ATTORNEYS FOR PETITIONER:
ATTORNEYS FOR RESPONDENT:
GARY J. DANKERT STEVE CARTER
MICHAEL A. WILKINS ATTORNEY GENERAL OF INDIANA
BRIAN J. PAUL Indianapolis, IN
Indianapolis, IN DAVID A. ARTHUR
DEPUTY ATTORNEY GENERAL
THEODORE L. BENDALL Indianapolis, IN
GORDON BENDALL BRANHAM
McNEELY & DELANEY LLP ATTORNEY FOR HAYDEN M. SCHENKEL See footnote :
Huntington, IN ROGER M. MILLER
ATTORNEY AT LAW
Fort Wayne, IN
IN THE INDIANA TAX COURT _____________________________________________________________________
HUNTINGTON COUNTY COMMUNITY ) SCHOOL CORPORATION and ) HUNTINGTON COUNTYWIDE SCHOOL ) BUILDING CORPORATION II, ) ) Petitioners, ) ) v. ) Cause No. 49T10-0106-TA-44 ) INDIANA STATE BOARD OF TAX ) COMMISSIONERS, ))
(Ex. 7 at 1.) The Auditor made no mention in his certificate
that the petitions had not been verified as required by statute.
On May 22, 2000, the School Corporation, having reviewed the petitions and the Auditors certificate, determined that the petitions had not been verified and were therefore insufficient to commence the petition and remonstrance process. Accordingly, the School Corporation moved forward with its plans and, on January 22, 2001, approved the proposed lease rental agreement. Notice of that decision was published on February 1, 2001. On February 9, 2001, taxpayers filed another remonstrance petition pursuant to Indiana Code § 21-5-12-7(b) with the Auditor. The taxpayers challenged the lease agreement because: 1) it was not necessary; and 2) the rental payments were neither fair nor reasonable.
On February 15, 2001, the School Corporation petitioned the State Board to approve the execution of the lease pursuant to Indiana Code § 6-1.1-19-8. The State Board subsequently referred the lease petition to the Indiana School Property Tax Control Board (the Control Board), as permitted by Indiana Code § 6-1.1-19-8(b).
The School Corporation held a public hearing on March 12, 2001. At that hearing, all interested persons were given the opportunity to object to the lease on the basis that it was unnecessary and that the rental payments contained therein were neither fair nor reasonable. The School Corporation subsequently approved the execution of the lease agreement.
Thereafter, on April 19, 2001, the Control Board held a hearing on the lease petition. Comments from both proponents and opponents of the project were considered. Several of the Remonstrators from Huntington County were present at the hearing. At the hearings conclusion, the Control Board recommended approval of the lease.
Upon the recommendation of the Control Board, the State Board issued a final determination on June 1, 2001, approving the execution of the lease. In its final determination, however, the State Board found in relevant part:
10. The Auditors [March 5, 2001] withdrawal of the approval of the objecting petitions occurred after the statutory deadline for making such a determination under IC 6-1.1-20-3.1.
11. Evidence . . . was uncontroverted that the Auditor provided taxpayers with
incorrect or incomplete forms for the petition remonstrance, then used the flaws in
the forms as the reason for determining that the petitions were insufficient.
(Ex. 7 at 494.) Based on those findings, the State Board issued
its approval subject to the condition that [the School Corporation] shall first be
required to obtain approval of the project through the petition and remonstrance procedures
found in IC 6-1.1-20-3.2. (Ex. 7 at 495.)
The School Corporation filed this original tax appeal on June 28, 2001. Trial was held on September 5, 2001. Additional facts will be supplied as necessary.
Enrollment patterns within the school corporation.
The age and condition of the current school facilities.
The cost per square foot of the school building construction project.
The effect that completion of the school building construction project would have on
the school corporations tax rate.
Any other pertinent matter.
Ind. Code § 6-1.1-19-4.2 (emphasis added). See footnote Given the fact that the State Board is Indianas property tax specialist and is vested with broad discretion to exercise its powers in the performance of its duties, Bell v. State Bd. of Tax Commrs, 651 N.E.2d 816, 819-20 (Ind. Tax Ct. 1995), the sixth factor gives the State Board leeway to consider any non-listed factor that it considers pertinent to the approval or disapproval of the project and/or its lease agreement.
In the case at bar, the State Board considered pertinent to its approval of the lease agreement whether or not Huntington County taxpayers had an adequate opportunity to remonstrate against the School Corporations proposed project. The Court believes the State Board was within its discretion to do so. See footnote The Court also believes, however, that the State Board went too far.
Generally, when school corporations decide to build new schools, taxpayer emotion runs high, and debate as to the necessity of a project is frequent. Accordingly, the Indiana legislature has afforded taxpayers several opportunities throughout the process to voice their concerns. One such opportunity is the remonstrance process set forth in Indiana Code §§ 6-1.1-20-3.2.See footnote
Nevertheless, Indiana Code § 6-1.1-20-3.2 states that the remonstrance process can be initiated only [i]f a sufficient petition . . . has been filed as set forth in section 3.1 of this chapter[.] Ind. Code § 6-1.1-20-3.2 (emphasis added). Thus, the petition and remonstrance process set forth in Indiana Code § 6-1.1-20-3.2 is not initiated until the prerequisites of Indiana Code § 6-1.1-20-3.1 are met.
Indiana Code § 6-1.1-20-3.1 provides that once a school corporation makes a preliminary determination to issue bonds or enter into a lease agreement in order to finance a school construction project, it must give both published and posted notice to the public. Ind. Code §§ 6-1.1-20-3.1(1) and (2). That notice must include, among other things, [a] statement that any owners of real property . . . who want to initiate [the] petition and remonstrance process [of Indiana Code § 6-1.1-20-3.2] against . . . the lease payments must file a petition[.] Ind. Code § 6-1.1-20-2-3.1(3)(E).
For a petition under Indiana Code § 6-1.1-20-3.1 to be sufficient, it must satisfy three statutory requirements:
* * * *
(4) After notice is given, a petition requesting the application of a petition and remonstrance process may be filed by the lesser of:
two hundred fifty (250) owners of real property within
the political subdivision; or
ten percent (10%) of the owners of real property
within the political subdivision.
(5) Each petition must be verified under oath by at least one (1)
qualified petitioner in a manner prescribed by the state board of accounts before
the petition is filed with the county auditor under subdivision (6).
(6) Each petition must be filed with the county auditor not more than
thirty (30) days after publication . . . of the notice of the
Ind. Code §§ 6-1.1-20-3.1(4), (5) and (6) (emphasis supplied).
The parties to this action do not debate the fact that the taxpayers gathered enough signatures for the petition, nor do they debate the fact that the petition was filed with the Auditor within the statutorily prescribed time period. In fact, the parties do not even debate the fact that the petitions were never verified. Instead, the parties debate whether, in light of alleged misdeeds of the Auditor, the statutory requirement of verification should be waived.
The State Board asserts that when the taxpayers requested a petition form under Indiana Code § 6-1.1-20-3.1, the Auditor not only gave them the wrong form, but a form that lacked the verification certification as well. As a result, the State Board claims the Auditor misled the taxpayers into believing that verification was unnecessary. Despite the lack of verification, the State Board maintains:
[n]o one questions that the signatures are genuine nor that the people who signed them were taxpayers in the district. The Taxpayers gathered more than double the signatures required by statute. Neither the School Corporation nor the Auditor should be permitted to ignore the peoples message that a petition and remonstrance proceeding should go forward [under Indiana Code § 6-1.1-20-3.2].
(Respt Post-Tr. Br. at 2.)
The School Corporation, on the other hand, argues that Indiana Code § 6-1.1-20-3.1(5) unambiguously requires the petition be verified under oath by at least one qualified petitioner (i.e., taxpayer), and any failure to meet that requirement cannot be waived. Accordingly, the School Corporation maintains that the petition was invalid, the remonstrance process set forth in Indiana Code § 6-1.1-20-3.2 was not triggered, and the School Corporation was free to enter into the proposed lease subject to its approval by the State Board.
Indiana law is clear: a statute may be construed and interpreted only if it is ambiguous. Shoup Buses, Inc. v. Dept of State Revenue, 635 N.E.2d 1165, 1167-68 (Ind. Tax Ct. 1994). Otherwise, an unambiguous statute must be read to mean what it plainly expresses, and its plain and obvious meaning may not be enlarged or restricted. Dept of State Revenue v. Horizon Bancorp, 644 N.E.2d 870, 872 (Ind. 1994). The words and phrases of an unambiguous statute shall be taken in their plain, ordinary, and usual sense. State Bd. of Tax Commrs v. Jewell Grain Co., 556 N.E.2d 920, 921 (Ind. 1990); Ind. Code § 1-1-4-1(1).
The term must carries the same meaning as shall. See Rogets II The new Thesaurus 623 (1980); Websters Third New International Dictionary 1492 (1981). Consequently, in a statutory clause the word must has a mandatory, rather than a discretionary meaning. See Bielski v. Zorn, 627 N.E.2d 880, 885 (Ind. 1994). In the present case, the language [e]ach petition must be verified, Indiana Code § 6-1.1-20-3.1(5) (emphasis added), is unambiguously clear: if the petition is not verified, it is invalid. Neither the State Board, nor this Court, can enlarge the statutes meaning to account for special circumstances. See Bielski, 627 N.E.2d at 885.
The State Board, in turn, takes its argument to the next level: [l]iteral compliance with the verification provision is an impossibility. (Respt Post-Tr. Br. at 15.) Specifically, the State Board argues that while the Indiana Code § 6-1.1-20-3.1(5) requires the petitions to be verified in a manner prescribed by the state board of accounts, the state board of accounts has never prescribed such manner. (See Stip. Ex. A, #22.) As a result, the State Board asks how can the Remonstrators comply with a mandatory procedure that does not exist? (See Respt Post-Tr. Br. at 15.) The State Boards argument is purely rhetoric.
To verify a legal document or petition is [t]o confirm or substantiate by oath or affidavit; to swear to the truth of. Blacks Law Dictionary 1556 (7th ed. 1999). Any form of verification is sufficient if it serves the essential purpose of subjecting the affiant to the penalties for perjury. Rhoads v. Carmel Bd. of Zoning Appeals, 562 N.E.2d 752, 754 (Ind. Ct. App. 1990). Indiana Trial Rule 11(B) provides guidance as to what can constitute verification. It states:
When in connection with any civil or special statutory proceeding it is required that any pleading, motion, petition, supporting affidavit, or other document of any kind, be verified . . . it shall be sufficient if the subscriber simply affirms the truth of the matter to be verified by an affirmation or representation in substantially the following language:
I (we) affirm, under the penalties for perjury, that the foregoing representation(s) is
Ind. Trial Rule 11(B) (emphasis added).
Whether or not the petition form the taxpayers used under Indiana Code § 6-1.1-20-3.1 lacked a verification certificate is irrelevant. In fact, a plain piece of paper with the appropriate number of signatures would have been sufficient, had it been verified. See footnote What is relevant is that the statute, and not the petition form, explicitly mandates that the petitions are verified. The failure of the taxpayers to include that one verification sentence under Indiana Trial Rule 11(B) is fatal to the sufficiency of their petition.
While the taxpayers had a right to challenge the School Corporations proposed lease agreement under Indiana Code §§ 6-1.1-20-3.1 and 3.2, they also bore the responsibilities that were attached to that right. Indeed, the legislature created specific, statutory requirements by which to challenge the School Corporations proposed lease agreement. The taxpayers must, therefore, comply with the statutory requirements or relinquish their right. Cf. Williams Indus. v. State Bd. of Tax Commrs, 648 N.E.2d 713, 718 (Ind. Tax Ct. 1995) (a taxpayer must comply with statutory requirements in challenging a property assessment, or the Tax Court lacks jurisdiction). Here, the taxpayers failure to comply with these requirements renders their petition invalid. As a result, while the State Board was within its discretion to consider whether or not taxpayers had adequate opportunity to remonstrate against the proposed project, its discretion was limited to determining whether the statutory requirements of filing a remonstrance were met.
In addition, the State Board must take into account that the taxpayers were given another opportunity to remonstrate against the School Corporations lease agreement under Indiana Code § 21-5-12-7. The Huntington County taxpayers took full advantage of this remonstrance opportunity in February and March, 2001. Therefore, the Court finds that the portion of the State Boards final determination that required the School Corporation to proceed with the petition and remonstrance process set forth in Indiana Code § 6-1.1-20-3.2 constitutes an abuse of its discretion.