Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

11/15/95 COUNTY WHITESIDE v. ILLINOIS PROPERTY TAX

November 15, 1995

THE COUNTY OF WHITESIDE, WHITESIDE COUNTY BOARD OF REVIEW, CITY OF STERLING, STERLING COMMUNITY UNIT SCHOOL DISTRICT NO. 5, STERLING TOWNSHIP, SAUK VALLEY COMMUNITY COLLEGE DISTRICT NO. 506, STERLING PARK DISTRICT, STERLING RURAL FIRE PROTECTION DISTRICT, HOPKINS TOWNSHIP, CITY OF ROCK FALLS, ROCK FALLS ELEMENTARY SCHOOL DISTRICT NO. 13, ROCK FALLS TOWNSHIP HIGH SCHOOL DISTRICT NO. 301, COLOMA TOWNSHIP, COLOMA TOWNSHIP PARK DISTRICT, AND WHITESIDE COUNTY SPECIAL SERVICE AREA NO. 1, APPELLANTS,
v.
THE ILLINOIS PROPERTY TAX APPEAL BOARD AND NORTHWESTERN STEEL & WIRE CO., APPELLEES.



Petition for Review of Order of the Illinois Property Tax Appeal Board. Property Tax Appeal Board Docket Nos. 88-1238-I-3 thru 88-1304-I-3; 89-1536-I-3 thru 89-1611-I-3; 90-362-I-3.

Released for Publication December 21, 1995. Petition for Leave to Appeal Denied April 3, 1996.

Present - Honorable Peg Breslin, Justice, Honorable Tom M. Lytton, Justice, Honorable Kent Slater, Justice. Lytton, J., concurs. Breslin, J., dissents with opinion

The opinion of the court was delivered by: Slater

JUSTICE SLATER delivered the opinion of the court:

Appellee Northwestern Steel and Wire Company (Northwestern) filed complaints with appellant Whiteside County Board of Review challenging the assessed valuation of Northwestern's property for tax years 1988, 1989 and 1990. The board of review denied the requested relief and Northwestern appealed to the Illinois Property Tax Appeal Board (the appeal board). The remaining appellants, consisting of various taxing districts, intervened on the side of the board of review. Following an evidentiary hearing, the appeal board ruled in favor of Northwestern and granted assessment reductions. The board of review and the taxing districts (hereinafter collectively called the taxing districts) now appeal, raising several issues. For the reasons stated below, we affirm in part, reverse in part and remand for further proceedings.

OVERVIEW

Northwestern operates a so-called "mini-mill" which produces steel from scrap metal. A mini-mill differs from an integrated steel facility, which makes steel from iron ore. The mill is situated on 645 acres of land, with approximately 311 acres utilized as farmland and 334 acres used for manufacturing. One hundred and forty-five buildings are located on the property, ranging in size from 11 to 883,366 square feet, and totaling 4,198,576 square feet of building area. These buildings house various types of machinery and equipment which are used in the steel manufacturing process. The appeal board assessed the value of the property as $18,150,000. The taxing districts' expert, on the other hand, appraised the property in a preliminary report at an estimated value of $34,000,000 to $45,000,000.

THE "LIKE KIND" ISSUE

We first consider the taxing districts' contention that the appeal board erred in finding that certain machinery and equipment installed after January 1, 1979, were of "like kind" to the machinery and equipment in use prior to that date. The result of this finding was that the post-1979 machinery was classified in the same manner as the pre-1979 machinery, which had been classified as personal property. The taxing districts contend that the appeal board misinterpreted the like kind provision. We disagree.

Section 18.1 of the Revenue Act of 1939 provides in part:

"§ 18.1. Notwithstanding the provisions of this or any other Act, an ad valorem personal property tax shall not be levied after January 1, 1979, on any personal property having tax situs in this State, provided that this Section shall not prohibit the collection after January 1, 1979 of any taxes levied under this Act prior to January 1, 1979, on personal property subject to assessment and taxation under this Act prior to January 1, 1979. No property lawfully assessed and taxed as personal property under this Act prior to January 1, 1979, [or property of like kind acquired or placed in use after January 1, 1979,] shall be classified as real property subject to assessment and taxation under this Act after January 1, 1979. No property lawfully assessed and taxed as real property under this Act prior to January 1, 1979, [or property of like kind acquired or placed in use after January 1, 1979,] shall be classified as personal property subject to assessment and taxation under this Act after January 1, 1979." (Emphasis added.) 35 ILCS 205/18.1 (West 1992) repealed by Pub. Act 88-455, eff. Jan. 1, 1994, and re-enacted as amended as 35 ILCS 200/24-5 (West 1994).

This section, enacted in 1979, abolished ad valorem personalproperty taxes, as mandated by the Illinois Constitution. (See Ill. Const. 1970, art. IX, § 5(c).) In addition, section 18.1 was intended to "freeze" the classification of property as either real or personal, depending upon its classification prior to 1979. ( Central Illinois Light Co. v. Johnson (1981), 84 Ill. 2d 275, 418 N.E.2d 696, 49 Ill. Dec. 676.) In 1983, section 18.1 was amended by inserting the bracketed phrase "or property of like kind acquired or placed in use after January 1, 1979" as indicated above. (Pub. Act 82-935, eff. Jan. 1, 1983.) Thus, the amended section 18.1 "froze" not only pre-1979 property as real or personal, but also any other property of "like kind" subsequently acquired.

The property at issue in this case includes two continuous casters, a jumbo caster, a metallurgical furnace, a furnace ladle injection system, a 12-inch rod and bar mill, a computerized roll lathe, cleaning room equipment and nail packaging equipment. All of this property was acquired or placed in use after January 1, 1979. The appeal board first noted that the new equipment represented technological advancements that replaced older equipment. The board then found that the testimony of Gerald Shinville, vice-president of quality assurance and technology for Northwestern, Edmund McIntyre, an engineer, and Joseph Pataki, also an engineer, indicated that the machinery installed after 1979 performed the same function and produced the same products more efficiently and with superior quality than the equipment it replaced. The appeal board also found that the newer equipment had similar portability and was attached to the structures in a similar manner as the old. In ruling that the post-1979 equipment was of like kind to Northwestern's pre-1979 equipment, the appeal board stated that the purpose of section 18.1 was to prohibit the reclassification of new or replacement machinery to give businesses a sense of certainty that replacing older equipment with efficient new technology would not result in an increased tax burden and a loss of competitive advantage.

The taxing districts assert that the appeal board's interpretation of the like kind standard is overly broad and results in labeling any new equipment used in the manufacture of steel as like kind "despite any dissimilarities, however radical, in technology, nature, sophistication, function, or process, because it would provide the same function of contributing to the production of steel." The taxing districts suggest that a more reasonable interpretation of the like kind standard would exclude any machinery or equipment which, due to technological advances ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.