Appeal from the Circuit Court of Clark County; the Hon.
Richard E. Scott, Judge, presiding.
JUSTICE GREEN DELIVERED THE OPINION OF THE COURT:
This case arises from the proceedings of the Board of Review of Clark County (Board) on October 9, 1981, when it met, without notice, and raised by 8% the existing assessments of farm real estate owned by objectors Glen Applegate et al. Subsequently, after paying 8% of the taxes levied on those properties under protest, objectors filed objections in the circuit court of that county in response to the County Collector of Clark County's application for judgment for delinquent taxes for the revenue year 1980. The Collector filed a motion for summary judgment contending the objectors had failed to exhaust their administrative remedies. The objectors filed a cross-motion for summary judgment maintaining that the Board acted improperly in raising the assessment and that 8% of the taxes levied against the farm properties were, accordingly, erroneously levied. The trial court allowed the Collector's motion, denied that of the objectors, and entered judgment for the Collector on October 26, 1982.
Objectors Virgil Arney et al., have appealed. We have granted leave to the Illinois Agricultural Association (IAA) to file a brief amicus curiae. The parties agree that the properties in question all qualified as being a "farm" within the meaning of section 1(25) of the Revenue Act of 1939 (Act) (Ill. Rev. Stat. 1979, ch. 120, par. 482(25)) and subject to assessment under section 20e of the Act (Ill. Rev. Stat. 1979, ch. 120, par. 501e).
At all times pertinent, section 20e essentially provided that the farm value formula for arriving at the value of the best grade of farmland within the county should be determined by the Department of Local Government Affairs (whose duties have been transferred to the Department of Revenue by executive order (see Executive Order No. 3 (1979) preceding Ill. Rev. Stat. 1981, ch. 127, par. 1)), using the value per acre of agricultural products sold, the average value per acre of principal crops for the most recent three years, plus 10% of the average sale price per acre for the same three-year period. This section further provided that farmland of lesser value than that classified at the highest or best grade within the county should be valued for assessment purposes by local assessment officials on the basis of its productivity. See O'Connor v. A & P Enterprises (1980), 81 Ill.2d 260, 265-66, 408 N.E.2d 204, 206.
• 1 Objectors assert that the increase in the assessment by 8% constituted the imposition of a multiplier or equalization factor in violation of sections 20e and 108a of the Act (Ill. Rev. Stat. 1979, ch. 120, pars. 501e, 589.1) and article IX, section 4 of the Illinois Constitution of 1970, thus, amounting to constructive fraud. They maintain that the exhaustion of remedies doctrine should not be applicable here because of their lack of notice of the Board's actions. The IAA urges that exhaustion of administrative remedies should not be required under the circumstances here, where an objection is made to an allegedly illegal imposition of an equalizing factor or multiplier.
We share the concerns of the objectors and the IAA as to the problems that result from applying the exhaustion-of-remedies rule to the situation presented. In passing on this question, we need not rule upon the allegations by the objectors that the raising of the assessments constituted an illegal application of an equalizer, constituting constructive fraud. Rather, we deem the confusing nature of the applicable provisions of the Revenue Code and the procedures adopted by the Board to require that the objectors be permitted to prosecute objections to the Collector's application for judgment.
In Illinois Bell Telephone Co. v. Allphin (1975), 60 Ill.2d 350, 326 N.E.2d 737, the supreme court overruled the doctrine set forth in Owens-Illinois Glass Co. v. McKibbin (1943), 385 Ill. 245, 52 N.E.2d 177, whereby a taxpayer was permitted to attack the imposition of illegal, unauthorized or invalid taxes by proceeding in court without exhausting administrative remedies under the Revenue Code. Then, in People ex rel. Boylan v. Illinois Central Gulf R.R. Co. (1978), 72 Ill.2d 387, 381 N.E.2d 276, that court held that, without exhausting administrative remedies, a railroad company could pay its property taxes under protest and object to the collector's application for judgment on the grounds that the assessment was not properly equalized by the department under section 80 of the Act (Ill. Rev. Stat. 1973, ch. 120, par. 561). The court adhered to the rule of People ex rel. Cain v. Illinois Central R.R. Co. (1965), 33 Ill.2d 232, 210 N.E.2d 516, and prior cases in which a distinction was recognized between (1) objections to original assessments which required the expertise of the department making administrative procedures necessary, and (2) objections to the application of an equalizing factor which was a mechanical procedure. The court also noted that the railroad had a valid concern about the adequacy of notice and time provisions which would be applicable by statute if administrative proceedings had to be exhausted.
In People v. Jennings (1954), 3 Ill.2d 125, 119 N.E.2d 781, the failure of assessment officers to give proper notice of assessments of personal property was held to excuse objectors in court proceedings from the exhaustion of the administrative remedies requirement. (See also In re Application of County Treasurer (1977), 53 Ill. App.3d 760, 368 N.E.2d 1127.) A similar failure may have occurred here. However, even if statutorily required notice was given, the procedure used in the context of the confusing legislation involved requires, in fairness, that objectors be allowed to proceed by objecting to the Collector's application. Boylan.
The record before the court at the time of the hearing on the motion for summary judgment was substantially undisputed as to relevant events. On June 25, 1981, the Department of Revenue of the State of Illinois (Department) ordered the Board to reconvene "in extraordinary session for the purpose of further revising, correcting and equalizing the assessment of farm property." The Board then held the October 9, 1981, meeting where the assessments were increased by 8% and caused the following notice to be published in various county papers on October 15, and October 21, 1981:
Take note that for the purpose of reviewing and correcting reassessments of farm property in Clark County, Illinois, the Clark County Board of Review shall reconvene in extraordinary session on the 23rd day of October, 1981, at 10 a.m. to 11 a.m. at the Clark County Courthouse, Marshall, Illinois, pursuant to Chapter 120, Section 623, of the Illinois Revised Statutes. At said time the Board of Review shall review, correct, return and certify such reassessment as ordered by the Illinois Department of Revenue.
Earl Kile, Clerk of Board of Review."
None of the objectors appeared at the October 23 meeting and no correction or change was made to the assessments established at the October 9 meeting. The Board then certified and returned the assessments as increased. Taxes for the revenue year 1980 were then levied against objectors' properties.
Section 140.02 of the Act (Ill. Rev. Stat. 1981, ch. 120, par. 621.02) was in force at all pertinent times. It directs the Department to review the assessments made in each county under section 20e and if the Department finds that the assessments are not being made according to the statutory directive, the Department may, in its discretion, order a reassessment or direct the Board of Review to reconvene "for the purpose of correcting assessments." This section would appear to be the provision under which the Department intended to ...