, not public, funds.
In either case, plaintiffs conclude that, because the monies in the
CRSTF are private funds, any transfer of these funds into the GRF
constitutes a “taking” of private property for public purposes without
just compensation, in violation of our state and federal constitutions.
Ill. Const. 1970, art. I, § 15; U.S. Const., amend. V. As a result,
plaintiffs contend that the funds contained in the CRSTF must remain
inviolable such that the Ninety-third General Assembly or, indeed,
any future General Assembly, is without authority to order the
transfer of funds out of the CRSTF and into the GRF. We disagree.
First, plaintiffs wrongly characterize the funds which enter the
CRSTF as private money. Although the Act permits federal grant
money and private donations to be deposited in the CRSTF (see 625
ILCS 35/6 (West 2010)), plaintiffs do not allege, nor is there any
evidence of record to suggest, that monies from these sources ever
-9-
¶ 30
¶ 31
¶ 32
have been deposited into the CRSTF. Consequently, it is undisputed
that all of the monies in the CRSTF have come from the legislative
appropriation of a portion of the registration and licensing fees paid
to the state by motorcyclists each year for the privilege of operating
their motorcycles on the roadways of this state. Contrary to plaintiffs’
assertion, this portion of the motorcyclists’ registration and licensing
fees is not a “surcharge” or some type of special assessment paid by
motorcyclists separate and apart from the registration fee. Rather, the
money which enters the CRSTF is simply a percentage of the fee
collected by the state for the registration and licensing of motorcycles.
Clearly, the fee charged by the state for motorcycle registration and
licensing is state revenue and, therefore, the portion of this state
revenue which the General Assembly has allocated to the CRSTF is
also public money. Accordingly, we reject plaintiffs’ argument that
the monies deposited into the CRSTF are private funds held by the
state as trustee.
We also reject plaintiffs’ alternative argument that the funds
become private once they are deposited into the CRSTF because the
state, as settlor, created the CRSTF as an irrevocable private trust. A
private trust is one which is created by the settlor for the benefit of the
trust’s beneficiaries, who must be identified or ascertainable. See
Restatement (Second) of Trusts §1, cmt. c; §2, cmt. j (1959). It is
generally true that the settlor of a private trust must expressly reserve
the right of revocation for a trust to be revocable. See Restatement
(Second) of Trusts §330 (1959). However, the Restatement (Second)
of Trusts also provides that when a settlor has failed to expressly
indicate whether a trust is subject to revocation or amendment, the
question is one of interpretation. Restatement (Second) of Trusts
§330 (1959).
Plaintiffs contend that we should interpret the CRSTF as an
irrevocable trust because the Eighty-seventh General Assembly, as
settlor, did not reserve the right of revocation. In addition, plaintiffs
contend that legislative history–including the Governor’s veto
message and the legislative debates–indicates that it was the
legislature’s intent that the CRSTF be held, irrevocably, beyond the
power of future legislatures to sweep.
While it is true that the Eighty-seventh General Assembly did not
expressly reserve the right of revocation, it also did not expressly
create the CRSTF as an irrevocable trust. In an attempt to discern
legislative intent, we have reviewed the legislative debates and find
-10-
¶ 33
¶ 34
that they do not unequivocally support the notion that the legislature
intended to make the CRSTF an irrevocable trust. More importantly,
we must reject plaintiffs’ assertion that the legislature intended to
make the CRSTF an irrevocable trust because finding it to be such
would be contrary to settled principles of law and would place an
unconstitutional restraint on the legislature’s plenary power.
The Illinois General Assembly is a legislative body required by
our constitution to make appropriations for all expenditures of public
funds. Ill. Const. 1970, art. VIII, § 2. Our constitution provides that
“[p]ublic funds, property or credit shall be used only for public
purposes.” Ill. Const. 1970, art. VIII, § 1. Because we have found that
the funds which are deposited into the CRSTF are public funds, the
legislature would have violated its constitutional duty if it used these
funds to create vested rights in private individuals. See Fumarolo v.
Chicago Board of Education, 142 Ill. 2d 54, 104 (1990) ([A]bsent
some clear indication to the contrary, it is presumed that “ ‘a law is
not intended to create private contractual or vested rights but merely
declares a policy to be pursued until the legislature shall ordain
otherwise.’ ”) (quoting National R.R. Passenger Corp. v. Atchison,
Topeka & Santa Fe Ry. Co., 470 U.S. 451, 466 (1985)).
Further, interpreting the CRSTF as an irrevocable private trust
would mean that the Eighty-seventh General Assembly placed an
unconstitutional restraint on the legislature’s plenary power. In
Choose Life Illinois, Inc. v. White, 547 F.3d 853 (7th Cir. 2008), it
was held “axiomatic” that one legislature cannot bind a future
legislature.” And in Village of Rosemont v. Jaffe, 482 F.3d 926, 937
(7th Cir. 2007), the court held, “[i]t is for each elected legislature to
express the will of the people as it sees fit.” See also Reichelderfer v.
Quinn, 287 U.S. 315, 318 (1932) (“[T]he will of a particular Congress
*** does not impose itself upon those to follow in succeeding
years.”). The United States Supreme Court, in National R.R.
Passenger Corp. v. Atchison, Topeka & Santa Fe Ry. Co. described
as “elementary” the proposition that the principal function of a
legislature is to make laws which establish the policy of the state and
that policy is “inherently subject to revision and repeal.” National
R.R. Passenger Corp. v. Atchison, Topeka & Santa Fe Ry. Co., 470
U.S. at 466. To hold otherwise, the Court said, would “limit
drastically the essential powers of a legislative body.” National R.R.
Passenger Corp. v. Atchison, Topeka & Santa Fe Ry. Co., 470 U.S.
at 466.
-11-
¶ 35
¶ 36
¶ 37
Based on the above, we conclude that the CRSTF is not an
irrevocable trust. That being so, the state maintained legal title to the
funds placed in the CRSTF. Thus, the public nature of the funds did
not change once they were placed in the CRSTF. Since the funds held
in the CRSTF remained public funds, the legislature’s sweep of
monies out of the CRSTF pursuant to the FY2004 and FY2005
BIMPs did not constitute an unconstitutional taking of private
property for public purpose.
In reaching this determination, we find persuasive two supreme
court opinions from sister states: Board of Trustees of the Tobacco
Use Prevention & Control Foundation v. Boyce, 2010–Ohio–6207,
941 N.E.2d 745, and Barber v. Ritter, 196 P.3d 238 (Colo. 2008) (en
banc).
Boyce involved the Tobacco Use Prevention and Cessation Trust
Fund, which the Ohio General Assembly created in 2000. The
legislature allocated to this fund $235 million, which came from the
proceeds of a master settlement agreement which several states,
including Ohio, had entered into with United States tobacco-product
manufacturers to resolve litigation for the recovery of health-care
expenses incurred by the states as a result of tobacco-related illnesses.
After creating the fund, the legislature appropriated the money to an
endowment fund, which was to “be in the custody of the treasurer of
state but *** not be a part of the state treasury.” The money was to be
used to pay for programs and research related to tobacco-use
prevention and cessation. Boyce, 2010–Ohio–6207, ¶ 3, 941 N.E.2d
745. Eight years after the fund was created, the legislature passed new
legislation which liquidated the endowment fund and “deposit[ed] the
lesser of $40 million or 14.8 percent of the proceeds into the state
treasury to the credit of a tobacco-use-prevention fund, and
deposit[ed] the remaining proceeds from the liquidation
(approximately $190 million) into the state treasury to the credit of a
jobs fund.” Id. ¶ 5. In response to this new legislation, suit was
brought by certain former smokers for declaratory relief. The
plaintiffs claimed that a trust had been created, which the General
Assembly did not have the power to revoke. Plaintiffs sought
judgment declaring that (1) the new legislation was unconstitutional
under the contract clauses of section 10 of article I of the Constitution
of the United States and section 28 of article II of the Ohio
Constitution and (2) that the legislation “illegally attempts to
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appropriate non-treasury funds in breach of an irrevocable trust.” Id.
¶ 6.
According to the plaintiffs, the money in the endowment fund was
not “public funds” because the enabling statute provided that the
endowment fund “shall be in the custody of the treasurer of state but
shall not be a part of the state treasury.” Also, the plaintiffs
maintained that, because the fund was outside the state treasury, the
legislature intended “to create a trust setting the funds permanently
outside the control of future legislation.” The Ohio Supreme Court
rejected these arguments, stating:
“Although the General Assembly’s plenary legislative
power is expansive, it is not all-inclusive. It does not include
the ability to bind future General Assemblies. ‘No general
assembly can guarantee the continuity of its legislation or tie
the hands of its successors.’ ” Id. ¶ 16.
Quoting State ex rel. Fletcher v. Executive Council, 223 N.W. 737,
740 (Iowa 1929), the Ohio Supreme Court went on to state,
“ ‘[N]o General Assembly has power to render its enactment
irrevocable and unrepealable by a future General Assembly.
No General Assembly can guarantee the span of life of its
legislation beyond the period of its biennium. The power and
responsibility of legislation is always upon the existing
General Assembly. One General Assembly may not lay its
mandate upon a future one. Only the Constitution can do that.
*** The power of a subsequent General Assembly either to
acquiesce or to repeal is always existent.’ ” Boyce,
2010–Ohio–6207, ¶ 16, 941 N.E.2d 745.
The second case, Barber v. Ritter, 196 P.3d 238 (Colo. 2008) (en
banc), is very similar to the situation in the case at bar. In Barber, the
Colorado Supreme Court was asked to consider the constitutionality
of certain legislation which the Colorado General Assembly had
passed in response to an economic turndown which had caused
revenue shortfalls in its general fund. As a remedial measure, the
legislature transferred $442 million out of 31 special funds and into
the general fund. The Colorado Supreme Court addressed the
petitioners’ argument that three of the cash funds–the Colorado
Children’s Trust Fund (Colo. Rev. Stat. § 19–3.5–106 (2008)), the
Severance Tax Trust Fund (Colo. Rev. Stat. § 39–29–109 (2008)),
and the Unclaimed Property Trust Fund (Colo. Rev. Stat.
§ 38–13–116.5 (2008))–were public trusts and that the transfer of
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monies from these cash funds constituted a misappropriation of the
trust corpus, triggering an obligation to repay the transferred monies.
The Colorado Supreme Court noted:
“Petitioners argue that the General Assembly’s lack of
power to amend the statutes in question arises from the
special status of the funds created by those statutes as trusts.
Colorado follows the view of most jurisdictions that a trust,
once created, may not be revoked by the settlor without the
consent of all beneficiaries, unless the settlor has explicitly
reserved to himself or herself the power to do so unilaterally.
[Citations.]
None of the statutes creating the funds explicitly reserve
to the General Assembly the power as settlor to revoke or
amend them. However, we have repeatedly recognized that
the General Assembly’s power over appropriations is
constitutionally derived and have characterized this power as
“absolute” and “plenary. [Citations.] To hold that the General
Assembly could limit this plenary power to appropriate by
creating an irrevocable public trust would be to effectively
hold that the General Assembly could abrogate its
constitutional powers by statute. This is not the law. Our
constitution requires that amendments thereto be approved by
a two-thirds majority of each legislative house and an
affirmative majority of the electorate. Colo. Const. art. XIX,
§ 2. *** We therefore decline to read the cash funds’ enabling
legislation as creating irrevocable trusts that would
unconstitutionally restrain the legislature’s plenary power
over appropriations.” (Emphasis omitted.) Barber v. Ritter,
196 P.3d at 253-54.
Like the courts in Boyce and Barber, we conclude that our
legislature cannot create an irrevocable trust with public money. If we
were to hold otherwise, it would place an unconstitutional restraint
upon the legislature’s plenary power. Accordingly, we reject
plaintiffs’ claim that the money allocated to the CRSTF, once
deposited, irrevocably became the property of the beneficiaries of the
trust and, therefore, was private money. For that reason, we find no
basis for holding that the legislature is without authority to transfer
funds out of the CRSTF and into the GRF.
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¶ 44
¶ 45
¶ 46
¶ 47
¶ 48
¶ 49
¶ 50
¶ 51
Necessity of Amending the Act
Plaintiffs’ final contention is that, even if the legislature has the
authority to remove money from the CRSTF, it may only do so by
amending the enabling statute, i.e., the Cycle Riders Safety Training
Act. Again we disagree.
As explained above, we have determined that, to whatever extent
the CRSTF is a valid trust, it is not an irrevocable trust. The
Restatement (Second) of Trusts provides in comment n of section
330, “Ordinarily a power to revoke the trust will be interpreted as
including a power to revoke the trust in part by withdrawing a part of
the trust property from the trust.” Restatement (Second) of Trusts
§330, cmt. n (1959). There is nothing to indicate that a settlor is
required to withdraw funds from a revocable trust in a particular
manner or by a particular means.
In the present case, it is clear that the legislature did not want to
change the CRSTF, nor did it seek to alter the amount or manner in
which funds are allocated to CRSTF. The legislature simply wanted
to remove a certain amount of the trust property. We see no reason,
therefore, why the legislature cannot pass separate legislation which
permits the sweep of funds out of the CRSTF.
CONCLUSION
We affirm the judgment of the appellate court, which upheld the
trial court’s grant of summary judgment in favor of defendants,
Governor Patrick Quinn, Comptroller Daniel W. Hynes, and
Treasurer Alexi Giannoulias.
Appellate court judgment affirmed.
CHIEF JUSTICE KILBRIDE, dissenting:
I respectfully dissent from the majority opinion. I agree with the
majority that the registration and license fees are “public” funds. I am
concerned, however, that the legislature may have swept private or
federal funds from the trust. The legislature’s actions in sweeping
private or federal funds from the trust would violate both the enabling
statute and constitute a “taking.”
Based on the record before us, it is unclear whether any moneys
swept from the CRSTF comprised federal grants and private
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¶ 54
donations. It is undisputed that the enabling legislation permits
commingling of license and registration fees, private donations, and
federal grants. We simply do not know, based on the briefs and record
in this case, whether the fund contains any private or federal moneys.
I believe this court is making a grave error in declaring that the
sweeps were constitutional without additional fact-finding.
The majority cites Board of Trustees of the Tobacco Use
Prevention & Control Foundation v. Boyce, 2010-Ohio-6207, 941
N.E.2d 745, and Barber v. Ritter, 196 P.3d 238 (Colo. 2008) (en
banc), as persuasive authority. Both of these cases are distinguishable
from the instant case. In Boyce, the enabling statute created an
endowment fund solely for public tobacco settlement money and
contained no provisions for federal grants or private donations. Thus,
there was no question that the funds at issue contained only money
from the tobacco settlement. Similarly, in Barber, the funds at issue
contained no private donations or federal grant moneys.
This court has previously held that federal moneys are not Illinois
“public funds.” See City of Chicago v. Holland, 206 Ill. 2d 480, 49295 (2003). In Holland, this court recognized that “the state has no
lawful authority to utilize the federal grants for anything other than
their intended purposes.” Holland, 206 Ill. 2d at 494. Obviously,
sweeping any federal grant moneys intended for motorcycle rider
safety training from the fund to the General Revenue Fund is
impermissible.
Although the majority opinion only addresses the CRSTA, the
import of today’s decision should not be underestimated. There are
numerous “trust funds” created by other enabling acts. These “trust
funds” include the Renewable Energy Resources Trust Fund, funded
from fees imposed on taxpayer electric bills and earmarked for
development of renewable energy resources. See 20 ILCS 687/6-4, 65 (West 2010). The legislature has swept more than $17 million from
this trust fund alone. See 30 ILCS 105/8.42 (West 2004) (interfund
transfer of $3 million from the Renewable Energy Resources Trust
Fund into the General Revenue Fund); 30 ILCS 105/8.43 (West 2004)
(special fund transfer of $9,510,000 from the Renewable Energy
Resources Trust Fund into the General Revenue Fund); 30 ILCS
105/8.44 (West 2006) (special fund transfer of $14,033 from the
Renewable Energy Resources Trust Fund into the General Revenue
Fund); 30 ILCS 105/8.46 (West 2008) (transfer of $5 million from the
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¶ 57
¶ 58
¶ 59
Renewable Energy Resources Trust Fund to the FY09 Budget Relief
Fund).
The legislature has swept $53,000 from the Missing and
Exploited Children Trust Fund. See 30 ILCS 105/8.42 (West 2004)
(interfund transfer of $53,000 from the Missing and Exploited
Children Trust Fund into the General Revenue Fund). The Missing
and Exploited Children Trust Fund is comprised of private donations,
monetary gifts, grant funds of I-SEARCH Units under the
Intergovernmental Missing Child Recovery Act and funding from
other private sources and individuals for the purpose of promoting
and conducting programs or activities for the prevention or recovery
of missing or exploited children. See 30 ILCS 106/6a-5 (West 2010).
The legislature has swept $23,419 from the Continuing Legal
Education Trust Fund. See 30 ILCS 105/8.44 (West 2006) (special
fund transfer of $23,419 from the Continuing Legal Education Trust
Fund into the General Revenue Fund). The Continuing Legal
Educational Trust Fund was created under the State’s Attorneys
Appellate Prosecutor’s Act and is allowed to accept gifts or grants of
money from any public or private source. See 725 ILCS 210/4.10
(West 2010).
The legislature has also transferred nearly $2 million from the
State Parks Fund. See 30 ILCS 105/8.44 (West 2006) (special fund
transfer of $1,045,899 from the State Parks Fund to the General
Revenue Fund); 30 ILCS 105/8.46 (West 2008) ($250,000 transferred
from the State Parks Fund to the FY09 Budget Relief Fund). The
State Parks Fund is comprised, at least in part, by Illinois taxpayer
charitable donations on Schedule G of the Illinois Department of
Revenue tax form. See IL-1040 Schedule G (“Your contribution [to
the State Parks Fund] will help preserve and manage state parks
throughout Illinois, which are set aside to protect scenic areas and
areas of important historic or cultural significance. State parks also
offer diverse recreational opportunities such as camping, boating,
hunting, fishing and equestrian trails which may not be offered
through traditional municipal park systems.”)
While sweeps from these and other specific funds are not at issue
in this appeal, this court has an obligation to address the implications
of sweeping private donations and federal grant moneys from funds
earmarked for other purposes.
From a plain reading of the statute, I believe the legislature clearly
intended to earmark the registration and license fees to be used only
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for a specific purpose and created a trust to prevent funds from being
used for any other purpose. Certainly, the legislature may amend the
Act for future funds, or simply stop allocating future fees to the trust.
Even if it is shown that the fund currently contains no private or
federal monies, I believe the best approach is to require the legislature
to amend the enabling act and then allow restricted sweeps of public
funds, excluding sweeps of private donations and federal grant
moneys.
For the foregoing reasons, I respectfully dissent.
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