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Bd of Commissioners v. Cty of Du Page

OPINION FILED DECEMBER 7, 1983.

THE BOARD OF COMMISSIONERS OF THE WOOD DALE PUBLIC LIBRARY DISTRICT ET AL., PLAINTIFFS-APPELLANTS,

v.

THE COUNTY OF DU PAGE ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Du Page County; the Hon. John Teschner, Judge, presiding.

JUSTICE LINDBERG DELIVERED THE OPINION OF THE COURT:

This is the second appeal in a public library district's action challenging a county's practice of retaining the interest earned on the district's tax revenues collected on its behalf by the county. In the first appeal, we held that that practice was unconstitutional (107 Ill. App.3d 409, 437 N.E.2d 923) and our supreme court affirmed (96 Ill.2d 378). That decision compels us now to reverse the trial court's entry of summary judgment in favor of the county.

The County Treasurer of Du Page County, as ex-officio county collector for the county, collects tax moneys for and on behalf of the units of local government located in the county. Since October 1, 1972, the county treasurer has invested those tax moneys and earned interest on the investment. He has not, however, distributed the interest moneys to the units of local government, but rather deposited the interest moneys in the county corporate fund.

In the first appeal of this cause (hereinafter Wood Dale I), the issue was whether plaintiffs, the Board of Commissioners of the Wood Dale Public Library District and the Wood Dale Public Library District (hereinafter the district) had stated a cause of action against the following defendants: the County of Du Page; the Board of Commissioners of the County of Du Page; and John Lotus Novak, County Treasurer of Du Page County (hereinafter the county). The district had brought the action on its own relation and purportedly on behalf of all units of local government in Du Page County. The complaint, which the Du Page County circuit court had dismissed, contained two counts. Count I alleged that the county's practice of retaining the interest earned on the district's and others' collected tax moneys violated section 2 of "An Act relating to certain investments of public funds by public agencies" (the Investment of Public Funds Act) (Ill. Rev. Stat. 1981, ch. 85, par. 902), and count II alleged that the county's practice violated section 9(a) of article VII of the 1970 Illinois Constitution. The district prayed for a declaratory judgment that retention of the interest by the county was improper, a permanent injunction enjoining the county from retaining interest, and accounting for the period from October 1, 1972, to the conclusion of the litigation, and other relief. The county maintained that retention of the interest was authorized by section 6.1 of "An Act concerning county treasurers * * *" (the County Treasurers' Act) (Ill. Rev. Stat. 1981, ch. 36, par. 22.1) and was not constitutionally prohibited.

This court held that the county's practice of retaining the interest on the district's tax revenues violates article VII, section 9(a) of the Illinois Constitution and that this conclusion militates in favor of the statutory interpretation that section 6.1 of the County Treasurers' Act is not intended to authorize such practice. (107 Ill. App.3d 409, 417, 437 N.E.2d 923, 930.) The supreme court agreed with this conclusion; however, that court specifically declined to reach the question of the effect of section 280 of the Revenue Act of 1939 (Ill. Rev. Stat. 1981, ch. 120, par. 761) on the district's cause of action because the relevant amendment to that section became effective subsequent to the dismissal order and was, therefore, not considered by the trial court. 96 Ill.2d 378, 384-85.

On remand, the trial court found that section 280 prospectively bars the district's claim and that the district is not entitled to retrospective relief. On those bases, the trial court granted the county's motion for summary judgment in its favor. The district appeals, challenging both findings of the trial court and its dismissal of the district's motions for class certification and a preliminary injunction.

EFFECT OF SECTION 280

The district first contends that if section 280 is construed to permit the county's retention of the interest earned on the district's collected tax revenues, then the statute violates article VII, section 9(a) of the 1970 Illinois Constitution (salaries and fees clause). That part of the Constitution provides:

"(a) Compensation of officers and employees and the office expenses of units of local government shall not be paid from fees collected. Fees may be collected as provided by law and by ordinance and shall be deposited upon receipt with the treasurer of the unit. Fees shall not be based upon funds dispersed or collected, nor upon the levy or extension of taxes." Ill. Const. 1970, art. VII, sec. 9(a).

Section 280 of the Revenue Act of 1939 provides:

"Sec. 280. Subject to the provisions of `An Act requiring certain custodians of public moneys to file and publish statements of the receipts and disbursements thereof,' approved June 24, 1919, as heretofore or hereafter amended, and `An Act in relation to the preparation, publication and filing of annual accounts of certain municipalities, the payment of tax monies to treasurers of certain municipalities, and providing penalties for violations thereof,' approved August 15, 1961, as heretofore or hereafter amended, the county collector in counties with a population of 3,000,000 or more, shall on the first day of June and the first day of each and every month thereafter, pay over to the other proper authorities or persons the amounts in his hands and payable to them as taxes, not theretofore paid over. In counties with a population of less than 3,000,000, the county collector shall within 30 days after due date and at 30-day intervals thereafter, pay over to the other proper authorities or persons the amounts in his hands and payable to them as taxes, not theretofore paid over. Taxes collected in counties with a population of less than 3,000,000 and not distributed to other proper authorities shall be invested in accordance with the provisions of Section 1 of `An Act in relation to the deposit of public funds,' approved July 16, 1963, as heretofore or hereafter amended, and the interest accrued on monies held by the county collectors in excess of 30 days after the due date and the succeeding 30 day intervals thereafter, shall be distributed along with the principal amount of taxes.

Any county collector who wilfully fails to pay over the amount of taxes due and payable, at the time or times required by this Section, shall be subject as a penalty for such failure to pay a sum of money equal to the interest on such amount at the rate of one-tenth of one (1) per cent per day from the time such amount becomes due and payable until the same is paid; and the sureties upon the official bond of such collector shall be liable for the payment of such penalty. The penalty in this Section provided may be recovered in a civil action against such collector and his sureties aforesaid, in the name of the People of the State of Illinois, in any court of competent jurisdiction, and the amount of the penalty, when recovered, shall be paid, in counties with a population of less than 3,000,000, to the proper authorities or persons for whom the tax was collected, and in counties with a population of 3,000,000 or more, into the county treasury." Ill. Rev. Stat. 1981, ch. 120, par. 761.

Although the appellate court and supreme court opinions in Wood Dale I did not address this particular statute, those decisions dictate our resolution of this issue in the district's favor. That is because those decisions held that the practice by the county of retaining the interest on the district's collected tax revenues is unconstitutional as constituting the retention of a "fee" which is "based upon funds disbursed [or] collected [or] upon the levy or extension of the taxes." We stated that "insofar as the retention of interest in this case is in effect a charge upon units of local government * * * it is proscribed by the last sentence of article VII, section 9(a)." (107 Ill. App.3d 409, 415, 437 N.E.2d 923, 929.) Thus, if section 280 is read to authorize the retention of interest for 30 days, as the county argues it does, it is invalid as permitting an unconstitutional fee.

The county argues that section 280 avoids the evils at which the constitutional provision was aimed and which this court found in section 6.1 of the County ...


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