Court Opinion

ID: 9533627
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:33:19.780405+00
Date Added: 2024-06-11T13:29:06.174254
License: Public Domain

MR. JUSTICE UNDERWOOD, dissenting: As I read the court’s opinion it holds, in effect, that because the convention which drafted our 1970 Constitution did not say in article IX “The General Assembly is specifically prohibited from classifying real estate for purposes of taxation,” the legislature now possesses that power despite what seems to me an unmistakable manifestation of the convention’s contrary intention. Demonstration of that contrary intention will require more than a page or two, but the importance of the issue compels me to attempt it. The question, of course, is whether sections 20a — 1 through 20a — 3 of the Revenue Act of 1939 (Ill. Rev. Stat. 1973, ch. 120, pars. 501a — 1 through 501a — 3) constitute an invalid classification of real estate for purposes of taxation in violation of sections 4(a) and 4(b) of article IX of the 1970 State Constitution. Those sections provide as follows: “4. REAL PROPERTY TAXATION (a) Except as otherwise provided in this Section, taxes upon real property shall be levied uniformly by valuation ascertained as the General Assembly shall provide by law. (b) Subject to such limitations as the General Assembly may hereafter prescribe by law, counties with a population of more than 200,000 may classify or to continue to classify real property for purposes of taxation. Any such classification shall be reasonable and assessments shall be uniform within each class. The level of assessment or rate of tax of the highest class in a county shall not exceed two and one-half times the level of assessment or rate of tax of the lowest class in that county. Real property used in farming in a county shall not be assessed at a higher level of assessment than single family residential real property in that county.” At the outset, it is important to observe the manner in which article IX is structured. Section 1 confers broad powers upon the General Assembly to raise revenue, while sections 2 through 9 contain specific and exclusive limitations on such powers. The following explanation appears in the report of the Committee on Revenue and Finance with reference to section 1, which was adopted in substantially the same form as initially proposed by the committee: “The Committee does intend to place limits upon the General Assembly in its exercise of the tax power, but those limits are expressly stated and they are exclusive. *** The proposed wording *** [affirms] the sovereign power of the state and the General Assembly in Section 1 and then, in later sections, [sets] forth the specific restrictions which are intended to circumscribe the scope of the taxing power.” 7 Record of Proceedings, Sixth Illinois Constitutional Convention 2066 (hereafter referred to as Proceedings). Section 4 of article IX expressly restricts the manner in which revenue may be raised by taxation of real property. The opening sentence of section 4(a) sets forth the general rule that real estate taxes must be levied uniformly by valuation except as otherwise provided in section 4. Section 4(b) creates an exception to the general rule of uniformity by authorizing counties with a population of more than 200,000 to classify real property for purposes of taxation subject to limitations prescribed by the General Assembly. Since the exception permitting classification is expressly limited to counties with populations of more than 200,000, it is evident that any law establishing classification in counties with populations of less than 200,000 would not fall within the section 4(b) exception and would clearly violate the general rule of uniformity contained in section 4(a). This is the view expressed by this court in Hamer v. Kirk (1976), 65 Ill. 2d 211, 219, where it was said in considering a related question: “The Constitution permits the classification of real property for purposes of taxation only in counties with a population of more than 200,000.” The language of section 4(b) also plainly states that classification in counties which may classify is permissive and not mandatory. While the General Assembly may well have broad authority pursuant to section 4(b) to enact laws affecting the manner in which such counties may classify, the power to prescribe “limitations” cannot fairly be construed to include the power to enact laws mandating classification in counties which do not wish to do so. The explanation accompanying the official text of section 4 of article IX, as it was submitted to and adopted by the voters, clearly recognizes that the general rule of uniformity is applicable to all counties except those with populations of more than 200,000 which “may” classify real estate for taxation purposes. The explanation states: “This replaces parts of Article IX, Sections 1 and 3 of the 1870 Constitution. Any tax on real property must be uniform and based on the value of the property, except in counties which are permitted to classify real estate for taxation purposes. Counties with more than 20.0,000 population may divide real property into reasonable classes with uniform assessments within each class, subject to regulation by the General Assembly. The highest class in a county may not be assessed or taxed at a rate more than two and one-half times that of the lowest class. This section also protects farm property in a county from being assessed at a level higher than that of single-family residential real property.” 7 Proceedings 2736-37. It is highly significant, in my opinion, that section 5 of article IX, which is concerned with personal property taxation, expressly provides that the General Assembly shall have authority to classify personal property. Section 5(a) provides: “The General Assembly by law may classify personal property for purposes of taxation by valuation, abolish such taxes on any or all classes and authorize the levy of taxes in lieu of the taxation of personal property by valuation.” The Committee on Style, Drafting and Submission offered the following explanation for that language: “In the light of the structure of this Article as discussed in the Explanation of Section 1, it can be argued that Subsection (a) is superfluous. The sentence contains no limitations on the power to tax. Unlike Section 4, there is no opening limitation of uniformity to which exceptions for classification are necessary. Nevertheless, in view of the history of the Revenue Article of the 1870 Constitution, it may be appropriate to emphasize the power of the legislature to classify, to abolish taxes on given classes, and authorize personal property taxes not based on valuation.” (7 Proceedings 2252-53.) The inclusion of the uniformity requirement in the section dealing with real estate (art. IX, sec. 4) together with the authorization for counties over 200,000 to classify, when considered in the context of the express grant of legislative authority to classify personal property contained in section 5 is, in my judgment, quite persuasive, if not conclusive, evidence of an intent to restrict the power to classify real estate for taxing purposes to those counties of more than 200,000 population. This is the conclusion of the authors of the commentary on the 1970 Constitution (Ill. Ann. Stat., 1970 Const., art. IX, sec. 4, Constitutional Commentary, at 176 (1971)), who state: “Section 4 seems to prohibit the classification by the State and other units of government of real estate for tax purposes, except in counties of 200,000 or more in population (there were 8 such counties under the 1970 census). Within the exception, classification is subject to limitations contained in Subsection 4(b) and to such further limitations as may be prescribed by law. This limited power to classify real estate for tax purposes represented a compromise at the Convention between those who opposed any classification and those who wanted all counties to have the right of classification.” Vesting in the General Assembly authority to place limitations upon the power of the populous counties to classify is entirely consistent with an intention to have a degree of uniformity in the classification systems adopted by those counties having power to do so. My conclusions are strengthened by examination of the proceedings of the convention, which shows that from the beginning the framers of the present Constitution felt that the de facto classification of real estate for purposes of taxation, which had developed in Cook County since the adoption of the 1870 Constitution, was a matter that should be expressly dealt with in the 1970 Constitution. The initial proposal of the Committee on Revenue and Finance provided as follows: “Section 4.1 — Real Property Taxation Any county over 200,000 population is authorized to classify real property for taxation purposes. The General Assembly shall establish a system of classification of real property for taxation purposes, which system may be adopted by any other county in lieu of uniform taxation of real property. In any county the level of assessment or rate of taxation of the highest class shall not be more than two and one-half times the level of assessment or rate of tax of the lowest class.” (7 Proceedings 2108.) The committee report included these comments and explanation: “Article IX, Section 1 of the present constitution requires that the property tax be uniform according to value and, except for certain specified exemptions, that it apply to all kinds of real and personal property.” 7 Proceedings 2109. “The provisions permitting counties of more than 200,000 population to classify real estate represent a recognition of the desirability of permitting the de facto system of classification in Cook County to continue and of the stated desire to have it extended to other counties. This system has developed out of the experience of many years. Given the necessity of raising large sums of money from property taxation, it reduces the harmful effects of the tax by placing more of the burden upon those kinds of property which are unique to the central city or which obtain special advantages from a central city location. The Committee also recognizes the fact that an abrupt shift from the present system to a system of uniformity would create political, administrative and legal chaos. The decision to permit other populous counties to classify real estate stems from the Committee’s recognization [síc] that several of these counties are part of the Chicago Metropolitan Area and that all of them face, or may face, problems similar to those which resulted in the development of the present system in Cook County. The proposal will permit each of these counties to adopt a system similar to that used in Cook County or to develop a system better adapted to its own particular circumstances. Analysis of the problem and the testimony of those who appeared before the Committee indicates that there is less need and less desire for classification of real estate in the less populous counties. The Committee feels that it would be undesirable to permit 102 different systems of real estate taxation in the state. Nevertheless, the Committee does not believe that it is desirable to prevent any possible future use of classification. The suggested language requires the General Assembly to develop a system of classification suitable for the less populous counties ■ and to give counties the option of adopting the system or continuing to assess on a uniform basis.” (7 Proceedings 2115-17.) It is important, in my opinion, to note that the convention deleted from this proposal the language which would have authorized the General Assembly to establish a system of classification which any county choosing to do so could adopt. The report also made reference to the fact that other States had adopted comprehensive systems of real estate classification. Exhibits attached to the report showed that in Arizona the rate of assessment ranged from 18% to 60%, in Minnesota from 5% to 50%, and in Montana from 7% to 100%. A number of committee members filed dissenting statements indicating their strong opposition to classification of real property for taxation purposes, citing statements from taxing officials in Minnesota to the effect that the classification system in that State had been a total failure and should not be attempted in other States. (7 Proceedings 2125.) Other committee members objected to any form of classification outside of Cook County. 7 Proceedings 2127. When the committee’s proposal was brought before the convention for its consideration, it became apparent that there was a division between those delegates who favored classification, those who favored it only for Cook County and the surrounding “collar” counties, and those who opposed it for any county. The committee’s rationale for the proposal regarding classification is illustrated by the following discussion between Delegates Tomei and Scott: “MR. TOMEI: Finally, I think I would like to ask just a general philosophical question, and that deals with the rationale for classification of real property. I understand, of course — I can understand the classification when it comes to income, because we know it’s a factor of ability to pay — and we may get to that through the exemption route or some other means, if we have the flat rate tax proviso — but I wondered what the rationale is, in the committee’s opinion, for this type of classification with respect to real property. MR. SCOTT: I would have to be 100 percent honest with you; I don’t think you can get very many authorities that would defend, on an economical basis, the classification of real estate for taxation purposes. But let’s be realists. I know, as I stand here before you, that no revenue article amendment is going to pass that doesn’t in ' some way, maybe with some restrictions, make legal the de facto classification in Cook County.” 3 Proceedings 1898. The following discussion concerning the vesting of power in counties over 200,000 to classify real estate for taxation is also pertinent: “MR. WHALEN: Mr. Scott, I was wondering what the rationale of the committee was for vesting in the General Assembly the power to classify personal property, but not vesting that power in the General Assembly in counties over 200,000 for realty? MR. SCOTT: That is a hard one to answer, but the honest answer was that the consensus — or at least that day we voted ten to eight — the ten favored that we leave it to, really, the county boards in those counties. That’s about the best answer I can give you. MR. WHALEN: You favored doing it, but I don’t understand the reason for it. MR. SCOTT: Well, I guess the reason for it, and my reason would be for it — the only reason I could give— would be really that property taxes go — the revenues therefrom go — to the local governments, and it should be a local problem, if this Convention goes that way or goes on record and supports that view; and the best body to determine it at the local level is the county board, and, as you know, now we also have mandatory supervisors of assessments, and that is a county officer who will be working with the county board. ***” (3 Proceedings 1901-02.) That discussion is indicative, as are others, of the intent that the General Assembly, even as to counties over 200.000, have no power to classify as to real estate. A proposed amendment to do away with any form of classification by requiring uniform assessment of real property throughout the State was debated and defeated. (3 Proceedings 1997-2016.) Another amendment which would permit classification only in counties of over 2.000. 000 was also defeated in the face of opposition by delegates from the collar counties in which there were taxing districts which overlapped with Cook County. 3 Proceedings 2017-20. In an attempt to reach a compromise between the opposing viewpoints, Delegate Karns, who was chairman of the Committee on Revenue and Finance, proposed the following amendment: “Taxes upon real property shall be levied uniformly by valuation which shall be ascertained in such manner as the General Assembly shall prescribe by law — provide by law, provided that, subject to such limitations as the General Assembly may hereafter prescribe by law, counties may classify or continue to classify real property for purposes of taxation. Any such classification shall be reasonable and assessments shall be uniform within each class. Real property used in agriculture shall be assessed at the same level of assessment as single-family residential real property.” (3 Proceedings 2021.) The effect of the proposed amendment was to establish the concept of uniformity of real property taxation as a general rule but to permit all counties to classify at their option subject to limitations prescribed by the General Assembly. This amendment was adopted but then subsequently modified to limit the classification power to the counties over 200,000. Quite significantly, as indicated earlier, the amendment eliminated entirely the original concept that the General Assembly could establish a system of classification which could be adopted by counties under 200,000 in lieu of uniform taxation. It is also important, in considering the validity of the statute before us which requires classification at the request of the owner of qualified land, to recognize that while the convention contemplated that the General Assembly would retain the right to enact laws limiting the manner in which the populous counties classify, it was not intended that any county could be required to classify.The following discussion is relevant: “MR. HENDREN: I would like to ask Mr. Kams a question. Delegate Kams, in the second sentence, my question is — not being an attorney — could the General Assembly by statute mandate classification in my county? MR. KARNS: No.” 3 Proceedings 2025-26. “MRS. LEAHY: Mr. Kams, I am really just trying to understand what this amendment does. MR. KARNS: Fine. MRS. LEAHY: Now as I understand it, in your first sentence you decree uniformity but you do not define any standard upon which the uniformity shall be measured. Right? The General Assembly provides that. It can be 55 percent of fair market value or cash value or full fair value or whatever they set up. Right? MR. KARNS: Right. MRS. LEAHY: The only time they move into the picture, in terms of classification, is after the county has decided to classify. Right? MR. KARNS: Wrong. I think they could — I would assume they could move into the picture of classification at any time, if they chose. MRS. LEAHY: But you answered Mr. Hendren and said they could not mandate classification. MR. KARNS: No, that’s right. MRS. LEAHY: Could they decide- MR. KARNS: That’s a different proposition, I submit — mandating it and enacting legislation in that subject. MRS. LEAHY: Well, I thought one included the other. Let me ask, could the General Assembly pass a statute saying that any county over 200,000 population must classify — must do it in the following manner? MR. KARNS: No, they cannot require classification, but they may prescribe guidelines, whether or not any county is classified. MRS. LEAHY: Okay. Now — so in a sense, though, they really only have effect after the county has decided to classify. Then they can prescribe how. MR. KARNS: No, no. They could set up standards prior to any classification in any given county. MRS. LEAHY: Yes, but they would have no effect if no county decided to classify. MR. KARNS: That’s right.” 3 Proceedings 2026. “MR. SHUMAN: Mr. Karns, could you tell me, in the absence of any law enacted by the General Assembly, could a county choose to classify, if this provision was a part of our constitution? MR. KARNS: Yes. MR. SHUMAN: Could every county choose to classify in the absence of any limitations imposed by the General Assembly? MR. KARNS: If it chose.” (3 Proceedings 2027.) These questions and answers occurred, of course, prior to the adoption of the 200,000 limitation. After further discussion, the Karns admendment was adopted and later modified by adding the 200,000 limitation. A discordant note, stressed by defendants and emphasized in the majority opinion, was inteijected during a colloquy on a subsequent date between Delegates Karns and Parkhurst: “MRS. LEAHY: Does this mean that the state may not classify real property? Or did the Revenue Committee take a position on that?. MR. KARNS: Well, we — I think we reserved — an attempt was to reserve to counties the initial ability to classify real, real property. However, you will notice the first sentence of 4(b) says, ‘Subject to such limitations as may hereafter be prescribed by law.’ That would give the state an opportunity, if — we assume that if the matter got out of hand, or if they wanted to impose some limitations or restrictions or general laws dealing with the matter, they would have the ability to do so. MRS. LEAHY: I think, though, the question is directed to 4(a). MR. PARKHURST: May I comment? MR. KARNS: Go ahead. MR. PARKHURST: *** On this one, the question raised by Delegate Leahy about the state’s authority to classify, I would say the same answer pertains to the answer I asked of Delegate Scott a moment ago about assessing. If there’s no prohibition — if there’s no prohibition in the constitution which prohibits the state from classifying — and I see none — it looks to me like the authority to classify is permissive for counties; and, therefore, it does not preclude the state from doing it.” (5 Proceedings 3822.) In judging the accuracy and relevance of Delegate Parkhurst’s statement, however, it should be remembered that he was not a member of the committee, and, apparently, expressed only his own opinion. The delegates then adopted the amendment proposed by Delegate Hendren which limited classification to counties with over 200,000 inhabitants. (5 Proceedings 3896.) Following that, Delegate Karns proposed an amendment which would delete the last sentence of section 4(b), which read: “Real property used in farming in a county shall not be assessed at a higher level of assessment than single-family residential real property in that county.” (5 Proceedings 3907.) The proceedings include the following explanation and discussion which indicate an intent to limit classification to counties with populations of more than 200,000: “MR. KARNS: I would just say in behalf of this amendment that we just adopted an amendment introduced by Mr. Hendren which I believe makes the last sentence unnecessary in section 4(b). As you will recall, I was the architect of this accommodation some months ago, and the last sentence at that time was a sentence that was desired by the agricultural community. I understand, now, that they would prefer that that sentence not be in there — that they have some reservation about its presence perhaps rendering some constitutional infirmity in this section — at least, that’s the opinion of their counsel. I have not read his opinion, so I am not fully aware of the reasoning — the reasons behind it. However, with the— when we limit the classification to counties over 200,000, I don’t think that the last sentence is necessary in any event, so I would ask that that be removed. * * * MR. LEWIS: Mr. Vice-President, unless Delegate Kams has information other than what I have, the feeling among the farm community is that since it may — it might — be unconstitutional, that they wanted protection in having no classification downstate with any respect to farm communities. We have taken action that still leaves classification in seven counties. Therefore, the protection is still needed for those seven counties, and it — while it might have some problems constitutionally, they would want it left in; and the protection is still needed in those counties, certainly, in order to make it somewhat uniform with the status downstate where there is no classification, so I would urge us not to strike this sentence. It is my understanding of the experts with respect to the farm community that they still want the possible protection that it affords in those seven counties. If it is stricken by the courts later, fine; but they want at least to have a go at it on those seven counties. They would have much preferred to have no classification except in Cook County, but since there was a desire to put in some other larger counties, they certainly were willing to go along with the 200,000 limit; but I would ask that we not delete this sentence so that there will be that protection in those seven counties. VICE-PRESIDENT SMITH: Delegate Mathias? MR. MATHIAS: Well, Mr. Vice-President, I agree with what Mr. Karns said with respect to the opinion of the counsel for the Illinois Agricultural Association. He was afraid of this section. I have doubts myself, but — and I think that Mr. Kams is entirely right — in the counties of less than 200,000 population there is no need for this sentence. * * * MR. LEWIS: Mr. Vice-President, wouldn’t I be correct that the effect of the Hendren amendment is to apply section (b) only to counties of 200,000 or over; and, therefore, the sentence that Delegate Kams seeks to strike is only modifying, or only with respect to counties of 200,000 or more? The rest of the counties would fall under section (a) where classification is restricted. Would that not be correct? VICE-PRESIDENT SMITH: I think your question really calls for a legal interpretation, and that would be my personal interpretation; but I don’t think we can categorically say, as a Convention, that that’s correct or incorrect. Delegate Hendren? MR. HENDREN: I just wanted to say, for the record, that that was the purpose of submitting the amendment, as outlined by Mr. Lewis.” (5 Proceedings 3907-08.) The Kams amendment to delete the last sentence of section 4(b) was adopted (5 Proceedings 3910), but the sentence was subsequently reinstated. Considering the structure and language of sections 4(a) and (b) of article IX together with the contrasting provisions of section 5 of article IX, and the actions and discussions in the constitutional convention, I am convinced that the sole power of the General Assembly, in the area of classifying real estate for purposes of taxation, is to prescribe limitations upon the power of counties over 200,000 to do so. It seems to me entirely clear that the delegates to the convention included those who opposed any classification of real property for tax purposes, those who favored authorizing the General Assembly to prescribe a permissive classification scheme which any county could adopt, and those who favored classification only in the larger counties, and that the result of much debate and discussion was the adoption of a compromise. That compromise was motivated by a recognition that a new constitution which did not continue the existing de facto classification in Cook County probably would not be adopted by the voters. Since the counties surrounding Cook shared many of its problems and embraced overlapping taxing districts, they, too, should have classification powers, and the authority was finally enlarged to include all counties over 200,000. Efforts to expand beyond that point were repeatedly beaten back, and the original concept that the General Assembly could enact a classification system optional with the counties was eliminated. Recognizing, however, the need for some uniformity in the classification systems which might be adopted by the counties over 200,000, the convention did authorize the General Assembly to prescribe limitations upon their power. I simply cannot, however, agree that the convention intended to empower the General Assembly to establish a mandatory, statewide classification system under which any tract of land 10 acres or more in size and used for agricultural purposes qualifies for favorable tax treatment. My colleagues, however, have concluded that the legislature possesses the power to classify real estate for purposes of taxation. They reach that conclusion, it seems to me, by a selective process of stressing the sovereign power to tax and ignoring the limitations thereon, emphasizing language referring to proposals which the constitutional convention rejected and characterizing as equivocal what I view as clear expressions of the purpose of that body in adopting the present language of article IX. In so doing the majority has, I fear, permitted its enthusiasm for classification to overcome the fact that our function is to determine what the drafters of our constitution intended, not what we may believe preferable. In my opinion sections 20a — 1 through 20a — 3 of the Revenue Act of 1939 are unconstitutional in toto. MR. CHIEF JUSTICE WARD joins in this dissent.