ATTORNEY FOR PETITIONER:    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

RAKOCI, ROBERT,             )
                                 )
    Petitioner,                  )
    v.                           )

   
            ) Cause No. 49T10-0002-TA-23
DEPARTMENT OF LOCAL         )
GOVERNMENT FINANCE, See footnote         )
                )
    Respondent.            )    
______________________________________________________________________

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

NOT FOR PUBLICATION
April 23, 2004

FISHER, J.
Robert Rakoci (Rakoci) appeals the State Board of Tax Commissioners’ (State Board) final determination valuing his real property for the 1998 tax year. The issue for the Court to decide is whether the State Board erred in assigning each of Rakoci’s two apartment buildings a “C” grade. See footnote For the following reasons, the Court AFFIRMS the State Board’s final determination.
FACTS AND PROCEDURAL HISTORY

Rakoci owns two apartment buildings in Syracuse, Indiana. One building, a single-story structure, was built in 1957 (1957 building); the second building, a two-story structure, was built in 1996 (1996 building). For the 1998 assessment year, the local assessing officials valued the buildings from the General Commercial Residential (GCR) Schedule – apartment model and graded them a “C.” Rakoci appealed the assessment to the Kosciusko County Board of Review (BOR), claiming that the buildings were graded erroneously.See footnote The BOR denied Rakoci’s claim. Rakoci then appealed the BOR’s determination to the State Board. After a hearing on November 15, 1999, the State Board also denied Rakoci’s claim.
On February 4, 2000, Rakoci initiated an original tax appeal. The parties stipulated to the record and, on April 25, 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

In Indiana, an assessor uses his subjective judgment to assign a grade to a building. See Mahan v. State Bd. of Tax Comm’rs, 622 N.E.2d 1058, 1064 (Ind. Tax Ct. 1993). The grading system allows the assessor to recognize variations in the quality of an improvement’s materials, design, and workmanship. See footnote Id. See also Ind. Admin. Code tit. 50, r. 2.2-10-3(a) (1996). A grade is applied as a multiplier to an improvement’s base replacement cost. See footnote Miller Structures, Inc. v. State Bd. of Tax Comm’rs, 748 N.E.2d 943, 952 (Ind. Tax Ct. 2001) (footnote added).
    As the party challenging the final determination of the State Board, Rakoci was required to submit probative evidence demonstrating that its buildings were either improperly given a “C” grade or improperly denied an alternative grade. See Sollers Pointe Co. v. Dep’t of Local Gov’t Fin., 790 N.E.2d 185, 191 (Ind. Tax Ct. 2003). Rakoci has done neither.
    At the administrative hearing, Rakoci presented a document titled “Assessment Review and Analysis” (Analysis). See footnote The Analysis described the 1957 building as having “a 7-foot wall height[,] . . . face brick on wood joist[ walls,] . . . tile floors[,] [] no ceiling light fixtures[, and] no carpeting.” (Stip. R. at 63.) The Analysis described the 1996 building as having “an 8-foot wall height[,] . . . roof trusses [that] are 2x4 inch wood construction 24 inches on center[,] . . . limited window openings and no sliding glass doors.” (Stip. R. at 63.) Photocopied photographs of the exteriors of both buildings were also included in the Analysis. (Stip. R. at 65-71.) The Analysis concluded that “[n]o downward adjustment was made” to reflect the features in the buildings, and that they both “should be graded ‘D-2.’” (Stip. R. at 63.)
    These statements do not reflect that the “C” grade as assigned by the State Board was improper nor do they demonstrate how the buildings more closely resemble a “D-2”See footnote grade. Rather, the statements are nothing more than conclusions that “the grade is this” and it “should be that.” “A taxpayer’s conclusory statements do not constitute probative evidence concerning the grading of the subject improvement.” Miller Structures, Inc., 748 N.E.2d at 953 (internal quotation and citation omitted). Consequently, the State Board properly rejected Rakoci’s grade challenge. See footnote
CONCLUSION

For the reasons stated above, this Court AFFIRMS the 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 those 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, Rakoci raises 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 Rakoci’s claims and supporting arguments are identical to those previously rejected by the Court, the Court will not address them.

Footnote: Rakoci also claimed that yard improvements and a concrete dumpster pad were erroneously assessed; however, those issues were later withdrawn at the administrative level. ( See Stip. R. at 3, 24, 33.)

Footnote: For instance, “‘C’ grade buildings are moderately attractive and constructed with average quality materials and workmanship. These buildings have minimal to moderate architectural treatment . . . an average quality interior finish with adequate built-ins, standard quality fixtures, and mechanical features.” Ind. Admin. Code tit. 50, r. 2.2-10-3(a)(3) (1996).

Footnote: A “C” grade indicates a multiplier of one hundred percent (100%). 50 IAC 2.2-10-3(b)(3).

Footnote: Rakoci’s “Assessment Review and Analysis” was prepared by his property tax assessment consultant, Mr. Lance K. Rickard of Landmark Appraisals, Inc.

Footnote: “D” grade buildings are “constructed with economy materials and fair workmanship. . . devoid of architectural treatment.” 50 IAC 2.2-10-3(a)(4). These buildings “have a substandard quality interior finish with minimal built-in features, substandard quality electrical and plumbing fixtures, and a substandard quality heating system.” Id.

Footnote: In examining Rakoci’s briefs submitted to this Court, it also appears he is requesting a base rate adjustment to account for the features in his buildings that allegedly deviate from the model used to assess them. ( See Pet’r Br. at 1, 3-4; see also Pet’r Reply Br. at 1-3.) However, “the general rule is that the Court is bound by the issues and evidence raised at the administrative level.” Miller Structures, Inc. v. State Bd. of Tax Comm’rs, 748 N.E.2d 943, 948 (Ind. Tax Ct. 2001). Accordingly, because the issue was not raised at the administrative level, the issue is waived and may not now be considered by the Court. See id.