Appeal from the Circuit Court of Lake County; the Hon. Harry
D. Strouse, Jr., Judge, presiding.
JUSTICE HOPF DELIVERED THE OPINION OF THE COURT:
Rehearing denied July 18, 1983.
Commonwealth Edison Company (Edison) filed separate complaints with the Lake County Board of Review (LCBR) objecting to the 1975 and 1976 real estate assessments of its Zion Nuclear Generating Plant (Zion Station). In separate hearings before the LCBR the Board reduced the Zion Station assessments for both years. The Zion taxing bodies (Zion Park District, Zion Township School District No. 126, City of Zion, Zion Township, and Zion-Benton Library District, hereinafter referred to collectively as Zion), appealed from the LCBR's decisions in both cases to the Property Tax Appeal Board (PTAB). Edison appealed from the LCBR's decision regarding the 1976 assessment.
The PTAB consolidated the 1975 and 1976 appeals. After hearing evidence and argument on these cases, the PTAB determined that: (1) the proper level of assessment for 1975 and 1976 was 27.29% and 28.22%, respectively, as determined by the Department of Local Government Affairs' (DLGA) one-year assessment/sales ratio studies for the year immediately preceding the years in question (1974 and 1975); (2) capitalized operator training costs incurred by Edison as part of the construction costs of Zion Station should be included in the valuation of the Zion Station real property; (3) certain assets which were certified by the State after January 1, 1975, as pollution control facilities but not yet assessed by the State should be included in the county assessment for the 1975 tax year; (4) the proper deduction for a federally imposed operating limitation on the plant was 7% for the 1975 and 1976 tax years, and; (5) personal property in the amount of $9,372,978 should be deducted from the real property assessment for 1976.
Edison filed for administrative review of the PTAB's decision in the circuit court of Lake County. The LCBR also petitioned for administrative review of the level of assessment for the subject tax years.
The circuit court affirmed the PTAB's decisions in part, and reversed them in part. The court found that the PTAB applied the proper levels of assessment and the proper deduction for the operating limitation. In addition, the court found that certain operator training costs were properly included in the real estate assessments for both years. However, the court determined that the PTAB improperly included the value of the two pollution control facilities in the 1975 assessment, as well as certain personal property in the 1976 assessment.
All parties to the action have appealed from various portions of the circuit court judgment. Edison appeals from the portions of the order which include the operator training costs in the assessments for both years, and set the deduction for the operating limitation at 7%, rather than 15%, for 1975. It also claims the proper level of assessment for 1975 and 1976 is 26.21% and 27.02%, respectively, as determined by analyzing sales data for the years prior and subsequent to the assessment dates.
LCBR appeals from the circuit court's decision regarding the proper levels of assessment for 1975 and 1976, claiming the appropriate factor to be applied is 31.75% for 1975, and 32.33% for 1976. These figures are based upon the use of assessment/sales ratio studies for the three years immediately preceding the tax years in question. (See Ill. Rev. Stat. 1975, ch. 120, par. 482(24).) The Zion taxing bodies joined LCBR in appealing this issue and also challenge, along with the PTAB, the finding regarding the personal property and pollution control deductions.
We first turn our attention to the question of whether the PTAB and the circuit court applied the proper levels of assessment to the subject property for the tax years in question. The PTAB applied assessment factors of 27.29% for 1975, and 28.22% for 1976, based upon one-year adjusted sales ratio studies for the year immediately preceding the years in question. Edison contends the level of assessment should be determined by analyzing the assessment/sales data for the year immediately prior to the tax date in question as well as the year subsequent to that date. The Zion taxing bodies and the LCBR argue that the PTAB was required by statute to use a three-year sales ratio study in determining the appropriate levels of assessment for the years in question. See Ill. Rev. Stat. 1975, ch. 120, par. 482(24).
• 1 Illinois' system of taxing real and personal property is established by the Revenue Act of 1939 as amended. (Ill. Rev. Stat. 1975, ch. 120, par. 481 et seq.) Under the Act the local assessor must assess real and personal property at 331/3% of its actual value "as determined by the Department's assessment to sales ratio studies for the 3 most recent years preceding the assessment year, adjusted to take into account any changes in assessment levels implemented since the data for such studies were collected." (Ill. Rev. Stat. 1975, ch. 120, par. 501, referencing par. 482(24).) Thus, the local assessor must apply the three-year standard in making the original assessment of real property. (See also Lake County Board of Review v. Property Tax Appeal Board (1980), 86 Ill. App.3d 553, 407 N.E.2d 1022.) The local boards of review are then required to annually equalize intracounty assessments by raising or lowering the total assessed value of property in any assessment district within the county so that such property is assessed at 33 1/3% of its fair cash value. (Ill. Rev. Stat. 1975, ch. 120, par. 589.1.) Again, the 33 1/3% figure is determined by analyzing the Department of Local Government Affairs' assessment to sales ratio studies for the three most recent years preceding the assessment year. (Ill. Rev. Stat. 1975, ch. 120, par. 482(24).) After determining the intracounty multipliers, the board then reports the results to the DLGA. (Ill. Rev. Stat. 1975, ch. 120, par. 589.1.) The DLGA reviews the assessment for each county and assessment district within each county and is charged with the duty of equalizing the value and assessment of property between the counties throughout the State so that the total reviewed assessment for each county produces a ratio of assessed to 331/3% of fair cash value which is equivalent to 100%. (Ill. Rev. Stat. 1975, ch. 120, pars. 611(7), 627.) The proper amount for each county is then certified to the county clerks, who extend taxes on this basis. Ill. Rev. Stat. 1975, ch. 120, par. 632.
The Property Tax Appeal Board is authorized upon petition to review the decision of the boards of review and determine whether certain property was properly assessed. (Ill. Rev. Stat. 1975, ch. 120, par. 592.1.) The PTAB establishes by rule an informal procedure "for the determination of the correct assessment of property." (Ill. Rev. Stat. 1975, ch. 120, par. 592.2.) One such rule, Rule 4D, states "[t]he decisions of the Property Tax Appeal Board will be based upon equity and the weight of the evidence." (Rule 4D, Official Rules of the PTAB.) This same standard is stated in section 111.4 of the Revenue Act of 1939 (Ill. Rev. Stat. 1975, ch. 120, par. 592.4):
"The Board shall make a decision in each appeal or case heard by it, and such decision shall be based upon equity and the weight of evidence * * *."
The LCBR and the Zion taxing bodies both argue that since the local assessors, the boards of review, and the DLGA each use a three-year ratio study to determine the 331/3% figure, the use of other than a three-year study would result in appealing taxpayers being assessed according to a different process than those not appealing. The PTAB defends its application of a one-year adjusted sales ratio study by noting that under Rule 4D it has the authority to base its decision on equity and the weight of the evidence. It argues that the figures applied by it represent the actual level of assessment to fair market value as of the tax dates in question, as determined by the DLGA. Barbara Moore, testifying on behalf of the DLGA, stated that it recommended settlement on a one-year basis, or 27.29% for 1975, and 28.22% for 1976. On the basis of this testimony, the PTAB reasoned that an assessment level at higher than these rates, which would be produced if it used the three-year method, would result in Edison being taxed at a disproportionately higher rate than other taxpayers in Lake County. Finally, Edison urges this court to determine the median level of assessment by analyzing the declining trend in the level of assessment from one year to the next and estimating through the use of graphs the median assessment level as of the particular tax dates in question (i.e., January 1, 1975, and January 1, 1976). As an alternative approach, Edison urges this court to average the sales ratio for the 1975 and 1976 tax years to determine the correct level of assessment as of January 1, 1976. Either method would result in the same assessment level for the years in question.
• 2 We have previously considered this precise issue in Lake County Board of Review v. Property Tax Appeal Board (1980), 86 Ill. App.3d 553, 407 N.E.2d 1022. In that case, the PTAB appealed from the circuit court's decision that the assessment level for property in Lake County in 1976 was to be determined on the basis of the three-year adjusted sales ratio study, rather than the one-year study applied by the PTAB. We agreed with the PTAB's argument that it was authorized under Rule 4D to apply the one-year basis if this was necessary in order to do equity. (86 Ill. App.3d 553, 555, 407 N.E.2d 1022, 1024.) However, we further held that because of the particular ...