INDIANA TAX COURT
TOWN OF ST. JOHN, et al., )
v. ) Case No. 49T10-9309-TA-70
STATE BOARD OF TAX )
ORDER AND JUDGMENT ENTRY
May 31, 2000
Petitioners request that the Court order Respondent, the State Board of Tax Commissioners
(State Board), to adopt and implement new real property assessment regulations by dates
FACTS AND PROCEDURAL HISTORY
The present litigation has spanned approximately seven years and to date has generated
six separate published opinions, including two decisions by the Indiana Supreme Court.
The Court will not recite the entire history of this long-standing controversy.
For an overview of this cases procedural history, see State Board of Tax
Commissioners v. Town of St. John, 702 N.E.2d 1034, 1035-36 (Ind. 1998) (St.
John V). In St. John V, the Indiana Supreme Court affirmed this
Courts determination in Town of St. John v. State Board of Tax Commissioners,
690 N.E.2d 370, 382 (Ind. Tax Ct. 1997) (St. John III)
cost schedules used in the State Boards real property assessment regulations violate the
Property Taxation Clause of the Indiana Constitution.
See St. John V, 702
N.E.2d at 1043.
On April 23, 1999, this Court entered an Order requiring the State Board
to implement a constitutional assessment system as promptly as possible. In its
Order, the Court gave three reasons for its decision not to require the
new regulations to be adopted and implemented by dates certain. First, the
State Board indicated that its new regulations would be completed in the fall
of 1999, a few months behind the statutory schedule. Second, the Court
wanted the Executive Branch, particularly the State Board, to have discretion to implement
the new assessment rules in the most practical manner, so long as they
are diligent and expeditious.
Third, the Court stated its desire to take
no action that would preclude the General Assembly from enacting legislation necessary to
ensure smooth and effective implementation of the new assessment rules, so long as
implementation is in good faith and not dilatory. However, the Court expressly
reserved its right to set a date certain for implementation of a remedy.
On March 6, 2000, Petitioners, by counsel, filed a Motion for Court to
Establish Prompt Date for Reassessment. Petitioners request that this Court set dates
certain for both the adoption and implementation of constitutional assessment regulations. In
addition, Petitioners ask the Court to require the State Board to submit periodic
status reports on its progress. Petitioners also advise the Court to
consider appointing an independent commissioner to prepare the new assessment regulations. Finally,
Petitioners motion asserts that the Court should order that the new regulations be
based on objectively verifiable data and that a single definition of property wealth,
applicable to all types of property, be adopted.
The State Board, by counsel, responded to Petitioners motion on March 22, 2000,
with its Plan to Establish Date for Reassessment Rule. The State Boards
plan consists of two stages: (1) contracting with and receiving information from
and (2) receiving public comments on all the alternatives as they
are developed into final regulations. The State Board proposes a period of
120 days for the completion of stage one (thirty days to contract with
the three outside entities and another ninety days to receive their reports) and
a period of six to eight months for completion of stage two.
Therefore, the State Board envisions having finalized regulations within ten to twelve months.
Once new, constitutional regulations are in place, the State Board estimates that
the reassessment process will take an additional fifteen to twenty-four months. According
to the State Board, Time is needed for assessor training, updating of computer
software and other equipment, and the actual gathering and tabulating of data.
(Respt Plan to Establish Date at 8.)
The Court held a hearing on Petitioners motion and the State Boards plan
on April 28, 2000. Additional facts will be supplied as needed.
ANALYSIS, OPINION & ORDER
This Court has the inherent power to take steps necessary to enforce its
own orders. See State ex. rel. Brubaker v. Pritchard, 236 Ind. 222,
138 N.E.2d 233, 235 (1956) (The power of a court to enforce compliance
with its orders and decrees duly entered is inherent. No statutory sanction
is needed.); Kaghanns Korner, Inc. v. Brown & Sons Fuel Co., 706 N.E.2d
556, 564 (Ind. Ct. App. 1999) ([C]ourts of this state have long had
power, both inherent and statutory, to entertain actions and issue orders to assist
in the enforcement of their judgments) (citing Bitner v. Hull, 695 N.E.2d 181,
183 (Ind. Ct. App. 1998)). The parties do not dispute the Courts
authority to set specific dates for implementation of a remedy. The Court
finds that it has the power to order remedial action to ensure that
the State Board fully complies with the Courts Order.
The Court finds it necessary to establish dates certain for adopting and implementing
new, constitutional assessment regulations. The three reasons identified in the Courts Order
for not requiring new regulations by a date certain no longer apply.
The State Board failed to complete its new regulations by the fall of
1999. Although the State Board began work on new regulations, its work
was abruptly halted last December by order of Governor Frank OBannon. Beyond
contacting a few entities and local assessors, the State Board has done little
since the end of the 2000 legislative session to adopt and implement new
regulations. (Hrg Tr. at 50.) Thus, the Executive Branch, particularly the
State Board, has not been diligent and expeditious in creating and implementing new
regulations. It has been more than thirteen months since the Court ordered
the State Board to implement constitutional assessment regulations as soon as possible.
Further delay cannot be justified and will not be tolerated.
The State Board has failed to comply with the Courts Order. Therefore,
the Court ORDERS the State Board to take the following actions within the
time periods specified. First, the State Board shall take the necessary steps
to have new, constitutional assessment regulations promulgated and in effect on or by
June 1, 2001. See generally Ind. Code Ann. §§ 4-22-2-23 to -36
(West 1991 & Supp. 1999) (statutes governing rulemaking process). This gives the State
Board approximately one year to do its job. Though slightly shorter, this
one year period provides essentially the same time allowed by Ind. Ann. Code
§ 4-22-2-25 (West Supp. 1999) for an agency to comply with all required
rulemaking procedures, including obtaining the Governors approval.
In fact, with diligent effort,
the State Board can immediately take steps to meet the Courts deadline by
publishing its intention to adopt new regulations in the Indiana Register this upcoming
Of course, this is merely a maximum date; the State Board
is encouraged to use all deliberate speed to expedite the rulemaking process in
an efficient, yet fair and effective, manner. Given the importance of the
new regulations, the Attorney General and Governor can likewise be expected to give
their full attention to reviewing the new regulations. They are not required
to exhaust the entire time allotted to them in deciding to approve or
disapprove of the regulations. See Ind. Code Ann. § 4-22-2-32 (West Supp.
1999) (giving Attorney General forty-five days to review and either approve or disapprove
new regulations); Ind. Code Ann. § 4-22-2-34 (West 1991) (allowing Governor up to
thirty days to approve or disapprove new regulations).
Second, real property in Indiana must be reassessed using constitutional regulations as of
March 1, 2002. This deadline is firm. It is not a
mere goal. As the Court declared in St. John IV, 691 N.E.2d
at 1389, In our legal system, constitutional rights are a categorical imperative, not
a goal to be accomplished in the future.
The Courts primary concern is to free all taxpayers from the burdens of
having their properties assessed under an unconstitutional system. However, the Court also
recognizes the State Boards legitimate concerns regarding time for training assessors, updating software
and other equipment and gathering and tabulating data. The Court has reasonably
balanced the State Boards practical concerns with the constitutional rights of taxpayers in
ordering a reassessment deadline of March 1, 2002. The State Board has
nine months from the date that it is expected to have final assessment
regulations in effect in which to address issues regarding software, training and data.
This time period gives the State Board sufficient time to fix the
system in a way that avoids chaos and confusion among the various taxing
agencies, entities and taxpayers generally. See St. John IV, 691 N.E.2d at
1389-90. While this deadline may represent a challenge to the State Boards
administrative capabilities, the Court is convinced that the State Board has the ability
and desire to carry out its duties. Further, the Court acknowledges that
its timetable allows less than one year for training assessing officials and even
less time than usually allowed to do the job of assessing. The
Court, however, is confident that with various organizations such as the IAAO offering
training and with levelheaded Hoosier common sense aboundingtogether with a determination by assessing
officials to do the job requiredthese officials will be able and ready to
do their jobs in a timely manner with accuracy, care, precision and pride.
Third, the State Board shall submit detailed status reports to this Court on
the first day of each month, starting July 1, 2000. The reports
shall inform the Court as to the State Boards progress in meeting the
aforementioned deadlines. The Court desires to know precisely what steps the State
Board has taken in the month prior to the report and anticipates taking
in the ensuing month to meet its obligations with respect to adopting new
regulations and reassessing taxpayers properties. The Court expects the State Board to
keep it up-to-date on those issues specifically designated as areas for concern, i.e.,
training assessors, updating software and other equipment and gathering and tabulating data.
The State Board shall provide Petitioners with a copy of each status report,
and Petitioners may, if they choose, file with the Court a response to
each status report by the tenth day of each month. Petitioners are
expected to inform the Court if they find that the State Board or
any local assessing official is acting in a less-than-diligent manner or if they
anticipate the State Boards failure to meet the deadlines herein imposed. The
State Board will continue submitting monthly status reports until further order of the
Although the Court agrees with the Petitioners statement that the State Board has
demonstrated an inability over the past year to adopt an assessment regulation which
either defines or measures property wealth, the Court at this time declines to
appoint an independent commissioner to prepare new assessment regulations. Ind. Trial Rule
53(A) allows the Court, with the concurrence of the Supreme Court, to appoint
a commissioner in a pending case. Such an appointment is appropriate where,
as the Court could find here, some exceptional condition requires it. T.
R. 53(B). The Court, in enforcing its Order, could waive certain statutory
rulemaking provisions and grant a commissioner broad authority to draft new regulations.
However, with concrete dates for adopting and implementing new regulations now established, the
Court believes that the State Board should be granted one final opportunity to
fulfill its duties. The State Board is advised not to take its
tasks lightly. The Court hereby makes it clear that, should it find
the State Boards efforts deficient in any meaningful way, it will reconsider Petitioners
suggestion to appoint an independent commissioner to draft new regulations, as well as
any other appropriate relief.
Petitioners also ask the Court to order the State Board to base its
new regulations on objectively verifiable data and to order the adoption of a
single definition of property wealth. The Court declines this invitation. The
State Board is guided by the prior decisions of the Supreme Court and
this Court as to what a constitutional assessment system requires. To that
effect, the following principles are relevant. The Property Taxation Clause of the
Indiana Constitution requires that each taxpayers property wealth bear its proportion of the
overall property tax burden. St. John V, 702 N.E.2d at 1039 (citing
Boehm v. Town of St. John, 675 N.E.2d 318, 324 (Ind. 1996) (St.
John II) (internal quotation omitted)). The General Assembly must provide for a
system of assessment and taxation characterized by uniformity, equality, and just valuation based
on property wealth. Id. at 1040.
The General Assembly may adopt different methods of assessment for different classifications of
property in order to achieve uniformity and equality. Id. at 1041.
However, classification of differing properties cannot be arbitrary but rather must be based
upon differences naturally inhering in the property. Id. at 1042. See
also Ind. Code Ann. § 6-1.1-31-6(a) (West 2000) (listing factors that State Board
shall consider in classifying land and improvements). While different assessment methodologies may
the Property Taxation Clause requires that these different methods result in
general uniformity and equality across all classifications. St. John V, 702 N.E.2d
The General Assembly permits the State Board to consider fair market value in
assessing real property. In St. John V, 702 N.E.2d at 1038, the
Supreme Court found that Ind. Code Ann. § 6-1.1-31-6(c) (West 2000) was constitutional.
Subsection 6(c) provides: With respect to the assessment of real property,
true tax value does not mean fair market value. True tax value
is the value determined under the rules of the state board of tax
commissioners. The Supreme Court concluded that this provision does not prohibit the
State Board from promulgating regulations in which true tax value is based, in
whole or in part, upon property wealth. St. John V, 702 N.E.2d
at 1038. In other words, subsection 6(c) instructs that true tax value
is not exclusively or necessarily identical to fair market value.
In reaching its decision, the Supreme Court noted that the State Boards assessment
regulations, pursuant to Ind. Code Ann. § 6-1.1-31-6(b) (West 2000), must include instructions
for determining the true tax value of property based on six listed factors
and any other factor that the board determines by rule is just and
See St. John V, 702 N.E.2d at 1038. Thus, the
Supreme Court reasoned, the General Assembly intends for the State Boards regulations to
accommodate unenumerated factors that it finds just and proper. Id. The
State Board simply failed to determine that fair market value information constitutes a
just and proper factor. See id.
The State Board is not required to base its new assessment system solely
upon strict fair market value. St. John V, 702 N.E.2d at 1041
(citing St. John II, 675 N.E.2d at 327). However, as the
Supreme Court noted, while the General Assembly has discretion to provide regulations to
secure just valuations of property, its discretion is limited by the constitutional requirements
of uniform and equal rate of property assessment and taxation. See id.
Compliance with these limitations is subject to judicial review. See id.
To ensure the availability of adequate judicial review, the Supreme Court agreed
with this Court that the State Boards regulations must be based on objectively
verifiable data. See id. See also St. John III, 690 N.E.2d
at 384-88 (discussing need for ascertainable standards as regards neighborhood desirability, neighborhood boundaries,
condition, grade and economic obsolescence).
Regardless of whether or how the State Boards new regulations incorporate fair market
value information, the fact remains that the State Board is not required to
reinvent the wheel. Most states, pursuant to either constitutional or statutory mandates,
require some measure of uniformity of assessment and taxation. See, e.g., Idaho
Const. art. VII, § 5 (All taxes shall be uniform upon the
same class of subjects . . . and shall be levied and collected
under general laws, which shall prescribe such regulations as shall secure a just
valuation for taxation of all property, real and personal.); Ill. Const. art. IX,
§ 4 ([T]axes upon real property shall be levied uniformly by valuation ascertained
as the General Assembly shall provide by law.); Mich. Const. art. IX, §
3 (The legislature shall provide for the uniform general ad valorem taxation of
real and tangible property not exempt by law . . . .); Or.
Const. art. IX, § 1 (The Legislative Assembly shall . . .
provide by law uniform rules of assessment and taxation.). Cf. Iowa
Code Ann. § 441.21 (West 2000) (stating that all property subject to taxation
shall be valued at its actual value, and . . . shall be
assessed at one hundred percent of its actual value, and . . .
[t]he actual value of all property shall be the fair and reasonable market
value of such property . . . .). These states have devised
and implemented systems of assessment and taxation that pass their respective tests of
uniformity. To ensure uniformity, they have enacted statutes and promulgated regulations providing
for mass appraisals systems
that are designed to achieve valid, accurate and equitable
valuations in an economical and efficient manner.
These states have educated and
trained their assessing officials to do their jobs consistent with their statutes and
regulations and have often incorporated new technology to organize and facilitate the assessment
There is no reason why the State Board cannot draw upon
the expertise and lessons from other states for assistance in promulgating new regulations
that pass constitutional muster in Indiana.
The State Board is Indianas acknowledged property tax expert. See Phelps Dodge
v. State Bd. of Tax Commrs, 705 N.E.2d 1099, 1102 (Ind. Tax Ct.
1999) (citing Clark v. State Bd. of Tax Commrs, 694 N.E.2d 1230, 1241
(Ind. Tax Ct. 1998)), review denied. It knows how to do its
job. What the State Board does not know, it can readily learn.
The Court will elaborate no further on what the State Board must
do to adopt and implement new, constitutional assessment regulations by the deadlines
imposed by the Court. As stated supra, all land and improvements in
Indiana shall be assessed with the new assessment regulations as of March 1,
2002. Until that date, (1) real property tax assessments shall be made
in accordance with the current system; (2) any challenges to real property tax
assessments shall be governed by existing law; and (3) real property tax assessments
are not subject to challenge on the ground that the true tax value
system violates the Indiana Constitution.
The State Board is ORDERED to adopt new, constitutional regulations no later than
June 1, 2001. Further, assessments of real property as of March 1,
2002 must be based on constitutional regulations. The State Board is to
submit monthly status reports to the Court on its progress in adopting and
implementing new regulations. Petitioners will be permitted to respond to such reports.
_________________________ Thomas G. Fisher, Judge
Indiana Tax Court
Thomas M. Atherton
KATZ & KORIN, P.C.
1120 Market Tower
10 West Market Street
Indianapolis, IN 46204
Richard A. Waples
Attorney at Law
410 North Audubon Road
Indianapolis, IN 46219
Peter H. Donahoe
HILL FULWIDER McDOWELL FUNK
& MATTHEWS, P.C.
One Indiana Square, Suite 2000
Indianapolis, IN 46204-2031
James K. Gilday
WOOD TUOHY GLEASON MERCER
3400 Bank One Center Tower
Indianapolis, IN 46204-5134
Kenneth J. Falk
Indiana Civil Liberties Union
1031 East Washington Street
Indianapolis, IN 46202
Representing Amici Curiae:
David L. Pippen
Attorney at Law
7164 Graham Road, Suite 180
Indianapolis, IN 46250
Larry J. Stroble
BARNES & THORNBURG
1313 Merchants Bank Building
11 South Meridian Street
Indianapolis, IN 46204
Senator Luke Kenley
P.O. Box 549
Noblesville, IN 46061
Gretchen K. Gutman
Attorney at Law
200 West Washington Street
Indiana State House
Indianapolis, IN 46204
Howard A. Kenley, III
Attorney at Law
P.O. Box 549
Noblesville, IN 46061
Mitchell V. Harper
Attorney at Law
5207 Hopkinton Drive
Fort Wayne, IN 46814
Attorney at Law
P.O. Box 1290
Indianapolis, IN 46206-190
Karen M. Freeman-Wilson
Attorney General of Indiana
By: Jon Laramore
Deputy Attorney General
Indiana Government Center South, Fifth Floor
402 West Washington Street
Indianapolis, IN 46204-2770
The first published opinion associated with this litigation was
Bielski v. Zorn,
627 N.E.2d 880 (Ind. Tax Ct. 1994). Bielski addressed the State Boards
motion to dismiss pursuant to Ind. Trial Rules 12(B)(1) and 12(B)(6) and was
decided prior to the consolidation of the Town of St. Johns original tax
appeal with those of other Petitioners.
For the sake of convenience, the Court will apply the short citation
references used by the Indiana Supreme Court in
St. John V. Thus,
this Courts 1997 opinion will be cited as St. John III and its
subsequent Order and Judgment Entry, Town of St. John v. State Board of
Tax Commissioners, 691 N.E.2d 1387 (Ind. Tax Ct. 1998), including the Courts Order
of Clarification (issued April 2, 1998), will be cited as St. John IV.
Ind. Const. art. X, § 1 provides in part: The General
Assembly shall provide, by law, for a uniform and equal rate of property
assessment and taxation and shall prescribe regulations to secure a just valuation for
taxation of all property, both real and personal.
The Court noted that it has the power to compel the State
Board and local assessing officials to act more expeditiously.
These entities are: Appraisal Research Corporation, the International Association of Assessing
Officials (IAAO) and the Lincoln Institute for Land Policy. Petitioners motion listed
the latter two entities as possible candidates to serve as an independent commissioner
overseeing preparation of the new assessment regulations.
amici curiae have filed briefs in this matter. The Court
will not outline the positions taken in these briefs but has fully considered
all arguments presented therein.
Section 4-22-2-25 measures the one year period from the date an agency
publishes a notice of intent to adopt a rule under
Ind. Code Ann.
§ 4-22-2-23 (West Supp. 1999), while the Court now imposes a one year
deadline measured from the day after this order is issued. Further, the
one year permitted by section 4-22-2-25 does not include the thirty day period
provided by Ind. Code Ann. § 4-22-2-36(2) (West Supp. 1991), which states that
a rule accepted for filing by the Indiana Secretary of State takes effect
on . . . [t]he date that is thirty (30) days from the
date and time that the rule was accepted for filing under [Ind. Code
Ann. § 4-22-2-35 (West Supp. 1991)].
The Court can think of no obstacles that should prevent the State
Board from forwarding the necessary materials for publishing its intent under section 4-22-2-23
to the Indiana Register by June 10, 2000. (Respt Plan to Establish
Date at 7 n.3) (Material for any issue of the [Indiana] Register must
be received by the tenth day of the previous month.)
Footnote: The Court in
St. John IV, 691 N.E.2d at 1390, ordered the
State Board to consider all competent real world evidence presented to the State
Board by persons filing appeals on or after May 11, 1999. The
Supreme Court reversed this order in St. John V, 702 N.E.2d at 1043.
The Court is not ordering that all assessments under the new regulations
be completed by March 1, 2002. The Court realizes that the State
Board, while it may supervise reassessments, lacks authority to conduct reassessments itself.
See Matonovich v. State Bd. of Tax Commrs, 705 N.E.2d 1093, 1098 (Ind.
Tax Ct. 1999) (concluding that State Board lacked authority to conduct county-wide reassessment
it ordered pursuant to Ind. Code § 6-1.1-4-9), review denied, 726 N.E2d 298
(Ind. 1999). However, assessments are often not completed by the actual assessment
date; it is not imperative that assessments be completed by the assessment date,
because in Indiana taxes real property are paid one year after the annual
March 1 assessment date. See Graybar Elec. Co. v. State Bd. of
Tax Commrs, 723 N.E.2d 491, 494 (Ind. Tax Ct. 2000) (citing Ind. Code
Ann. § 6-1.1-4-4 (West 2000)). It is the State Boards statutory duty
to see that all property assessments are made in the manner provided by
law. Ind. Code Ann. § 6-1.1-35-1 (West 2000). The Court takes
no position regarding the remedies available to the State Board if local assessing
officials fail to meet this Courts reassessment deadline. See Matonovich, 705 N.E.2d
at 1098 n.11.
The Supreme Court observed that the constitution does not require an assessment
to be based upon the highest and best use of the property.
St. John V, 702 N.E.2d at 1042. It found that property valuation
for assessment based upon value in use is a reasonable measure of property
According to the Supreme Court, If interpreted as an absolute prohibition upon
considering fair market value as true tax value, subsection 6(c) would be constitutionally
St. John V, 702 N.E.2d at 1038.
The six factors are: (1) classification of real property; (2) size
of real property; (3) effects that location and use have on the value
of real property; (4) depreciation, including physical depreciation and obsolescence, of real property;
(5) the cost of reproducing improvements; and (6) the productivity or earning capacity
See Ind. Code Ann. § 6-1.1-31-6(b)(1) to -(6) (West 2000).
A modern mass appraisal system consists of a data management system, a
sales analysis system, a valuation system, and an administrative system.
Fisher, The Worst Tax? A History of the Property Tax in America 195
Equalization is an important concept in mass appraisals. The 1991 Michigan
Assessors Manual, Vol. III, ch. 7 states: The prime object of mass
appraisals for tax purposes is to equalize property. Not only must the
value of one residential property be equalized with another, but it must also
be equalized with each agricultural, commercial, and industrial property within the political unit.
Chapter six of Michigans Manual states that Equalization ensures that each property
owners share of expense for operating the government is justly proportional to the
value of his or her property in relation to all other properties in
the taxing district. Sales ratio (or assessment-ratio) studies can be used to
compare the assessed value of property with its market value; they are principally
undertaken for evaluating assessment accuracy and achieving tax equalization.
See Kemp v.
State Bd. of Tax Commrs, 726 N.E.2d 395, 403 (Ind. Tax Ct. 2000)
(citing Institute of Property Taxation, Property Taxation 154 (Jerrold F. Janata ed., 2d
ed. 1993)). Some states determine a common level ratio to help achieve
a uniform level of assessment across the entire assessment roll; the purpose of
common level ratio methodologies has been to equalize the various assessing practices from
one assessing jurisdiction to another . . . . See Institute of
Property Taxation, supra at 169, 170. Currently, the General Assembly allows the
State Board to equalize assessments. See Ind. Code Ann. § 6-1.1-14-5 (West
2000) (providing that, after hearings, the State Board shall issue an order increasing
or decreasing assessed values of tangible property within individuals counties or throughout the
state, if it finds that assessed values are not uniform and equal).
One author has observed:
[T]he entire field [of appraisal methodology] has been revolutionized by developments in computer
technology and mapping techniques. . . .
[Per an IAAO survey,] a state agency in forty-one states is involved in
supervising or training local assessors. In thirty-nine states the state agency publishes
an assessment manual. In twenty-four states assessors are required to follow an
assessment manual. In some states they may use the state-published manual or
choose another manual. Fifteen states monitor the computer systems used by local
assessors. . . .
Today state agencies in a number of states assist local officials in acquiring
Fisher, supra note 14 at 195, 198.
True tax value in Indiana is the assessed value of real property
as determined by the State Boards regulations.
See Ind. Code § 6-1.1-31-6(c).
In St. John III, 690 N.E.2d at 374, this Court explained that
true tax value is a figure produced by the application of a closed
set of self-referential rules and formulas contained in Title 50. Cf. Barker
v. State Bd. of Tax Commrs, 712 N.E.2d 563, 572 (Ind. Tax Ct.
1999) (However, evidence of actual reproduction cost may have relevance in certain cases.)
(citations omitted). Thus, in challenging the assessed values of land and improvements,
taxpayers necessarily must advocate their positions by specific reference to the State Boards
regulations. In many states, however, regulations and assessment manuals are used as
guides or aids in the mass appraisal of real property; the regulations are
designed to enable assessors to assess property on a mass basis in a
manner that derives values approximating market value. See, e.g., 1984 Iowa Real
Property Appraisal Manual, Introduction (The purpose of this manual, therefore, is not
to serve as an absolute canon, but rather to provide a fairly comprehensive
reference guide for those . . . involved in the assessing-appraising profession.) and
1991 Michigan Assessors Manual, Notice (noting that manual was prepared with the intention
that it be used as a guide in estimating the replacement/reproductive costs of
buildings and ancillary land improvements. In all circumstances, it should be used
with judgment and discretion. Sometimes actual known costs or locally derived costs
will be better indicators of cost new.). Compare Fisher, supra note 14
at 195 (noting that comparative sales, income and cost methods of valuation are
still basis of appraisal methodology but that in practice not all three can
be used for each property, so that the appraiser must choose the most
appropriate methods and correlate the values obtained in several ways using his or
her own judgment and knowledge of the market.). However, the regulations are not
necessarily used in connection with appeals. Therefore, taxpayers may use fee appraisal
evidence to support their positions as to the correct assessed values of their
properties. Compare Institute of Property Taxation, supra note 15 at § 2.11
(discussing use of sales ratio studies in administrative appeals and noting that trend
appears to be toward greater use of such studies). Thus, in deciding
whether or how to incorporate fair market value within a mass appraisal system,
the State Board will have to decide the extent, if at all, it
will permit use of outside data in administrative appeals. See St. John
V, 702 N.E.2d at 1041 & 1043 (stating that State Boards regulations are
not required to use all three standard market-value measures of value in its
assessment system and holding that Property Taxation Clause does not require the consideration
of all property wealth evidence in individual assessments or appeals therefrom).
The issue of whether the State Board should pay Petitioners attorneys fees
and costs is still pending. Pursuant to
Ind. T.R. 54(B), the Court
finds that there is no just reason to delay entry of judgment on
Petitioners motion and retains jurisdiction over the issue of payment of attorneys fees.