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Commonwealth Edison Company v. Will County Collector

May 03, 2001

COMMONWEALTH EDISON COMPANY, APPELLANT,
v.
WILL COUNTY COLLECTOR, APPELLEE.



The opinion of the court was delivered by: Justice McMORROW

Agenda 23-May 2000.

In 1994, the General Assembly enacted tax rate amendments to section 5-1024 of the Counties Code (55 ILCS 5/5-1024 (West 1994)) and section 9-107 of the Local Governmental and Governmental Employees Tort Immunity Act (Tort Immunity Act) (745 ILCS 10/9-107 (West 1994)). The issue presented in this case is whether these amendments should be applied to certain tax levies that were adopted by Will County shortly before the amendments became effective. The appellate court concluded that the amendments should be so applied. 305 Ill. App. 3d 819. For the reasons that follow, we affirm.

BACKGROUND

Section 5-1024 of the Counties Code (55 ILCS 5/5-1024 (West 1994)) grants the authority to non-home-rule counties, such as Will County, to levy property taxes for what is commonly referred to as general corporate purposes. Section 5-1024 also sets a limit on the amount of taxes that a county may raise for such purposes. This limit is expressed as a rate, specifically, a percentage of the value of taxable property as equalized or assessed by the Department of Revenue. Prior to 1995, the rate at which Will County could levy for its general corporate fund (the general corporate rate limitation) was set at $0.25 per $100 of assessed valuation.

While section 5-1024 authorizes levies for general corporate funds, various other statutory provisions authorize levies for more specific purposes. Among these other statutory provisions is section 9-107 of the Tort Immunity Act (745 ILCS 10/9-107 (West 1994)). Section 9-107 provides that a local public entity may levy property taxes to cover the cost of insuring or otherwise defending itself against workers' compensation claims and tort claims for which the local public entity is liable under the Tort Immunity Act.

Section 5-1024 of the Counties Code lists many of the taxes that a county is statutorily authorized to levy for specific purposes and further provides that these taxes are exempt from the general corporate rate limitation. Before 1995, however, taxes for workers' compensation and tort immunity defense funds that were authorized by section 9-107 of the Tort Immunity Act were not listed under section 5-1024 as being exempt from the general corporate rate limitation.

In 1993, our appellate court held that, under the then-existing language of section 5-1024 of the Counties Code and section 9-107 of the Tort Immunity Act, property taxes levied by a non-home-rule county for tort liability insurance had to be included within the general corporate rate limitation established under section 5-1024. See In re Application of the Du Page County Collector, 243 Ill. App. 3d 823 (1993). Taxes levied for tort liability insurance were held void "to the extent the general corporate tax rate would have exceeded the maximum rate [under section 5-1024] if the liability insurance rate had been included in the general corporate rate." Du Page County Collector, 243 Ill. App. 3d at 825.

In response to this decision, in January of 1994, House Bill 2627 was introduced in the Illinois House of Representatives. This bill added language to both section 5-1024 of the Counties Code and section 9-107 of the Tort Immunity Act which makes it clear that taxes for workers' compensations funds and tort immunity defense funds are excluded from the general corporate rate limitation. House Bill 2627 was passed in the General Assembly on May 29, 1994. On June 27, 1994, the Governor signed House Bill 2627 into law as Public Act 88-545 (Act). The effective date of the Act was January 1, 1995.

On November 17, 1994, approximately six weeks prior to the Act's effective date, Will County adopted its 1994 levies for its corporate fund, tort immunity insurance fund and workers' compensation fund. After January 1, 1995, the Will County clerk extended these levies against the assessed values of property within the county. The rates of the levies, as certified by the county clerk, were $0.25 for the general corporate fund, $0.0223 for the workers' compensation fund, and $0.0155 for the tort immunity insurance fund. The total rate of these three levies was $0.2878 per $100 of assessed valuation.

The plaintiff, Commonwealth Edison Company (Edison), paid the first installment of its 1994 Will County property taxes on June 1, 1995, and the second installment on September 1, 1995. On November 3, 1995, Edison filed a tax objection complaint in the circuit court of Will County. Citing to Du Page County Collector, 243 Ill. App. 3d 823, Edison asserted that Will County's 1994 levies for its tort immunity insurance and workers' compensation funds had to be included within the county's general corporate rate limitation and, therefore, that Will County had exceeded the corporate rate limitation of $0.25 by a total of $0.0378 (the combination of the workers' compensation rate and the tort immunity insurance rate). Thus, according to Edison, Will County's 1994 tax levies for its workers' compensation and tort immunity insurance funds were illegal and void. The circuit court sustained Edison's objection. In so doing, the court rejected an argument advanced by defendant, the Will County collector (collector), that the amendments to section 5-1024 and section 9-107 enacted by the General Assembly in Public Act 88-545 should be applied retroactively to validate the levies.

The appellate court reversed. 305 Ill. App. 3d 819. The appellate court concluded that the plain language of the amendments to sections 5-1024 and 9-107 indicated that the General Assembly intended the amendments to be applied to levies adopted prior to January 1, 1995, and, therefore, that the Will County levies were legally valid. The appellate court also determined that, because no vested right was involved, the application of the amendments to the levies did not violate Edison's rights under the due process clause of the Illinois Constitution (Ill. Const. 1970, art. I, §2). We granted Edison's petition for leave to appeal.177 Ill. 2d R. 315(a).

ANALYSIS

Before discussing the merits of this appeal, we address a preliminary procedural matter.

After oral arguments were held in this cause, Edison and the collector filed in this court an "Agreed Motion for Leave to Substitute Named Party." In this motion, Edison and the collector stated that Edison had "settled its claim" with the collector. Edison and the collector then asked this court to substitute another company, Illinois Bell Telephone Company/Ameritech, for Edison as "the named party appellant." According to a sworn statement made within the motion, Illinois Bell was one of numerous tax objectors who brought the instant appeal. On the basis of this representation, the motion was allowed, and an order substituting "Illinois Bell Telephone Company/Ameritech as the named party appellant" was entered by this court on November 16, 2000.

Upon subsequent review of the record, however, and following the issuance of a rule to show cause and the filing of an answer, this court has determined that the statement made in the agreed motion that numerous tax objectors were involved in this appeal was incorrect. At the time the agreed motion for substitution of named party was filed, the only parties to this cause were Edison and the collector. Because Illinois Bell was not, in fact, a party to the present action or the judgment appealed from, we have concluded that the motion to substitute Illinois Bell as the "named party appellant" was improvidently granted. Therefore, simultaneously with this opinion, an order has been issued vacating the order substituting "Illinois Bell Telephone Company/Ameritech as the named party appellant."

As noted, in the "Agreed Motion for Leave to Substitute Named Party," Edison and the collector stated that Edison has settled its tax objection claim. Notably, neither party sought, as Edison's counsel should have sought, to dismiss Edison from this proceeding. Nor did either party indicate that this appeal might be moot.

However, even assuming that the instant appeal is moot, we choose to address the merits of the case pursuant to the public interest exception to the mootness doctrine. Whether statutory amendments that affect tax rates should be given retroactive application is an issue of substantial public importance, the issue is likely to recur, and, as will be discussed below, our case law regarding the retroactive application of statutory amendments is in conflict. See In re D.L., 191 Ill. 2d 1, 8 (2000). Accordingly, we turn to the merits.

At issue in this case is whether the tax rate amendments to section 5-1024 of the Counties Code and section 9-107 of the Tort Immunity Act should be applied to levies that were adopted by Will County for its workers' compensation and tort immunity defense funds approximately six weeks before the amendments became effective. In order to resolve this issue, we must consider and apply the legal principles that govern the retroactive application of statutory amendments. Unfortunately, however, recent decisions of this court, beginning with First of America Trust Co. v. Armstead, 171 Ill. 2d 282 (1996), have left these principles "in the state of some muddle." Kopec v. City of Elmhurst, 193 F.3d 894, 906 (7th Cir. 1999) (Posner, C.J., dissenting).

In Armstead, this court addressed whether a newly enacted statutory amendment should be applied in that appeal. Recognizing that the principles for determining whether a statutory amendment applies to an existing controversy on appeal had "not been consistently stated" (Armstead, 171 Ill. 2d at 287-88), this court set out to clarify this area of the law. The court began its effort by examining prior case law that had addressed the issue of retroactivity. The court determined that previous opinions had generally followed one of two different approaches to retroactivity, either the "legislative intent approach" or the "vested rights approach." Generally stated, under the legislative intent approach, statutory amendments are presumed to operate prospectively unless the ` "express language or necessary implication' " of the amendment " `clearly indicate[s] that the legislature intended a retroactive application.' " Armstead, 171 Ill. 2d at 288, quoting Rivard v. Chicago Fire Fighters Union, Local No. 2, 122 Ill. 2d 303, 309 (1988). Under the vested rights approach, in contrast, legislative intent is "largely ignored." Armstead, 171 Ill. 2d at 289. Instead, the law is applied as it exists at the time of the appeal unless to do so would interfere with a vested right, i.e., an interest protected from legislative interference by the due process clause of the Illinois Constitution (Ill. Const. 1970, art. I, §2). Armstead, 171 Ill. 2d at 289.

After setting forth the two lines of case law, this court in Armstead held that the vested rights approach to retroactivity was "the better approach." Armstead, 171 Ill. 2d at 289. The court reached this conclusion based upon its understanding of "true" retroactivity. The Armstead court noted that " `a statute is not retroactive just because it relates to antecedent events, or because it draws upon antecedent facts for its operation.' " Armstead, 171 Ill. 2d at 289-90, quoting United States Steel Credit Union v. Knight, 32 Ill. 2d 138, 142 (1965). Instead, a retroactive change in the law is defined as ` " `one that takes away or impairs vested rights acquired under existing laws, or creates a new obligation, imposes a new duty, or attaches a new disability in respect of transactions or considerations already past.' " ' Armstead, 171 Ill. 2d at 290, quoting United States Steel Credit Union, 32 Ill. 2d at 142, quoting 82 C.J.S. Statutes ยง412 (1953). Accordingly, the Armstead court observed that "[w]here no vested rights are involved, either because they are not yet perfected or because the amendment is procedural in nature, the amendment can be applied to the existing controversy without any retroactive impact." Armstead, 171 Ill. 2d at 290. Applying this definition of retroactivity, the Armstead court concluded that "there is little reason to focus on legislative intent." Armstead, 171 Ill. 2d at 290. Rather, ...


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