Wirtz v. Quinn

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Wirtz v. Quinn

State: Illinois

Court: 1st District Appellate

Docket No: 1-09-3163, 1-10-0344 Cons. NRel

Case Date: 01/26/2011

Preview:THIRD DIVISION January 26, 2011

Nos.

1-09-3163 1-10-0344

W. ROCKWELL WIRTZ, an Individual and ) WIRTZ BEVERAGE ILLINOIS, LLC, an Illinois Limited Liability Company, on Behalf of and for the Benefit of the Taxpayers of the State of Illinois, Plaintiffs-Appellants, v. PATRICK QUINN, in His Official Capacity as Governor of the State of Illinois; DANIEL W. HYNES, in His Official Capacity as Comptroller of the State of Illinois; ALEXI GIANNOULIAS, in His Official Capacity as Treasurer of the State of Illinois; THE DEPARTMENT OF REVENUE; BRIAN HAMER, Director of Revenue; THE ILLINOIS GAMING BOARD; AARON JAFFE, CHARLES GARDNER, EUGENE WINKLER, JOE MOORE, JR., and JAMES E. SULLIVAN, as Members of the Illinois Gaming Board; THE ILLINOIS LOTTERY; and JODIE WINNETT, Superintendent of the Lottery, Defendants-Appellees.

Appeal from the ) Circuit Court of ) Cook County. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Honorable ) Lawrence O'Gara, ) Presiding Judge.

PRESIDING JUSTICE QUINN delivered the judgment of the court, with opinion. Justices Neville and Steele concurred in the judgment and opinion. OPINION Plaintiffs, W. Rockwell Wirtz and Wirtz Beverage Illinois, LLC, on behalf of all taxpayers situated in the State of Illinois, brought this suit pursuant to section 11-303 of the

Nos. 1-09-3163, 1-10-0344 Illinois Code of Civil Procedure (Code) (735 ILCS 5/11-303 (West 2008)), seeking to enjoin the disbursement of public funds by the defendant public officials in connection with the "Capital Projects Acts," four pieces of legislation passed by the Illinois General Assembly and signed into law by Governor Patrick Quinn on July 13, 2009. Specifically, plaintiffs alleged that the Capital Projects Acts, three substantive bills and one appropriation bill (now Public Acts 96-34, 96-35, 96-37 and 96-38), violated provisions of the Illinois Constitution, including the single subject rule, the uniformity clause, the requirement that an appropriation bill be confined to the subject of appropriation, the requirement that public funds be used only for public purposes and the requirements of separation of powers and effective date of laws. The circuit court denied plaintiffs leave to file their complaint and plaintiffs' motion to reconsider. Plaintiffs now appeal. For the following reasons, we find that Public Act 96-34 was enacted in violation of the single subject requirement of our state constitution and, therefore, Public Act 96-34 is void in its entirety and because Public Acts 96-35, 96-37 and 96-38 are contingent on the enactment of Public Act 96-34, these public acts cannot stand. I. BACKGROUND Plaintiffs' complaint challenged the constitutionality of Public Acts 96-34, 96-35, 96-37 and 96-38. A. Public Act 96-34 Public Act 96-34 is titled "AN ACT concerning revenue." Article 5 of Public Act 96-34 creates the Video Gaming Act, which allows licensed retail establishments where alcoholic liquor is served for consumption, licensed fraternal establishments, and licensed veterans establishments

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Nos. 1-09-3163, 1-10-0344 and truck stops to conduct video gaming. Public Act 96-34 also amends the Riverboat Gambling Act to provide for administration and enforcement of video gaming by the Illinois Gaming Board. The bill also amends the Illinois Criminal Code to provide that gaming under the Video Gaming Act is not illegal gambling under Illinois law. Public Act 96-34, article 800, creates the Capital Spending Accountability Law, which requires the Governor's Office of Management and Budget to make reports each quarter on the State's capital projects. Section 905 of Public Act 96-34 amends the State Finance Act to: (1) create the Capital Projects Fund and require transfers to the General Revenue Fund and that the Capital Projects Fund be used for capital projects and debt service; (2) create the Local Government Video Gaming Distributive Fund; and (3) stop all diversions from the Road Fund to the Secretary of State and State Police. Public Act 96-34, section 910 and 925, also amends the Use Tax Act and Retailers' Occupation Tax Act to provide that candy, certain beverages, and grooming and hygiene products are taxed at the 6.25% rate (instead of the 1% rate) and to require deposit of the increased revenue into the Capital Projects Fund. Section 900 amends the Illinois Lottery Law to allow the Department of Revenue to conduct the Lottery through a management agreement with a private manager and to authorize a pilot program to allow the purchase of Illinois Lottery tickets on the Internet. Section 935 amends the University of Illinois Act to require the University to conduct a study on the effect on Illinois families of members of the family purchasing Illinois Lottery tickets and to report its findings. Section 945 of Public Act 96-34 amends the Liquor Control Act of 1934 to increase the

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Nos. 1-09-3163, 1-10-0344 tax on wine, beer, and alcohol and spirits. Section 955 amends the Illinois Vehicle Code to increase various fees and fines and to make changes concerning truck load and weight restrictions. B. The FY2010 Budget Implementation Act (Public Act 96-37) Public Act 96-37 creates the FY2010 Budget Implementation (Capital) Act (the BIMP) and is titled "AN ACT concerning government." Contingent upon Public Act 96-34 becoming law, the BIMP amends the provisions in Public Act 96-34 including those pertaining to the private manager for the lottery and to the central communications system for the video gaming program. The BIMP adds a new section 85 to the Video Gaming Act, making its provisions severable pursuant to section 1.31 of the Statute on Statutes (5 ILCS 70/1.31 (West 2008)). Also contingent upon Public Act 96-34 becoming law, the BIMP clarifies that, while the proceeds of the new liquor tax are to be deposited into the Capitol Projects Fund, the existing liquor tax amounts are to be deposited into the General Revenue Fund. The BIMP also makes the additional tax severable under section 1.31 of the Statute on Statutes. The BIMP contains other provisions, including: a provision that amends the River Edge Redevelopment Zone Act to provide for the certification of a pilot river-edge redevelopment zone in Elgin in 2009; a provision amending the Vehicle Code to mandate a financial disclosure in rental car contracts for consumers; provisions creating an urban weatherization program; provisions adding Gaming Board peace officers; and provisions authorizing the Capital Development Board to provide grants to fund capital projects to improve or renovate a hospital's facility or to improve, replace, or acquire equipment or technology.

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Nos. 1-09-3163, 1-10-0344 C. The Trailer Bill (Public Act 96-38) Public Act 96-38 (the Trailer Bill) is titled "AN ACT concerning government," and is a trailer bill to Public Act 96-34. The Trailer Bill amends certain provisions of Public Act 96-34, if and only if Public Act 96-34 becomes law. Contingent upon Public Act 96-34 becoming law, the Trailer Bill changes the effective date for the increase in taxes on candy, certain beverages, and grooming and hygiene products to September 1, 2009 (rather than August 1, 2009). Contingent upon Public Act 96-34 becoming law, the Trailer Bill amends the Video Gaming Act by: (1) making changes concerning the residency requirements for licensing; (2) clarifying that the 50% split of the after-tax profits from a video gaming terminal is mandatory "notwithstanding any agreement to the contrary" between the licensed establishment and the video gambling operator; and (3) adding a severability clause. D. The Appropriation Bill (Public Act 96-35) Public Act 96-35 (the Appropriation Bill) is titled "AN ACT making appropriations." The Appropriation Bill provides appropriations for public funds for projects provided by Public Act 96-34 and the BIMP. The Appropriation Bill contains an article making its effectiveness contingent upon Public Act 96-34 becoming law, providing that it "does not take effect at all unless [Public Act 96-34], as amended, becomes law." The Appropriation Bill includes a provision that "[n]o contract shall be entered into or obligation incurred for any expenditures for appropriation in Sections 5 and 10 of this Article until after the purposes and amounts have been approved in writing by the Governor." The Appropriation Bill also creates a grant program for the Environmental Protection Agency for

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Nos. 1-09-3163, 1-10-0344 wastewater compliance, but only where "[t]hese grants are limited to projects for which the local government provides at least 30% of the project cost. There is an approved compliance plan, and there is an enforceable compliance schedule prior to grant award." E. Trial Court Proceedings On October 20, 2009, the circuit court entered an order denying plaintiffs leave to file their complaint challenging the constitutionality of Public Acts 96-34, 96-35, 96-37 and 96-38. In doing so, the circuit court stated as follows: "This matter is an action that restrained and enjoined the disbursement of public funds by any officer or officers of the state government and that may be maintained under our laws by the Attorney General or any citizen and taxpayer of the state. In this case, this is a hearing pursuant to that statute regarding the bringing of the action by a citizen taxpayer. And the determination for this court to make is *** whether or not there's reasonable ground for the filing of such an action by, in this case, a citizen taxpayer. *** And in making the court's decision, in addition to reviewing the written submissions and listening to the arguments of counsel, I have to remain constantly aware that the judiciary close [sic] the legislative process and the legislation with a strong constitutional presumption, and, further, that the language they used in the submissions before the court clearly is not the language of common everyday

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Nos. 1-09-3163, 1-10-0344 conversation, which is clearly evidenced by the discussion of the single subject rule that perhaps only lawyers or legislative analysts would conceive or define in the way that our courts have defined in a very, very broad, liberal sense, quite differently than most people on the street would define `single subject.' But the court has gone through all of the counts of the complaint, reviewed all the authorities and citations as to argument by counsel, and based on all of the authorities that have been submitted, the issue is whether or not a reasonable ground [for] filing a complaint is found, and this court respectfully finds in the negative, and, therefore, the petition to file is respectfully denied." On November 18, 2009, plaintiffs filed a notice of appeal from the circuit court's order denying leave to file their complaint (No. 1-09-3163). On January 29, 2010, the circuit court denied plaintiffs' motion for reconsideration and plaintiffs filed a second notice of appeal (No. 1-100344). On February 18, 2010, this court consolidated the two appeals. On appeal, plaintiffs contend that the circuit court failed to apply the proper standard under section 11-303 of the Code (735 ILCS 5/11-303 (West 2008)), and the circuit court should have allowed plaintiffs leave to file their complaint which stated constitutional claims, including violations of the single subject rule, the uniformity clause, the requirement that an appropriation bill be confined to the subject of appropriation, the requirement that public funds be used only for public purposes and the requirements of separation of powers and effective date of laws.

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Nos. 1-09-3163, 1-10-0344 II. ANALYSIS A. Standard of Review Plaintiffs' petition for leave to file their complaint was brought under section 11-303 of the Code (735 ILCS 5/11-303 (West 2008)). Section 11-303 provides: "Such action, when prosecuted by a citizen and taxpayer of the State, shall be commenced by petition for leave to file an action to restrain and enjoin the defendant or defendants from disbursing the public funds of the State." Section 11-303 further provides that if the court is satisfied that there is "reasonable ground for the filing of such action, the court may grant the petition." 735 ILCS 5/11-303 (West 2008). Our supreme court has held that a proposed complaint presents "reasonable grounds" for filing suit when there is nothing to indicate that the purpose of the petition "is frivolous or malicious." Strat-O-Seal Manufacturing Co. v. Scott, 27 Ill. 2d 563, 566 (1963). Whether a statute is unconstitutional is a question of law subject to de novo review. Lebron v. Gottlieb Memorial Hospital, 237 Ill. 2d 217, 227 (2010); People v. Olender, 222 Ill. 2d 123, 131 (2005). We are mindful that legislative acts are afforded a considerable presumption of constitutionality. Olender, 222 Ill. 2d at 132. B. Single Subject Rule We first consider plaintiffs' argument that the legislature violated the single subject rule of the Illinois Constitution (Ill. Const. 1970, art. IV,

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