Appeal from the Circuit Court of Cook County, the Hon. Richard
L. Curry, Judge, presiding.
MR. JUSTICE RYAN DELIVERED THE OPINION OF THE COURT:
Rehearing denied May 30, 1979.
In this case we are confronted with the question of whether section 5(c) of article IX of the Illinois Constitution of 1970 prohibits the imposition of an ad valorem tax on personal property after January 1, 1979, and if so, is the further provision of section 5(c) concerning the enactment of a replacement tax operable. Section 5(c) provides:
"On or before January 1, 1979, the General Assembly by law shall abolish all ad valorem personal property taxes and concurrently therewith and thereafter shall replace all revenue lost by units of local government and school districts as a result of the abolition of ad valorem personal property taxes subsequent to January 2, 1971. Such revenue shall be replaced by imposing statewide taxes, other than ad valorem taxes on real estate, solely on those classes relieved of the burden of paying ad valorem personal property taxes because of the abolition of such taxes subsequent to January 2, 1971. If any taxes imposed for such replacement purposes are taxes on or measured by income, such replacement taxes shall not be considered for purposes of the limitations of one tax and the ratio of 8 to 5 set forth in Section 3(a) of this Article."
In this case, Client Follow-Up Company, an Illinois corporation (Client), filed a class action in the circuit court of Cook County against Thomas C. Hynes, assessor of Cook County, Stanley T. Kusper, county clerk of Cook County, and Edward J. Rosewell, county treasurer and ex-officio county collector of Cook County. Count I of the complaint sought a declaration that the extension and collection of 1978 personal property taxes against the plaintiffs after January 1, 1979, is unconstitutional, and sought to enjoin their extension and collection. Count II sought similar relief as to 1979 personal property taxes. Thereafter, an order was entered allowing Allan Masters, P.C., a professional corporation (Masters), Township High School District 205 of Cook County, and the city of Chicago to intervene as parties defendant. Technical Exhibits Corporation, an Illinois corporation, was granted leave to intervene as a party plaintiff and as a representative of a class of corporations that are being assessed for a "capital stock tax" by the Department of Local Government Affairs (Department), which was made a party defendant.
Motions to dismiss were filed. The court granted the respective motions to dismiss, holding that the provisions of section 5(c) of article IX do not constitute an abolition of the personal property tax after January 1, 1979, but constitute a mandate to the legislature. Notices of appeal were filed and this court entered an order under Rule 302(b) (58 Ill.2d R. 302(b)), transferring the appeal from the appellate court to this court.
The defendants, relying on this court's holding in Elk Grove Engineering Co. v. Korzen (1973), 55 Ill.2d 393, contend that the provisions of section 5(c) do not constitute a limitation on the legislative power to impose personal property taxes after January 1, 1979, but, instead, constitute only a mandate to the General Assembly to abolish the personal property tax. The defendants point out that this court has held that a constitutional mandate to the legislature cannot be enforced by the courts>, citing Fiedler v. Eckfeldt (1929), 335 Ill. 11, Fergus v. Kinney (1928), 333 Ill. 437, Fergus v. Marks (1926), 321 Ill. 510, People ex rel. Woodyatt v. Thompson (1895), 155 Ill. 451, and G. Braden & R. Cohn, The Illinois Constitution: An Annotated and Comparative Analysis 116 (1969). It is also contended that our holding in Elk Grove supports the conclusion that even after January 1, 1979, the adoption of a replacement tax is required before any ad valorem personal property tax can be abolished.
In Elk Grove, this court considered statutory enactments which had exempted certain classes of personal property from taxation. The General Assembly had not enacted replacement taxes as required by section 5(c). This court stated that the provisions of that section constituted a mandate to the legislature to abolish ad valorem taxes on personal property on or before January 1, 1979; that the provision was not self-executing; that the section required the General Assembly, when abolishing the tax, to concurrently therewith and thereafter enact a replacement tax, and that the provision of that section concerning the replacement tax was also not self-executing. This court held that the legislature could not abolish the ad valorem personal property tax on a class of taxpayers without enacting a replacement tax as required by section 5(c) of article IX. This court made no determination in Elk Grove as to whether the mandate of the Constitution to the legislature to abolish the tax continued after January 1, 1979, or whether after that date action by the General Assembly would be necessary to abolish the tax. The same is true of our holding in American National Bank & Trust Co. v. Kusper (1977), 69 Ill.2d 374.
Since the issues now before this court were not considered in Elk Grove or American National Bank, the decisions in those cases are not controlling. We must, therefore, now construe the effect of the provisions of section 5(c) of article IX as they apply to ad valorem taxes levied on personal property after January 1, 1979.
Under traditional constitutional theory, the basic sovereign power of the State resides in the legislature. Therefore, there is no need to grant power to the legislature. All that needs to be done is to pass such limitations as are desired on the legislature's otherwise unlimited power. (G. Braden & R. Cohn, The Illinois Constitution: An Annotated and Comparative Analysis 111 (1969).) Thus, limitations written into the Constitution are restrictions on legislative power and are enforceable by the courts>. On the other hand, constitutional directives to the legislature are considered as mandates or commands to the legislature to act, and it is generally held that the courts> are powerless to enforce them. (Kamin, Constitutional Abolition of Ad Valorem Personal Property Taxes: A Looking-Glass Book, 60 Ill. Bar J. 432 (1972).) Thus, the issue before us is whether section 5(c) of article IX constitutes a limitation on the legislature's authority to tax after January 1, 1979, or whether the continuing mandate to abolish this tax, which Elk Grove determined to exist before January 1, 1979, continues to be a mandate to the legislature after that date.
In construing the meaning of a constitutional provision, it is appropriate and helpful to examine it in light of the history and condition of the times, and the particular problem which the convention sought to address by incorporating in the document the questioned provision. (Wolfson v. Avery (1955), 6 Ill.2d 78, 88-93.) When the 1970 Illinois constitutional convention convened, there was strong sentiment in this State to abolish personal property taxes by valuation. (Kamin, Constitutional Abolition of Ad Valorem Personal Property Taxes: A Looking-Glass Book, 60 Ill. Bar J. 432, 435 (1972).) Both the report of the Committee on Revenue and Finance, and the report of the dissenters on that committee, recognized the unfairness of the ad valorem personal property tax and the inability to apply it evenly. (7 Record of Proceedings, Sixth Illinois Constitutional Convention 2129-42, hereafter referred to as Proceedings.) In fact, a publication entitled "Report of Governor's Revenue Study Committee, 1968-69," incorporated in the report of the majority of the Revenue and Finance Committee, referred to the personal property tax in Illinois as a "scandal." (7 Proceedings 2133.) As discredited as the ad valorem personal property tax may have been, it was recognized by the committee that this tax provided a substantial amount of needed revenue for the local taxing bodies, which would be seriously hampered in their operation by the outright abolition of the tax. 7 Proceedings 2131.
The constitutional convention was also aware that the 1969 General Assembly had enacted Senate Joint Resolution No. 30 (1969), which proposed an amendment to the 1870 Constitution which would exempt personal property "as to individuals" from taxation. This proposed amendment was to be submitted to the voters at an election on November 3, 1970. The proposals adopted by the Constitutional Convention would be submitted to the voters about a month later at a special election on December 15, 1970. It was anticipated by the convention that the voters would approve Senate Joint Resolution No. 30 on November 3, 1970, and that at the time of the referendum on the proposals adopted by the constitutional convention, ad valorem taxes on personal property owned by individuals would have been abolished.
Against this background of events, the Committee on Revenue and Finance presented its proposal to the convention, the language of which, with only minor changes, ultimately became section 5(a) of article IX of the 1970 Constitution. The committee did not incorporate in its proposal any of the provisions now found in sections 5(b) or 5(c) of article IX. The provisions of these two subsections were adapted from the report of those members of the Committee on Revenue and Finance who dissented from the proposal submitted by the committee.
The explanation to the convention which accompanied the proposal of the committee stated that the approval of its proposal concerning personal property taxes would permit the legislature to nullify the results of the referendum on Senate Joint Resolution No. 30, and to enact legislation providing property tax relief it deemed advisable. 7 Proceedings 2137.
The dissenters from this proposal submitted their version of a proposed personal property tax provision for the Constitution. It provided:
"Any ad valorem personal property tax abolished or not imposed on the date this article takes effect shall not be reinstated or imposed thereafter. On January 1, 1979, the General Assembly shall abolish all ad valorem personal property taxes not previously abolished, and shall replace revenues lost to local governmental units as a result of such abolition by ...