Excerpts of the Tax Court's Decision follow:
On appeal, Clark County provides the Court with three
reasons why the DLGF’s final determination is invalid and should be reversed. First,
Clark County argues that the DLGF abused its discretion by arbitrarily and
capriciously determining that the Council did not make a data error,
correctable under Indiana Code § 6-1.1-18.5-14, when it approved its 2008
property tax levy for $2.7 million less than what was statutorily permitted.
Second, Clark County argues that the DLGF contravened the law when it failed to
apply retroactively the 2011 statutory amendment that eliminated the “use it or
lose it” provision from the formula contained in Indiana Code § 6-1.1-18.5-3. Third,
Clark County argues that the DLGF violated its due process rights.
I.
Clark County claims
that the DLGF abused its discretion by arbitrarily and capriciously determining
that the Council did not make a data error, correctable under Indiana Code §
6-1.1-18.5-14, when it approved its 2008 property tax levy for $2.7 million
less than what was statutorily permitted. (See Pet’r Br. at 13-16.) Clark
County acknowledges that the Council intentionally decided not to ask for the
maximum levy allowable under Indiana Code § 6-1.1-18.5-3. (See Pet’r Br. at
14-15.) Nonetheless, it argues that that decision constituted a data error
correctable under Indiana Code § 6-1.1-18.5-14 because
[n]o responsible member of the [] Council would have
knowingly and intentionally breached their primary statutory duty to budget and
appropriate sufficient funds to provide for the essential functions of Clark County
government, thereby jeopardizing the public health, safety, and welfare of its
citizens by the consequences of the dire financial condition which has inevitably
now resulted. To the contrary, while the vote of the [] Council to reduce the
2008 department budgets . . . may have been an intentional act, it is clear…
that the [] Council had no clue of the long-term financial damage that [this
decision would] inflict[] on Clark County and its citizens by the resultant
maximum levy reduction.
(Pet’r Br. at 14-15.) In other words, Clark County argues
that the Council made a data error when it decided to forego the additional
revenue that could be generated through the levy because it could not have
foreseen any of the unexpected financial expenses and setbacks that would occur
in 2009 and beyond. (See, e.g., Oral Arg. Tr. at 27-28 (asserting that the
Council could not have possibly known in 2008 “what issues would crawl out of
the woodwork” in subsequent years).)
Unambiguous statutes must be read to mean what they plainly
express and that plain meaning may not be enlarged or restricted. Indiana Dep’t
of State Revenue v. Horizon Bancorp, 644 N.E.2d 870, 872 (Ind. 1994). Indiana
Code § 6-1.1-18.5-14(a) unambiguously allows for the correction of an “error in
data,” not an error in interpreting that data. See I.C. § 6-1.1-18.5-14(a).
Thus, the statute allows for the correction of an objective error only, not a
subjective error. This conclusion is supported by the fact that Indiana Code §
6-1.1-18.5-14 allows the DLGF to correct an error in data on its own initiative
(indicating that the error is not only readily fixable, but that it is easily observable
to someone who did not make it). See id.
Here, there is no record evidence to indicate that there was
an objective error in the Council’s data when it made its decision to forego
the maximum levy allowable for 2008. Indeed, the evidence indicates that when
it made its decision, the Council had accurate numbers as well as a warning
from the DLGF that the consequence of reducing its 2008 levy would be to
significantly reduce the county’s maximum levy in 2009, regardless of what the
future held. Despite the DLGF’s warning, the Council proceeded to approve a
property tax levy for $2.7 million less than what was statutorily allowed in
2008. This was not an “error in data,” nor was it even an error in interpreting
data. Instead, it was simply a failure on the part of the Council to plan for
budgetary contingencies. Consequently, the Court will not reverse the DLGF’s
final determination on this basis.
II.
Clark County also
claims that the final determination should be reversed because the DLGF should
have retroactively applied the 2011 statutory amendment that eliminated the
“use it or lose it provision” incorporated within Indiana Code § 6-1.1-18.5-3’s
calculation of “maximum permissible ad valorem property tax levy.” (Pet’r Br.
at 16-19.) Clark County argues that the Legislature intended this amendment to
be applied retroactively because it is remedial. (See Pet’r Br. at 18-19.)
Without strong and compelling reasons, statutes and
statutory amendments will not be applied retroactively. See Indiana Dep’t of
State Revenue v. Estate of Riggs, 735 N.E.2d 340, 344 (Ind. Tax Ct. 2000). An
exception to this general rule exists for remedial statutes and amendments,
i.e., those statutes and amendments that are intended to cure a defect or a
mischief that existed in a prior statute. State v. Pelley, 828 N.E.2d 915, 919
(Ind. 2005). “Ultimately however, whether or not a statute [or amendment]
applies retroactively depends on the legislature’s intent.” Bourbon Mini-Mart, Inc. v. Gast Fuel and
Servs., Inc., 783 N.E.2d 253, 260 (Ind. 2003).
Thus, “when a remedial statute is involved, a court must construe it to
‘effect the evident purpose for which it was enacted[.]’” Id. (citation
omitted).
Prior to July 1, 2011, the Legislature included the “use it
or lose it provision” in the formula for calculating and adjusting a “maximum
permissible ad valorem property tax levy for the preceding calendar year[.]”
See I.C. §§ 6-1.1-18.5-1, -3. Effective thereafter, however, the Legislature
completely removed that provision from the calculation. See Pub.L.No. 124-2011
§ 1 (eff. July 1, 2011). Clark County asserts that this amendment was remedial
because the original statute’s defect of being too complex. (See Pet’r Br. at
18 (asserting that “the Indiana Legislature recognized that the procedures for
calculating and adjusting maximum levies needed to be simplified” when it
eliminated the “use it or lose it” provision).)
The best evidence of the Legislature's intent is found in
the actual language used within a statute or an amendment. DeKalb Cnty. E.
Cmty. Sch. Dist. v. Dep’t of Local Gov’t Fin., 930 N.E.2d 1257, 1260 (Ind. Tax
Ct. 2010). Here, the words of the amendment unambiguously provided that it was
not entitled to retroactive effect. See Pub.L.No. 124-2011 § 1 (stating that
the “use it or lose it” provision was eliminated “[f]or purposes of determining
a maximum permissible ad valorem property tax levy under [Indiana Code §
6-1.1-18.5-3] for property taxes imposed for an assessment date after January
15, 2011” (emphasis added)). Accordingly, the statutory amendment eliminating
the “use it or lose it” provision was not remedial.
III.
Finally, Clark County
claims that Indiana Code § 6-1.1-18.5-12 required the DLGF to conduct a hearing
on its levy appeal, and by not doing so, the DLGF deprived it of its right to
due process. (See Pet’r Br. at 11-12.) Indiana Code § 6-1.1-18.5-12, however,
did not require the DLGF to conduct an administrative hearing on Clark County’s
levy appeal.
The relevant portions of Indiana Code § 6-1.1-18.5-12 state
that
(a) Any civil taxing unit that determines that it cannot
carry out its governmental functions for an ensuing calendar year under the
levy limitations imposed by [Indiana Code § 6-1.1-18.5-3] may . . . appeal to
the [DLGF] for relief from those levy limitations. In the appeal the civil
taxing unit must state that it will be unable to carry out the governmental
functions committed to it by law unless it is given the authority that it is
petitioning for. The civil taxing unit must support these allegations by
reasonably detailed statements of fact.
(b) The [DLGF] shall immediately proceed to the examination
and consideration of the merits of the civil taxing unit’s appeal.
(c) In considering an appeal, the [DLGF] has the power to
conduct hearings, require any officer or member of the appealing civil taxing unit
to appear before it, or require any officer or member of the appealing civil
taxing unit to provide [it] with any relevant records or books.
IND. CODE § 6-1.1-18.5-12(a)-(c) (2010) (emphasis added).
This statutory language merely provided the DLGF with the discretionary power
to conduct a hearing on Clark County’s levy appeal. See, e.g., Horizon Bancorp,
644 N.E.2d at 872 (explaining that the plain and obvious meaning of an
unambiguous statute may not be enlarged or restricted). Because Indiana Code §
6-1.1-18.5-12 did not require the DLGF to hold a hearing on Clark County’s levy
appeal and Clark County has not provided the Court with any other legal
analysis to support its claim that it has been deprived of due process, the
DLGF’s final determination will not be reversed on this basis.
