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Porter County can't leave RDA

March 2, 2011

A northwestern Indiana county can’t withdraw from a regional development authority created by lawmakers to facilitate economic development, the Indiana Court of Appeals held Wednesday.

The  Porter County Council sought declaratory judgment that it has the ability to withdraw from Northwest Indiana Regional Development Authority. The RDA, created by the General Assembly in 2005, is funded by mandatory payments from Porter and Lake counties, and the cities of Gary, East Chicago and Hammond. The council voted to withdraw from the RDA in April 2009; in response the Legislature passed two amendments in June 2009 stating that if Porter County ends its membership in the RDA, municipalities in the county could join and thereby require the county officials to continue to pay county economic development tax revenues to the RDA.

The trial court granted RDA’s motion for summary judgment and denied the council’s motion for summary judgment, finding the relevant statutes don’t contain an express or implied right to withdraw. It also vacated a partial settlement agreement between the council and the county auditor and treasurer in which they had been depositing the tax revenues into an escrow account instead of paying the RDA. The court ordered the auditor and treasurer to make all future payments to the RDA as required by statute.

The Court of Appeals affirmed in County Council of Porter County v. Northwest Indiana Regional Dev. Authority, et al., No. 37A04-1004-CT-291, holding Porter County can’t withdraw from the RDA. It pointed to the fact when the statute was first created, it contained specific instructions that only applied to Porter County. Porter County was automatically made a member of the RDA when the legislation was enacted, wrote Judge Ezra Friedlander. Even though the legislation creating the RDA is silent about participating counties’ ability to withdraw from the RDA, the judges found that the General Assembly had the ability to write the legislation to include a withdrawal provision, but did not.

“… we conclude the amendments, which it should be noted were passed by a different legislative body, i.e., the 116th Indiana General Assembly, were legislative responses to Porter County’s attempt to withdraw from the RDA, or more specifically, to Porter County’s attempt to escape its financial obligations under the RDA Act,” wrote the judge.

The judges also held that the council waived its argument that if the original legislation establishing the RDA Act is construed so as to forbid the county’s withdrawal, it is unconstitutional special legislation. The council didn’t present that claim to the trial court; instead, it challenged the constitutionality of the provisions that required the county to pay RDA fees regardless of whether Porter County withdrew its membership.

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