ATTORNEY FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
DAVID A. HAPPE STEVE CARTER
ATTORNEY AT LAW ATTORNEY GENERAL OF INDIANA
Anderson, IN John D. Snethen
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
CITY OF ANDERSON, INDIANA, )
v. ) Cause No. 49T10-0407-TA-34
INDIANA DEPARTMENT OF )
LOCAL GOVERNMENT FINANCE, )
ORDER ON PETITIONERS MOTION FOR SUMMARY JUDGMENT AND RESPONDENTS MOTION FOR JUDGMENT ON
NOT FOR PUBLICATION
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
Citys motion for summary judgment and the DLGFs motion for judgment on the
pleadings. While the parties motions raise several issues for this Courts consideration,
one is dispositive: whether the Court has subject matter jurisdiction.
FACTS AND PROCEDURAL HISTORY
The City is a municipal corporation located in Madison County, Indiana. For
the 2002 tax year, the Citys 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 Citys 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
Citys 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.
ANALYSIS AND OPINION
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 Dept
of Local Govt Fin. at 4, ¶ 2.) The Citys request for
relief must be dismissed due to this Courts 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. Dept of Local Govt 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. Dept of Local Govt 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.
The City claims that the DLGFs 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
Petr Br. in Supp. of Mot. for Summ. J. (Petr 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 Petr 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 Petr 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 Citys
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 theyve
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
(See Hrg 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 State Bd. of Tax Commrs 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 Citys pessimistic
view of the agencys potential outcome does not convert the 2004 Order into
a final determination, nor does it confer jurisdiction upon this Court.
For these reasons, the DLGFs motion for judgment on the pleadings is DENIED.
See supra note 2. The Court also DENIES the Citys motion
for summary judgment. The Court dismisses the case for lack of subject
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
Attorney General of Indiana
By: John D. Snethen
Deputy Attorney General
Indiana Government Center South, Fifth Floor
302 West Washington Street
Indianapolis, IN 46204
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 units certified levy was considered levy excess and was to be deposited
in the taxing units levy excess fund.
See Ind. Code Ann. §
6-1.1-18.5-17(a), (b) (West 2003).
In its motion for judgment on the pleadings, the DLGF asks the
Court to find that the Citys 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. (
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
Respt Mot. for J. on the Pleadings at 4.) This Court will
not make the DLGFs case for it. See Davidson Indus. v. State
Bd. of Tax Commrs, 744 N.E.2d 1067, 1071 (Ind. Tax Ct. 2001).
Accordingly, the Court DENIES the DLGFs motion for judgment on the pleadings.
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 Hrg Tr. at 28.) The City
asked the Court to direct the DLGF to use its discretion to grant
the excess levy. (See Hrg Tr. at 28.) Until the DLGF
has issued a final determination, the Court lacks subject matter jurisdiction. See
BP Prods. North America Inc. v. Dept of Local Govt Fin., 774 N.E.2d
122, 126 (Ind. Tax Ct. 2002), review denied.