A.B.A.T.E. of Illinois, Inc. v. Giannoulias

Filed 5/3/10 NO. 4-09-0069
IN THE APPELLATE COURT
OF ILLINOIS
FOURTH DISTRICT
A.B.A.T.E. of Illinois, Inc., and K. ) Appeal from
GENE BEENENGA, ) Circuit Court of
Plaintiffs-Appellants, ) Sangamon County
v. ) No. 06CH363
ALEXI GIANNOULIAS, Treasurer, State of )
Illinois; DANIEL W. HYNES, Comptrol- )
ler, State of Illinois; and PAT QUINN, )
Governor, State of Illinois, in Their ) Honorable
Official Capacities, ) Leo J. Zappa, Jr.,
Defendants-Appellees. ) Judge Presiding.
_________________________________________________________________
PRESIDING JUSTICE MYERSCOUGH delivered the opinion of
the court:
Plaintiffs, A.B.A.T.E. of Illinois, Inc. (ABATE), and
K. Gene Beenenga, appeal the trial court's order granting the
motion of defendants Alexi Giannoulias, Daniel W. Hynes, and Pat
Quinn for summary judgment and denial of their motion to recon-
sider. We affirm.
I. BACKGROUND
ABATE is an Illinois general not-for-profit corporation
whose members are motorcycle enthusiasts. Beenenga is a member
of ABATE and a motorcyclist.
Through Public Act 82-649, effective January 1, 1982
(Pub. Act 82-649, §§ 1 through 7, eff. January 1, 1982 (1981 Ill.
Laws 3373-76)), the legislature enacted the Cycle Rider Safety
Training Act (Act) (Ill. Rev. Stat. 1981, ch. 95 1/2, pars. 801
through 807), which included a Cycle Rider Safety Training Fund
(CRST Fund) (Ill. Rev. Stat. 1981, ch. 95 1/2, par. 806). The
Illinois Department of Transportation (Department) was given the
"power, duty[,] and authority to administer [the] Act." Ill.
Rev. Stat. 1981, ch. 95 1/2, par. 803. That version of section 6
stated the following with respect to deposits into the CRST Fund:
"To finance the Cycle Rider Safety
Training program and to pay the costs
thereof, the Secretary of State will hereaf-
ter 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 preced-
ing quarter, which amount the State Comptrol-
ler 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 Depart-
ment. 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 ap-
proved Regional Cycle Rider Safety Training
Centers for the conduct of courses, or for
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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 [Training] Fund to the Illinois Road
Fund so that said total approximately equals
$1,200,000, and, upon receipt of such notifi-
cation, the State Comptroller shall transfer
such amount to the Illinois Road Fund." Ill.
Rev. Stat. 1981, ch. 95 1/2, par. 806.
In January 1992, the legislature amended the former
version of section 6 of the Act when it enacted Public Act 87-838
(Pub. Act 87-838, §6, eff. January 1, 1993 (1991 Ill. Laws 4782,
4810)). The new version became section 6 of the Act (625 ILCS
35/6 (West 1992)). Public Act 87-838 amended section 6 of the
Act to allow funds in the CRST Fund to be transferred to the
General Revenue Fund by adding the following paragraph to section
6 of the Act:
"In addition to any other permitted use
of moneys in the Fund, and notwithstanding
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any restriction on the use of the Fund, mon-
eys 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 money exists in the Fund. On Feb-
ruary 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." 625 ILCS 35/6
(West 1992).
In December 1992, the legislature again amended section
6 of the Act when it overrode then Governor Jim Edgar's veto and
passed House Bill 1129, which became Public Act 87-1217, effec-
tive January 1, 1993 (Pub. Act 87-1217, §1, eff. January 1, 1993,
(1216 Ill. Laws 3775, 3775-76)). Because Public Act 87-1217
substantially changed section 6, we include it in its entirety
and emphasize what plaintiffs maintain are the substantive
changes to section 6 of the Act that are of import to this case:
"To finance the Cycle Rider Safety
Training program and to pay the costs
thereof, the Secretary of State will hereaf-
ter deposit with the State Treasurer an
amount equal to each annual fee and each
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reduced fee, for the registration of each
motorcycle, motor driven cycle[,] and motor-
ized 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 5/2-119 (West 1992))], 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 cre-
ated. 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 ap-
proved Regional Cycle Rider Safety Training
Centers for the conduct of courses, or for
any purpose related or incident thereto and
connected therewith." (Emphases added.) 625
ILCS 35/6 (West Supp. 1993).
Effective June 20, 2003, the legislature enacted an act
relating to budget implementation (hereinafter BIMP), Public Act
93-32 (2004 BIMP) (Pub. Act 93-32, §50-5, eff. June 20, 2003
(2003 Ill. Legis. Serv. 400, 401 (West))), which amended the
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State Finance Act (30 ILCS 105/1 through 40 (West 2004)) (2004
State Finance Act). Relevant to this case are sections 8h (30
ILCS 105/8h (West 2004)), 8j (30 ILCS 105/8j (West 2004)), and
8.42 (30 ILCS 105/8.42 (West 2004)). These amendments authorized
the Treasurer and Comptroller to transfer amounts from certain
funds held by the State Treasurer, including the CRST Fund (30
ILCS 105/8.42 (West 2004)), and from additional amounts created
through the increase of fees to the General Revenue Fund upon
direction from the Director of the Bureau of the Budget. 30 ILCS
105/8h, 8j (West 2004).
Effective July 30, 2004, Public Act 93-839 (2005 BIMP)
amended the State Finance Act yet again. Public Act 93-839 (Pub.
Act 93-839, §10-100, eff. July 30, 2004 (2004 Ill. Legis. Serv.
1381, 1407-08 (West))) amended section 8h of the State Finance
Act to give the Governor the power to direct the Treasurer and
Comptroller to transfer money from any fund held by the State
Treasurer to the General Revenue Fund. 30 ILCS 105/8h (West
Supp. 2005).
Later, Governor Blagojevich issued "Fund Transfer
Notifications" directing the transfer of money from many of the
State's funds, including the CRST Fund, into the General Revenue
Fund. Defendants admit that $1,205,600 was transferred from the
CRST Fund to the General Revenue Fund pursuant to the 2004 BIMP.
On June 9, 2006, plaintiffs filed a motion for tempo-
rary restraining order, asking the trial court to restrain
defendants (Judy Baar Topinka was Treasurer and Rod Blagojevich
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was Governor at the time) from transferring funds from the CRST
Fund (and many other funds) to the General Revenue Fund. The
trial court granted the temporary restraining order.
On June 12, 2006, plaintiffs filed a class-action suit
for declaratory judgment, mandamus, preliminary injunction, and
permanent injunction against defendants barring the transfer of
funds from a number of funds, including the CRST Fund, to the
General Revenue Fund. In relevant part, plaintiffs alleged that
the transfer of funds from the CRST Fund to the State's General
Revenue Fund pursuant to Public Acts 93-32 and 93-839 were
unenforceable because the transfers were inconsistent with the
CRST Fund's "enabling statute" and the transfers violated several
constitutional provisions. On July 28, 2006, the trial court
denied the motion for preliminary injunction. In August 2006,
defendant Hynes filed a motion to dismiss that the trial court
denied.
On April 30, 2008, defendants filed a motion for
summary judgment. On August 12, 2008, plaintiffs filed a cross-
motion for summary judgment. On October 23, 2008, the trial
court granted summary judgment in favor of defendants. The court
granted the motion because "the BIMP's in question were passed
after the current CRSTF Act was enacted. The intent of the
legislature was clear, and the more recent legislation (i.e., the
BIMPs), it can be implied, repealed the statute in question,
CRSTF." Moreover, the court found it was apparent from the fact
that the legislature acted to prohibit transfers from specific
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funds, but not the CRST Fund, that it intended the transfer from
the CRST Fund to take place. On January 5, 2009, the trial court
denied plaintiffs' motion to reconsider.
This appeal followed.
II. ANALYSIS
In this appeal, plaintiffs make two general arguments.
Plaintiffs argue that because the monies in the CRST Fund are
private, the legislature could not transfer the monies pursuant
to the 2004 and 2005 BIMPs without violating the takings clauses
of the Illinois and United States Constitutions. Plaintiffs also
contend that the 93rd General Assembly did not have the authority
to transfer CRST Fund funds into the General Revenue Fund because
the 87th General Assembly intended to place the CRST Fund beyond
the powers of later legislatures to sweep and accomplished this
by making the CRST Fund a "trust fund outside of the state
treasury."
An appellate court reviews a trial court's order
granting summary judgment de novo. Reppert v. Southern Illinois
University, 375 Ill. App. 3d 502, 504, 874 N.E.2d 905, 907
(2007). "The purpose of summary judgment is not to try a ques-
tion of fact, but to determine whether one exists." Land v.
Board of Education of the City of Chicago, 202 Ill. 2d 414, 421,
781 N.E.2d 249, 254 (2002). Summary judgment is appropriate
where the pleadings, depositions, and admissions on file, to-
gether with any affidavits and exhibits, when viewed in the light
most favorable to the nonmoving party, indicate that there is no
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genuine issue of material fact and the moving party is entitled
to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West
2006). "As in this case, where the parties file cross-motions
for summary judgment, they invite the court to decide the issues
presented as a matter of law." Liberty Mutual Fire Insurance Co.
v. St. Paul Fire & Marine Insurance Co., 363 Ill. App. 3d 335,
339, 842 N.E.2d 170, 173 (2005).
Further, the issue in this case is one of statutory
interpretation. This court reviews issues of statutory interpre-
tation de novo. Reppert, 375 Ill. App. 3d at 504, 874 N.E.2d at
907. Our supreme court recently stated the following with
respect to the rules of statutory construction:
"The primary rule of statutory construc-
tion is to give effect to the intent of the
legislature. The best evidence of legisla-
tive intent is the statutory language itself,
which must be given its plain and ordinary
meaning. The statute should be evaluated as
a whole. Where the meaning of a statute is
unclear from a reading of its language,
courts may look beyond the statutory language
and consider the purpose of the law, the
evils it was intended to remedy, and the
legislative history of the statute." Ultsch
v. Illinois Municipal Retirement Fund, 226
Ill. 2d 169, 181, 874 N.E.2d 1, 8 (2007).
- 9 -
"Where the language of a statute is plain and unambiguous, a
court need not consider other interpretive aids." Ultsch, 226
Ill. 2d at 184, 874 N.E.2d at 10.
Plaintiffs contend the transfer of the funds violates
the takings clause of both the Illinois and United States Consti-
tutions because it would be a taking of private monies. The
federal takings clause is found in the fifth amendment and
provides the following: "nor shall private property be taken for
public use, without just compensation." U.S. Const., amend. V.
This provision is made applicable to the states through the
fourteenth amendment (U.S. Const., amend. XIV). Southwestern
Illinois Development Authority v. National City Environmental,
L.L.C., 199 Ill. 2d 225, 235, 768 N.E.2d 1, 7 (2002). The
Illinois takings clause is found in article I, section 15, of the
Illinois Constitution and provides: "Private property shall not
be taken or damaged for public use without just compensation as
provided by law." Ill. Const. 1970, art. I, §15.
Plaintiffs argue Thompson v. Kentucky Reinsurance
Ass'n, 710 S.W.2d 854 (Ky. 1986), has "startlingly" similar facts
and is therefore persuasive. In Thompson, the issue on appeal
was whether Kentucky's General Assembly could divert funds from
the Kentucky Reinsurance Association (KRA), a statutorily created
Kentucky nonprofit corporation, which operated entirely on
premiums collected from Kentucky insurance carriers licensed to
write workers compensation insurance, Kentucky self-insurance
groups, and Kentucky self-insured employers. Thompson, 710
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S.W.2d at 855. Kentucky's legislature attempted to transfer the
premiums paid to the KRA into the state's general revenue fund.
Thompson, 710 S.W.2d at 857. Kentucky's supreme court found the
legislature did not have this power because the funds were
"clearly private funds." (Emphasis omitted.) Thompson, 710
S.W.2d at 857. The fund from which the Kentucky legislature
attempted to transfer money received its income solely "from
premiums charged its subscribers-insurance carriers, self-insur-
ance groups, and self-insured employees." Thompson, 710 S.W.2d
at 857.
Plaintiffs also claim this case is similar to Illinois
Clean Energy Community Foundation v. Filan, 392 F.3d 934 (7th
Cir. 2004). There, the State argued it could require the trust-
ees of a charitable trust that the Interstate Commerce Commission
had required Commonwealth Edison to establish with proceeds from
the sale of seven of Commonwealth Edison's power plants to turn
over up to $125 million to the State's treasury and environmental
agencies upon written demand by the State's budget director.
Illinois Clean Energy, 392 F.3d at 936. Even though the state
created the trust, it was independent of the State and was funded
by private money. Illinois Clean Energy, 392 F.3d at 936-37.
Therefore, the State could not confiscate any of the trust's
assets. Illinois Clean Energy, 392 F.3d at 938.
However, both Thompson and Illinois Clean Energy are
distinguishable from the case sub judice in that the fees col-
lected and placed into the CRST Fund are fees charged by the
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State for the privilege of operating a motorcycle. The fees are
not received from insurance premiums and held by a separate
corporation such as the KRA as in Thompson. Similarly, the
monies in the CRST Fund are not from the sale of a private
corporation's assets with the proceeds being used, at the State's
direction, to create a foundation or trust as in Illinois Clean
Energy.
The case here is also different from City of Chicago v.
Holland, 206 Ill. 2d 480, 493, 795 N.E.2d 240, 248 (2003),
another case cited by plaintiffs, where the funds at issue were
primarily generated through federal grants and self-generated
revenue through fees paid by airlines, passengers, and tenants of
airports. The money in the CRST Fund is collected by the Secre-
tary of State from motorcyclists who are paying for the privilege
of operating a motorcycle in Illinois (much like owners of
automobiles pay fees to register their cars), held by the State
Treasurer, and administered by the Department. See 625 ILCS 35/6
(West 1992).
Defendants argue that while section 6 of the Act
authorizes federal money and private donations to be placed in
the fund, plaintiffs have actually offered no evidence that any
federal or private monies were transferred into the CRST Fund or
that the money transferred pursuant to the 2004 and 2005 State
Finance Acts were those monies other than the public funds
collected by the Secretary of State. In other words, the record
reflects no private money or restricted federal funds were
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transferred from the CRST Fund to the General Revenue Fund.
Section 6 also authorizes the Department to accept State funds to
be placed in the CRST Fund. 625 ILCS 35/6 (West 1992). Because
no record evidence shows any private monies were transferred from
the CRST Fund to the General Revenue Fund, plaintiffs cannot show
any private money was taken, an essential element of showing a
violation of the takings clause of the Illinois and United States
Constitutions.
As stated, plaintiffs also make and, for the sake of
argument, we will accept as true, the following arguments: (1)
the plain language of the Act shows the legislature created a
trust and placed it outside the State Treasury with the intent
that no General Revenue Funds could be placed in the trust, (2)
the December 1992 amendments show the legislature intended to
change the CRST Fund from a special fund inside the State Trea-
sury to a trust fund outside the State Treasury and to deprive
the legislature of the power to transfer funds from the CRST Fund
into the General Revenue Funds, and (3) the legislative history,
including the Governor's veto message and legislative debates,
shows the legislature intended to place the CRST funds beyond the
power of later legislatures to sweep. However, even accepting
these arguments as true, we conclude the legislature had the
authority to enact the 2004 and 2005 BIMPs that enabled the
transfer of funds from the CRST Fund into the General Revenue
Fund.
Both plaintiffs and the dissent would have us apply the
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general rules of trusts to the CRST Fund created by the Act and
hold that the legislature was without the power to transfer funds
from the CRST Fund to the General Revenue Fund. Illinois, like
most jurisdictions, follows the general rule that "a settlor
cannot modify or revoke a trust unless he has reserved the power
to do so in the trust agreement." Williams v. Springfield Marine
Bank, 131 Ill. App. 3d 417, 419, 475 N.E.2d 1122, 1124 (1985).
Here, the General Assembly did not reserve to itself in the Act
the power to revoke or modify the terms of the trust when it
created the trust. While we have been unable to find any Illi-
nois case law addressing whether the general rules of trusts
apply to the legislature in circumstances similar to those
present in the case sub judice, at least two courts from other
jurisdictions have refused to apply the general principle that a
settlor does not have the power to revoke or modify the terms of
a trust unless they explicitly reserved that power to the legis-
lature. See Barber v. Ritter, 196 P.3d 238, 253-54 (Colo. 2008)
(where the Colorado Supreme Court recognized the legislature did
not reserve the right to modify or revoke the terms of the
statute creating the trust but concluded the legislature had the
power to do so to allow the transfer of funds from the trust fund
into the general revenue fund); Board of Trustees of the Tobacco
Use Prevention & Control Foundation v. Boyce, Nos. 09AP-768,
09AP-769, 09AP-785, 09AP-786, 09AP-832, 09AP-833 cons. (Ohio
App. December 31, 2009) (where the court refused to apply the
general rule and find the legislature created an irrevocable
- 14 -
trust because a legislature has no power to bind future legisla-
tures).
In Barber, the petitioners argued that three funds from
which monies were transferred into the general revenue fund were
public trusts and the transfer of monies from those funds into
the general revenue fund constituted a misappropriation of the
trust corpus. Barber, 196 P.3d at 252-53. The Colorado Supreme
Court accepted for the sake of argument, without deciding, that
the three funds were public trusts. Barber, 196 P.3d at 253.
The Barber court stated that the petitioners' argument
turned on the implicit premise that the Colorado General Assembly
lacked the authority to alter or amend the statutes creating the
trusts. Barber, 196 P.3d at 253. Therefore, the amendments
providing for the transfer were ineffective and "constituted a
misappropriation of the trust corpus." Barber, 196 P.3d at 253.
Specifically, the petitioners argued "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."
Barber, 196 P.3d at 253.
The court noted that Colorado follows the view that
once a trust is created it cannot be revoked by the settlor
without all of the beneficiaries' consent unless the settlor
explicitly reserved the power to do so unilaterally. Barber, 196
P.3d at 253. However, the court concluded the legislature could
not limit its absolute power to appropriate funds by creating an
irrevocable public trust:
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"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 appropria-
tions is constitutionally derived and have
characterized this power as 'absolute' and
'plenary.' [Citation.] *** To hold that
the General Assembly could limit this plenary
power to appropriate by creating an irrevoca-
ble public trust would be to effectively hold
that the General Assembly could abrogate its
constitutional powers by statute. This is
not the law. *** We therefore decline to
read the cash funds' enabling legislation as
creating irrevocable trusts that would uncon-
stitutionally restrain the legislature's
plenary power over appropriations.
The status of the three cash funds as
public trusts does not, and constitutionally
cannot, have any limiting effect on the leg-
islature's plenary power to amend or repeal
those funds' enabling statutes. The legisla-
ture's amendment of the cash funds' enabling
statutes to allow for the transfer of funds
to the General Fund did not, therefore, con-
- 16 -
stitute a misappropriation of the trust cor-
pus, and did not trigger a fiduciary obliga-
tion to repay the transferred monies. Thus,
we hold that, even if the cash funds are
public trusts, they are not irrevocable
trusts, and the legislature has the authority
to amend them to allow for the transfer of
monies to the General Fund." (Emphasis in
original.) Barber, 196 P.3d at 253-54.
Similarly, an Ohio appellate court (Boyce, slip op. at
9) followed the reasoning of Barber and upheld the transfer of
money from an endowment fund (admittedly classified as state
funds) into the general fund. In doing so, the Boyce court
recognized the principle that one General Assembly cannot bind
successive legislatures is a constitutional principle "derived
from the General Assembly's plenary power to legislate as to any
matter, except as limited by the state and federal
[c]onstitutions." Boyce, slip op. at 20.
It is "well accepted in [Illinois] that the constitution is
not regarded as a grant of powers to the legislature but is a
limitation upon its authority; the legislature may enact any
legislation not expressly prohibited by the constitution."
People ex rel. Chicago Bar Ass'n v. State Board of Elections, 136
Ill. 2d 513, 525, 558 N.E.2d 89, 94 (1990). As stated, plain-
tiffs have not shown a taking of private funds prohibited by
either the Illinois or federal constitution and we have found no
- 17 -
other constitutional provision prohibiting the transfers.
Additionally, Illinois courts have stated that "[t]he
legislature is *** the sole and exclusive authority for the
appropriation of the funds of the state." Galpin v. City of
Chicago, 159 Ill. App. 135, 153 (1910). Moreover, "[t]he trans-
fer of money accumulated in one fund into a general revenue fund
is generally within the province and authority of the legisla-
ture." Terra-Nova Investments v. Rosewell, 235 Ill. App. 3d 330,
340, 601 N.E.2d 1109, 1117 (1992); see also Valstad v. Cipriano,
357 Ill. App. 3d 905, 917-18, 828 N.E.2d 854, 868 (2005).
Further, the actions of one legislature cannot bind future
legislatures. See Polich v. Chicago School Finance Authority, 79
Ill. 2d 188, 200-01, 402 N.E.2d 247, 252 (1980); see also Choose
Life Illinois, Inc. v. White, 547 F.3d 853, 858 n.4 (7th Cir.
2008) ("It is axiomatic that one legislature cannot bind a future
legislature"). As shown, Illinois follows the same principles
the Barber and Boyce courts used to come to their respective
decisions that their state's respective legislatures had the
power to amend the statutes in question to allow for the transfer
of funds held in a trust created by the legislature, even though
that power was not explicitly reserved in the statutes creating
those trusts, into the General Revenue Fund. We adopt the Barber
and Boyce courts' reasoning and conclude the Illinois legisla-
ture, by enacting the 1992 amendments to the Act, did not create
an irrevocable trust and therefore had the authority to transfer
funds from the CRST Fund into the General Revenue Fund via the
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2004 and 2005 BIMPs.
Because of our conclusion, we must look to what the
later Public Acts 93-32 and 93-839 accomplished. The 2004 BIMP
specifically authorized the interfund transfer at issue here as
the CRST Fund is one of the funds listed from which the legisla-
ture authorized money to be transferred to the General Revenue
Fund. 30 ILCS 105/8.42 (West 2004). Also of note, section 8.42
states, "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."
(Emphasis added.) 30 ILCS 105/8.42 (West 2004).
This language shows the legislature's intent to autho-
rize these transfers in a time of our state's fiscal crisis in
spite of any statute previously in existence that states other-
wise. Moreover, section 8h of the State Finance Act authorized
the Director of the Bureau of the Budget to order the State
Treasurer and State Comptroller to transfer a specified fund from
any fund held by the State Treasurer. The CRST Fund is held by
the State Treasurer (see 625 ILCS 35/6 (West 1992) ("Secretary of
State will hereafter deposit in the State Treasury")). Further,
if the legislature had intended to exempt the CRST Fund from
these transfers, the legislature could have done so explicitly as
it did with restricted federal funds, the Motor Fuel Tax Fund,
the Criminal Justice Information Systems Trust Fund, and other
funds listed. See Pub. Act 93-32, §50-5, eff. June 20, 2003
(2003 Ill. Legis. Serv. 400, 401-02 (West)); Pub. Act 93-839,
- 19 -
§10-100, eff. July 30, 2004 (2004 Ill. Legis. Serv. 1381, 1402-04
(West)). These legislative enactments show the 93rd General
Assembly intended to authorize the transfer of CRST Fund monies
into the General Revenue Fund.
III. CONCLUSION
For the reasons stated, the 2004 and 2005 BIMPs are
constitutional and enforceable. Therefore, we affirm the trial
court's judgment.
Affirmed.
POPE, J., concurs.
APPLETON, J., dissents.
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JUSTICE APPLETON, dissenting:
I respectfully dissent from the majority's decision.
By the 1992 amendment to section 6 (625 ILCS 35/6 (West 1992)),
the legislature declared an express trust. Illinois residents 16
years of age or older with a valid driver's license have a
beneficial interest in the "trust fund." That beneficial inter-
est is property, which the State cannot take without violating
the takings clause of the Illinois Constitution (Ill. Const.
1970, art. I, §15). The budget-implementation plans are uncon-
stitutional insomuch as they take amounts already deposited in
the trust fund and transfer those amounts to the General Revenue
Fund.
A. An Express Trust
1. The Capacity of the State To Create a Trust
"[T]he General Assembly is free to enact any legisla-
tion that the constitution does not expressly prohibit." Maddux
v. Blagojevich, 233 Ill. 2d 508, 522, 911 N.E.2d 979, 988 (2009);
see also Locust Grove Cemetery Ass'n v. Rose, 16 Ill. 2d 132,
138, 156 N.E.2d 577, 580 (1959) ("Every subject within the scope
of civil government which is not within some constitutional
inhibition may be acted upon by the General Assembly"). I am
aware of no constitutional provision expressly prohibiting the
General Assembly from enacting legislation making the State of
Illinois the settlor of a trust. I do not doubt that the General
Assembly has the power to grant property outright, such as by
awarding grants out of public funds. It follows that the General
- 21 -
Assembly also has the power to transfer public funds in trust.
"A person has capacity to create a trust by transferring property
inter vivos in trust to the extent that he has capacity to
transfer the property inter vivos free of trust." Restatement
(Second) of Trusts §19, at 64 (1959).
Several treatises on the law of trusts recognize that a
state can be a trustee. (They also add that sovereign immunity
might prevent a beneficiary from enforcing the trust. Sovereign
immunity does not prevent us, however, from assessing the consti-
tutionality of a statute.) 2 A. Scott, M. Ascher & W. Fratcher,
Scott & Ascher on Trusts §11.1.5, at 607-08 (5th ed. 2006); G.
Bogert & G. Bogert, Trusts & Trustees §128, at 393 (1984);
Restatement (Second) of Trusts §95, at 221-22 (1959). If, in the
view of these authorities, a state can take property in trust, a
state can transfer property in trust to one of its agencies. I
conclude that the General Assembly has the inherent power to make
the State of Illinois the settlor of a trust and to appoint a
state agency as the trustee.
2. Requirements for the Creation of an Express Trust
The supreme court has held there are six requirements
for the creation of an express trust:
"(1) [the] intent of the parties to create a
trust, which may be shown by a declaration of
trust by the settlor or by circumstances
which show that the settlor intended to cre-
ate a trust; (2) a definite subject matter or
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trust property; (3) ascertainable beneficia-
ries; (4) a trustee; (5) specifications of a
trust purpose and how the trust is to be
performed; and (6) delivery of the trust
property to the trustee." Eychaner v. Gross,
202 Ill. 2d 228, 253, 779 N.E.2d 1115, 1131
(2002).
I find the fulfillment of each of those requirements in this
case.
a. A Declaration of Trust by the Settlor
In section 6 of the State Finance Act (625 ILCS 35/6
(West 2004)), the General Assembly makes "a declaration of
trust." Eychaner, 202 Ill. 2d at 253, 779 N.E.2d at 1131. To
finance a training program for motorcycle riders, the General
Assembly requires the Secretary of State to "deposit with the
State Treasurer an amount equal to each annual fee and ***
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 trust
fund outside of the State treasury[,] to be known as the [']Cycle
Rider Safety Training Fund,['] which is hereby created." (Empha-
sis added.) 625 ILCS 35/6 (West 2004).
The mere use of the word "trust" does not establish the
existence of an express trust. La Throp v. Bell Federal Savings
& Loan Ass'n, 68 Ill. 2d 375, 381, 370 N.E.2d 188, 191 (1977).
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(Again, six requirements must be met. Eychaner, 202 Ill. 2d at
253, 779 N.E.2d at 1131.) Nevertheless, I consider the legisla-
ture's use of the term "trust fund" to be compelling evidence
that it intended to create a trust. See Oglesby v. Springfield
Marine Bank, 395 Ill. 37, 49, 69 N.E.2d 269, 276 (1946) ("Ordi-
narily, where an express private trust is relied on, the instru-
ments introduced in evidence to establish such trust contain
words such as 'in trust'"). I must assume the legislature did
not use that term lightly or in ignorance.
b. Definite Subject Matter or Trust Property
The subject matter of the trust is definite: the
amounts deposited in the trust fund. These amounts are to be
"equal to each annual fee and *** reduced fee[] for the registra-
tion of each motorcycle, motor driven cycle[,] and motorized
pedalcycle." 625 ILCS 35/6 (West 2004).
c. Ascertainable Beneficiaries
The beneficiaries are ascertainable: "all residents of
the State who hold a currently valid driver's license and who
have reached their 16th birthday." 625 ILCS 35/4 (West 2004).
These are beneficiaries "'capable of taking, and so defined and
pointed out, that the trust will not be void for uncertainty.'"
Kingsley v. Montrose Cemetery Co., 304 Ill. App. 273, 284, 26
N.E.2d 613, 618 (1940), quoting Gallego's Executors v. Attorney
General, 30 Va. 450, 466 (1832). "It is not essential to the
validity of a deed of trust that the beneficiaries should appear
therein by name. It will be sufficient if they are so described
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or designated that they may be ascertained and distinguished."
First National Bank of Elgin v. Schween, 127 Ill. 573, 580, 20
N.E. 681, 685 (1889). I am aware of no authority forbidding the
establishment of a trust with numerous beneficiaries. The
beneficiaries in this case, though numerous, are definite and
ascertainable.
d. A Trustee
The Department of Transportation is the trustee of the
trust fund. The Act does not call the Department the "trustee,"
but the use or nonuse of that word is not controlling. See La
Throp, 68 Ill. 2d at 381, 370 N.E.2d at 191; Restatement (Second)
of Trusts §24(2), at 67 (1959). Through its description of the
Department's powers and duties with respect to the trust fund,
the Act appoints the Department as trustee.
The Department has "the power, duty[,] and authority to
administer [the] Act" (625 ILCS 35/3 (West 2004)), and adminis-
tering the Act ultimately comes down to deciding specifically how
the trust fund will be spent (consistently with the provisions
setting forth the purpose of the trust and the manner of perfor-
mance). The Department may promulgate rules and regulations for
the administration of the Act. 625 ILCS 35/5 (West 2004). The
Department shall designate the state colleges, community col-
leges, state universities, and community agencies that may
organize "Training Centers," in which "cycle rider safety train-
ing courses" will be taught. 625 ILCS 35/4 (West 2004). "The
Department is authorized to and shall award contracts out of
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appropriations to the Department from 'The Cycle Rider Safety
Training Fund' to qualifying Regional Cycle Rider Safety Training
Centers for the conduct of approved Cycle Rider Safety Training
courses." 625 ILCS 35/7 (West 2004). By rule and regulation,
the Department shall prescribe the curriculum and accreditation
for these courses, along with the qualifications and certifica-
tion requirements for the instructors. 625 ILCS 35/4 (West
2004). The Department shall accept moneys for deposit into the
trust fund, which it shall use "for the expenses of the Depart-
ment in administering the provisions of [the] 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
2004). These are just the sort of tasks one would expect a
trustee to perform in administering the trust fund.
e. Specification of the Trust Purposes and
How the Trust Is To Be Performed
i. The Trust Purpose
The trust purpose is to provide "courses of instruction
in the use and operation of cycles, including instruction in the
safe on-road operation of cycles, the rules of the road[,] and
the laws of this State relating to motor vehicles." 625 ILCS
35/2.03 (West 2004). These courses are open to all Illinois
residents 16 years of age or older who possess a valid driver's
license. 625 ILCS 35/4 (West 2004).
ii. How the Trust Is To Be Performed
By describing the trustee's powers and duties, the Act
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describes how the trust is to be performed. Generally, the
manner of performance is as follows. The Department will approve
the organization of regional training centers, which will offer
courses on motorcycle safety. 625 ILCS 35/4 (West 2004). The
Department will enter into contracts with these training centers
and, by disbursements from the trust fund, pay for their services
to trainees. 625 ILCS 35/7 (West 2004). By publishing rules and
regulations, the Department will fill in certain details, such as
the curriculum and accreditation for the courses and the qualifi-
cations and certification of instructors. 625 ILCS 35/4 (West
2004). A trust instrument need not specify all the details of
administration, so long as it describes, in general terms, the
manner in which the trust is to be performed. In re Estate of
Zukerman, 218 Ill. App. 3d 325, 330, 578 N.E.2d 248, 252 (1991).
f. Delivery of the Trust Property to the Trustee
The State has delivered trust property to the Depart-
ment, as trustee, by depositing amounts in the trust fund.
B. A Taking
"Private property shall not be taken *** for public use
without just compensation as provided by law." Ill. Const. 1970,
art. I, §15. The budget implementation plans violate the takings
clause insomuch as they transfer amounts from the trust fund to
the General Revenue Fund, for, in so doing, they take what does
not belong to the State of Illinois: the beneficial interest in
the trust fund.
Plaintiffs characterize the corpus of the trust as
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"private funds," and defendants characterize it as "public
funds." Neither term is apt. Whenever the Comptroller deposits
an amount of money into the trust fund, the ownership of that
money divides in two: the Department of Transportation, as
trustee, receives the legal title, and the beneficiaries receive
the equitable estate. See Randolph v. Wilkinson, 294 Ill. 508,
515, 128 N.E. 525, 529 (1920); 35 Ill. L. & Prac. Trusts §59, at
111 (2001). The equitable estate is property (Merchants' Loan &
Trust Co. v. Patterson, 308 Ill. 519, 530, 139 N.E. 912, 916
(1923)), and the State cannot take it any more than it could take
the car parked in someone's driveway.
The trust fund in this case is an educational trust
fund, and, essentially, it is no different from the educational
trust fund an uncle might establish for a nephew, with himself as
trustee. If he and his nephew have a falling out, he cannot
remove the money from the trust account and put it back in his
private account. That would be conversion (or, in the State's
case, an uncompensated taking). He can stop depositing money
into the trust account (just as the General Assembly, if it
wished, could repeal the provision in section 6 (625 ILCS 35/6
(West 2004)) whereby registration fees are deposited every
quarter into the trust fund). But once he deposits a sum into
the trust account, he loses the equitable title to it and retains
only the legal title.
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