                                                                  FILED
                                                             Feb 20 2018, 5:37 am

                                                                  CLERK
                                                              Indiana Supreme Court
                                                                 Court of Appeals
                                                                   and Tax Court




ATTORNEYS FOR APPELLANT                                   ATTORNEYS FOR APPELLEE
Bryan H. Babb                                             Steven C. Shockley
Bradley M. Dick                                           Russell C. Menyhart
Bose McKinney & Evans LLP                                 Taft Stettinius & Hollister LLP
Indianapolis, Indiana                                     Indianapolis, Indiana



                                            IN THE
    COURT OF APPEALS OF INDIANA

City of Hammond,                                          February 20, 2018
Appellant-Plaintiff,                                      Court of Appeals Case No.
                                                          49A04-1612-PL-2784
        v.                                                Appeal from the Marion Superior
                                                          Court
Herman & Kittle Properties,                               The Honorable Michael D. Keele,
Inc.,                                                     Judge
Appellee-Defendant.                                       Trial Court Cause No.
                                                          49D07-1601-PL-531



Robb, Judge.




Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018          Page 1 of 56
                                Case Summary and Issues
[1]   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.


[2]   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

      Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 2 of 56
      of Indiana intervened in the action for the limited purpose of defending the

      constitutionality of the law.


[3]   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



      Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 3 of 56
      preliminarily that Hammond does not have standing to challenge the

      constitutionality of the Fee Exemption.


[4]   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.



                             Facts and Procedural History
                                 I. Hammond’s Ordinances
[5]   In August 1961, Hammond enacted Ordinance 3337, “an ordinance

      establishing minimum standards governing supplied facilities, maintenance and

      occupancy of dwellings within the City of Hammond; fixing certain

      responsibilities and duties of owners and occupants of dwellings; authorizing

      the inspection of dwellings, the condemnation of dwellings unfit for human

      habitation, and fixing the penalties for violations.” Appendix to Brief of

      Appellant, Volume II at 99. In pertinent part, Ordinance 3337 provides:


              The Health Officer and/or the Fire Inspector and/or the Building
              Commissioner are hereby authorized and directed to make
              inspections to determine the condition of dwelling units, rooming
              units, and premises located within the City of Hammond, in
              order that they may perform their duties of safeguarding the
              health and safety of the occupants of dwellings and of the general
              public. For the purpose of making such inspections, the Health
              Officer, and/or Fire Inspector and/or Building Commissioner
      Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 4 of 56
              are hereby authorized to enter, examine and survey at all
              reasonable times, all dwellings, dwelling units, rooming units,
              and premises.


      Id. at 101 (Section 2.1); see also Hammond City Code § 96.135(B) (2002)

      (authorizing and directing the Code Enforcement Commissioner to make

      inspections to determine the condition of dwelling units, rooming units, and

      premises in the city and requiring the owner or occupant of every dwelling,

      dwelling unit or rooming unit to give an authorized city inspector access to the

      premises). A “dwelling” is “any building which is wholly or partly used or

      intended to be used for living or sleeping by human occupants . . . .” App. to

      Br. of Appellant, Vol. II at 99 (Section 1.5). A “dwelling unit” is “any room or

      group of rooms located within a dwelling and forming a single habitable unit

      with facilities which are used or intended to be used for living, sleeping,

      cooking and eating.” Id. at 100 (Section 1.6). A “rooming unit” is “any room

      or group of rooms forming a single habitable unit used or intended to be used

      for living and sleeping, but not for cooking or eating purposes.” Id. at 101

      (Section 1.21).


[6]   In addition, Ordinance 3337 has a section devoted to hotels and rooming

      houses. Id. at 108. A “rooming house” is “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.” Id. at 101

      (Section 1.22). Every hotel and rooming house is required to be inspected twice


      Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 5 of 56
      each year and every person maintaining or operating a hotel or rooming house

      is obligated to pay the City Controller an annual inspection fee of $5 per hotel

      or rooming house. Id. at 108 (Sections 9.2(A) and 9.2(B)).1 Thus, Hammond’s

      inspection program applies to both owner-occupied dwellings and rentals.


[7]   In January 2001, Hammond enacted Ordinance 8327, the purpose of which “is

      to protect the health, safety and general welfare of the citizens of the City of

      Hammond by requiring the registration of all rental housing units which are or

      shall be in existence in the City of Hammond.” Id. at 118. The ordinance

      required “[a]ny owner of real property in the City of Hammond, which real

      property is used as rental housing, . . . to register all such properties on an

      annual basis.” Id. at 119. “Rental housing” is defined as “any room, dwelling

      unit, rooming unit or portion thereof let or intended to be let to a family or

      person for compensation.” Id. The ordinance also imposed a five dollar annual

      registration fee for each dwelling or rooming unit. Id. at 119-20. In 2004,

      Ordinance 8327 was amended to increase the annual registration fee for each

      dwelling or rooming unit to $10. Id. at 124. In 2010, Ordinance 9060 increased

      the annual fee to $80 “in order for the City of Hammond to bear the increased

      costs of inspections and enforcement actions on income property . . . .” Id. at

      129. A 2011 ordinance made other changes to the rental registration program

      that are not relevant to this litigation, but specifically continued the $80 annual




      1
       Currently, this provision also applies to motels and the inspection fee is $100. Hammond City Code §
      96.088(B) (2004).

      Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018                   Page 6 of 56
      fee. Id. at 137; see also Hammond City Code § 96.152(C) (2011). Failure to

      register annually subjects the owner to a fine per unit per day.


                    II. Relevant Statutes and Legislative History                                      2




                                             A. 2011 – HEA 1543
            Regulation of Residential Leases Begins by Requiring Fees be Maintained
              in a Special Fund and Allowing Landlords to Pass Fee on to Tenants

[8]   House Bill 1543 was introduced in 2011 to add a chapter to Title 36 concerning

      the regulation of residential leases. As introduced, the bill proposed, among

      other things, that a regulation by a political subdivision regarding

      landlord/tenant relations could not require owners of rental units to be

      registered with the political subdivision. App. to Br. of Appellant, Vol. II at 145

      (HB 1543 Introduced Version Sec. 5).3 HB 1543 would therefore have barred

      all political subdivisions from registering rental units and therefore barred all

      registration fees. Ultimately, however, the General Assembly enacted Indiana

      Code chapter 36-1-20 as follows:




      2
        Although the substance of Hammond’s inspection program is relevant to the issues given the statutory
      definition of “rental registration and inspection program” added in 2015, inspection fees themselves are not
      at issue. The following recitation of statutory history is therefore limited to the changes relevant to
      registration fees.
      3
          The proposed text read as follows:
                 A regulation may not do any of the following:
                          (1) Require owners of rental units to be:
                                   (A) licensed; or
                                   (B) registered with the political subdivision.

      Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018                      Page 7 of 56
        Sec. 1. The definitions in IC 32-31-3 apply throughout this
        chapter.


        Sec. 2. (a) Except as provided in subsection (b), the owner of a
        rental unit assessed any inspection, registration, or other fee by a
        political subdivision pertaining to the rental unit may:
        (1) notify the tenants of the rental unit of the assessment of the
        fee; and
        (2) require the tenants of the rental unit to reimburse the owner
        for the payment of the fee.
        ***


        Sec. 3. Any inspection, registration, or other fee assessed under
        section 2 of this chapter and collected by a political subdivision
        must be maintained 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. Each fund shall be
        maintained as a separate line item in the political subdivision’s
        budget. Money in the fund may not at any time revert to the
        general fund or any other fund of the political subdivision.


Id. at 150. Thus, the bill as enacted allowed political subdivisions to impose a

fee in any amount for registration of rental units, but required those fees to be

maintained in a special fund to be used only for reimbursing program costs.

The bill also allowed landlords to pass the fees on to tenants. An emergency

was declared for the bill and it became effective upon passage on May 10, 2011.




Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 8 of 56
                                              B. 2013 – HEA 1313
                                   Amendment to Temporarily Freeze Fees
                                  and Appoint an Interim Study Commission

[9]    House Bill 1313 proposed to repeal chapter 36-1-20 and add a new chapter that

       would allow registration of rental units but bar imposition of a rental

       registration fee. See id. at 154 (HB 1313 Introduced Version Sec. 3).4 The bill as

       enacted, however, amended chapter 36-1-20 to add a new section placing a

       temporary moratorium on imposing new registration fees or increasing existing

       registration fees. Ind. Code § 36-1-20-4(b) (2013); App. to Br. of Appellant,

       Vol. II at 157 (“A regulation that does any of the following may not be adopted

       after February 28, 2013: . . . [i]mposes or increases a fee or other assessment for

       . . . [r]egistration of an owner, landlord, or rental unit.”). By its own terms, this

       section expired on July 1, 2014. Ind. Code § 3-1-20-4(d) (2013); App. to Br. of

       Appellant, Vol. II at 158. An interim study committee was appointed to study

       the topic of regulation of residential leases by political subdivisions. App. to Br.

       of Appellant, Vol. II at 158.


[10]   The minutes from the September 2013 meeting of the Interim Study

       Commission on Economic Development regarding this issue show



       4
           The relevant section reads as follows:

                  A regulation that does any of the following may not be adopted or enforced:
                  ***
                  (3) Imposes a fee for any of the following:
                           (A) Inspection of a rental unit.
                           (B) Registration of an owner, landlord, or rental unit.
                           (C) For any other purpose.

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018             Page 9 of 56
       Representative Speedy introduced the topic by indicating there is “a concern

       that several political subdivisions have increased the fees to the point that it

       impacts the affordability of housing and is detrimental to professionally

       managed rental properties and to new rental housing development.” App. to

       Br. of Appellant, Vol. III at 190. Representative Speedy “proposed that the

       General Assembly adopt a comprehensive policy on fees that a political

       subdivision may charge with regard to rental properties.” Id. Representatives

       of various organizations and towns, as well as owners and residents of rental

       housing, also gave statements about registration and inspection programs.


                                          C. 2014 – HEA 1403
                  Amendment Creating the Annual Registration Fee Restriction
                              and Date-Based Fee Exemption

[11]   House Bill 1403, introduced on January 16, 2014, proposed to amend chapter

       36-1-20 to provide as follows with respect to registration programs:


               Sec. 5. (a) This chapter does not prohibit a political subdivision
               from establishing and enforcing a registration program for rental
               units within the political subdivision.


               (b) A political subdivision may assess a one (1) time registration
               fee of not more than five dollars ($5) for a rental unit
               community. . . .


       App. to Br. of Appellant, Vol. II at 165 (HB 1403 Introduced Version Sec. 6)

       (emphasis added). This original proposal would have allowed a political

       subdivision to register rental units but restricted it to imposing a one-time-only

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 10 of 56
       fee of not more than five dollars. The Legislative Services Agency (“LSA”)

       prepared a Fiscal Impact Statement noting there are fourteen Indiana cities and

       towns, including Bloomington, Hammond, and West Lafayette, that have

       rental registration and/or inspection programs with fees ranging from $10 per

       unit to $200 per rental community. Id. at 169. The Fiscal Impact Statement

       states every program, except for Bloomington’s, was created after 2000.


[12]   A new version of House Bill 1403 was then introduced which included the Fee

       Restriction still in place today: “A political subdivision may impose on an

       owner or landlord of a rental unit an annual registration fee of not more than

       five dollars ($5).” Id. at 177 (HB 1403 Amended Version Sec. 6) (emphasis

       added). This proposed amendment—applicable to all political subdivisions—

       allowed a political subdivision to register rental units but restricted it to

       imposing a yearly fee of not more than five dollars. This proposed version of

       the statute was later amended to add an exemption to the Fee Restriction:

       “This [Fee Restriction] section does not apply to a political subdivision with a

       rental registration or inspection program created before July 1, 1984.” Id. at

       183. With this latest amendment, political subdivisions with programs falling

       within the Fee Exemption were not subject to the Fee Restriction and could

       therefore charge an annual registration fee of more than five dollars. LSA

       issued a new Fiscal Impact Statement noting that of the fourteen previously

       noted cities or towns with rental registration programs, “[t]wo 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.” Id.


       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 11 of 56
       at 187.5 Hammond was not mentioned in the Fiscal Impact Statement despite

       its inspection program starting in 1961.


[13]   The bill as enacted and effective June 30, 2014, reads, in pertinent part:


               (a) This section does not apply to a political subdivision with a
               rental registration or inspection program created before July 1,
               1984.


               (b) This chapter does not prohibit a political subdivision from
               establishing and enforcing a registration program for rental units
               within the political subdivision.


               (c) A political subdivision may impose on an owner or landlord
               of a rental unit an annual registration fee of not more than five
               dollars ($5).


               (d) A registration fee imposed under subsection (c) covers all the
               rental units in a rental unit community. However, if a rental unit
               is not part of a rental unit community, a registration fee may be
               imposed for each separate parcel of real property on which a
               rental unit is located.


               (e) If the ownership of a rental unit community or the ownership
               of a parcel of real property on which a rental unit is located
               changes, a political subdivision may require the new owner of the
               rental unit community or new owner of the real estate parcel to:




       5
         Although the chart included in the Fiscal Impact Statement says West Lafayette’s rental certificate program
       began in 2005, statements before the Interim Study Committee indicated West Lafayette created its
       inspection program in 1976. App. to Br. of Appellant, Vol. III at 192. Regardless of the date in the Fiscal
       Impact Statement, it appears undisputed that West Lafayette’s program qualifies for the Fee Exemption.

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018                    Page 12 of 56
                        (1) pay an annual registration fee of not more than five
                        dollars ($5); and


                        (2) provide updated registration information to the
                        political subdivision;


               not later than thirty (30) days after the change of ownership.


       Ind. Code § 36-1-20-5 (2014). It is under this version of the statute the

       Hammond-HKP dispute initially arose.


                                          D. 2015 – HEA 1165
                     Amendment to the Definition of “Rental Registration and
                                     Inspection Program”

[14]   House Bill 1165 proposed amending section 36-1-20-5 so that the Fee

       Exemption applied only to “a political subdivision with a rental registration or

       inspection program created after July 1, 1977, and before July 1, 1984.” App. to

       Appellant’s Br., Vol. II at 211 (HB 1165 Introduced Version Sec. 6) (emphasis

       on added language). LSA’s Fiscal Impact Statement for this bill noted the

       proposed amendment would mean Bloomington’s program, which began in the

       early 1970s6 and charges about $75, would be subject to the Fee Restriction. Id.

       at 215.




       6
        Statements before the Interim Study Committee on Economic Development in 2013 suggested that
       Bloomington’s program began in 1961. See App. to Br. of Appellant, Vol. III at 192.

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018             Page 13 of 56
[15]   Also, up to this point, Indiana Code chapter 36-1-20 had incorporated the

       definitions in Indiana Code chapter 32-31-3. Ind. Code § 36-1-20-1. Indiana

       Code section 32-31-3-8(2)(C) defines a “rental unit” to include a “rooming

       house.” HB 1165 proposed adding the following definition of “rental

       registration or inspection program” to Indiana Code chapter 36-1-20:


               As used in this chapter, “rental registration or inspection
               program” means a program authorizing the registration or
               inspection of rental units and no other type of dwelling. The
               term does not include a general housing registration or inspection
               program.


       App. to Br. of Appellant, Vol. II at 208 (HB 1165 Introduced Version Sec. 2).

       And a “rental unit” would be defined as:


               (1) a structure, or the part of a structure, that is used as a home,
               residence, or sleeping unit by:
                       (A) one (1) individual who maintains a household; or
                       (B) two (2) or more individuals who maintain a common
               household; or
               (2) any grounds, facilities, or area promised for the use of a
               residential tenant, including the following:
                       (A) An apartment unit.
                       (B) A mobile home space.
                       (C) A single or two (2) family dwelling.


       Id. at 209 (HB 1165 Introduced Version Sec. 3). The result of these

       amendments would be that a “rental registration or inspection program” as

       defined for purposes of chapter 36-1-20 included programs that only inspected

       rental units and not rooming houses or boarding houses. LSA’s Fiscal Impact


       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 14 of 56
       Statement noted the number of units subject to rental registration fees in

       political subdivisions may be reduced with the elimination of rooming houses

       and boarding houses from the definition. Bloomington’s rental inspection

       program includes the inspection of rooming houses. Id. at 222 (Bloomington

       Municipal Code § 16.02.020 defining a rental unit as “any dwelling unit,

       rooming house, or rooming unit occupied by a person(s) other than the owner

       and/or their legal dependent”) and 225 (Bloomington Municipal Code §

       16.03.040(a) requiring “[e]ach residential rental unit” to receive an inspection).

       West Lafayette’s rental certificate program defines rental housing to include a

       “rooming unit.” App. to Br. of Appellant, Vol. IV at 167 (West Lafayette City

       Code § 117.02(n) defining rental housing as “any room, dwelling unit, rooming

       unit or portion thereof let or intended to be let to a family or person for

       compensation”). Hammond’s ordinance defines “rental housing” to include a

       “rooming unit.” Hammond City Code § 96.151.


[16]   Ultimately, the date range for the Fee Exemption was abandoned, and section

       36-1-20-5 remains as it was in 2014, imposing a fee restriction on political

       subdivisions unless they had a rental registration or inspection program prior to

       July 1, 1984. The only change made by HEA 1165 to Indiana Code chapter 36-

       1-20 was to add a definition for a “rental registration or inspection program” – a

       definition, notably, that is different than originally proposed. As enacted

       retroactively to January 1, 2015, Indiana Code section 36-1-20-1.2 states, in

       pertinent part:




       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 15 of 56
               As used in this chapter, “rental registration or inspection
               program” means 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.


       Ind. Code § 36-1-20-1.2. This means that to qualify as a “rental” program, the

       program must apply to all rental properties and to only rental properties. The

       effect of the 2015 legislation was that Bloomington and West Lafayette

       continued to qualify for the Fee Exemption because their programs applied only

       to rental housing. But Hammond no longer qualified for the Fee Exemption on

       two fronts. First, relevant to the first sentence of the newly-added definition,

       Hammond’s program permits the inspection of non-rental housing. See App. to

       Br. of Appellant, Vol. II at 101 (Section 2.1 of Hammond’s 1961 ordinance

       authorizing inspections of “dwelling units, rooming units, and premises” in

       Hammond). Second, relevant to the second sentence of the definition,

       Hammond’s inspection program is both a permissive general inspection

       program and a mandatory hotel and rooming house inspection program. See id.

       at 108 (Section 9.2(A) of Hammond’s 1961 ordinance requiring inspection of

       every hotel and rooming house in Hammond twice a year).


                             E. Summary of Legislative Changes
[17]   Beginning in 2011, the General Assembly began regulating political

       subdivisions’ rental registration and inspection programs. The original

       proposed legislation would have barred registration programs and therefore


       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 16 of 56
registration fees altogether, but that proposal was rejected. Instead, the General

Assembly allowed registration programs and restricted the fees that could be

charged to five dollars annually for a rental unit community unless the program

was created prior to July 1, 1984, and fit a specific definition. Several proposed

amendments that would have excluded Bloomington in particular from the Fee

Exemption were abandoned. The result of the legislative amendments is that

every political subdivision but Bloomington and West Lafayette are subject to

the Fee Restriction. Hammond’s City Controller submitted an affidavit in

which she noted the consequences of the legislative changes for Hammond’s

rental registration and inspection program:


        8. Hammond employs six full time inspectors, who conduct
        inspections of rental properties.
        9. Hammond also employs part time inspectors.
        10. Hammond also incurs costs and expenses for supplies
        necessary to run the rental inspection and registration program.
        11. The cost of administering the rental registration and
        inspection program exceeds the revenue that Hammond receives
        from rental registration fees.
        12. Even when Hammond charged a rental registration fee of
        $80, the revenue generated from that fee did not fully cover the
        costs of administering the program . . . .
        13. After Hammond was forced to reduce its rental registration
        fee from $80 to $5, the amount of rental registration fees that
        Hammond has collected has declined by almost 90%.
        14. This reduction will create [sic] budget shortfall for
        Hammond’s rental registration and inspection program of over
        $700,000.




Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 17 of 56
       App. to Br. of Appellant, Vol. V at 149.7


                                              III. The Dispute
[18]   HKP is the management company for two rental communities in Hammond,

       Golden Manor Apartments and Saxony Townhomes. On May 20, 2014,

       Hammond sent letters to HKP seeking to collect a total of $85,840 in 2014

       rental registration fees that had not yet been paid for those two properties.8 See

       App. to Br. of Appellant, Vol. II at 198-99 (letter regarding Golden Manor,

       seeking $6,400 in registration fees and $40,000 in late fees) and 200-01 (letter

       regarding Saxony, seeking $5,440 in registration fees and $34,000 in late fees).

       HKP’s regional manager replied by email on June 2, 2014, acknowledging

       receipt of the letters:


                The delay in payment was to determine if the fees of $80 per unit
                would be pro-rated due to the changes that HB 1403 brought
                about with regard to rental registration fees. The fees are for
                2014 but will significantly reduce after 6-30-14 so I am sure you
                can understand why we worked to determine what, if any portion
                of the fees would be pro-rated.




       7
        Because of restrictions on inspections of rental housing in Indiana Code section 36-1-20-4.1, Hammond
       could not simply increase the fee it charges for inspections in order to make up for this shortfall.
       8
        Section 96.152(A) of Hammond’s City Code provides that any owner of real property that is used as rental
       housing in the city is required to register the property annually by April 15. Section 96.152(F) provides for a
       $500 per unit late fee for each rental unit not registered by April 15.

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018                      Page 18 of 56
       Id. at 203. HKP’s corporate counsel also replied to Hammond by letter dated

       June 6, 2014:


               Please note that HKP disputes the validity of the alleged debts of
               $39,440.00 and $46,400.00 as set forth in your May 20th letters,
               and in fact, a hearing with the Hammond Board of Public Words
               and Safety has been scheduled for July 3, 2014 to address this
               specific issue.


               HKP is hopeful to have a resolution to this dispute as the result
               of or before the July 3, 2014 hearing, and as such, would request
               that your offices forego any further collection or other litigation
               efforts at this time and pending the determination that is issued
               with regard to the upcoming hearing.


       Id. at 205.


[19]   Before the July 3 hearing, Hammond filed a declaratory judgment action.9 The

       complaint alleges, in pertinent part:


               7. On or about March 26, 2014, Governor Mike Pence signed
               House Enrolled Act 1403 (“HEA 1403”) into law. HEA 1403
               amended several sections of the Indiana Code concerning local
               government, and added a few sections as well. . . .


               8. HEA 1403, Section 5 is the section relevant to this Complaint,
               and effective June 30, 2014, will be added to the Indiana Code as
               a new section, Indiana Code § 36-1-20-5. HEA 1403, Section
               5(c) states: “A political subdivision may impose on an owner or



       9
        The original complaint was allegedly filed June 23, 2014, but is not included in the record. The following
       comes from the first amended complaint, filed September 15, 2014. There is no indication what was
       amended from the original to the first amended complaint.

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018                    Page 19 of 56
        landlord of a rental unit an annual registration fee of not more
        than five dollars ($5).” HEA 1403, Section 5(c), therefore
        purports to cap Indiana political subdivisions’ annual rental
        registration fees at $5 per rental unit. An exemption is provided,
        however, to a “political subdivision with a rental registration or
        inspection program created before July 1, 1984.” HEA 1403,
        Section 5(a) (emphasis added).


        9. Hammond created a rental inspection program in 1961 by
        enacting Hammond Ordinance Number 3337 . . . . Specifically,
        Ordinance 3337 authorized and directed Hammond’s Health
        Officer and/or Fire Inspector and/or the Building Commissioner
        (“Inspection Officials”) to “make inspection to determine the
        condition of dwelling units, rooming units, and premises located
        within the City of Hammond . . . .” Dwelling units and rooming
        units are defined, so that they encompass rental property as well
        as purchased property. . . .


        10. Thereafter, in 2001, Hammond created a rental registration
        program by enacting Hammond Ordinance Number 8327 . . . .
        This Ordinance required all “rental housing units” to register
        annually and pay a $5 annual fee for “each dwelling or rooming
        unit.” Four ordinances since 2001 have amended Hammond’s
        rental registration program. . . . The most recent amendment,
        Ordinance 9060, enacted in 2010, changed the annual
        registration fee from $10 to $80. . . .


        11. Based on the foregoing, Hammond created a rental
        inspection program before July 1, 1984, and its rental registration
        program after that date. Because Hammond is “a political
        subdivision with a rental registration or inspection program
        created before July 1, 1984,” HEA 1403, Section 5(a) (emphasis
        added), Hammond’s current rental registration program, which
        requires an $80 per unit annual registration fee, qualifies for the
        exemption from the $5 per unit cap on rental registration fees in
        HEA 1403, Section 5(c).
Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 20 of 56
               12. . . . In 2014, [HKP] has refused to pay the $80 per unit annual
               registration fee for Saxony Townhomes and Golden Manor
               Apartments because it contends that the $80 fee conflicts with the
               $5 cap on rental registration fees in HEA 1403, Section 5(c). . . .
               In other words, [HKP] disputes Hammond’s position that
               Hammond is entitled to the exemption in HEA 1403, Section
               5(a) from the $5 cap.


       Id. at 23-25. Accordingly, Hammond sought a declaration that:


               (1) the exemption under HEA 1403, Section 5(a) applies to any
               Indiana political subdivision that created either a rental
               inspection program or a rental inspection [sic] program before
               July 1, 1984; and (2) Hammond’s current rental registration
               program, therefore, qualifies for the exemption under HEA 1403,
               Section 5(a), is lawful under HEA 1403, and can continue to be
               implemented and enforced against all rental property owners and
               managers in Hammond, including but not limited to [HKP] . . . .


       Id. at 26.


[20]   After HEA 1165 was enacted in 2015 amending the definition of “rental

       registration or inspection program,” Hammond amended its complaint. Count

       I still sought a declaration that in 2014, Hammond qualified for the Fee

       Exemption and HKP could not dispute the 2014 registration fees owed.

       Hammond alleged the enactment of HEA 1165 “confirms that Hammond

       qualified for the Fee Exemption in 2014. If Hammond did not, the Legislature

       would have seen no need to enact HEA 1165 to disqualify Hammond from the

       Fee Exemption beginning in 2015.” Id. at 91. Newly added Counts II and III

       alleged the 2015 version of Indiana Code section 36-1-20-5 violated the Indiana


       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 21 of 56
       Constitution. Count II alleged a violation of Article 4, Section 22 prohibiting

       special laws “[r]elating to fees or salaries.” Count III alleged a violation of

       Article 4, Section 23 requiring that “in all . . . cases where a general law can be

       made applicable, all laws shall be general . . . .” In both cases, Hammond

       alleged that the Fee Exemption in section 36-1-20-5(a) could not be severed

       from the remainder of the section.


[21]   Both Hammond and HKP filed motions for summary judgment. Hammond’s

       position was that its rental inspection program was created prior to July 1,

       1984, and it therefore qualified for the Fee Exemption in 2014 but the legislative

       history of the statutory amendments shows the Fee Exemption was intended to

       benefit only Bloomington and West Lafayette to the exclusion of all other

       political subdivisions and that the 2015 amendment finally accomplished that.

       Hammond contended the legislation is unconstitutional special legislation

       because the legislation creates non-uniform rental registration fees throughout

       the state when laws of general applicability could be made. HKP took the

       position that 1) Hammond did not have a rental registration or inspection

       program that was created before July 1, 1984, as that term is now defined, and

       was therefore not entitled to the fees it requested for 2014; 2) Hammond lacks

       standing to raise its constitutional claims based on precedent from our supreme

       court; 3) the “fees” referred to in Article 4, Section 22 are fees collected by

       public officials to compensate them for their services, not the “fees” implicated

       by this case; 4) the Fee Exemption is constitutional general legislation; 5) the

       Fee Exemption constitutes a commonly used grandfather clause that has never


       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 22 of 56
       been considered special legislation; 6) even if it is special legislation, it is

       nonetheless constitutional, justified by the special characteristics of

       Bloomington and West Lafayette; and 7) if the Fee Exemption is

       unconstitutional, it is severable from the rest of the statute.


[22]   In addition, the Indiana Attorney General was permitted to intervene in this

       action for the “limited purpose of defending the constitutionality of Indiana’s

       laws, to the extent they are called into question.” App. to Br. of Appellant, Vol.

       III at 67. The State of Indiana filed a Memorandum of Law in Support of the

       Constitutionality of Indiana Code Section 36-1-20-5 mostly aligned with HKP’s

       position. The State, like HKP, first asserted Hammond lacks standing. Unlike

       HKP, however, the State acknowledged the statute was special legislation, but

       argued it was nonetheless constitutional as it was based on inherent

       characteristics of Bloomington and West Lafayette, primarily the high rate of

       renter-occupied housing as compared with other political subdivisions with

       rental registration or inspection programs.


[23]   Following extensive briefing by the parties and the State, the designation of

       numerous exhibits as evidence on both sides, and a hearing, the trial court

       issued an order on August 29, 2016, granting summary judgment to Hammond

       on Count I of its complaint upon concluding Hammond was entitled to the

       registration fees it sought from HKP for 2014.10 The trial court also granted




       10
          HKP does not appeal this ruling. The only issue before the court on appeal concerns the constitutionality
       of Indiana Code section 36-1-20-5. Findings and conclusions related to Count I have been omitted below.

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018                    Page 23 of 56
summary judgment to HKP on Counts II and III of Hammond’s complaint

upon concluding Indiana Code section 36-1-20-5 is constitutional special

legislation. Specifically, with respect to Counts II and III the trial court

concluded:


        A. Hammond has standing.


        1. HKP and the State contend that Hammond does not have
        standing to bring Counts II and III. . . . Hammond brought its
        suit under the Declaratory Judgment Act (“Act”).


        ***


        4. HKP and the State argue that Howard County v. Kokomo City
        Plan Comm’n, 330 N.E.2d 92 (Ind. 1975), forecloses Hammond’s
        standing to bring Counts II and III. But in Howard County, the
        county did not allege that it had suffered any injury. Here,
        Hammond alleges an injury. And in Howard County, the county
        was not attempting to uphold the challenged validity of its
        ordinance. Here, Hammond is attempting to uphold the
        challenged validity of its ordinance, and in Indiana Dep’t of Nat.
        Resources v. Newton Cnty., 802 N.E.2d 430, 433 (Ind. 2004), the
        Supreme Court held – based on Howard County – that a county
        had standing to “uphold[] the challenged validity of its
        ordinances.” Moreover, the Court of Appeals has rejected HKP
        and the State’s broad reading of Howard County – “Howard County
        does not hold a county may not seek to invalidate a statute;
        rather, a county cannot do so in the absence of any injury to the
        county itself.” Marion Cnty. v. State, 888 N.E.2d 292, 297 (Ind.
        Ct. App. 2008).


        5. Hammond’s rights, status, and legal relations have been
        affected. So, Hammond has standing to bring all of its claims

Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 24 of 56
        under the Act, and it seeks to uphold the validity of its challenged
        ordinance. So, it has standing under Newton County.


        ***


        C. The Fee Exemption is special legislation.


        9. In Counts II and III, Hammond alleged the Fee Exemption is
        special legislation in violation of Ind. Const. Art. IV Sections 22
        and 23. During briefing, the State conceded that the Fee
        Exemption is special legislation. HKP argues the Fee Exemption
        is a standard grandfather clause.


        10. “The determination of whether a law is special or general is a
        threshold question in determining its constitutionality under both
        Article IV, Section 22 and Section 23.” A law is “special if it is
        designed to operate upon or benefit only particular
        municipalities.”


        ***


        12. The Fee Exemption singles out a smaller group for special
        treatment and is special legislation. Until 2013 . . ., all political
        subdivisions could charge rental registration fees of any amount.
        At least ten municipalities had fees of more than $5. In 2014, the
        Fee Exemption limited the political subdivisions that could
        charge more than $5 to those with “a rental registration or
        inspection program created before July 1, 1984. . . .” It appears
        the Legislature used the 1984 date to single out a group
        (Bloomington and West Lafayette) smaller than the previously
        specified class (all political subdivisions) to receive a special
        benefit (the Fee Exemption), making the Fee Exemption special
        legislation.



Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 25 of 56
        ***


        15. Despite this evidence, HKP contends the Fee Exemption is a
        standard grandfather clause. The actions the Legislature took
        after Hammond filed this suit undermine this contention. “A
        statute is ‘special’ if it ‘pertains to and affects a particular case,
        person, place, or thing, as opposed to the general public.” After
        Hammond filed this suit, the Legislature attempted to affect this
        case and remove Hammond from the Fee Exemption in four
        ways. The first two efforts accidentally removed Bloomington
        from the Fee Exemption, so they were dropped. The last two
        efforts succeeding in removing only Hammond, and they were a
        clear effort to affect this case, demonstrating that the Fee
        Exemption is special legislation.


        ***


        D. The Fee Exemption does not violate Ind. Const. Art. IV, Sec
        22.


        18. In Count II . . ., Hammond alleges that the Fee Exemption
        violates Article IV, Section 22, prohibiting “local or special laws
        . . . [r]elating to fees or salaries, except that the laws may be so
        made as to grade the compensation of officers in proportion to
        the population and the necessary services required.”


        19. The term “fees” used in Section 22 refers to the nineteenth
        century “fee system” of using fees collected by county officers . . .
        to compensate them directly. In the 1890’s, the State abrogated
        this “fee system,” and all county officials were instead
        compensated by salaries.


        20. Accordingly, the “fees” referenced in Article IV, Section 22
        are fees paid directly to county officials as compensation.

Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 26 of 56
        However, the annual rental registration fee regulated by Indiana
        Code § 36-1-20-5 is not paid directly to county officials as
        “salary” or compensation; rather, it is directed to a special fund.
        Therefore, the fee limitation at issues does not regulate a “fee” as
        contemplated by Article IV, Section 22. HKP is therefore
        entitled to judgment as a matter of law on Count II.


        E. Ind. Code 36-1-20-5 does not violate Section 23.


        21. In Count III . . ., Hammond alleges the Legislature used the
        July 1, 1984 cut-off date in the Fee Exemption to exempt only
        Bloomington and West Lafayette from the Fee Restriction of
        Subsection 5(c). Hammond contends this violates Article IV,
        Section 23 of the Indiana Constitution, which requires that “in all
        . . . cases where a general law can be made applicable, all laws
        shall be general, and of uniform operation throughout the State.”
        To be unconstitutional under Section 23, “a law must not only be
        special but subject to a law of general applicability.” The test is
        “whether there is something about the class [created by the
        special law] that makes it unique and whether that uniqueness
        justifies the differential treatment.”


        22. Bloomington and West Lafayette are unique in ways that
        justified their exemption from the Fee Restriction. The housing
        markets in Bloomington and West Lafayette are dominated by
        rental housing like nowhere else in the state, giving the owners of
        rental properties in those cities unique leverage in their housing
        markets. At the same time, as relatively small cities with large
        numbers of college students living in them, Bloomington and
        West Lafayette have a unique pool of tenants – young,
        unsophisticated, first-time renters. With inspection programs,
        they ensured the landlords provided safe, habitable rental
        housing to their inexperienced tenant populations; with
        registration programs, they ensured the landlords could be
        identified and held accountable for housing-code violations.
        Unlike other cities in the state, Bloomington and West Lafayette
Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 27 of 56
               have for decades imposed the costs of their special oversight on
               the landlords themselves.


               23. It is at least conceivable that the Legislature, by enacting the
               Fee Exemption of Ind. Code § 36-1-20-5(a), decided that the
               unique circumstances of the housing markets in Bloomington
               and West Lafayette justified exempting them from the Fee
               Restriction imposed by Subsection 5(c). Therefore, Hammond
               has not satisfied its burden of negating “every conceivable basis
               which might have supported the classification.” Accordingly,
               Ind. Code § 36-1-20-5 is constitutional special legislation under
               Article IV, Section 23, and HKP is entitled to judgment as a
               matter of law on Count III . . . .


       App. to Br. of Appellant, Vol. IX at 239-46 (some citations omitted). After the

       trial court denied Hammond’s motion to correct error, Hammond initiated this

       appeal.



                                 Discussion and Decision                              11




                    I. Summary Judgment Standard of Review
[24]   When reviewing the grant or denial of summary judgment, we apply the same

       test as the trial court: summary judgment is appropriate only if the designated

       evidence shows there is no genuine issue of material fact and the moving party

       is entitled to judgment as a matter of law. Ind. Trial Rule 56(C); Sedam v. 2JR




       11
         We heard oral argument on this case on December 12, 2017, in Indianapolis, Indiana. We commend
       counsel for their excellent written and oral advocacy.

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018            Page 28 of 56
       Pizza Enterps., LLC, 84 N.E.3d 1174, 1176 (Ind. 2017). Our review is limited to

       those facts designated to the trial court, T.R. 56(H), and we construe all facts

       and reasonable inferences drawn from those facts in favor of the non-moving

       party, Meredith v. Pence, 984 N.E.2d 1213, 1218 (Ind. 2013). On appeal, the

       non-moving party carries the burden of persuading us the grant of summary

       judgment was erroneous. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). A

       grant of summary judgment will be affirmed if it is sustainable upon any theory

       supported by the designated evidence. Miller v. Danz, 36 N.E.3d 455, 456 (Ind.

       2015).


[25]   “Specific findings and conclusions by the trial court are not required, and

       although they offer valuable insight into the rationale for the judgment and

       facilitate our review, we are not limited to reviewing the trial court’s reasons for

       granting or denying summary judgment.” Doe v. Donahue, 829 N.E.2d 99, 106

       (Ind. Ct. App. 2005), trans. denied, cert. denied, 547 U.S. 1162 (2006). In

       addition, the “[f]act that the parties [made] cross-motions for summary

       judgment does not alter our standard of review. Instead, we must consider each

       motion separately to determine whether the moving party is entitled to

       judgment as a matter of law.” Id. (citation omitted).


[26]   Finally, as this proceeding concerns the constitutionality of a statute, we note

       that a statute is “clothed with the presumption of constitutionality until clearly

       overcome by a contrary showing.” Zoeller v. Sweeney, 19 N.E.3d 749, 751 (Ind.

       2014) (citation omitted). We resolve all doubts in favor of the legislature, and

       where there are multiple possible interpretations of the statute, we will choose

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 29 of 56
       the interpretation that upholds the statute. State v. Buncich, 51 N.E.3d 136, 141

       (Ind. 2016). “To doubt the constitutionality of a law is to resolve in favor of its

       validity.” Henderson v. State, 137 Ind. 552, 36 N.E. 257, 258 (1894).


                                                   II. Standing
[27]   We begin with the threshold question raised by both HKP and the State

       regarding whether Hammond has standing to pursue this constitutional

       challenge to Indiana Code section 36-1-20-5.12 Although HKP agrees with the

       trial court’s resolution that the Fee Exemption does not violate the Indiana

       Constitution, it urges affirming on the alternate ground of standing in

       furtherance of our policy of exercising judicial restraint in constitutional

       matters. See Jones v. Jones, 832 N.E.2d 1057, 1059 (Ind. Ct. App. 2005) (noting

       we must refrain from deciding constitutional questions when non-constitutional

       grounds are available for resolving the case).


[28]   Standing “focuses on whether the complaining party is the proper person to

       invoke the court’s power.” State ex rel. Cittadine v. Ind. Dep’t of Transp., 790

       N.E.2d 978, 979 (Ind. 2003). Only those who have a personal stake in the

       outcome of the litigation and who show they have suffered or are in immediate

       danger of suffering a direct injury have standing. Id.




       12
          The State filed a Notice of Joining Appellee’s Brief in this matter, noting HKP’s brief “asserts the
       arguments that the Attorney General raised in the trial court” and declining to file a separate brief “in the
       interests of judicial economy and to avoid a duplication in briefing.” References to HKP therefore include
       the State except where noted otherwise.

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018                      Page 30 of 56
[29]   HKP cites Bd. of Comm’rs of Howard Cty. v. Kokomo City Plan Comm’n, 263 Ind.

       282, 330 N.E.2d 92 (1975), as support for its position that Hammond does not

       have standing to bring this case. In Howard County, the Board of

       Commissioners of Howard County challenged a statute authorizing cities in

       counties with a population under 84,000 to exercise planning and zoning

       authority for two miles outside city boundaries without the consent of county

       commissioners. The county made several constitutional arguments that the

       population classification discriminated against residents of the county, invoking

       Article 4, Sections 22 and 23, among others. With respect to Article 4, the

       county claimed, “the residents of the contiguous area in counties such as

       Howard are thereby discriminated ageinst [sic] in their political and civil

       rights.” Id. at 295, 330 N.E.2d at 100. Our supreme court noted the county

       “makes no claim that it, as a governmental entity, is injured by the statute, nor

       would such a claim stand up against the power of the State over its

       subdivisions.” Id.


               When a governmental subdivision of the State receives a
               command from the Legislature to exercise or to refrain from
               exercising the police power in a particular manner or in a
               particular area of governmental concern, that governmental body
               is powerless to invoke . . . Art. 4, ss 22 and 23, against such a
               command on its own behalf, or on behalf of its citizens.


       Id. The court determined that, although a state may act as parens patriae on

       behalf of its citizens, a county cannot. Id. at 101. “[S]ince a county has not

       been recognized as a sovereign which may protect its citizens,” the county’s


       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 31 of 56
       attempt to “represent the interests of individual residents to vindicate

       constitutional rights personal to them” fails for lack of standing to assert the

       claims of its residents. Id. at 295, 330 N.E.2d at 100-01; see also Bd. of Comm’rs of

       Union Cty. v. McGuinness, 80 N.E.3d 164, 170 (Ind. 2017) (affirming dismissal of

       county’s complaint against the Indiana Department of Transportation for

       damage to septic systems of county residents because county did not aver a

       personal interest, only an interest on behalf of its citizens). HKP essentially

       asserts this case holds that under no circumstances may a political subdivision

       assert rights under Article 4, Sections 22 or 23, and states that in the forty-two

       years since this decision, “this holding has never been questioned, much less

       overturned.” Brief of Appellee at 29.


[30]   Although it may never have been explicitly overturned, the extent of the Howard

       County decision is indeed questionable. Where HKP would have Howard

       County apply under all circumstances in which an Article 4 claim is raised by a

       political subdivision, subsequent cases have clearly delineated a political

       subdivision’s ability to challenge a state statute based on the nature of the injury

       alleged. In State ex rel. State Bd. of Tax Comm’rs v. Marion Superior Court, 271 Ind.

       374, 377, 392 N.E.2d 1161, 1164 (1979), our supreme court, citing Howard

       County, stated, “A county or an official thereof possesses standing to challenge

       an interpretation or application of a statute if it can be demonstrated that the

       party is seeking the resolution of a legitimate controversy surrounding the

       operation of the statute.” The court determined a county, through its county

       council and commissioners, had standing to maintain an action challenging a

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 32 of 56
       State Board of Tax Commissioners determination regarding county property

       tax rates because the county “has a vital interest at stake [and i]t would be

       anomalous indeed for us to hold that a county or its officials cannot resolve in a

       court of law a bona fide dispute . . . over the application of a state statute.” Id.

       at 378, 392 N.E.2d at 1165. In so holding, the court distinguished cases in

       which the complaining political subdivisions were denied standing because in

       those cases, the city or county complainant had no “personal” interest in the

       dispute. Id. at 377-78, 392 N.E.2d at 1165 (citing, e.g., Lentz v. Trustees of Ind.

       Univ., 248 Ind. 45, 221 N.E.2d 883 (1966), where the county assessor tried to

       challenge a decision of the State Tax Board as to a particular piece of property

       owned by a private entity).


[31]   Similarly, in Ind. Dep’t of Natural Res. v. Newton Cty., 802 N.E.2d 430, 433 (Ind.

       2004), the supreme court, again citing Howard County, decided the merits of a

       county’s constitutional challenge to a statute that conflicted with a county

       ordinance, noting “the County has a legitimate interest in upholding the

       challenged validity of its ordinances just as it does in seeking interpretation of

       statutes that affect its governance.”13 And in Marion Cty. v. State, 888 N.E.2d

       292 (Ind. Ct. App. 2008), Marion and St. Joseph Counties challenged the

       constitutionality of a state statute authorizing the State to recoup from counties




       13
          The specific challenge in Newton County was to the constitutionality of a statute as a violation of separation
       of powers. Id. at 432.



       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018                       Page 33 of 56
       a portion of its expenses in operating juvenile detention facilities.14 The State

       sought an arrearage of approximately $75 million dollars from the counties.

       The State, citing Howard County, asserted that “with rare exceptions, a county

       and its government have no standing and are powerless to challenge the

       constitutionality of a state statute.” Id. at 297. This court disagreed: “Howard

       County does not hold a county may not seek to invalidate a statute; rather, a

       county cannot do so in the absence of any injury to the county itself.” Id.

       Because the counties “have a stake in the $75 million at issue in this case”—

       money that would be paid out of their own treasuries—the court held the

       counties had standing to pursue their claim. Id. at 298.


[32]   More particularly, several cases since Howard County have addressed the merits

       of a political subdivision’s Article 4, Sections 22 or 23 challenge to a statute if

       the political subdivision—rather than its constituents—had a direct stake in the

       outcome and was in danger of suffering a direct injury. See, e.g., Alpha Psi

       Chapter of Pi Kappa Phi Fraternity v. Auditor of Monroe Cty., 849 N.E.2d 1131,

       1134 (Ind. 2006) (addressing the merits of a county’s Article 4, Section 23

       argument regarding the constitutionality of a statute requiring the auditor to

       waive the requirement to timely file an application for exemption of a university

       fraternity property from taxation); Mun. City of S. Bend v. Kimsey, 781 N.E.2d

       683, 684 (Ind. 2003) (addressing the merits of a challenge under Article 4,




       14
          The counties challenged the statute as a violation of Article 9, Section 2, requiring the General Assembly
       to provide “institutions for the correction and reformation of juvenile offenders.”

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018                     Page 34 of 56
       Section 23 by the city of South Bend to a law applicable only to St. Joseph

       County allowing a majority of landowners in an affected area of the county to

       block annexation by a municipality). HKP posits that because standing was not

       addressed in Alpha Psi Chapter or Kimsey, it was likely waived by the opposing

       party failing to raise it. Nonetheless, Hammond itself stands to lose hundreds

       of thousands of dollars annually if it is restricted to collecting a five dollar

       annual rental registration fee due to the most recent iteration of Indiana Code

       section 36-1-20-5. See App. to Br. of Appellant, Vol. II at 170 (showing

       Hammond’s fee revenue in 2011 was $851,899 and in 2012 was $862,384).

       Hammond is not seeking to represent the interest of any individual, group of

       individuals, or business in this litigation; rather, it is seeking to represent its own

       interests and uphold its own ordinance regarding rental registration. Because

       Hammond has a direct stake in the outcome of this litigation and will sustain a

       direct injury if the statute is upheld, Hammond has standing to raise these

       claims.


                                III. The Indiana Constitution
[33]   Section 22 of Article 4 prohibits enactment of various local or special laws

       regarding sixteen enumerated subjects. Alpha Psi Chapter, 849 N.E.2d at 1134.

       Section 23 establishes a requirement of general laws where such can be made in

       all other cases. Id. Specifically, Article 4, Section 22 of the Indiana

       Constitution states:


               The General Assembly shall not pass local or special laws:
               ***

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 35 of 56
               Relating to fees or salaries, except that the laws may be so made
               as to grade the compensation of officers in proportion to the
               population and the necessary services required . . . .


       And Article 4, Section 23 of the Indiana Constitution states:


               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.


[34]   The determination of whether a law is special or general is a threshold question

       when analyzing its constitutionality under both Article 4, Sections 22 and 23.

       Alpha Psi Chapter, 849 N.E.2d at 1136. A statute is “general” if it applies to “all

       persons or places of a specified class throughout the state,” and a statute is

       “special” if it “pertains to and affects a particular case, person, place, or thing,

       as opposed to the general public.” Kimsey, 781 N.E.2d at 689 (citation

       omitted). “If the law is general, we must then determine whether it is applied

       generally throughout the State. If it is special, we must determine whether it is

       constitutionally permissible.” Id. at 690 (quoting Williams v. State, 724 N.E.2d

       1070, 1085 (Ind. 2000)).


[35]   The State conceded below that the statute in question was a special law. See

       App. to Br. of Appellant, Vol. V at 56 (from the State’s Memorandum of Law

       in Support of the Constitutionality of Indiana Code Section 36-1-20-5: “In this

       case, the statute at issue is permissible special legislation . . .”). HKP

       maintained below that the Fee Exemption was not special legislation just

       because fewer than all municipalities qualify; rather, HKP asserted the Fee

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 36 of 56
       Exemption was “a common tool of statutory drafting” “to protect those who

       have relied on the law as it existed before a new statute takes effect”: the

       grandfather clause. App. to Br. of Appellant, Vol. IV at 206, 208.15 However,

       HKP has apparently abandoned this tack on appeal, and we will proceed, as the

       trial court did, under the assumption that Indiana Code section 36-1-20-5 is,

       indeed, special legislation, as it pertains to and affects a particular case and/or

       place. Our task, then, is to determine whether the law is constitutionally

       permissible. Kimsey, 781 N.E.2d at 690.


[36]   Before discussing the constitutional questions, it is important to note that

       Hammond does not dispute the constitutionality of the Fee Restriction, as, in

       the absence of the Fee Exemption, it applies across the board to all political

       subdivisions. We also note the trial court found Hammond was entitled to the

       Fee Exemption in 2014 and granted Hammond summary judgment on its claim

       against HKP for approximately $86,000 in rental registration and late fees owed

       that year for its rental properties. HKP does not appeal this decision, and we

       proceed with the assumption that Hammond was entitled to the Fee Exemption

       as it existed in 2014. Additionally, Hammond does not argue that the 2014

       iteration of the statute is unconstitutional special legislation – nor would it be

       expected to, as the Fee Exemption at that point also benefitted Hammond. It is

       not the Fee Exemption per se that troubles Hammond, then, but the Fee




       15
          HKP argued in the alternative below as it argues now on appeal that even if the statute was special
       legislation, it was constitutional special legislation. See id. at 208.

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018                     Page 37 of 56
       Exemption in conjunction with the definition of “rental registration and

       inspection program” the legislature added in 2015. It is only when the

       legislature added the definition of “rental inspection or registration program”

       that excluded Hammond from the Fee Exemption that Hammond’s alleged

       injury arose.


                                       A. Article 4, Section 22
[37]   If a statute is special legislation relating to one of the sixteen enumerated

       subjects in Section 22, it is per se unconstitutional. See State v. Lake Superior

       Court, 820 N.E.2d 1240, 1249 (Ind. 2005) (holding two statutes applicable only

       to Lake County were unconstitutional upon finding they related to the

       assessment and collection of taxes, which is prohibited by Section 22), cert.

       denied, 546 U.S. 927 (2005). Hammond bases its Section 22 argument on the

       provision prohibiting the General Assembly from passing local or special laws

       relating to fees or salaries.


[38]   HKP argues (and the trial court agreed) the “fees” referred to in Section 22 are

       only those fees which are used to directly compensate public officials for their

       services as they were in 1851 when Section 22 was written. See State v. Hoovler,

       668 N.E.2d 1229, 1233 (Ind. 1996) (noting that in interpreting a provision of the

       Indiana Constitution, “we seek the common understanding of both those who

       framed it and those who ratified it”) (quotation omitted). As explained in

       Harter v. Bd. of Comm’rs of Boone Cty., 186 Ind. 301, 116 N.E. 304, 304 (1917),

       the “fee system” of compensating public officials meant officials collected


       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 38 of 56
certain fixed fees for services required to discharge the duties of their office. See

also Cowdin v. Huff, 10 Ind. 83 (1857) (explaining there were at that time three

modes of compensating persons engaged in public service: fees, which are

“compensation for particular acts or services”; wages, which are the

“compensation paid . . . for services by the day, week, etc.”; and salaries, which

are “per annum compensation to men in official . . . situations”). “This system

for compensating officials became so intolerable” that the legislature in 1891

replaced that system with a law fixing salaries applicable to county officers and

fees to be collected for certain services, requiring the fees to be paid into the

county treasury and salaries to be paid therefrom. Harter, 116 N.E. at 304-05.16

A series of amendments to the fee and salary acts and cases challenging those

laws followed until the supreme court in Harmon v. Bd. of Comm’rs of Madison

Cty., 153 Ind. 68, 54 N.E. 105 (1899), upheld the fee and salary acts against a

Section 22 challenge. HKP argues the Fees and Salaries clause of Section 22

has since been dormant and cannot support Hammond’s claim that the Fee

Restriction is unconstitutional pursuant to this provision because “fees” no

longer compensate county officers as they did when this section was enacted.




16
   When enacted in 1851, Section 22 originally prohibited special laws “in relation to fees and salaries.”
Because officials in larger and more populous counties provided more services, they collected more fees than
officials in smaller counties, and Section 22 was amended in 1881 to add the provision that “laws may be so
made as to grade the compensation of officers in proportion to the population and necessary services
required.” The section was further amended in 1984 as part of an overall revision “designed to make the
Indiana Constitution more understandable through the use of modern language.” Gallagher v. Indiana State
Election Bd., 598 N.E.2d 510, 513-14 (Ind. 1992), cert. denied, 506 U.S. 1081 (1993). The original introduction
“in relation to” was changed to “relating to” during this comprehensive revision.

Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018                     Page 39 of 56
[39]   Hammond contends the Fees and Salaries clause survived the abolishment of

       the fee system of compensation and the legislature cannot now pass a special

       law governing the payment of fees of any type. Indeed, with the passing of the

       fee and salary acts, fees continued to be paid although they no longer directly

       compensated public officials and the validity of those fees was considered

       separately from salaries under Sections 22 and 23. For instance, in State ex rel.

       McCoy v. Krost, 140 Ind. 41, 39 N.E. 46 (1894), the court discussed whether the

       Lake County recorder could charge $1.25 for recording a mortgage when the

       law set a fee of $1.00. The recorder argued the fee and salary acts were

       unconstitutional under Sections 22 and 23 because, for some reason, the law

       had failed to provide a salary for the Shelby County recorder (and other public

       officials in Shelby County). The court, however, noted the question before it

       pertained only to the validity of the law prescribing a fee for recording

       mortgages, “unless it shall be found that the fee provisions and the salary

       provisions of the law are so interdependent as to cause the fall of either by the

       invalidity of the other. A full reading of the act will disclose that the system of

       fees provided therein is complete . . . .” Id. at 47; see also State ex rel. Bd. of

       Comm’rs of Benton Cty. v. Boice, 140 Ind. 506, 39 N.E. 64, 64 (1894) (citing Krost

       and noting Krost “held that the act should be considered as presenting a system

       of fees apart from the system of salaries also provided” and adding that “either

       system must stand, and its constitutional validity be determined, independently

       of the other”). The court in Krost held, notwithstanding any deficiencies in the

       salary law, the fee law was valid and prescribed a fee of one dollar for recording

       mortgages.
       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 40 of 56
[40]   HKP is correct that there has been no litigation on this point in over a hundred

       years. But that does not mean the constitutional provision is no longer in effect;

       in fact, it remains very much a part of Indiana’s Constitution to this day. As

       noted above, in the early 1980s, the General Assembly, by joint resolution,

       undertook to amend the state constitution to update “certain antiquated style,

       language, or provisions.” 1982 Ind. Acts P.L. 231. Had the legislature

       considered the Fees and Salaries clause of Section 22 “antiquated,” it could

       have addressed it at that time. Amendments to thirty-four provisions of the

       constitution were proposed, including amendments to Section 22. And yet the

       only thing that was amended in the Fees and Salaries clause was the

       introductory language. We therefore cannot agree with HKP that the Fees and

       Salaries clause has no continued viability.


[41]   HKP also points out that the fees prescribed in the 1890s’ fee and salary acts

       were those paid to constitutional officeholders for services provided by the

       office, unlike the fees at issue herein. Again, this is correct, but a broader view

       of Section 22 and the cases that have construed it supports the notion that when

       the State sets a fee—any fee—it should apply uniformly. Cf. Harmon, 54 N.E. at

       107 (“The state has the right to appoint such reasonable fees to be paid for

       official services as it sees fit [and t]he fees for such official services must be

       uniform throughout the state.”). And here, the State has taken on the task of

       regulating the fee a municipality may charge for a service to landlords and

       tenants, but has not required the fee to be uniform across the state. In addition,

       the legislature has declared that rental registration fees must be maintained in a


       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 41 of 56
       special fund to be used only for reimbursing the costs of the registration and

       inspection programs. Ind. Code § 36-1-20-3. In this regard, the fees at issue

       herein are similar to the fees considered in the 1890s. The fees collected in the

       1890s were used to pay the salaries of the officials collecting them; here, the

       rental registration fees are used to pay for the implementation and operation of

       the program assessing them, which would include the salaries paid to those

       running the program. See App. to Br. of Appellant, Vol. V at 148-49 (affidavit

       of Hammond City Controller noting the Hammond rental registration and

       inspection program employs six full time inspectors, part time inspectors, and

       incurs costs and expenses for supplies in running the program). No other

       program or expense is paid for or supported by the monies generated by this

       program.


[42]   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.


                                       B. Article 4, Section 23
[43]   Even where a law does not address one of the Section 22 subjects, the residual

       clause of Section 23 requires it must nevertheless be general where a general law
       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 42 of 56
       can be made. See Ind. Const. Art. 4, sec. 23 (“. . . in all other cases where a

       general law can be made applicable, all laws shall be general, and of uniform

       operation throughout the State”) (emphasis added); Lake Superior Court, 820

       N.E.2d at 1245. Therefore, even if we had not found the rental registration and

       inspection fee to be subject to Section 22, it might still be unconstitutional under

       Section 23. In including the qualifying language—“where a general law can be

       made applicable”—the drafters expressed a preference for general laws while

       recognizing that special laws were sometimes necessary. Indiana Gaming

       Comm’n v. Moseley, 643 N.E.2d 296, 300 (Ind. 1994). “If the subject matter of

       an act is not amenable to a general law of uniform operation throughout the

       State, it is constitutionally permissible.” Buncich, 51 N.E.3d at 141.


[44]   Because all sides apparently now agree that section 36-1-20-5 is special

       legislation, see ¶ 35, supra; see also Alpha Psi Chapter, 849 N.E.2d at 1137 (the

       conclusion that a law is special is a threshold determination in analyzing a law’s

       constitutionality), a review of Hammond’s Section 23 claim calls upon us to

       determine only whether the statute is nevertheless permissible because the

       “relevant traits of the affected area are distinctive such that the law’s application

       elsewhere has no effect” and it therefore cannot be made applicable generally,

       Kimsey, 781 N.E.2d at 692. In other words, we consider whether there is

       something about the class that makes it unique and whether that uniqueness

       justifies its differential treatment. Alpha Psi Chapter, 849 N.E.2d at 1138. Our

       courts have, on several occasions, found unique circumstances justifying

       differential legislative treatment. See, e.g., Buncich, 51 N.E.3d at 142-43

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 43 of 56
       (upholding statute applicable only to Lake County aimed at reducing the cost of

       election administration by consolidating small precincts based on that county’s

       exceptionally high number of small precincts – both the highest number of

       small precincts in the state and more than twice as many as any other county);

       Lake Superior Court, 820 N.E.2d at 1250-51 (upholding tax reassessment statute

       based on Lake County’s history of systemic underassessment); Williams, 724

       N.E.2d at 1086 (upholding a statute providing for additional magistrates in

       Lake County superior courts because the need was objectively supported by a

       study comparing caseloads and finding Lake County, as a larger county with a

       larger docket, was in need of those judicial resources); Hoovler, 668 N.E.2d at

       1233-35 (upholding statute allowing Tippecanoe County to increase certain

       taxes because it was the only county subject to Superfund liability); Moseley, 643

       N.E.2d at 301-05 (upholding riverboat gambling statute that provided for voting

       by city rather than by county for Lake County alone because of the unique

       circumstances of its waterfront).


[45]   In other cases, we have found the proffered “unique circumstances” to be

       insufficient to warrant special legislation. See, e.g., Alpha Psi Chapter, 849

       N.E.2d at 1137-39 (striking statute that allowed three particular fraternities at a

       single university to retroactively extend time to file for a property tax exemption

       because the only thing separating them from other fraternities at the university

       was their failure to timely file: “[u]ltimately, the taxpayers’ argument boils

       down to a claim that they are unique because they, and they alone, require

       relief from the consequences of their own oversight”); Kimsey, 781 N.E.2d at


       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 44 of 56
       694 (striking annexation statute applicable only to St. Joseph County because

       neither “the need to preserve rural land around urban areas” nor the need to

       prevent competing cities from annexing each other’s land was unique to that

       county).


[46]   As Hammond points out, whether a general law can be made applicable is

       typically a hypothetical situation, because the law at issue in the typical case

       begins as a law granting special treatment to a small class. But in this case, it

       appears a statute was enacted as a general law and through the series of

       amendments detailed in the Facts and Procedural History section, supra, became a

       special law benefitting only Bloomington and West Lafayette. House Bill 1543

       in 2011 allowed municipalities who already had rental registration and

       inspection programs to continue to charge fees of their choosing (and allowed

       other municipalities to implement fees of any amount), provided those fees

       were maintained in a special fund to be used only for running the program.

       Thus, until House Bill 1313 in 2013, any political subdivision could charge

       rental registration fees of any amount.17 After the 2014 amendment added the

       Fee Restriction and Fee Exemption, every political subdivision but

       Bloomington, West Lafayette, and Hammond was restricted to charging a fee

       of five dollars based on a seemingly arbitrary date. And after the 2015

       amendment changed the definition of “rental registration and inspection



       17
         Recall that in 2013, HEA 1313 prohibited a political subdivision from adopting a regulation that imposed
       an inspection, registration, or other fee after February 28, 2013, allowing political subdivisions which already
       imposed a fee to continue, but not allowing political subdivisions to begin imposing a fee.

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018                      Page 45 of 56
       program,” only Bloomington and West Lafayette were eligible for the Fee

       Exemption, and therefore only those two cities may charge fees of their

       choosing. This result was clearly intentional and not merely serendipitous

       because the series of amendments focused on drafting a statute that achieved

       this very result: that every political subdivision was subject to the Fee

       Restriction but Bloomington and West Lafayette.


[47]   HKP argues Bloomington and West Lafayette are unique in ways that

       rationally justify the determination that they alone should be exempt from the

       Fee Restriction, citing their unique housing markets and “an unmatched history

       of employing rental registration and inspection programs to regulate all

       landlords . . . .” Br. of Appellee at 58; see also App. to Br. of Appellant, Vol. IX

       at 245-46 (trial court stating Bloomington and West Lafayette are unique

       because their housing markets are dominated by rental housing and their tenant

       pool is “young, unsophisticated, first-time renters” and they have for decades

       imposed the costs of oversight on landlords). But Hammond argues that these

       “unique characteristics” (while denying they are unique at all) existed in 2011,

       as well, and cannot suddenly justify allowing them to continue charging any fee

       they want while restricting all others to a five dollar fee. In fact, the reasons for

       singling out Bloomington and West Lafayette are primarily couched in terms of

       the characteristics of those cities and not necessarily by those possessed by the

       classification: a political subdivision with a rental registration or inspection

       program created before July 1, 1984 that does not have a general housing

       registration or inspection program or a registration or inspection program that


       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 46 of 56
       applies only to rooming houses and hotels. Ind. Code §§ 36-1-20-5(a); 36-1-20-

       1.2. Further, Hammond argues it is not just the Fee Exemption itself but the

       process by which the Fee Exemption came into being that demonstrates this is

       unconstitutional special legislation. The legislative history of Indiana Code

       chapter 36-1-20 shows that language was offered and rejected until the statute

       was crafted into the legislation it is today, benefitting only Bloomington and

       West Lafayette. Even LSA’s Fiscal Impact Statements specifically point out the

       impact of various proposed bills on Bloomington and West Lafayette.


[48]   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.




       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 47 of 56
[49]   In Buncich, our supreme court considered whether a law creating a committee in

       Lake County directed to identify small voting precincts amenable to

       consolidation was unconstitutional special legislation. The data available to the

       court showed that at the time the statute was enacted, Lake County had 525

       precincts, 130 of which qualified as “small” (fewer than 500 active voters). 51

       N.E.3d at 139. The number of small precincts in Lake County was more than

       double that of any other county (Allen County was next with fifty-eight out of

       338), and was also more than the total number of small precincts in the other

       seven most populous counties (Marion, Allen, Hamilton, St. Joseph,

       Vanderburgh, Porter, and Elkhart Counties had 129 small precincts combined).

       Id. at 139, 143 n.11.


               The State argues Lake County is sufficiently distinct in that it has
               an exceptionally high number of small precincts, which impose
               significant and unnecessary costs on the election system.
               Buncich responds that nearly all of our counties have small
               precincts, and that taxpayers across the state could benefit from
               cost savings. We are thus confronted with a question of degree:
               Lake County is not unique merely because it has small precincts,
               but at what point does the sheer number of small precincts in
               Lake County become a defining characteristic such that it
               justifies special legislation?


       Id. at 142-43 (footnotes omitted). The court concluded Buncich, who had the

       burden of proof as the party seeking to strike down the statute, had not met his

       burden of rebutting the presumption that the legislature had determined Lake

       County to be past the point at which the characteristic becomes defining. Id. at

       143. The court also noted that the statute in question did not mandate a

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 48 of 56
       solution to the unique circumstances but left the decision-making authority for

       how to handle the disproportionate number of small precincts at the local level.

       Id. Therefore, the court concluded “the abnormal number of small precincts in

       Lake County is a defining characteristic that is sufficiently distinctive to justify

       the Statute.” Id.


[50]   HKP seems to try to analogize this situation to the argument the State made in

       Buncich, contending the legislature was justified in crafting this special

       legislation because the “sheer number” of renters in general and renters of a

       certain age in particular in Bloomington and West Lafayette is a defining

       characteristic. Here, the alleged “unique characteristics” offered to justify the

       Fee Exemption being applicable to only Bloomington and West Lafayette are

       their positions as home to the largest college campuses in the state with the

       highest percentages of both rental housing generally and rental housing

       occupied by “unsophisticated, first-time renters” in particular, see Brief of

       Appellee at 20-21,18 and “by far the longest history of regulating all landlords in

       their housing markets via rental registration and inspection programs,” id. at 54.

       While it may be true those are circumstances unique to Bloomington and West




       18
          A table compiled by HKP from 2014 United States Census Bureau data shows 65.7% of Bloomington’s
       total occupied housing units are renter occupied and 52.4% of the total occupied housing units are renter
       occupied by non-family members fifteen to thirty-four years old. Id. at 21. Similarly, in West Lafayette,
       68.8% of total occupied housing is renter occupied and 71.1% is occupied by non-family members fifteen to
       thirty-four years old. Id. The city with the next highest percentage of renter occupied housing is East
       Chicago, with 56.6%. Id. The city with the next highest percentage of renter occupied housing by non-family
       members aged fifteen to thirty-four is Muncie, with 37.2%. Id. Hammond’s renter occupied housing units
       are 38.2% of its total occupied housing, with 12.6% occupied by non-family members aged fifteen to thirty-
       four. Id.

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018                 Page 49 of 56
Lafayette, there is no obvious connection between those characteristics and the

statute allowing those cities and those cities alone to charge any rental

registration fee they want, while restricting all others to a very minimal fee. If

the defining characteristic of Bloomington and West Lafayette is the large pool

of “young, unsophisticated renters” in rental housing markets with dominant

landlords, it is unclear how a statute allowing those cities to charge whatever

they wish and allowing the landlords to pass that greater fee on to their

allegedly vulnerable tenants is reasonably related to that characteristic.19 Stated

differently, the alleged “uniqueness” of Bloomington and West Lafayette does

not justify exempting them from the Fee Restriction. Although HKP posited at

the summary judgment hearing that the unique situation in Bloomington and

West Lafayette “cries out for oversight,” it also posited that while the legislature

was imposing that oversight on other political subdivisions, it “could have

reasonably decided that in [those] market[s] . . . we’re going to cut them loose.”

Transcript at 61. That is not a meaningful explanation for why the rental

housing markets in Bloomington and West Lafayette justify collecting a




19
   College students may be the majority people occupying rental housing in Bloomington and West
Lafayette, but it is unlikely that landlords rent to young, presumably unemployed or minimally employed
people without some sort of guarantee from a parent or other responsible party. Thus, the characteristics of
the people occupying rental housing in Bloomington and West Lafayette are not necessarily indicative of the
characteristics of the actual renters. Counsel for HKP acknowledged at oral argument that parents may have
to sign for their children when renting an apartment. See
https://mycourts.in.gov/arguments/default.aspx?&id=2161&view=detail&yr=&when=&page=1&court=ap
p&search=&direction=%20ASC&future=False&sort=&judge=&county=&admin=False&pageSize=20 at
23:05-23:25.

Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018                   Page 50 of 56
       registration fee of more than five dollars when all other political subdivisions

       are restricted to that amount.


[51]   The purpose of Section 23 “is to prevent the legislature from providing a benefit

       to or imposing a burden on one locality and not others . . . .” Buncich, 51

       N.E.3d at 141. The Fee Exemption in its current form is available only to

       political subdivisions with programs created before July 1, 1984, that authorize

       registration or inspection of all rental housing and only rental housing. Of the

       fourteen cities LSA identified as having rental registration or inspection

       programs in 2014—before the addition of the Fee Restriction and Fee

       Exemption—all of them charged a fee of more than five dollars. The statute

       now allows only two of those cities to continue to do so; whereas twelve of

       those cities will have to run their programs on even fewer dollars than before.

       The legislative history of section 36-1-20-5 shows the Fee Exemption was

       carefully crafted to provide a benefit to Bloomington and West Lafayette while

       burdening all other cities. See Hoovler, 668 N.E.2d at 1234 (the court noting it

       would not limit its consideration to the statute’s language but also consider the

       circumstances surrounding the act in question in determining its

       constitutionality under Section 23). However, in so doing, the statute was not

       tailored to address the allegedly “unique circumstances” in Bloomington and

       West Lafayette; rather, those “unique circumstances” seem to have been hand-

       picked post hoc to justify the differential treatment imposed by the statute. See

       Kimsey, 781 N.E.2d at 694 (noting the several different explanations offered to

       justify a statute’s application only in counties with population between 200,000


       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 51 of 56
       and 300,000 “were all couched in terms of characteristics of St. Joseph County,

       not necessarily those possessed by a county of this population size”); see also

       Buncich, 51 N.E.3d at 139 (the statute addressing the abnormally high number

       of small precincts in Lake County appointed a committee to identify the small

       precincts and determine if any adjoining precincts could be combined; thus, the

       statute directly addressed the defining characteristic). A general law regarding

       rental registration fees can be—and in fact was—made applicable across the

       state. By crafting this special law to exempt Bloomington and West Lafayette

       from that general law, the legislature has run afoul of Section 23.


                                              C. Severability
[52]   As the Fee Exemption is unconstitutional special legislation, it must be stricken.

       Hammond argues the Fee Exemption is not severable from the remainder of the

       section and that the entire section, including the Fee Restriction, must be

       stricken.


               A statute bad in part is not necessarily void in its entirety.
               Provisions within the legislative power may stand if separable
               from the bad. But a provision, inherently unobjectionable,
               cannot be deemed separable unless it appears both that, standing
               alone, legal effect can be given to it and that the legislature
               intended the provision to stand, in case others included in the act
               and held bad should fall.


       State v. Monfort, 723 N.E.2d 407, 415 (Ind. 2000) (quoting Dorchy v. Kansas, 264

       U.S. 286, 289-90 (1924)). The test for severability is whether the legislature

       would have passed the statute had it been presented without the invalid

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 52 of 56
       provisions. Paul Stieler Enterps., Inc. v. City of Evansville, 2 N.E.3d 1269, 1279

       (Ind. 2014); see Ind. Code § 1-1-1-8(b)(1) (stating that “[e]xcept in the case of a

       statute containing a nonseverability provision, each part . . . of every statute is

       severable” and the invalidity of any provision does not affect the remainder

       unless “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”).

       “The inclusion of a severability clause creates a presumption that the remainder

       of the Act may continue in effect. The absence of a severability clause creates

       the opposite presumption: the Legislature intends the Act to be effective as an

       entirety or not at all.” Ind. Educ. Emp’t Relations Bd. v. Benton Cmty. Sch. Corp.,

       266 Ind. 491, 365 N.E.2d 752, 762 (1977).


[53]   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. In the absence of a

       severability clause, the burden is on the supporter of the legislation to show the

       provisions involved are separable. Id. HKP looks to the legislative vote on

       House Bill 1403 to support its assertion that the Fee Exemption is not so

       essentially and inseparably connected with the Fee Restriction that the

       legislature would not have passed one without the other. HKP notes that the

       Fee Exemption had effect in only two House districts and two Senate districts

       but the Senate nonetheless passed HB 1403 by a vote of 34-12 and the House

       passed the bill 67-28. Accordingly, HKP contends “there is no basis to


       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 53 of 56
       conclude these large majorities would have vanished if Bloomington and West

       Lafayette were subjected to the Fee Restriction.” Br. of Appellee at 77. The

       various proposed and actual amendments to the statute, however, indicate that

       from the beginning, the legislature did not intend for the Fee Restriction to

       apply to Bloomington and West Lafayette. House Bill 1403 was originally

       proposed with a one-time Fee Restriction applicable to all political subdivisions,

       then amended to an annual Fee Restriction applicable to all political

       subdivisions, and passed out of committee that way. See App. to Br. of

       Appellant, Vol. IV at 106. Representative Truitt, representing a district which

       includes portions of Tippecanoe County, then moved to amend the bill to

       include the Fee Exemption language. See id. at 108-09. The bill with the Fee

       Exemption then passed both houses and was signed by the governor. When

       House Bill 1165 was proposed with a definition of “rental registration and

       inspection program” that would have impacted Bloomington and West

       Lafayette’s ability to qualify for the Fee Exemption, the definition was carefully

       amended so that Bloomington’s and West Lafayette’s programs would meet the

       definition but Hammond’s would not, and only then was the statute passed, to

       be effective retroactively.


[54]   Without the Fee Exemption, Bloomington and West Lafayette would be

       subject to the Fee Restriction, a result the legislature specifically avoided. We

       therefore agree with Hammond that the legislative history of the statute

       demonstrates the legislature would not have passed section 36-1-20-5 with the

       Fee Restriction had it been presented without the Fee Exemption.


       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 54 of 56
[55]   Whether or not an invalid portion of a statute is severable ultimately rests on a

       judicial determination of legislative intent. Kinslow v. Cook, 165 Ind. App. 623,

       628, 333 N.E.2d 819, 822 (1975). In determining legislative intent, we may

       properly consider the object which the legislature sought to accomplish via the

       legislation. In re City of Mishawaka, 259 Ind. 530, 533, 289 N.E.2d 510, 512

       (1972). Here, to address the concern that escalating fees may impact the

       affordability of rental housing and be detrimental to professionally managed

       and developed rental communities, the legislature sought to restrict the rental

       registration fee all political subdivisions except Bloomington and West

       Lafayette could charge. Only the statute with the Fee Exemption could

       accomplish that. The Fee Exemption is not severable from the remainder of

       section 36-1-20-5, and therefore the entire section must be stricken.



                                                Conclusion
[56]   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.


[57]   Reversed and remanded.

       Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 55 of 56
Riley, J., and Pyle, J., concur.




Court of Appeals of Indiana | Opinion 49A04-1612-PL-2784 | February 20, 2018   Page 56 of 56
