ATTORNEY FOR PETITIONER:                               ATTORNEYS FOR RESPONDENT:
JAMES. K. GILDAY                                       CURTIS T. HILL, JR.
GILDAY & ASSOCIATES, P.C.                              ATTORNEY GENERAL OF INDIANA
Indianapolis, IN                                       ANDREW T. GREIN
                                                       DEPUTY ATTORNEY GENERAL
                                                       Indianapolis, IN



                                  IN THE
                            INDIANA TAX COURT
                                                                                 FILED
                                                                             Mar 03 2017, 2:24 pm

6787 STEELWORKERS HALL, INC.,                        )                      CLERK
                                                                       Indiana Supreme Court
                                                     )                    Court of Appeals
                                                                            and Tax Court
       Petitioner,                                   )
                                                     )
                       v.                            ) Cause No. 49T10-1503-TA-00007
                                                     )
JON M. SNYDER, ASSESSOR OF                           )
PORTER COUNTY,                                       )
                                                     )
       Respondent.                                   )


                     ON APPEAL FROM A FINAL DETERMINATION OF
                         THE INDIANA BOARD OF TAX REVIEW

                                      FOR PUBLICATION
                                        March 3, 2017

WENTWORTH, J.

       6787 Steelworkers Hall, Inc. (“Local 6787”) appeals the Indiana Board of Tax

Review’s denial of its applications for a charitable or educational purposes property tax

exemption for the 2008 and 2010 tax years (the “periods at issue”).1 Upon review, the

Court affirms the Indiana Board.




1
  Portions of the certified administrative record are confidential. Accordingly, the Court will only
provide that information necessary for the reader to understand its disposition of the issues
presented. See generally Ind. Administrative Rule 9.
                          FACTS AND PROCEDURAL HISTORY

       Local 6787, an affiliate of the United Steelworkers of America, is a labor union

that is owned by approximately 3,400 employees of ArcelorMittal’s Burns Harbor steel

mill (i.e., the members).2 (See Cert. Admin. R. at 916, 1307, 1311, 1315, 1322, 1324-

25.) Local 6787 was organized as a domestic not-for-profit corporation in 1967 and is

recognized by the Internal Revenue Service as a 501(c)(5) organization. (See Cert.

Admin. R. at 917-24, 1318-21.) Local 6787’s By-laws state its objectives:

               First. To unite in [Local 6787], regardless of race, creed, color
           or nationality, all working men and working women who are
           members of the United Steelworkers of America (hereinafter
           referred to as the “International Union”) and who are within the
           jurisdiction of [Local 6787].

              Second. To establish through collective bargaining, adequate
           wage standards, shorter hours of work, and improvements in the
           conditions of employment for workers in [the] industry.

               Third. To engage in educational, legislative, political, civic,
           social, welfare, community and other activities; to advance and
           safeguard the economic security and social welfare of workers in
           [the] industry, the International Union, its Local Unions and the free
           labor movements of the United States, Canada and the world; to
           protect and extend our democratic institutions and civil rights and
           liberties; and to perpetuate and extend the cherished traditions of
           democracy and social and economic justice in the United States,
           Canada and the world community.

              Fourth. To take all steps and actions consistent with the
           Constitution and policies of the International Union and these
           Bylaws, to implement and carry out the objects, rights, activities
           and responsibilities of this organization and the International Union.

              Fifth. [To] . . . affiliate with the appropriate central and local
           bodies chartered by the Federation and with all district and
           subdistrict bodies of the United Steelworkers of America.

              Sixth. [To] . . . establish a better civic and political relationship

2
   ArcelorMittal, the largest steel company in the world, owns the Burns Harbor facility, a fully
integrated steel mill. (See Cert. Admin. R. at 913-15, 1313-14.)
                                               2
          within the Burns Harbor Community. It will help to build the image
          of our [Local 6787], the United Steelworkers of America, and the
          trade labor Union as a whole in this new community.

(Cert. Admin. R. at 931-32.)

      During the periods at issue, Local 6787 owned a 12,000 square foot Union Hall

and a 22,000 square foot Meeting Hall situated on 20 acres of land in Porter County,

Indiana. (Cert. Admin. R. at 322-24, 1326-27, 1473-74, 1540-42.) The Porter County

Assessor assigned the property a total assessed value of $3,554,800 in 2008 and

$4,955,300 in 2010. (Cert. Admin. R. at 322-25, 660.) Local 6787 filed exemption

applications for 2008 and for 2010 with the Porter County Property Tax Assessment

Board of Appeals (PTABOA) claiming that its property qualified for an exemption

because it was used for both charitable and educational purposes.          The PTABOA

denied both exemption applications.

      Local 6787 sought review of the denials with the Indiana Board. In November of

2013, the Indiana Board conducted a two-day hearing during which Local 6787 offered

forty-nine exhibits and the testimony of several witnesses to demonstrate that it used its

property for charitable and educational purposes during the periods at issue.         For

instance, Peter Trinidad, the vice-president of Local 6787, explained that Local 6787, as

the “exclusive bargaining agent” for its members, fulfilled the charitable and educational

objectives set forth in its By-laws by negotiating and enforcing basic labor agreements

(the BLAs) with ArcelorMittal. (See Cert. Admin. R. at 1306, 1308, 1330-32.) Local

6787’s witnesses also explained that the BLAs satisfied the needs and human wants of

Local 6787’s members by implementing several targeted policies, procedures, and

benefits such as:



                                            3
           1) employment security measures that specifically included layoff
              minimization plans (LMPs);3

           2) economic security policies that set forth, among other things,
              certain hiring preferences, wage expectations, specialized
              benefits for active duty members and their families, alternative
              working schedules, and several grievance procedures;

           3) safety initiatives that included the right to refuse unsafe work
              without repercussion, the right to participate in all accident
              investigations, and the provision of vouchers for work boots;4

           4) civil rights initiatives designed to help Local 6787’s members
              identify and prevent workplace harassment on the basis of
              specifically enumerated protected classes;

           5) the Employee Assistance Program (the EAP)5 and other
              wellness events for the benefit of Local 6787’s members, their
              families, and even the general public; and

           6) the provision of job-specific training, specialized training to
              develop union leadership skills, annual tuition reimbursements,
              and several other educational opportunities that were facilitated
              by the company-funded Institute for Career Development (the
              ICD).6

(See, e.g., Cert. Admin. R. at 1329-57, 1363-68, 1376-80, 1420-47, 1688-90, 1728-38,


3
  For example, ArcelorMittal and Local 6787 created an LMP in 2008 that prevented 2,000 of
Local 6787’s members from being laid off and likely staved off the shuttering of the Burns
Harbor facility. (See Cert. Admin. R. at 1377-1412; Confd’l Cert. Admin. R. at 145-93.)
4
  Local 6787’s emphasis on the safety and the overall well-being of its members made the
Burns Harbor facility ArcelorMittal’s safest domestic steel mill. (See Confd’l Cert. Admin. R. at
229-366; Cert. Admin. R. at 1553-73.)
5
  For purposes of the EAP, which was funded by ArcelorMittal and primarily conducted offsite,
Local 6787 contracted with an independent third party to perform interventions and provide
confidential free health counseling for its members and their families. (See Cert. Admin. R. at
1334, 1633-61; Confd’l Cert. Admin. R. at 377-92.)
6
   The ICD arranged for the provision of a wide variety of educational opportunities that were
intended to lower the stress levels of Local 6787’s members and provide them with “portable”
skills. (See Cert. Admin. R. at 989, 1422-23.) For instance, Local 6787’s members were able to
take GED preparation classes, woodworking classes, jewelry-making courses, plumbing or
electrical wiring classes, and Ivy Tech culinary courses. (See, e.g., Cert. Admin. R. at 989-
1119, 1421-36, 1714-25.)
                                               4
1744-51, 1804-06.) (See also generally Confd’l Cert. Admin. R. at 1-144.)

          Furthermore, Local 6787 claimed that its charitable and educational activities

relieved the human wants and needs of its members as well as those of the greater

public.    (See, e.g., Cert. Admin. R. at 1333.)      In support of this claim, Local 6787

presented a Civic Engagement and Community Support Report stating that its provision

of specialized union activities and educational opportunities benefited the Burns Harbor

Community by making its members “model citizens” who were “[b]etter educated, more

informed, and more socially responsible than the general population,” as evidenced by

their active involvement in charities and municipal volunteer positions, coaching of youth

sports, and regular church attendance. (See Cert. Admin. R. at 1149, 1577-83.) (See

also generally Cert. Admin. R. at 1144-1207.) Local 6787 also submitted an Economic

Impact Report indicating that its presence in Porter County “contributed to high wages in

nonunion industries . . . as well as to less inequality generally and a larger middle

class[.]”7 (See Cert. Admin. R. at 1590-91, 1594.) (See also generally Confd’l Cert.

Admin. R. at 367-76.)

          Local 6787 provided testimony that it also relieved the human wants and needs

of its retirees by allowing them to hold monthly meetings in the Meeting Hall free of

charge so that they could “deal with social, economic, educational, legislative[,] and

political developments” and “fight for the preservation of things like social security and

the shared values of steelworkers.” (See Cert. Admin. R. at 1611-12, 1616.) Moreover,


7
  Furthermore, the Economic Impact Report provided that Local 6787’s members: 1) generated
about $195 to $260 million in additional income when compared to nonunion employees; 2)
increased Porter County’s income tax base by about $1 to $1.3 million; 3) increased the State’s
income tax base by about $13 million; and 4) caused a significant amount of new spending in
the community. (See Cert. Admin. R. at 1594-96, 1599-1602; Confd’l Cert. Admin. R. at 369-
72.)
                                              5
the testimony provided that Local 6787 often allowed other charitable organizations,

such as the American Red Cross or the United Way, to use the Meeting Hall free of

charge and that its members regularly donated to charities, with their charitable

donations totaling about $800,000 during the periods at issue. (See Cert. Admin. R. at

1333, 1415-16.) (See also Cert. Admin. R. at 1270-81.)

      Based on its evidentiary presentation, Local 6787 claimed that the Union Hall

qualified for a 100% exemption because it was used exclusively for the charitable

purpose of conducting Local 6787’s day-to-day union activities. (See, e.g., Cert. Admin.

R. at 1298, 1326, 1473-74.) In addition, Local 6787 asserted that its Meeting Hall

qualified for a predominate use exemption because it was used 74.4% of the time in

2008 and 67.2% of the time in 2010 for exempt purposes (e.g., union-related

charitable/educational events and non-union related charitable events) in relation to its

use for non-exempt purposes (e.g., wedding receptions, balls, and banquets) during the

periods at issue. (See, e.g., Cert. Admin. R. at 1258-64, 1299, 1765-97.) Moreover,

Local 6787’s financial secretary explained how its income and expense data showed

that it derived no profit from its property’s non-exempt uses during the periods at issue.

(See Cert. Admin. R. at 1797-1803; Confd’l Cert. Admin. R. at 393-95.)

      The Assessor responded that he had no dispute with Local 6787’s factual

presentation, but he disagreed with its legal conclusions. (See Cert. Admin. R. at 1302-

03.) The Assessor maintained that although Local 6787’s use of its property was “very

notable and very desirable,” the few instances when its activities conferred a charitable

or educational benefit to the community at large were merely “collateral.” (See, e.g.,

Cert. Admin. R. at 1304-05, 1504-09, 1523, 1533-34.) Consequently, the Assessor



                                            6
asserted that Local 6787’s use of its property was not “charitable” or “educational” within

the statutory meaning of those words because its activities were designed primarily to

benefit its members. (See Cert. Admin. R. at 1303-06.)

      On January 16, 2015, the Indiana Board issued its final determination explaining

that Local 6787’s charitable uses of its property were confined to the occasions that it 1)

allowed charitable organizations to use the Meeting Hall free of charge; 2) held wellness

events for the public; and 3) donated to charities or encouraged its members to do so.

(See Cert. Admin. R. at 117, 144 ¶¶ 82-84.) In contrast, Local 6787’s provision of other

union-related activities, specifically its negotiation and implementation of the BLAs’

employment and economic security measures as well as certain healthcare, training,

and educational initiatives, were not exempt “charitable” or “educational” uses. (See

Cert. Admin. R. at 139-43 ¶¶ 72-80, 145 ¶ 86, 147 ¶¶ 91-92.) Indeed, the Indiana

Board found these activities were ineligible “fringe compensation benefits of the BLA[s]”

intended to benefit Local 6787’s members, conferring nothing more than “incidental”

benefits to the public, and pursued for self-interest rather than for altruistic or

philanthropic motives. (See Cert. Admin. R. at 139-43 ¶¶ 68-80, 145-47 ¶¶ 87-93.) The

Indiana Board further explained that Local 6787’s evidentiary presentation failed to

show how its emphasis on safety and civil rights were “charitable” under the charitable

purposes exemption.     (See Cert. Admin. R. at 144-45 ¶ 85.)         The Indiana Board

therefore determined that Local 6787 failed to show that its property was used, either

exclusively or predominately, for charitable and educational purposes during the periods

at issue. (See Cert. Admin. R. at 147-49 ¶¶ 94-97.)

      On March 2, 2015, Local 6787 initiated this original tax appeal. The Court heard



                                            7
oral argument on December 11, 2015. Additional facts will be supplied as necessary.

                                STANDARD OF REVIEW

       The party seeking to overturn an Indiana Board final determination bears the

burden of demonstrating its invalidity. Hubler Realty Co. v. Hendricks Cnty. Assessor,

938 N.E.2d 311, 313 (Ind. Tax Ct. 2010). Accordingly, Local 6787 must demonstrate to

the Court that the Indiana Board’s final determination is arbitrary, capricious, an abuse

of discretion, or otherwise not in accordance with law; contrary to constitutional right,

power, privilege, or immunity; in excess of or short of statutory jurisdiction, authority, or

limitations; without observance of procedure required by law; or unsupported by

substantial or reliable evidence. See IND. CODE § 33-26-6-6(e)(1)-(5) (2017).

                                           LAW

       The charitable and educational purposes exemptions provide that “[a]ll or part of

a building is exempt from property taxation if it is owned, occupied, and used . . . for

educational . . . or charitable purposes.”       IND. CODE § 6-1.1-10-16(a) (2008).     The

exemptions also extend to the land on which an exempt building is situated and the

personal property contained therein. See I.C. § 6-1.1-10-16(c), (e). When a taxpayer

uses its property for exempt and non-exempt purposes, as here, the taxpayer must

demonstrate that it owned, occupied, and predominately used its property for one or

more exempt purposes during the relevant periods at issue to qualify for exemption.

See, e.g., Indianapolis Osteopathic Hosp., Inc. v. Dep’t of Local Gov’t Fin., 818 N.E.2d

1009, 1014 (Ind. Tax Ct. 2004), review denied; IND. CODE § 6-1.1-10-36.3(a) (2008)

(defining “predominate use” as more than 50% of a property’s total use).




                                             8
                                        ANALYSIS

       On appeal, Local 6787 asserts that the Indiana Board’s final determination must

be reversed for two reasons. First, it claims that the Indiana Board’s final determination

is “in derogation of a 150 year old Supreme Court decision” and is therefore contrary to

law. (See Pet’r Br. Supp. Pet. Judicial Review (“Pet’r Br.”) at 21-43.) In addition, Local

6787 claims that the Indiana Board’s final determination is not supported by substantial

evidence. (See Pet’r Br. at 21-22, 43-46.)

                                              I.

       Local 6787 claims that the Indiana Board’s finding that most of its union-related

activities were “fringe benefits,” not exempt charitable and educational activities, is

contrary to law because it was based on the faulty legal premise that its services are

targeted towards its membership and confer no public benefit. (See, e.g., Pet’r Br. at

31-33, 41-42; Pet’r Reply Br. at 10-13.) To support its claim, Local 6787 primarily relies

on the following excerpt from an 1865 Indiana Supreme Court case:

          [i]t is not essential to charity that it be universal. That an institution
          limits the dispensation of its blessing to one sex, or to the
          inhabitants of a particular city or district, or to the membership of a
          particular religious or secular organization does not deprive it of the
          character of a charitable institution.

(Pet’r Br. at 31 (quoting City of Indianapolis v. Grand Master, etc., of Grand Lodge of

Indiana, 25 Ind. 518, 522 (1865) (emphases added)).) Accordingly, Local 6787 explains

that the Supreme Court expressly recognized that real property of “member-centric”

organizations is eligible for exemption and the Indiana Board’s “new test for member-

centric charities” directly contravenes this well-established caselaw. (See Pet’r Reply

Br. at 11-12; Oral Arg. Tr. at 26.)



                                              9
      In Grand Master, the Supreme Court considered whether a “benevolent

corporation” was a “charitable institution” eligible for exemption under a statute that was

markedly different from the one at issue here. See Grand Master, 25 Ind. at 519-22.

Specifically, the statute in Grand Master exempted from property taxation “‘every

building erected for the use of any benevolent or charitable institution’” rather than the

narrower exemption provided to buildings that are owned, occupied, and used for

charitable purposes under the statute effective for the periods at issue. Compare id. at

519 (emphasis added and citation omitted) with I.C. § 6-1.1-10-16(a). Consequently,

the taxpayer’s status as a “benevolent corporation” was dispositive in the Grand Master

case, but is not relevant to the exemption statute at issue here. Furthermore, although

there is Indiana authority that fraternal beneficiary associations are like benevolent

corporations, nothing in the Grand Master case or elsewhere indicates that the features,

functions, or activities of labor unions, like Local 6787, are akin to benevolent

corporations for purposes of the charitable and educational exemptions. See, e.g.,

Bauer v. Samson Lodge, No. 32, K. of P., 1 N.E. 571, 574-75 (Ind. 1885) (recognizing

that fraternal beneficiary associations have features similar to both insurance

companies and benevolent organizations (i.e., charities)); Fraternal Order of Eagles No.

3988, Inc. v. Morgan Cnty. Prop. Tax Assessment Bd. of Appeals, 5 N.E.3d 1195, 1199-

1202 (Ind. Tax Ct. 2014) (recognizing that the fraternal beneficiary exemption provided

under Indiana Code § 6-1.1-10-23 is separate and distinct from the charitable and

educational purposes exemptions provided under Indiana Code § 6-1.1-10-16).

Accordingly, the Court finds that the Indiana Board did not err when it found Grand

Master was not binding precedent for the “member-centric” organization of Local 6787.



                                            10
See, e.g., Tannins of Indianapolis, LLC v. Indiana Dep’t of State Revenue, 6 N.E.3d

511, 512 (Ind. Tax Ct. 2014) (stating that when a taxpayer seeks an exemption, it bears

the burden of proof, and the Court strictly construes any ambiguities in favor of

taxation). Consequently, Local 6787 has not demonstrated that the Indiana Board’s

final determination is contrary to law.

                                             II.

       Local 6787’s second claim is that the Indiana Board’s final determination must be

reversed because it is not supported by substantial evidence. Local 6787 maintains

that it submitted probative evidence demonstrating that it has both charitable and

educational purposes, that it engaged in activities that fulfilled those purposes, and “[i]ts

evidence went unrebutted, and in almost every material sense, was accepted by the

[Indiana] Board.”     (Pet’r Br. at 20-21.)        (See also Pet’r Br. at 21-31, 36-46.)

Consequently, Local 6787 claims that the Indiana Board “committed reversible error

when it found that [Local 6787] did not make a prima facie case; did not find that the

Assessor failed to rebut [its] prima facie case; and decided that Local 6787 is not

exempt from property taxes.” (Oral Arg. Tr. at 67 (emphases added).)

       When the Court reviews a final determination of the Indiana Board, it may neither

reweigh the evidence presented nor judge the credibility of the witnesses who testified

at the Indiana Board hearing. See Freudenberg-NOK Gen. P’ship v. State Bd. of Tax

Commr’s, 715 N.E.2d 1026, 1030 (Ind. Tax Ct. 1999), review denied. Rather, the Court

defers to the factual findings that are supported by substantial evidence and reviews

any questions of law arising from those findings de novo. Cedar Lake Conference

Ass’n v. Lake Cnty. Prop. Tax Assessment Bd. Appeals, 887 N.E.2d 205, 207 (Ind. Tax



                                             11
Ct. 2008), review denied. Here, the certified administrative record shows that Local

6787’s activities primarily benefitted its members and that its property was not used like

a benevolent corporation during the periods at issue. Accordingly, the Court finds that

the Indiana Board’s factual findings are supported by substantial evidence. See DeKalb

Cnty. Assessor v. Chavez, 48 N.E.3d 928, 931-32 (Ind. Tax Ct. 2016) (providing that the

Indiana Board’s factual findings are supported by substantial evidence (i.e., more than a

scintilla and less than a preponderance) if a reasonable person could view the certified

administrative record in its entirety and find enough relevant evidence to support the

findings). Moreover, to the extent Local 6787 is simply asking the Court to reweigh the

evidence, the Court declines. Indeed, Local 6787 has not shown that the Indiana Board

abused its discretion, (i.e., it misinterpreted the law or issued a final determination

clearly against the logic and effect of the facts and circumstances before it), in

concluding that its property was not predominately used for charitable or educational

purposes during the periods at issue. See Hubler Realty, 938 N.E.2d at 315 (providing

that the Court will not reweigh evidence absent an abuse of discretion). Consequently,

the Assessor failed to demonstrate that the Indiana Board’s final determination is not

supported by substantial evidence.

                                     CONCLUSION

      For the above-stated reasons, the final determination of the Indiana Board is

AFFIRMED.




                                           12
