Anderson, IN     John D. Snethen
    Indianapolis, IN

CITY OF ANDERSON, INDIANA,                                             )
    Petitioner,                                                             )
    v.                                                                      )   Cause No. 49T10-0407-TA-34
INDIANA DEPARTMENT OF                                                       )
LOCAL GOVERNMENT FINANCE,                                                   )
    Respondent.                                                             )    


April 25, 2005

    The City of Anderson, Indiana (City) appeals its 2004 Budget Order and 100% of Budget Levy Certification (2004 Order) issued by the Indiana Department of Local Government Finance (DLGF). The matter is before the Court on both the City’s motion for summary judgment and the DLGF’s motion for judgment on the pleadings. While the parties’ motions raise several issues for this Court’s consideration, one is dispositive: whether the Court has subject matter jurisdiction.

The City is a municipal corporation located in Madison County, Indiana. For the 2002 tax year, the City’s property tax certified levy was set at $23,499,426; it collected $24,191,006. Consequently, in March 2003, the DLGF issued a levy excess order (2003 Order) requiring the City to deposit $231,791 into a levy excess fund as mandated by statute. See Ind. Code Ann. § 6-1.1-18.5-17(a), (b) (West 2003). See footnote In issuing its 2003 Order, however, the DLGF did not distinguish between the taxes first due and payable in 2002 and the receipt of delinquent tax payments (i.e. property taxes for years prior to 2002). As a result, delinquent tax payments amounting to $822,220 were used in calculating the amount to be deposited in the City’s levy excess fund.
On June 30, 2004, the DLGF issued its 2004 Order requiring the City to transfer the money in its levy excess fund to its general fund. See A.I.C. § 6-1.1-18.5-17(d). Consequently, the 2004 Order also reduced the City’s 2004 levy by $231,791 and in turn, impacted the tax rates to be applied. After being told by the DLGF that there was no formal process to appeal the 2004 Order, the City filed an original tax appeal on July 30, 2004. On January 10, 2005, the DLGF filed a motion for judgment on the pleadings and the City filed a motion for summary judgment. The Court conducted a hearing on the motions on February 28, 2005. See footnote Additional facts will be supplied as necessary.
Standard of Review

Summary judgment is proper only when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C).

The City states that the DLGF incorrectly calculated the amount to be placed into the levy excess fund because it included delinquent tax payments in that calculation, in contravention of Indiana Code § 6-1.1-18.5-17. See supra note 1. As a result, the City requests that the Court set aside the 2004 Order and direct the DLGF to issue a new 2004 Budget Order consistent with Indiana Code § 6-1.1-18.5-17, or in the alternative, direct the DLGF to add the $231,791 amount to its maximum allowable levy for 2005. (See Pet. for Judicial Review of a Final Action of the Indiana Dep’t of Local Gov’t Fin. at 4, ¶ 2.) The City’s request for relief must be dismissed due to this Court’s lack of subject matter jurisdiction.
“Subject matter jurisdiction is the power of a court to hear and determine the general class of cases to which the proceedings before it belong.” Whetzel v. Dep’t of Local Gov’t Fin., 761 N.E.2d 904, 906 (Ind. Tax Ct. 2002). In turn, this Court has exclusive jurisdiction over:
any case that arises under the tax laws of this state and that is an initial appeal initiated after December 31, 2001, of a final determination made by the [DLGF] if the following apply: (1) the [T]ax [C]ourt would have had jurisdiction over the case if the appeal had been initiated before January 1, 2002[; and] (2) [t]his act does not provide that the final determination is subject to appeal to the Indiana board of tax review.

P.L. 198-2001, § 116.
A final determination establishes the rights of or imposes obligations on a party as a consummation of an administrative process. BP Prods. North America Inc. v. Dep’t of Local Gov’t Fin., 774 N.E.2d 122, 126 (Ind. Tax Ct. 2002) (citation omitted), review denied. In determining whether a final determination exists, the Court looks at three factors: (1) was the petitioner a party to the action; (2) did the action impose obligations on the petitioner; and (3) was the action a consummation of the administrative process. See id. at 126-127.
The City claims that the DLGF’s 2004 Order meets all three requirements and is therefore appealable to this Court. More specifically, the City argues that it was a party to the action because the 2004 Order was a direct review and reduction of its budget, levy and tax rate. (See Pet’r Br. in Supp. of Mot. for Summ. J. (Pet’r Br.) at 3.) The City also argues that the 2004 Order imposed obligations on it by requiring it to transfer $231,791 from its levy excess fund to its general fund. (See Pet’r Br. at 3.) Finally, the City argues that the 2004 Order consummated the administrative process because the DLGF indicated that no statutory or administrative procedure existed for the City to challenge the certification. (See Pet’r Br. at 3.) While the Court agrees with the City on the first two factors, it finds that the 2004 Order was not the consummation of the administrative process because administrative procedures existed for the City to challenge its budget, levy or tax rate, and the City did not exhaust those remedies.
During the hearing conducted on the motions, counsel for the City admitted that the City had other administrative procedures at its disposal. Specifically, the City’s counsel stated:
I acknowledge that there were other administrative ways that the City could have raised the issue with the DLGF, but I think I can say with a fair degree of certainty that it would not have mattered at all. All those [procedures] were just different ways of bringing the issue before the DLGF. The DLGF still had to address the issue, and they’ve made clear what their position is. … So no matter how or when it had been raised, the DLGF would have still had to have addressed that issue and we know what their answer to that issue was and is.

(See Hr’g Tr. at 25.) In other words, the City, anticipating a negative response from the DLGF, bypassed the agency altogether. Nevertheless, it had the option to raise the issue with the DLGF, “in which case the machinery of the tax system would [have] produce[d] [an] appealable final determination[].” See footnote See State Bd. of Tax Comm’rs v. Inspat Island, Inc., 784 N.E.2d 477, 482 (Ind. 2003) (agency decision was not a final determination and the petitioner had means to obtain an appealable order) (footnote added). The City’s pessimistic view of the agency’s potential outcome does not convert the 2004 Order into a final determination, nor does it confer jurisdiction upon this Court.


For these reasons, the DLGF’s motion for judgment on the pleadings is DENIED. See supra note 2. The Court also DENIES the City’s motion for summary judgment. The Court dismisses the case for lack of subject matter jurisdiction.
SO ORDERED this 25th day of April, 2005.

                                Thomas G. Fisher, Judge
                                Indiana Tax Court


David A. Happe
120 East Eighth Street
P.O. Box 2100
Anderson, Indiana 46018

Steve Carter
Attorney General of Indiana
By: John D. Snethen
Deputy Attorney General
Indiana Government Center South, Fifth Floor
302 West Washington Street
Indianapolis, IN 46204

Footnote: Indiana Code § 6-1.1-18.5-17 provided that property tax proceeds, “for taxes first due and payable during a particular calendar year,” exceeding 102% percent of a taxing unit’s certified levy was considered levy excess and was to be deposited in the taxing unit’s levy excess fund. See Ind. Code Ann. § 6-1.1-18.5-17(a), (b) (West 2003).

Footnote: In its motion for judgment on the pleadings, the DLGF asks the Court to find that the City’s claim was actually a challenge to the levy excess order issued by the DLGF in March of 2003, and that any such challenge is barred by the statute of limitations. ( See Resp’t Mot. for J. on the Pleadings at 3-4.) The DLGF, however, failed to cite an applicable statute or authority to support its motion. (See Resp’t Mot. for J. on the Pleadings at 4.) This Court will not make the DLGF’s case for it. See Davidson Indus. v. State Bd. of Tax Comm’rs, 744 N.E.2d 1067, 1071 (Ind. Tax Ct. 2001). Accordingly, the Court DENIES the DLGF’s motion for judgment on the pleadings.

Footnote: At the hearing, the City indicated that it had an administrative appeal pending, in which it requests that the DLGF grant an excess levy for the 2005 calendar year. ( See Hr’g Tr. at 28.) The City asked the Court to direct the DLGF to use its discretion to grant the excess levy. (See Hr’g Tr. at 28.) Until the DLGF has issued a final determination, the Court lacks subject matter jurisdiction. See BP Prods. North America Inc. v. Dep’t of Local Gov’t Fin., 774 N.E.2d 122, 126 (Ind. Tax Ct. 2002), review denied.