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07/21/97 CITY CHICAGO v. BOARD TRUSTEES UNIVERSITY

July 21, 1997

THE CITY OF CHICAGO, PLAINTIFF-APPELLANT,
v.
BOARD OF TRUSTEES OF THE UNIVERSITY OF ILLINOIS, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County. Honorable JOHN A. WARD, Judge Presiding.

The Honorable Justice Buckley delivered the opinion of the court. Campbell, P.j. and Gallagher, J., concur.

The opinion of the court was delivered by: Buckley

The Honorable Justice BUCKLEY delivered the opinion of the court:

The City of Chicago (the City) brought a declaratory judgment action against the Board of Trustees of the University of Illinois (the Board) seeking a declaration that the Board is required to collect and remit certain city taxes. The Board filed a motion to dismiss the complaint pursuant to section 2-619 of the Illinois Code of Civil Procedure. 735 ILCS 5/2-619 (West 1994). The circuit court granted the Board's motion, finding (1) the circuit court lacks subject matter jurisdiction because the university is entitled to sovereign immunity, and (2) the City's home rule power does not confer authority to require the Board to collect and remit city taxes. The City now appeals.

The City brought this action seeking a declaration that the Board must collect parking, amusement, and telecommunications taxes and remit those funds to the City. The City's claim arises from three municipal ordinances which the Board maintains cannot be applied to the University.

First, the Parking Lot and Garage Operations Tax Ordinance provides that owners and operators of public parking lots or garages must collect a municipal tax from their customers and remit the tax to the City at the end of each month. Chicago Municipal Code §§ 4-236-020(a), (e) (November 11, 1994). Similarly, the Amusement Tax Ordinance places the same responsibility to collect and remit municipal taxes on owners, managers, and operators of amusements or amusement facilities. Chicago Municipal Code §§ 4-156-010, 4-156-020(A), 4-156-030(A) (November 15, 1995). Finally, the Telecommunications Tax Ordinance requires entities that charge a fee for the transmission of telecommunications to collect and remit city taxes. Chicago Municipal Code §§ 3-70-030(A), 3-70-020(1), (K), 3-70-040(A) (eff. July 1, 1995).

Count I of the City's complaint alleges that the Board owns and operates numerous parking facilities in Chicago. Spaces in these facilities are offered for a fee to the general public.

Count II alleges that the Board owns and operates several facilities in Chicago that host "amusements" as that term is defined in the Amusement Tax Ordinance. See Chicago Municipal Code § 4-156-010 (November 15, 1995). Two examples of these facilities are the UIC Pavilion, where attractions such as rock concerts and sporting events are held, and the Chicago Circle Center, which operates participatory activities such as bowling, tennis, pool, swimming, and ice skating. These events and activities are offered to the general public for a fee.

Finally, count III of the complaint alleges that the Board charges for telecommunications services in Chicago, including telephone calls made and received by students living in university housing.

In each count, the City claims that its municipal ordinances are applicable to the Board. The City has demanded that the Board collect and remit the taxes as required in the ordinances, but the Board has refused.

The City filed this action on July 5, 1994. The complaint seeks an order declaring that the Board is required to collect and remit the parking, amusement, and telecommunications taxes. On September 24, 1994, the Board moved to dismiss the complaint pursuant to section 2-619 of the Illinois Code of Civil Procedure. 735 ILCS 5/2-619 (West 1994). The motion asserted that the circuit court is without subject matter jurisdiction because the Board is entitled to sovereign immunity. The motion further asserted that the City does not have home rule authority to impose a tax on the university because the university is an instrumentality of the state.

On March 10, 1995, the circuit court entered an order granting the Board's motion to dismiss for both reasons asserted in the motion. On March 30, 1995, the City filed its timely notice of appeal.

A. SOVEREIGN IMMUNITY

The City first claims the circuit court erred in finding that the Board is entitled to sovereign immunity. Sovereign immunity exists in Illinois pursuant only to statute. Ill. Const. 1970, art. XIII, § 4. The State Lawsuit Immunity Act provides that "the State of Illinois shall not be made a defendant or party in any court," except as provided in the Illinois Public Labor Relations Act (5 ILCS 315/1 et seq. (West 1994)) and the Illinois Court of Claims Act (705 ILCS 505/1 et seq. (West 1994)). 745 ILCS 5/1 (West 1994). The Public Labor Relations Act regulates labor relations between public employers and employees (5 ILCS 315/1 et seq. (West 1994)) and, therefore, it is not relevant to this case. The Court of Claims Act provides that the Court of Claims shall have exclusive jurisdiction over various actions ...


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