City of Hammond v. Herman & Kittle Properties, Inc. and State of Indiana , 119 N.E.3d 70 ( 2019 )

FILED
Mar 15 2019, 11:53 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
I N T HE
Indiana Supreme Court
Supreme Court Case No. 19S-PL-148
City of Hammond,
Appellant (Plaintiff)
–v–
Herman & Kittle Properties, Inc.,
Appellee (Defendant)
and
State of Indiana,
Appellee (Intervenor)
Argued: September 13, 2018 | Decided: March 15, 2019
Appeal from the Marion Superior Court,
No. 49D07-1601-PL-531
The Honorable Michael D. Keele, Judge
On Petition to Transfer from the Indiana Court of Appeals,
No. 49A04-1612-PL-2784
Opinion by Chief Justice Rush
Justices David, Massa, and Goff concur.
Justice Slaughter not participating.
Rush, Chief Justice.
Article 4, Section 23 of the Indiana Constitution forbids special
legislation—laws that apply only to a specific class—if a general law can
be made applicable. Our case law has underscored two important, but
countervailing, points: while the drafters of the 1851 Constitution sought
to curb the spread of special legislation throughout the state, special laws
are sometimes necessary.
Our analysis of special legislation begins with the oft-stated
presumption in favor of a statute’s constitutionality. With that
presumption in mind, we then determine whether the statute’s proponent
has met its burden to show that a general law cannot be made applicable.
This burden is met by demonstrating that an affected class has unique
characteristics that justify the particular form of differential treatment
provided by the special law. Given the overarching presumption in favor
of the law’s constitutionality, this burden is low—but it is still a burden
that the proponent of the law must meet.
Here, a special law singles out the cities of Bloomington and West
Lafayette for preferential treatment. That law is the “Fee Exemption,” a
provision in Indiana Code section 36-1-20-5 that allows those cities to
charge local landlords any amount to register rental properties. All other
Indiana localities, meanwhile, are restricted to charging only $5 under
another provision—the “Fee Restriction”—found in the same statute. The
Fee Restriction was born of legislative concern that rental-registration fees
statewide were negatively impacting housing affordability and rental
development.
Unhappy with the special treatment afforded to Bloomington and
West Lafayette, the city of Hammond challenged the Fee Exemption as
unconstitutional under Article 4, Section 23. Hammond argues that the
Fee Exemption is amenable to general applicability throughout the state.
The city further argues that the Fee Exemption is not severable from the
rest of Indiana Code section 36-1-20-5 and so the entire statute, including
the Fee Restriction, must be struck down.
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Both the State and Herman & Kittle Properties—a Hammond
landlord—defend the Fee Exemption’s constitutionality. They contend
that the statute’s special treatment is warranted by three characteristics
unique to Bloomington and West Lafayette: the cities’ high percentage of
renter-occupied properties, their large universities that draw young and
unsophisticated renters, and their long-running rental-fee programs. But
simply pointing to these characteristics is not enough to overcome the
burden placed on a law’s proponents. The State and Herman & Kittle also
needed to establish a connection between the cities’ alleged uniqueness
and the Fee Exemption—by explaining how the unique characteristics
justify that special treatment. Since the law’s proponents did not carry
their burden here, the Fee Exemption is unconstitutional special
legislation that must be struck down.
Although the Fee Exemption is unconstitutional, the remainder of
Indiana Code section 36-1-20-5—including the Fee Restriction—remains in
force. This is because, by statute, the absence of a nonseverability clause
triggers a presumption in favor of severability that Hammond failed to
overcome. Accordingly, the Fee Restriction operates statewide, limiting all
political subdivisions’ rental-registration fees—including those of
Bloomington and West Lafayette—to no more than $5 per rental unit.
Facts and Procedural History
In recent years, local programs that charge fees for required inspection
or registration of rental units have become a subject of growing legislative
interest. As more Indiana political subdivisions began enacting rental-fee
programs, some established programs started raising their per-unit fees.
A flurry of legislative activity to regulate these programs eventually
culminated in the current version of Indiana Code section 36-1-20-5. Two
provisions of that statute operate in concert to restrict all municipalities
from charging more than a $5 rental-registration fee—all except
Bloomington and West Lafayette.
Hammond challenged the “Fee Exemption” provision of Section 36-1-
20-5—the part that exempts the two cities from the $5 cap—as
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unconstitutional special legislation. Before addressing the merits of that
claim, we first turn to the relevant facts and complex legislative history
that gave rise to the dispute.
I. Hammond’s rental-fee programs
To protect the public health, safety, and general welfare of the city,
Hammond created two programs—an inspection program and a rental-
registration program. Both programs charge fees for rental units.
The inspection program was created in 1961. It authorized city officials
to inspect all dwelling units—both owner-occupied and rented. And it
specifically required a $5 annual inspection fee for hotels and rooming
houses. 1
Decades later, in 2001, Hammond created its rental-registration
program. That program required owners of rental housing to register their
units with the city and to pay a per-unit $5 annual registration fee. The
city then increased the fee twice over the next ten years—to $10 in 2004,
and to $80 in 2010.
The eight-fold increase was Hammond’s response to the 2010 state
constitutional amendment placing caps on property taxes, including a 2%
cap on rental properties. That amendment led to substantial savings for
landlords but also significantly strained many municipal budgets—
especially for municipalities, like Hammond, whose tax bases were
shrinking.
1The ordinance defined a rooming house as “any dwelling, or that part of any dwelling
containing three or more rooming units, in which space is let by the owners or operator to
persons who are not husband or wife, son or daughter, mother or father, or sister or brother of
the owner or operator.”
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II. Other rental-fee increases and legislative
response
Hammond was not the only municipality to address fiscal restraints by
way of rental-unit fees. East Chicago, Griffith, Munster, Nappanee, and
Speedway adopted programs to increase rental-fee revenue before the tax
caps went into effect. After 2010, Bloomington joined Hammond in raising
rates; and Crown Point, Evansville, and Valparaiso started charging
rental-unit fees.
A. House Bill 1543
In 2011, the year after the tax caps took effect, the General Assembly
introduced House Bill 1543, which added a chapter to the Indiana Code:
Chapter 36-1-20, “Regulation of Residential Leases.” As introduced, the
bill included a provision that would have barred a number of rental-unit
inspection fees and would have banned political subdivisions from
requiring rental-unit registration.
That provision, however, was left out of the final bill. As enacted,
Chapter 36-1-20 allowed cities to collect inspection and registration fees.
See P.L. 212-2011, § 1 (codified at Ind. Code § 36-1-20-3 (Supp. 2011)). But
the amount collected had to be placed “in a special fund dedicated solely
to reimbursing the costs reasonably related to services actually performed
by the political subdivision that justified the imposition and amount of the
fee.” Id. Notably, the new statute applied statewide and did not restrict
how much municipalities could charge for rental inspections and
registrations. See id.
B. House Bill 1313
Two years later, in 2013, the General Assembly introduced House Bill
1313. This bill initially contained a provision barring local inspection and
registration fees on rental units. But it too was removed, and the final bill
instead placed an approximately one-year moratorium on imposing new,
or increasing existing, inspection or registration fees. See P.L. 149-2013, § 1
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(codified at Ind. Code § 36-1-20-4 (Supp. 2013)). It also directed that an
interim study committee investigate the “regulation of residential leases
by political subdivisions.” Id. at § 2.
That fall, the committee heard testimony on the issue. One side was
concerned that the fees were becoming too costly, negatively impacting
housing affordability and new rental development. Yet others claimed
that the fees charged were fair and reasonable, and that they failed to even
cover program administration costs.
Among the fees’ defenders were representatives from Bloomington
and West Lafayette. A representative from Bloomington testified that its
program began in 1961, that renters make up 67% of its housing market,
and that the city’s program protects the welfare of its citizens and the
character of the city itself. West Lafayette representatives explained that
the city has had an inspection program since 1976, the number of rental
units is increasing, and the “program protects property and assures
parents of students that housing is safe.”
C. House Bill 1403
Several months later, in January 2014, the General Assembly
introduced House Bill 1403 to significantly amend Chapter 36-1-20. See
P.L. 193-2014, §§ 2–9. In relevant part, the bill included a provision—the
“Fee Restriction”—prohibiting a political subdivision from charging
rental-registration fees over $5. About two weeks after the bill with the
Fee Restriction was first read, a West Lafayette Representative introduced
an amendment adding the “Fee Exemption.” The Fee Exemption specified
that the Fee Restriction would “not apply to a political subdivision with a
rental registration or inspection program created before July 1, 1984.” Id.
The Legislative Services Agency issued a fiscal impact statement
analyzing the proposed legislation. The statement concluded, “[t]here are
14 cities or towns that have rental inspection programs . . . . Two of those
programs, Bloomington and West Lafayette, would not be affected by the
proposed changes to the law as they were established prior to July 1,
1984.” Ultimately, House Bill 1403 was enacted with both the Fee
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Restriction and the Fee Exemption. See P.L. 193-2014, § 8 (codified at Ind.
Code § 36-1-20-5 (Supp. 2014)).
In May 2014, Hammond notified Herman & Kittle Properties that it
owed around $86,000 in rental-registration fees and penalties for 2014 on
two apartment complexes it operated in the city. Herman & Kittle refused
to pay that amount: it cited the recently enacted Fee Restriction and
contended that its rental-registration fees would “significantly reduce”
after the Fee Restriction went into effect on June 30.
But Hammond disagreed. So the city filed a complaint, seeking a
declaratory judgment that it could continue charging its $80 per-rental fee.
It argued that its rental-fee program was not subject to the Fee
Restriction’s $5 cap because the Fee Exemption applied. Hammond
pointed to the fact that it had created its inspection program in 1961—well
before July 1, 1984.
D. House Bill 1165
While Hammond’s lawsuit was pending, the General Assembly
introduced House Bill 1165, proposing two notable changes to Chapter 36-
1-20: narrowing the Fee Exemption and supplying certain new definitions.
The bill initially proposed language that would have made the Fee
Exemption applicable only to political subdivisions “with a rental
registration or inspection program created after July 1, 1977, and before
July 1, 1984.” This would have removed Hammond from qualifying for
the Fee Exemption because its inspection program began in 1961. But it
would also have excluded Bloomington, “which began [its program] in
the early 1970s,” according to the relevant fiscal impact report. 2
Ultimately, the language narrowing the Fee Exemption was taken out.
2 As stated earlier, a Bloomington representative testified before the study committee that the
city’s program began in 1961. For purposes of this decision, it is of no consequence that there
is conflicting evidence in the record as to when Bloomington’s program began.
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Another part of the proposal that would have excluded Bloomington—
along with Hammond—from the Fee Exemption was likewise rejected;
this part had to do with the definitions of “rental registration or inspection
program” and “rental unit.” Those definitions determined the scope of the
Fee Exemption, which applied only “to a political subdivision with a
rental registration or inspection program created before July 1, 1984.” The
proposal sought to define “rental registration or inspection program” as
“a program authorizing the registration or inspection of rental units and
no other type of dwelling” (emphasis added). And its definition of rental
units did not include rooming houses.
Since Hammond’s program required inspection of rooming houses, it
would not qualify for the Fee Exemption under the proposal. But neither
would Bloomington’s program, because it required inspections and
registrations of each “residential renting unit”—a term explicitly defined
by the city to include a “rooming house.”
The final bill, though, did not adopt definitions that excluded all
programs that inspected rooming houses. Instead, it adopted definitions
that excluded Hammond’s program—but not Bloomington’s or West
Lafayette’s—from the Fee Exemption. Here’s how: The enacted act
defined a “rental registration or inspection program” as “a program
authorizing the registration or inspection of only rental housing. The term
does not include a general housing registration or inspection program or a
registration or inspection program that applies only to rooming houses
and hotels.” P.L. 65-2015, § 1 (codified at Ind. Code § 36-1-20-1.2 (Supp.
2015)).
This excluded Hammond from the Fee Exemption on two fronts: (1)
because it had a general inspection program that permitted the inspection
of non-rental housing, and (2) because it required the inspection only of
rooming houses and hotels. However, the amended language no longer
excluded Bloomington because its program applied only to rental
housing. So under the final bill, both Bloomington and West Lafayette
qualified for the Fee Exemption, while all other political subdivisions were
subject to the Fee Restriction—meaning only Bloomington and West
Lafayette could charge a higher-than-$5 annual rental-registration fee.
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E. Constitutional challenges to the Fee Exemption
This legislation prompted Hammond to amend its complaint to add
state constitutional claims challenging the Fee Exemption. Hammond
argued that the Fee Exemption violated both Article 4, Section 22’s
prohibition of special laws relating to fees and Article 4, Section 23’s
prohibition of special legislation where a general law can be made.
Hammond further argued that the Fee Exemption is not severable from
the remainder of Indiana Code section 36-1-20-5. The State then
intervened “for the limited purpose of defending the constitutionality of
Indiana law.”
On cross-motions for summary judgment, the trial court held that
Hammond had standing to challenge the constitutionality of the Fee
Exemption; Hammond qualified for the Fee Exemption in 2014; and
although the Fee Exemption is special legislation intended to benefit only
Bloomington and West Lafayette, it is nonetheless constitutional.
The Court of Appeals partially reversed the trial court, holding that the
Fee Exemption does violate Article 4, Sections 22 and 23 of the Indiana
Constitution. City of Hammond v. Herman & Kittle Props., 95 N.E.3d 116, 120
(Ind. Ct. App. 2018). The panel also struck down all of Section 36-1-20-5,
which included both the Fee Restriction and the Fee Exemption. Id. at 144.
Both the State and Herman & Kittle petitioned to transfer. 3 We now
grant transfer, vacating the Court of Appeals opinion. 4 Ind. Appellate
Rule 58(A).
3 Because the positions of Herman & Kittle and the State essentially align, we’ll refer to both
parties collectively as “Herman & Kittle” for ease of reading.
4We summarily affirm the excellently crafted Court of Appeals decision that Hammond has
standing to pursue its constitutional challenges. See Ind. Appellate Rule 58(A)(2).
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Standard of Review
The constitutionality of an Indiana statute and the propriety of
summary judgment are both questions of law that we review de novo.
State v. Norfolk S. Ry., 107 N.E.3d 468, 471 (Ind. 2018); Paul Stieler Enters. v.
City of Evansville, 2 N.E.3d 1269, 1272 (Ind. 2014).
Discussion and Decision
The Indiana Constitution provides two provisions aimed at limiting
special legislation, which is a law that “pertains to and affects a particular
case, person, place, or thing, as opposed to the general public,” Mun. City
of S. Bend v. Kimsey, 781 N.E.2d 683, 689 (Ind. 2003) (quoting Black’s Law
Dictionary 890 (7th ed. 1999)). These provisions are Sections 22 and 23 of
Article 4.
Section 22 prohibits special laws on specific topics, including “fees and
salaries.” Section 23 contains broader language and reads,
In 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.
Hammond maintains that the Fee Exemption is special legislation that
violates both sections of Indiana’s Constitution, and that the special
legislation is not severable from the remainder of Indiana Code section 36-
1-20-5. Herman & Kittle does not dispute that the statutory provision is
special legislation—nor could it reasonably do so. After all, it’s clear that
the Fee Exemption “pertains to and affects” particular places, namely,
Bloomington and West Lafayette. But Herman & Kittle does contend that
the Fee Exemption is constitutional special legislation, or if it’s not
constitutional, it’s at least severable.
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After careful consideration, we hold that the Fee Exemption violates
Article 4, Section 23. 5 Special legislation is constitutional only if an affected
class’s unique characteristics justify the differential legislative treatment.
See, e.g., Kimsey, 781 N.E.2d at 694. And that is not the case here. Although
Herman & Kittle proffered justifications for the special law—specifically,
that Bloomington and West Lafayette contain high percentages of renter-
occupied properties, that they contain large universities and accordingly
many young and unsophisticated renters, and that they have had long-
running rental-fee programs—these reasons do not warrant the Fee
Exemption’s special funding mechanism for those two cities alone.
Even though the Fee Exemption is invalid and so must be struck down,
it is severable from the remainder of Indiana Code section 36-1-20-5. This
is because Hammond failed to rebut a statutory presumption in favor of
severability. Thus, the Fee Restriction stands, and no municipality is
spared from the $5 cap on rental-registration fees.
Deciding the constitutionality of special legislation is no easy task. It
involves a consideration of Article 4, Section 23’s historical
underpinnings—which not only reveal a hard-fought battle to protect
against the negative ramifications of special legislation, but also recognize
the need for special laws under certain circumstances. And the provision’s
origins have shaped the framework that we apply to special-legislation
challenges today: a framework that has evolved over time and entails
meticulous analysis.
So to fully explain the holding we reach today, we begin with the intent
behind framing and ratifying Article 4, Section 23. See Paul Stieler, 2 N.E.3d
at 1272–73. To discern this intent, we “examin[e] the language of the text
in the context of the history surrounding its drafting and ratification, the
purpose and structure of our constitution, and case law interpreting the
5Given our resolution on Article 4, Section 23 grounds, we need not address Hammond’s
Article 4, Section 22 argument.
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specific provisions.” Id. (alteration in original) (quoting Ind. Gaming
Comm’n v. Moseley, 643 N.E.2d 296, 298 (Ind. 1994)).
I. The history behind state constitutional limits on
special legislation
Over a nineteen-day span in 1816, representatives met in Corydon,
Indiana, where they framed and signed our State’s first constitution.
William W. Thornton, The Constitutional Convention of 1850, in Report of
the Sixth Annual Meeting of the State Bar Association of Indiana 152, 152
(1902). The original framers knew that Hoosiers might wish to amend
their work, so Article 8 provided for a vote every twelve years on whether
a convention should be called to “revise, amend, or change the
constitution.” Ind. Const. of 1816, art. VIII, § 1. When this question was
put to Indiana voters in both 1828 and 1840, the calling of a convention
failed each time. Thornton, supra, at 153.
The lack of interest in amending the 1816 Constitution began to change
with the election of Governor James Whitcomb in 1843. Id. at 153–54. In his
inaugural address, Governor Whitcomb began the push for revision
because of the “growing evils of excessive legislation.” Id. at 153. He
remarked, “It is of the greatest importance to the welfare of the people,
that the laws should be generally known and well understood.” Id. at 153–
54. In response, the legislature did not call for a constitutional convention,
but the judiciary committee conceded in a report that the constitution
could be revised at any time, not just at the end of the constitutional
period of twelve years. Id. at 154–55.
In December 1845, Governor Whitcomb again highlighted a need for
constitutional change, because “[m]uch the greater part of the legislature
is occupied in passing local and private acts, for most of which, it is well
worthy of consideration whether ample provision can not be made by a
few general laws.” Id. at 155. The legislature responded, putting the
question of calling a constitutional convention to the voters on the August
1846 ballot. Id. at 156.
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The election was held, and more votes were cast in favor of holding a
convention than against. Id. However, the 1816 Constitution required “a
majority of all the votes given at such election” to call for a constitutional
convention, Ind. Const. of 1816, art. VIII, § 1, and the governor and
legislature interpreted this as requiring “a majority of all the votes cast at
the election, regardless of the [votes cast on the] question of the
convention.” Thornton, supra, at 157. Because there were 126,123 votes cast
in the governor’s race, but only 62,018 votes cast on the question of
holding a convention—with 33,175 Hoosiers voting in favor—the required
“majority of all the votes cast” was apparently lacking, and the measure
failed. Id. at 156–57.
Governor Whitcomb, however, did not quit. In 1848, he again
emphasized the need for a constitutional convention to address “the
growing amount of . . . our local and private legislation.” Id. at 162–63. He
further remarked, “[i]f calling a convention to amend the constitution
were productive of no other result than furnishing an effectual remedy for
this growing evil, it would be abundantly justified . . . .” Id. at 165.
Notably, “special legislation” represented 91% of all bills passed in the
following year’s legislative session. Frank E. Horack, Special Legislation:
Another Twilight Zone, 12 Ind. L.J. 109, 115 (1936).
The legislature again responded to the governor’s plea, and the
question of holding a constitutional convention was put on the August
1849 ballot. Thornton, supra, at 170. This time it passed. Id.
By the time the delegates met a little over a year later on October 7,
1850, it was clear that “[t]he prevention of special and private legislation
was the most potent argument for revision.” Id. at 177–78. Thus,
throughout the 127-day convention, id. at 180, curtailing special legislation
was a topic of great debate. During one such discussion, Delegate John
Pettit of Tippecanoe County expressed his view that
the laws should be general in every instance. Sir, if this is not
done, you are just leaving undone the very thing which, most
of all others, we are sent here to do—to cut down this whole
system of local legislation, so that a man, in stepping over the
boundary line of one county into another county, might not be
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under the painful uncertainty as to whether he was living
under the same system of laws.
2 Report of the Debates and Proceedings of the Convention for the Revision of the
Constitution of the State of Indiana 1009, 1765–66 (Wm. B. Burford Printing
Co. 1935) (1850) [hereinafter 2 Debates]; 1 Report of the Debates and
Proceedings of the Convention for the Revision of the Constitution of the State of
Indiana 4 (1850) [hereinafter 1 Debates].
Pettit’s remarks echoed those of Delegate David M. Dobson from the
Owen and Green district, who said, “It should be remembered that the
Legislature are to have no power of passing local laws; yet the power
should be vested somewhere, and it should be done under a general law.”
2 Debates, supra, at 1765; 1 Debates, supra, at 3. Pettit later explained the
reasoning for Dobson’s assertion: “our object ought to be to make our laws
uniform, so that wherever a man treads the soil of Indiana, he shall have
the same rights and privileges, and stand in all respects surrounded by the
same laws, and be governed by them.” 2 Debates, supra, at 1767.
Delegates Pettit and Dobson were not alone. Convention President
George W. Carr noted in his closing remarks that the newly drafted
constitution provided “an effectual remedy for that most injurious evil in
our legislation for many years past, known as local and special
enactments.” Id. at 2077; 1 Debates, supra, at 4, 6. That remedy came in the
form of Article 4, Sections 22 and 23, which represented the delegates’
“attempt to prevent private and local legislation.” Thornton, supra, at 189.
This history is telling. Special legislation drew an impassioned
response, culminating in significant changes to our state constitution—
including Article 4, Section 23, which is our focus today.
In the years following the 1850–1851 Convention, this section has
remained unaltered: “In 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. But the framework for analyzing and applying this provision has
evolved over time. We now turn to that framework’s development
through case law.
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II. The evolution of special-legislation analysis
In the 1850’s and 60’s, our Court wrestled with whether the legislature
alone could decide if “a general law can be made applicable.” Ind. Const.
art. 4, § 23. But we ultimately determined in 1933 that complete legislative
deference did not square with the framers’ intentions for enacting Article
4, Section 23. We explained that “it was intended by the framers of the
Constitution that the decision of this court should determine the law and
the limits of legislative power.” 6 Heckler v. Conter, 206 Ind. 376, 381, 187
N.E. 878, 879 (1933). So, it is for the Court to decide that a law cannot
stand “[i]f the law is local or special, and it is clear that a general law can
be made applicable.” Id. at 381, 187 N.E. at 879.
Next came a string of cases involving Article 4, Section 23 challenges to
laws with population restrictions. In most cases, the laws were upheld as
“general laws.” See, e.g., Groves v. Bd. of Comm’rs, 209 Ind. 371, 375–76, 380,
199 N.E. 137, 139–41 (1936) (upholding law that applied to counties with a
population between 250,000 and 400,000 having three or more cities each
with a population of 50,000 or more); Evansville-Vanderburgh Levee Auth.
Dist. v. Kamp, 240 Ind. 659, 661–66, 168 N.E.2d 208, 209–11 (1960)
(upholding law that applied to counties with a population between
160,000 and 180,000); Graves v. City of Muncie, 255 Ind. 360, 362–64, 264
N.E.2d 607, 609–11 (1970) (upholding law that applied to any city in a
county with a population between 110,000 and 120,000); N. Twp. Advisory
Bd. v. Mamala, 490 N.E.2d 725, 726 (Ind. 1986) (upholding law that applied
to townships with a population between 180,000 and 204,000).
Yet, in others, we found Article 4, Section 23 violations, after
determining that the population classifications weren’t permissible. See
Perry Civil Twp. v. Indianapolis Power & Light Co., 222 Ind. 84, 91–92, 51
N.E.2d 371, 374 (1943) (striking down law under Article 4, Section 23
6One legislative power that Article 4, Section 23 was enacted to limit is logrolling—a practice
“in which it [becomes] customary for members of the legislature to vote for the local bills of
others in return for comparable cooperation.” Kimsey, 781 N.E.2d at 686 (alteration in original)
(quoting Osborne M. Reynolds, Jr., Local Government Law 85–86 (1982)).
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because the population did not “bear[] a rational relationship to the
subject dealt with”); State Election Bd. v. Behnke, 261 Ind. 540, 543, 307
N.E.2d 56, 58 (1974) (striking down law under Article 4, Section 23
because it was written in a way that no other county could ever qualify).
From these cases, two guiding principles developed. First, although
population alone was not a proper basis for legislative classification, the
law would be upheld if the population classification had a “rational
relationship” to the law’s subject matter. See Perry Civil Twp., 222 Ind. at
91, 51 N.E.2d at 374. Second, a law was classified as “general” if it was
possible for other political subdivisions to move into the population
category in the future; it did not matter if, at the time of passage, a law
applied to only one locale. See Graves, 255 Ind. at 363–64, 264 N.E.2d at
610–11.
These principles, though, were later replaced by a more fine-tuned
approach. It started in 1994 with Moseley, which observed that even if a
law is general in form, it may be unconstitutional special legislation as
applied if the unique characteristics of a political subdivision do not
justify the law’s different treatment. Ind. Gaming Comm’n v. Moseley, 643
N.E.2d 296, 301 (Ind. 1994).
In that case, this Court examined a statute that, through population
categories, permitted only Lake County to vote on riverboat gambling by
city (versus by county). Id. at 298. In evaluating the Article 4, Section 23
challenge, the Court began with the well-established and oft-stated
principle that it presumes the constitutionality of the statute. Id. at 300. We
then focused on more than the law’s population classifications alone,
explaining that we “must examine whether the law, even if general in
form, is special as applied.” Id. at 301.
In upholding the law, the Court reasoned that the statute was not
subject to a uniform law of general applicability because “not every
county is home to a suitable body of water.” Id. And even though the law
treated Lake County differently than other waterfront counties, we found
the differential treatment fit into the purpose of the law. Id. A unique
characteristic of Lake County—namely, that its whole waterfront was
covered by substantial cities—justified the distinction. Id.
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Two years later, this Court built on Moseley’s analytical framework,
focusing on when special legislation is “constitutionally permissible.” In
Hoovler, we analyzed a special law that helped Tippecanoe County
address the financial burden of cleanup costs associated with a
“Superfund” landfill site. State v. Hoovler, 668 N.E.2d 1229, 1234 (Ind.
1996). In doing so, we examined “circumstances surrounding [the Act],
including language in the Act itself,” and determined that the statute was
special legislation because the legislature intended that it apply to only
Tippecanoe County. Id.
We then concluded that the law was constitutional because
Tippecanoe County’s “Superfund” landfill site possessed a characteristic
that justified the special legislation. Id. at 1235; see also Kimsey, 781 N.E.2d
at 694 n.8. Specifically, the EPA gave a special designation to Tippecanoe’s
particular “Superfund” site, exposing that county to unique potential
financial liability. Hoovler, 668 N.E.2d at 1235. And, so, a general law could
not apply uniformly in all counties. Id. Ultimately, by building upon
Moseley’s analytical framework, Hoovler provided valuable guidance for
analyzing the constitutionality of a special law.
With Moseley and Hoovler as our guides, we next explained in Williams
that analyzing a challenge under Article 4, Section 23 requires two steps.
Williams v. State, 724 N.E.2d 1070, 1085 (Ind. 2000). First, we determine
whether the law is general or special. Id. Second, if the law is general, we
decide whether it is applied generally throughout the state; but if the law
is special, we decide whether the law is nevertheless constitutionally
permissible. Id.
In that case, we reviewed a statute that provided for the appointment
of magistrates only in Lake County courts. Id. After determining that the
magistrate statute was special—given that it provided for the
appointment of magistrates solely in Lake County—this Court upheld the
law as constitutionally permissible. Id. at 1085–86. We reasoned that the
unique characteristics of Lake County, a large county with a large case
docket, made the special treatment appropriate. Id. at 1086.
The approaches taken in Moseley, Hoovler, and Williams—looking to the
actual effect of and underlying reasons for the statute—laid the
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groundwork for this Court’s Kimsey decision. In that case, the legislature
passed a law permitting counties with a population between 200,000 and
300,000 to defeat a proposed annexation if a simple majority of
landowners opposed it. Kimsey, 781 N.E.2d at 684. The challenged law
applied exclusively to St. Joseph county; for all other counties, the statute
required the opposition of 65% of landowners to defeat annexation. Id. at
684–85.
This Court noted that “if there are characteristics of the locality that
distinguish it for purposes of the legislation, and the legislation identifies
the locality, it is special legislation.” Id. at 692. We then pointed to the
circumstances surrounding the law’s enactment, and concluded that it
was indeed special legislation because the population classification
“served no purpose other than to identify St. Joseph County.” Id. at 693.
But unlike the laws in Moseley, Hoovler, and Williams, the special
legislation in Kimsey was unconstitutional because a general law could be
made applicable to deal with the targeted conditions. Id. at 694. We
explained, “if the conditions the law addresses are found in at least a
variety of places throughout the state, a general law can be made
applicable and is required by” Article 4, Section 23. Id. at 692–93. Even
though several rationales were advanced in support of the statute’s
constitutionality, none of those justifications were “inherent in the
population range” and none “turn[ed] on facts unique to St. Joseph
County.” Id. at 694.
In this way, Kimsey helped illuminate when special legislation is
unconstitutional. But perhaps Kimsey’s most significant contribution to
Article 4, Section 23 jurisprudence was its discussion of who bears the
burden of proof when special-legislation challenges are lodged.
Specifically, Kimsey acknowledged the necessity of the “proponents of . . .
special legislation” to have “a factual basis upon which to rest their
assertion that a general statute could not apply,” pointing out that the
Court was “directed to nothing in the record and no relevant facts
susceptible of judicial notice that are unique to St. Joseph County.” Id. In
other words, Kimsey highlighted that the proponent of the special law
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bears the burden of establishing that an affected class’s unique
characteristics justify the particular differential treatment.
Kimsey’s discussion of the proper analysis for Article 4, Section 23
claims was quite comprehensive, providing well-defined guidance for this
Court’s more recent special-legislation cases. In two of those cases—Lake
Superior Court and Buncich—following the analytical framework laid out
in Kimsey and its predecessors led the Court to reject Article 4, Section 23
challenges. In a third case—Alpha Psi—following the same framework led
the Court to strike down a special law as unconstitutional.
In Lake Superior Court, we examined two countywide reassessment
statutes that applied only to Lake County. State ex rel. Att’y Gen. v. Lake
Superior Court, 820 N.E.2d 1240, 1250–51 (Ind. 2005). We determined that
the law did not run afoul of Article 4, Section 23 because “no comparable
set of circumstances in any other county produc[ed] such widespread tax
inequities and unusual issues of valuation.” Id. at 1250. We reached this
conclusion because a proponent of the law “point[ed] to the long and
tortured history of property taxation in Lake County,” id. at 1249, and we
had “administrative findings, judicial findings, and legislative action all
pointing to a unique circumstance created by uneven assessment
practices” in that particular county, id. at 1250.
Similarly, in Buncich, we upheld a special law—again applying only to
Lake County—aimed at reducing costs of administering elections by
consolidating smaller precincts. State v. Buncich, 51 N.E.3d 136, 141 (Ind.
2016). Buncich began by reinforcing the general principle that a statute is
“clothed with the presumption of constitutionality.” Id. (quoting Boehm v.
Town of St. John, 675 N.E.2d 318, 321 (Ind. 1996)).
Then, in addressing the special law at issue, the Court noted that the
competing arguments involved “a question of degree.” Id. at 143.
Specifically, while the State pointed to the high number of small precincts
in Lake County, the opponent of the legislation countered that nearly all
counties have small precincts. Id. at 142–43. Thus, since “Lake County is
not unique merely because it has small precincts,” Buncich posed the
question, “[A]t what point does the sheer number of small precincts in
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Lake County become a defining characteristic such that it justifies special
legislation?” Id. at 143 (emphasis omitted).
This Court concluded that the opponent of the special law failed to
“rebut[] the presumption that the legislature determined Lake County to
be past that point,” noting that Lake County had not only the “largest
number of small precincts in the state” but also “more than twice as many
as all other counties.” Id. Recognizing that statistics “may be pliable,” id.,
the Court threw “the benefit of the doubt in favor of the constitutionality
of the law,” id. (quoting Moseley, 643 N.E.2d at 300). Accordingly, we
determined that the special legislation was constitutionally permissible. Id.
Conversely, this Court struck down special legislation in Alpha Psi,
determining that the differential treatment wasn’t warranted because
there was “nothing unique” about the specified class. Alpha Psi Chapter of
Pi Kappa Phi Fraternity, Inc. v. Auditor of Monroe Cty., 849 N.E.2d 1131, 1138
(Ind. 2006). In that case, we addressed a statute that essentially gave filing
extensions to three Indiana University fraternities for their property-tax-
exemption applications. Id. at 1133. In finding an Article 4, Section 23
violation, we stressed that the law’s proponent gave “no meaningful
explanation as to why the problems” the affected class faced were “any
different than those faced by landowning fraternities and sororities
throughout the state.” Id. at 1138. Rather, we determined that the offered
justifications merely identified unique characteristics of fraternities or
sororities “as a whole.” Id. Thus, we classified the statute in Alpha Psi as
“precisely the sort of ‘special law’ that” our drafters in 1850 and 1851
sought to eliminate. Id. at 1139.
So, what can be distilled from this review of Article 4, Section 23 case
law? In sum—that the constitutionality of special legislation hinges on the
uniqueness of the identified class and the relationship between that
uniqueness and the law. More specifically, a special law complies with
Article 4, Section 23 when an affected class’s unique characteristics justify
the differential treatment the law provides to that class. See Buncich, 51
N.E.3d at 143; Lake Superior Court, 820 N.E.2d at 1250; Williams, 724 N.E.2d
at 1086; Hoovler, 668 N.E.2d at 1235; Moseley, 643 N.E.2d at 301. But, a
special law violates Article 4, Section 23 when there are no unique
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circumstances of an affected class that warrant the special treatment—
meaning that a general law could be made applicable. See Alpha Psi, 849
N.E.2d at 1138–39; Kimsey, 781 N.E.2d at 694.
With this test, though, we keep in mind two considerations.
First, because a special-legislation challenge is a type of constitutional
challenge, there is an overarching presumption that the statute is
constitutional. See, e.g., Buncich, 51 N.E.3d at 141. So in close cases, the
special law will be upheld. See id. at 143.
Second, once a special-legislation claim is lodged and the court
determines that the law is indeed special, the burden is on the proponent
to show that a general law can’t be made applicable. See id. This requires
the legislation’s proponent to clear a low bar by establishing a link
between the class’s unique characteristics and the legislative fix. See id. If
the proponent overcomes its initial hurdle to show a link between the
unique characteristics and the special treatment, but the case poses a
question of degree—i.e., the characteristics used to justify the special law
are common to the specified class and to those outside of the class—then
the opponent of the legislation must show why the specified class’s
characteristics are not defining enough to justify the special legislation.
See, e.g., id.; Moseley, 643 N.E.2d at 301. By carrying this burden, the
opponent demonstrates that the law’s proponent has failed to justify the
special treatment.
With that multi-layered analytical framework, we turn to the Fee
Exemption’s constitutionality.
III. Applying the current analytical framework to the
Fee Exemption
Since the parties agree that the Fee Exemption is special legislation, we
face the question, “Is the special legislation constitutionally permissible?”
To answer that question, we apply the framework outlined above.
As the proponents of the Fee Exemption, Herman & Kittle must
establish why the law couldn’t operate statewide. Again, this burden is
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overcome—at least initially—by demonstrating a link between the class’s
unique characteristics and the legislative fix. Herman & Kittle argues that
the special law is justified because of three unique characteristics in
Bloomington and West Lafayette: (1) a higher-than-average share of
renters; (2) a large percentage of young, unsophisticated renters; and (3) a
history of regulating landlords in the rental markets through inspection
and registration programs. We address each of these proffered
justifications in turn.
According to 2010 census data, Bloomington and West Lafayette do
have the highest percentages of renter-occupied housing units in Indiana,
at 67% and 67.6%, respectively. Herman & Kittle links these percentages to
the Fee Exemption’s special treatment by arguing that the rental
percentages in Bloomington and West Lafayette “giv[e] landlords
unequaled control over the supply of housing.” Though this may be
enough to overcome the proponent’s initial burden, the rental-percentage
characteristic raises a question of degree, and Hammond has shown that
those percentages are not defining enough to justify the differential
treatment.
The same data that identifies Bloomington’s and West Lafayette’s
percentages of renter-occupied units shows that other Indiana
municipalities have similarly high percentages of renter-occupied housing
units: East Chicago at 58.5%, Speedway at 51.5%, Elkhart at 49.2%,
Lafayette at 48.7%, Muncie at 48.6%, Gary at 47.3%, Valparaiso at 44.6%,
Terre Haute at 44.5%, Indianapolis at 44.2%, and Evansville at 44%. Thus,
we agree with Hammond that the moderately higher percentages found in
Bloomington and West Lafayette are not defining characteristics that can
justify the preferential treatment provided to just those two cities. Cf.
Buncich, 51 N.E.3d at 143.
Herman & Kittle’s second explanation to support the Fee Exemption is
that Bloomington and West Lafayette have high percentages of students
who are “often unsophisticated first-time renters” because the cities are
home to Indiana University and Purdue University, respectively. Yet,
Herman & Kittle gives no reason why these types of renters are grounds
to permit rental-registration fees over $5.
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Nor are Bloomington and West Lafayette the only two cities in Indiana
containing a large public university with many students who are “often
unsophisticated first-time renters.” For example, Muncie has Ball State
University; Indianapolis has Indiana University–Purdue University; and
Terre Haute has Indiana State University. So on its second asserted
justification, Herman & Kittle has failed to establish a unique
characteristic that warrants special treatment. See Alpha Psi, 849 N.E.2d at
1138.
Herman & Kittle finally argues that Bloomington and West Lafayette
have uniquely long histories of regulating landlords in the rental-housing
market. True, the evidence before us shows that Bloomington created its
program either in 1961 or in the early 1970s, and West Lafayette’s
program began in 1976. But Herman & Kittle has failed to establish that
these are uniquely long-running programs, particularly compared to
Hammond’s, which was created in 1961, and the City of Goshen’s, which
has spanned more than 25 years. Since Bloomington and West Lafayette
do not have uniquely long-running programs, Herman & Kittle cannot
link them to the Fee Exemption’s special treatment. Thus, the evidence
before us shows that the Fee Exemption is amenable to being applied
generally throughout the State.
Ultimately, Herman & Kittle’s proffered justifications do not support
the differential treatment the Fee Exemption gives to Bloomington and
West Lafayette. In other words, this case is starkly different from prior
cases in which this Court found a relationship between an affected class’s
unique characteristics and the special treatment granted to that class.
To be sure, this case is unlike Hoovler, where the unique financial
liability Tippecanoe County faced was directly related to the tax-increase
relief it received through special legislation. Hoovler, 668 N.E.2d at 1235.
It’s also unlike Williams, where the unique needs of Lake County justified
the special law providing for the appointment of magistrates in that
county alone. Williams, 724 N.E.2d at 1085–86. The circumstances here also
differ from those in Lake Superior Court, where the unique scale,
complexity, and tortured history of property taxation in Lake County
warranted the special legislation aimed at fixing the issue through
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reassessment. Lake Superior Court, 820 N.E.2d at 1250–51. And, finally, this
case is dissimilar to Buncich, where a uniquely large number of small
precincts in Lake County directly related to the special legislation
reducing the number of small precincts. Buncich, 51 N.E.3d at 143.
Unlike the special legislation described above, the Fee Exemption
cannot survive an Article 4, Section 23 challenge. The justifications set
forth by Herman & Kittle demonstrate nothing more than a “generalized
uniqueness” in Bloomington and West Lafayette. Id. at 142 n.7. In other
words, while there are characteristics of Bloomington and West Lafayette
that may be uncommon or rare across the state, that is not enough; rather,
“there must be unique characteristics that justify the particular piece of
legislation.” Id. (emphasis added). There is no evidence, for example, that
either Bloomington or West Lafayette is facing a fiscal issue that would
justify charging higher amounts for rental-registration fees than every
other municipality in the state. At the end of the day, the evidence does
not indicate that Bloomington and West Lafayette—and those two cities
alone—need the Fee Exemption’s special treatment. Cf. id. at 143; Lake
Superior Court, 820 N.E.2d at 1249–50; Hoovler, 668 N.E.2d at 1235; Moseley,
643 N.E.2d at 301.
The Fee Exemption is precisely the type of law our framers sought to
eliminate during the 1850–1851 Constitutional Convention. While the bar
to establish the constitutionality of special legislation is by no means a
high one, the proponent still must justify the special treatment afforded to
the specified class. Here, Herman & Kittle has not done so.
For two of the proffered “unique characteristics,” Herman & Kittle
failed to establish a link between those characteristics and the Fee
Exemption’s preferential treatment. Specifically, Herman & Kittle didn’t
explain why populations of young, unsophisticated renters or long-
running rental-fee programs justify allowing Bloomington and West
Lafayette to charge rental fees over $5. For the third alleged “unique
characteristic”—that the two cities have high percentages of renter-
occupied properties—Herman & Kittle managed to link the characteristic
to the legislative remedy. But Hammond then pointed to similarly high
rental-occupancy percentages throughout the state, showing why that
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characteristic was not defining enough to justify preferential treatment to
only Bloomington and West Lafayette. Thus, a general law can be made
applicable, which means the Fee Exemption is unconstitutional special
legislation.
Because the Fee Exemption is constitutionally defective under Article 4,
Section 23, that provision must be stricken. See Kimsey, 781 N.E.2d at 696.
But what does that mean for the remainder of Indiana Code section 36-1-
20-5—particularly the Fee Restriction that imposes the $5 limit on rental-
registration fees? To answer that question, we explore the principles of
severability.
IV. Severability of the Fee Exemption
“A statute bad in part is not necessarily void in its entirety.” Paul
Stieler, 2 N.E.3d at 1279 (quoting Dorchy v. Kansas, 264 U.S. 286, 289 (1924)).
Rather, we must determine whether the infirm provision of a statute is
severable, leaving the remainder intact. Id.
To make this determination, we ask whether the statute can stand on
its own without the invalid provision, and whether the legislature
intended the remainder of the statute to stand if the invalid provision is
severed. Id. If we answer either question in the negative, the offending
provision is not severable, and the whole statute must be stricken. See id.
Herman & Kittle and Hammond understandably take diverging
positions on this issue. While Herman & Kittle advocates for severability
of the Fee Exemption, Hammond does not. Accepting Herman & Kittle’s
position would mean that the Fee Restriction remains valid; that it would
apply to every political subdivision across the state; and that,
consequently, no political subdivision could charge more than a $5 per-
rental-registration fee. Accepting Hammond’s position, however, would
mean that Indiana Code section 36-1-20-5 is void in its entirety,
eliminating any statutory restriction on how much municipalities could
charge for registration fees.
Siding with Hammond, the Court of Appeals struck down the whole
statutory section, finding the Fee Exemption nonseverable. City of
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Hammond, 95 N.E.3d at 144. In doing so, the panel relied on certain
legislative history to conclude that the General Assembly would not have
approved the Fee Restriction without an exemption for Bloomington and
West Lafayette. See id. at 143–44.
Notably, in its analysis, the Court of Appeals pointed out that Chapter
36-1-20 does not contain a severability clause and relied on this Court’s
decision in Benton Community in stating that “[t]he inclusion of a
severability clause creates a presumption that the remainder of the Act
may continue in effect” but that “[t]he absence of a severability clause
creates the opposite presumption: the Legislature intends the Act to be
effective as an entirety or not at all.” City of Hammond, 95 N.E.3d at 143
(quoting Ind. Educ. Emp’t Relations Bd. v. Benton Cmty. Sch. Corp., 266 Ind.
491, 510, 365 N.E.2d 752, 762 (1977)).
Herman & Kittle argues that the Court of Appeals failed to
acknowledge and apply the correct presumption—one created by Indiana
Code section 1-1-1-8. This statute was significantly amended after Benton
Community to include a new subsection (b), which provides in part,
(b) Except in the case of a statute containing a nonseverability
provision, each part and application of every statute is
severable. If any provision or application of a statute is held
invalid, the invalidity does not affect the remainder of the
statute unless:
(1) the remainder is so essentially and inseparably connected
with, and so dependent upon, the invalid provision or
application that it cannot be presumed that the remainder
would have been enacted without the invalid provision or
application; or
(2) the remainder is incomplete and incapable of being
executed in accordance with the legislative intent without
the invalid provision or application.
See 1987 Ind. Acts 1, P.L. 1, § 1 (codified at I.C. § 1-1-1-8 (2018)) (emphasis
added). Herman & Kittle asserts that because Indiana Code section 36-20-
1-5 lacks a nonseverability clause, the presumption is that the Fee
Indiana Supreme Court | Case No. 19S-PL-148 | March 15, 2019 Page 26 of 30
Exemption is severable from the remainder of the statute. The landlord
further claims that the statute’s history shows that the legislature’s
primary focus was on addressing the escalating rental-registration fees
throughout the State and their negative effects—not on exempting
Bloomington and West Lafayette from the caps on fees.
Succinctly put, the issue before us is whether the legislature intended
the Fee Restriction to live and die with the Fee Exemption. Because the
General Assembly did not include a nonseverability clause, under Indiana
Code section 1-1-1-8(b), the presumption is that the invalid provision—
here, the Fee Exemption—is severable from the remainder of the statute.
Given the absence of the nonseverability clause, the burden is on
Hammond to show that the whole statute must be stricken. 7 This is done
by demonstrating that the invalid provision is “inseparably connected
with” and “dependent upon” the remainder of the statute, or by
demonstrating that the remainder cannot be applied in accordance with
legislative intent. I.C. § 1-1-1-8(b).
In support of Hammond’s argument that the legislature would not
have passed the Fee Restriction without the Fee Exemption, the city points
to three failed legislative attempts to impose fee restrictions statewide: (1)
HB 1543, which, as introduced, barred all political subdivisions from
requiring rental-unit registration; (2) HB 1313, which, as introduced,
barred all political subdivisions from imposing rental-unit registration
fees; and (3) HB 1403, which, as introduced, barred all political
subdivisions from charging a rental-registration fee of more than $5.
7In Benton Community, this Court recognized that, with a presumption of nonseverability in
the absence of a severability clause, “the burden is upon the supporter of the legislation to
show the separability of the provisions involved.” 266 Ind. at 510–11, 365 N.E.2d at 762
(quoting Carter v. Carter Coal Co., 298 U.S. 238, 312 (1935)). But when the legislature added
subsection (b) to Indiana Code section 1-1-1-8 after Benton Community, this subsection shifted
the presumption by stating that “[e]xcept in the case of a statute containing a nonseverability
provision, each part and application of every statute is severable.” With the presumption
shifted, the burden to overcome that presumption likewise shifted—now requiring, in the
absence of a nonseverability clause, the opponent of the legislation to show that the entire
statute must be stricken down. Cf. Carter, 298 U.S. at 312.
Indiana Supreme Court | Case No. 19S-PL-148 | March 15, 2019 Page 27 of 30
Hammond asserts that none of these bills exempted Bloomington and
West Lafayette from fee restrictions and that HB 1403 passed only after
the Fee Exemption was added. Thus, according to Hammond, the
legislature would not want a provision limiting rental-registration fees to
just $5 (the Fee Restriction) unless Bloomington and West Lafayette were
spared from that restriction (Fee Exemption).
Herman & Kittle responds that the Fee Restriction’s vitality doesn’t
depend on the validity of the Fee Exemption. The landlord points out that
the primary legislative concern in enacting the Fee Restriction was rising
fees that were negatively impacting the affordability of rental housing and
stifling rental development. Herman & Kittle maintains that, given this
primary concern, we must presume the legislature intended for the Fee
Restriction to apply to all political subdivisions—including Bloomington
and West Lafayette—rather than having no rental-fee restrictions
statewide. We agree.
Although both parties present defensible arguments, Indiana Code
section 1-1-1-8(b)’s presumption operates in favor of severability—and
Hammond has failed to defeat that presumption. Hammond has not
demonstrated that the legislature intended to revert back to a time when
political subdivisions could charge any rental-registration-fee amount of
their choosing. Rather, the legislature, over many years, strove to limit the
burden that increasing fees were placing on rental communities. Thus, to
invalidate the Fee Restriction would go against legislative intent—not
support it. Accordingly, the Fee Exemption is severable from the
remainder of Indiana Code section 36-1-20-5.
Conclusion
Under Article 4, Section 23 of the Indiana Constitution, special
legislation is constitutionally infirm if “a general law can be made
applicable.” And a general law can be made applicable if the affected class
possesses no unique characteristics that justify the special treatment
afforded by the special law.
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Here, as the proponents of the Fee Exemption, the State and Herman &
Kittle bore the burden to demonstrate why Bloomington and West
Lafayette should be able to charge any amount for rental-registration fees,
when all other political subdivisions across the state are capped at $5.
Because they failed to make that showing, the Fee Exemption is
unconstitutional special legislation that must be stricken.
But the Fee Exemption is severable from the remainder of Indiana Code
section 36-1-20-5, given Hammond’s failure to rebut an applicable
statutory presumption of severability. Thus, the Fee Restriction now
operates statewide, and all municipalities are restricted from charging a
rental-registration fee that exceeds $5.
Accordingly, the judgment of the trial court in favor of Herman & Kittle
is reversed to the extent the trial court found the Fee Exemption
constitutional. The case is remanded to the trial court with instructions to
enter a judgment in favor of Herman & Kittle on the issue of severability
and for further proceedings consistent with this opinion.
David, Massa, and Goff, JJ., concur.
Slaughter, J., not participating.
Indiana Supreme Court | Case No. 19S-PL-148 | March 15, 2019 Page 29 of 30
ATTORNEYS FOR APPELLANT
Bryan H. Babb
Bradley M. Dick
Bose McKinney & Evans LLP
Indianapolis, Indiana
ATTORNEYS FOR APPELLEE
Steven C. Shockley
Russell C. Menyhart
Taft Stettinius & Hollister LLP
Indianapolis, Indiana
ATTORNEYS FOR INTERVENOR
Curtis T. Hill, Jr.
Attorney General of Indiana
Thomas M. Fisher
Solicitor General
Frances H. Barrow
Julia C. Payne
Deputy Attorneys General
Indianapolis, Indiana
Indiana Supreme Court | Case No. 19S-PL-148 | March 15, 2019 Page 30 of 30