PRIMECO PERSONAL COMMUNICATIONS, L.P., еt al., Appellees and Cross-Appellants, v. THE ILLINOIS COMMERCE COMMISSION et al., Appellants and Cross-Appellees.
Nos. 89075, 89084 cons.
Supreme Court of Illinois
March 29, 2001
Rehearing denied June 4, 2001.
196 Ill. 2d 70
Circuit court judgment reversed; cause remanded.
James E. Ryan, Attorney General, of Springfield (Joel D. Bertocchi, Solicitor General, and A. Benjamin Goldgar, Assistant Attorney General, of Chicago, of counsel), for appellant Illinois Commerce Commission.
Mara S. Georges, Corporation Counsel, of Chicago (Lawrence Rosenthal, Benna Ruth Solomon and Julian N. Henriques, Jr., of counsel), for appellant City of Chicago.
Caesar A. Tabet and Karina H. DeHayes, of Tabet, DiVito & Rothstein, LLC, and William R. Quinlan and Jean M. Prendergast, of Quinlan & Crisham, Ltd., all of Chicago, for appellees Primeco Personal Communications, L.P., et al.
Marvin A. Miller, of Miller, Faucher & Cafferty LLP, Lawrence W. Schad and Stephen B. Diamond, of Beeler, Schad & Diamond, P.C., Myron Cherry and Matthew D. Tanner, of Cherry & Lehman, LLC, Robert A. Holstein and Thomas A. Zimmerman, Jr., of Stern, Holstein, Zimmerman & Hanson, P.C., Lee J. Schwartz, Kevin M. Forde and Edward R. Vrdolyak, all of Chicago, for intervenor appellees Dr. William Spillman et al.
Roger Huebner, of Springfield, for amicus curiae Illinois Municipal League.
In this case, we are asked to decide whether the “municipal infrastructure maintenance fee” (the municipal IMF) (see
The defendant is the Illinois Commerce Commission (ICC), the state agency with the responsibility of regulating certain aspects of the telecommunications industry in Illinois. The intervening defendant is the City of Chicago, one of the municipalities that has passed an ordinance imposing a municipal IMF. The defendant and the intervening defendant (the defendants) argued that the
The trial court agreed with the plaintiffs that the municipal IMF was unconstitutional and struck it down on its face. Because the circuit court invalidated an Illinois statute, the defendants took their appeal directly to this court. See 134 Ill. 2d R. 302(a)(1). While we agree that the municipal IMF is unconstitutional as applied to the plaintiffs in this case, we do not find it to be invalid on its face. A recitation of the pertinent facts in this case is necessary in order to frame the legal issue presented to us.
BACKGROUND
For decades, the public rights-of-way have been available for use by the telecommunications industry. Historically, landline providers (i.e., telecommunications providers who transmit messages by means of cable wire) have built, owned, and maintained a wire-based (or fiber-optic-cable-based) infrastructure by placing telecommunications cables, poles, switching equipment, terminal boxes, manhole covers, concentrators, splicing cases, and other equipment in and under the public streets and roadways. The landline providers use this infrastructure to transmit telephone calls or other data for their customers. However, the landline system is no longer the only means of sending and receiving telecommunications. For many years, it has been possible to send and receive telecommunications without the use of wires or cables—in other words, by wireless means. In order to facilitate the transmission of wireless telecommunications, however, an alternate infrastructure had to be established.
Wireless telecommunications providers transmit messages through the air by means of microwavе transmissions rather than cable wire. The wireless infrastructure
At the present time, it is impossible for the wireless providers to rely entirely on their own wireless infrastructure to send and receive most telecommunications. For instance, if a cellular customer wishes to call a land-based telephone, the signal must pass through the landline system (at least for the last pоrtion of the call) in order for it to reach the landline customer. Conversely, when a landline customer wishes to call a wireless customer, the landline provider must use the wireless provider‘s infrastructure to complete the call. In order to facilitate the completion of such calls, the wireless and landline providers have negotiated “interconnection agreements” by which they pay each other specified amounts based on a standard charge for each minute that a landline provider uses the wireless infrastructure and vice versa.
Wireless and landline usage intersect in other situations as well. For instance, when a cellular customer wishes to call another cellular customer (even if both customers use the same wireless provider), the wireless customer places the call, which is then received at a cell
In order for a wireless provider to obtain the right to transmit its electromagnetic signals through the landline system, it must lease the capacity from a landline provider. When a wireless provider enters into lease agreements with the landline provider for the purpose of allowing it to send messages between its cell sites and switching center, it is called “backhaul services.”
In order to provide telecommunications services to all of their customers, the landline providers install and maintain an extensive system of wires and cables within the public rights-of-way. Wireless providers, on the other hand, do not own, operate or maintain any equipment in the public rights-of-way. The wireless providers operate and maintain all of their equipment on private property pursuant to privately negotiated commercial leases.
Historically, landline providers have obtained access to the public rights-of-way by negotiating with individual municipalities. In order to establish and maintain telephone service, a landline provider would often have to tear up the public roads, dig holes, and erect telephone poles along the streets. Until 1998, the landline providers obtained the right to do this in exchange for the payment of what was called a “franchise fee.” The franchise fee operated as a means of compensating the municipality for the providers’ use of the streets, sidewalks and other public areas. See City of Springfield v. Inter-State Independent Telephone & Telegraph Co., 279 Ill. 324, 325-26 (1917).
Franchise fees were not the only fees or taxes paid by telecommunications retailers to the various organs of government. Until 1998, the state levied a tax on telecommunications retailers called the “invested capital tax.” See
Five years ago, Congress amended the Communications Act of 1934 in the form of the federal Telecommunications Act of 1996. One of these amendments provides that “[n]o State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.”
Following the passage of the amendments to the
The municipal IMF is a fee paid to a certain municipality that has passed an ordinance imposing one.
“shall be the only fee or compensation for recovering the reasonable costs of regulating the use of the public rights-of-way and for the use of public rights-of-way that may be levied by or otherwise required by ordinance, resolution, or contract to be paid to a municipality for the use of its public way by telecommunications retailers.”
35 ILCS 635/30 (West 1998) .
See also
Soon after the passage of the Act, the City of Chicago passed its own municipal IMF at the maximum allowable rate, 2%. See
On April 27, 1998, a number of wireless providers filed this action for injunctive and declaratory relief challenging the constitutionality of the Act insofar as it authorizes municipalities to impose a municipal IMF. The plaintiffs, Primeco Personal Communications, L.P., Illinois RSA #3, Inc., USCOC of Illinois RSA #4, Inc., Davenport Cellular Telephone Co., USCOC of Illinois RSA #1, Inc., and National Cellular Communications, Inc., are all wireless telecommunications retailers providing wireless telephone service to customers in Illinois. The defendant, the ICC, is the Illinois agency responsible for regulating the rates of landline telecommunications providers. The complaint contained three counts, all seeking to invalidate the municipal IMF as unconstitutional on its face. After the complaint was filed, the City of Chicago intervened as a defendant to defend the
In count I, the plaintiffs argued that the municipal IMF violates the uniformity clause because it allows municipalities to assess a percentage fee on the “gross charges” of telecommunications retailers, whether landline or wireless. Because the purpose of the municipal IMF is to compensate municipalities for the use of the public rights-of-way, it was argued, the extension of the municipal IMF to wireless providers, who do not own or operate any equipment in the public rights-of-way, was “entirely unreasonable and inconsistent with the express purpose of the [IMF] Act.” According to the complaint, the Act, by classifying all telecommunications providers as equally subject to the municipal IMF, violated the portion of the uniformity clause which requires the General Assembly to classify the subjects or objects of nonproperty taxes in a reasonable manner.
In count II of the complaint, the plaintiffs argued that the municipal IMF violated the uniformity clause because of those entities which the Act excluded from its coverage. Precisely, the plaintiffs argued that certain entities that use “PBX” (private branch exchange) and “Centrex” systems are not subject to payment of a municipal IMF, but should be. Centrex customers are those entities which lease switching capacity from landline providers for private use. These entities tend to be large corporations or commercial landlords that need an internal means of communication, but do not wish to establish their own network of wires and equipment. Instead, the Centrex customers sign a lease with a landline provider for the limited use of some of the landline provider‘s infrastructure. PBX customers, on the other hand, buy or lease a switching computer which performs the same function as a Centrex system. Instead of signing a lease with a landline provider, the PBX customer
According to the plaintiffs, the exclusion of PBX and Centrex customers from coverage under the municipal IMF creates an unreasonable classification. Because the PBX or Centrex customers simply lease capacity from the landline providers, the wireless plaintiffs argued that their own use (or, rather, nonuse) of the public rights-of-way is equivalent to that of PBX and Centrex customers. For this reason, it was argued that there is no justification for making wireless providers subject to the municipal IMF while excluding PBX and Centrex entities.
Finally, in count III, the plaintiffs argued that section 13-511 of the Public Utilities Act, which became effective on the same date as the municipal IMF, is unconstitutionally vague because it contains language that is so imprecise that it fails to offer meaningful guidance to the ICC as the agency charged with enforcing the directives contained in the statute. See
“With respect to any telecommunications retailer that is regulated by the Illinois Commerce Commission, the Commision shall order such rate adjustments as shall be necessary to assure that the implementation of the Telecommunications Municipal Infrastructure Fee Act *** shall have no significant impact on the net income of each such telecommunications retailer.”
220 ILCS 5/13-511 (West 1998) .
The plaintiffs argued that when the statute authorizes the ICC to adjust the rates of landline providers to assure that the Act “shall have no significant impact on
The parties filed cross-motions for summary judgment on all three counts. In their cross-motions, the parties agreed that there were no disputed issues of material fact and that summary judgment was therefore appropriate. On January 11, 2000, the circuit court granted the plaintiffs’ motion for summary judgment on count I, but entered summary judgment in favor of the defendants on counts II and III. The circuit court found that the Act created an unreasonable class of subject entities by broadly imposing the municipal IMF on all telecommunications retailers, both landline and wireless, whether they used the public rights-of-way or not. Because the circuit court found that the object of the municipal IMF was to compensate municipalities for the use of the public rights-of-way, the court then determined that it was unreasonable to include wireless providers, who never “use” the public rights-of-way, within the class of individuals subject to the municipal IMF.
The parties filed cross-appeals, which we consolidated. Because the circuit court invalidated an Illinois statute, the appeals were taken directly to this court. See 134 Ill. 2d R. 302(a)(1). The circuit court stayed the enforcement of its judgment pending appeal, subject to certain conditions. After the notices of appeal had been filed, Dr. William Spillman, Tiffany Insurance Agency, and 13 other persons were given leave to intervene as plaintiffs in the circuit court and as cross-appellees in this court. The intervening cross-appellees are all consumers who have paid the municipal IMF and are now seeking restitution in the circuit court.
Although there are cross-appeals filed in this case, the plaintiffs’ cross-appeal relates only to counts II and
ANALYSIS
The defendants’ appeal is taken from an order entering summary judgment in the plaintiffs’ favor on count I. Summary judgment is appropriate when “the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”
I. The Uniformity Clause
“In any law classifying the subjects or objects of non-property taxes or fees, the classes shall be reasonable and the subjects and objects within each class shall be taxed uniformly. Exemptions, deductions, credits, refunds and other аllowances shall be reasonable.”
Ill. Const. 1970, art. IX, § 2 .
In order for a classification to be considered reasonable, it must (1) based on a real and substantial difference between those who are taxed and those who are not taxed, and it must (2) bear some reasonable relationship to the object of the legislation or to public policy. Milwaukee Safeguard Insurance Co. v. Selcke, 179 Ill. 2d 94, 98 (1997); Allegro Services, Ltd. v. Metropolitan Pier & Exposition Authority, 172 Ill. 2d 243, 250 (1996); Searle Pharmaceuticals, Inc. v. Department of Revenue, 117 Ill. 2d 454, 468 (1987). The foregoing test has also been applied in cases construing article IX, section 1, of the 1870 Constitution. See Searle Pharmaceuticals, Inc., 117 Ill. 2d at 468-69;
The initial burden of proof in these cases is not with the party attacking the classification as unreasonable.
II. The Object of the Municipal IMF
A uniformity clause challenge such as this one requires us to first determine the object (or purpose) of the taxing provision at issue. Milwaukee Safeguard Insurance Co., 179 Ill. 2d at 98. Once we have determined the object, it is incumbent upon us to determine whether that object is reasonably related to the class of entities taxed. Milwaukee Safeguard Insurance Co., 179 Ill. 2d at 98. The plaintiffs argue that the purpose behind the municipal IMF was to replace the franchise fee system. According to their theory, instead of having a complex array of franchise fees charged on a municipality-by-municipality basis, the municipal IMF would establish a uniform charge that telecommunications providers would pay to have access to the public rights-of-way. Because the wireless providers do not own or operate any equipment in the public rights-of-way or have any desire or need to do so, they argue that it is unreasonable to place them in a class of entities who must pay the municipal IMF. Rather, it is the landline providers who alone make use of the public rights-of-way for telecommunications activity.
Defendants, on the other hand, argue that the purpose of the municipal IMF is to provide a means of raising municipal revenue and that nothing in the Act
Unlike many other taxing schemes, the Act is not at all cryptic as to the purpose behind the municipal IMF. In fact, the first section in the Act, after the short title, is entitled “Legislative intent.” See
“This Act is intended to abolish the invested capital tax on telecommunications retailers ***[,] abolish municipal franchise fees with respect to telecommunications retailers, create a uniform system for the collection and distribution of fees associated with the privilege of use of the public right of way for telecommunications activity, and provide municipalities with a comprehensive method of compensation for telecommunications activity including the recovery of reasonable costs of regulating the use of the public rights-of-way for telecommunications activity.”
35 ILCS 635/5 (West 1998) .
The defendants argue that we should disregard this section because it consists of nothing more than “prefatory language.” According to the defendants’ theory, courts should only look to these types of sections, sometimes referred to as preambles, when the operative parts of the act are ambiguous. Because the operative parts of the
Defendants misunderstand our precedents on this matter. While it is true that a “declaration of policy or a preamble is not a part of the act itself” (Triple A Services, Inc. v. Rice, 131 Ill. 2d 217, 227 (1989); see also Brown v. Kirk, 64 Ill. 2d 144, 152-53 (1976)), that is not the end of the matter. In Atkins v. Deere & Co., we held that a “preamble has long been recognized as one of the quintessential sources of legislative intent.” Atkins v. Deere & Co., 177 Ill. 2d 222, 232 (1997). “The fact that the preamble often accompanies a bill throughout the legislative process, is voted upon by the members of the General Assembly, and is included in the text which is presented to the Governor for signature highlights the unique character of the preamble in terms of legislative intent.” Atkins, 177 Ill. 2d at 232; accord Edwards v. Pope, 4 Ill. 465, 470 (1842) (holding that the “preamble to a statute is no part of the act; still it may assist in ascertaining the true intent and meaning of the legislature“). Moreover, “a preamble constitutes a stronger expression of intent than does a passing comment made by a single legislator during legislative debates.” Atkins, 177 Ill. 2d at 232-33.
Defendants urge us, instead of relying on section 5 to discern the object of the municipal IMF, to look to sections 20 and 25(a) and (c) of the Act (
Section 5 of the Act strongly implies that the municipal IMF was intended as a replacement for the revenue generated by franchise fees. According to this section, the Act was intended to “abolish municipal franchise fees with respect to telecommunications retailers, [and] create a uniform system for the collection and distribution of fees associated with the privilege of use of the public right of way for telecommunications activity.”
The franchise fee was often treated as a sort of rent payment “which the [telecommunications provider] was required to pay as a reasonable compensation for the use of the parts of the streets and alleys occupied by its poles” or other equipment. City of Springfield, 279 Ill. at 327. Normally, a municipality would pass an ordinance in which it would offer a telecommunications provider the right of access to the public rights-of-way in return for a
Historically, municipalities would often bargain with telecommunications providers in order to extract the maximum amount of consideration that a provider would be willing to pay for using the public rights-of-way. In the years leading up to the passage of the Act, however, we began to reign in the power of municipalities in this respect. In 1993, we held that a municipality‘s only interest in the public streets was regulatory in nature, not proprietary. American Telephone & Telegraph Co. v. Village of Arlington Heights, 156 Ill. 2d 399, 413 (1993). As such, franchise fees could “only cover actual costs, including inspection, regulatory, administrative and repair costs associated with the tunneling under public streets.” American Telephone & Telegraph Co., 156 Ill. 2d at 413-14. Municipalities, we held, did “not have the authority to hold the public streets hostage as a means of raising revenue.” American Telephone & Telegraph Co., 156 Ill. 2d at 408.
Obviously, our holding in American Telephone & Telegraph Co. could only reach as far as those cases in which a telecommunications provider actually challenged the imposition of a franchise fee in court. It would therefore be reasonable to assume that there were still a number of franchise agreements in existence at the time the Act was passed that imposed fees which were wholly unrelated to a municipality‘s regulatory costs. But regardless of whether the franchise fee was proportional to a municipality‘s regulatory costs, its purpose was always the same—as a quid pro quo for granting telecommunications providers access to the public rights-of-way.
Prior to the enactment of the Act, a telecommunica-
tions provider never would have entered into a franchise fee agreement with a municipality unless it needed to access the public rights-of-way in that particular municipality. Once a telecommunications provider gained access to the public rights-of-way by paying a franchise fee, it would use that access to lay cable or erect telephone poles or other equipment on public property. If the municipal IMF was intended as a statewide replacement for franchise fees, it makes sense to conclude that this same bargain has now been codified in the form of the municipal IMF.
For this reason, it makes no difference whether the municipal IMF raises revenue in direct proportion to a municipality‘s regulatory costs. In cases brought under the second prong of the “reasonable classification” test, we are merely asking whether the tax classification created by a piece of legislation is reasonably related to its object (see Milwaukee Safeguard Insurance Co., 179 Ill. 2d at 98), not whether the means of taxation are crafted in a way to raise revenue in direct proportion to the costs related to the object of the legislation.
In addition to abolishing and replacing franchise fees, the municipal IMF was also intended to “create a uniform system for the collection and distribution of fees associated with the privilege of use of the public right of way for telecommunications activity.”
The remaining language in section 5 states that the municipal IMF was intended as a means of providing “municipalities with a comprehensive method of compensation for telecommunications activity including the recovery of reasonable costs of regulating the use of the public rights-of-way for telecommunications activity.” (Emphasis added.)
We believe that the best interpretation of the remaining language in section 5 is that it merely reflects the purpose that had been served by franchise fees. When the General Assembly abolished franchise fees and fashioned the municipal IMF in its place, the legislature must have been cognizant of the function that had been served by franchise fees, i.e., that they were not necessarily in direct proportion to a municipality‘s regulatory costs. By using the term “including,” the legislature appаrently crafted the municipal IMF in such a way that it reflected the function of franchise fees. That is, the municipal IMF, like franchise fees, would be related to the recovery of regulatory costs involved with telecom-
Even though one could argue that the municipal IMF encompasses a broader purpose than the mere reimbursement of a municipality‘s regulatory costs, it was not intended to encompass a broader purpose than that of franchise fees. In addition to section 5, there are several other indicators which make it clear that the legislature had no broader purpose in mind than replacing franchise fees with a more uniform system. That is, the municipal IMF would do nothing more than create a statewide means of providing access to the public rights-of-way though the imposition of a uniform fee.
First of all, the title given to the municipal IMF illustrates its purpose. The legislature described the municipal IMF as a “[m]unicipal telecommunications infrastructure maintenance fee.” See
There is yet another factor which leads us to believe that the municipal IMF was intended as a charge for obtaining access to the public rights-of-way. As we
Section 30 of the Act demonstrates that the municipal IMF serves the same function as the optional IMF. Section 30 provides that the payment of the municipal IMF (in a municipality that has enacted one) or the payment of the optional IMF (in a municipality that has not yet enacted a municipal IMF) gives the telecommunications provider the right to obtain access to the public rights-of-way in the municipality to which the fee pertains.
If a municipality wishes to impose a municipal IMF, the Act prohibits the municipality from collecting the feе “during any period of time when a municipality receives any compensation other than the municipal [IMF] *** for a telecommunications retailer‘s use of the public right-of-way ***.”
The Act provides yet another clue indicating the purpose of the municipal IMF. In section 35 of the Act, entitled “home rule,” the Act states that a “home rule municipality may not impose franchise or other fees upon or require other compensation from telecommunications retailers for use of the public way, other than the municipal [IMF] authorized by this Act.”
All of these examples provide overwhelming textual evidence of the legislative purpose behind the municipal IMF. Based on these provisions, we find that it is unquestionable that the municiрal IMF was intended as a uniform means of allowing telecommunications providers to have access to the public rights-of-way while giving municipalities compensation that they otherwise would have received in the form of a franchise fee.3
The circuit court, in its decision, discussed at great length the meaning of the phrase “use of the public right of way,” as that phrase is employed in the Act. The circuit court first analyzed the “narrow” definition of the term “use,” i.e., the physical occupation of the public rights-of-way by the wires, poles, and other pieces of equipment owned by a telecommunications retailer. The “broad” definition, however, would include the act of leasing
It is not necessary to analyze whether the “broad” definition of the term “use” would justify the classification created by the municipal IMF. It is clear from the text of the Act that the phrase “use of the public right of way” refers to the physicаl occupation of those rights-of-way by a telecommunication provider‘s infrastructure. For instance, section 25(e) of the Act describes a situation in which a municipality is still receiving “compensation from a telecommunications retailer [in the form of a franchise fee] for the use of the public right of way.”
III. Reasonable Classification
Now that we have established the object of the municipal IMF, we must determine whether that object is reasonably related to the class of entities to which the municipal IMF applies. See Milwaukee Safeguard Insurance Co., 179 Ill. 2d at 98. If, as we have already established, the object of the muniсipal IMF is to replace franchise fees and establish a uniform system for allow-
The defendants argue this very point, but for a different purpose. Rather than using this observation to establish that the classification created by the municipal IMF is unreasonable, the defendants attempt to establish thereby that by including wireless providers among those entities subject to the municipal IMF, the legislature demonstrated its desire to make wireless providers subject to the fee (in other words, the tax classification itself demonstrates the legislature‘s purpose in creating the fee). Under this theory, the classification created by the municipal IMF is reasonable because it fits the overall purpose of the legislation (to provide municipalities with a general sоurce of revenue from both landline and wireless telecommunications activity). This argument is obviously circular. If the tax classification itself informs the inquiry regarding the purpose of the legislation (even in clear contravention of all other textual indications), any classification would inevitably survive a uniformity clause challenge. Such a rationale, however, renders the limitations contained in the uniformity clause utterly meaningless. Our precedents do not establish that the uniformity clause of our constitution is devoid of substance.
We find that the defendants in this case have failed to offer a sufficient legal justification for imposing the municipal IMF on a class of entities which includes wireless providers. As we established, the purpose of the municipal IMF is to create a fee whereby telecommunica-
IV. Facial Invalidation
We do not believe, however, that our conclusion on this matter suffices to render the municipal IMF facially invalid. “A facial challenge to a legislative Act is, of course, the most difficult challenge to mount successfully, since the challenger must establish that no set of circumstances exists under which the Act would be valid.” United States v. Salerno, 481 U.S. 739, 745 (1987), quoted with approval in In re C.E., 161 Ill. 2d 200, 210-11 (1994). The fact that the municipal IMF operates unconstitutionally as it applies to wireless providers is insufficient to render it wholly invalid. See Salerno, 481 U.S. at 745; In re C.E., 161 Ill. 2d at 210-11.
In spite of this, the circuit court invalidated the municipal IMF on its face. We do not believe, however, that this case presented the circuit court with an all-or-nothing constitutional dilemma. By examining the trial judge‘s reasoning, we can understand the error that led him to believe that it did.
As previously discussed, in the portion of its opinion addressing the “narrow” and “broad” definitions of the phrase “use of the public right of way,” the circuit court held that the municipal IMF would be invalid even under the “broad” definition of that phrase (which includes the mere leasing of landline capacity by a wireless provider) because the wireless provider‘s practice of leasing land-
In its holding on this matter, the circuit court relied heavily on the reasoning of this court in City of Chicago Heights v. Public Service Co., 408 Ill. 310 (1951). In fact, much of the discussion in the parties’ briefs is centered around that case. However, City of Chicago Heights is inapposite to our holding in this case. City of Chicago Heights involved the constitutionality of two franchise fees imposed by the City of Chicago Heights on the gross receipts of any telecommunications company that occupied the public rights-of-way within the city limits. See City of Chicago Heights, 408 Ill. at 316. In that case, we held that the franchise fees imposed by Chicago Heights violated the uniformity clause because a fee assessed as a
In the present case, however, we determined that the municipal IMF is invalid in its application to the plaintiffs because the classification created by the fee is not reasonably related to the fee‘s purpose. The franchise fee in City of Chicago Heights was not challenged under this theory. As the above-quoted language demonstrates, the franchise fee in City of Chicago Heights was struck down because it taxed the members of the subject class in a nonuniform manner. City of Chicago Heights, 408 Ill. at 318. As the text of the uniformity clause indicates, however, a piece of legislation must first create a reasonable tax classification before a court can even reach the question of whether the members of that class are being taxed uniformly. See
Not only is it unnecessary, it is improper. Our jurisdiction is restricted to cases which present an actual controversy, and we decline to issue advisory opinions on moot or abstract questions of law. People ex rel. Partee v. Murphy, 133 Ill. 2d 402, 408 (1990); People ex rel. Blackv. Dukes, 96 Ill. 2d 273, 276 (1983); In re Marriage of Wright, 89 Ill. 2d 498, 500 (1982). If the resolution of a certain question of law cannot affect the result as to the parties or controversy before it, the court should not resolve the question merely to set a precedent or to guide future litigation. Segers v. Industrial Comm‘n, 191 Ill. 2d 421, 428 (2000); In re Barbara H., 183 Ill. 2d 482, 491 (1998); Murphy, 133 Ill. 2d at 408.
CONCLUSION
Accordingly, for the reasons given, we affirm the circuit court‘s order of summary judgment under count I of the complaint that found the municipal IMF to be in violation of article IX, section 2, of the Illinois Constitution. However, we do not find the municipal IMF to be invalid on its face. Rather, we find that the municipal IMF violates the uniformity clause only to the extent that it applies to telecommunications retailers who do not own, operate, or maintain any part of their infrastructure within the public rights-of-way.
Affirmed.
Dissenting Opinion Upon Denial of Rehearing
JUSTICE FREEMAN, dissenting:
The City of Chicago and the Illinois Commerce Commission (defendants) have filed a petition for rehearing in this cause. Because I believe that this court‘s opinion may have been in error, I respectfully dissent from the denial of the petition for rehearing.
The legislature enacted the Telecommunications Municipal Infrastructure Maintenance Fee Act (Act) (
“This Act is intended to abolish the invested capital tax on telecommunications retailers ***. This Act is also intended to abolish municipal franchise fees with respect to telecommunications retailers, create a uniform system for the col-
lection and distribution of fees associated with the privilege of use of the public right of way for telecommunications activity, and provide municipalities with a comprehensive method of compensation for telecommunications activity including the recovery of reasonable costs of regulating the use of the public rights-of-way for telecommunications activity.” 35 ILCS 635/5 (West 1998).
The invested capital tax (
The Act replaced the invested capital tax and the franchise fees with a state infrastructure maintenance fee imposed upon landline telecommunications retailers (
Pursuant to section 20 of the Act, a municipality could impose a Municipal IMF upon telecommunications retailers by adopting an ordinance to that effect. If the municipality had a population of more than 500,000, it could impose a Municipal IMF of “2.0% of all gross charges charged by the telecommunications retailer to
The City of Chicago passed an ordinance imposing a Municipal IMF of 2% on “all gross charges charged by telecommunications retailers to a service address in the city for telecommunications originating or received in the city.” Chicago Municipal Code § 3-75-030(A) (added October 1, 1997). Primeco Personal Communications, L.P., a wireless telecommunications retailer, аnd several other wireless telecommunications retailers (plaintiffs) filed an action for injunctive and declaratory relief.
Plaintiffs noted that wireless telecommunications retailers do not own or operate equipment in the public rights-of-way. Plaintiffs claimed that the purpose of the Municipal IMF was to compensate municipalities for the use of the public rights-of-way. Plaintiffs argued that the Municipal IMF violated the uniformity clause of the Illinois Constitution (
Defendants responded that the Municipal IMF was not a fee for the use of the public rights-of-way. Instead, the Municipal IMF was a tax imposed uniformly on telecommunications retailers. Defendants maintained that the Municipal IMF did not violate the uniformity clause.
This court held section 20 of the Act (
In their petition for rehearing, defendants question this court‘s conclusion that the Municipal IMF was intended as a uniform means of compensating municipalities for allowing telecommunications retailers to have access to the public rights-of-way. Defendants maintain that the Municipal IMF was intended as a means of raising revenue from telecommunication activities, and not just a way to compensate municipalities for the costs they incur in allowing telecommunications retailers to have access to the public rights-of-way. Defendants note that, pursuant to sections 20 and 25 of the Act (
Next, defendants assert that the Municipal IMF is a fair way of raising revenue from telecommunication activities. Defendants explain:
“[W]hile wireless retailers do not themselves need to install or repair equipment in public rights-of-way, they are critically dependent upon such equipment. Rather than place their own equipment in the public way, wireless retailers have chosen to rely on landline carriers to do this for them. Thus, it is reasonable to spread to wireless carriers a portion of the compensation that municipalities receive for granting landlines access to public rights-of-way, since wireless providers are critically dependent on the ability of landline carriers to obtain access to public rights-of-way in order to install and maintain equipment. For that reason, the General Assembly reasonably included wireless retailers within the class of telecommunicаtions retailers that must compensate municipalities for granting landline carriers access to public rights-of-way. Indeed, as we explain above, wireless retailers previously contributed to the payment of franchise fees for landlines. For that reason, they could also be expected to contribute to the IMF, which replaced franchise revenues.”
Finally, defendants maintain this court‘s opinion will have an adverse impact on “every municipal budget in Illinois” and will require “painful cuts in municipal services or borrowing at considerable cost to the taxpayers in order to plug budgetary shortfalls” resulting from the invalidation of the Act.
I believe that defendants have advanced considerations that merit rehearing by this court. I also find an additional reason for allowing the petition for rehearing in this court‘s failure to either follow or overrule our decision in City of Chicago Heights v. Public Service Co., 408 Ill. 310 (1951). This court‘s attempt to distinguish City of Chicago Heights is unpersuasive.
The decision in this cause is of momentous import to the litigants and to the people of this state. The City of Chicago and numerous municipalities in the state stand to lose a great deal of revenue because this court has in-
JUSTICE MCMORROW joins in this dissent.
(No. 83279.—
THE PEOPLE OF THE STATE OF ILLINOIS, Appellee, v. JULIUS S. KUNTU, Appellant.
Opinion filed May 24, 2001.