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In Re Application of County Collector

OPINION FILED APRIL 21, 1977.

IN RE APPLICATION OF COUNTY COLLECTOR. — (ROBERT G. SKIDMORE, COUNTY COLLECTOR OF LAKE COUNTY, PLAINTIFF-APPELLEE,

v.

ILLINOIS STATE TOLL HIGHWAY AUTHORITY ET AL., DEFENDANTS-APPELLANTS.)



APPEAL from the Circuit Court of Lake County; the Hon. LLOYD A. VAN DEUSEN, Judge, presiding.

MR. JUSTICE GUILD DELIVERED THE OPINION OF THE COURT:

On October 26, 1971, the Illinois State Toll Highway Authority (hereinafter referred to as Authority) and the Standard Oil Division of American Oil Company (hereinafter referred to as Standard Oil) filed their objection to judgment being rendered on the application of the county treasurer and ex officio collector of Lake County for taxes paid under protest for the year 1970. The property in question was a leasehold for the oasis on the Authority's property which had been assessed by the County of Lake resulting in a purported tax due of $29,826.40. On February 10, 1972, the circuit court of Lake County found the leasehold interest of Standard Oil to be exempt from taxation under the provisions of section 18 of the toll highways act of 1953 (Ill. Rev. Stat. 1971, ch. 121, par. 314a43) which read:

"All property belonging to the Commission, and the said toll highways, shall be exempt from taxation."

The court further entered an injunction permanently enjoining the county treasurer, county assessor, county clerk of Lake County and the State's Attorney of Lake County and their successors in office from collecting or attempting to assess, levy or collect in any manner any general real estate taxes levied on the oasis or any part thereof or any interest therein.

Since the entering of that injunction the language of that section has been carried forward to section 22 of the toll highways act of 1967 (Ill. Rev. Stat. 1973, ch. 121, par. 100-22). Section 22 was amended by the legislature effective October 1, 1973, and now reads as follows:

"§ 22. All property belonging to the Authority, and the toll highways, shall be exempt from taxation. However, such part of that property as has heretofore been or shall hereafter be leased by the Authority to a private individual, association or corporation for a use which is not exempted from taxation under Section 19 of the Revenue Act of 1939, is subject to taxation as provided in Section 26 of the Revenue Act of 1939, regardless of any provision in such a lease to the contrary." (Emphasis added.)

The italicized sentence was added by the legislature by this amendment.

On February 21, 1975 the State's Attorney of Lake County on behalf of the county treasurer and ex officio county collector moved the court to vacate the decree of February 10, 1972. On March 4, 1975, the Authority moved to strike and dismiss the motion to vacate the 1972 decree. This motion was denied on March 7, 1975. On March 10, 1975, the State's Attorney of Lake County, on behalf of the county treasurer and ex officio county collector, moved the court to amend or modify the injunction order restraining the collection of the taxes as aforesaid so that it would be inoperative after the effective date of the amendment. On March 24, 1975, the circuit court of Lake County entered its order finding that it had continuing jurisdiction as to the permanent injunction of the court and found, in substance, that under the amended provisions of section 22 of the toll highways act of 1967 that the leasehold property was taxable as any other real estate or property. The court thereupon vacated, terminated and dissolved the permanent injunction enjoining the taxing authorities from collecting taxes from leasehold interest of Standard Oil. The Authority has appealed.

Stated otherwise, the court in its order of March 24, 1975 found that the original injunction was based upon the exemption granted by section 22 of the toll highways act of 1967; that section 22 was amended effective October 1, 1973, to no longer exempt leasehold interests unless the use of the leasehold was exempt under section 19 of the Illinois Revenue Act (Ill. Rev. Stat. 1973, ch. 120, par. 500). The court further found that exemption for the use of a leasehold for tollway purposes was not granted by section 19 and concluded that the Authority property was taxable as to the leasehold interest of Standard Oil.

• 1-3 The first contention of the Authority is that the property in question is State property, that under the Illinois Revenue Act there is a blanket tax exemption to all State property and, therefore, notwithstanding the amendment to section 22, the property is nevertheless exempt. The difficulty with this argument is that in the case before us we are considering a leasehold interest of Standard Oil, not State property. In this connection the record discloses a 25-year lease agreement was entered into by Standard Oil and the Authority on December 20, 1957, which is still in effect and will not expire until 1982. This lease specifically provides that the annual rent paid by the lessee, Standard Oil, will be reduced by an amount equal to any ad valorum taxes which might be levied against the leasehold. This issue was considered by our supreme court in Illinois State Toll Highway Com. v. Korzen (1965), 32 Ill.2d 338, 205 N.E.2d 433, and reference is made to that decision in which the supreme court interpreted the provisions of section 18 of the toll highways act of 1953 (then Ill. Rev. Stat. 1963, ch. 121, par 314a43), which read:

"All property belonging to the Commission, and the said toll highways, shall be exempt from taxation."

In considering the leasehold interest of Standard Oil the supreme court stated:

"We think the General Assembly, in providing that `all property belonging to the Commission' without regard to its use, shall be exempt from taxation, meant to include the property here in question." (32 Ill.2d 338, 340, 205 N.E.2d 433, 434.)

The court, of course, did not consider the amendment to section 22 of the toll highways act of 1967. The court did, however, go on to observe that the service facilities were ...


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