ATTORNEY FOR PETITIONERS:    ATTORNEYS FOR RESPONDENT:
DAVID L. PIPPEN    STEVE CARTER
ATTORNEY AT LAW     ATTORNEY GENERAL OF INDIANA
Indianapolis, IN    Indianapolis, IN
    
    JOEL SCHIFF
    DEPUTY ATTORNEY GENERAL
    Indianapolis, IN
______________________________________________________________________
     IN THE INDIANA TAX COURT

UMBAUGH, M.D. & SYMPSON, CLAUD,    )
                                        )
    Petitioners,                        )
    v.                                  )

          
            ) Cause No. 49T10-0002-TA-24
DEPARTMENT OF LOCAL         )
GOVERNMENT FINANCE, See footnote         )
                )
    Respondent.            )    
______________________________________________________________________

ON APPEAL FROM A FINAL DETERMINATION OF
THE STATE BOARD OF TAX COMMISSIONERS

NOT FOR PUBLICATION
March 16, 2004

FISHER, J.
    M.D. Umbaugh and Claud Sympson (the Petitioners) appeal the State Board of Tax Commissioners’ (State Board) final determination valuing their real property for the 1996 tax year. The issue for the Court to decide is whether the State Board erred when it refused to adjust the base rate and physical depreciation assigned to the Petitioners’ improvement. See footnote For the following reasons, the Court AFFIRMS the State Board’s final determination.
FACTS AND PROCEDURAL HISTORY

    The Petitioners own land and an improvement in Kosciusko County, Indiana. For the 1996 tax year, local assessing officials valued the Petitioners’ improvement using the General Commercial Industrial (GCI) light manufacturing model and calculated its physical depreciation using the 40-year life expectancy table.     
    The Petitioners appealed their assessment by filing a Form 133 Petition for Correction of an Error (Form 133) with the Kosciusko County Board of Review (BOR). The BOR denied their appeal. The Petitioners then appealed the BOR’s denial to the State Board, claiming that the base rate and physical depreciation calculations were erroneous. After a hearing on November 15, 1999, the State Board issued a final determination in which it adjusted the base rate of the Petitioners’ improvement to account for a lack of partitioning, but denied all other requested relief.
On February 4, 2000, the Petitioners initiated an original tax appeal. The parties stipulated to the record and, on April 20, 2001, this Court heard their oral arguments. Additional facts will be supplied as necessary.
ANALYSIS AND OPINION
Standard of Review

This Court gives great deference to the final determinations of the State Board when it acts within the scope of its authority. Hamstra Builders, Inc. v. Dep’t of Local Gov’t Fin., 783 N.E.2d 387, 390 (Ind. Tax Ct. 2003). Thus, this Court will reverse a final determination of the State Board only when its findings are unsupported by substantial evidence, arbitrary, capricious, constitute an abuse of discretion, or exceed statutory authority. Id. When appealing to this Court from a State Board final determination, the taxpayer bears the burden of showing that the final determination is invalid. Id.
Discussion

    The Petitioners filed a Form 133 to correct certain errors that they discovered in their tax duplicate. See Ind. Code Ann. § 6-1.1-15-12(a)(7) (West 1996). Those errors were limited “first, to those errors involving the incorrect use of numbers in determining the assessment; and second, to those errors which [could] be corrected accurately, with precision, and with rigorous exactness.” Barth v. State Bd. of Tax Comm’rs, 756 N.E.2d 1124, 1128 (Ind. Tax Ct. 2001) (quoting Hatcher v. State Bd. of Tax Comm’rs, 561 N.E.2d 852, 854 (Ind. Tax Ct. 1990)). Thus, the errors subject to correction by a Form 133 are those that can be corrected without resort to subjective judgment. See id.


1. Base Rate Adjustments

    The Petitioners claim they are entitled to several base rate adjustments to account for their improvement’s deviation from the GCI light manufacturing model used to assess it. See footnote The State Board denied the Petitioners’ claims, finding that subjective judgment would be required to make the requested adjustments and therefore, were not appropriate for a Form 133. (Stip. R. at 44-47.)
A. Wall Height

The Petitioners first contend that the wall height adjustments for their improvement should be determined from the “unfinished” category rather than “semifinished” category presumed under the GCI model. Wall height adjustments are “made based on the structure’s actual wall height as compared to the model height. Each foot of height variation is either added or deducted based on the finish type of the specific model.” Ind. Admin. Code tit. 50, r. 2.2-10-6.1(a)(6) (1996).
To support their claim, the Petitioners submitted photocopied photographs of interior sections of their improvement and the testimony of their property tax consultant, Mr. M. Drew Miller (Miller), that the upper portion of the walls are exposed insulation. (See Stip. R. at 68-70, 74.) The State Board countered that the interior had “some paint” and “eight-foot of steel siding” that had to be accounted for. (Stip. R. at 74-75.)
The evidence demonstrates that the interior of the Petitioners’ improvement comprises a range of qualities and designs, and therefore fails to show objectively that the interior is “unfinished.” Accordingly, an assessor’s subjective judgment is required to determine the finish type present in the Petitioners’ improvement. See Barth, 756 N.E.2d at 1131 (stating that when an assessor must decide whether a building’s interior finish is “minimal” or covers “most” of the interior, an assessor must use subjective judgment). Consequently, the remedy the Petitioners seek is not correctable via a Form 133 and therefore, the State Board did not err in denying the Petitioners’ requested relief in this regard.
B. Exterior Walls

    The Petitioners next claim they are entitled to an adjustment to account for the type of their improvement’s exterior walls. The GCI model provides for two different wall types: Type One (1) walls are “reinforced concrete block” and Type Two (2) walls are “[c]ommon brick on concrete block back-up.” Ind. Admin. Code tit. 50, r. 2.2-11-2(4) (1996).
To support the Petitioners’ claim, Miller explained that “the subject does not have [concrete block exterior walls.]” (Stip. R. at 74.) Miller also submitted photocopies of photographs of the building; however, it is unclear what the photographs are meant to depict. (See Stip. R. at 68-70.) The Petitioners testimonial and pictorial evidence fails to indicate what type of exterior wall their improvement does have. Thus, the Court cannot say that the State Board erred in denying relief to the Petitioners on this issue.
C. Miscellaneous

Finally, the Petitioners assert that their improvement does not have the type of windows, heating, or lighting fixtures presumed in the GCI model. The GCI model presumes an improvement has: “25% vented steel sash glass windows[;]” a “[g]as fired, forced air” heating system; and “600 ampere service . . . [h]igh intensity [lighting] fixtures, switches and receptacles.” 50 IAC 2.2-11-2(4). Accordingly, to be entitled to these base rate adjustments, the Petitioners bore the burden of presenting objective evidence that their improvement did not have the features listed in the model or had features not listed in the model. See footnote See Barth, 756 N.E.2d at 1129. The Petitioners also bore the burden of ascertaining the cost of each feature based on the regulations without exercising subjective judgment. See footnote See id.
The Petitioners, however, failed to provide any objective base rates to account for the differing features that they claim existed in their improvement. Consequently, to determine the correct amount to deduct from the Petitioners’ base rate to compensate for these alleged deviations, the State Board would first have to determine the type of heating system, the intensity of illumination, and the quality of the lighting present in the Petitioners’ improvement. Then, the State Board would have to determine how those features are different from those presumed in the model and what amount of adjustment is appropriate under the regulations. Such determinations require subjective judgment. See Hatcher v. State Bd. of Tax Comm’rs, 601 N.E.2d 19, 22 (Ind. Tax Ct. 1992). Thus, the remedy the Petitioners seek is not correctable via a Form 133 and the State Board therefore did not err in denying the Petitioners’ claims.
2. Physical Depreciation Tables

The Petitioners also ask the State Board to adjust the life-expectancy table used to calculate their improvement’s physical depreciation. See footnote The local assessing officials depreciated their improvement from the 40-year life expectancy table, which is used for “wood joist apartments, medical facilities, parking garages, [and] all [] fire resistant buildings not listed elsewhere.” See Ind. Admin. Code tit. 50, r. 2.2-11-7 (1996) (emphasis added). See also Ind. Admin. Code tit. 50, r. 2.2-10-6.1(a)(9) (1996) (stating that the base rate for the GCI schedule, the schedule used to assess the Petitioners’ improvement, is based upon fire resistant construction).
The Petitioners assert, however, that their improvement is a “light pre-engineered structure [that] should be physically depreciated using the 30-year life table.” (Stip. R. at 74.) Light pre-engineered structures are one type of building depreciated according to the 30-year life expectancy table. See 50 IAC 2.2-11-7. Accordingly, to prevail on their claim, the Petitioners bore the burden of presenting objective evidence demonstrating that their improvement is a light pre-engineered structure. See Hamstra Builders, 783 N.E.2d at 390-91 (describing structural characteristics of certain light, pre-engineered buildings).
At the administrative hearing, Miller stated that the improvement “is a light pre-engineered structure . . . [with] tapered columns.” See footnote (Stip. R. at 74 (footnote added).) Tapered columns are but one type of column used in the construction of certain pre-engineered buildings. See Hamstra Builder’s, 783 N.E.2d at 391. Absent evidence supporting this assertion, however, it remains conclusory and does not objectively establish that the Petitioners’ improvement is a light pre-engineered building. See Miller Structures, Inc. v. State Bd. of Tax Comm’rs, 748 N.E.2d 943, 954 (Ind. Tax Ct. 2001) (stating that “conclusory statements do not constitute probative evidence”). Thus, the State Board did not err when it denied the Petitioners’ claim.
CONCLUSION

    The Petitioners failed to provide objective evidence demonstrating that they were entitled to the base rate and physical depreciation adjustments they requested. Accordingly, the Court AFFIRMS the final determination of the State Board.


Footnote: The State Board of Tax Commissioners (State Board) was originally the Respondent in this appeal. However, the legislature abolished the State Board as of December 31, 2001. 2001 Ind. Acts 198 § 119(b)(2). Effective January 1, 2002, the legislature created the Department of Local Government Finance (DLGF), see Indiana Code Annotated § 6-1.1-30-1.1 (West Supp. 2003)(eff. 1-1-02); 2001 Ind. Acts 198 § 66, and the Indiana Board of Tax Review (Indiana Board). Ind. Code Ann. § 6-1.5-1-3 (West Supp. 2003)(eff. 1-1-02); 2001 Ind. Acts 198 § 95. Pursuant to Indiana Code Annotated § 6-1.5-5-8, the DLGF is substituted for the State Board in appeals from final determinations of the State Board that were issued before January 1, 2002. Ind. Code Ann. § 6-1.5-5-8 (West Supp. 2003)(eff. 1-1-02); 2001 Ind. Acts 198 § 95. Nevertheless, the law in effect prior to January 1, 2002 applies to these appeals. A.I.C. 6-1.5-5-8. See also 2001 Ind. Acts 198 § 117. Although the DLGF has been substituted as the Respondent, this Court will still reference the State Board throughout this opinion.

Footnote: In addition, the Petitioners raise various state and federal constitutional claims that this Court has declined to reach in previous cases. See, e.g., Barth, Inc. v. State Bd. of Tax Comm’rs, 756 N.E.2d 1124, 1127 n.1 (Ind. Tax Ct. 2001). Because the Petitioners’ claims and supporting arguments are identical to those previously rejected by the Court, the Court will not address them.

Footnote: To help identify and define various classes of buildings, Indiana’s assessment regulations have categorized improvements into numerous models based upon their physical characteristics. See Ind. Admin. Code tit. 50, rr. 2.2-11-1 to -3 (1996). The improvement models replicate the reproduction costs of a given structure by assuming the presence of certain construction elements. See Ind. Admin. Code tit. 50, r. 2.2-10-6.1(a)(1) (1996). When an improvement varies from the model, adjustments must be made to the base price to account for those variations. 50 IAC 2.2-10-6.1(c). These adjustments can generally be accomplished via the assessment regulations’ cost schedules and unit-in-place cost schedules. See Ind. Admin. Code tit. 50, r. 2.2-11-6 (1996); Ind. Admin. Code tit. 50, r. 2.2-15-1 (1996).


Footnote: Both parties agreed that the Petitioners’ improvement lacked windows. The State Board claimed it accounted for that deviation by reducing the grade of the improvement because there was no specified rate listed in the regulations to deduct for that missing component. ( See Stip. R. at 76.) See also Whitley Prods., Inc. v. State Bd. of Tax Comm’rs, 704 N.E.2d 1113, 1117 (Ind. Tax Ct. 1998) (stating that when an objective adjustment cannot be made to account for deviations from the model, the State Board must resort to using subjective judgment to account for such deviations by reducing the grade of an improvement), review denied.

Footnote: The Petitioners’ photographs showing fluorescent lighting, alone, fails to provide the State Board with an objective rate to deduct pursuant to the regulations. ( See Stip. R. at 69, 74.) See also 50 IAC 2.2-10-6.1-(c)(1)(F) (stating that the lighting adjustments are predicated on intensity of illumination and fixture quality).

Footnote: Physical depreciation measures an improvement’s loss of value due to “decay and wear and tear.” Ind. Admin. Code tit. 50, r. 2.2-10-7(a) (1996). To account for this loss of value, the regulations provide economic life tables that, based on the combination of an improvement’s age and condition, provide a percentage that can be applied to reduce an improvement’s value. See 50 IAC 2.2-10-7(d).

Footnote: Miller also submitted a document stating that “[t]he 12,500sf building is constructed with .325” rigid framing with .024” metal siding and has minimal tolerances[.]” (Stip. R. at 67.) It is unclear to the Court, however, that this description is in fact for the improvement at issue: the document refers to an assessment for the 1989-1991 tax years, concerning parcel number 020-21000-08, regarding a structure priced from the small shop model. ( See Stip. R. at 67.) The Petitioners are appealing the 1996 tax year, parcel number 020-065-004.A, regarding a structure priced from the light manufacturing model. (See Stip. R. at 4, 26-28.) Consequently, the Court will not consider this evidence relevant in its analysis of the Petitioners’ claim. See Standard Plastic Corp. v. Dep’t of Local Gov’t Fin., 773 N.E.2d 379, 384 (Ind. Tax Ct. 2002) (stating that relevant evidence is such evidence “a reasonable mind might accept as adequate to support a conclusion”).