Indiana State Bd. of Tax Com'rs v. Ropp
Decision Date | 08 March 1983 |
Docket Number | No. 1-1181A333,1-1181A333 |
Citation | 446 N.E.2d 20 |
Parties | INDIANA STATE BOARD OF TAX COMMISSIONERS, Carleton L. Phillippi, Chairman, Taylor I. Morris, Jr., Durwood S. Strang, Allen W. Smith, Assessor of Pike County, Indiana, Leo Woods, Treasurer of Pike County, Indiana, Defendants-Appellants, v. Frank ROPP, Joseph Wesley Elbert, Howard Miley, Jr., James Lamey, Gerald Willis, Robert Adams, Jim Shoultz, Betty Stone, Wayne Henson, Opal Henson, Plaintiffs-Appellees. |
Court | Indiana Appellate Court |
Linley E. Pearson, Atty. Gen. of Indiana, Stephen R. Bock, Deputy Atty. Gen., Jeffrey L. Hunter, Deputy Atty. Gen., Indianapolis, for defendants-appellants.
James G. McDonald, Jr., Princeton, for plaintiffs-appellees.
This is an appeal from a judgment of the Pike Circuit Court upon findings of fact and conclusions of law in favor of plaintiffs-appellees Frank Ropp, et al. 1 (taxpayers), real property taxpayers owning real estate in Pike County, Indiana, and against the defendants-appellants Indiana State Board of Tax Commissioners, et al. 2 (State Board). The trial court's judgment permanently enjoined and restrained the State Board from utilizing the factor of 42 percent increase in real property tax assessments in Pike County and ordered tax duplicates to be issued pursuant to the assessments originally made by the Pike County taxing authorities. 3
We reverse.
On November 4, 1976, the State Board adopted Regulation 17, also known as the Indiana Real Property Appraisal Manual. Regulation 17 was adopted in connection with the reappraisal of real property throughout the State as required under Ind.Code 6-1.1-4-4. As adopted by the State Board, Regulation 17 directed that the value of all land and improvements should be adjusted by a reduction of 30 percent, an inflation adjustment factor, to determine true cash value.
This 30 percent inflation adjustment factor was challenged in Francis X. McCloskey et al v. State Board of Tax Commissioners, Cause No. 37226, a Hancock Circuit Court case decided on October 24, 1977, wherein the trial court enjoined the enforcement of Regulation 17 insofar as the implementation of the 30 percent inflation adjustment factor which provided:
"True Cash Value is the total value determined by items 1 through 7 less the just and proper inflation adjustment factor of 30%."
The State Board, acquiescing to the ruling, notified the Pike County taxing officials of the Hancock Circuit Court's ruling by way of two letters on November 8, 1977 and April 5, 1978, wherein the State Board instructed the local taxing authorities to disregard the 30 percent factor in their tax assessments. Nevertheless, the Pike County taxing officials on April 2, 1979, utilized the 30 percent factor in determining true cash value during the course of the 1979 real property tax assessment. Thereafter, on January 16, 1980, the State Board notified Evaline Hilgeman, the county auditor, that there would be a public hearing to consider the modification of real property assessments as of March 1, 1979. The hearing was held on February 5, 1980, and an equalization order was issued by the State Board on February 7, 1980, which modified the Pike County real property assessments by removing the 30 percent adjustment factor. On February 15, 1980, an objection to the initial equalization order was filed with the State Board, and the objection contained the signatures and addresses of 24 Pike County taxpayers who owned real estate there.
The State Board sent a letter to the county auditor on February 29, 1980, notifying that office a second equalization hearing would be held on March 19, 1980. Also, notice was sent to three of the first ten taxpayers listed on the objection petition and to seven other taxpayers whose names appeared thereon. The State Board also published notice of the second equalization hearing in a newspaper of general circulation in Pike County. After the second hearing, the State Board issued a final equalization order affirming the first one. Thereafter, the taxpayers filed their petition for appeal and injunction which the Pike Circuit Court granted in their favor.
The State Board presents three issues for review as follows:
I. Whether the trial court erred in holding that the defendant, Indiana State Board of Tax Commissioners, acted arbitrarily and unreasonably in setting aside the action of the Pike County Board of Review in relation to the 1979 assessment of real property in Pike County, Indiana?
II. Whether the trial court erred in holding that the defendant, Indiana State Board of Tax Commissioners, gave improper notice of the Pike County equalization hearings which it conducted?
III. Whether the trial court erred in holding that the defendant, Indiana State Board of Tax Commissioners, committed certain procedural errors in relation to the Pike County equalization hearings, errors primarily concerned with making an administrative determination prior to hearing, failing to inform taxpayers of certain "alleged" rights prior to hearing and conducting perfunctory hearings only?
Issue I. Validity of Regulation 17
The crux of the matter is the vitality of Regulation 17 as of April 2, 1979, when the Pike County taxing officials applied it in their assessment. Taxpayers support the decision of the trial court by claiming that the unappealed McCloskey decision was not binding on the Pike Circuit Court in the instant case. They cite Hagood v. State, (1979) Ind.App., 395 N.E.2d 315, which held that the unappealed decision of a trial court is binding only as to the parties thereto and is not stare decisis. They assert that Regulation 17 was duly enacted by the State Board and should remain in force until properly rescinded, citing Ind.Code 4-22-2-6 which requires that a regulation must be rescinded in the same way that it is enacted. The procedure for promulgating new rules requires, among other things, notice and a hearing. Thus, taxpayers maintain that the attempt by the State Board to rescind that portion of Regulation 17 which imposed the 30 percent inflation adjustment factor by the mere expediency of a letter is of no force and effect and the regulation remains intact. Consequently, the State Board's order removing the 30 percent factor was arbitrary. The State Board advances numerous arguments, but we need address only the validity of the regulation.
Ind.Code 4-22-2-1 et seq. provides a statutory scheme for the promulgation of rules and regulations of state agencies. Ind.Code 4-22-2-1 provides:
"It is the intent to establish a uniform method of making, promulgating, filing, and publishing rules by all agencies of this state, to permit public participation therein and provide a method of making rules readily accessible to the public...."
Ind.Code 4-22-2-2 provides:
Other requirements in the chapter exist, but for our purposes we need focus only on Ind.Code 4-22-2-11, which provides:
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