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Illinois Supreme Court Upholds Transfer of Safety Funds

Posted on Oct 28, 2011
In 1982, Illinois created the Cycle Rider Safety Training Act (CRST). This act was to promote safety for persons and property connected with motorcycles. To finance the CRST, a portion of the fees collected for motorcycle registrations was transfered quarterly to a special fund known as the Cycle Rider Safety Training Fund (CRSTF).

 In 1993, the Illinois legislature amended the CRSTF from a special fund inside the state treasury to a "trust fund outside of the state treasury." This was in response to an amendment to the Act in 1992, which permitted the use of moneys in the CRSTF to be transferred to the General Revenue Fund. This newly created "trust fund" called for the elimination of sweeping money from the fund into the General Revenue Fund and also removed the provision allowing regular trasfers out of the fund. The safety funds were safe...or were they?

Fast forward to June, 2003: the legislature enacted Public Act 93-32, the Budget Implementation Act for fiscal year 2004. This FY2004-BIMP, through the State Finance Act, allowed the transfer of CRSTF monies to the General Revenue Fund: $1,000,000. Of course, the motorcyclists of Illinois and A.B.A.T.E. of Illinois were outraged by this action. It was thought that the earlier legislation protected what was thought to be private money in a trust fund.

On June 9, 2006, A.B.A.T.E. of Illinois sought relief through a temporary restraining order, and soon after, a motion for preliminary injunction. The circuit court of Sangamon County denied the motion for preliminary injunction and the defendants (the governor, comptroller and treasurer of Illinois) moved for dismissal of the complaint. The next step was Appeals Court, and A.B.A.T.E. lost again.  A.B.A.T.E. then petitioned the Illinois Supreme Court to hear the case and it was granted.

On October 27, 2011, the Supreme Court of Illinois affirmed the judgement of the appellate court, which upheld the trial court's grant of summary judgment in favor of defendants, Governor Patrick Quinn, Comptroller Daniel W. Hynes and Treasurer Alexi Giannoulias.

A.B.A.T.E. of Illinois lost this courageous battle and now hundreds of millions of dollars are up for grabs from special funds in Illinois.

There were a number of questions brought to the court, including if future legislation could undo the amendment in 1993 that created the CRSTF. Also in question was whether a trust fund outside of the state treasury was protected from the legislature's authority to sweep funds into the General Revenue Fund. That authority rested on the difference between private and public funds. A.B.A.T.E. was unsuccessful in arguing that the CRSTF was private money, therefore the Illinois General Assembly is required by the Illinois Constitution to appropriate all expenditures of public funds and these funds cannot be used by private individuals. Since it was never proven that any federal or private money was ever deposited into the fund, it was not an unconstitutional act to move any of the CRSTF to the General Revenue Fund. The Illinois Supreme Court stated that the legislature (referring to the 1993 amendment creating the CRSTF) "cannot create an irrevocable trust with public money."

There was one dissenting justice, Chief Justice Kilbride, who agreed that it was proven that the registration and license fees are "public" funds. He was however concerned that it was never proven as fact that no federal grants or private money was deposited into the CRSTF. He was concerned that a grave error was made in declaring the sweeps were constitutional without additonal fact-finding concerning private donations. For that reason, he dissented.