ATTORNEYS FOR PETITIONER:
TIMOTHY D. HERNLY
JAMES A. OBRIEN
PHILIP J. FACCENDA, JR.
BARNES & THORNBURG
South Bend, IN
ATTORNEYS FOR RESPONDENT:
ATTORNEY GENERAL OF INDIANA
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
BETA STEEL CORPORATION, )
COMPANY, Successor in Merger with
v. ) Cause No. 71T10-9801-TA-14
DEPARTMENT OF LOCAL GOVERNMENT )
ON APPEAL FROM A FINAL DETERMINATION
OF THE STATE BOARD OF TAX COMMISSIONERS
December 20, 2002
Beta Steel Corporation (Beta Steel) appeals the final determination of the State Board
of Tax Commissioners (State Board) denying its Form 137R Petition for Survey and
Reassessment (Form 137R). The dispositive issue is whether the State Board erred
in determining that a substantial amount of Beta Steels real and personal property
had not been destroyed based on the comparative assessed value of Beta Steels
destroyed property to the gross assessed value of all property in Portage Township.
For the reasons stated below, the Court REVERSES the State Boards final
determination and REMANDS this issue to the Indiana Board of Tax Review (Indiana
See footnote for further proceedings consistent with this opinion.
FACTS AND PROCEDURAL HISTORY
Beta Steel operates a steel mill in Portage Township, Porter County, Indiana.
On March 27, 1996, a pressure vessel exploded in the mill, blowing a
hole in the roof. Fragments of the pressure vessel landed several hundred
yards away, causing property damage to at least thirty nearby businesses. Several
of Beta Steels employees were injured, and one employee was killed. In
all, 15% of Beta Steels real property and 20% of its personal property
was destroyed as a result of the explosion, and the mill was closed
for several months.
On September 24, 1997, Beta Steel filed a Form 137R with the State
Board and requested a hearing. The State Board declined to hold a
hearing, and on December 18, 1997, issued a final determination on Beta Steels
Form 137R. In its final determination, the State Board found that the
loss in assessed value from the explosion to Beta Steels property was $2.3
million. The State Board further found that the total assessed gross valuation of
all property in Porter Township was $371 million. The State Board concluded
that because the value of Beta Steels destroyed property represented only 0.6% of
the total gross assessed value of all property in Portage Township, a substantial
amount of property had not been destroyed. Accordingly, the State Board denied
any disaster relief to Beta Steel.
On January 29, 1998, Beta Steel initiated an original tax appeal. The
parties jointly stipulated to the evidence, and on May 25, 1999, the Court
held a trial. At trial, the parties waived the filing of post
trial briefs, and the Court took the matter under advisement. Additional facts
will be provided 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. Walker Mfg. Co.
v. Dept of Local Govt Fin., 772 N.E.2d 1, 4 (Ind. Tax Ct.
2002). 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.
A taxpayer who appeals to this Court from a State Board final determination
bears the burden of showing that the final determination is 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 carries the burden of establishing
a prima facie case, the burden shifts to the State Board to rebut
the taxpayers evidence and justify its decision with substantial evidence. Clark v.
State Bd. of Tax Commrs, 694 N.E.2d 1230, 1233 (Ind. Tax Ct. 1998).
This case raises an issue of first impression, namely, whether the State Board
erred by determining that a substantial amount of a taxpayers real and personal
property had not been destroyed based on the comparative value of its destroyed
property to the gross assessed value of all property in the township in
which the taxpayers property was located. The controlling statute is Indiana Code
Section 6-1.1-4-11, which provides:
If a substantial amount of real and personal property in a township has
been partially or totally destroyed as a result of a disaster, the state
board of tax commissioners shall:
(1) cause a survey to be made of the area or areas in
which the property has been destroyed; and
(2) order a reassessment of the destroyed property;CONCLUSION
if a person petitions the department to take that action.
Ind. Code § 6-1.1-4-11(a) (1998) (emphasis added). The State Board argues that
a substantial amount of property is not destroyed until the assessed value of
the destroyed property exceeds 1% of the gross assessed value of all property
in a township. Beta Steel, on the other hand, argues that Indiana
Code Section 6-1.1-4-11 does not provided for a comparison of assessed property values
within a township in order to determine whether a substantial amount of property
has been destroyed.
This Court will construe terms within a statute only if they are ambiguous.
Shoup Buses, Inc. v. Indiana Dept of State Revenue, 635 N.E.2d 1165,
1167 (Ind. Tax Ct. 1994). Although a simple disagreement between parties
does not necessarily indicate ambiguity, opposing interpretations are persuasive in suggesting that an
ambiguity exists. Id. at 1168. In construing a statute, the
Courts goal is to determine and give effect to the Legislatures intent.
Id. To accomplish this, the [C]ourt gives statutory words and phrases their
plain, ordinary, and usual meaning[.] Id. (internal quotation marks and punctuation omitted).
Nothing in the language of Indiana Code Section 6-1.1-4-11 indicates that the determination
to afford disaster relief is made by comparing the assessed value of destroyed
property to the gross assessed value of all property in a township.
Indeed, nothing in the language of the statute provides for disaster relief on
the basis of any comparative determinations whatsoever. Rather, the determination of disaster
relief is based on a finding that: (1) a disaster has occurred, (2)
the disaster partially or totally destroyed real and personal property in a township,
and (3) a substantial amount of property was destroyed. I.C. § 6-1.1-4-11.
Here, the parties agree that the explosion at Beta Steel was a disaster
that resulted in the partial destruction of Beta Steels real and personal property
in Portage Township. The only issue is whether a substantial amount of
Beta Steels property was destroyed. The State Board argues that the phrase
substantial amount is synonymous with substantial value,
See footnote but the State Board has ignored
the plain and ordinary meaning of the word amount.
Where a word in a statute is undefined by statute or case law
(as it is in this instance), the Court gives the word its plain
and ordinary meaning; the Court may do so by referring to a dictionary.
May Dept. Stores Co. v. Indiana Dept of State Revenue, 749 N.E.2d
651, 661 (Ind. Tax Ct. 2001). Here, the statute refers to an
amount of property. I.C. § 6-1.1-4-11. The plain and ordinary meaning
of amount is quantity. See Websters Third International Dictionary 72 (1981).
Accordingly, the phrase substantial amount in Indiana Code Section 6-1.1-4-11 is synonymous with
substantial quantity, not substantial value.
Because the State Board made its final determination on Beta Steels Form 137R
based on the assessed value of Beta Steels property relative to that of
the entire township, the State Boards final determination was arbitrary, capricious, and contrary
to law. The Court therefore REVERSES the State Boards final determination and
REMANDS this issue to the Indiana Board to determine whether a substantial amount
of Beta Steels real and personal property was destroyed by the disaster.
If the Indiana Board determines that a substantial amount of Beta Steels property
was destroyed, it shall order a survey and reassessment of the affected property
pursuant to Indiana Code Section 6-1.1.-4-11.
For the reasons stated, the Court REVERSES the State Boards final determination on
Beta Steels Form 137R and REMANDS this issue to the Indiana Board for
further proceedings consistent with this opinion.
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. Pub. L. No. 198-2001, § 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); Pub. L. No. 198-2001, §§ 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); Pub.
L. No. 198-2001, § 95. Nevertheless, the law in effect prior to
January 1, 2002 applies to these appeals. I.C. § 6-1.5-5-8. See
also Pub. L. No. 198-2001, § 117. Although the DLGF has been
substituted as the Respondent, this Court will still reference the State Board throughout
All cases that would have previously been remanded to the State Board
are now remanded to the Indiana Board of Tax Review (Indiana Board).
Ind. Code § 6-1.1-15-8. Final determinations made by the Indiana Board are
subject to review by this Court pursuant to Indiana Code § 6-1.1-15.
Ind. Code §§ 6-1.5-5-7; 33-3-5-2.
The State Board purports to have a rule that interprets substantial amount
to mean when (1) the assessed value of the destroyed property exceeds 1%
of the gross assessed value of all township property or (2) the disaster
causes damage to more than one taxpayers property within a township. (Trial
Tr. at 9.) This rule, however, was unknown to the public prior to
this litigation. This Court gives no deference to unpublished, secret rules.
See Harrington v. State Bd. of Tax Commrs, 525 N.E.2d 360, 36162 (Ind.
Tax Ct. 1988) (holding that a lack of ascertainable standards in State Board
rules violates a taxpayers right to due process). Consequently, the Court finds
no merit in the State Boards unpublished and secret rule for determining a
taxpayers eligibility for disaster relief. See id.
Scheid v. State Bd. of Tax Commrs, 560 N.E.2d 1283 (Ind.
Tax Ct. 1990), the issue was the meaning of the word disaster in
Indiana Code Section 6-1.1-4-11. Scheid, 560 N.E.2d at 1286. The issue
arose because the term was not defined by statute or case law, and
the State Board had not promulgated any rule or public policy statement interpreting
Indiana Code Section 6-1.1-4-11. Twelve years later, the State Board still has
not promulgated any rule or public policy statement interpreting Indiana Code Section 6-1.1-4-11.
Consequently, should the State Board choose someday to publicly interpret Indiana Code
Section 6-1.1-4-11, its interpretation must comport with existing case law on Indiana Code
Section 6-1.1-4-11. See Centrium Group v. State Bd. of Tax Commrs, 599
N.E.2d 242, 243 (Ind. Tax Ct. 1992) (holding that the Court will reverse
the State Board when it acts contrary to law).