Home Rule Units: Distinction Between Administrative Fees vs. Penalties

A recent unpublished opinion out of the 1st District Appellate Court (“Appellate Court”) addressed a class action suit against the City of Chicago (“Chicago”) that challenged Chicago’s authority to enact an ordinance authorizing the assessment of administrative penalties on owners of impounded vehicles and established administrative hearing procedures. The circuit court granted Chicago’s motion to dismiss with prejudice, and the plaintiffs appealed.

On appeal, one of the arguments plaintiffs pursued against Chicago, as a home rule municipality, was that the impoundment ordinance was preempted by 625 ILCS 5/11-208.7. The Illinois General Assembly enacted section 11-208.7, administrative fees and procedures, for impounding vehicles for specified violations (which went into effect January 1, 2012). Section 11-208.7 states, in part, the following:

“Administrative fees and procedures for impounding vehicles for specified violations. (a) Any county or municipality may, consistent with this Section, provide by ordinance procedures for the release of properly impounded vehicles and for the imposition of a reasonable administrative fee related to its administrative and processing costs associated with the investigation, arrest, and detention of an offender, or the removal, impoundment, storage, and release of the vehicle. The administrative fee imposed by the county or municipality may be in addition to any fees charged for the towing and storage of an impounded vehicle. The administrative fee shall be waived by the county or municipality upon verifiable proof that the vehicle was stolen at the time the vehicle was impounded.”

The Appellate Court disagreed and emphasized that powers of home rule units of government (such as Chicago) are “based on the assumption that municipalities should be allowed to address problems with solutions tailored to their local needs”. The Illinois Constitution gives “home rule units the broadest powers possible, to the extent that the General Assembly does not specifically limit the concurrent exercise of those power or specifically declare the State’s exercise to be exclusive” and “those powers are to be construed liberally”. If the legislature does not specifically limit or deny home rule authority, a municipal ordinance and a state statute may operate concurrently, and any limitation or denial of home rule authority must be expressly stated in the statute.

The Appellate Court went on to note that section 11-208.7 “expressly provides that any county or municipality may, consistent with its provisions, enact ordinances with procedures for the release of properly impounded vehicles and for the imposition of a reasonable administrative fee, in addition to any towing or storage fees for impounded vehicles”. Further, the Appellate Court stated that nowhere in that section was there an explicit limitation on “the power of a home rule unit to charge an administrative penalty or fine for the underlying violation that led to the impoundment of the vehicle” (emphasis added).

Simply put, the plain language of section 11-208.7, as interpreted by the Appellate Court, provides for the collection of an administrative fee (related to its administrative and processing costs associated with the investigation, arrest, and detention of an offender, or the removal, impoundment, storage, and release of the vehicle) and does not preclude a home rule unit from imposing an administrative penalty or fine.