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Indiana Supreme Court justices

The justices of the Indiana Supreme Court are, from left, Mark Massa; Steven David; Chief Justice Loretta Rush; Christopher Goff; and Geoffrey Slaughter, a Crown Point native.

INDIANAPOLIS — It was not immediately clear during oral arguments Thursday how the Indiana Supreme Court will come down on the constitutionality of a 2015 state law targeting Hammond's rental registration revenue.

House Enrolled Act 1165 limited Hammond, like nearly all other Indiana localities, to charging just a $5 annual rental registration fee, but continued allowing West Lafayette and Bloomington to assess landlords any reasonable fee.

Hammond attorney Bryan Babb argued there was no legitimate basis for the General Assembly to exempt the two college towns from the fee restriction, thereby making the statute unconstitutional special legislation.

He urged the high court to restore the ability of every community to charge a reasonable fee, and not allow the Legislature to get in the business of picking winners and losers through myriad, unjustified local exemptions.

"They are asking you to do via judicial fiat what they could not get accomplished," Babb said. "They could not get this law passed without exempting two very influential municipalities."

Hammond previously charged an $80 per unit annual registration fee that partially covered its costs of conducting regular safety inspections of rental properties.

Court records show the city lost approximately $700,000 in annual revenue after the statute mandated that Hammond only could charge a fee of $5 per unit per year.

The Indiana Court of Appeals ruled 3-0 in February that the characteristics of West Lafayette and Bloomington were not sufficiently unique to justify special legislation, as occasionally has been permitted by the Supreme Court, such as the state-mandated consolidation of Lake County numerous "small" election precincts.

But attorneys for the state and Herman and Kittle Properties, a Hammond landlord, argued to the high court that the appellate ruling should be set aside because the two college towns have unquestionably unique rental markets, and the Legislature was within its rights to tailor the law to those characteristics.

Chief Justice Loretta Rush pushed back on that claim, pointing out that other college towns, such as Muncie and Terre Haute, and even cities like Hammond, have roughly the same proportion of rental properties as West Lafayette and Bloomington.

She also described the Legislature's multi-year efforts to cap Hammond's rental registration fee while preserving the exemption for others as a "tortured process."

There is no official timeline for the four participating Supreme Court justices to issue a ruling.

Justice Geoffrey Slaughter, a Crown Point native, recused himself since he represented Herman and Kittle Properties in the case at the trial court level before being appointed in 2016 to the Supreme Court.

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