Robb, J.
Case Summary and Issues
In 1961, the City of Hammond created an inspection program for rental housing that permitted inspections of housing and required inspections of rooming houses. In 2001, Hammond created a program which required annual registration of all rental housing and assessed a per unit fee. Beginning in 2011, the Indiana General Assembly passed a series of bills related to rental registration and inspection programs, including a 2014 bill that restricted fees that could be imposed by a rental registration program (“Fee Restriction”) unless the program was created prior to July 1, 1984 (“Fee Exemption”). In 2014, Hammond sought payment of nearly $86,000 from Herman & Kittle Properties, Inc. (“HKP”) for overdue registration fees for two of its rental properties. Based on the 2014 legislation, HKP disputed it owed the entirety of those fees. Hammond then filed a complaint seeking a declaratory judgment that because its inspection program was created prior to July 1, 1984, its program was unaffected by the 2014 legislation and, accordingly, HKP owed the fees in question.
While that declaratory judgment action was pending, the General Assembly in 2015 enacted further legislation that amended the definition of a “rental registration or inspection program” such that there was no question Hammond’s registration program did not qualify for the Fee Exemption. Hammond then amended its complaint to add Counts II and III seeking a declaratory judgment that the 2015 legislation was special legislation in violation of Article 4 Sections 22 and 23 of the Indiana Constitution. The State of Indiana intervened in the action for the limited purpose of defending the constitutionality of the law.
Both Hammond and HKP filed motions for summary judgment. The trial court granted summary judgment to Hammond on the first count, finding Hammond qualified for the Fee Exemption in 2014. The trial court also found that although the Fee Exemption is special legislation, it does not violate the Indiana Constitution. The trial court therefore granted summary judgment to HKP on Counts II and III of Hammond’s complaint. Hammond now appeals, raising three issues for our review:
1) Whether Hammond is entitled to summary judgment declaring the Fee Exemption is in violation of Indiana Constitution Article 4, Section 22’s prohibition on special legislation relating to salaries and fees;
2) Whether Hammond is entitled to summary judgment declaring the Fee Exemption is in violation of Indiana Constitution Article 4, Section 23’s requirement that where possible, laws must be general; and
3) Whether, if the Fee Exemption is unconstitutional, it is severable from the remainder of section 36-1-20-5 or whether the entire section must be stricken
HKP’s brief, in which the State has joined, does not challenge the entry of summary judgment for Hammond on Count I. In addition to meeting Hammond’s argument with respect to Counts II and III, HKP alleges preliminarily that Hammond does not have standing to challenge the constitutionality of the Fee Exemption.
Concluding that Hammond has standing, that the Fee Exemption runs afoul of both Sections 22 and 23 of Article 4 of the Indiana Constitution, and that the Fee Exemption is not severable from the remainder of section 36-1-20-5, we reverse and remand to the trial court to enter summary judgment for Hammond on Counts II and III.
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Section 36-1-20-5 relates to fees for rental registration programs and allows Bloomington and West Lafayette and only Bloomington and West Lafayette to charge a fee different than all other political subdivisions in the State. Section 36-1-20-5 therefore runs afoul of Article 4 Section 22, which prohibits special laws relating to fees or salaries. Because section 36-1-20-5 is unconstitutional under Section 22, we need not necessarily consider Hammond’s alternative argument that the statute is unconstitutional under Section 23. However, in the interest of completeness, we do so below.
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The subject of the law—rental registration fees—is amenable to a general law of uniform application throughout the state. The conditions the law addresses— identification of landlords and protection of tenants—are found throughout the state. But the law burdens political subdivisions on the basis of a seemingly random date and highly specific definitional terms. The law began life as a law of general applicability, but, through a series of amendments, transformed into a law benefitting only two Indiana cities. The purpose of limits on special legislation is to “prevent state legislatures from granting preferences to some local units or areas within the state . . . .” Kimsey, 781 N.E.2d at 685 (citation omitted). It appears that is exactly what happened here; the question is whether the alleged “unique circumstances” of Bloomington and West Lafayette are actually unique circumstances at all, and if so, whether those unique circumstances rationally justify the law allowing them, and them alone, to be exempt from the Fee Restriction.
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Standing alone and without the Fee Exemption, section 36-1-20-5 could be given legal effect as a law of general applicability. However, Indiana Code chapter 36-1-20 does not contain a severability clause…
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Conclusion
The special legislation at issue both relates to fees and salaries and could be made a law of general applicability. Therefore, it runs afoul of both Sections 22 and 23 of Article 4 of the Indiana Constitution. Because making the statute one of general applicability was not the legislature’s intent, we conclude section 36- 1-20-5 must be stricken in its entirety. The judgment of the trial court in favor of HKP on Counts II and III of Hammond’s complaint for declaratory judgment is reversed, and the case is remanded to the trial court for further proceedings consistent with this opinion.
Reversed and remanded.
Riley, J., and Pyle, J., concur.