David L. Pippen
Jeffrey A. Modisett
Vincent S. Mirkov
Indianapolis, Indiana ATTORNEYS FOR APPELLEE
Attorney General of Indiana
Deputy Attorneys General
David L. Pippen
Jeffrey A. Modisett
Vincent S. Mirkov
dismiss Mixmill's appeal for lack of jurisdiction. The State Board argued in part that the Tax
Court lacked jurisdiction because the State Board never received the taxpayer's Petition for
Review and never issued a final determination. The Tax Court entered an order denying the
State Board's motion to dismiss and subsequently granted leave to file an interlocutory
appeal of that order. This Court accepted the interlocutory appeal on May 22, 1998.
Indiana tax laws. Nor do the parties contend that another statute confers jurisdiction upon
the Tax Court or any other court. Rather the dispute focuses on the requirement that the case
be an initial appeal of a final determination of the State Board. Specifically, the issue is
what constitutes a final determination of the State Board for purposes of appeal to the Tax
Court when the State Board never receives the taxpayer's petition because the County Board
of Review has never acted on the petition or forwarded it to the State Board.
Mixmill notes that no provision of the tax code provides an explicit method for obtaining review of administrative determinations if a County fails to act. Mixmill understandably contends that at some point, now long past, the County's failure to act is the equivalent of a denial of administrative relief. Otherwise stated, Mixmill argues that the County's failure to act deprives it of its right to review of the initial administrative determinations and its only remedy is to permit it to proceed to the Tax Court without prior administrative review.
Two questions emerge from the arguments presented: (1) whether the legislature intended to permit taxpayers to appeal to the Tax Court if the County does not act before the next reassessment; and (2) whether an omission of clear guidelines for County action effectively denies a taxpayer's right to review of an administrative determination to the extent that the scheme raises constitutional issues, or requires judicial surgery. The answers to these questions must start with the statutory scheme provided by the legislature for taxpayer appeals.
A. The statutory scheme
raised by filing a Petition for Correction of Errors with the County Auditor. Id. § 6-1.1-15-
12. The auditor is authorized to resolve some issues, for example mathematical errors. See
id. § 6-1.1-15-12(b). However, a Petition for Correction of Errors may, under some
circumstances, require State Board approval or an order by the Tax Court, see id. § 6-1.1-
15-12(c), or action by three county officials. See id. § 6-1.1-15-12(d).See footnote
State Bd. of Tax
Comm'rs v. L.H. Carbide Corp., ___ N.E.2d ___ (Ind. 1998), also decided today, deals with
the same issue in that procedural posture.
The statutory scheme clearly provides for the State Board to rule on either a Petition for Review or a Petition for Correction before the issue is submitted to the Tax Court. In only one circumstance _ failure of the State Board to provide a hearing and rule within the prescribed time frameSee footnote 5 _ may a taxpayer bring an appeal directly to the Tax Court after County action.
Although the statutes specifically address the appropriate next step for the taxpayer if the State Board fails to act timely, they do not spell out what happens if the County does nothing. Indeed, there is a deafening statutory silence on this point. However, as the State Board points out, the legislature did provide that the County Board of Review has a duty to
conduct a hearing and rule on a properly submitted Petition for Review within prescribed
time frames. Unfortunately, the statute includes no analog at the County level to the
provisions governing default by the State Board. It says nothing about the remedy for the
circumstance that gives rise to this case: failure by the County to act on the petition in the
prescribed time frame.
For this reason Mixmill's reliance on Bielski v. Zorn, 627 N.E.2d 880 (Ind. Tax 1994), is misplaced. Mixmill contends that Bielski affirmed the State Board's obligation to review assessments and affirmed the taxpayer's right to review of administrative actions and that the Tax Court found it had jurisdiction to review the matter because the State Board never reviewed the Petition it received and a breakdown in procedure [would] foreclose the taxpayer's right to review. Brief of Appellee at 7 (citing Bielski, 627 N.E.2d at 886). However, in Bielski the County Board had acted, the petition was properly lodged with the State Board, and the State Board's delay triggered the Tax Court's jurisdiction by the terms of the statute. Accordingly, the Tax Court's jurisdiction was conferred by the provision that is absent in the statutory framework applicable to defaults by the County Board of Review. See Ind. Code § 6-1.1-15-4(e).
We do not find anything in the statutues implying a legislative desire to permit circumvention of the administrative process. To the contrary, the legislature provided that only final determinations (or failures to act timely) by the State Board are appealable to the Tax Court. To reinforce this requirement, the legislature specifically provided that: If a taxpayer fails to comply with any statutory requirement for the initiation of an original tax
appeal, the tax court does not have jurisdiction to hear the appeal. Ind. Code § 33-3-5-
In view of the explicit language of these provisions, we can only conclude that the legislature intended to require the taxpayer to follow all statutory procedures for review before going to the Tax Court. This is not an irrational requirement. Administrative agencies have technical expertise in areas that the courts do not. For often recited reasons, in nearly all circumstances their rulings are required before resort to a court is available. See Sproles, 672 N.E.2d at 1358.
Mixmill, understandably frustrated by this impasse, contends that the net result of this arrangement is to remit it to an endless loop that denies it any remedy whatever. The State Board responds that a remedy lies in mandamus, correctly pointing out that the County Board of Review has a duty to act on the Petition, and even a duty within a specified time in the case of Petitions for Review. As the Court of Appeals recently held in another context, failure of an administrative agency to act can confer jurisdiction on the trial court to order the agency to act, but not to direct any portended result of that action. MHC Surgical Ctr. Assocs., Inc. v. Office of Medicaid Policy & Planning, 699 N.E.2d 306 (Ind. Ct. App. 1998); see also Indiana State Highway Comm'n v. Zehner, 174 Ind. App. 176, 366 N.E.2d 697 (1977). Although the duty to act on a Petition is imposed by the tax laws of this state, and that duty arises under the tax laws, any suit to enforce it must nonetheless be brought in a court of general jurisdiction because it does not meet the second final determination requirement of the Tax Court's jurisdiction. The proper party, moreover, is
not the State Board but the county officials who are charged to be in default of that duty.
The State Board never made the requisite final determination on Mixmill's petition, not
because the State Board failed to act on it, but because the State Board never received the
petition. As a result the clock the legislature placed on the State Board to act never started
ticking and cannot trigger Tax Court jurisdiction.
We understand Mixmill's frustration with a system that does not readily define a time frame for moving onto the next step of the review process. We hope that the county officials will not put Mixmill and themselves to the expense of a mandamus action. However, this Court cannot fill gaps in a statutory scheme designed by the legislature. Grody v. State, 257 Ind. 651, 659-60, 278 N.E.2d 280, 285 (1972).
B. Right to review of administrative determinations
Mixmill contends that denial of jurisdiction in the Tax Court would deprive it of its constitutional right to review of administrative procedures. The Tax Court agreed that under the statutes, inaction by a County could effectively eliminate a taxpayer's ability to get review of administrative tax determinations. Although neither Mixmill nor the Tax Court cites a specific provision of the Indiana Constitution supporting a right to review, Mixmill points to Bielski. In Bielski, 627 N.E.2d at 886, the Tax Court cited State ex rel. State Bd. Of Tax Comm'rs v. Marion Superior Court, 271 Ind. 374, 378, 392 N.E.2d 1161, 1165 (1979), for the proposition that in Indiana, there is a constitutional right to review of administrative actions. That case in turn drew this proposition from Warren v. Indiana Telephone Co., 217 Ind. 93, 26 N.E.2d 399 (1940). In Warren, this Court determined that
the orders of an administrative body are subject to judicial review; and that they must be so
to meet the requirements of due process. 217 Ind. at 105, 26 N.E.2d at 404. Although
referring to due process, a term from the federal constitution, it is clear that the Warren
opinion was grounded in Article I, § 12 of the Indiana Constitution, which provides: All
courts shall be open; and every man, for injury done to him in his person, property, or
reputation, shall have remedy by due course of law.
The statutes involved in this case provide for review. The problem is that the County officials have not yet taken the action, as they are required to do by statute, to permit full review. As we held in Clifft v. Indiana Dep't of State Revenue, dealing with a contention of undue delay under the Due Process Clause of the U.S. Constitution's Fourteenth Amendment: [W]here property rights are involved, mere postponement of the opportunity to be heard is not a denial of due process if the opportunity ultimately given is adequate. 660 N.E.2d 310, 318 (Ind. 1995) (citing Commissioner v. Shapiro, 424 U.S. 614, 631-32, 96 S. Ct. 1062, 47 L. Ed. 2d 278 (1976)). We are not presented with a deprivation of property without any remedy. Cf. Logan v. Zimmerman Brush Co., 455 U.S. 422, 102 S. Ct. 1148, 71 L. Ed. 2d 265 (1982) (the state's dismissal of an employee's timely filed claim because the Commission failed to hold a hearing within the statutory time frame was unconstitutional because the dismissal, without an alternative remedy, deprived the employee of property in violation of the Fourteenth Amendment's Due Process Clause); Brinkerhoff-Faris Trust & Savings Co. v. Hill, 281 U.S. 673, 50 S. Ct. 451, 74 L. Ed. 1107 (1930) (a state court's order that a taxpayer first seek an administrative remedy, when in fact none was available, violated the Fourteenth Amendment). Rather, this case presents delays in processing that presumably
are the product of the legislature's decision to require administrative review and the county's
level of service in fulfilling that obligation. There is no reason to believe that relief, although
delayed, is not wholly obtainable. The remedy of mandamus, although cumbersome, is
available to the taxpayers unwilling to wait in line. That is enough to render the statutory
scheme constitutional, if unwieldy. The General Assembly may wish to address Mixmill's
very legitimate concerns. However, this Court cannot legislate a remedy for an awkward but
nonetheless constitutional method of reviewing taxpayer protests.
SHEPARD, C.J., and DICKSON, SULLIVAN and SELBY, JJ., concur
appeal to the Tax Court of this final determination in this appeal.
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