ATTORNEY FOR PETITIONER:
DAVID L. PIPPEN
ATTORNEY AT LAW
ATTORNEYS FOR RESPONDENT:
ATTORNEY GENERAL OF INDIANA
KAREN L. HSU
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
DANA CORPORATION, )
v. ) Cause No. 49T10-9906-TA-133
DEPARTMENT OF LOCAL )
ON APPEAL FROM A FINAL DETERMINATION
OF THE STATE BOARD OF TAX COMMISSIONERS
NOT FOR PUBLICATION
July 25, 2003
Dana Corporation (Dana) appeals the final determination of the State Board of Tax
Commissioners (State Board) valuing its land for the 1995 assessment year. The
issue for the Court to decide is whether the State Board erred when
it refused to award Danas land a 95% negative influence factor.
See footnote For the
following reasons, the Court AFFIRMS the State Boards final determination.
FACTS AND PROCEDURAL HISTORY
Dana owns land in Wayne County, Indiana. For the 1995 assessment year,
Danas land was assessed with a 35% negative influence factor. Dana appealed
the assessment to the Wayne County Board of Review (BOR), arguing that because
the land was environmentally contaminated, it should be granted a 95% negative influence
factor. The BOR denied Danas appeal, and Dana subsequently appealed to the
State Board. On April 15, 1999, the State Board issued a final
determination upholding the BORs decision.
On May 28, 1999, Dana initiated an original tax appeal. The parties
stipulated to the record and, on October 31, 2000, they agreed to brief
this case in lieu of a trial. The Court heard oral argument
on April 2, 2001. Additional facts will be supplied as needed.
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. Thousand Trails, Inc.
v. State Bd. of Tax Commrs, 757 N.E.2d 1072, 1075 (Ind. Tax Ct.
2001). 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.
Furthermore, a taxpayer who appeals to this Court from a State Board final
determination bears the burden of showing that the final determination was invalid.
Id. The taxpayer must present a prima facie case by submitting probative evidence,
i.e., evidence sufficient to establish a given fact that, if not contradicted, will
remain sufficient. Id. Once the taxpayer presents a prima facie case,
the burden shifts to the State Board to rebut the taxpayers evidence and
support its findings with substantial evidence. Id.
The sole issue is whether the State Board erred when it refused to
award a 95% negative influence factor to Danas land. Under the State
Boards rules, an influence factor refers to a condition peculiar to the acreage
tract that dictates an adjustment to the extended value [of the land] to
account for variations from the norm. Ind. Admin. Code tit. 50, r.
2.2-4-17(c)(8) (1996). The amount of the influence factor is expressed as a
percentage that is either added to or subtracted from the assessed value of
the acreage, depending on whether it is a positive influence factor or a
negative influence factor. See id. A taxpayer who seeks a negative
influence factor must submit probative evidence that (1) identifies the propertys deviation from
the norm and (2) quantifies the effect of that deviation on the propertys
value. See Talesnick v. State Bd. of Tax Commrs, 756 N.E.2d 1104,
1108 (Ind. Tax Ct. 2001).
The record indicates that Danas land deviates from the norm because of environmental
contamination (see Stip. R. at 14), thus, the question remains whether Dana submitted
probative evidence quantifying the effect of the contamination on the lands value.
Danas evidence consisted of a statement from Paul D. Turpin, Project Manager of
a company called RMT, Inc. (Stip R. at 3438.) Turpin estimated
that the cost to perform remedial actions to Danas land would be between
$3.7 million and $4.6 million. (Stip. R. at 34.) Dana argues
that Turpins estimate establishes the effect the contamination has on the use or
value of the land for the tax years at issue. (Petr Post
Hrg Br. at 4.) Dana then argues that a 95% negative influence
factor is warranted because the cost to clean up the land exceeds the
value of the land. (See Oral Argument Tr. at 1213.)
To substantiate its request for a 95% negative influence factor, Dana needed to
show the causal link between (1) the contamination and (2) a reduction in
property value. See Talesnick, 756 N.E.2d at 1108. Its evidence does
not do so. Instead, Dana has simply concludedbased only on Turpins estimate
of remedial coststhat it is entitled to a 95% negative influence factor.
(See Oral Argument Tr. at 12.) However, a mere opinion or conclusion
does not constitute probative evidence. Talesnick, 756 N.E.2d at 1108 n.7.
Danas conclusion does not constitute probative evidence as quantification of a negative influence
factor. Consequently, Dana has not made a prima facie case.
For the aforementioned reasons, the Court AFFIRMS the State Boards final determination.
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), and the
Indiana Board of Tax Review (Indiana Board).
Ind. Code §§ 6-1.1-30-1.1; 6-1.5-1-3
(West Supp. 2001); 2001 Ind. Acts 198 §§ 66, 95. Pursuant to
Indiana Code § 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 § 6-1.5-5-8 (West Supp. 2001) (eff. 2002); 2001
Ind. Acts 198 § 95. Nevertheless, the law in effect prior to
January 1, 2002 applies to these appeals. 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
In addition, Dana 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 Commrs, 756 N.E.2d 1124, 1127 n.1 (Ind. Tax
Ct. 2001). Because Danas claims and supporting arguments are identical to those
previously rejected by the Court, the Court will not address them.
The Court is mindful that under the State Boards rules, no method
is provided for valuing environmentally contaminated property. Nevertheless, many techniques are currently
being used in other jurisdictions to quantify the effect of contamination on a
See, e.g., Or. Admin. R. 150-308.205-(E) (2003) (requiring assessors to
apply the sales comparison, cost, and income approaches to value contaminated land); Garvey
Elevators, Inc. v. Adams County Bd. of Equalization, 621 N.W.2d 518, 52728 (Neb.
2001) (affirming propertys value in use even though the cost of remediation exceeded
nominal unencumbered value of the property); Commerce Holding Corp. v. Bd. of Assessors
of the Town of Babylon, 673 N.E.2d 127, 128 (N.Y. 1996) (affirming income
capitalization method combined with sales comparison approach for land only); Westling v. County
of Mille Lacs, 543 N.W.2d 91, 93 (Minn. 1996) (accepting valuation of property
where evidence of comparable properties established its market value less the value resulting
from stigma and the present value of the anticipated cleanup costs); Inmar Ass.
v. Borough of Carlstadt, 549 A.2d 38, 44 (N.J. 1988) (holding that the
value of contaminated land for tax purposes cannot be determined by simply deducting
the cost of the cleanup from the putative value of the property and
suggesting that contaminated properties be assessed as special purpose properties); Arizona Dept of
Revenue, Contaminated Property Valuation Guideline 7 (1998) (noting that the sales comparison, cost,
income, and value in use approaches all may be used to value contaminated