Indianapolis Pub. Transp. Corp. v. Ind. Dep't of Local Gov't Fin.

988 N.E.2d 1274

INDIANAPOLIS PUBLIC TRANSPORTATION CORPORATION, Petitioner,

v.INDIANA DEPARTMENT OF LOCAL GOVERNMENT FINANCE, Respondent.

No. 49T10–0910–TA–76.

Tax Court of Indiana.

May 3, 2013.

Jeffrey S. Dible, Frost Brown Todd LLC, Indianapolis, IN, Attorney for Petitioner.

Gregory F. Zoeller, Attorney General of Indiana, Timothy A. Schultz, Deputy Attorney General, Indianapolis, IN, Attorneys for Respondent.

WENTWORTH, J.

Indianapolis Public Transportation Corporation (IndyGo) appeals the Department of Local Government Finance's (DLGF) final determination denying its excess property tax levy request for the 2007 budget year. On appeal, IndyGo argues that the DLGF's final determination must be reversed because it is unlawful, not supported by the evidence, and an abuse of discretion. The Court disagrees.

FACTS AND PROCEDURAL HISTORY

IndyGo, a public transportation corporation, provides bus service throughout Marion County, Indiana. IndyGo does not provide bus service, however, within the City of Lawrence, the City of Southport, and the Town of Speedway.

In November of 2008, IndyGo requested the DLGF's permission, pursuant to Indiana Code § 6–1.1–18.5–16, to impose an excess property tax levy. In its request documentation, IndyGo indicated that, due to an “erroneous assessed valuation,” it had suffered property tax revenue shortfalls in budget years 2006 and 2007. ( See Cert. Admin. R. at 1.) IndyGo therefore sought to impose an excess levy in the aggregate amount of $1,047,369 ($344,478 for its 2006 shortfall and $702,891 for its 2007 shortfall).

The DLGF referred IndyGo's request to the Local Government Tax Control Board for a recommendation. On February 26, 2009, the Tax Control Board held a hearing during which IndyGo explained how, using data from the Marion County Treasurer's office, it calculated its 2007 shortfall:

first it computed the total amount of property taxes (both real and personal) charged in Marion County for the 2006 (pay 2007) assessment as $1,234,203,346;

from that figure, it subtracted $65,534,933, which it determined represented the total amount of property taxes (both real and personal) charged for the 2006 (pay 2007) assessment within Lawrence, Southport, and Speedway for a result of $1,168,667,813;¹

it next computed the total amount of property taxes (both real and personal) paid in Marion County for the 2006 (pay 2007) assessment as $1,147,620,620;

from that figure, it subtracted $58,429,384, which it determined represented the total amount of property taxes (both real and personal) paid for the 2006 (pay 2007) assessment within Lawrence, Southport, and Speedway, for a result of $1,089,189,357;

by subtracting the “paid” from the “charged,” IndyGo concluded that in budget year 2007, Marion County suffered a property tax revenue shortfall in the amount of $79,478,456 ( i.e., $1,168,667,813 minus $1,089,189,377);

of that shortfall, IndyGo determined that $770,941, or .00971%, was its own. IndyGo arrived at this amount by dividing Center Township's tax rate of 3.7166% by IndyGo's tax rate of .0361% and then applying that result ( i.e., .00971%) against the $79,478,456.²

( See generally Cert. Admin. R. at 8–23 (footnote added).) IndyGo stated during the hearing that it used the same methodology to calculate its 2006 shortfall.

A DLGF representative also attended the hearing, presenting documentation that showed the amount of the certified levy, the actual collections, and the delinquent tax collections regarding IndyGo's general fund for both 2006 and 2007. Based on that documentation, the DLGF representative explained that IndyGo did not have a property tax revenue shortfall in 2007: its certified levy was $15,229,898 and it actually collected $15,315,930. ( See Cert. Admin. R. at 69, 126 (explaining that the DLGF calculates shortfalls by subtracting the actual collections figure from the certified levy figure).) At the conclusion of the hearing, the Tax Control Board's members voted unanimously to recommend to the DLGF that IndyGo's excess property tax levy request for both 2006 and 2007 be approved.

On September 16, 2009, the DLGF issued a final determination denying IndyGo's 2007 excess property tax levy request. The DLGF's final determination, in its entirety, stated:

The [DLGF] has reviewed your appeal for a levy increase due to a Shortfall in budget year 2007 in the amount of $702,478. After a review of the petition pursuant to IC 6–1.1–18.5, and in consideration of all evidence provided, the [DLGF] finds as follows:

Denied:

The excessive levy appeal for [IndyGo] is denied because the unit did not have a shortfall in 2007. The unit's property tax levy for [the] 2007 General Fund was $15,229,898 and the unit collected $15,315,934 for the General Fund.

(Cert. Admin. R. at 76.) The following day, the DLGF issued a final determination with respect to IndyGo's excess property tax levy request for the 2006 budget year:

The [DLGF] has reviewed your appeal for a levy increase due to a Shortfall in budget year 2006 in the amount of $344,478. After a review of the petition pursuant to IC 6–1.1–18.5, and in consideration of all evidence provided, the [DLGF] finds as follows:

Modified Approval:

The excessive levy appeal for [IndyGo] is approved in the amount of $218,999. The unit's shortfall appeal for budget year 2006 is reduced because the unit received $125,479 too much levy for budget year 2008.

(Cert. Admin. R. at 75.)

On October 29, 2009, IndyGo filed an original tax appeal challenging the DLGF's final determination with respect to its 2007 excess tax levy appeal. The Court heard the parties' arguments on April 21, 2011. Additional facts will be supplied as necessary.

STANDARD OF REVIEW

This Court hears appeals from final determinations of three administrative agencies: 1) the Indiana Department of Revenue (Department); 2) the Indiana Board of Tax Review (Indiana Board); and 3) the DLGF. SeeInd.Code §§ 33–26–3–1, –2 (2013); Ind.Code § 33–26–6–0.2 (2013). When reviewing final determinations of the Department and the Indiana Board, the Court is bound by statutorily-prescribed standards of review. See, e.g.,Ind.Code §§ 6–8.1–5–1(h)–(i), –9–1(c)–(d) (2013) (standard of review applied to final determinations of the Department); Ind.Code § 33–26–6–6 (2013) (standard of review applied to final determinations of the Indiana Board). The statutes are silent, however, with respect to the standard of review this Court is to employ when reviewing final determinations of the DLGF.

Given that silence, this Court will not go any further in this case than to review the propriety of 1) the DLGF's factual findings and 2) the DLGF's legal conclusions in light of those factual findings. See State Bd. of Tax Comm'rs v. Gatling Gun Club, Inc., 420 N.E.2d 1324, 1326–29 (Ind.Ct.App.1981) (discussing the limited nature of the scope of judicial review of administrative agency decisions in general). In other words, the Court will review the DLGF's findings of fact and conclusions of law to determine whether they are arbitrary, capricious, an abuse of discretion, unsupported by substantial evidence or in excess of statutory authority. See id.See also Scopelite v. Dep't of Local Gov't Fin., 939 N.E.2d 1138, 1147 (Ind. Tax Ct.2010); DeKalb Cnty. E. Cmty. Sch., Dist. v. Dep't of Local Gov't Fin., 930 N.E.2d 1257, 1260–61 (Ind. Tax Ct.2010); Clark–Pleasant Cmty. Sch. Corp. v. Dep't of Local Gov't Fin., 899 N.E.2d 762, 769 (Ind. Tax Ct.2008) (all explaining that the Court will consider the evidence as contained within the administrative record to determine if the DLGF's factual findings are supported by substantial evidence ³ and that its legal conclusions are correct). See alsoInd.Code § 6–1.1–30–1 (2013) (explaining that the DLGF is required to keep a public record of its proceedings and orders, a properly certified and attested copy of which “is sufficient evidence in all courts or proceedings to prove an action, rule or order of the [DLGF]”).

ANALYSIS

Each year, public transportation corporations pay their operating costs and expenditures from the collection of local property taxes. See, generally,Ind.Code § 6–1.1–17–0.5 through –21 (2013); Ind.Code § 36–1–2–10 (2013); Ind.Code § 36–9–4–12 (2013) (all providing the general procedures by which public transportation corporations fix and review their budgets, tax rates, and tax levies). While public transportation corporations are subject to property tax levy limits under Indiana Code § 6–1.1–18.5–3, they may petition for excess tax levies when they suffer from property tax revenue shortfalls. Indeed, during the time period at issue in this case, Indiana Code § 6–1.1–18.5–16 provided, in relevant part:

(a) A civil taxing unit may request permission from the local government tax control board to impose an ad valorem property tax levy that exceeds the limits imposed by [Indiana Code § 6–1.1–18.5–3] if:

(1)the civil taxing unit experienced a property tax revenue shortfall that resulted from erroneous assessed valuation figures being provided to the civil taxing unit;

(2) the erroneous assessed valuation figures were used by the civil taxing unit in determining its total property tax rate; and

(3) the error in the assessed valuation figures was found after the civil taxing unit's property tax levy resulting from that total rate was finally approved by the department of local government finance.

(b) A civil taxing unit may request permission from the local government tax control board to impose an ad valorem property tax levy that exceeds the limits imposed by [Indiana Code § 6–1.1–18.5–3] if the civil taxing unit experienced a property tax revenue shortfall because of the payment of refunds that resulted from appeals under this article and IC 6–1.5.

(c) If the local government tax control board determines that a shortfall described in subsection (a) or (b) has occurred, it shall recommend to the department of local government finance that the civil...