ATTORNEYS FOR APPELLANTS
Attorney General of Indiana
Beth H. Henkel
Deputy Attorneys General
ATTORNEYS FOR APPELLEES
Peter L. Benjamin
Gerald M. Bishop
John S. Dull
SUPREME COURT OF INDIANA
STATE OF INDIANA et al., )
Appellants (Defendants Below), )
v. ) Indiana Supreme Court
) Cause No. 45S05-0005-CV-338
BERNADETTE COSTA et al., )
Appellees (Plaintiffs Below). )
APPEAL FROM THE LAKE SUPERIOR COURT
The Honorable James Danikolas, Judge
Cause No. 45D03-9911-CP-2869
ON PETITION FOR INTERLOCUTORY APPEAL
August 15, 2000
Taxpayers brought this suit in a court of general jurisdiction to contest the
Health Care for the Indigent
(HCI) tax levy. As in State Board
of Tax Commissioners v. Montgomery, 730 N.E.2d 680 (Ind. 2000), we hold that
they must first exhaust the administrative remedy of requesting a refund.
The operation of the HCI program is described in
Montgomery, 730 N.E.2d at
681. Briefly, the HCI program is designed to provide indigent patients with
emergency medical health care. The HCI levy is imposed primarily as a
property tax and the formula for its calculation in each county is prescribed
The HCI statute directs each county to establish an HCI
fund and to forward the monies to a state HCI fund on a
monthly basis. See Ind. Code §§ 12-16-14-1, -6 (1998 & Supp. 1999).
In June 1998, two of the taxpayers in this action, Troy Montgomery and
Frances DuPey, wrote a letter to the Chairman of the State Board of
Tax Commissioners requesting an adjustment of the formula for computing the HCI tax
levy and a refund for three years of alleged overpayments. The Chairman
responded that the State Board had no authority either to alter the statutory
formula for assessment of the tax levy or to order any refunds.
Montgomery and DuPey, along with several other parties to the present case, then
brought suit in the Indiana Tax Court requesting a declaration that the tax
levy violates Article 1, Section 23 and Article 10, Section 1 of the
Indiana Constitution. The Tax Court found that it had jurisdiction over that
case and certified the question for interlocutory appeal. This Court reversed, holding
that the Tax Court was without jurisdiction because the petitioners had not exhausted
their administrative remedies.
See Montgomery, 730 N.E.2d at 680-81.
Before this Court rendered its decision in
Montgomery, seven of the same taxpayers
filed this suit in Lake County Superior Court. The State moved to
dismiss, invoking the defense of failure to exhaust administrative remedies. The trial
court denied the motion but certified the order for interlocutory appeal. The
Court of Appeals declined to accept the appeal, and this Court accepted jurisdiction
on May 24, 2000 pursuant to Indiana Appellate Rule 4(A)(9).
Montgomery explained the reasons for requiring exhaustion of administrative remedies and ultimate resort,
if necessary, to the Tax Court. We concluded that a taxpayer seeking
to challenge the HCI tax levy must file a claim for a refund
pursuant to Indiana Code § 6-1.1-26-1. See 730 N.E.2d at 685.
This claim is then reviewable by the State Board pursuant to Indiana
Code § 6-1.1-26-2, and, if denied, constitutes a final determination of the State
Board that is reviewable in the Tax Court.
The plaintiff-taxpayers have not
filed a claim for a refund and thus have not exhausted their administrative
remedies. Accordingly, this claim, filed as an original action in a court
of general jurisdiction, must be dismissed.
This case is remanded to the trial court with direction to dismiss the
SHEPARD, C.J., and DICKSON, SULLIVAN and RUCKER, JJ., concur.
The Health Care for the Indigent Program is codified at Indiana
Code §§ 12-16-2-1 to -16-3.
See Ind. Code § 12-16-14-3 (1998).
Appellate Rule 4(A)(9) provides:
When an appeal is filed in the office of the clerk, in the
Court of Appeals, appellant or appellee may petition the Supreme Court to transfer
such an appeal to the Supreme Court upon a showing, under oath, that
the appeal involves a substantial question of law of great public importance and
that an emergency exists for a speedy determination.
Jurisdiction is proper in the Tax Court if the case arises under
the tax laws of the State and the tax appeal follows from a
final determination of the State Board of Tax Commissioners. See State v.
Sproles, 672 N.E.2d 1353, 1356-57 (Ind. 1996) (petitioner may appeal to Tax Court
from a final determination of Department of State Revenue).