Board of Education of Auburn Community Unit School District No. 10 v. Illinois Department of Revenue ( 2010 )

Filed 3/10/10 NO. 4-09-0806
IN THE APPELLATE COURT
OF ILLINOIS
FOURTH DISTRICT
THE BOARD OF EDUCATION OF AUBURN ) Appeal from
COMMUNITY UNIT SCHOOL DISTRICT NO. 10, ) Circuit Court of
Plaintiff-Appellee, ) Sangamon County
v. ) No. 08MR590
THE ILLINOIS DEPARTMENT OF REVENUE and )
BRIAN HAMER, in His Capacity as )
Director of the Illinois Department of )
Revenue, )
Defendants-Appellants, )
and )
SANGAMON COUNTY; JOE AIELLO, Clerk; )
MONTGOMERY COUNTY; and SANDY ) Honorable
LEITHEISER, Clerk, ) Leo J. Zappa, Jr.,
Defendants. ) Judge Presiding.
_________________________________________________________________
PRESIDING JUSTICE MYERSCOUGH delivered the opinion of
the court:
In October 2008, the Board of Education of Auburn
Community Unit School District No. 10 (Auburn Board) filed a
complaint for declaratory judgment against the Illinois Depart-
ment of Revenue (Department) and its Director, Brian Hamer. The
Auburn Board sought a ruling that the Property Tax Extension
Limitation Law (PTELL) (35 ILCS 200/18-185 through 18-245 (West
2008)) no longer applied to the Auburn Community Unit School
District No. 10 (Auburn District). In November 2008, the com-
plaint was amended to include Sangamon County, Montgomery County,
and the clerks of both counties as defendants.
In April 2009, the Auburn Board moved for summary
judgment. In June 2009, the Department and Hamer also moved for
summary judgment. In September 2009, the trial court granted the
Auburn Board’s motion for summary judgment and denied the Depart-
ment and Hamer’s motion. We reverse.
I. BACKGROUND
The Auburn District was originally located entirely
within Sangamon County. In January 2007, the Regional Board of
School Trustees of Sangamon County (Regional Board) dissolved the
Divernon Community Unit School District No. 13 (Divernon Dis-
trict) and annexed some Divernon District territory to the Auburn
District. This annexation gave the Auburn District a small
amount of territory in Montgomery County such that the reconsti-
tuted Auburn District has approximately 0.3% of its total equal-
ized assessed valuation in Montgomery County and 99.7% in
Sangamon County.
In April 2008, the Sangamon County clerk’s office sent
correspondence to the Auburn District stating that the reconsti-
tuted Auburn District was exempt from PTELL (35 ILCS 200/18-185
through 18-245 (West 2008)). PTELL limits the ability of units
of local government to raise property taxes. The Sangamon County
clerk had previously applied PTELL when calculating the Auburn
District’s tax extension because Sangamon County voters approved
PTELL by referendum in 1996 (35 ILCS 200/18-213 (West 1996)). In
contrast, Montgomery County has never held a referendum on PTELL.
On April 24, 2008, legal counsel for the Auburn Dis-
trict sent correspondence to the Department requesting an opinion
on whether the reconstituted Auburn District was subject to PTELL
since it now contained territory located in both a PTELL county
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and a non-PTELL county. The Auburn District sought this opinion
in order to facilitate the issuance of bonds for $9 million worth
of improvements involving heating, ventilating, and air condi-
tioning systems, roofing, lighting, windows, and paving at two
elementary schools and one middle/high school. On August 26,
2008, deputy general counsel for the Department responded by
letter stating that the Department declined to issue a formal
opinion because PTELL contains "no explicit provision that
clearly addresses the situation." Instead of a formal opinion,
the letter provided informal guidance that PTELL still applied to
the Auburn District based on the Department’s reading of sections
18-213 and 18-214 of PTELL (35 ILCS 200/18-213, 18-214 (West
2008)). The last four paragraphs of the letter read as follows:
"After examining the language in PTELL
it is apparent that there is no explicit
provision that clearly addresses the situa-
tion. As a result, the Department declines
to issue any formal opinion or ruling on your
request.
However, if the Department were required
to provide guidance in this matter, based on
the Department’s analysis of the most rele-
vant sections (35 ILCS 200/18-213 and 18-214)
in this specific circumstance, it appears the
Auburn [District] remains subject to PTELL
and its restrictions. Section 18-213 covers
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referenda and the applicability of PTELL,
while section 18-214 details referenda on the
removal of the applicability of PTELL to non-
home rule taxing districts. Neither section
appears to lend support to the conclusion the
Auburn [District] should no longer be subject
to PTELL.
The applicability of PTELL to the Auburn
[District] is further bolstered when consid-
ering the intent of the PTELL statute to
provide transparency and voter participation;
the fact that Sangamon County already voted
to approve PTELL; and due to the fact that
the vast majority of the Auburn [District] is
contained within Sangamon County.
Based on the analysis contained herein,
the Department’s guidance is that Auburn
[District] remains subject to PTELL and its
restrictions."
In October 2008, the Auburn Board filed a complaint for
declaratory judgment against the Department and Hamer. In
November 2008, the complaint was amended to include Sangamon
County, Montgomery County, and the clerks of both counties as
defendants. In April 2009, the Auburn Board moved for summary
judgment. In June 2009, the Department and Hamer filed a cross
motion for summary judgment. In September 2009, the trial court
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granted the Auburn Board’s motion for summary judgment and denied
the Department and Hamer’s motion.
This appeal followed. The Sangamon and Montgomery
County clerks are not parties to this appeal. Although Hamer is
an appellant, he will not be mentioned further because his
arguments are identical to those of the Department.
II. ANALYSIS
We review the grant of summary judgment de novo. Smith
v. Neumann, 289 Ill. App. 3d 1056, 1063, 682 N.E.2d 1245, 1249
(1997). De novo review is also appropriate because this case
presents a question of law. People v. Bonutti, 212 Ill. 2d 182,
188-89, 817 N.E.2d 489, 493 (2004).
The Auburn Board argues PTELL no longer applies to the
Auburn District based upon section 18-213 of PTELL. 35 ILCS
200/18-213 (West 2008). Section 18-213 lays out the requirements
for the initial implementation of PTELL. Section 18-213 provides
as follows:
"Referenda on applicability of the
[PTELL].
(a) The provisions of this [s]ection do
not apply to a taxing district subject to
this [l]aw because a majority of its 1990
equalized assessed value is in a county or
counties contiguous to a county of 3,000,000
or more inhabitants, or because a majority of
its 1994 equalized assessed value is in an
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affected county and the taxing district was
not subject to this [l]aw before the 1995
levy year.
(b) The county board of a county that is
not subject to this [l]aw may, by ordinance
or resolution, submit to the voters of the
county the question of whether to make all
non-home rule taxing districts that have all
or a portion of their equalized assessed
valuation situated in the county subject to
this [l]aw in the manner set forth in this
[s]ection.
For purposes of this [s]ection only:
'Taxing district' has the same meaning
provided in [s]ection 1-150.
'Equalized assessed valuation' means the
equalized assessed valuation for a taxing
district for the immediately preceding levy
year.
(c) The ordinance or resolution shall
request the submission of the proposition at
any election, except a consolidated primary
election, for the purpose of voting for or
against making the [PTELL] applicable to all
non-home rule taxing districts that have all
or a portion of their equalized assessed
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valuation situated in the county.
The question shall be placed on a sepa-
rate ballot and shall be in substantially the
following form:
Shall the [PTELL] (35 ILCS
200/18-185 through 18-245), which
limits annual property tax exten-
sion increases, apply to non-home
rule taxing districts with all or a
portion of their equalized assessed
valuation located in (name of
county)?
Votes on the question shall be recorded as
'yes' or 'no'.
(d) The county clerk shall order the
proposition submitted to the electors of the
county at the election specified in the ordi-
nance or resolution. If part of the county
is under the jurisdiction of a board or
boards of election commissioners, the county
clerk shall submit a certified copy of the
ordinance or resolution to each board of
election commissioners, which shall order the
proposition submitted to the electors of the
taxing district within its jurisdiction at
the election specified in the ordinance or
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resolution.
(e)(1) With respect to taxing districts
having all of their equalized assessed valua-
tion located in the county, if a majority of
the votes cast on the proposition are in
favor of the proposition, then this [l]aw
becomes applicable to the taxing district
beginning on January 1 of the year following
the date of the referendum.
(2) With respect to taxing
districts that meet all the follow-
ing conditions this [l]aw shall
become applicable to the taxing
district beginning on January 1,
1997. The districts to which this
paragraph (2) is applicable
(A) do not have all
of their equalized as-
sessed valuation located
in a single county,
(B) have equalized
assessed valuation in an
affected county,
(C) meet the condi-
tion that each county,
other than an affected
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county, in which any of
the equalized assessed
valuation of the taxing
district is located has
held a referendum under
this [s]ection at any
election, except a con-
solidated primary elec-
tion, held prior to the
effective date of this
amendatory [a]ct of 1997,
and
(D) have a majority
of the district's equal-
ized assessed valuation
located in one or more
counties in each of which
the voters have approved
a referendum under this
[s]ection prior to the
effective date of this
amendatory [a]ct of 1997.
For purposes of this
[s]ection, in determining
whether a majority of the
equalized assessed valua-
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tion of the taxing dis-
trict is located in one
or more counties in which
the voters have approved
a referendum under this
[s]ection, the equalized
assessed valuation of the
taxing district in any
affected county shall be
included with the equal-
ized assessed value of
the taxing district in
counties in which the
voters have approved the
referendum.
(3) With respect to taxing
districts that do not have all of
their equalized assessed valuation
located in a single county and to
which paragraph (2) of subsection
(e) is not applicable, if each
county other than an affected
county in which any of the equal-
ized assessed valuation of the
taxing district is located has held
a referendum under this [s]ection
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at any election, except a consoli-
dated primary election, held in any
year and if a majority of the
equalized assessed valuation of the
taxing district is located in one
or more counties that have each
approved a referendum under this
[s]ection, then this [l]aw shall
become applicable to the taxing
district on January 1 of the year
following the year in which the
last referendum in a county in
which the taxing district has any
equalized assessed valuation is
held. For the purposes of this
[l]aw, the last referendum shall be
deemed to be the referendum making
this [l]aw applicable to the taxing
district. For purposes of this
[s]ection, in determining whether a
majority of the equalized assessed
valuation of the taxing district is
located in one or more counties
that have approved a referendum
under this [s]ection, the equalized
assessed valuation of the taxing
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district in any affected county
shall be included with the equal-
ized assessed value of the taxing
district in counties that have
approved the referendum.
(f) Immediately after a referendum is
held under this [s]ection, the county clerk
of the county holding the referendum shall
give notice of the referendum having been
held and its results to all taxing districts
that have all or a portion of their equalized
assessed valuation located in the county, the
county clerk of any other county in which any
of the equalized assessed valuation of any
taxing district is located, and the [Depart-
ment]. After the last referendum affecting a
multi-county taxing district is held, the
[Department] shall determine whether the
taxing district is subject to this [l]aw and,
if so, shall notify the taxing district and
the county clerks of all of the counties in
which a portion of the equalized assessed
valuation of the taxing district is located
that, beginning the following January 1, the
taxing district is subject to this [l]aw.
For each taxing district subject to paragraph
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(2) of subsection (e) of this [s]ection, the
[Department] shall notify the taxing district
and the county clerks of all of the counties
in which a portion of the equalized assessed
valuation of the taxing district is located
that, beginning January 1, 1997, the taxing
district is subject to this [l]aw.
(g) Referenda held under this [s]ection
shall be conducted in accordance with the
Election Code." 35 ILCS 200/18-213 (West
2008).
Therefore, in order to implement PTELL in a
multicounty district, each county must hold a referendum, and the
county having the majority of the equalized assessed valuation of
the taxing district must vote to approve PTELL. 35 ILCS 200/18-
213(e)(3) (West 2008). The Auburn District was undisputedly
subject to PTELL prior to the annexation. The Auburn Board,
however, argues that once the annexation made the Auburn District
a two-county taxing district, PTELL no longer applies because
Montgomery County has not held a referendum to implement PTELL as
required by section 18-213(e)(3).
The Department counters that if Montgomery County held
a PTELL referendum, regardless of the vote’s outcome, PTELL would
continue to apply to the Auburn District because Montgomery
County property only represents a tiny minority of the total
equalized assessed valuation of the Auburn District. The
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Department also contends that section 18-213 only applies to the
initial imposition of PTELL, and section 18-214 of PTELL provides
the sole method for the subsequent removal of PTELL.
The Department also argues PTELL applies to the Auburn
District based upon section 18-214 of PTELL because there has not
been a referendum to remove the PTELL from the Auburn District.
35 ILCS 200/18-214 (West 2008). Section 18-214 establishes the
procedure for removing PTELL via referendum.
"Referenda on removal of the applicabil-
ity of the [PTELL] to non-home rule taxing
districts.
***
(b) For purposes of this [s]ection only:
'Taxing district' means any non-home
rule taxing district that became subject to
this [l]aw under [s]ection 18-213 of this
[l]aw.
'Equalized assessed valuation' means the
equalized assessed valuation for a taxing
district for the immediately preceding levy
year.
(c) The county board of a county that
became subject to this [l]aw by a referendum
approved by the voters of the county under
[s]ection 18-213 may, by ordinance or resolu-
tion, in the manner set forth in this
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[s]ection, submit to the voters of the county
the question of whether this [l]aw applies to
all non-home rule taxing districts that have
all or a portion of their equalized assessed
valuation situated in the county in the man-
ner set forth in this [s]ection.
(d) The ordinance or resolution shall
request the submission of the proposition at
any election, except a consolidated primary
election, for the purpose of voting for or
against the continued application of the
[PTELL] to all non-home rule taxing districts
that have all or a portion of their equalized
assessed valuation situated in the county.
The question shall be placed on a sepa-
rate ballot and shall be in substantially the
following form:
Shall the [PTELL] (35 ILCS
200/18-185 through 35 ILCS
200/18-245), which limits annual
property tax extension increases,
apply to non-home rule taxing dis-
tricts with all or a portion of
their equalized assessed valuation
located in (name of county)?
Votes on the question shall be recorded as
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'yes' or 'no'.
(e) The county clerk shall order the
proposition submitted to the electors of the
county at the election specified in the ordi-
nance or resolution. If part of the county
is under the jurisdiction of a board or
boards of election commissioners, the county
clerk shall submit a certified copy of the
ordinance or resolution to each board of
election commissioners, which shall order the
proposition submitted to the electors of the
taxing district within its jurisdiction at
the election specified in the ordinance or
resolution.
(f) With respect to taxing districts
having all of their equalized assessed valua-
tion located in one county, if a majority of
the votes cast on the proposition are against
the proposition, then this [l]aw shall not
apply to the taxing district beginning on
January 1 of the year following the date of
the referendum.
(g) With respect to taxing districts
that do not have all of their equalized as-
sessed valuation located in a single county,
if both of the following conditions are met,
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then this [l]aw shall no longer apply to the
taxing district beginning on January 1 of the
year following the date of the referendum.
(1) Each county in which the
district has any equalized assessed
valuation must either, (i) have
held a referendum under this
[s]ection, (ii) be an affected
county, or (iii) have held a refer-
endum under [s]ection 18-213 at
which the voters rejected the prop-
osition at the most recent election
at which the question was on the
ballot in the county.
(2) The majority of the equal-
ized assessed valuation of the
taxing district, other than any
equalized assessed valuation in an
affected county, is in one or more
counties in which the voters re-
jected the proposition. For pur-
poses of this [s]ection, in deter-
mining whether a majority of the
equalized assessed valuation of the
taxing district is located in one
or more counties in which the vot-
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ers have rejected the proposition
under this [s]ection, the equalized
assessed valuation of any taxing
district in a county which has held
a referendum under [s]ection 18-213
at which the voters rejected that
proposition, at the most recent
election at which the question was
on the ballot in the county, will
be included with the equalized
assessed value of the taxing dis-
trict in counties in which the
voters have rejected the referendum
held under this [s]ection.
(h) Immediately after a referendum is
held under this [s]ection, the county clerk
of the county holding the referendum shall
give notice of the referendum having been
held and its results to all taxing districts
that have all or a portion of their equalized
assessed valuation located in the county, the
county clerk of any other county in which any
of the equalized assessed valuation of any
such taxing district is located, and the
[Department]. After the last referendum
affecting a multi-county taxing district is
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held, the [Department] shall determine
whether the taxing district is no longer
subject to this [l]aw and, if the taxing
district is no longer subject to this [l]aw,
the [Department] shall notify the taxing
district and the county clerks of all of the
counties in which a portion of the equalized
assessed valuation of the taxing district is
located that, beginning on January 1 of the
year following the date of the last referen-
dum, the taxing district is no longer subject
to this [l]aw." 35 ILCS 200/18-214 (West
2008).
Section 18-214(g) specifies two requirements for
removing PTELL in taxing districts having equalized assessed
valuation located in two counties, such as the Auburn District.
35 ILCS 200/18-214(g) (West 2008). First, each county must hold
a referendum and put the issue before the voters. 35 ILCS
200/18-214(g)(1)(i) (West 2008). Second, the county having the
majority of the equalized assessed valuation of the taxing
district must vote to reject PTELL. 35 ILCS 200/18-214(g)(2)
(West 2008). Defendant argues neither Sangamon County nor
Montgomery County have conducted referenda to remove PTELL.
Because such referenda have not taken place, the Department
contends PTELL still applies to the Auburn District.
The Department further asks us to defer to its inter-
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pretation of PTELL. Where a statute is ambiguous, substantial
weight and deference should be given to the interpretation of the
administrative agency charged with enforcing the statute. Reed
v. Kusper, 154 Ill. 2d 77, 86, 607 N.E.2d 1198, 1203 (1992). In
this instance, however, the statute is not ambiguous. Instead,
as the Department itself stated, PTELL contains "no explicit
provision that clearly addresses the situation." Further, the
Department has not promulgated regulations, or even a formal
opinion letter, to which we could defer. Nonetheless, we agree
with the Department that nothing in the statute addresses the
current situation, that section 18-213 only applies to the
initial imposition of PTELL and section 18-214 provides the sole
method of removal of PTELL. However, sections 18-213 and 18-214
contain no authority for applying the PTELL to the Montgomery
County property annexed into the Auburn District.
The primary rule of statutory construction is to give
effect to the intent of the legislature. People v. Pack, 224
Ill. 2d 144, 147, 862 N.E.2d 938, 940 (2007). The plain and
ordinary meaning of the statutory language provides the best
means of determining legislative intent. Reda v. Advocate Health
Care, 199 Ill. 2d 47, 55, 765 N.E.2d 1002, 1007 (2002). When the
statutory language is plain and unambiguous, we will not add
exceptions, limitations, or conditions that conflict with the
intent of the legislature. Rosewood Care Center, Inc. v. Cater-
pillar, Inc., 226 Ill. 2d 559, 567, 877 N.E.2d 1091, 1096 (2007).
We will also not add provisions that are not contained in the
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statute. People v. Lewis, 223 Ill. 2d 393, 402, 860 N.E.2d 299,
305 (2006).
The purpose of PTELL is to give citizens greater
control over their taxes. Acme Markets, Inc. v. Callanan, No.
106198, slip op. at 11 (October 29, 2009), __ Ill. 2d __, __, __
N.E.2d __, __. "Where, as here, the requirements of a statute
are designed for the protection of taxpayers, those provisions
are mandatory ***." Acme Markets, slip op. at 11, __ Ill. 2d at
__, __ N.E.2d at __.
The legislature has provided a specific referendum
mechanism in section 18-214 for the removal of PTELL in districts
where each county has held a referendum. 35 ILCS 200/18-214
(West 2008). The mandated referendum for the removal of PTELL
from the Auburn District has not taken place in Sangamon County.
The statutory language in section 18-214 does not authorize a
removal referendum for the annexed property of the district in
Montgomery County. Section 18-214 applies only to a taxing
district which has become subject to PTELL pursuant to section
18-213.
"(b) For purposes of this [s]ection
only:
'Taxing district' means any non-home
rule taxing district that became subject to
this [l]aw under [s]ection 18-213 of this
[l]aw." 35 ILCS 200/18-214(b) (West 2008).
In other words, only Sangamon County can conduct a referendum to
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remove itself from PTELL here because it adopted PTELL pursuant
to a referendum. (Counties which have rejected PTELL can also
conduct a removal referendum. "Each county in which the district
has any equalized assessed valuation must either, (i) have held a
referendum under this [s]ection, (ii) be an affected county [(not
applicable here)], or (iii) have held a referendum under
[s]ection 18-213 at which the voters rejected the proposition at
the most recent election at which the question was on the ballot
in the county." 35 ILCS 5/18-214(g)(1) (West 2008).)
Sections 18-213 and 18-214 simply do not contain a
revocation provision for districts which acquire property via
annexation, and this court cannot read such a provision into the
statute absent statutory authority. The legislature addressed
the annexation of property to a district in section 18-225. 35
ILCS 200/18-225 (West 2008) (addressing the calculation of the
limiting rate when property is annexed or disconnected but not
addressing the multicounty situation raised in this case). Had
the legislature intended to permit the removal of PTELL via
annexation, without a vote of the taxpayers, the legislature
would have done so.
The people of Sangamon County voted to implement PTELL,
and the voters of Montgomery County have not voted on PTELL.
Only public referenda in Montgomery County to adopt or reject
then remove PTELL and/or a referendum in Sangamon County to
remove PTELL will change the PTELL status of these counties.
Therefore, that portion of the Auburn District located within
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Sangamon County will remain subject to PTELL, and that portion of
the Auburn District located within Montgomery County shall not be
subject to PTELL.
III. CONCLUSION
For the reasons stated, we reverse the trial court’s
judgment.
Reversed.
STEIGMANN and APPLETON, JJ., concur.
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