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Washington, Indiana                Attorney General of Indiana

                             VINCENT S. MIRKOV
Deputy Attorney General
                            Indianapolis, Indiana

HOMER E. SCHNARR,                                                 )
            Claimant,                                                      ) 
        v.                                                             ) Cause Nos.  82T10-9710-SC-00186


STATE BOARD OF TAX COMMISSIONERS,                                          ) 
            Respondent.                                                    )


June 17, 1998



    Homer E. Schnarr appeals the final determination of the State Board of Tax Commissioners assessing his property as of the March 1, 1995 assessment date. Schnarr presents three issues for this Court's consideration:

    I. Whether more of Schnarr's land should receive a severe flooding influence factor.

    II. Whether Schnarr's dwelling is incorrectly graded.

    III. Whether Schnarr's garage and out buildings are incorrectly assessed.

    Homer Schnarr owns agricultural and residential land and improvements located in rural Daviess County, Indiana. The True Tax ValueSee footnote 1 (TTV) of Schnarr's agricultural property was determined to be $63,180 ($50,490 for the land and $12,690 for the improvements), and his residential property to be $21,000 ($6,000 for the land and $15,000 for the improvements).See footnote 2 Believing this value to be too high, Schnarr filed a Petition for Review of Assessment (Form 130) with the BOR. Schnarr maintained that his dwelling (which was fire damaged), garage and out buildings were assessed too high and that all of his farmland should get an influence factor due to severe flooding. The BOR denied Schnarr's protest. Schnarr subsequently filed a Petition for Review of Assessment (Form 131) with the State Board. After a hearing and an inspection of the property, the State Board reduced the assessment of his dwelling, garage and some of his out buildings. However, the State Board denied Schnarr's protest regarding a flooding influence factor. Unsatisfied with this result, Schnarr now appeals to this court.

Additional facts will be supplied as necessary.

    The State Board is charged with the responsibility of interpreting the property tax laws and of ensuring that property assessments are made in the manner prescribed by law. See Zakutansky v. State Bd. of Tax Comm'rs, 691 N.E.2d 1365, 1367 (Ind. Tax Ct. 1998). This Court has recognized that the State Board must be given a great deal of discretion in carrying out its responsibilities. Vonnegut v. State Bd. of Tax Comm'rs, 672 N.E.2d 87, 89 (Ind. Tax Ct. 1996), review denied. Consequently, the party challenging an assessment bears the burden of demonstrating that the assessment is unsupported by substantial evidence, constitutes an abuse of discretion, exceeds the State Board's statutory authority, or is arbitrary or capricious. Talesnick v. State Bd. of Tax Comm'rs, 693 N.E.2d 657, 659 (Ind. Tax Ct. 1998).
I. Severe flooding influence factor

    Schnarr contends that the State Board's determination of the value of his land constitutes an error of law. Specifically, Schnarr maintains that because his tillable land has been subjected to more than five floods in a period of ten years, it should be classified as "Type 42_flooded severely." This would entitle the land to a 50% influence factor pursuant to Ind. Admin. Code tit. 50, r. 2.2-5-2(2)(B) (1996). The regulation reads:
    "Type 42" indicates that damaging floods occur five (5) or more times in a period of ten (10) years. The land is classified as flooded severely and receives a fifty percent (50%) influence factor deduction.

Id. In support of this contention, Schnarr presented hearing officer Norris with various maps (Pet'r Ex. 2, 3, 4), records of river and climatological observations from the National Weather Service (Pet'r Ex. 6), and many photographs (Pet'r Group Ex. 9).
    The State Board rejected Schnarr's contention. The hearing officer determined that the flooding which occurred was not serious enough to be considered "severe." He determined that 9.67 acres of his tillable land is given an adjustment for occasional flooding and, because of the nature of the flooding that occurs, such an adjustment was all that Schnarr was entitled to.
    A plain reading of the regulation indicates that a deluge the like of which would make Noah question his faith is not necessary to qualify for the influence factor. Rather, the question is whether or not five or more damaging floods have occurred in a ten year period. If so, the land is given the classification of severely flooded. In other words, the question of whether or not the land is severely flooded for purposes of this regulation is primarily a quantitative question, rather than a qualitative one. See footnote 3
     Schnarr presented evidence at both the State Board level and before this Court to indicate that his land has been flooded, and damaged, more than 5 times over a ten year period. (Pet'r Ex. 6). The State Board, while considering this evidence, simply misapplied the regulation by looking to the severity of the floods themselves (referring to them as "flash flooding") and not looking to their frequency or the damage caused.

Schnarr presented photographs of damaged fields and damaged livestock feed. (Pet'r Group Ex. 9). He also testified to the fact that he lost livestock due to starvation. (Tr. at 40). The State Board's failure to consider Schnarr's evidence was a misapplication of the law. Cf. Vonnegut, 672 N.E.2d at 90; cf. Simmons v. State Bd. of Tax Comm'rs, 642 N.E.2d 559, 562 (Ind. Tax Ct. 1994). As such, the State Board's decision regarding the application of Ind. Admin. Code tit. 50, r. 2.2-5-2(2)(B) to Schnarr's acres classified as tillable (Type 4 or #4-WA) is reversed. This issue is REMANDED to the State Board with instructions to classify the land as severely flooded (Type 42) and to adjust Schnarr's assessment accordingly.

II. Dwelling assessment
    The BOR determined the TTV of all of Schnarr's improvements to be $15,000. This was figure reduced to a TTV of $12,200 by the State Board. In arriving at this figure, the State Board determined that the TTV of Schnarr's residence was $5,200. Schnarr feels that it is impossible for the TTV of his dwelling to be $5,200 because his house is so extensively fire-damaged. Indeed, Schnarr contends that he is forced to live in his basement because of the fire damage. To support this contention he supplied both the hearing officer and this Court with photographs of his house. (Pet'r Group Ex. 9).
    In addition to the photographs he received, hearing officer Norris also inspected Schnarr's house. He determined that the BOR assessment was incorrect. He adjusted the TTV because of a lack of central heating. He also deducted 50% from the base price to account for the lack of finished interior caused by the fire damage. In addition,

the hearing officer found that Schnarr's basement, in which he was living, was not included in the assessment of his house. The hearing officer added this to the TTV.
    In looking at the State Board's Final Assessment Determination (Resp. Ex. A) and the property record card (Resp. Ex. B), the Court notes that the hearing officer provided his reasoning for making the determinations in writing. Doing so makes it much easier for the Court to review a determination, because the Court is "able to determine from the record whether the assessed value was properly calculated." Corey v. State Bd. of Tax Comm'rs, 674 N.E.2d 1062, 1066 (Ind. Tax Ct. 1997). In this instance, the hearing officer provided detailed calculations regarding the lack of interior finish. (Resp. Ex. B).
    However, in comparing the photographs provided by Schnarr (Pet'r Group Ex. 9) with the property record card (Resp. Ex. B), the Court finds that a "D" Grade is not supported by the evidence. The regulations provide grade exemplars in Ind. Admin. Code 2.2-7-10 (1996). These exemplars are included for the purpose of allowing an assessor to compare the subject property in order to arrive at the correct assessment and should be followed. The "D Residential Dwellings" illustrated in the State Board regulations do not come close to mimicking Schnarr's fire-damaged, patchwork hovel. No reasonable person looking at Schnarr's home could conclude that it merits a grade as high as a "D." The Court finds that the State Board's determination of this issue is not supported by substantial evidence and is arbitrary and capricious. See Corey, 674 N.E.2d at 1066. The State Board's assessment of Schnarr's residential dwelling is therefore reversed and remanded.

III. Agricultural building condition
    Schnarr is also unhappy with the condition assigned to the various improvements on his agricultural land. Condition is determined according to regulations provided by Ind. Admin. Code tit. 50, r. 2.2-7-7.1(f)(6). Condition is a judgment of the physical state of the item relative to its age. Schnarr contends that all of his agricultural buildings should be "sound valued." See Ind. Admin. Code tit. 50, r. 2.2-7-7.1(f)(6)(H). He also argues that those buildings which have already been sound valued should be deemed worth less than $50 and given a True Tax Value of zero pursu ant to rule 2.2-7-7.1(f)(6)(I).
    Schnarr offered nothing other than his opinion to either hearing officer Norris or this Court concerning what condition should be assigned to his agricultural buildings. Therefore, Schnarr has not presented any evidence on which this Court may conduct a review of hearing officer Norris' recommendations and the State Board's decision. The State Board's assessment of the agricultural buildings is therefore AFFIRMED.
    This Court holds that the State Board acted in an arbitrary and capricious manner when it refused to allow Schnarr's tillable land to be classified as severely flooded (Type 42). The State Board decision constitutes an error of law. Additionally, the State Board's decision regarding the grade of Schnarr's residence is not supported by the evidence.
    For the above stated reasons, the State Board's assessment is REVERSED and REMANDED for further action consistent with this opinion on the issues of an

application of an influence factor for flooding and grade. In all other respects and to all other issues, the State Board's final determination is AFFIRMED.

Footnote:     1 See Ind. Code Ann. § 6-1.1-31-6 (West 1989).
Footnote:     2 Schnarr is claiming errors on two parcels of land. Cause number 82T10-9710- SC-00186 relates to Schnarr's 6.33 acres of land that includes his homesite. This will be referred to as "residential property." Cause number 82T10-9711-SC-00190 relates to Schnarr's 142 acres of land and improvements that the Court will refer to as the "agricultural land."
Footnote:     3 The regulation does require the floods to be "damaging." Ind. Admin. Code tit. 50, r. 2.2-5-2(2)(B). Although what constitutes damaging is not defined, it is clear that Schnarr has shown his property was damaged by the floods in Daviess County. Schnarr has provided the Court with numerous photographs as well as his testimony regarding the damage to his property.

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