The Christian County Board of Review v. The Property Tax Appeal Board

• Court: Appellate Court of Illinois
• Decided: October 30, 2006
• Docket: 5-04-0731 Rel
• Status: Published

Opinion

Rule 23 order filed NO. 5-04-0731 September 12, 2006; Motion to publish granted IN THE October 30, 2006. APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT ________________________________________________________________________

THE CHRISTIAN COUNTY BOARD OF ) Appeal from the REVIEW, ) Circuit Court of ) Christian County. Plaintiff-Appellant, ) ) v. ) No. 01-MR-13 ) THE PROPERTY TAX APPEAL ) BOARD, CAROL PRESNELL, and JACK ) PRESNELL, ) Honorable James J. Eder and ) Honorable Michael R. Weber, Defendants-Appellees. ) Judges, presiding. ------------------------------------------------------------------------------------------------------------ THE CHRISTIAN COUNTY BOARD OF ) Appeal from the REVIEW, ) Circuit Court of ) Christian County. Plaintiff-Appellant, ) ) v. ) No. 01-MR-15 ) THE PROPERTY TAX APPEAL ) BOARD and ALLEN C. BRAUNE, ) Honorable James J. Eder and ) Honorable Michael R. Weber, Defendants-Appellees. ) Judges, presiding. ------------------------------------------------------------------------------------------------------------ THE CHRISTIAN COUNTY BOARD OF ) Appeal from the REVIEW, ) Circuit Court of ) Christian County. Plaintiff-Appellant, ) ) v. ) No. 01-MR-17 ) THE PROPERTY TAX APPEAL ) BOARD and ROBERT A. NOREUIL, ) Honorable James J. Eder and ) Honorable Michael R. Weber, Defendants-Appellees. ) Judges, presiding. ------------------------------------------------------------------------------------------------------------ THE CHRISTIAN COUNTY BOARD OF ) Appeal from the REVIEW, ) Circuit Court of ) Christian County. Plaintiff-Appellant, ) ) v. ) No. 01-MR-16 ) THE PROPERTY TAX APPEAL ) BOARD, ) ) Defendant-Appellee and Cross-Appellant, ) ) and ) ) BELINDA SEXSON, ) Honorable James J. Eder and ) Honorable Michael R. Weber, Defendant-Appellee. ) Judges, presiding. ________________________________________________________________________

JUSTICE WELCH delivered the opinion of the court:

In 1999, the Christian County Board of Review (County) assessed five manufactured

homes located in Christian County as real property. Each owner of the manufactured homes

separately appealed the assessments to the Property Tax Appeal Board (PTAB) and argued

that the manufactured homes should be assessed as personalty and not real property. The

PTAB agreed with each owner of the manufactured homes and found that because the

manufactured homes do not rest on a permanent foundation and because the County did not

have a lawful method of assessing manufactured homes or like-kind property prior to 1979,

they were improperly assessed as real property pursuant to the Property Tax Code (35 ILCS

200/1-1 et seq. (West 2002)). The PTAB found that the manufactured homes should be

treated, for taxation purposes, as mobile homes subject to the provisions of the Mobile Home

Local Services Tax Act (35 ILCS 515/1 et seq. (West 2002)). The County appealed each

PTAB decision to the circuit court of Christian County.

On review, the circuit court upheld the PTAB's findings that none of the manufactured

homes rested on a permanent foundation. The circuit court also held that regarding four of

the manufactured homes, the PTAB's findings that the County did not have a lawful method

2 of assessing manufactured homes or like-kind property prior to 1979 and that therefore the

classification of the property did not freeze under section 24-5 of the Property Tax Code (35

ILCS 200/24-5 (West 2002)) were not against the manifest weight of the evidence.

However, regarding the fifth manufactured home, the circuit court held that because the

evidence was uncontradicted that the fifth manufactured home had been assessed as real

property prior to 1979, the PTAB's findings "with respect to the assessment of [this

manufactured home]" were against the manifest weight of the evidence. The County appeals

the circuit court's adverse decisions on the four manufactured homes, and the PTAB appeals

the circuit court's adverse decision on the fifth manufactured home. These cases have been

consolidated. For the reasons that follow, we affirm the decisions of the PTAB, and we

affirm in part and reverse in part the decisions of the circuit court.

Before addressing the issues raised on appeal, we note that this appeal comes to us

from several decisions by the circuit court of Christian County. However, because the PTAB

is an administrative agency subject to the Administrative Review Law (735 ILCS 5/3-101

et seq. (West 2004)), our review focuses exclusively on the decisions of the PTAB and not

the decisions of the circuit court. Senachwine Club v. Putnam County Board of Review, 362

Ill. App. 3d 566, 568 (2005). We also note that our review of an administrative agency's

findings of fact is performed under a manifest-weight-of-the-evidence standard of review.

Dowrick v. Village of Downers Grove, 362 Ill. App. 3d 512, 515 (2005). Furthermore, we

review de novo an administrative agency's conclusion on a question of law. Comprehensive

Community Solutions, Inc. v. Rockford School District No. 205, 216 Ill. 2d 455, 471 (2005).

Finally, where there is a mixed question of law and fact, we review an administrative

agency's decision for clear error. Elementary School District 159 v. Schiller, 221 Ill. 2d 130,

143 (2006).

Essentially, there are three issues raised by the parties on appeal. These issues can be

3 summarized as follows: first, whether the PTAB's decisions that the County did not have a

lawful method for assessing manufactured homes or like-kind property prior to 1979 and

thereby improperly assessed the manufactured homes as real property pursuant to section 24-

5 were against the manifest weight of the evidence, second, whether the PTAB erred in

defining the term "permanent foundation" as it is used in the Property Tax Code, and third,

whether the PTAB erred in assessing as real property air conditioner units attached to some

of the manufactured homes. The evidence presented to the PTAB was as follows.

There are four owners of the five manufactured homes. Belinda Sexson is the owner

of two of the manufactured homes. Carol and Jack Presnell, Allen C. Braune, and Robert

A. Noreuil each own one manufactured home. Each owner of a manufactured home also

owns the property where the manufactured home is located. Four of the manufactured homes

were constructed after 1980. The fifth manufactured home, which is one of the two

manufactured homes owned by Sexson, was built prior to 1979 and was on the property

purchased by Sexson in 1995.

Each manufactured home rests on concrete blocks. Wood shims lie between the frame

of the manufactured homes and the concrete blocks, to level the manufactured homes. The

concrete blocks are not mortared together. The concrete blocks rest on concrete pads, piers,

or gravel. None of the concrete pads or piers extends more than a few inches below the

ground.

Each manufactured home has an exterior skirting surrounding its perimeter. The

skirting does not support the homes in any way. Some of the manufactured homes have a

central-air-conditioning unit attached. The County assessed these attached air conditioners

as real property.

Ronald Finley, the chief county assessment officer of Christian County, has been

employed with the Christian County assessment office as the supervisor of assessments from

4 October 16, 1978, to May 16, 1994, and since December 1, 1996. Evidence was presented

by Finley in regard to Christian County's methods for assessing mobile home property prior

to 1979. According to an affidavit submitted by Finley, he "made an exhaustive review of

the records and documents" from 1975 through 1978, and based upon this review he

concluded that the County had a general policy of assessing mobile homes as follows:

"[A]ll factory[-]assembled structures designed for permanent habitation which are not

located in a mobile home park or are not situated on leased ground [and] which have

wheels, tongues[,] and hitches removed were and are treated as real estate and

assessed as real estate for the purposes of ad valorem taxation. Those with wheels,

tongues[,] and hitches intact, or those located in a mobile home park or, for the most

part, on leased ground, were and are treated for taxation purposes under the Mobile

Home Local Services Tax Act ***."

The affidavit, however, noted some instances where the County assessed mobile homes

located on leased property as real property. In addition, the affidavit pointed out that during

1980 or 1981, Finley had conducted a review of all "factory[-]assembled dwellings" to

determine if similar properties were being assessed by the same method and he learned that

some mobile homes that had the tongues, hitches, and wheels intact were improperly assessed

as real property and that some mobile homes with tongues, hitches, and wheels removed were

improperly assessed as personalty. These improper assessments were corrected upon

discovery.

Finley testified that the criterion used by Christian County to determine whether a

mobile home should be taxed as real property or personalty is whether the owner of the

mobile home owns the underlying property where the mobile home is located. Finley

testified that it was never the policy of the County to tax mobile homes based on whether

they rested on a permanent foundation.

5 Upon reviewing the evidence, the PTAB found that the County failed to establish that

it had a uniform consistent practice of classifying and assessing mobile homes as real

property prior to 1979. As a result, the PTAB found that because the County did not have

a lawful method for assessing mobile homes or like-kind property prior to 1979, section 24-5

did not "freeze" the classification of manufactured homes. In addition, the PTAB found that

the manufactured homes did not rest in whole on a permanent foundation and were therefore

improperly assessed as real property pursuant to the Property Tax Code.

The first issue raised on appeal pertains to section 24-5 and the PTAB's findings that

the County did not lawfully assess mobile home property or like-kind property prior to 1979.

Section 24-5 was enacted in 1979 to prevent the reclassification of personal property to real

property after the General Assembly abolished the ad valorem personal property tax. Oregon

Comm unity Unit School District No. 220 v. Property Tax Appeal Board, 285 Ill. App. 3d

170, 176 (1996). The current version of section 24-5 provides as follows:

"No property lawfully assessed and taxed as personal property 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. No property lawfully

assessed and taxed as real property 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." 35 ILCS 200/24-5 (West 2002).

Under section 24-5, if a property was lawfully assessed as real property or personal property

prior to January 1, 1979, that property and property of like kind must be classified the same

way after January 1, 1979.

In the instant case, the PTAB found that the County did not have a lawful method of

assessing mobile home property prior to 1979 and that, therefore, the status of mobile home

property or property of like kind did not freeze. The County disputes the PTAB's findings,

6 arguing that the evidence demonstrated that the County had a lawful consistent method of

assessing mobile homes as real property prior to 1979 and that, therefore, the mobile homes

in the instant case were properly assessed as real property pursuant to section 24-5.

Under section 24-5, classifications are only "frozen" if the property was "lawfully

assessed" prior to 1979. Oregon Community Unit School District No. 220, 285 Ill. App. 3d

at 183. "It is well established that it is unlawful for an assessor to exempt one kind of

property while classifying the same kind of property in the same district as nonexempt."

Oregon Community Unit School District No. 220, 285 Ill. App. 3d at 178. "The uniformity

clause of the constitution [(Ill. Const. 1970, art. IX, §4(a))] prohibits a taxing official to [sic]

value one property in one manner and then value the same kind of property, in the same

district, in another manner." Oregon Community Unit School District No. 220, 285 Ill. App.

3d at 183.

In the instant case, Finley's affidavit and testimony support the PTAB's findings that

the County did not have a lawful method of assessing mobile home property. The County's

policy, as set forth by Finley, provided that mobile homes are assessed based on whether the

mobile homes are located on land owned by the owners of the mobile homes or whether the

mobile homes are located on land that was leased. However, the evidence reveals that this

general policy was not consistently applied. Finley testified that in 1980 or 1981, he

reviewed the assessments of similar properties and found that some were not assessed in

accordance with the County's policy. According to Finley's affidavit, some mobile homes

that were located on leased grounds were assessed as real property. Other evidence also

revealed a disparate treatment of similar properties in various townships. For example,

evidence revealed that 11 of 27 factory-assembled homes in Bear Creek Township were

treated as personalty, while the remaining 16 were treated as real property. The County

offered no explanation for the disparity.

7 Upon reviewing the record, we cannot conclude that the PTAB's findings that the

County did not have a consistent method, and hence a lawful method, of assessing mobile

home property or property of like kind prior to 1979 are against the manifest weight of the

evidence. As a result, the PTAB's decision that section 24-5 does not permit the County to

assess the manufactured homes at issue as real property was also not in error. Because the

County failed to demonstrate that mobile home property or property of like kind had been

lawfully assessed as real property prior to 1979, section 24-5 does not provide the County

with a means to assess the manufactured homes in the instant case as real property.

Our decision extends to the manufactured home that was constructed prior to 1979,

which the circuit court held was properly assessed as real property under section 24-5

because the County had always assessed this specific property as real property. Again,

because the County failed to show that it had a lawful method of assessing mobile home

property, under the plain terms of the statute section 24-5 cannot be employed. Section 24-5

only applies to property that was lawfully assessed. The County has failed to show that said

property was lawfully assessed as real property. Accordingly, we reverse the circuit court's

decision as it pertains to the pre-1979 manufactured home owned by Sexson. Because the

PTAB's findings that the County did not lawfully assess mobile home property or property

of like kind prior to 1979 were not against the manifest weight of the evidence, we affirm the

PTAB's findings that the County improperly assessed the five manufactured homes as real

property in accordance with section 24-5.

The second issue raised on appeal pertains to the PTAB's definition of the term

"permanent foundation." In the instant case, the County also assessed the manufactured

homes as real property based on the claim that because the manufactured homes rest in whole

on a permanent foundation, they were real property in accordance with the Property Tax

Code and the Mobile Home Local Services Tax Act (35 ILCS 515/1 et seq. (West 2002)).

8 The PTAB correctly observed that the Property Tax Code and the Mobile Home Local

Services Tax Act do not define the term "permanent foundation," and so the PTAB turned

to other statutes that do define the term, and the PTAB adopted a definition of a permanent

foundation for the purposes of the Property Tax Code and the Mobile Home Local Services

Tax Act. Under the definition adopted, the PTAB found that the manufactured homes did

not rest on a permanent foundation and therefore were improperly assessed as real property.

The County now challenges the PTAB's definition of a permanent foundation.

Before setting forth the definition of the term "permanent foundation" that the PTAB

adopted and the specific objections raised by the County to this definition, we note that the

PTAB has the authority to construe statutory provisions in making decisions and

determinations but that its interpretation of a statute presents a question of law and is

therefore subject to de novo review. Geneva Community Unit School District No. 304 v.

Property Tax Appeal Board, 296 Ill. App. 3d 630, 633 (1998). However, although the

reviewing court is not bound by an agency's interpretation of a statute, courts will give

substantial weight to the interpretation of an ambiguous statute by the agency charged with

its administration and enforcement. Geneva Community Unit School District No. 304, 296

Ill. App. 3d at 633. Agencies are able to make informed judgments upon the issues, based

on their experience and expertise. Geneva Community Unit School District No. 304, 296 Ill.

App. 3d at 633.

Section 1-130 of the Property Tax Code states in relevant part that real property

includes "any vehicle or similar portable structure used or so constructed as to permit its use

as a dwelling place, if the structure is resting in whole on a permanent foundation."

(Emphasis added.) 35 ILCS 200/1-130 (West 2002). The Mobile Home Local Services Tax

Act provides that if a home fits within the definition of a mobile home, it is subject to the

privilege tax and shall not be assessed and taxed as real property. 35 ILCS 515/1 et seq.

9 (West 2002). Section 1 of the Mobile Home Local Services Tax Act defines the term

"mobile home" as follows:

" '[M]obile home' means a factory[-]assembled structure designed for

permanent habitation and so constructed as to permit its transport on wheels,

temporarily or permanently attached to its frame, from the place of its construction to

the location, or subsequent locations, and placement on a temporary foundation, at

which it is intended to be a permanent habitation, and situated so as to permit the

occupancy thereof as a dwelling place for one or more persons, provided that any such

structure resting in whole on a permanent foundation, with wheels, tongue[,] and

hitch removed at the time of registration provided for in Section 4 of this Act, shall

not be construed as a 'mobile home'[] but shall be assessed and taxed as real property

as defined by Section 1-130 of the Property Tax Code." (Emphasis added.) 35 ILCS

515/1 (West 2002).

Like the Property Tax Code, the Mobile Home Local Services Tax Act does not define the

term "permanent foundation."

Recognizing that neither statute defines the term "permanent foundation," the PTAB

looked to several other statutes and codes that do define the term. The statutes included the

Illinois Manufactured Housing and M obile Home Safety Act (430 ILCS 115/2(a) (West

2002)), the Manufactured Home Quality Assurance Act (430 ILCS 117/10 (West 2002)), and

the Mobile Home Park Act (210 ILCS 115/2.10 (West 2002)). The codes included the

Illinois Manufactured Home Installation Code (77 Ill. Adm. Code §870.20 (Conway-Green

CD-ROM 2000)) and the Manufactured Home Community Code (77 Ill. Adm. Code

§860.150(a) (Conway-Green CD-ROM 2000)). Mobile homes are the subject matter in each

of these state statutes or codes. Each statute and code examined by the PTAB contains a

definition of the term "permanent foundation." The similarities among these definitions

10 include a description of a closed or continuous perimeter foundation of material such as

mortared concrete block that extends into the ground below the established frost depth or is

intended to support and anchor the unit to withstand the specified design loads. After

considering the definitions in these statutes and codes, the PTAB defined the term

"permanent foundation" as "a continuous perimeter formation composed of concrete,

mortared concrete block, mortared brick[,] and the like that extends below the frost line that

actually supports and anchors the mobile home." Based on the evidence presented in the

underlying cases, the PTAB found that none of the manufactured homes rests in whole on

a permanent foundation.

On appeal, the County does not challenge the PTAB's findings that the manufactured

homes do not rest on a permanent foundation as that term is defined by the PTAB. The

County instead challenges the PTAB's definition of the term and argues that the PTAB's

definition is erroneous and that it should have defined a permanent foundation as "anything

that transfers weight of a structure to the earth intended to last [for] the usefulness of said

structure," which is the definition employed by the County. The County makes two

arguments to support its position that the definition adopted by the PTAB is erroneous.

First, the County contends that the PTAB erred in forming a definition of the term

"permanent foundation" from the statutes and codes it examined. The County contends that

the statutes and codes from which the PTAB garnered a definition did not intend to define

the term "permanent foundation" for "purposes of taxation" and that therefore they are not

applicable to the instant case. However, the appellate court has already rejected this

argument in Lee County Board of Review v. Property Tax Appeal Board, 278 Ill. App. 3d

711, 720-21 (1996). In Lee County Board of Review, the appellate court affirmed the PTAB's

definition of the term "permanent foundation" as taken from the Illinois Manufactured

Housing and M obile Home Safety Act. Lee County Board of Review, 278 Ill. App. 3d at 722.

11 In Lee County Board of Review, the PTAB acknowledged that neither the Revenue Act (now

known as the Property Tax Code) nor the Mobile Home Local Services Tax Act defined the

term "permanent foundation." Lee County Board of Review, 278 Ill. App. 3d at 722.

Accordingly, the PTAB turned to the definition set forth in the Illinois Manufactured

Housing and Mobile Home Safety Act. On review, the appellate court noted that because the

statutes involve the same subject matter–mobile homes–the PTAB's use of the definition

from the Illinois Manufactured Housing and Mobile Home Safety Act was proper. Lee

County Board of Review, 278 Ill. App. 3d at 721. The court stated, "[I]t is appropriate for

the court to compare other statutes on the same subject matter, even though not strictly in

pari materia." Lee County Board of Review, 278 Ill. App. 3d at 721. As in Lee County

Board of Review, we do not believe the PTAB erred in defining the term "permanent

foundation" based on definitions in other similar statutes that also involve the same subject

matter–mobile homes.

Next, the County contends that the PTAB's definition of the term "permanent

foundation" is erroneous because under the definition, no mobile home can rest wholly on

a perimeter foundation because it would collapse from the lack of support. To support this

claim, the County cites the testimony of Allen Braune, an owner of one of the manufactured

homes at issue in the instant case, who testified during one of the hearings that he believed

that if his manufactured home rested only on a perimeter foundation, it would collapse. The

County also cites Sweitzer v. City of O'Fallon, 135 Ill. App. 3d 1, 4 (1985), wherein this court

stated: "[T]he mobile home of today remains unsuitable for attachment to a permanent

foundation. It is generally supported by a steel frame and tied down by cables to prevent it

from being blown away or displaced in severe winds." No additional evidence was presented

to support the County's position. The County did not offer any expert testimony to support

its claim. In any event, in reviewing an agency's construction of a statute, we defer to an

12 agency's experience in construing and applying the statutes that it administers. Based on the

record in this case, we do not agree that the PTAB's definition of the term "permanent

foundation" is erroneous because it renders the Property Tax Code and the Mobile Home

Local Services Tax Act meaningless because no mobile home can be supported by a

permanent foundation.

In sum, we reject the County's argument that the PTAB's definition is in error.

Because the County does not challenge the PTAB's application of the facts to this definition,

we affirm the PTAB's findings that the manufactured homes are mobile homes within the

meaning of the Mobile Home Local Services Tax Act and not subject to real estate taxation

in accordance with the Property Tax Code. Accordingly, we affirm the PTAB's findings that

the County improperly assessed the manufactured homes as real property.

We now turn to the third issue raised on appeal, whether the PTAB erred in finding

that the County improperly assessed the air-conditioning units that were attached to the

mobile homes as real property. In Boone County Board of Review v. Property Tax Appeal

Board, 276 Ill. App. 3d 989, 997 (1995), the appellate court held that items merely attached

to personalty cannot be taxed as real property. The County does not challenge this principle

but argues that because the manufactured homes were properly assessed as real property, the

air conditioners also were properly assessed as real property. Because our decision affirms

the PTAB's findings that the manufactured homes were improperly assessed as real property,

we agree with the PTAB that the air conditioners also were improperly assessed as real

property. Accordingly, we affirm the PTAB's decision that the air conditioners attached to

the manufactured homes were improperly assessed as real property.

For the foregoing reasons, we affirm the circuit court's decisions pertaining to the

manufactured homes owned by Carol and Jack Presnell, Allen C. Braune, and Robert A.

Noreuil. In addition, we affirm the circuit court's decision as it pertains to the manufactured

13 home owned by Belinda Sexson that was manufactured after 1979. Finally, we reverse the

circuit court's decision pertaining to the manufactured home owned by Belinda Sexson that

was manufactured prior to 1979.

Affirmed in part and reversed in part.

GOLDENHERSH and HOPKINS, JJ., concur.