1 I llino is sales tax has two components, t he Retailers' Tax Act and the Use Tax Act (35 I LCS 105/1 et seq. (West 2004)). Sinc e the Use Tax Act was adopted to suppl em ent the Retail

ers' Tax A ct, bot h co nt ain co mplementa ry pr ovisio ns, a nd co nst ru ct ion o f one pr ovisio n is releva nt in the con stru cti on of i ts compl em

ent. See Gr anite City St eel Co . v. Departmen t o f Re ven ue , 30 Ill . 2d552, 558 (1964). Since L

PFC addresse s onl

y the Retail ers' Tax A

ct, we refer onl

y to that stat ute but acknowl edge t hat ou r int er pr et at ion is r elevant t o t he co mple men t ar y pr o visio n fo un d in section 3-- 5( 4) of th e U se Ta x A ct. No. 2-- 06--0520 Fil ed: 1-9-08

______________________________________________________________________________ IN THE APP ELL ATE C OURT

OF IL LINO IS SECOND DI STRICT

______________________________________________________________________________ LOM BA RD PU BLIC FA CILI TIES ) Ap peal f rom th e Ci rcui t Court CORPORA

TION, ) o f D u P ag e C o un t y. ) Pl ai n ti f f -A pp el l an t, )

) v. ) No. 05-- MR--1505 ) THE DEPA

RTMENT OF R

EVENUE, ) Ho no r ab le

) Edward

R. Dun can , Jr., Defe ndan t-Appell ee. ) Judge, Presi din g.

______________________________________________________________________________ JU STI CEBO WMA

N del i v er ed th e op i n i on of th e c our t: Plai ntif f, Lom bard Publ ic Faci li tiesCo r po r at io n ( LP FC ) , ap pe als th e dec i si on of de f en da n t, t he Departmen

t o f Re ven ue (De pa rtm en t), de ny i ng i ts a ppl i ca ti on f or ex em ption from the Retailers' Occupa ti on

Tax Act (Retai le

rs' Tax A ct) (35 ILCS 120/1 et seq. (West 20 04 )), pu rs ua n t to th e ex emp t io n p r o vid ed in

section 2--5( 11) o f the Retail ers' Ta x A ct. 1 On No vember 10, 200 3, L PFCNo. 2-- 06--0520

-2-

fi le d i ts a ppl i ca ti on f or ex em ption f rom the Retailers' Tax A

ct, in dicatin g that its purchases were tho se o f ago ve rnme nt al b o dy, na mel y , the Vi l l age of

Lom ba rd. On No vember 7 , 2 005 , t he De par t ment is sued its d ecisio n denying LP FC's a pplicat ion aft er an ad mini st ra t ive heari

ng wasco nduct ed. LPFC fi le d a compl ai nt for adm

in is trat iv e review i n the ci rcuit court, and on May

4, 2006, th

e ci rcui t court aff irm ed the deci si on of the Departmen t. LPFC tim

el y a ppeal ed, arguin

g that (1) t his co ur t sho uld review de n ovo t he issue of wh ether it qualif

ies f or an exemption f

rom the Ret ail

ers' Tax Act as a governm ental bo dy, an d in so do ing ( 2) t he co ur t sho uld fin d th at it constitutes a "governm ental bo dy" by ap plying t he "r ea lit ies o f o wn er ship " p r in ci pledis cu ssed in Sou

th er n Il l i n oi s U n i v er si ty Foundation v . Boo ker , 98 I ll. A pp . 3d 10 62 , 10 69 ( 19 81 ) . We affir m. I. BACKG

ROUND On Se pte mber 4 , 2 003 , in an e ffort t o d evelo p a p ar cel o f land near Yo rk t ow n Sho pping Center i nto a hote l an d c onv en ti on ha l l , th e V i l l ag e of

Lomb ard (Vil

la ge) passed Ordi

nan ce Num ber 5351. Lom

ba rd, Il l ., Ordi na nc e No. 535 1 (ef

f . Septem ber 4, 200 3). Tha t or dinance app ro ved t he i nc orporati

on o f LP FC t o as sist t he V illage in se cu ring financ ing fo r t he c o nst ru ct io n o f th e con ve nti on hall a nd h o t el fac ility. Th e fo rm ati onof LP FC wa s nec essa ry beca use t he co st of t he projectexce ede d t he Village's st at ut or y bonding lim itat ions. The ordinan

ce speci fi ed that the purpo se of LP FC , a n o t - fo r - pr o fit corp orati on, wa s to " as sist i

n th e f i na nc i ng an d c ons tructi on of

a c onv en ti on ha ll and hotel f aci l i ty" i n the Vi l l age. Th e ord

i na nc e f urth er s tate d that u

pon red em ption of the bonds is sued for the project, LPFC woul d transfer ti tle of the prope rt y to t he Village fr ee o f any encumb rances. LP FC

wa s g ra n ted au th ori ty to issue, sel

l, and del iv er its bonds, encum

ber any real pr operty or e qui pm en t ac qui re d b y i t f or th e pur pos e of f i n an ci n g th e p roj ec t, a

n d en ter i n to co n tra ctsNo. 2-- 06--0520

-3-

f orthe sa l e of bon dsan d the c ons

tructi on a nd ac qui si ti on of the con ve nti on h al l an d h ot el fa cili t y. The ord in ance nam ed fi ve i ndi viduals as di

recto rs of LPFC. The arti cl esof i nc orporati

on f or L PF C p rovi de d the f

ol l owi ng . They l i ste d L eon

ard J. F l ood as t he r egist er ed a gent , w ith t he Village's a ddr ess a s t he co rpo rat ion's add ress . T he pur po se o f LPFC was "to a ss i st the Vi ll

age of Lom

bard i n i ts essenti al

governm ental purposes." Articl

es IV and V al l owe d the V i l l ag e to re

move an y di rector or of

f i cer wi th or wi thou t ca us e b y the maj ori ty vote of t he p re sident and bo ar d o f tr ust ees of t he Village. The Village ap po inted t he initial dire ct or s and retained the right to fi

ll any vacanci es. Pe rar t icle VI I, n

o am en dm en ts wer e a l l owe d to b e m

ade to ar t icle IV without the ap pr ov al of th e Vi ll age. Further, section 4.8 and s ection 6.3 of the arti cl es ma de the Open Me etings

Act (5 ILCS 120/1 et seq. (We st 2004 )), t he Stat e Gif t Ban Act (5 I LCS 425/1 et seq. (Wes t 200 4) ), and t he con f l i ct of i ntere st statute (50

ILCS 105/3 (We st 2004 )) ap plic ab le to LPFC. Ar t icle X p r o vid ed t ha t LP FC "s ha ll no t se ll, t r an sfe ro ro t he rwis e c o nve y t it le to th e H otel

an d C on v en ti on Fa ci l i ty t o a t hird p ar t y witho ut t he pr ior co nsent " o f the Village in the for m of a r eso lut ion ad op t ed by t he Village and f i l ed wi th LP FC . If

th e V i l l ag e w er e to c on se n t to the sale of the property to t hi rd persons, title woul

d fi rst t ransf er from L PFC to t he Vi

ll age. The Vil la ge and LPF C entered i

nto an agreem

ent enti tled th e " Ta x Re b ate A gr eemen

t" dated Ap r il 1, 2 005 . I n that agr eement , LP FC agree d to obtai n a surety b ond i

n the am ount of $1.1 mil lion, enter in to a m asterde ve lo pme nt ag r ee men t wit h H ar p L o mba r d, LL C, su bmit con str uc ti on pl ans to t he Vil l age f

or approval , and overs ee t he construction of the project i n accordance wi

th Vil la ge Ordin ance Nos. 539 6 an

d 5397 . LPFC was

to enter in to agreem ents wi th sui table third parti es, such as constructi on com

pan i es a nd c onsu l tants, i n orde r to comp l ete the

proj ect. P urs uant to t he agreem ent, the Vil

la ge agreed to pro vi

de fun ds t o mak e d eb t se r vic e p ayme nt s o n t he bo nd s o nly ifNo. 2-- 06--0520

-4-

inc o me fr o m t he pr o

jec t wa s in suf

f i ci en t. H owe ve

r, the agre em

en t con tai ne d a $2 m i l l i on c ap on what t he Villa ge wo uld pay o n bond debt for t he se nior bond s. F ur t her , t he Vil la ge's taxi ng power and full f aith a nd cr edit wo uld no t be pled ged as se cur ity for any of t he bonds. On Septem ber 29, 2005, construction of the convention h al l a nd hotel faci li ty comm enced af ter LPFC i ssued b onds in t he amo un t o f $ 18 3, 71 0, 00 0 a nd ac qu ir ed t it le t o t he pr o pe r t y. On No vember 1 0, 200 3, LPFC fil ed it s ap plicat ion fo r e xempt ion fro m the Retail ers' Tax A ct on the p rinci

ple t hat its p ur chas es mad e fo r t he co nst ru ct ion and furnishing o f the hot el and con ve nti on center project were those of a governm ental bod y (t he Village) . O n Mar ch 5, 200 4, t he Dep ar t ment deni

ed LPFC's request f

or a s al estax exem ption n um be r, c onc l udi ng tha t LP FC wa s n ot a g ov er n men tal b ody wi th i n th e m ea n i n g of se cti on 2- -5 (1 1) of

th e R eta i l er s' Ta x A ct. LPFC f

il ed a compl ai nt for adm

in is trat iv e r evi ew in

the ci rcuit court o n A

pril 8, 2004, but it was di sm is sed because LP FC

di d n ot ex ha us t all adm

in is trat iv e reme die s, in

cl udin g requestin

g a heari ng. LPFC the

n requested an adm

in is trat iv e heari ng. OnJu ly 28, 200 5, a h

eari ng was h eld be f ore an adm i nistrati ve l aw j udge

(AL J). A t th e heari ng, cou n se l f or th e D ep ar tmen t ad m i tte d tha t t he issue o f whethe r an o rga nizatio n li ke LP FC qualif ie d for a t ax exe mpt ion as a "g ove rnment al bod y" was o ne t hat was ra re ly confro nt ed. The Dep ar t ment arg

ue d that LPF C d

i d n ot p re sent any evidenc e t hat a go ver nmenta l bod y owne d t he conven tion cen ter and hotel prop erty or that LP FC was a governm ental body i tself . LPFC argued t hat if the D epa rt ment appl i ed the "re al i ti esof ow ner ship" t est as t he co ur t in So ut he rn I llino is did, it would find tha t LPFC was a go ver nmenta l bod y under t he Re t ailers' T ax Act . We examine So ut he rn I llino is in the a nalysis sect ion o f this o pinion.No. 2-- 06--0520

-5-

At the outset of the hea

rin g, LP FC 's arti cl esof i nc orporati

on and b yl aws, a copy of

Vil la ge Ordin ance No . 5 351 , a ndthe Tax

Reb ate Agreem

en t were a l l en tered i nto ev i den ce. Ne xt, Le onard Flood, director of fi

nan ce and treasurer f

or t he Vi ll age, testifi

ed on beh

al f of LPFC. Fl

ood was i nv ol ve d w i th th e c onv en ti on c en ter a nd hote l f ac i l i ty proj ec t f rom its begi nni ng. The to tal cost of t he project was estim

ated at $192 mi ll

ion. LPF C would b e i ssui ng $1 82 mil li

on in tax-exem

pt revenue b on dsto cover t he cost of t he pr ojec t , be cau se o f the Village's bo nding limi t at ions. Pu rsu ant to se cti on 8 --5 --1 of

t he Il l i noi s Mu ni ci pal Code (M uni ci pal Code) (6 5 ILC S 5/8--5 --1 (West 200 4)), t he Vi llag e c o uld no t be co me ind eb t ed fo ran amo un t gr ea t er t ha n 8 . 62 5% o f t he va lue o f t ax ab le propert y therei n, wh ich wo uld allo w t he Villa ge ap pr o ximat ely $ 10 6 millio n a va ilable t o iss ue in bonds. Th at a

moun t wa s w hol l y i ns uf f i ci en t f or th e c onv

en ti on c en ter proj ect in

li gh t o f i ts to tal antic ipa ted co st s and the Vi ll

age's other expen

ses an d needs. F lood iden

tif ie d a copy of Ordin

ance No. 5351 and ex

pla i ned t hat t he ordi

na nc e p rovi de d f

or th e c rea

ti on of LP FC f or th e p urp ose

of fi nan ci ng, constructing, and e quippi ng the proposed deve lop ment. Ot her municipalities in t he na ti on have used such corpor ations in ord er to fi

nance l arge pro jects, and the Vi

ll age de t er mined t ha t t his wo uld be a sui

table opt ion f or t he conv

ention c enter project. Flood further ackn owledged t

ha t LPFC' s articl

es of i ncorporat ion provi

ded that: (1) t he Vi

ll age wo uld ap po int LP FC's d irect or s and
r et ain t he au t ho r it y t o r emo ve an y o f f i cer a t an y ti me; (2 ) the V i l l ag e m

us t ap pr ov e a n y ch an ge to LPFC 's by

la ws; (3) per the Tax

Re ba t e A gr ee men t , t he Villa ge ple dg ed t o r eb at e t o LP FC all of t he sales tax reven

ue generated f

rom the project and pl

ace i t into the project revenue s tream t o as sis t in t he re ti re men t of th e deb t; (4 ) t he Village will tak e t itle o f the pr op er t y free a nd clea r o f any encum brance s up on

th e r eti re men t of th e b on ds ; an

d ( 5) LP FC

h as n o au th ori ty to sell the pr operty withoutcon sent of

the Vi l l ag e. F l ood f

ur th er ex pl ai n ed th at u n der the te

rm s of th e T ax Re b ateNo. 2-- 06--0520

-6-

A gr eemen

t, the Vil lage had the ul

timate risk b ecause if

there were a shortfal

l i n the reve nuefro m the pr o jec t , t he Villa ge wo uld b e r es ponsi b l e f or p rov i di n g a b acks top g

ua ra n ty to pay the debt servi

ce expense o nc e a ll ava ilable reserves h ad been exh austed. Under

t he ag re ement , in any given year , t he Vil la ge could be required to pay up to $2 mi ll ion to co ver debt service expense . If reven ue wer e i n suf f i ci en t, LP FC ha d n o r es o ur ce s it se lf t o ut ilize . LP FC wa s s t affe d b y Villa ge emp lo yees, and
meeti n gswereh el

d a t th e V i l l ag e i

n ac cord w i

th th e Open Me eti n gsA ct. O n cross-exam

in ation, Fl ood admitted that LPFC di d not have the ab il ity to im pose t axes , maint ain a police force, or pro vi

de water or sewagetrea

tmen t, an d had not rec ei ve d a ny ch arte r f rom the St ate o f Il

li nois recognizi

ng i t as a governm

ental body. On

redirect, he ackn

owledged that

t he by la ws included a r equ irement t hat LPFC abide by t he t er ms of t he Open Mee tings Act, even though by law that act d id n

ot apply to corp orat ions. On No ve mbe r4, 20 05 , t he ALJ iss ue d h is d ec isio n in t he mat t er , w hich was app ro ved byt he Dep ar t ment on N ove mber 7 , 2 005 . I n t he de cision, t he De par t ment ma de the f ol l owi ng f i nd i ng s of fact. LPFC was a not-for-pro fi t cor porat ion i

ncorporat ed solel

y b y F lood after the Vill

age passed Ordin ance No. 5351 . The Village ap po inted its five initial dire ct or s and re t ained t he r ight t o r emove an y di r ec t o ran d f

ill a ny va ca nc y. LP FC co nt r ac t ed un de rit s o wn na me a nd t o o k t it le t o pr o pe r t y, thoughup o n r ed emp t io n o f t he bo nd s, t it le w o uld pa ss t o t he Villa ge . Any a men dme nt t o ar t icle IV of LPFC 's b

yl aws had to be approved b y the Vil la ge. The Depa rtme nt m ade th e f oll owi ng c oncl usi ons of l aw. Section 7 of the R

etail ers' Tax Act provides t ha t t he bu r de n is on thetaxp ay er to show that he i s entitled to an exemption. 35 ILCS 120/7 (Wes t 200 4) . T he Departmen t's i ni tial March 5, 2004, deni

al letter est abl

ish ed its pr ima fa cie case th at LPFC did no t qua lif y for t he exe mpt ion, and t hus t he bur den s hifted t o L PFC t o p re sentNo. 2-- 06--0520

-7-

evi dence that t he Departm

ent's determ

in ations were no t correct. Cop i l ev i tz v . De pa rtm en t of Reven ue , 41 Ill . 2d154, 157-58 (1968). T he text of the March 5, 2004, denial

le tt er in dic ated that LPFC ma y ha ve origi na l l y appl i ed f or a tax e xem pti on as a ch ari tabl e organ ization. Ho wever , LP FC ma de it clea r in t he hea ring an d i ts b rief to t he AL J t ha t it wa s a ss er t ing it wa s a go ve rnme nt al b o dy. Be ca us e LPF C a

ba nd one d a ny arg um en t tha t i t wa s enti tl ed to the tax exem ption as an ex clu sive ly ch ar it ab le or ganizat ion, t he Dep art ment did no t a naly ze t hat issue and d iscussed solely whethe r LP FC qu alif ied as a g o ve rnme nt al b o dy. Fi rs t, the Departmen

t decided that So ut he rn I llino is was not ap pli cable to this case, because t he co ur t 's hol

di ng was l i m i ted to the f

acts of that ca se w

here the re were stipul

ated facts and the i

ssue related to the own ersh

i p of real propert y . It w en t on to ex pl ai n th at i f th e l eg i sl atu rei n ten de d to in cl ude any nonprofi t o rgani zation acti

ng as an agent or ins

trumental ity of a governm

ental bo dy, then th e statu te m us t b e r ead to g i

v e e f f ec t to that i

n ten t. H owev er , i

n tax ati on ca se s, a statu

te must be st r ict ly con stru ed i n f av orof tax ati on an d aga i nst exem pti on. Wyndemere Ret irement Com m un i ty v. Departmen

t o f Re ven ue , 274 Ill. App . 3 d 45 5, 459 (1 995 ). The Dep ar t ment t hen we nt o n t o ap ply traditional

rule s o f st at ut o ry co nst ruc t io n, de t er mining t ha t if the le gis la

ture had in

tended to incl

ude ag en ts orinstr ument alities o f the go ver nment in the R et ailers' T ax Act , it wo uld have expr essly do ne so. The De

pa rtm en t com pa red thi s c as e to Car ro ll v. Paddock , 1 99 I ll. 2d 1 6, 28 ( 200 2) , w her e t he courtde cid ed t ha t no t - fo r - pr o fit chari tabl e hospi tal s an d not-f or-prof i t me ntal he al th ca re or ganiza t ions we r e n o t "lo ca l pu blic e nt it ies " w it hin t he mea nin g o f the Lo cal Go ver nmenta l and Governm ental Empl oyees Tort Imm

un ity Act (To rt I mm

uni ty Act) (745 ILCS 10/1- -101. 1 (West 2000) ). Li

kewi se, the Dep artm

en t foun d tha t the term "g o ve rnme nt al b o dy" in

the Retail ers' Tax A ct was not intende d to cover nonprofi t cor porat ions

that wer e ac t ing

asag en ci esor i ns trum en tal i ti esofNo. 2-- 06--0520

-8-

t he governm

ent. LPFC n

ow appeals tha

t decisi on, arguin g that LPFC qual

if ie s fo rt he go ve rnme nt albody e xem ption whe n the So ut he rn I llino is factors are applie d to the facts present here.

II. AN AL YSIS Fi rs t, the parties do not agree on the appli cabl e standard of revi ew . LPFC argues that we sho uld review de no vo t he is sue of wh ether it qual

if ie d for the exem

ption as a govern

me ntal bo dy, beca use t he fact s ar e und isput ed. The Dep ar t ment a rg ues t hat t he is sue of wh ether LPFC qual

if ie s f orthe govern men tal-b ody exem ption i s a m i xe d qu es ti on of l aw an d f ac t, so the standard of revi ew i s c l ea rl y-e rron eou s. Both

pa rties ar e p ar ti al l y cor re ct. T his cou rt r evi ews the deci si on of the adm in is trat iv e agency , not t he decisi on of the trial cou rt. Dow Ch em i cal Co. v . De pa rtm en t of Reven ue , 359 Ill . App. 3d 1, 20

(2005 ). "The stan

dard of r ev iew ap pli cabl e to an [ad m i ni stra ti ve ] ag en cy 's de ci si on d ep en dson w he the r th e q ue sti on presented o n ap pe al is o ne o f fac t , o f l aw, or of both." Du P age Co unt y Airpo rt Aut hor ity v. Dep ar t ment of Revenue , 358 Ill . App. 3d 476, 482 (2005). Our r evi ew of an agency 's f actual f in din gs is l i m i ted to determ

i ni ng w hether s uch f i ndi ngs areaga inst t he manifest w eight of t he evide nce, and we do n ot we i gh th e ev i den ce

or sub sti tute ou r jud gment in place o f the agen cy . Du Page Cou n ty Ai rport , 358 Ill. App . 3 d at 482 . Ag ency ru lings on q ues t ions o f law do not re ceive such deferen ce on review, but ratherare reviewed de no vo . Du Pa ge Coun ty A i rport , 358 Ill . App. 3d at 482. When the is sue presen

ted contains m

ix ed questions

of law and f

act, t he standard of

reviewis whet her t he de ci si on was clearl

y erroneous. Dow , 359 Ill . App. 3d at 20. The clearl

y-erroneous standard appl ie s to adm in is trat iv e casesin volv in g mi xed questions of l

aw and f act, rat her than

a bifurcated standard, i n pa r t be ca us e o f t he de fer en ce giv en t o t he ag en cy's ex pe r ien ce an d e xp er t ise in int er pr et ing it s statutes. Home Depot, U.S. A., Inc. v. Departme nt of Revenue , 355 Il

l . Ap p. 3d 37 0, 374 ( 2005) .No. 2-- 06--0520

-9-

A m i xe d qu es ti on of law an d fa ct is whether the f acts satisf y a statut ory standard or whether t he rule o f law , as ap pli ed to the e stab l i shed f acts, is v i ola ted. Dow , 3 59 I ll. App. 3d a t 22. The clear ly-err one ou s st anda rd of r eview lies so mewher e bet wee n a de no vo and a ma nifes t -w eig ht -o fthe-evidence

standard, but provides

some def erence to the agency

's ex perien ce and ex perti se. Dow , 359 Il l . Ap

p. 3d a t 22. W hi l e the agen cy i s aw arded

def eren ce, a revi ewi ng c ourt wi l l

re verse t he agency deci si on when

there is evi dence supp ortin g rev ersa l and the revi ewi ng c ourt is " 'left w ith t he de f i n i te and fi rm convi ction that a mistake has been comm itted. ' " AFM Mes seng er Ser vice, Inc . v. De pa rtm en t of Em pl oy men t Se cu ri ty , 198 Il l . 2d 380 , 393 (2 001), quot in g Unit ed S t at es v. Uni

ted State s G y psum Co. , 333 U .S. 364, 3 95, 92 L . Ed. 746, 7 66, 68 S . Ct. 525, 5 42 (19 48). In thi s ca se, the parti

es d o not di spute a

ny f acts, a nd th us thereis no question of fact presented for our review. The i

nterpretat ion of

the defi ni tion of "govern

me ntal b ody" un

der se cti on 2--5(11) of

the Retai l ers ' T ax A ct i s a que sti on of law , t o w hich de novo review applie s. See Du Page Cou n ty Ai rport , 358 Ill . App. 3d at 483 (apply in g de no vo review to st atuto ry i nterpret at io n question ). Fina lly, w e r ev iew t he De pa r t men t 's u lt im ate conc l usi on (i ts appl i cation of section 2-- 5(11) to the facts of this

case), that LP FC

di d n ot qua l i f y f oran exem

ption f rom the Retai le

rs' Tax Act as a g ove rn men tal bod y , us i ng the cl ea rl y-er roneou s stan

da rd of review. See El em

en tary Sch ool Dis trict159 v. Schi

ll er , 221 Ill . 2d 130, 14 4 ( 20 06 ) ( ap ply in g de no vo sta

nd ard of rev i ew f or statutory i n ter pr eta ti on qu esti on an d c l ea rl y-e rron eou s stan da rd to th e s ch

ool b oard' s u

l ti mate deci sion); Ho neywell Int er nat ional, Inc . v. Dep ar t ment of Revenue , 366 Ill . App. 3d 187, 192 (2006) (a pplyingcl early

-erroneous standard of revi ew where f acts were undi sputed but appl i ca ti on of sta tute to facts was

in dis pute) .No. 2-- 06--0520

-10-

Bef ore we c an de cide w het her t he De par t ment's dec ision t o d eny LP FC 's exem ption request was errone ous, we

m ust f i rst exam i ne the m ean i ng of "govern men tal body" i n s ection 2--5 (11). LPFC ar gu es t ha t wh ile it is no t a g o ve rnme nt al b o dy, t he De pa r t men t sho uld ha ve fo un d it elig ible f orthe exem

ption bec ause i

t was es se n ti al l y ac ti n g a s a n ag en t or i n str um en tal i ty of t he Village. The Dep ar t ment argues that because L PFC purchas es and h

olds ti tle t o al l prop erty , LP FC doe s n ot qua lif y for t he go ver nmenta l-bo dy exempt ion. Secti on 2--5 (11) of

the R etail ers' Tax Act provi

desex em pti ons f or: "Personal propert y s old to a governm ental bod y , t o a c o r

po r at io n, so cie t y, asso ciat ion, f

ounda tion , or in

sti tution organ ized a nd ope rated exc l usi ve l y f or chari tab le , reli gious, or ed

uc ati ona l pur pos es , or to a

not -f or -p ro fit co rp or at ion, so ciet y, ass oc iatio n, fou ndat ion, instit ut ion, or org an iza ti on th at hasno c om

pe ns ate d of

f i cers oremployee s and that i s organ

ized a nd ope rated pr i mari l y f or the re crea

tion of p ersons 55 y

ears of a ge or ol der. A lim ited liabil ity co mpany may qualify f or t he exe mpt ion u nder t his par agr aph o nly i f the li mi ted liabilit y co mpa ny is or ganize d and operated exclusi vel y f or educational

purposes. On and af ter Ju l y 1, 1 98 7, h

owev er , no en

ti ty ot herwi se el

igi ble for thi s exem

ption sh al l m ake tax-free pu r ch as es un les s it ha s a n a ct ive ide nt ifica t io n nu mbe ris su ed b y the D epartm

en t." (Em phasi s ad ded.) 3 5 ILC S 120/

2--5(11 ) (We st 2004 ). The Retailers'

Tax Act doe s not define "governm ental body" but defin

es "purchaser" as foll

ows:

" 'P ur ch as er ' me an s a nyo ne wh o , t hr o ug h a sa le a t r et ail, acq uire s t he own ers hi p of orti tl e to tangibl

e personal proper ty for val uabl e consideration." 35 ILCS 12 0/1 (West 2004) .No. 2-- 06--0520

-11-

The pa rti esdo n ot ci te a nd wedo n ot fi nd a case anal yzin g the term "governm

ental bo dy" in t he Re t aile r s' T ax Ac t , an d t he st at ut e it se lf does n ot def i ne the term. We, therefore, apply traditional rul esof sta tutory con stru cti on. Th e c ard

i na l rul e of st at ut or y cons t ru ct ion is t o a sce rt ain and g ive eff ect to the l egi slature' s i

nten t. Col l i n sv i l l e C om m un i ty Uni t Sch ool Dis

trict No. 10 v. Regional Board of Sc h ool Tru ste es of St. C l ai r C oun ty , 218 Ill. 2d 175 , 1 86 ( 200 6) . T he be st i nd i ca ti on of legislat iveint en t is t he lan gu ag e o f t he st at ut e, giv en it s p lain and o rd inary meaning, and co nsider ing t he sta tute i n i ts en tire ty. Co llinsv ille , 218 Ill . 2d at 186. Wh ere the m ean i ng of a statute is un

clear, co ur t s may loo k beyo nd t he langu age of t he st at ut e and consider the purpo se o f t he law , t he ev il it was intend ed t o r emedy, and t he legislat ivehistory of the statute. Strog er v . Re giona l Tra ns porta ti on A uth ori ty , 201 Ill . 2d 508, 524 (2 00 2) . F oll owi n g th es e r ul es , w e l ook to the term "governm ental body ," using it s plain and ordi

na ry mea ning , an d fin d t he t er m t o be un amb igu o us . T he st at ut e c lea r ly applie s on l

y to governm

ental bodie s, and n

ot agents or instrumen

tali ties thereof. W

e need not further ana lyze w het her LP FC is a g o ver nment al bo dy, bec au se it ad mits it is no t in it s a pp ellan t 's br ief. The special

concurrence b elie

ves that ouran alys is sh

oul d e nd at ou r con cl us i on th at s ec ti on 2--5(11) doe s n

ot en com pa ss ag en ts or i ns trum en tal i ti esof governm ental bodie s. However, this e

nds o nly the fi rst step of our rev i ew, wh i ch wasto in terpret se cti on 2--5 (11) de no vo . The partiesand t he ALJ addressed, atgreat length, wh ether t he r eas oning set for t h in So ut he rn I llino is wa s a pp lica ble to LPFC suc h t hat it w as e ligibl e fo r t he exe mpt ion as an ag ent or instrum entality of the Vi ll age even thought he st at ut e d o es no t ex pr es s t ha t ag en t s o rinst rume nt ali t ies o f governm en tal bodi es a re exem pt. W e f i n d th at i t i s a pp rop riate

to ad dr es s th e p ar ti es ' cen tral argu men ts as l it iga t ed t o t his cou rt, to the tri al cou rt, a nd at the adm

i ni stra ti ve l evel asl i ti ga nts l ook t o o ur op inions for gui dance. See Ci ty of Ch i cago v . Pooh Ba

h En terpri ses , Inc . , 224 Il

l . 2d 390 , 454 (2 007) (F reem an , J.,No. 2-- 06--0520

-12-

dissent ingupon

de ni al of reh 'g) (c om men ti ng on inappr op riat enes s o f co ur t 's fai lure to address central argu men ts ra ised by

t he parties an

d court 's f ai lure to provide l

iti gants wi th guidan ce for f uture cases in it s opini on that dism

is sed a cen

trali ssue wi

thout anal y si s of the p arti es'

argum en ts). Ac co r di ng ly, as the Depart men

t's decisi on apply in g the law to t he f

acts o f thi s case in

volv es a m i xe d qu es ti on of l aw an d f act, we revi ew i ts dec i sion f

or cl ear e rror. We disag re e wit h LPFC t hat S o ut he rn I llino is is app licable to t he fact s her e. In Southern I llino is , t he Univer sity t ra nsferr ed t itle o f a re sident ial hous ingpr o pe r t y t o a n o np r o fit corp orati on that it cr eat ed, t he So ut her n Illino is Unive rsit y Fou ndat ion, which lease d t he pr op er t y back t o t he Un ive r sit y. So ut he rn I llino is , 98 Ill . App. 3d at 1 06 3- 65 . Th

e U n i v er si ty cr ea ted th e F oun da ti on to ho ld t it le in o rd er t o o bt ain lo ng- t er m financ ing fo r t he c o nst ru ct io n o f a resi dence hal l, because statutory debt restricti ons prev en

ted the Uni versi ty f rom ob tai ni ng th e loans i n i ts na me. Southern I llino is , 98 Ill . App. 3d

at 1067. The Foundation then sought a propert y tax

exem pti on af f ord ed to pr op er t y owne d by

the State of Il l i noi s. So ut he rn I llino is , 98 Ill . App. 3d at 1063-64. In or der to det er mine wh eth er th e p rop er

ty wa s " own

ed " b y the State of Ill in ois ( i.e. th e U

n i v er si ty ) p ur suan t to se cti on 19.5 of the Reven

ue Act of 1939 ( I ll. Rev. Stat. 1979, ch. 120, par. 500.5), t he court anal yz ed what t ype o f o wn er sh ip wa s r eq ui r ed by t he statute and t he r elat ionship o f the Univer sity and t he Foun dation. So ut he rn I llino is , 98 Ill . App. 3d at 1064. The a pp el l ate court hel d that t he Un

iv ersi ty possesse d

equi table ownershi p of the resi

dence ha ll pr op er t y becau se t he Uni ve r sit y's boa rd of d irect or s co nt ro lled t he manag ement of t he F ou ndat ion, t he Univer sity pr eside nt was among t he Fo unda t ion's 1 1 bo ar d member s, a nd t he chai rman of th e U n i v er si ty' s b oard w as

au th ori ze d to desi gnate t wo board mem bers. Southern I llino is , 98 Ill . App. 3d at 1065, 1069. Further, t he control and operation of the propert y was underNo. 2-- 06--0520

-13-

the jurisdi ction of the Un

iv ersi ty, and the property was m anaged by the Uni versi ty's housi ng off ic e in the sam e m ann er as all ot her student housing f

acil ities . So ut he rn I llino is , 98 Ill . App. 3d at 1066. The Uni versi ty al so used

its own funds t o p ay "re nt " t o t he Fo unda t ion by paying t he Fo unda t ion's federal mortgag e as the F ounda tion 's agen t. So ut he rn I llino is , 98 Il l . A pp. 3d a t 106 6. U

pon re t irement of t he mor t gag e o bt ained by t he Fo unda t ion, t he t itle o f the propert y was to t ransf er to the U ni versi ty. So ut he rn I llino is , 98 Ill . App. 3d at 1066. As to the que sti on of whether e qui

tab l e ow ne rs hi p w assu f f i ci en t to sa ti sf y the exem ption statut e, the county argued that "ownershi p" for tax purposes required "actual, l egal ownershi p" and, therefore, because t he Fo un da t io n he ld ac tua l ti tl e to the p rope

rty , th e U ni ve rs i ty di d n ot qua l i f y f or the property

tax exem pti on. So ut he rn I llino is , 98 Ill . App. 3d at 1067. The Uni versi ty argued that it he ld e qu it ab le o wn er ship in the p ro per t y and t hat t his was s ufficient t o q ualify f or t he exe mpt ion. So ut he rn I llino is , 9 8 I ll. App. 3d a t 106 7. The court stated t hat reven ue coll ection was

concerned "n ot wi th th e r ef i n em en ts of ti tl e b ut wi th th e re al i ti esof ownership." So ut he rn I llino is , 98 Ill . App. 3d at 1069, citin

g Peo ple v. Chi

cago Ti tl e & Tru st C o. , 75 Il

l . 2d 47 9, 4 89 (1 97 9) (s tati

n g ti tl e to pr operty ref ers to ale gal relationshi

p with l and, whi le ownershi p is denoted by cont ro l and t he r ight to enj oy the benef

its of the pro pert y). However, t he language of section 19.5 did not sp ec if y tha t le gal ownershi p was requi

red, as t he l an

gu ag e ex em

pte d " ' [a ]l

l pr ope rty of ev er y ki n d b el on gi n g to t he Sta te of Illinois,' " and t her efo re equ itable o wner ship wa s su ffi cient t o q ualify f

or t he exe mpt ion. So ut he rn I llino is , 98 Ill . App. 3d at 1070. While t her e ar e ce rt ainly some fact ual simil ar ities be t wee n So ut he rn I llino is and thi s case, we find t he de t er minative fact s in South ern Il l i noi s dist inguishable fr om t he fact s her e. First and f ore m ost , t he sta

tutes i nv ol ve d i n th i s c as e do not

co nc er n le ga l an d e qu it ab le o wn er sh ip o f p r o pe r t y.No. 2-- 06--0520

-14-

Sec ti on 2--5(11) unamb iguousl

y a ppli es onl y to governm

ental bod ies (a nd

ot her enti ties n ot at issue in this ca se) and cl early

not t o agents or instrum

entalities of

govern men tal bod i es . F urth

er, se cti on 1 de fines a pu rc hase r a s "anyo ne who , t hro ugh a sale at re t ail, ac quir es t he own ers hi p of or ti tl e to t an gib le pe r so na l pr o pe r t y fo ra v alu ab le c o nsid eration." 35 I LCS 1 20/ 1 (Wes t 2 004 ). LPFC purchased

item s wi th fun ds obtain ed through the is suance

of it s bo nds; t hus, t he Village pr ovid ed no va lua ble cons i derati

on f or the prope

rty. Whet her t he Vi

l l ag e w as ab l e to u se

an d en j oy th e p rop er

ty as t he Univer sity did in So ut he rn I llino is is irre levant beca use t he Village d id no t pr ovi de v alu ab le con si de rati on f orany pu rchase rel

ated to the conven

tion cen ter. Ho wever, even

if the Vi ll age provided co nsider at ion, t her e is no evidenc e t hat t he Village ha s po sses sion, co nt ro l, and use of t he personal pr o pe r t y wh ile LPFC hold s t itle. Unlike t he Univer sity in So ut he rn I llino is , the Vil la ge never had ti tl e to t he co nvent ion cen ter property

, and the property wasnever l eas ed to the Vi l l age. In So ut he rn I llino is , t he parties, unli ke the part ies h

ere, st ipul ated t o a number of f

acts, in cl udin g that t he Uni versi ty at all ti mes con trol l ed , op erate d, a

n d u se d th

e r es i den ce

h al l as i ts o wn an d u se d i ts ownfun ds to pay the Fo un dati on' s f edera l mortgage. So ut he rn I llino is , 98 Ill . App. 3d at 1066. Here, whi le the Vi ll age m ai ntain ed control over buildi

ng pl ans, i t did not mai

ntain dai ly contro l ove

r t he pr o pe r t y, an d t he Villa ge did not funnel any of it s o wn fund s t o L PFC. Rat her , a ll f unds use d by LPFC f or t hi s project

were obtai ne d through

i ssu ance of LPF C' s b onds . Fu r t he r , t he Villa ge it se lf had l im ited fi nan ci al exposure i

n the project be cause tax i ncom e used to wards pay

in g off the bonds wa s rec ei v ed f rom LP FC pu rs ua n t to th e T ax

Re b ate A gr eemen

t. LPFC ma kes several

ot her arguments for its position, and those ar guments al so fai l f or various reasons. LP FC

arg ue s th at the V i l l ag e i s th

e ul ti m atebe ne f i ci ary of t he pr ojec t beca use t he Vil la ge and it s re sident s will enjoy the t ax r evenu es a nd emplo yment oppo rtu ni

ties that t he project creat es.No. 2-- 06--0520

-15-

Howev er, the sa m e i s tru e f orpr ivat e d eve lo pme nt , a nd p riva t e d eve lo pe rs wo uld no t qu alify for tax exempt ions f

orgovernm

en tal bodi es u nde r thi s l ogi c. Ne xt, L PF C c i

tes to Internal

Reven ue Service (IRS) Rul e 6 3-- 20 f

ora test used to determi

ne wh ether in terest incom

e recei ved on b onds issued by a nonprofi t cor porat ion c onstituted in terest received

on governm

ental obli gations. LPF C adm

its that t he IRS test is not bi

ndi ng on thi s court but i s m

erel y persuas i ve authority. Howev

er, we find t his cas e's sales tax exe

mption is sue dis t ing uis ha ble fr o m t he I RS 's in t er es t inc o me t ax issue and t hat t he IRS 's t est is ina

pp li cab l e, ev

en f or guidan ce, to the c ase

at ba r. Ed en Re t irement Cent er , I nc. v. Dep ar t ment of Revenue , 213 Ill . 2d 273, 290-91 (2004) ( federal t ax- exempt st at us is no t dispo sitive of Il l i noi s tax ex em pti on i ssues). LPFC 's ar gument that it i s an agen t o f the Vi ll age al so fai

ls under bas ic

agency -law pri nci ple s because the p rinci

pal i s t he onl

y s ource of an agen

t's authority. See Merch

an ts' Na ti ona l Ba nk of Pe o r ia v. Ni ch ol s & Shep he rd C o. , 223 Il

l . 41, 49 ( 1906) ; 3 A

m . Jur. 2d Agen

cy §68 (2 007). While t he special

concurrence poi

nts out t hat exceptions to t hi s traditiona l agency rule m ay exi st, we do not agre e t ha t an y su ch ex ce pt io n w o uld ap ply t o a n o n- ho me- rule mun icip alit y. N o n- ho me- rule mun ic ipa li tiesmus t derive thei

r authority to act from the legi sl ature ( Villa ge o f Or lan d H il ls v . Citize ns Ut ilit ies Co . o f I llino is , 347 Ill . App. 3d 504, 519 (2004)), and thus they "possess only those powers ex pr es sly gran ted, powers

i n ci den t to those ex pr es sl y gr an ted , a n d p owe rsi n di sp ensa b l e to accomplish

t he mun ici pali t[ies'] purpo ses" ( Thom

pson v. V i l l age of

Newa rk , 32 9 I ll. App. 3d 536, 539 (2002)). Here, sect ion 8--5--1 of the Mun ic ipa l C ode expres sly pr ohi

bi ted the Vi l l ag e f rom issuing bond s in the amou nt ne ce ss ary f or th e c onv

en ti on c en ter; the ref ore, to al l owth e V i l l ag e to ex pr es sly al l owLP FC to do s o or late r r at ify an ac t of LP FC o n its be half wo uld co nt ra dict t he legislat ur e's cl ear

in tent t hat non-hom

e-rule m unici palities l im it thei r in debtedness . We f

in d this logic,No. 2-- 06--0520

-16-

using t he sp ecial co ncur re nce's t er mino lo gy o f ch o ice , "p er fec t ly intu itive. " This is no t t o s ay tha t t he Vil la ge was legally pro hibited fro m crea t ing LPFC to faci

li tate t he f in anci ng of the conv

ention c enter pr oj ec t, as t ha t iss ue wa s no t r ais ed ; r at he r , we simp ly no t e t ha t LP FC co uld not be considered an agent of the Vi

ll age. Fin ally, i ni ts repl y b rief , L PF C raise d th

e a rgum en t th at th e p owe r to a pp oi n t cor porate di rectors co nst itu t es e quit able o wner ship o f tha t co rp or at ion's prop erty. In a m oti on t ake n wit h t he case, t he De pa r t men t mo ve d t o st r ike t his a r gu men t pu r su an t t o Su pr eme Co ur t Ru le 3 41 ( j) ( 21 0 I ll. 2d R. 34 1( j )), b ec au se

LP FC di d n ot ma ke thisargum ent in its initial brief, and in t he alt er nat ive requestedper mission t o file a su rr eply brief t o r esp ond t o t he ar gument . We gr ant t he De par t ment's
m oti on t o file a su rr eply brief, a nd we agree wi

th the Departmen

t's argum ent that a corpor ation that observes the f orm al i ti esof cre ati ng a s ep ara te e xi stenc e m ay not d i sreg ard such di sti nc ti on in order to avoid sales tax burdens. Sup eri orCoal Co. v. Departmen t o f F in ance , 3 77 I ll. 282 (1 941 ) ( finding that a corpor ation an

d its stockholders, ev

en if ot her corporat ions , are deemed se pa ra te e n ti ti es wi th respectto tax

i ss ue s a nd cou rts wi l li gnore th e f

i cti on of cor porate en ti ty on l y wh en i t i s u se d to perp etrate

frau d o r d ece ive the public) . T he su pr eme co ur t in Superior Coal specifi cally stated t hat "wh ereco rp or at ions meticu lou sly obser ve t he fo rmalities incide nt t o s epa ra t e co rp or at e exist ence and
r ece ivesubstantial

economi c ben efi ts therefrom, they

wil l n ot be perm

itted to dis

regar d * ** th e ma in tenance of separate c orp orat e identi ties." Superior Coal , 377 I ll . at 290; see also Ma in Ba nk of Chi cago v. Baker , 86 I ll. 2d 188, 205 (1981) (explai ni ng that a corpor ation i s separate and distin ct f rom it s sh ar eh ol ders , di re ctor s, an

d of f i cers , a n d g en eral l y f rom oth er cor porati on s wi th wh ich it is aff il ia ted, and that nei

ther stock o wn er ship alo ne no rt he us e o f co mmo n o ffice r s a nd dir ec t o r s in one corp orati on b y an oth er cr ea tes an i den ti ty of i n terest b etw een

th e tw o or crea testhe

rel ati on ofNo. 2-- 06--0520

-17-

pr inc ipa l an d agen t). H er e, th e V i l l ag e cre ate d LPF C a s a se pa ra te a n d di sti n ct e n ti ty i n ord er to be ne fit fr o m its fina nci

ng capabi li ties. Therefore, the Vil

lage cann ot now avoid its existence as a separat e entity to avoid sales tax burdens. In rev i ew i ng the De pa rtm en t's ul ti matede ci si

on to d en y exem ption status t o L PFC, we find its a rg ument s pe rsu asive. The Dep ar t ment argues t hat LPFC's status as t he actual purchaser must be co nsider ed a par t fro m that of t he Village, re lyi ng o n Be rwyn Lu

m be r Co. v. Korshak , 34 Ill . 2d 320, 322-23 (1966), and Yal e C l ub of Chicag o v. Dep ar t ment of Revenue , 214 Ill . App. 3d 468, 476 (1991 ), and w e ag re e. In Berwy n Lum ber , t he indep ende nt co nt ra ct o r p laint iffs sough t an exem ption f rom t he Retai l ers ' T ax A ct f or bui l di ng -m ateri al pur ch as estha t the y mad e p urs

ua nt to a con stru cti on contract they

had wi th the governm en t. Berwy n Lum ber , 3 4 I ll. 2d a t 321 . T he contracto rs argued that the material s purchased were used o r consumed by exem pt o rganizations, w hich use d t he contractors as thei

r agen ts; h owev er, the

re wa s no ba sis fo ran ag en cy- r ela t io nsh ip a r gu men t in t he record. Berwy

n Lum ber , 3 4 I ll. 2d a t 322 . T he co nt ra ct or s ar gue d t hat by not allowing t hem the exempt ion, the g overn

me n t wa s i

n cu rri n g h i gh er costs, b ut th

e c our t also r ej ec ted th at a rgum en t. Be rwyn Lum

ber , 34 I ll. 2d at 32 3. The court held that the exc lus ion was i ntended f or t he purchaser and no t fo r"s o meo ne els e fa r t he rdo wn t he line o f ec o no mic int er co ur se wit h w ho m he in t ur n might deal ," an d it was undisp ut ed t hat t he sales i n qu esti on weresa l es to i n de pen den t con tra ctor s, n ot to t he gove rnm en tal bodi es that were

parties to the

constructi on con

tracts. Berwy

n Lum ber , 34 Ill . 2d at 323 . As in Berwy

n Lum ber , t he pa rt ies do not dispu t e t hat LPFC is not a go ver nmenta l bod y and that i t, an d n ot t he Village, was t he act ual pu rc hase r a nd t itleho lder of t he pe rso nal pr op er t y. As t he courtin Berwy

n Lum ber ex pl ai ne d, th e e xe m ption a ppl i esto the ac tua l pur ch as er a nd not to af uture bene f i ciary of t he purch

ase s. In thi s ca se, the f

uture b enef

i ts are even mo re re mot e t han in Be rwynNo. 2-- 06--0520

-18-

Lum ber b ec au se th e V i l l ag e acq

ui re s ti tl e to the property

i n qu esti on onl y wh en the b onds

are redeem ed, an d the re de m

ption of the bon dsdepe nds on

the succ es s of

t he co nvent ion ce nt er , a mong ot her un co nt r o llable fac t o r s. He nc e, t he fut ur e b en efit is me r ely a fut ur e e xp ec t an cy, wh er ea s in Be rwyn Lum

ber t he go ver nment w ou ld pr esu mably have benefitt ed fr om t he pu rc hase s o f the constr uction equipmen

t as so on as the equipmen t was used at its si

tes. Li kewi se, in Yal e Cl

ub , a n o np r o fit or ganiza t ion inco rp or at ed t o p ro mot e Ya le Univers ity by re cr uit ingChicag o- ar ea s t ude nt s, r aising funds for scho larships , a nd pr omo t ing and o rg anizing alumni ev en ts sough t a s al estax exem ption f oreducational

or cha ri tabl e organ izations. Yal e Cl

ub , 21 4 I ll. App. 3d at 470 -7 1. The main pur po se o f the Yale C lub was t o int er view pr os pec t ive st ude nt s in the Chi cago area, but it di d not makeany admissions decisions, asthos e re mai ne d i n th e s ol e c ontr

ol of Ya le Uni versi ty. Yal e Cl

ub , 214 Ill . App. 3d at 47 1. T he cou rt h el d that the Y al

e C l ub di d n ot qu alify for the educational

tax exem ption, becaus e i

ts stat us had

to be con si de red ap art f rom tha t of Yal e U ni ve rs i ty , th e org an

iza ti on its ex is tence ben efi tt ed. Yal e Cl

ub , 2 14 I ll. App. 3d a t 476 . T he courtco nsid er ed t ha t t he Ya le Cl ub wasnot a rec ogni

zed p art of Y ale Un

i versi ty, i ts m em bers we re not a p art of Yal e U ni ve rs i ty's sta f f , an d i t did n ot ha ve an y con trol i n Yal e U ni ve rs i ty's ad m i ss i on decisi ons. Yal e Cl

ub , 214 Ill . App . 3d at 47 6. Mo r eo ve r , t he r e w as no ev ide nc e t ha t Ya le Univer sity's re cr uit ing and fu ndr aising n ee dswou l d n ot h av e b een met wi th out th e e f f orts o f t he Ya le Club. Yal e Cl

ub , 214 Ill. App . 3 d at 476 -7 7. The court al so rejected the Yal e Cl ub's argumen t t hat it qua lif ied fo r t he chari

table tax exem ption bec ause the cl

ub wa s n ot de si gn ed to b en ef i t an i n de f i n i te nu m be r of pe rs ons oral l those i n n eed w ho ap pli ed, as the def i ni tion requi red. Yal e Cl

ub , 21 4 I ll. App. 3d at 478.No. 2-- 06--0520

-19-

Again, t he co ur t in Yal e Cl ub co nsid er ed t he st at us o f t he en t it y se ek ing t he ex emp t io n se pa ra te f rom the orga ni za ti on it ben efi tt ed. Here, we als o must consider LPFC 's st at us s epa ra t e and apart fr o m t he Villa ge , an d in do ing so we r ea ch t he sa me co nclusio n as t he co ur t in Yal e Cl ub . Like t he Yal e Cl

ub, LPFC: (1) h

ad little or no control over the Vil la ge and i ts deci si ons; (2) was not organize d as an age ncy or branch of

the Vi ll age i tself ; an d (3) di d not perf

orm a f unc tion ne ces sary to ma in tain the Vil la ge's ex is tence. Wh

il e Vi ll age em ploy ees were appoi

nted to LPFC's b oard, cor porate me etings were conducted sepa

r at e fr o m Vil

la ge m eetin gs, and the b oard had to seek Vil la ge app ro val only for lim

ited act ivities, suc h as a ppr ova l for bu ilding plans o r t he ea rly sale o f the pr o pe r t y. Over all, t he Village w as no t dep ende nt upo n LPFC for its g ove rnment al act ivities, and LPFC was al so not dependent on t he Vill age for its day-to- day project managem ent act iv ities . The De pa rtm en t's con cl us i on s that L PFC did not qualify for exem

ption status and that S outhern I llino is 's rati onal e was i na ppl i cab l e to the f

acts of thi s ca se w ere n

ot cle arl y err oneous , es pe cia lly given t he gui dan ce o f Berwy n Lum ber and Yal e Cl

ub . T he De pa r t men t 's d ec isio n is co nsist ent with gui

delin es regardi ng construction of tax e

xem ption statut es. St atutes t hat exem pt pr operty or an ent ity fro m taxa t ion must be st rict ly const ru ed in f av or o f taxation and agai nst ex em pti on. Wy

nde mere , 274 Ill . App. 3d at 459 . T he pa rt y req ues t ing t he exe mpt ion must pr ove it s en titl em en t cl earl y and concl usi ve l y . Wy nde mere , 27 4 I l l . A

pp . 3d at 4 59 . C our

ts may not cr ea te orext end e xempt ions fr om t axat ion by judicial inte rp re t at ion of a s tatut e. See Rogy' s New Gene ra t ion, Inc. v. Departmen t o f Re ven ue , 318 Ill . App. 3d 7 65, 771 (20 00) ; Fo llet t 's I llino is Book & Suppl y Store, Inc. v. Isaacs , 27 Il l . 2d 600 , 606 (1 963). In anal y zi ng a n exem pti on, al l f acts a re to be construed an

d al l deb atab l e que sti ons r

esol ve d i n f av or of taxati on. Wy

nde mere , 274 I ll. App. 3d at 459. The burden

to prove entitlem

ent to t he governm

ental bod y exempt ion wa s o n LPFC , a ndNo. 2-- 06--0520

-20-

it di d n ot cl ea rl y es tab l i sh tha t se cti on 2 --5 (11 ) of

the Retai l ers ' T ax A ct a ppl i esto a cor porate en ti ty created by

a governm

ental body. The

refore, under

the se f ac ts a nd trad i ti ona l rul esof tax exem ption co nst ru ct ion, we

f i n d th at th e D ep ar tmen t' s dec i si on to de ny LP FC exem ption s tatus wa s n ot cle ar ly erro neous. III. CONCLUSION Ba sed on the foregoin

g reasons, we af

fi rm the j udgme

nt of the ci

rcuit court o f Du

Pag e Co un t y. Af fi rmed. ZENOFF, J., co ncurs. JUSTICE O'MA

LLEY, special ly

concurrin

g: I agr ee w ith t he ma

jori ty thatLP FC ' s c l ai

m to a ta x exem pti on as an ag en t or i n str um en tal i ty of th e V i l l ag e f

oun derson th e p l ai n tex t of se cti on 2- -5 (1 1) of

th e R etai l ers'Ta x

A ct. W h at I que sti on is t he nece ssit y, and even t he pr op riet y, o f the near ly eight p age s o f analysis tha t follow t he ma jori ty's statut ory construction, whi ch I consi der dispo sitive o f the exempt ion issu e. I a lso d ou bt the soundness of a crucial s egment of the maj ority's surplus an aly sis. In co nst ru ing sec t ion 2
-- 5( 11) , t he major ity emplo ys the dictum t hat "[w ]he re t he meaning of a statut e i s unc lear, co ur t s may loo k beyo nd t he langu age of t he st at ut e. " Slip o p. at 11. The
maj ori ty f i n dsth e r el ev an t l an gu ag e of se cti on 2- -5 (1 1) "u

n am b i gu ous " a

n d c on cl ud es th at th e statu te "c lea r ly appl ie s on l

y to governm

ent bodie s, and n

ot agents or instrumen

tali ties thereof." Sl

ip op. at 10. The maj ori

ty proc ee ds , h owe ve

r, to a ddr es s w he the r L PF C " wa s e l i gi

bl e f or th e e xe m ption as an agent or ins

trumental ity of the Vi ll age even thou gh the sta tute d oesnot e xpres s th at age nts or in strumen tali tiesof governm

ental bodie s are exem

pt ." (Emphasi s added.) Sli p op. at 11. I amNo. 2-- 06--0520

2 Of co ur se, if extr insic aids we re app ro pr iate her e, t he mos t indicat ive wo uld be the h i story of se cti on 2-
- 5. T he wo r ds "o ran y ag en cy o rinst rume nt alit y t he r eo f" w er e d ele t ed in 1965 (1965 -21- uns ure wh y t he majo r it y cho o se s t o ad dr es s t his question . I f, as is undi sputed here, section 2--5(11) is t he o nly p o ss ible a ut ho r it y fo rt he ex emp t io n, an d, as t he majo r it y r ig ht ly c onc ludes , t he unam bi guous t hru st of t he t ext for eclo ses a n exempt ion o n thes e fa ct s, t he n fu r t he rdis cu ss io n is needles s. In

f ac t, th e m aj ori ty' s protr ac ti on

appe ar s to clash

wi th n orms of statutory

co nst ru ct ion. The con ve rs e of th e m ax i m th at " [w ]her e th

e m ea n i n g of a statu te is unclea r, co ur t s may loo k beyo nd t he la nguage of the

statut e" (s l i

p op . a t 11 ) i s: "a

cou rt ma y not l ook b ey ond the pl ai n l an gua geof a stat ute if i ts meani ng i s unam

biguous" (em

phasi s ad ded) ( Pe o ple v. W

ard , 194 Ill . App. 3d 229, 234 (1990 )), lest

it "c re at e exc ept ions o r limi t at ions which are not co ntained i n the stat ute" ( Dar wish v. Nationwi de Mu tua l In su ran ceCo. , 246 Ill . App. 3d

903, 907 (19 93) ). A

l thou gh the maj ori ty di d n ot ult imat ely create an exce

ption or li

mi tation to the pla

in la nguage of the sta

tute , its extratextual anal ysi s was expr essly unde rt ake n t o d et er mine whet her it w ou ld make s uch a n amendment . That an alys is involves a discu ssio n of se ver al case s, bu t t he o nly one t hat has r elevanc e t o t he i nte rpreta ti on of se ct ion 2
-- 5( 11) , a nd t he o nly one t hat war ra nt s anyt hing beyond a ment ion by t he majo r it y, is Ber wyn L umb er . T he re, the supreme court construed a prior version of secti on 2--5, whi ch ex emp t ed "s ale s t o an y go ve rnme nt al b o dy orany ag en cy or i ns trum en tal i ty the reof " ( emp ha sis added) (Ill . Rev . Stat. 1963, c h. 12 0, par. 4 41). Th

e court re fused t o br oa den t he exe mpt ion beyo nd it s pla in la nguage an

d so rejected a l

umb eryard' s clai

m that i t was entitl ed

to an exem ption f orsales to entities that the co urt deter mi ned were not agents o r in strum en t alit ies o f ago ve rnme nt al b o dy. Be rwyn Lum

ber , 34 I ll. 2d at 32 3. Berwy n Lum ber supports t he m

aj ority' s strict

co nst ru ct ion o f the "governm ental body" exem

ption i n i ts current stat e. 2 Th e m

aj ori ty sh oul d have i nc orporated i tsNo. 2-- 06--0520

I ll. Laws 136) an

d have not appeared sin

ce. The am

endm ent ma kes pl ai n th e i nte nt of the l egi slature to now li m i t the ex em pti on to governm

en tal bodi es proper. -22- di scus si on o f Berwy n Lum ber i n to t he st at ut or y analysis rat her t han plac e it in t he lat er re gio ns of t he opini on where i

ts relev ance is not ful

ly appreci ated. The ma jori ty def ends i ts excess an

al ys is by assertin g that i ts c ons tructi on of

section 2--5(11) was but " the f

i rst step" of i

ts rev i ew. Sl i p op. at 11. The next ste p, c l ai m s th e m aj ori ty , i s to det er mine "w h eth er th e r ea son

i n g s et f orth in So ut he rn I llino is [is] ap plicable to LPFC su ch t ha t it was el igi ble for the exem

ption asan ag ent or i

n str um en tal i ty of th e V i l l ag e ev en

th oug h th e statu te does not ex

pres s tha t agen ts or i nstrumen tal i tie s of gove rnm en tal bodi es a re ex em pt." Sli p op. at 11. I disa gree. The onl

y l egi tim ate step lef

t was to determi

ne wh ether LFPC was

a governm

ental body pr op er -- and that was eas il y de ci ded , sin

ce LFPC c onceded the i ssue. The m aj ority' s second step eff ect ive ly defea ts th e c on cl us i on s of th e f i rs t ste p. I f i t i s a l eg i ti mate qu esti on f or th e m aj ori ty whether LPFC was an ag ent or instr ument ality o f the Vil l ag e, th en th e m aj ori ty m us t con si der i ts reli ance on t he pl

ai n te xt of the sta tute i nc onc l us i ve , f or oth erw i se i t woul d f i nd the que sti on of agency clearl y mooted. I d o no t unde rst and w hy t he major ity dr aws what app ear s t o be a de fini t ive co nc lu sio n o nly t o imp lied ly d isr eg ar d i t almo st imme di at ely. Southern I llino is is si mpl y i nappl ic abl e here an d does not

wa rra nt th e c ons i de rabl e a

tten ti on t he ma jori ty devot es to it. In discus si ng the case , the maj ority obse rves that sec t ion 1 of t he Retailers' Tax Act , w hich defines " pur chas er " as o ne wh o ac qui re s prop er

ty "for val uabl e consideration," does not recogniz e the

con ce pt of equ itable o wner ship t hat t he co ur t in So ut he rn I llino is fo un d imp lied in t he pr o pe r t y t ax st at ut e. T he majo r it y re as o ns t ha t , be ca us e t he Villa ge pr o vid ed no "v alu ab le co nsider at ion" for t he pe rso nal pr op er t y sold he re , it canno t be co nsider ed t he "p ur chas er ." TheNo. 2-- 06--0520

-23-

signifi cance of t his co nclusio n for t he exem ption i ssueis

not apparent, for t he m

aj ority n ever pl aces "purc ha ser" in context, leavi

ng une xpl ai ned h ow the term oper a tes

i n th e R eta i l er s' Ta x A ct to det er mine exem ptions. The m

aj ority protracts and compl ic ates wh at o ught t o ha ve bee n a straigh tforward appli

cation of s ection 2--5(11), the contro ll in g provisi on here. The major ity, int er est ingly, cite s t he disse nt fro m the d enial of r ehea ring in Poo h Bah Enterprises

to justif y i ts forging ahead to ad dress So ut he rn I llino is and the a gen cy question . Asi

de f rom t he fact t hat a disse nt "has no precedential v alue" ( Pe o ple v. Williams , 368 Ill . App. 3d 616, 621 (2006 )), t he intr aco ur t dispu t e in Pooh Bah sc ar ce ly re se mbles my

dif feren ces wi th the ma jori ty he re. In Po oh Bah , ba

r o wn er s a r gu ed t ha t a C hic ag o o r din an ce ba nnin g t he sa le o f alc o ho l in estab l i sh men ts that f eature nude dan ci ng vi olated the fi

rst and fourteenth am

endm ents to t he Un

ited Stat es Cons

tituti on (U.S. C onst., am

en ds . I, XIV) . The m

aj ori ty de cl i ne d to a ppl y the sta nd ard of strict scrutin y to the ordinan

ce, optin g i nstead f or in term edi ate scruti ny. Poo h Bah , 224 Ill . 2d at 415 n.12. The dissent acc use d t he major ity o f ignor ing t he authorities that t he b ar owners ci

ted for strict scrutin y rev ie w. The di ssen

t said: "The opini

on of thi s court o verlooks bot h of [the] recen t United St at es Su pr eme Courtf re e sp eec h cas es o n which t he de fendant s st ro ngly rely for t heir st rict scr ut iny argumen t. Rat her than

directl y a ddress a cent ra l arg ument debated at len gth by the parties in this case an d engage i n a thorough anal

ys is of these contentions, the court si mpl y rel egates this im port ant debate to a brief

footnot e i

n the opin ion. *** * * * I am deepl y troubl ed by

the court 's out-of-hand dism is sal of Pooh Bah's

strict scr ut iny ar gument for seve

ral addi tional reasons. *** [S]uch

co nduc t on t he part o f this court deniesNo. 2-- 06--0520

-24-

t he pa rties to this action the reass

urance that we hav

e caref ull y c onsi dered and del

ib erated t he ir argumen ts. What mes sa ge doe s th i s c our t se n d to li tigants wh

en i t do es not even b ot her to ad dr es s t he ce nt r al a r gu men t s r ais ed in t he irap pe als , es pe cia lly wh en t he y a re i ss ue s of constitutional

ma gni tude? I ven

ture t o say that

i t creates the p erce pti on tha t thi s court

has predetermi

ned the outco me

of the appeal

an d does n ot de em

i t n ec es sa ry to b oth er

wi th argu men ts t hat may cut in the o ppo site dire ct ion. In a ddit ion, by failing t o ad dr es s a nd fully anal yz e an i ssue such

as whether strict scrutiny applie s to t he ordin

ance ch al le n ged in t his case, this court fai ls to provide the b ench

and b ar with the guida

nce needed to dea l

wi th si mi la ris sues i n f uture cases . " ( E mph as is adde d.) Poo h Bah , 224 Ill . 2dat 452 -5 4 ( Fre eman, J., disse nti ng u pon de ni al of re h' g). The ma jori ty be li eves it is do ing t he se rvice t hat t he major ity in Poo h Bah shirke d. Lifting la nguagefrom

the Poo h Bah

dissent , t he ma

jori ty cl ai ms that "it i s appro priate to address t he parties' central argu men ts as lit iga t ed t o t his c o ur t " a nd t ha t it s d isc us sio n w ill pro vide "guidance" to t hose "at the admi

ni strative l

evel " (slip op. at 11). Ho wever contor ted, t he disse nt 's ac cus at ions in Pooh Bah wil l n ot fi t here. The i ssueof whether strict scrutiny applie d was "ce nt ra l" in Poo h Bah because it wa s a th re sh ol d q ue sti on f or re v i ewi n g th e Ch i ca go or di n an ce un der the f i rs t am en dm en t. Th e su pr eme co ur t dis po se d o f t he iss ue , no t by r en de r ing it lo gic ally imma t er ial in li g h t of a s ep arate hold ing( e.g. , d eciding t hat t he first amendment did n ot appl y a t all ), but by f in din g that a differe nt standard, inter mediat e sc ru t iny, app lied. H er e, t he major ity's ho lding t hat t he pl ai n l an gua geof se cti on 2-- 15( 11)excl

ude s a tax exem ption f oragents or instrumen

tali tiesof governm

ental bodie s extin guis hesthe separate question of w hether LF PC was the agen t o f the Vi

ll age . The su bject ive feel in gs of appel

la te li tigants that an

i ss uei s " centr

al " doesnot

make i t so. F or v ari

ousrea sons, n

otNo. 2-- 06--0520

-25-

al larguments " li

tigated to t hi s court" are decided b y thi s court. The particul

ar, and compel

li ng, rea son for the m

aj ority to di spe nse w ith t he ag en cy que sti on i s th at the p l ai n l an gua geof se cti on 2–5(11) forecloses

t he iss ue . T hu s, I am u na ble t o ap pr ec iat e w ha t "g uid an ce " t he majo r it y co uld hope t o give t ho se "a t t he a dminist ra t ive le vel" o n wh at mak es an a ge nt o r ins t ru ment alit y of a governm ental bod y f or pu rpos esof an exem ption un de rse ct io n 2
- - 5( 11 ) . T he r e is no usef ul gui dance f orthe maj ori ty to gi ve on a n i ss uetha t i ts c ons tructi on of secti on 2--5(11) altoget her str i psof v i tal i ty i n th i s c our t. Perhaps t he major ity wishes t o p ro vide ge ner al ill uminat ion in t he r ealm of ag enc y l aw. I be l i ev e the

maj ority errs i n i ts ex posi tion . The m

aj ori ty re aso ns t hat , a s t he Village c ou ld no t have legally issued bo nds in t he amo unt nece ssar y for t he co nst ru ct ion, LPFC co uld no t be actin g as t he Village's age nt in issuingits own bo nd s, be ca us e u nd er "b as ic a ge nc y-la w * ** t he pr inc ipa l is t he o nly source of an agent's authority" ( sl i p op . a t 15 ). Th e m

aj ori ty ci tes an Il l i noi s ca se, Merchants' Na t io na l Ba nk o f Pe o r ia

v. Ni ch ol s & Shep he rd C o. , 223 Ill . 41 (1906), and a section of A me rican Juris prudenceo n a ge nc y law . I pr es ume t he majo r it y is p ar ap hr as in g t he fo ll owing un derscored statements f

rom Am erica n Juri sprudence: "The au th ori ty of the agen

t is the v ery es sence of

the prin ci pal and agen t relations hi p. Unless ot herwise

ag r ee d, it i

nc l udes onl y authority to act for the b enef

i t of the pri nc i pal , and t he so ur ce o f the aut hor ity is always t he pr incipal, ne ver t he ag ent . *** An a ge nt ha s no implie d o rap pa r en t au t ho r it y t o do t ha t wh ich t he pr inc ipa l wo uld not be authorize d to do pe r so na lly ." (Em phasi s ad ded.) 3 Am. Jur. 2d Agen cy §68, at 482- 83 (20 07).No. 2-- 06--0520

-26-

Treatisesarenot bindi

ng on our cour ts ( I llino is State Toll Hi gh wa y A uthori ty v. A moco O i l Co. , 336 I ll. Ap p. 3d 30 0, 307 ( 2003) ) . This aside, I do not bel

ie ve the un derscored pri

n ci pl es ar e a pp rop riate for det ermi

ni ng whether an agency

relationshi

p exi sts between t he Vill

age and LPFC. The f i rs t pri n ci pl e, th at " th e s ource

of th e a uth ori ty is always t he pr incipal, ne ver t he agen t," is drawn from two cases: Al

ar v. Mercy

Mem orial Hospital , 208 Mi ch. App. 518, 529 N.W.2d 318 (1995 ), and K

uh n v . P.J . Ca

rl i n C ons tructi on Co. , 274 N. Y. 118 , 8 N. E. 2d 3 00 ( 193 7) . I n Al ar , t he pla int iff sought to bi

nd a hosp it al to the acts of a phy si ci an wh o t he h ospital cl ai me d was not an em ploy ee but a n i nde pen den t contractor, an

d wh ose acts the h

ospi tal clai med, al terna tiv el y , were not wit hin the scope of th

e age ncy . In add re ssing t he qu est ion whe t her , a ssu ming the physician was t he age nt of t he hospi

tal, the particul

ar act sue d up on w as w ithin t he physician's a ppa re nt aut hor ity, t he courtexpl ai ned that "ap par ent aut hor ity must be t ra cea ble to t he pr incipal and c anno t be establ is hed only by the act s and conduct o f the agent" ( Al ar , 208 Mich . App. at 528, 529 N. W.2 d at 323 )- -t he prop osi ti on par aphr ase d by American J ur ispru denc e. In Kuhn , where the plai ntif f s ought t o hold an em pl oy er ac cou n tab l e f or a pa rti cul ar ac t of a p ar ty wh o wa s u n di spute dl

y i ts e m pl oy ee , the c our

t, diminishing t he i

m port of th e age

nt' s own i ns i nua tions to thi

rd parties ab out hi s authority, rem arked that "the power to act and bi nd a pri nci pa lcom es f rom t he ac t s o f t he pr inc ipa l an d n o t fr o m his ag en t" ( Kuhn , 274 N .Y. at 134 , 8 N.E.2d at 306). Thi s, presum

abl y, was the concept that Am

erica n Juris prudenceso ught to enca

psul ate. Mer chant s' Na t ional Ba nk , st anding fo r t his same pr op os itio n, holds: "Th

e s ourc e of

authority is the pri

nci pal , and the power *** ca n o nly be pr o ve d b y t r ac ing it t o t ha t so ur ce in

some word or act o f the al le ged princi pal." Mer chant s' Na t ional Ba nk , 223 Ill . at 49. I fa il t o se e w ha t r o le t his co nc ep t pl ays here. LPFC h as not tried

t o ba se an ag en cy r ela t io nsh ip on an y th i n g oth er th an th e acts of the Vi ll age.No. 2-- 06--0520

-27-

The second unders cored prin ci ple , that "an agent has n

o im pli ed or apparent aut hority

to do that whi ch the pri nci pal would not b e auth

orized to do pers onal

l y ," i s al so i na ppl i cab l e h erebecause , by i ts terms, i

t restricts onl

y i m pli ed or app are nt au

thorit y, a nd t he au t ho r it y LP FC r elie s o n is express, conv

ey ed i n the un equi voca l decl arations of

the Vi l l age. Th e p rope

r cr i teri a f ordet er mini

ng t he exi stence of an

agency relationshi

p are " 'wh

ether the alle ged prin

ci pal has t he right t o c ont ro l the ma nne rand metho d in which wo rk is car ried ou t by the alleged age nt and w het her t he allege d ag ent can aff ect t he legal relationshi

ps of the princi

pal' " ( Oliveira- Bro ok s v. Re /M ax I nt er na t io na l, Inc. , 372 Ill . App. 3d 127, 134 (2007), quo ting A nd ers on v. Boy Scouts of Am

erica , Inc. , 226 Ill . App. 3d 44 0, 44 3 ( 19 92 ) ) . T his id ea is p er fec t ly int uit ive . On e c an r ea dily ima gin e a n ind ividua l be ing he ld ac co un t ab le f

or th e actsof

an othe r wh o, thoughcomm

ittin g those acts while

exerci si ng a profes si onal ortra de l i cen se th at th e f orm er l acke d, was

n on eth el es s s ub j ec t to s uf f i ci en t con trol th at a pr inc ipa lage nt rel ati ons hi p e xi ste d b etw een th

e tw o. There f

ore, thou gh the Vi l l ag e c oul d n ot is sue bo nd s in the amount tha t it cre at ed LP FC to issue, t his do es no t pr eclud e LP FC fro m being t he ag ent of t he Vil la ge. I expre ss no o pini

on o n whether LP FC was in fact the agent o f the Vill age under t hese prin ci ple s, because

the is sue i s i

mm aterial giv en the pl ai n thrust of the statuto ry l

anguage.