Court Opinion

ID: 9505312
Source: CourtListenerOpinion
Date Created: 2023-08-06 20:03:23.316543+00
Date Added: 2024-06-11T09:04:23.516126
License: Public Domain

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 89% in tax obligations for residential property owners. 3 Appellants' App. at 10. That estimate was later adjusted to reflect an estimated 338% 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 *1259took 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." Op. at 1254 (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 82," Op. at 1252, 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 DLGE"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. *12601.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...." L.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 [DLGEF]." 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 IL.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. § 6-1.1-4-82 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 183 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.
.C. § 6-1.1-15-12(g).
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. 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 inoperative as though it had never been passed." State v. Steinwedel, 208 Ind. 457, 180 N.E. 865, 867 (19832). 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 *12612002 assessments. See IL.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., 820 N.E.2d 1222, 2005 WL 67130 (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., 820 N.E.2d 1231 (No. 49S10-0309-TA-00400) (Ind. Jan. 18, 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 820 N.E.2d at 1236-37.
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.

. 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.

. 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/ap-proved_manuals/index.html (emphasis added).