The Bd. of Educ. of Auburn Cmty. Unit Sch. Dist. No. 10 v. the Ill. Dep't of Revenue

• Decision Date: 10 March 2010
• Docket Number: No. 4–09–0806.,4–09–0806.
• Citation: 264 Ed. Law Rep. 356,398 Ill.App.3d 629,347 Ill.Dec. 19,941 N.E.2d 888
• Parties: The BOARD OF EDUCATION OF AUBURN COMMUNITY UNIT SCHOOL DISTRICT NO. 10, Plaintiff–Appellee,v.The ILLINOIS DEPARTMENT OF REVENUE and Brian Hamer, in His Capacity as Director of the Illinois Department of Revenue, Defendants–Appellants,andSangamon County; Joe Aiello, Clerk; Montgomery County; and Sandy Leitheiser, Clerk, Defendants.
• Court: United States Appellate Court of Illinois

398 Ill.App.3d 629
941 N.E.2d 888
347 Ill.Dec. 19
264 Ed. Law Rep. 356

The BOARD OF EDUCATION OF AUBURN COMMUNITY UNIT SCHOOL DISTRICT NO. 10, Plaintiff–Appellee,
v.
The ILLINOIS DEPARTMENT OF REVENUE and Brian Hamer, in His Capacity as Director of the Illinois Department of Revenue, Defendants–Appellants,andSangamon County; Joe Aiello, Clerk; Montgomery County; and Sandy Leitheiser, Clerk, Defendants.

No. 4–09–0806.

Appellate Court of Illinois, Fourth District.

March 10, 2010.

[941 N.E.2d 889]

Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro, Solicitor General, and Rachel Murphy (argued), Assistant Attorney General, of counsel), for appellants.

Lorilea Buerkett (argued), of Brown, Hay & Stephens, LLP, of Springfield, for appellee.Presiding Justice MYERSCOUGH delivered the opinion of the court:

[398 Ill.App.3d 629 , 347 Ill.Dec. 20] In October 2008, the Board of Education of Auburn Community Unit School District No. 10 (Auburn Board) filed a complaint for declaratory judgment against the Illinois Department of Revenue (Department) and its Director, Brian Hamer. The Auburn Board sought a ruling that the Property Tax Extension Limitation Law (PTELL) (35 ILCS 200/18–185 through 18–245 (West 2008)) no longer applied to the Auburn Community Unit School District No. 10 (Auburn District). In November 2008, the complaint was amended to include Sangamon County, Montgomery County, and the clerks of both counties as defendants.

[398 Ill.App.3d 630] In April 2009, the Auburn Board moved for summary judgment. In June 2009, the Department and Hamer also moved for summary judgment. In September 2009, the trial court granted the Auburn Board's motion for summary judgment and denied the Department and Hamer's motion. We reverse.

I. BACKGROUND

The Auburn District was originally located entirely within Sangamon County. In January 2007, the Regional Board of School Trustees of Sangamon County (Regional Board) dissolved the Divernon Community Unit School District No. 13 (Divernon District) and annexed some Divernon District territory to the Auburn District. This annexation gave the Auburn District a small amount of territory in Montgomery County such that the reconstituted Auburn District has approximately 0.3% of its total equalized assessed valuation in Montgomery County and 99.7% in Sangamon County.

In April 2008, the Sangamon County clerk's office sent correspondence to the Auburn District stating that the reconstituted Auburn District was exempt from PTELL (35 ILCS 200/18–185 through 18–245 (West 2008)). PTELL limits the ability of units of local government to raise property taxes. The Sangamon County clerk had previously applied PTELL when calculating the Auburn District's tax extension because Sangamon County voters approved PTELL by referendum in 1996 (35 ILCS 200/18–213 (West 1996)). In contrast, Montgomery County has never

[941 N.E.2d 890]

held a referendum on PTELL.

On April 24, 2008, legal counsel for the Auburn District sent correspondence to the Department requesting an opinion on whether the reconstituted Auburn District was subject to PTELL since it now contained territory located in both a PTELL [347 Ill.Dec. 21] county and a non–PTELL county. The Auburn District sought this opinion in order to facilitate the issuance of bonds for $9 million worth of improvements involving heating, ventilating, and air conditioning systems, roofing, lighting, windows, and paving at two elementary schools and one middle/high school. On August 26, 2008, deputy general counsel for the Department responded by letter stating that the Department declined to issue a formal opinion because PTELL contains “no explicit provision that clearly addresses the situation.” Instead of a formal opinion, the letter provided informal guidance that PTELL still applied to the Auburn District based on the Department's reading of sections 18–213 and 18–214 of PTELL (35 ILCS 200/18–213, 18–214 (West 2008)). The last four paragraphs of the letter read as follows:

“After examining the language in PTELL it is apparent that there is no explicit provision that clearly addresses the situation. [398 Ill.App.3d 631] As a result, the Department declines to issue any formal opinion or ruling on your request.

However, if the Department were required to provide guidance in this matter, based on the Department's analysis of the most relevant sections (35 ILCS 200/18–213 and 18–214) in this specific circumstance, it appears the Auburn [District] remains subject to PTELL and its restrictions. Section 18–213 covers referenda and the applicability of PTELL, while section 18–214 details referenda on the removal of the applicability of PTELL to non-home rule taxing districts. Neither section appears to lend support to the conclusion the Auburn [District] should no longer be subject to PTELL.

The applicability of PTELL to the Auburn [District] is further bolstered when considering the intent of the PTELL statute to provide transparency and voter participation; the fact that Sangamon County already voted to approve PTELL; and due to the fact that the vast majority of the Auburn [District] is contained within Sangamon County.

Based on the analysis contained herein, the Department's guidance is that Auburn [District] remains subject to PTELL and its restrictions.”

In October 2008, the Auburn Board filed a complaint for declaratory judgment against the Department and Hamer. In November 2008, the complaint was amended to include Sangamon County, Montgomery County, and the clerks of both counties as defendants. In April 2009, the Auburn Board moved for summary judgment. In June 2009, the Department and Hamer filed a cross motion for summary judgment. In September 2009, the trial court granted the Auburn Board's motion for summary judgment and denied the Department and Hamer's motion.

This appeal followed. The Sangamon and Montgomery County clerks are not parties to this appeal. Although Hamer is an appellant, he will not be mentioned further because his arguments are identical to those of the Department.

II. ANALYSIS

We review the grant of summary judgment de novo. Smith v. Neumann, 289 Ill.App.3d 1056, 1063, 225 Ill.Dec. 168, 682 N.E.2d 1245, 1249 (1997). De novo review is also appropriate because this case presents a question of law. People v. Bonutti, 212 Ill.2d 182, 188–89, 288 Ill.Dec. 131, 817 N.E.2d 489, 493 (2004).

The Auburn Board argues PTELL no longer applies to the Auburn District based upon section 18–213 of PTELL. 35 ILCS 200/18–213 (West 2008). Section 18–213 lays out the requirements for the

[347 Ill.Dec. 22 , 941 N.E.2d 891]

initial implementation of PTELL. Section 18–213 provides as follows:

[398 Ill.App.3d 632] “Referenda on applicability of the [PTELL].

(a) The provisions of this [s]ection do not apply to a taxing district subject to this [l]aw because a majority of its 1990 equalized assessed value is in a county or counties contiguous to a county of 3,000,000 or more inhabitants, or because a majority of its 1994 equalized assessed value is in an affected county and the taxing district was not subject to this [l]aw before the 1995 levy year.

(b) The county board of a county that is not subject to this [l]aw may, by ordinance or resolution, submit to the voters of the county the question of whether to make all non-home rule taxing districts that have all or a portion of their equalized assessed valuation situated in the county subject to this [l]aw in the manner set forth in this [s]ection.

For purposes of this [s]ection only:

‘Taxing district’ has the same meaning provided in [s]ection 1–150.

‘Equalized assessed valuation’ means the equalized assessed valuation for a taxing district for the immediately preceding levy year.

(c) The ordinance or resolution shall request the submission of the proposition at any election, except a consolidated primary election, for the purpose of voting for or against making the [PTELL] applicable to all non-home rule taxing districts that have all or a portion of their equalized assessed valuation situated in the county.

The question shall be placed on a separate ballot and shall be in substantially the following form:

Shall the [PTELL] (35 ILCS 200/18–185 through 18–245), which limits annual property tax extension increases, apply to non-home rule taxing districts with all or a portion of their equalized assessed valuation located in (name of county)?

Votes on the question shall be recorded as ‘yes' or ‘no’.

(d) The county clerk shall order the proposition submitted to the electors of the county at the election specified in the ordinance or resolution. If part of the county is under the jurisdiction of a board or boards of election commissioners, the county clerk shall submit a certified copy of the ordinance or resolution to each board of election commissioners, which shall order the proposition submitted to the electors of the taxing district within its jurisdiction at the election specified in the ordinance or resolution.

(e)(1) With respect to taxing districts having all of their...