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