Opinion ID: 2222232
Heading Depth: 1
Heading Rank: 3

Heading: applicability of the administrative procedure act and due process challenges

Text: The plaintiffs next contend that the multiplier is invalid because the Department failed to follow the Illinois Administrative Procedure Act (APA) (Ill. Rev. Stat. 1985, ch. 127, par. 1001 et seq. ) and also violated the due process rights of taxpayers. The plaintiffs advance 10 specific arguments to support their contention that the Department did not follow the APA and violated the due process rights of the taxpayers. They contend the Department failed to: (1) adopt rules relating to its sales ratio studies and its determination of the multiplier; (2) adopt rules relating to the conduct of the hearing on the multiplier; (3) issue subpoenas to persons to appear and testify at the hearing; (4) place witnesses under oath at the hearing; (5) provide plaintiffs access to all relevant documents through discovery-type procedures; (6) provide an unbiased hearing officer; (7) have its Director independently review the hearing officer's recommendations; (8) allow comment on the hearing officer's report prior to setting the final multiplier; (9) certify a final multiplier; and (10) exercise its considered judgment. Section 148a of the Revenue Act requires the Department to publish its estimated multiplier (known as the tentative multiplier) in a general circulation newspaper within the particular county and give notice of the hearing to the public in the same newspaper publication. The section further provides that the Department may exercise its considered judgment to either confirm or revise its estimated multiplier, after giving such hearing to all interested parties and such opportunity for submitting such proofs and arguments in support of or adverse to such estimate as the Department considers requisite.  (Emphasis added.) Ill. Rev. Stat. 1985, ch. 120, par. 629a. The underlying premise for the plaintiffs' contention that the APA applies to a multiplier hearing is that such a hearing is a contested case within the meaning of the APA. The definition of contested case is set out in section 3.02 of the APA: `Contested case' means an adjudicatory proceeding, not including rate making, rule-making, quasi-legislative, informational or similar proceedings, in which the individual legal rights, duties or privileges of a party are required by law to be determined by an agency only after an opportunity for hearing. (Emphasis added.) Ill. Rev. Stat. 1985, ch. 127, par. 1003.02. The Department says the hearing it conducts on the tentative multiplier is not governed by the APA, as the hearing is not a contested case within the meaning of section 3.02. It says taxation is a legislative function and the determination of the multiplier is a legislative fact, rather than an adjudication of individual rights. As a determination of legislative fact, the Department considers that the hearing is properly classified as that is in the nature of rule making, quasi-legislative, informational or similar proceedings that are excepted in section 3.02 from the definition of a contested case. As such, the Department contends the hearing falls outside the definition of a contested case under the APA. The Department also contends that section 2 of the APA shows that a multiplier hearing is exempt from the applicability of the APA, as it states: Where the Act creating or conferring power on an agency establishes administrative procedures not covered by this Act, such procedures shall remain in effect. (Ill. Rev. Stat. 1985, ch. 127, par. 1002.) The Revenue Act, which the Department says creates or confers power on the Department to set the multiplier, provides in section 148a specific procedures concerning notice of the hearing by publication two weeks prior to the hearing date. The Department notes that section 148a also provides for how the hearing is to be conducted, as it states that all interested persons shall have an opportunity to submit proofs and arguments in support of or adverse to the estimated multiplier before the Department decides whether to increase or decrease the estimated multiplier. The section, the Department contends, also establishes the procedure for the decision to issue within 30 days of the hearing's conclusion while, section 151 (Ill. Rev. Stat. 1985, ch. 120, par. 632) provides for the Department's issuance of the certified multiplier to the county clerk. Because these portions of the Revenue Act provide specific procedural guidelines for the multiplier hearing, the Department contends section 2 of the APA defers to these procedures and exempts the Department from promulgating rules for the conduct of the hearing. The Department also says, in response to the plaintiffs' due process arguments, that section 148a accords all process due under law to the Department's determinations. We consider that the Department is correct in its contention that the multiplier hearing is not a contested case within the meaning of the APA and that section 148a adequately provides due process protection to taxpayers interested in challenging the tentative multiplier. The levy of taxes is a legislative, rather than a judicial, function vested in the General Assembly by specific grant in our State constitution (Ill. Const. 1970, art. IX, § 4(a)). The legislature has the authority to delegate the taxation function and has done so, through section 146 of the Revenue Act, by designating the Department to act as the equalizing authority. While the legislature has required the Department, through section 148a, to hold a public hearing on its estimated multiplier, it has delegated a great deal of discretion to the Department on how the hearing is to be conducted. The section provides that the Department, in its considered judgment, may either confirm or revise its estimated multiplier after giving such hearing to all interested parties and such opportunity for submitting such proofs and arguments in support of or adverse to such estimate as the Department considers requisite.  (Emphasis added.) (Ill. Rev. Stat. 1985, ch. 120, par. 629a.) The Department, then, is granted discretion to hear the taxpayers' arguments and proofs to the extent that it considers requisite in order for it to reach a decision on whether to revise or confirm its estimated multiplier. The Department's determination of the multiplier is a legislative function, and the required hearing is intended, from what is stated in section 148a, to be an information-gathering forum in pursuit of legislative facts. As such, the nature of this required hearing is similar to a rulemaking or informational proceeding, excepted from the APA's definition in section 3.02 of a contested case. As the Department correctly maintains, a distinction is drawn in the administrative law area on the type of hearing that is necessary to meet due process requirements in determining legislative facts as opposed to adjudicative facts. Trial-type procedures, including the taking of evidence subject to cross-examination, are required when individual interests are at stake and specific facts are in dispute. (See, e.g., United States v. Florida East Coast Ry. Co. (1973), 410 U.S. 224, 35 L.Ed.2d 223, 93 S.Ct. 810; 2 K. Davis, Administrative Law §§ 12.2, 12.3, at 409-13 (2d ed. 1979).) The Supreme Court has stated that there is a recognized distinction in administrative law between proceedings for the purpose of promulgating policy-type rules or standards, on the one hand, and proceedings designed to adjudicate disputed facts in particular cases on the other. United States v. Florida East Coast Ry. Co. (1973), 410 U.S. 224, 245, 35 L.Ed.2d 223, 239, 93 S.Ct. 810, 821. Due process in the equalization/assessment context, the Court has held, accords a landowner protesting the amount assessed against his own property the right to present his arguments at a hearing, while no hearing at all is required prior to a decision by State taxing officials to increase the valuation of all properties within a city. (See Londoner v. City & County of Denver (1908), 210 U.S. 373, 52 L.Ed. 1103, 28 S.Ct. 708; Bi-Metallic Investment Co. v. State Board of Equalization (1915), 239 U.S. 441, 60 L.Ed. 372, 36 S.Ct. 141.) The former situation requires a hearing, as a small number of persons are affected on individual grounds based on a particular set of disputed facts that were adjudicated, while the latter situation involves all property taxpayers in the city and the determination is based on general facts affecting everyone. As we noted previously, the equalization process, intended to insure the constitutionally required uniformity of taxes on real property among our State's 102 counties, affects property collectively within a county. The Department is prohibited by the Revenue Act from revising or changing any individual assessment made by any local assessment officer. (Emphasis added.) (Ill. Rev. Stat. 1985, ch. 120, par. 633.) No individual rights are at stake at the multiplier hearing. Having determined that the Department's multiplier hearing is not a contested case within the meaning of the APA, we conclude that sections of the Act that plaintiffs draw upon to invalidate the multiplier are not applicable. Too, as the Department adjudicates no individual rights at the hearing, but attempts only to set an equalization factor affecting all properties within the county, we deem that the due process rights of the taxpayers are adequately recognized and secured in section 148a of the Revenue Act. Section 148a also provides administrative procedures not covered by the APA such that those procedures in section 148a remain in effect, as provided in section 2 of the APA. As such, the plaintiffs' various contentions that the multiplier is invalid because the Department failed to follow the APA, which assumes the applicability of the APA to this type of hearing, must be rejected. Thus, we reject the plaintiffs' arguments that the multiplier is invalid because the Department failed to (1) adopt rules relating to its sales ratio studies and its determination of the multiplier; (2) adopt rules relating to the conduct of the hearing on the multiplier; (3) issue subpoenas to persons to appear and testify at the hearing; (4) place witnesses under oath at the hearing; (5) provide plaintiffs access to all relevant documents through discovery-type procedures; (6) have its director independently review the hearing officer's recommendations; (7) allow comment on the hearing officer's report prior to setting the final multiplier; and (8) exercise its considered judgment. We next address the plaintiffs' two remaining due process arguments: that the Department failed to provide an unbiased hearing officer and failed to certify a final multiplier. At the hearing, the plaintiffs filed a motion to disqualify Barbara Moore as the hearing officer, which was denied. The plaintiffs claim a denial of due process, as Moore was also the Department employee responsible for preparing the tentative multiplier. While not questioning Moore's integrity or honesty, the plaintiffs contend Moore was biased toward validating her own prior work on the multiplier. We consider that the decision of this court in Scott v. Department of Commerce & Community Affairs (1981), 84 Ill.2d 42, requires the rejection of the plaintiffs' arguments. This court held in Scott that one attempting to disqualify a hearing officer must overcome a presumption of honesty and integrity by those serving as adjudicators and that generally, in the administrative law area, there is no denial of due process when one person combines the adjudicating and investigating functions. (84 Ill.2d at 55-56.) The plaintiffs point to nothing in Moore's final report that casts doubt concerning her honesty or integrity; their due process argument must fail. As for the contention that the Department failed to certify a final multiplier and had certified instead the tentative multiplier, denying plaintiffs due process, we observe that again plaintiffs present no evidence to overcome the presumption that all the agency's acts in connection with the multiplier were performed properly. (See, e.g., People ex rel. Wenzel v. Chicago & North Western Ry. Co. (1963), 28 Ill.2d 205.) Too, the Department did not revise or modify its tentative multiplier after the hearing, so that the final multiplier was actually the same as the tentative multiplier. For the reasons given, the judgment of the circuit court, affirming the Department's determinations on the 1985 Cook County multiplier, is affirmed. Judgment affirmed. JUSTICE CALVO took no part in the consideration or decision of this case.