Indianapolis, IN
Indianapolis, IN

Indianapolis, IN


DANA CORPORATION,                                                         )
    Petitioner,                                                                )
    v.                                                                         )   Cause No. 49T10-9906-TA-133
DEPARTMENT OF LOCAL                                                            )
GOVERNMENT FINANCE, See footnote             )
    Respondent.            )    


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 Dana’s land a 95% negative influence factor. See footnote For the following reasons, the Court AFFIRMS the State Board’s final determination.

Dana owns land in Wayne County, Indiana. For the 1995 assessment year, Dana’s 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 Dana’s appeal, and Dana subsequently appealed to the State Board. On April 15, 1999, the State Board issued a final determination upholding the BOR’s 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.
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 Comm’rs, 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 taxpayer’s 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 Dana’s land. Under the State Board’s 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 property’s deviation from the norm and (2) quantifies the effect of that deviation on the property’s value. See Talesnick v. State Bd. of Tax Comm’rs, 756 N.E.2d 1104, 1108 (Ind. Tax Ct. 2001).
The record indicates that Dana’s 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 land’s value. Dana’s evidence consisted of a statement from Paul D. Turpin, Project Manager of a company called RMT, Inc. (Stip R. at 34–38.) Turpin estimated that the cost “to perform remedial actions” to Dana’s land would be between $3.7 million and $4.6 million. (Stip. R. at 34.) Dana argues that Turpin’s estimate establishes the effect the contamination has on the use or value of the land for the tax years at issue. (Pet’r Post Hr’g 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 12–13.)
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 concluded—based only on Turpin’s estimate of remedial costs—that 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. Dana’s conclusion does not constitute probative evidence as quantification of a negative influence factor. Consequently, Dana has not made a prima facie case. See footnote

For the aforementioned reasons, the Court AFFIRMS the State Board’s final determination.

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), 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 this opinion.

Footnote: 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 Comm’rs, 756 N.E.2d 1124, 1127 n.1 (Ind. Tax Ct. 2001). Because Dana’s claims and supporting arguments are identical to those previously rejected by the Court, the Court will not address them.

Footnote: The Court is mindful that under the State Board’s 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 property’s value. 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, 527–28 (Neb. 2001) (affirming property’s 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 Dep’t 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 property).