
                              No. 3--96--0189

_________________________________________________________________



                    IN THE APPELLATE COURT OF ILLINOIS



                              THIRD DISTRICT



                                A.D., 1996



CHICAGO SMSA Limited Partnership,  		)

ILLINOIS SMSA Limited Partnership, 		)    

CYBERTEL CELLULAR TELEPHONE        	)

COMPANY, and ILLINOIS RSA 6 & 7    		)

Limited Partnership,					)    Petition for Review of an

                                   				)    Order of the Illinois    

     Petitioners-Appellants,       			)    Commerce Commission

                                   				)

v.                                 				)    No. 95-0049

                                   				)

ILLINOIS COMMERCE COMMISSION,      	)

                                   				)

     Respondents-Appellees.        			)

_________________________________________________________________



       PRESIDING JUSTICE BRESLIN delivered the opinion of the court:

_________________________________________________________________



     The petitioners, Chicago SMSA limited Partnership, Illinois

SMSA Limited Partnership, Cybertel Cellular Telephone Company, and

Illinois RSA 6 & 7 Limited Partnership (petitioners), appeal an

order of the Illinois Commerce Commission (Commission) which

determined that they were required to pay the public utility tax on

revenues generated by their provision of cellular telephone

services.  We hold that under the plain language of the tax

statute, the petitioners have no taxable revenue.  Therefore, we

reverse.

     The petitioners provide wireless telecommunication services

under the Ameritech brand name.  Although providers of these

services were formerly required to file tariffs with the Commission

for the services they provide, the Commission excused Chicago SMSA

Limited Partnership from the tariff filing requirement in 1987 by

exercising its rulemaking authority pursuant to section 13-203 of

the Public Utilities Act (Act) (220 ILCS 5/13-203 (West 1994)). 

However, the Commission pointed out in its order that Chicago SMSA

Limited Partnership would continue to be subject to the remaining

provisions of the Act, including the public utility tax requirement

of section 2-202 (220 ILCS 5/2-202 (West 1994)).  In subsequent

rulemaking proceedings, the Commission granted the same exemption

to the remaining petitioners. See 83 Ill. Adm. Code §760.20 (1992);

83 Ill. Adm. Code §760.10 (1987).

     In 1995, the petitioners filed estimated gross revenue returns

showing that no revenues would be subject to the tax.  The

Commission responded by issuing a citation order which required the

petitioners to show cause why the Commission should not take action

to enforce section 2-202 of the Act.  Because there was no factual

dispute, no evidentiary hearing was held and the parties submitted

briefs on the issue of whether the public utility tax applied to

the petitioners' revenues.

     In a proposed order, the Commission hearing examiner pointed

out that utilities are only required to pay tax on revenues

collected pursuant to rates that the utility is required to file

with the Commission.  Because the petitioners were no longer

required to file any rates, the hearing officer concluded that they

had no revenue for purposes of the public utility tax.  The

Commission, however, rejected the proposed order.  The Commission

observed that the original order excusing Chicago SMSA Limited

Partnership from the tariff filing requirement specifically stated

that the carrier would continue to be subject to the public utility

tax requirement of section 2-202 of the Act.  In addition, the

Commission concluded that the petitioners must pay the public

utility tax because the policy statement in section 2-202 provides

that regulated utilities should bear the cost of regulation.  After

the Commission denied their petition for rehearing, the petitioners

filed this appeal.

     The issue on appeal is whether the Commission properly

interpreted section 2-202 of the Act.

     When interpreting a statute, a court's primary objective is to

ascertain and give effect to the intent of the legislature, and

that intent is best evidenced by the language used by the

legislature. Thomas M. Madden & Co. v. Department of Revenue, 272

Ill. App. 3d 212, 651 N.E.2d 218 (1995).  The interpretation of a

statute by an agency charged with its administration is accorded

deference, but it is not binding on the appellate court. Parisi v.

Jenkins, 236 Ill. App. 3d 42, 603 N.E.2d 566 (1992).  Although a

policy declaration may be used to clarify ambiguous provisions of

a statute, it may not be used to create ambiguity where none

exists. Illinois Independent Telephone Association v. Illinois

Commerce Commission, 183 Ill. App. 3d 220, 539 N.E.2d 717 (1988).

     Under section 2-202 of the Act, utilities are required to pay

a tax equal to a percentage of their gross revenues.  According to

section 3-121 of the Act:

     As used in Section 2-202 of this Act, the term "gross

     revenue" includes all revenue which (1) is collected by

     a public utility subject to regulation under this Act (a)

     pursuant to the rates, other charges, and classifications

     which it is required to file under Section 9-102 of this

     Act ***. 220 ILCS 5/3-121 (West 1994).

     Once the Commission excused the petitioners from the Act's

tariff filing requirements, the revenue generated by the

petitioners' cellular telephone services was not collected pursuant

to a rate or classification which the petitioners were required to

file under the Act.  Therefore, such revenue cannot be considered

gross revenue for purposes of section 2-202.  Because the

petitioners' services do not generate any "gross revenue" as that

term is defined in section 3-121, it is clear that they have no tax

liability under section 2-202 of the Act.  Accordingly, we hold

that the petitioners are not obligated to pay public utility tax on

the revenue generated by their cellular telephone services.

     The Commission points out, however, that when it excused

Chicago SMSA Limited Partnership from the tariff filing requirement

in 1987, it made clear in its order that the carrier would continue

to be subject to the public utility tax requirement of section 2-

202 of the Act.  According to the Commission, this determination

also applies to the remaining petitioners because the Commission

granted their request to be included within the scope of the 1987

order.  Thus, the Commission contends that the issue of the

petitioners' tax liability under section 2-202 has been previously

determined and cannot be relitigated in this case.  We disagree.

     The Commission's 1987 order provided that the petitioners were

bound by the public utility tax requirement of section 2-202. 

However, it did not address the issue of whether the petitioners'

revenues would be considered gross revenue for purposes of that

section.  Thus, the issue on appeal in the instant case was not

resolved in the 1987 order.  Accordingly, we reject the

Commission's argument.

     The Commission also claims that the petitioners are subject to

the public utility tax because the policy statement in section 2-

202 provides that utilities subject to regulation should bear the

cost of regulation.  However, it is well settled that policy

declarations may only be used to clarify ambiguous provisions of a

statute. Illinois Independent Telephone Association v. Illinois

Commerce Commission, 183 Ill. App. 3d 220, 539 N.E.2d 717 (1988). 

Since the Commission cannot point to any ambiguity in section 2-202

or 3-121, the policy statement is not a proper basis for imposing

tax liability on the petitioners.

     The petitioners have also raised other grounds for reversing

the Commission's ruling in this case.  However, because we have

reversed on the above grounds, we need not address these

contentions.

     For the foregoing reasons, the decision of the Illinois

Commerce Commission is reversed.

     Reversed.

     HOLDRIDGE, P.J., and LYTTON, J., concur.



