FISHER, Senior Judge.
The Greenfield Fire Protection Territory, which was established by the City of Greenfield and the unincorporated area of Center Township, Hancock County, Indiana (Center Township), is the only fire protection territory in Hancock County that has a uniform tax rate. In 2011, the Department of Local Government Finance (DLGF) issued a final determination pursuant to Public Law 172-2011, Section 164
Prior to 2008, Center Township had individual contracts with the Greenfield Fire Department for fire protection and emergency response services. (See Cert. Admin. R. at 1.) The residents of Center Township, however, paid significantly less for the same services than the residents of the City of Greenfield.
In March 2008, the legislative bodies of the City of Greenfield and Center Township adopted an identical ordinance and resolution that approved their Interlocal Agreement to establish the Territory under Indiana Code § 36-8-19-1 et seq. (See Cert. Admin. R. at 9-30.) (See also Cert. Admin. R., App. A (Audio of DLGF Hr'g) at 33:04.) The Interlocal Agreement provided that the City of Greenfield, as the provider unit,
In 2009, the Territory adopted its first annual budget and established a uniform tax rate of $0.2414. (See Cert. Admin. R. at 48, 53, 87-88; DLGF Hr'g at 21:45.) In 2010, the uniform tax rate increased to $0.2566, but by 2011, it had decreased to $0.2436. (See Cert. Admin. R. at 53, 90-91, 94.)
On May 10, 2011, the legislature enacted Public Law 172-2011, Section 164, a non-code provision,
P.L. 172-2011, § 164 (2011) (repealed 2012). The DLGF subsequently notified all interested parties that it would conduct a public hearing, accept evidence, and then make a decision whether it would adjust the Territory's tax rates and levies based on the factors set forth in Public Law 172-2011, Section 164. (See Cert. Admin. R. at 34-35.)
Approximately 70 individuals appeared at the DLGF's hearing on September 15, 2011, to either advocate for or oppose an adjustment of the Territory's tax rates and levies. (See Cert. Admin. R. at 39-43.) The advocates sought a reduction of the Territory's tax rates and levies on the bases that it lacked transparency,
On October 17, 2011, the DLGF issued a final determination that reduced the Territory's general fund levy from $2,345,015 to $2,060,260 for the 2012 budget year. (Compare Cert. Admin. R. at 94 with 112.) In so doing, the DLGF effectively eliminated the Territory's use of a uniform tax rate by setting the City of Greenfield's maximum general fund levy at $1,790,312 and Center Township's maximum general fund levy at $269,948. (See Cert. Admin. R. at 104, 112.) The DLGF did not adjust the tax rate or levy for the equipment replacement fund. (See Cert. Admin. R. at 112.)
On November 16, 2011, the City of Greenfield and the Territory initiated this original tax appeal. The Court heard the parties' arguments on June 18, 2012. Additional facts will be supplied as necessary.
The party seeking to overturn a DLGF final determination bears the burden of demonstrating that it is invalid. See Brown v. Dep't of Local Gov't Fin., 989 N.E.2d 386, 388 (Ind. Tax Ct.2013). Accordingly, the City of Greenfield and the Territory must show the Court that the DLGF's final determination is arbitrary and capricious, an abuse of discretion, unsupported by substantial evidence, or contrary to law. See id.
On appeal, the City of Greenfield and the Territory contend that the DLGF's final determination must be reversed because it is arbitrary and capricious and not supported by substantial evidence. (See Pet'rs' Appellate Br. ("Pet'rs' Br.") at 17-25.) Alternatively, the City of Greenfield and the Territory claim that the DLGF's final determination is invalid because Public Law 172-2011, Section 164 violates Indiana's Constitution by contravening the special legislation provisions of Article 4, Sections 22 and 23.
The City of Greenfield and the Territory claim that the DLGF's final determination is arbitrary and capricious and not supported by substantial evidence because it
"The practical reasons for requiring administrative findings are so powerful that the requirement has been imposed with remarkable uniformity by virtually all federal and state courts, irrespective of a statutory requirement.'" Perez v. U.S. Steel Corp., 426 N.E.2d 29, 31 (Ind.1981) (citation omitted). Indeed, the fact-finding requirement keeps an agency within its jurisdiction, protects against careless or arbitrary action, and "insures that a careful examination of the evidence, rather than visceral inclinations, will control [its] decision." Id. at 31-32. The fact-finding requirement also ensures that the parties know the evidentiary bases upon which the agency's ultimate decision rests, helps them plan their cases for rehearing or judicial review, facilitates judicial review, and avoids judicial usurpation of administrative functions. Id.
To that end, the Indiana Supreme Court has explained that an agency's findings of fact are satisfactory if they provide "`a simple, straightforward statement of what happened ... stated in sufficient relevant detail to make it mentally graphic[.]'" Id. at 33 (citation omitted). Moreover, the agency's factual findings should reveal its analysis of the evidence as well as its determination of the relevant sub-issues and factual disputes that, collectively, are dispositive of the particular claim or the ultimate factual question before the agency. Id. See also Pack v. Indiana Family & Soc. Servs. Admin., 935 N.E.2d 1218, 1223 (Ind.Ct.App.2010). Accordingly, factual findings containing statements that the evidence either revealed or was "such and such," that a witness testified to "this or the other," or that an agency finds that a witness testified to "this or the other" are insufficient because the statements do not indicate what the agency found after examining all of the evidence. Perez, 426 N.E.2d at 33.
The DLGF's factual findings are contained in paragraphs 6 through 33 of its final determination. (See Cert. Admin. R. at 105-12.) Those paragraphs, however, contain very few factual findings that comport with the teachings of Perez and Pack. Indeed, paragraphs 6 through 15 and 31 through 32 merely identify the witnesses that offered written and oral testimony during the administrative process and restate portions of their testimony. (See Cert. Admin. R. at 105-07, 112.) Paragraphs 16 and 18 through 24 primarily contain the DLGF's reproductions of certain evidence, including the population changes, the assessed valuation changes, and the fire protection costs in the Territory and other areas. (Compare Cert. Admin. R. at 107-10 with 54, 56-58, 65, 68, 71.) Moreover, paragraph 33 appears to provide the DLGF's legal rationale for readjusting the Territory's levies, not a factual
The lack of sufficient factual findings would typically require the Court to remand the matter to the DLGF. See Perez, 426 N.E.2d at 33-34; Pack, 935 N.E.2d at 1227-28. Here, however, the Court need not remand for this deficiency because the DLGF's final determination is invalid for an entirely different reason.
The City of Greenfield and the Territory have also claimed that Public Law 172-2011, Section 164 contravenes Indiana's Constitution by violating the special legislation provisions set forth in Article 4, Sections 22 and 23. (See Pet'rs' Br. at 9-15.) Article 4, Section 22 prohibits the enactment of special laws regarding sixteen enumerated subjects, including "the assessment and collection of taxes for State, county, township, or road purposes[.]" IND. CONST. art. 4, § 22. In turn, Article 4, Section 23 provides that "[i]n all the cases enumerated in [Section 22], and in all other cases where a general law can be made applicable, all laws shall be general, and of uniform operation throughout the State." IND. CONST. art. 4, § 23. Consequently, the determination of whether a law is special or general is a threshold question when analyzing its constitutionality under both Article 4, Sections 22 and 23.
The City of Greenfield and the Territory claim that Public Law 172-2011, Section 164 is a special law because the Territory is the only fire protection territory to which the law applies. (See Pet'rs' Br. at 11.) On its face, Public Law 172-2011, Section 164 states that it applies only to fire protection territories located in Hancock County with uniform tax rates. See P.L. 172-2011, § 164. The administrative record in this case indicates that while there are other fire departments in Hancock County, the Territory is the only fire protection territory in Hancock County with a uniform tax rate. (See, e.g., Cert. Admin. R. at 54, 65, 67; DLGF Hr'g at 1:01:44, 1:03:16.) Accordingly, the Court finds that Public Law 172-2011, Section 164 is a special law. (See also Resp't Resp. Br. at 8; Oral Arg. Tr. at 58-59 (indicating that the DLGF does not dispute this finding).)
Because Public Law 172-2011, Section 164 is a special law, the Court now turns to the question of whether it violates Article 4, Section 22's prohibition against the enactment of a law concerning the assessment and collection of tax for township purposes. The City of Greenfield and
Several years ago, the Indiana Supreme Court determined that a special law that allowed a taxing unit to increase a county's existing tax rate did not violate Article 4, Section 22. See State v. Hoovler, 668 N.E.2d 1229, 1233 (Ind.1996). The Supreme Court explained that the special law was constitutional because increasing a tax rate (i.e., the amount a taxpayer must pay in property tax) failed to implicate the assessment or collection of tax because it did not authorize any new property valuations or changes in the system of tax gathering. See id. See also REAL PROPERTY ASSESSMENT GUIDELINES FOR 2002 — VERSION A (Guidelines) (incorporated by reference at 50 IND. ADMIN. CODE 2-3-1-2 (2002 Supp.)), Bk. 2, Glossary at 21 (defining "tax rate" as the percentage used to determine how much a taxpayer will pay in property taxes). Public Law 172-2011, Section 164 does not authorize new property valuations nor does it change the manner in which taxes are collected; instead, it merely provides for an adjustment to the Territory's existing tax levy (i.e., the amount it may collect in property tax for fire protection). See P.L. 172-2011, § 164; Guidelines, Bk. 2, Glossary at 20 (defining "tax levy" as the total revenue that a taxing unit (e.g., a township) may raise in property tax dollars annually). Consequently, Public Law 172-2011, Section 164 does not violate Article 4, Section 22. See Hoovler, 668 N.E.2d at 1233.
The City of Greenfield and the Territory have also claimed that Public Law 172-2011, Section 164 contravenes the special legislation provisions set forth in Article 4, Section, 23 of the Indiana Constitution. To be unconstitutional under Article 4, Section 23, a law must be both special and subject to a law of general applicability. Alpha Psi, 849 N.E.2d at 1137. To determine whether special legislation is subject to a law of general applicability, the Court must examine "`whether there are inherent characteristics of the affected [class] that justify [special] legislation.'" Id. at 1137-38 (citations omitted). In so doing, the Court must consider 1) if the statute "`is meaningful in a variety of places or whether relevant traits of the affected area are distinctive such that the law's application elsewhere has no effect,' and 2) if those `unique circumstances ... rationally justify the legislation.'" Id. at 1138 (citations omitted). In other words, the Court must determine "whether there is something about the class that makes it unique and whether the uniqueness justifies the differential treatment." Id.
The City of Greenfield and the Territory assert that Public Law 172-2011, Section 164 is unconstitutional special legislation under Article 4, Section 23 "in its rawest form" because the legislature could have drafted the law as a general law as there is nothing unique about the Territory, the sole fire protection territory in Hancock County with a uniform tax rate. (See Pet'rs' Br. at 14-15.) The DLGF counters that Public Law 172-2011, Section 164 could not have been made generally applicable, however, given two unique circumstances: 1) the manner in which the Territory was established and, 2) the Territory's use of a uniform tax rate that unfairly shifted the tax burden from the City of Greenfield to Center Township.
In resolving Article 4, Section 23 challenges, courts typically examine whether some uniqueness exists in the class specified in the special legislation. See Alpha Psi, 849 N.E.2d at 1138. For instance, the Indiana Supreme Court upheld a special law that applied solely to Tippecanoe County because it was the only county in the state that was subject to possible Superfund liability under federal environmental protection laws. See Hoovler, 668 N.E.2d at 1235. Similarly, the Supreme Court upheld special legislation that applied only to Lake County because it had well-established issues with its overall property tax system and a uniquely comprised tax base. See State ex rel. Att'y Gen. v. Lake Sup. Ct., 820 N.E.2d 1240, 1249-50 (Ind.2005). In both cases, certain administrative findings, judicial findings, or legislative actions corroborated the existence of unique circumstances that justified the special legislation. See id. at 1249-50; Hoovler, 668 N.E.2d at 1234-36.
Contrary to the DLGF's claim, the certified administrative record in this case does not suggest that either the Territory or the circumstances surrounding its establishment are unique. This conclusion is supported by three other provisions of Public Law 172-2011, which indicate that Section 164 could have been made generally applicable. For instance, Section 159 states:
P.L. § 172-2011, § 159 (2011) (codified at IND.CODE § 36-8-19-6.3 (2011)). Section 163 addressed the establishment of fire protection territories throughout the state by requiring legislative bodies to follow additional procedures before adopting an ordinance or resolution to establish a fire protection territory. See P.L. 172-2011, § 163 (2011) (repealed 2012).
The certified administrative record and the three generally applicable provisions of Public Law 172-2011 regarding fire protection territories indicate that Public Law 172-2011, Section 164 could have been written to apply throughout the state because neither the Territory nor the circumstances surrounding its establishment are unique. Therefore, Public Law 172-2011, Section 164 contravenes the special legislation provisions set forth in Article 4, Section 23 of the Indiana Constitution. Accordingly, the DLGF's final determination that adjusted the Territory's general fund levy for the 2012 budget year pursuant to Public Law 172-2011, Section 164 is invalid.
For the above-stated reasons, the final determination of the DLGF is REVERSED. The Court REMANDS this matter to the DLGF with instructions to reinstate the City of Greenfield's and Center Township's original levies and tax rates for the 2012 budget year and take any other actions consistent with this opinion.