State Ex Rel. Attorney General v. Lake Superior Court

Attorneys for relator Attorneys for
respondents
Stephen A. Carter Treasurer of Lake
County
Attorney General of Indiana John S. Dull
Merrillville, Indiana
Gary Damon Secrest
Joby Jerrells George Patrick
Deputy Attorneys General Crown Point,
Indiana
Indianapolis, Indiana
Miller Citizens Corporation
Kenneth D. Reed
Harold Abrahamson
John P. Reed
Hammond, Indiana

Gregory S. Reising
Douglas M. Grimes
Gary, Indiana

Common Council of the City of
Hammond
Robert G. Berger
Highland, Indiana

Common Council of the City of
East Chicago
Joseph Allegretti
Indianapolis, Indiana

__________________________________________________________________

In the
Indiana Supreme Court
_________________________________

No. 45S00-0405-OR-204

State of Indiana ex rel.
The Attorney General of the State
of Indiana,
Relator,

v.

The Lake Superior Court and
The Honorable Robert Pete,
As Judge Thereof,
Respondents.
_________________________________

On Petition for Writ of Mandamus and Prohibition
_________________________________

Attorneys For Appellants Attorneys for Appellees
Governor of Indiana Miller Citizens
Corporation
Attorney General of Indiana Kenneth D. Reed
Department of Local Government Harold Abrahamson
Finance John P. Reed
Stephen A. Carter Hammond, Indiana
Attorney General of Indiana
Gregory S. Reising
Gary Secrest Douglas M. Grimes
Joby Jerrells Gary, Indiana
John Snethen
Douglas Webber Common Council of
the City of
Deputy Attorneys General Hammond
Indianapolis, Indiana Robert G. Berger
Highland, Indiana
United States Steel Corporation
Thomas Atherton Common Council of the
City of
Ronald M. Soskin East Chicago
David Suess Joseph Allegretti
Indianapolis, Indiana Indianapolis, Indiana

International Steel Group, Inc. the Treasurer of Lake
County
Larry J. Stroble John Dull
Michael V. Knight Merrillville, Indiana
Indianapolis, Indiana
George Patrick
BP Products N. America, Inc. Crown Point, Indiana
Jeffrey T. Bennett
Indianapolis, Indiana Common Council of the
City of
. Gary
Ispat Inland, Inc. William Clyde Jones
Francina A. Dlouhy Gary, Indiana
James H. Ham, III
Christopher A. Ruhl
Indianapolis, Indiana
__________________________________________________________________

In the
Indiana Supreme Court
_________________________________

No. 45S00-0405-CV-224

Governor of the State of
Indiana, et al.,
Appellants
(Defendants below),

v.

Miller Citizens Corporation,
et al.,
Appellees
(Plaintiffs below).
_________________________________

Appeal from the Lake County Superior Court, No. 45D05-0404-PL-91
The Honorable Robert A. Pete, Judge
_________________________________

On Direct Appeal
_________________________________

January 13, 2005

Boehm, Justice.

In 2001, the General Assembly passed two statutes that applied only
in Lake County and provided for countywide reassessment of property for tax
purposes to be conducted by the Department of Local Government Finance and
by private contractors selected by the DLGF. The plaintiffs are a group of
taxpayers who brought an action in April 2004 in Lake Superior Court
seeking a declaratory judgment that these statutes are unconstitutional.
The bills for taxes due in 2003 had not yet been mailed due to delays in
the reassessment process and the plaintiffs asked that the taxing
authorities in that county be enjoined from mailing bills for the property
taxes due in 2003.

The trial court found the statutes to violate five separate provisions
of the Indiana Constitution and granted the requested preliminary
injunction. The Attorney General contended that exclusive jurisdiction
over this case lies in the Tax Court and on that ground asked this Court
for a writ of mandamus and prohibition. While that writ proceeding was
pending, an appeal of the preliminary injunction was also initiated. This
Court stayed the trial court’s preliminary injunction. As a result the
taxing authorities were free to mail the bills for taxes due in 2003. We
then ordered the writ proceeding and the appeal to be argued concurrently.
This opinion addresses both.

We hold that the Lake Superior Court had no jurisdiction to entertain
these claims. We recognize that ordinarily lack of jurisdiction of the
trial court would preclude deciding any other issues. However, this case
presents a challenge to the entire assessment process in Indiana’s second
most populous county. For the reasons explained below, we think it is
clear that the plaintiffs will ultimately fail in their effort to enjoin
the tax bills produced by the 2002 countywide reassessment. It is not in
anyone’s interest to preserve false hopes by resolving this appeal on
jurisdictional grounds alone. In short, there is broad public interest in
a prompt resolution of this case, and the parties ask us to address the
merits of the plaintiffs’ claims without regard to jurisdiction. For these
reasons we do so without delaying a final resolution of this matter.

We conclude that the statutes providing for private parties or the
DLGF to assess certain assets in Lake County violate one of the provisions
of the Indiana Constitution on which the plaintiffs rely, but not the other
four. Although the 2001 laws violated Article IV, Section 22 of the
Indiana Constitution as special legislation providing for the assessment of
taxes, in 2004 the General Assembly passed a statute authorizing the
assessment conducted pursuant to the 2001 legislation. This “curative”
legislation validated the acts taken under the unconstitutional special
legislation. Moreover, plaintiffs waited until reassessment was completed
to seek injunctive relief. In the meantime, other taxpayers and local
government units relied on the ongoing reassessment process provided by
statute to supply funding for essential day-to-day functions of government.
For that reason as well, plaintiffs’ claim for injunction was barred by
the delay in seeking equitable relief.

Factual and Procedural Background

In broad brush, the amount of property taxes owed for each individual
property is set by allocating the total amount of property taxes to be
raised in a taxing district among all pieces of property in proportion to
their assessed valuations. If the total to be raised increases, of course
the sum of all tax bills in the district goes up by that amount. But, the
total amount to be raised is unaffected by a reassessment of property
valuations. If all assessed valuations go up or down by the same
percentage as the result of a reassessment, even if there is a large change
in the dollar amount of the assessed valuation on each property, there is
no change in the tax burden of any individual property. In simplified
terms, if the assessed valuation of every property doubles, it would have
no effect on the tax bills of any of them. If, however, some assessed
valuations go up or down more than others, as is always the case in the
real world, some taxes go up and some go down, but the gains by those whose
assessed valuations go down more than the average are offset by losses
among those whose assessed valuations increase more than the average. In
other words, reassessment is a zero sum game for all property in the
affected area.

As explained in more detail below, Lake County has for several years
had a history of uneven assessments and generally lower assessed valuations
than those in other parts of the state for similar properties. In response
to this situation, the two challenged provisions were enacted by the 2001
session of the General Assembly in the same law, H.B. 1902. Both by their
terms apply only in counties with populations between 400,000 and 700,000,
and Lake County is the single county meeting that criterion. The two
statutes now appear as Indiana Code section 6-1.1-4-32 (2004), which
authorized the DLGF to employ private firms to assess real property in Lake
County, and Indiana Code section 6-1.1-8.5-1 et seq., which provided for
the DLGF itself to assess industrial properties in Lake County with an
estimated assessed value in excess of $25 million.

Indiana property taxes are due in May and November of each year based
on assessed valuations as of March 1 of the preceding year. Both of the
challenged statutes provide procedures that formed a part of the process of
determining the assessed valuation of property in Lake County as of March
1, 2002. The 2002 reassessment was completed, although later than usual,
by a private firm selected by the State Board and by the DLGF. In
practical terms, the issue here is that the reassessment resulted in
proportionally lower assessed valuations of some large industrial
properties in Lake County compared to the changes in assessed valuations of
some residential properties, notably those owned by the plaintiffs. As a
result, the 2003 taxes increased for the owners of properties whose changes
in assessments were proportionally higher. For some properties, these new
taxes were dramatically higher than their historic levels. The State
points out that if the reassessment is accurate, the increase in taxes
compared to prior years merely corrects an underpayment these residential
properties have enjoyed in the past. The plaintiffs counter that the
effect of increased taxes is to lower the market value of their residential
properties because most homes are purchased based on the monthly cash
payments required for principal and interest on a mortgage plus taxes and
insurance. An increase in taxes means a potential purchaser has less
available for monthly mortgage payments and therefore produces a reduced
market value of the property.

Article IV, Section 22 of the Indiana Constitution prohibits “local or
special laws” dealing with a number of subject matters, one of which is
“providing for the assessment and collection of taxes . . . .” Article IV,
Section 23 provides that even if a law does not address one of the Section
22 items, it nevertheless must be a general law “where a general law can be
made applicable.” Finally, Article X, Section 1 directs the General
Assembly to “provide, by law, for a uniform and equal rate of property
assessment and taxation . . . .” Plaintiffs brought this action in Lake
Superior Court, contending that these two statutes violate each of these
three provisions, and two others as well. For that reason they claim that
the collection of the 2003 property taxes in Lake County must be enjoined.
The State responds that the trial court lacks jurisdiction over this case.
The State also contends that the statutes are constitutional, and in any
event the resulting assessed valuations are correct, so there is no point
in redoing the assessment by some other agency that would, after some
extended time, arrive at the same results, and in the meantime severely
interfere with the day-to-day operation of local government in Lake County.

After a hearing in which no testimony was taken, the trial court
granted a preliminary injunction. The State first asked this Court,
pursuant to Original Action Rule 1(A), for a writ of mandamus and
prohibition, contending that the trial court lacked jurisdiction based on
the plaintiffs’ failure to exhaust administrative remedies. The State also
initiated an appeal of the preliminary injunction pursuant to Appellate
Rule 14(A)(5). Because the preliminary injunction was based on a holding
that a statute was unconstitutional, the appeal also is directly to this
Court. App. R. 4(A)(1)(b). We granted the State’s request for a stay of
the trial court’s preliminary injunction, permitting the tax bills to be
mailed. We then consolidated the argument on the two proceedings and now
address both in this opinion.

The parties do not dispute the underlying facts. The issues relating
to the jurisdiction of the trial court and the merits present only
questions of law.

I. Jurisdiction of the Trial Court

Plaintiffs brought this suit contending their properties were
incorrectly assessed and therefore their soon-to-be mailed tax bills were
too high. The statute creating the Tax Court provides that that court has
“exclusive jurisdiction over any case that arises under the tax law of this
state and that is an initial appeal of a final determination” of the
Indiana Board of Tax Review. Ind. Code § 33-3-5-2 (2003).[1] Other
statutes provide in some detail the procedure for contesting an assessment
of property. These include an appeal from county determinations to the
Board, and a provision in Indiana Code section 6-1.1-15-5(b) for review of
challenges to assessments by the Tax Court “under I.C. 4-21.5-5.” This
refers to the Judicial Review chapter of the Indiana Administrative Orders
and Procedures Act which includes Section 4(a) requiring exhaustion of
administrative remedies before judicial review may be initiated. In State
v. Sproles, 672 N.E.2d 1353, 1357 (Ind. 1996), we held that a taxpayer
wishing to contest a tax must first exhaust administrative remedies, and
that these statutes collectively deprive the other trial courts of this
state of jurisdiction over any case that “principally involves collection
of a tax or defenses to that collection.” As explained in Lake County
Property Tax Assessment Board of Appeal v. BP Amoco Corp., ___ N.E.2d ___
(No. 49S10-0309-00400) (Ind. Jan. 13 2005), handed down today, a challenge
of the sort plaintiffs bring in this case is properly presented in the
first instance to the Indiana Board of Tax Review. Accordingly, judicial
review lies exclusively in the Tax Court. See also State Bd. of Tax
Comm’rs v. Mixmill Mfg. Co., 702 N.E.2d 701, 702 (Ind. 1998); Winski Bros.
v. Bayh, 679 N.E.2d 912, 915 (Ind. Ct. App. 1997). In 2001, after these
decisions, the statutes discussed above were amended to substitute the
Board of Review for the State Tax Board as the agency entertaining property
tax appeals from local taxing authorities, but the language conferring
exclusive jurisdiction on the Tax Court and requiring exhaustion of
administrative remedies was preserved without change. Pub. L. No. 198-
2001, § 98, 2001-2 Ind. Acts 1293, 1407. We perceive no legislative
dissatisfaction with the construction of that provision we made explicit in
Sproles, and find it controlling here.

Plaintiffs contend that the Lake Superior Court, as a court of general
jurisdiction, has jurisdiction “over the constitutionality of these
statutes.” Precisely the same claim was advanced and rejected in Sproles,
672 N.E.2d at 1357. That case involved a claim, asserted in a court of
general jurisdiction, that a tax could not be collected because the
constitution prevented its collection. The claim in Sproles was that the
constitutional ban on double jeopardy prevented collection of the
Controlled Substance Excise Tax where the taxpayer had been convicted of a
crime for possession of the same marijuana that was the subject of the tax.
We held that such a case “arises under” the tax laws and therefore must be
brought in the Tax Court after exhaustion of administrative remedies. Id.
at 1361. The sole relief the plaintiffs seek here is an injunction against
the collection of property taxes, and their claim is that the assessed
valuations of Lake County property are invalid because the assessment was
done pursuant to unconstitutional statutes. These constitutional issues
are asserted as the basis of defense to the collection of the property
taxes. Just as Mr. Sproles did, Plaintiffs here seek to bring their claim
in a court of general jurisdiction to enjoin collection of a tax.

The trial court concluded that this case involves assessments, not
taxation, and therefore Sproles was inapplicable. As already noted, the
statute governing challenges to assessments, I.C. § 6-1.1-15-5 (2004),
expressly incorporates the exhaustion requirement as to challenges to
assessments. Assessments, just as other challenges to a tax, are routed
through the Board of Tax Review, and we see no distinction for these
purposes between a challenge to assessments, whether procedural or
substantive, and any other basis to contest a tax.

We are equally unpersuaded by Plaintiffs’ suggestion that it makes a
difference that the tax in Sproles was a “listed tax” regulated by the
Department of Revenue, rather than the property tax administered through
the Board of Tax Review. The same statutory language imposes
jurisdictional restrictions on both types of tax. Both are subject to the
same requirement of exhaustion of administrative remedies and both are
subject to the exclusive jurisdiction of the Tax Court by the same language
in Indiana Code section 33-3-5-2(a) (2003), which applies that language to
both listed taxes in subsection (a)(1) and to property taxes in subsection
(a)(2).

In summary, the question whether the Tax Court jurisdiction is
exclusive is purely a matter of legislative intent. In 1996, we held that
the purpose of the 1986 legislation creating the Tax Court was to
consolidate tax litigation in one forum, and deprive the courts in various
locations around the State of jurisdiction to address these issues.
Sproles, 672 N.E.2d at 1357. Despite his claim that resort to his
administrative remedy was futile, Sproles was required to exhaust
administrative remedies and present his constitutional claims to the Tax
Court. Id. at 1361. That result is dictated by the General Assembly, and
the same statutes govern the plaintiffs’ claim here.

II. The Merits of Plaintiffs’ Claims

Failure to exhaust administrative remedies is a defect in subject
matter jurisdiction. M-Plan, Inc. v. Ind. Comprehensive Health Ins. Ass’n,
809 N.E.2d 834, 837 (Ind. 2004) (citing Austin Lakes Joint Venture v. Avon
Utils., Inc., 648 N.E.2d 641, 644 (Ind. 1998)). Accordingly, the trial
court was without jurisdiction to entertain this claim, and a writ of
prohibition is properly requested. State v. Allen Superior Court, 699
N.E.2d 1134, 1135 (Ind. 1998). Plaintiffs request us to address the merits
of their contentions, even if the trial court lacked jurisdiction. We
agree we should do so. The issues have been fully briefed by the parties
and by the intervenors, and a resolution of the merits of these contentions
is in the public interest.

A. Special Legislation Under Article IV of the Indiana Constitution

Both Section 22 and Section 23 of Article IV of the Indiana
Constitution prohibit “special” legislation under some circumstances.
Plaintiffs contend that the statutes providing for DLGF to assess
industrial property and for private contactors to be hired to assess
residential property are local or special legislation as that term is used
in both sections. We agree that these laws are “special” for purposes of
Article IV. The statutes authorizing the 2002 reassessments by their terms
applied only in counties of population between 400,000 and 700,000, and
Lake County is the only such county. To be sure, some statutes applicable
only to areas with specified populations may be justifiable as special
legislation, because the parameters rationally relate to the subject matter
of the legislation. They may also be viewed as “general legislation” if
the subject matter is one that is rationally related to population, such as
the basic structure of local government. So, as we observed in City of
South Bend v. Kimsey, 781 N.E.2d 683, 694 (Ind. 2003), the Unigov statute,
which applies only to counties with cities of the first class, and
therefore only to counties with cities of certain size, may properly be
viewed as a general law even if it applies in practice in only one place.
By hooking the defining characteristic (in Unigov a city of the first
class) to the justifying characteristic (rational desire for more expansive
and encompassing form of metropolitan government), legislation applicable
in only one county may over time become applicable in others. Here
however, the apparent reasons for limiting the application of the statutes
in question are not related to population. Rather, they plainly derive
from the troubled history of property taxation in Lake County discussed
below. Thus, the rationale for population-based statutes relating to the
organization of local government do not apply here, and the law, applicable
only in Lake County, is “special” legislation whether it describes Lake
County by name, by population parameters, or by some other unique
characteristic. Id. at 692.

1. Local laws providing for the assessment and collection of taxes

Article IV, Section 22 provides a list of subjects as to which “local
or special laws” are prohibited. Among these are laws “providing for the
assessment and collection of taxes . . . .” The State argues that Section
22 does not apply to the statutes in question here because the Section is
written in the conjunctive, prohibiting local laws that “provide for the
assessment and collection of taxes.” Because there is no “collection”
aspect to these laws, the State contends Section 22 is inapplicable. We do
not agree. The constitutional debates make clear that lack of uniform
assessment practices was one of the principal concerns underlying both
Article X, Section 1, and Article IV, Section 22. See, e.g., Report of the
Debates and Proceedings of the Convention for the Revision of the
Constitution of the State of Indiana, Vol. II at 1290 (1850), where
Douglass Maguire, a delegate from Marion County, finding “great inequality
in the assessment and taxation of property,” called for checks upon county
assessors through a Board of Equalization to value all real property on an
equal basis. Although “and” is normally taken as conjunctive, it may be
read as disjunctive if the context makes clear that is the legislative
intent. See, e.g., State v. Myers, 146 Ind. 36, 38, 44 N.E. 801, 801-02
(1896); Brook v. State, 448 N.E.2d 1249, 1251 (Ind. Ct. App. 1983).

We think the history of Section 22 makes clear that it was addressed
to local laws dealing with either assessment of property or collection of
taxes, or both. Section 22 had no counterpart in the 1816 Constitution and
appeared for the first time in the Indiana Constitution as a result of the
1851 Constitutional Convention. It was the product of widespread
dissatisfaction with the large number of laws passed by the legislature in
the early days of this State dealing with purely local subjects. Many of
these imposed or authorized local taxes for specific projects, typically
roads or schools. Others addressed a variety of other special and local
interests, even granting divorces.

To “assess” property is to value it. Merriam Webster’s Collegiate
Dictionary 69 (10th ed. 1993). To “assess” a tax is to impose it. Id.
Thus, as a matter of syntax, Section 22’s reference to laws “providing for
the assessment and collection of taxes” may be read to deal only with laws
passed for the imposition or collection of taxes, and not the valuation of
property for tax purposes. However, in State v. Hoovler, 668 N.E.2d 1229
(Ind. 1996), we addressed a claim that Section 22 prohibited a statute
raising the maximum local county option income tax rate to 1.25% in
Tippecanoe County from the 0.7% rate applicable statewide. The effect was
to permit county authorities to adopt an additional 0.55% local income tax.
After a review of the historical roots of Section 22, this Court held that
this statute, though a local law, did not violate Section 22 because it did
not “authorize any new property valuations or changes in the system of tax
gathering.” Id. at 1233. The authorization of an increase in the rate of
an existing tax was not the “assessment and collection” of a tax. Indeed,
we specifically referred to a dictionary of the time, noting that
“assessment” includes “valuation of property . . . for purpose of
taxation.” Id. Hoovler thus made clear that local laws dealing with
assessment of property for tax purposes were prohibited by Section 22.
This is of course consistent with the history of Section 22, as variations
in assessment procedures were the most frequently cited reasons for the
need for constitutional limits on local legislation. Accordingly, we agree
with plaintiffs that these provisions constitute special legislation
“providing for the assessment and collection of taxes,” and therefore
violate Article IV, Section 22 of the Indiana Constitution. For the
reasons explained in Parts III and IV, however, the reassessments conducted
under these statutes are not invalid by reason of this flaw in the
statutes.

2. Special laws under Article IV, Section 23

Plaintiffs contend these laws also violate Article IV, Section 23,
which requires that “where a general law can be made applicable, all laws
shall be general, and of uniform operation throughout the State.” As we
held in Kimsey, under Section 23, a law limited to a given county is
prohibited unless “there are inherent characteristics of the affected
locale that justify local legislation.” Kimsey, 781 N.E.2d at 692. If the
affected county reflects unique circumstances that rationally justify the
legislation, then a general law is not “applicable” elsewhere and Section
23 is not violated. Id.

The State points to the long and tortured history of property taxation
in Lake County, described in Mantonovich v. State Bd. of Tax Comm’rs, 705
N.E.2d 1093, 1095 (Ind. Tax Ct. 1999) as “an endemic problem with the
uniformity of assessments within classes of property.” As explained above,
if some parts of a county significantly underassess properties compared to
the assessed valuations placed on similar properties elsewhere, the effect
is to shift tax burdens from the underassessed properties. Indeed, that
was the complaint of the town of St. John, which is in Lake County, that
led to the initial holding that the then-prevailing “true tax value” system
of assessment did not produce a uniform and equal method of assessment in
violation of Article X, Section 1 of the Indiana Constitution. Boehm v.
Town of St. John, 675 N.E.2d 318, 324 (Ind. 1996).

Until 2001, the State Tax Board had the functions of both the Board of
Tax Review and the DLGF. In 1998, the State Board had concluded, after
public hearings, that widespread underassessment in various units of Lake
County required ordering a countywide reassessment, and had employed a
private contractor to reassess all property in Lake County. Though noting
the State Board’s finding that there was “a widespread recognition that an
assessment problem exists in Lake County,” the Tax Court concluded that the
Board had no authority to employ a private firm to perform the
reassessment. Mantonovich, 705 N.E.2d at 1098. In response to that
decision, the General Assembly promptly granted the Board the authority the
Tax Court found lacking by enacting the statutes Plaintiffs challenge in
this case. We thus have administrative findings, judicial findings, and
legislative action all pointing to a unique circumstance created by uneven
assessment practices in various parts of Lake County. And, as Plaintiffs
point out, a few huge industrial complexes in Lake County constitute
significant percentages of all taxable property in some taxing districts, a
situation not faced in any other county, and requiring great care in
valuing such a dominant asset of unique kind and character for which there
is no ready market comparable to that for residential housing. We are
directed to no comparable set of circumstances in any other county
producing such widespread tax inequities and unusual issues of valuation.
These conditions readily justify local legislation to deal with a
reassessment problem of a scale and complexity not found elsewhere in the
state.

B. Other Constitutional Challenges

Plaintiffs contend without much explanation that these statutes
violate Article X, Section 1 of the Indiana Constitution. That section
requires a “uniform and equal rate of property assessment and taxation.”
We have held that the system of property taxation must be based on a system
that causes “each taxpayer’s property wealth bear its proportion of the
overall property tax burden.” Town of St. John, 675 N.E.2d at 324. There
is no basis to conclude that the statutes in question produce a
disproportionate assessment. Different procedures to accomplish a
reassessment based on the same substantive rules of valuation do not
violate that provision. Indeed, this Court has held that the goal of
statewide uniformity and proportionality trumps a local government’s
authority to value property. Zoercher v. Agler, 202 Ind. 214, 225-26, 172
N.E. 186, 190-91 (1930). The end result—a “uniform and equal rate” of
assessment—is required, but there is no requirement of uniform procedures
to arrive at that rate. To the contrary, the power of local authorities to
implement tax laws is purely statutory in nature. The only constitutional
constraint under Article X, Section 1 is upon the State itself, which must
provide a uniform and equal rate of assessment, but may provide whatever
procedures are appropriate consistent with the other provisions of the
Constitution.

For the same reason that these statutes do not violate Article IV,
Section 23, they also do not violate Article I, Section 23, which requires
that legislative classifications be reasonably related to inherent
characteristics that define the class. Plaintiffs do not elaborate on
these claims and we are left to surmise what the classification may be.
Taking the complaint at face value, the class appears to be Lake County
taxpayers compared to those in all other counties. As explained above,
given the long history of systematic underassessment in parts of Lake
County, there is abundant reason to provide for reassessment of property in
that county by means different from those applied in other counties. The
statutes thus satisfy the first prong of the requirements of Article I,
Section 23. The separate treatment of Lake County is “reasonably related”
to its “distinguishing characteristics.” Collins v. Day, 644 N.E.2d 72, 80
(Ind. 1994).

Plaintiffs also advance an argument, not clearly tied to any specific
constitutional provision, the substance of which is that local assessors
would recognize the adverse effect that lowering valuations of industrial
properties would have on some residential properties. This is compounded,
plaintiffs say, by the fact that this reassessment was performed by two
different agencies, private contractors for residential properties and DLGF
for industrial property. They claim a constitutional right to have locally
elected officials perform the assessments. There are several things wrong
with this claim. First, valuations, whether made by local authorities or
by others, are as of March 1 of a given year. Any shift in valuations
caused by tax bills in the future is a matter for future reassessments.
Second, this argument boils down to a claim that these plaintiffs have a
right to preferential treatment under the property tax laws. That is
precisely the contention rejected by other taxpayers, including the
residents of St. John, who felt disadvantaged by selective underassessments
in parts of Lake County and claimed those disparities violated their rights
to uniform and equal taxation. Without a showing that the substantive
results reached by the reassessments are incorrect, we will not indulge the
assumption that local officials would arrive at a different result.
Finally, there is nothing in the Constitution that guarantees an assessment
by locally elected officials. The clerk of the circuit court, auditor,
recorder, treasurer, sheriff, coroner, and surveyor are required by Article
VI, Section 2 to be “elected, in each county.” There is no such
requirement as to assessors. Indeed, at some points in the history of this
state the disparities created by local assessors responding to local
election pressures created demand for a statewide equalization board to
eliminate the resulting unfairness. Justin E. Walsh, The Centennial
History of the Indiana General Assembly 1816-1978, 102-04 (1987).

Plaintiffs’ claim that these statutes violate Article I, Section 21
against “taking” of property without compensation is frivolous. It is well
established that taxation is not a “taking” within the meaning of this
provision. Hutchins v. Town of Fremont, 194 Ind. 74, 83, 142 N.E. 3, 11-12
(1924); Bd. of Comm’rs of Jackson v. State, 147 Ind. 476, 492, 46 N.E. 908,
912 (1897); 5A Ind. Law Encyclopedia, Constitutional Law § 446, at 427
(1984). The properties remain in the hands of the owners, and their use is
unaffected by the reassessment.

Finally, Plaintiffs advance a number of arguments questioning the
wisdom of the legislation, but raise no constitutional issue. For example,
they claim that local authorities should be given the opportunity to
perform the assessments. They also question the lack of taxpayer awareness
of the effect of reassessment based on the fact that many homes are
mortgaged and the mortgagees, as escrow agents, receive the tax notices.
These claims present no legal issue. The policy arguments must be directed
to the General Assembly, not this Court. Plaintiffs’ other claims, such as
the unconstitutionality of the homestead tax credit, were not presented to
the trial court and are not available on appeal.

III. The 2004 Law as Curative Legislation

A general law could readily have been crafted in 2001 that would have
accomplished what the General Assembly attempted to do. As explained in
Part II.A.2, Lake County has a long and troubled history of assessment of
property, including findings of the State Board as early as 1998 that
systematic underassessment required a countywide reassessment. A statute
applicable to all counties permitting the use of contracted private
assessors or permitting the DLGF to perform that function where such a
finding is made would be a general law not subject to Article IV challenge
as special legislation. In 2004 such a law was passed.

Indiana Code section 6-1.1-4-35 (2004), applies by its terms to a
county “other than a county subject to section 32 [I.C. § 6-1.1-4-32].” At
the time this law was passed, presumably the intent of this exception was
to exclude Lake County, which, as explained in Part II, is the only county
that meets the population parameters of “section 32.” Because section 32
violates Article IV, Section 22, however, no county is “subject to section
32” and section 35 applies by its terms to Lake County and all ninety-one
other counties. Moreover, section 35(v) specifically provides that “the
provision of this section are severable as provided in I.C. § 1-1-1-8(b)
[the general severability statute].” Pursuant to Section 35(v), we are to
sever any invalid portions of section 35. If section 35 were inapplicable
in Lake County, it would constitute special legislation for the same
reasons section 32 runs afoul of Article IV, Section 22 of the Indiana
Constitution. Based on the effort in 2001 to accomplish essentially the
same thing for Lake County, we think it clear that the General Assembly
would prefer statewide application of section 35 to its statewide
invalidity. Accordingly, even if section 35 is read to exclude Lake
County, that exclusion would fall, for the purpose of preserving the
statute.

Section 35 provides for DLGF to order a State-conducted reassessment
for a county if it determines that the local officials are unable to
complete the reassessment by October 2003 or are likely to complete
reassessment in an “inaccurate manner.” The DLGF is authorized to contract
with private parties to perform the reassessment. Nothing precludes the
DLGF from performing a part of the reassessment itself and contracting for
others. The DLGF was thus authorized by the 2004 legislation to do
substantially the same things in Lake County that were in fact done under
color of section 32. We are unwilling to fortify the armory of those who
attack the law as famous for its ability to elevate form over substance.
We see no basis to trigger the disruption that would be generated by
invalidation of the entire county’s property tax base where there is no
showing that any identifiable property has been incorrectly assessed.
Indeed, what plaintiffs seek is court preservation of a system of taxation
that was held invalid six years ago in State Board of Tax Commissioners v.
Town of St. John, 702 N.E.2d 1034 (Ind. 1998).

The 2004 law acts as curative legislation by authorizing actions taken
pursuant to an unconstitutional statute. “A curative act is a statute
passed to cure defects in prior law, or to validate legal proceedings,
instruments, or acts of public and private administrative authorities. In
the absence of such an act the statute would be void for want of conformity
with existing legal requirements. . . . [A] curative act may validate any
past action which the legislature might have authorized beforehand.” 2
Norman J. Singer, Statutes and Statutory Construction, § 41.11, at 466-67
(6th ed. 2001). This Court has adopted Judge Cooley’s test for curative
acts:

If the thing wanting or which failed to be done, and which constitutes
the defect in the proceedings, is something the necessity for which
the legislature might have dispensed with by prior statute, then it is
not beyond the power of the legislature to dispense with it by
subsequent statute. And if the irregularity consists in doing some
act, or in the mode or manner of doing some act, which the legislature
might have made immaterial by prior law, it is equally competent to
make the same immaterial by a subsequent law.

See State ex rel. Harris v. Mutschler, 232 Ind. 580, 590-91, 115 N.E.2d
206, 210 (1953) (citing 2 Thomas M. Cooley, Constitutional Limitations at
775-76 (7th ed.)). A curative act should be liberally construed.
Mutschler, 232 Ind. at 591, 115 N.E.2d at 210. A curative or validating
statute is a species of retrospective legislation, “but that does not make
such a curative act unconstitutional unless violating some constitutional
provision such as impairing the obligation of a contract or the taking of
property without due process.” Martin v. Ben Davis Conservancy Dist., 238
Ind. 502, 512, 153 N.E.2d 125, 130 (1958); See Muncie Nat’l Bank v. Miller,
91 Ind. 441, 446 (1883). Therefore, when passing curative legislation the
legislature may recognize and validate a de facto condition or status.
There are limitations to this doctrine. For example the legislature cannot
authorize an unconstitutional act, Martin, 238 Ind. at 513, 153 N.E.2d at
130, or cure a jurisdictional defect in a court proceeding, Seitz v.
Mosier, 192 Ind. 416, 421-22, 136 N.E. 840, 842 (1922). But none are
applicable here. The legislature plainly could have authorized statewide
reassessments under the procedures of section 35.

The relevant point here is that the legislature may pass curative
legislation that validates official acts performed pursuant to an act which
a court later determines is unconstitutional so long as the curative
statute does not suffer from any of the same defects as the original law.
Thus, in Martin, the 1947 legislature passed an act that gave trial courts
the authority to establish conservancy districts and appoint their
directors and appraisers. Subsequently, the Court held that the 1947 law
violated the requirement, since removed from Article IV, Section 19 of the
Indiana Constitution, that the subject of every act “shall be expressed in
the title.” State ex rel. Pa. R.R. Co. v. Iroquois Conservancy Dist.
Court, 235 Ind. 353, 359, 133 N.E.2d 848, 851 (1956). In response, the
legislature passed the Conservancy Act of 1957 which by its terms
authorized the conservancy districts established pursuant to the 1947 act
and legalized prior acts of the board of directors for those districts.
This Court held that because it was within the legislature’s prerogative to
establish the conservancy districts in 1947, it was also within the power
of the General Assembly to cure any constitutional defects by passing
curative legislation that meets constitutional requirements. Martin, 238
Ind. at 512, 153 N.E.2d at 130. Similarly, this Court in Mutschler, 232
Ind. at 591, 115 N.E.2d at 210, upheld a general law that legalized
consolidated school districts that were defectively formed due to improper
notice or invalid elections. It was within the legislature’s discretion to
dispense with those requirements for consolidation, so it was permissible
to validate consolidations that had taken place without them, although they
were required at the time the consolidation originally took place. Id.

In Fahlor v. Board of Commissioners of Wells County, 101 Ind. 167, 171-
72 (1885), this Court declared that the proceedings and orders of the Wells
County board were void because the board was not in a regular or special
session when it approved the construction of a road. The next year,
however, in Johnson v. Board of Commissioners of Wells County, 107 Ind. 15,
26 8 N.E. 1, 6 (1886), this Court upheld legislation passed one month after
the decision in Fahlor, to legalize the proceedings of the county board as
to the gravel road. The Court held that curative legislation is invalid if
it “materially interferes with or overthrows vested rights, creates and
imposes new burdens, or infringes upon the judicial department of the
government.” Johnson, 107 Ind. at 19, 8 N.E. at 5-6; see also 5A Ind. Law
Encyclopedia, Constitutional Law § 272, at 188 (1984). But in the absence
of any of these, a curative law salvages actions taken under defective
statutes or in disregard of procedural requirements that are not required
by due process. This reasoning has been specifically followed by the
United States Supreme Court in sustaining curative laws authorizing
assessments for tax purposes. In Williams v. Supervisors of Albany, 122
U.S. 154, 164 (1887), the Court stated: “It is only necessary . . . to
consider whether the assessment could have been ordered originally . . . .
If [the statutory flaws] were not essential to any valid assessment, and
therefore might have been omitted or performed at another time, their
omission or defective performance may be cured by the same authority.” And
curative legislation has been specifically upheld to validate acts taken
pursuant to laws later held to be special legislation. See Marfa Indep.
Sch. Dist. v. S. T. Wood, 141 S.W.2d 590, 592 (1940).

In sum, in 2004 the Legislature authorized the DLGF to contract with
private parties to perform property value reassessments or to conduct
reassessments itself in counties where DLGF determines that local officials
are unable to complete the reassessment by October 2003 or are likely to
complete reassessment in an “inaccurate manner.” The DLGF did find
widespread unequal assessment practices in Lake County, and pursuant to
section 32 the county’s property values were reassessed. The legislature
had the power to authorize the DLGF to order the reassessment of property
values in Lake County at the time it passed section 32. It therefore also
had the power to cure the constitutional defect of the act by enacting
section 35. Accordingly, the 2002 reassessment is valid subject to any
individual errors in assessment that are determined in the normal review
process.

The doctrine of curative legislation permits the legislature in effect
to ratify a previously unauthorized reassessment. This produces no
injustice. There are unconstitutional statutes and unconstitutional
statutes. The constitutional flaw claimed here is not that the plaintiffs’
property is incorrectly valued, or that the assessments violated the
substantive requirement of Article X that they be “uniform and equal.”
Indeed there is no showing that the result would be different if the local
assessors had done the job and done it properly. The constitutional issue
is merely a claimed lack of authority of the persons who carried out the
assessment under color of a statute that had never been declared
unconstitutional at the time they acted. Moreover, as we hold today in
Department of Local Government Finance v. Commonwealth Edison Co. of
Indiana, ___ N.E.2d ___ (No. 49S10-0307-TA-293) (Ind. 2005) (slip op. at
6), the law permits an appeal of a property owner’s assessments even if the
basis of that appeal is an incorrect assessment of other properties. The
law thus affords a remedy for any inequity. But that remedy is not
upsetting the entire fiscal structure of the county, which would be the
result if some taxpayers are assessed on the basis of pre-reassessment
values and those who are pleased with the reassessment get its benefits.

IV. Appropriate Relief

The injunctive relief granted by the trial court is inappropriate for
reasons apart from lack of jurisdiction. Both the balance of benefits and
burdens and the doctrine of laches preclude the injunctive relief awarded
by the trial court. These are different ways of making the legal point
that this lawsuit for declaratory judgment and injunction comes far too
late in the process to obtain the result the plaintiffs seek. Plaintiffs
cannot wait until the eve of the date on which already overdue tax bills
are to be sent out to launch an attack on a process that has been underway
for over three years and is critical to the operation of government.

A. Injunctive Relief is Improper

Although we find the statutes authorizing these assessments to violate
Section 22, we are given no basis to conclude that a different result would
be produced by a reassessment by local authorities. The trial court found,
presumably correctly, that the effect of the reassessment is to increase
taxes on some properties compared to the taxes on the same property for
prior years. But there is no finding that the reassessment done pursuant
to these statutes produced a different result from the assessments that
will ultimately prevail if the tax bills are enjoined. Indeed, if the
local authorities do their jobs properly, and the reassessment was done
properly, there is no basis to conclude they would reach a different result
for any specific piece of property. Of course, one can conjecture that
there might be differences, but there is no basis to conclude what those
differences would be, at least without imputing improper motives to the
local authorities. As the State points out, the provisions governing the
values to be placed on property are applicable statewide. The only effect
of the statutes the plaintiffs attack is to change the agency that performs
the assessment, not the substance of what the assessor is to do. Indeed,
we have no basis to conclude that the assessed valuations produced by the
DLGF or the private firm are any different from what would have been
produced by a timely assessment if the local authorities had been able to
produce one, or would be produced by a reassessment in the future.

As a matter of basic equity law, and the law of preliminary
injunctions, courts must consider the relative benefits and burdens of
granting injunctive relief, even if the plaintiffs are correct. See Ind.
Family & Soc. Servs. Admin. v. Walgreen Co., 769 N.E.2d 158, 161 (Ind.
2002). A court, considering an application for preliminary injunction
“will consider the traditional balance of convenience; this is to say, it
will consider whether a greater injury would be done by granting the
injunction than would result from a refusal to do so.” 43A C.J.S.
Balancing Equities, Inconvenience, Hardship, or Injury-Temporary or
Preliminary Injunction or Restraining Order § 82, 102 (2004). Equity
courts are traditionally free to balance equities and hardships in
determining whether or not to grant an equitable remedy. Dan D. Dobbs, Law
of Remedies, § 2.4(1), at 91 (2d ed. 1993). Moreover, injunctive relief is
equitable in nature, and courts will not exercise that authority to produce
useless results. State ex rel Board of Sanitary Commissioners of Terre
Haute v. Superior Court of Vigo Cty., 247 Ind. 617, 220 N.E.2d 336 (Ind.
1966). Given that the new law, which became effective June 30, 2004, would
permit the DLGF to redo the entire reassessment and arrive at the same
place, injunctive relief must be denied on that ground alone. “The
jurisdiction of a court of equity extends no farther than is necessary to
do some equitable thing; it has no jurisdiction to do useless, unjust, and
inequitable things.” In re Hawkins Mortgage Co., 45 F.2d 937, 940 (7th
Cir. 1931). “It is an age old axiom that equity will not do a useless
thing.” Townsend v. Quern, 473 F. Supp 193, 198 (N.D. Ill. 1979). An
injunction is to be denied if the public interest would be substantially
adversely affected, even if the plaintiff has a claim. Fumo v. Medical
Group of Mich. City, Inc., 590 N.E.2d 1103, 1108 (Ind. Ct. App. 1992).

B. Laches

Finally, just as in any other case seeking equitable relief, undue
delay in seeking the relief may bar relief. Here the plaintiffs brought
this suit on April 29, 2004, seeking to enjoin the Lake County Treasurer
from sending out tax bills that should have been due in March 2003. But
due to delays in reassessment, the tax bills were already over a year late.
The claim is that these two statutes, on the books since 2001, were
unconstitutional. Rather than seeking to enjoin the implementation of
these reassessment procedures, the plaintiffs waited until they were
completed, no other reassessment having been conducted, and then sought to
enjoin the collection of 2003 taxes already over one year delayed. This is
a classic case for invoking of the equitable doctrine of laches.

Laches is an equitable doctrine. Unlike statutes of limitations, it
does not principally turn on time alone. Rather, if a party, with
knowledge of the relevant facts, permits the passing of time to work a
change of circumstances by the other party, laches may bar the claim.
Shafer v. Lambie, 667 N.E.2d 226, 231 (Ind. Ct. App. 1996). As early as
1996, the need for reassessment was obvious as a result of this Court’s
decision in Boehm v. Town of St. John, 675 N.E.2d 318 (Ind. 1996). The
basic fact of the legislature’s provision for reassessment in Lake County
by private contractors and the DLGF was in the public record and widely
publicized since 2001. The county’s taxing authorities are now dependent
on the results of that process to move forward, if belatedly, to proceed
with the ordinary process of funding government. Under these circumstances
laches bars granting of an injunction based on facts and theories available
to the plaintiffs three years earlier.

Conclusion

The preliminary injunction entered by the trial court is vacated.
This case is remanded with instructions to dismiss the complaint for lack
of jurisdiction.

Dickson, J. concurs.
Shepard, C.J., and Sullivan J. concur in Part I with separate opinion by
Sullivan, J.
Rucker, J. concurs in Parts I, II, and IV, and dissents as to Part III with
separate opinion.

Sullivan, Justice, concurring in Part I.

I concur with the Court’s earlier decision to vacate the trial court’s
injunction entered in this case and permit Lake County property tax
authorities to mail property tax bills based on the new assessments that
are challenged in this case. I also concur in part I of the Court’s
opinion. More specifically, I agree that the Legislature has deprived
Indiana trial courts of jurisdiction to review the claims advanced by the
taxpayers in this case. The Sproles case is clear and unequivocal
precedent on this point.

At the same time, I agree with the Court that taxpayers whose property
has been incorrectly assessed can appeal their assessments through
administrative channels. This Court in Dep’t of Local Gov’t Fin. v.
Commonwealth Edison Co. of Ind., No. 49S10-0307-TA-293, __ N.E.2d __, slip
op. at 6-7 (Ind. Jan. 13, 2005), makes clear that the remedy is available
even if the reason a taxpayer contends the taxpayer’s assessment is too
high is that other property in the township or county is assessed contrary
to law. (The Department of Local Government Finance made clear in its
filings in this case that it was prepared to review the assessments of over
5,000 Lake County residential taxpayers before the trial court’s injunction
in this case brought the proceedings to a halt. See Reply Br. of Relator-
Appellants at 4.)

I recognize that it appears unwieldy if not unfair that taxpayers who
believe they have been wrongly assessed—particularly, as in this case,
where they believe they have been assessed pursuant to an unconstitutional
statute—must go through several layers of administrative review before
being allowed to appeal to the Tax Court. Indiana trial courts review
claims of unconstitutionality all the time; why, the plaintiffs ask, should
their claim be reviewed differently?

The short answer is, of course, that the Legislature has said so, and
under our laws, it is up to the Legislature to determine the jurisdiction
of Indiana trial courts. See Ind. Const., art VII, §§ 1, 8. But sound
reasons explain why the Legislature established this procedure. Protests
over taxes are frequent and yet taxes are needed to provide public safety
and other public services. A system that channels tax protests through an
orderly system of administrative and Tax Court review without risking
abrupt stoppages in tax collections by order of any one of the state’s
hundreds of trial courts protects the interests of both taxpayers and of
all of us who rely on government services. Furthermore, utilizing an
orderly system of administrative and Tax Court review allows the executive
and legislative branches to effect compromises of tax controversies, rather
than have the answers dictated by (a variety of) courts.

It is in part because I believe that taxpayers and the executive and
legislative branches should have maximum freedom to effect compromise of
this tax controversy that I think the Court is wrong to reach the merits of
the various constitutional claims advanced. More than a century ago, this
Court said:

Courts will not pass upon a constitutional question, and decide
a statute to be invalid, unless a decision upon that very point
becomes necessary to the determination of the cause. This court has
repeatedly held that questions of this character will not be decided
unless such decision is absolutely necessary to a disposition of the
cause on its merits.

State v. Darlington, 153 Ind. 1, 4, 53 N.E. 925, 926 (1899); accord, Elk
Grove Unified Sch. Dist. v. Newdow, 124 S. Ct. 2301, 2308 (2004) (quoting
Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 341 (1936)
(Brandeis, J., concurring)); Spector Motor Service, Inc. v. McLaughlin, 323
U.S. 101, 105 (1944) (“If there is one doctrine more deeply rooted than any
other in the process of constitutional adjudication, it is that we ought
not to pass on questions of constitutionality . . . unless such
adjudication is unavoidable.”); Owens Corning Fiberglass Corp. v. Cobb, 754
N.E.2d 905, 916 (Ind. 2001); Indiana Wholesale Wine & Liquor Co. v. State
ex rel. Indiana Alcoholic Bev. Comm’n, 695 N.E.2d 99, 106 (Ind. 1998);
Citizens Nat’l Bank v. Foster, 668 N.E.2d 1236, 1241 (Ind. 1996).

Because a decision on the points discussed by the Court in Parts II
through IV are unnecessary to the determination of this case, I express no
opinion with respect thereto.
Shepard, C.J., concurs.

Rucker, Justice, concurring in part and dissenting in part.

I respectfully dissent from part III of the majority opinion. In all
other respects I concur.

The 2002 reassessment of real property in Lake County has resulted in
a dramatic increase in the property tax obligations for most Lake County
homeowners in general and the homeowners to this litigation in particular.
In one instance a homeowner’s tax bill increased by an astounding 208%, and
in another instance by an even more astounding 559%.[2] The tax increase
has had a devastating impact on the ability of many homeowners to meet
their monthly mortgage payment obligations. For others, it may mean losing
their homes altogether. This turn of events is not necessarily the result
of entities other than the elected Assessors conducting property tax
reassessments. Rather, it is the result of a shift in the tax burden to
local homeowners from what has been referred to as “The Big Four” (United
States Steel Corporation; Ispat Inland, Inc.; International Steel Group,
Inc.; and BP Productions of North America, Inc.).

To be sure, the 2002 reassessment and the resulting shift in the
property tax burden were not unanticipated. In a 1996 study commissioned
by the then State Board of Tax Commissioners (now the Department of Local
Government Finance, “DLGF”), researchers predicted that the adoption of a
market value methodology for the assessment of real property, provided no
other changes in the tax code were adopted, would result in an average
statewide increase of 39% in tax obligations for residential property
owners. 3 Appellants’ App. at 10. That estimate was later adjusted to
reflect an estimated 33% property tax payment increase statewide. Id.
Notably, the researchers observed, “Lake and Crawford Counties stand out as
having the highest residential tax shifts, 91.7% and 73.7%, respectively.”
Id. at 187. The reason for the estimated 91.7% tax shift in Lake County
was apparently due in part to the business and residential “multipliers”
used in the formula for determining market value assessments. Both
multipliers were higher in Lake County than in any other county in the
State of Indiana. With respect to the accuracy of these multipliers, the
researchers concluded:

If anything, the business multiplier used in the baseline
scenario overstates the actual business multiplier in Lake
County. Replacing the multipliers used in our analysis with the
multipliers [relied upon by the State experts’ assessment] would
reduce the homeowner shift in Lake County from 91.7% to 76.4%,
which still would be the highest shift among Indiana counties.

Id. at 187-88.

The record before us is silent regarding whether and to what extent
the DLGF took into account the results of its study and the researchers’
observations as it began to craft a property assessment scheme that more
accurately measures property wealth. Equally important, the record does
not reveal the formulae or methodology used by the DLGF to assess the value
of the real property holdings of the “Big Four.”[3] We do know that the
reassessments resulted in tax shifts among some Lake County homeowners far
in excess of those predicted by the researchers. We also know the “Big
Four” were provided with “special rules for the assessment and taxation of
industrial facilities . . . .” Indiana Code § 6-1.1-8.5-13. The fact that
special rules were fashioned for industrial facilities coupled with the
lack of any indication the DLGF relied on its own study to develop the new
property assessment system is significant in my view because not only the
assessed values of properties, but also the tax rates at which properties
are assessed, may be affected by who conducts the assessments and under
what rules the properties are assessed.

Having made the foregoing observations, I nonetheless agree with the
majority that injunctive relief is not an available remedy in this
instance. And I do so largely based upon the reasons the majority
explains. However, the majority has declared, on the basis of curative
legislation, that “the 2002 reassessment is valid subject to any individual
errors in the assessment that are determined in the normal review process.”
Slip op. at 21 (emphasis added). Not only is the majority’s “curative
legislation” analysis not applicable in this case, but also by using this
vehicle to validate the 2002 assessments, the majority forecloses the most
potent argument available to homeowners entitling them to administrative
relief, namely: because the assessment statutes are unconstitutional, the
taxes collected pursuant to the statutes are illegal as a matter of law.

A. Curative Legislation

First, although the Legislature certainly has the authority to enact
curative legislation, there is nothing in the text of the statute to
suggest the Legislature intended section 35 to serve that function. By
specifically declaring that section 35 applied to a county “other than a
county subject to section 32 [Lake County]” it is clear section 35 was
intended as an exception to section 32 not a “cure” of any perceived
constitutional infirmity.

Second, to say that the “DLGF was thus authorized by the 2004
legislation to do substantially the same things in Lake County that were in
fact done under the color of section 32,” slip op. at 17, is simply not
supported by the language of the statute. Section 32 as it existed in 2002
specifically dictated that Lake County assessors “may not appraise
property, or have property appraised . . . .” The only duty of the local
assessors was “to provide [the DLGF] or [the DLGF’s] contractor . . . any
support and information requested by the [DLGF] or the contractor.” Id.
By contrast, under the 2004 legislation there is no absolute prohibition
placed on local assessors from conducting reassessments. Rather, the DLGF
“may order a state conducted reassessment in the county” if it determines a
reassessment is necessary. I.C. § 6-1.1-4-35(e). Even then, provided the
local assessors act before the DLGF orders a state conducted reassessment,
the local assessors may “enter into a contract with a professional
appraising firm to conduct a reassessment . . . .” I.C. § 6-1.1-4-35(i).
And that contract “is as valid as if it had been entered into by the
[DLGF]; and [] shall be treated as the contract of the [DLGF].” Id. In
essence, the newly enacted statute, which supposedly applies statewide,
essentially gives local assessors an “opt-out” provision. Nothing
resembling such a provision exists in the Lake County-only statute. Thus,
while it is true the DLGF may order a statewide reassessment under section
35, it does not have carte blanche authority to conduct the reassessment
itself or to hire contractors for that purpose. Rather, unlike section 32,
under section 35 local Assessors still play a significant role in the
assessment of local property.

Finally, and perhaps most importantly, section 35 certainly has not
“cured” the constitutionally defective I.C. § 6-1.1-8.5-1 et seq. This
statute, which has undergone no substantial revision since its enactment,
provides “special rules” for the assessment of the “Big Four.” And the
assessments conducted under this statute apparently have been the greatest
contributor to the significant tax increases for homeowners in Lake County.
A DLGF ordered reassessment of property today could not include this Lake
County-only provision. In sum, the doctrine of curative legislation saves
neither I.C. § 6-1.1-4-32 nor I.C. § 6-1.1-8.5-1 et seq.

B. Available Remedies

Indiana Code § 6-1.1-15-1 et seq. sets forth the procedures for
review and appeal of property tax assessments. Among other things, a
taxpayer may file a Form 133 Petition to request a correction of errors for
one or more of the following reasons:

1) The description of the real property was in error.

2) The assessment was against the wrong person.

3) Taxes on the same property were charged more than one (1) time in the
same year.

4) There was a mathematical error in computing the taxes or penalties on
the taxes.

5) There was an error in carrying delinquent taxes forward from one (1)
tax duplicate to another.

6) The taxes, as a matter of law, were illegal.

7) There was a mathematical error in computing an assessment.

8) Through an error of omission by any state or county officer the
taxpayer was not given credit for an exemption or deduction permitted
by law.

I.C. § 6-1.1-15-12(a).

Even though injunction may not be an available remedy, the fact
remains that the property taxes imposed in this case are based on
unconstitutional reassessment statutes. “An unconstitutional act is not
law; it confers no rights; it imposes no duties; it affords no protection;
it creates no office; it is, in legal contemplation, as inoperative as
though it had never been passed.” State v. Steinwedel, 203 Ind. 457, 180
N.E.2d 865, 867 (1932). Consequently, the property taxes assessed pursuant
to these unconstitutional statutes are illegal “as a matter of law.” See
I.C. § 6-1.1-15-12(a)(6). It is on this ground that the homeowners here
should be entitled to relief. And the relief should entail payment of
property taxes due and owing based on the preexisting assessments with
appropriate refunds for all or a portion of tax installments already paid
under the 2002 assessments. See I.C. § 6-1.1-26-1(4)(B). In the meantime
there is nothing to prohibit DLGF from ordering a State conducted
reassessment under the provisions of Indiana Code § 6-1.1-4-35 enacted in
2004.

The majority suggests that homeowners have an available remedy under
the authority of Department of Local Gov’t Fin. v. Commonwealth Edison Co.
of Ind., ___ N.E.2d ___ (No. 49S10-0307-TA-293) (Ind. Jan. 13, 2005).
However, it appears to me that Commonwealth Edison must be read in
conjunction with Lake County Prop. Tax Assessment Bd. of Appeals v. BP
Amoco Corp., ___ N.E.2d ___ (No. 49S10-0309-TA-400) (Ind. Jan. 13, 2005).
And as I read BP Amoco, only if at least one taxpayer has already timely
filed a Form 130 petition challenging the methodology used in generating
the 2002 Lake County assessments, and only if through the administrative
review process there is a determination that the taxpayer is entitled to
relief, then and only then may the homeowners in this case possibly be
afforded relief by filing Form 133 petitions. Id. at slip op. 8-9.

In sum, as I understand the majority’s position, although the taxes in
this case were assessed under unconstitutional assessment statutes, that
fact alone has no practical consequence. Rather, in order to obtain
relief, homeowners must advance an argument independent of the statutes’
unconstitutionality. I cannot endorse this view. It is small comfort to
these homeowners for the Court to declare in one breath that the challenged
statutes constitute unconstitutional special legislation, a proposition
with which I agree, and in the next breath declare the functional
equivalent of “so what.” Accordingly, I respectfully dissent from Part III
of the majority opinion. In all other respects I concur.

-----------------------
[1] P.L. 98-2004 repealed and recodified Title 33. Effective July 1, 2004,
this section appears at Ind. Code § 33-26-3-1 (2004).
[2] For example, the property taxes of homeowners D.E. and N.E. increased
from $2000 to $9000; homeowner M.F.’s tax obligation increased from $2400
to $5000; homeowner M.G.’s tax obligation increased from $1050 to $4320;
homeowner B.H.’s tax obligation increased from $3756.48 to $11,460.08;
homeowner E.R.’s tax obligation increased from $2706 to $9267.90; the taxes
of homeowners K.S and D.S. increased from $1800 to $4600; and the taxes of
homeowners S.W. and A.H. increased from $2700 to $15,089. R. at 55-61.
[3] There are three accepted methods by which to determine the value of
real property: the cost approach, the sales comparison approach, and the
income approach. “All three of these approaches, when properly processed,
should produce approximately the same estimate of value.” See State Board
of Tax Commissioners, 2002 Real Property Assessment Manual at 3 (2002),
available at
http://www.in.gov/dlgf/reassessment/approved_manuals/index.html (emphasis
added).