Indianapolis, IN    Indianapolis, IN
    Indianapolis, IN


    IN THE INDIANA TAX COURT _____________________________________________________________________

KATY INDUSTRIES/DIEHL MACHINES,                                           )
    Petitioner,                                                                )
    v.                                                                         )   Cause No. 49T10-9701-TA-95
STATE BOARD OF TAX COMMISSIONERS,                                              )
    Respondent.                                                                )    


October 29, 2001


    Petitioner Katy Industries/Diehl Machines (“Katy”) appeals the July 23, 1998 final determination of the State Board of Tax Commissioners (State Board) valuing its property for the March 1, 1994 assessment date.


Whether Katy’s improvements are entitled to a change in grade?

Whether Katy’s improvements are entitled to additional obsolescence depreciation?

Whether Katy’s land is entitled to a negative influence factor adjustment?


    Katy timely filed a Form 131 Petition for Review of Assessment (“Form 131”) with the State Board challenging the 1994 assessment of its Wabash County, Indiana property. In its Form 131, Katy claimed that its improvements were entitled to an additional obsolescence adjustment, that its land was improperly valued, and that its improvements were graded improperly. On November 22, 1996, the State Board issued its final determination on Katy’s Form 131.
    The Wabash County Commissioners (the Commissioners) subsequently requested the State Board to rehear the matter. As a result, the State Board held another hearing on June 30, 1998. On July 23, 1998, the State Board issued another final determination in which it raised the grading on Katy’s improvements and upheld its original award of a 50% obsolescence adjustment. At the same time, the State Board rescinded its first final determination.
    Katy filed an original tax appeal with this Court, and trial was held on February 15, 1999. Additional facts will be supplied as necessary.

    This Court gives great deference to final determinations of the State Board. Wetzel Enters. Inc. v. State Bd. of Tax Comm’rs, 694 N.E.2d 1259, 1261 (Ind. Tax Ct. 1998). Accordingly, this Court will reverse a State Board final determination only if it is unsupported by substantial evidence, is arbitrary or capricious, constitutes and abuse of discretion, or exceeds statutory authority. Id.
    Katy bears the burden of showing the invalidity of the State Board’s final determination. See Clark v. State Bd. of Tax Comm’rs, 694 N.E.2d 1230, 1233 (Ind. Tax Ct. 1998). In bearing that burden, Katy may only present evidence to this Court that it presented at the administrative level. State Bd. of Tax Comm’rs v. Gatling Gun Club, Inc., 420 N.E.2d 1324, 1328 (Ind. Ct. App. 1981).

    In its November 1996 final determination, the State Board found that, inter alia:
Upon visual inspection and in consideration of 50 IAC 2.1-4-3(f) . . . the grades of buildings 1, 2, 3 and 4 are best described as “D+2”, the grades of buildings 6 and 7 are best described as “D-2”, the grade of building 5 is best described as “D+1”, the grade of building 8 is best described as “D” and the grade of building 9 is best described as “C”.

(Stip. Ex. 1.) In its second final determination, however, the State Board raised the grade on three of the buildings. Specifically, it raised the grade on buildings 6 and 7 to “D,” and building 8’s grade was raised to a “D+1.”
     To support the grade adjustments, the State Board relied on the recommendation of its hearing officer, who performed a site inspection of Katy’s buildings. See footnote The hearing officer sufficiently explained at trial why, based on her inspection and Regulation 17, she thought the grade adjustments on the three buildings were warranted. (Trial Tr. at 40-41;43-49.)
In contesting the State Board’s grade adjustments, Katy did not present any probative evidence to support its claim. Indeed, all the Court could find as to what Katy’s argument was based on was a statement made by Katy’s tax consultant at the June 30, 1998 rehearing: “we would agree with the State’s [November] finding on the grading.” (Stip. Ex. 14 at 4.) This consultant was with the hearing officer at the time of the site inspection and offered no evidence to refute the hearing officer’s observations. Likewise, counsel for Katy never offered an opportunity for the consultant to testify at trial in order to refute the State Board’s findings. Accordingly, the State Board’s final determination on the issue of grade is AFFIRMED. See footnote


In its July final determination, the State Board awarded Katy a 50% obsolescence depreciation adjustment on one of the improvements to the property. Katy, on the other hand, seeks at least a 60% depreciation adjustment.
Originally, Katy submitted a replacement cost calculation, quantifying the amount of obsolescence it sought as 86%. (See Stip. Ex. 7 at 4.) In its calculation, Katy mainly relied on the fact that the improvement, which was over one hundred years old, lacked adequate lighting and heating. Nevertheless, Katy used a new, pre-engineered steel building as the basis for its model. Consequently, while the State Board hearing officer used Katy’s calculation as a model to calculate the obsolescence adjustment, she also made the necessary adjustments to account for the appropriate amount of finish to be applied to the manufacturing area, irregular floor plan, and wall height. (Trial Tr. at 28-31); (Resp’t Post-Tr. Br. at 10.) For the aforementioned reasons, the Court finds that the State Board’s determination that Katy’s improvement is entitled to a 50% obsolescence adjustment is AFFIRMED. See footnote

Katy has also argued that its land is entitled to a negative influence factor to account for its “topography and the presence of the land in a designated flood plain (sic).” (Pet’r Post-Tr. Br. at 11.) This argument, however, was raised and addressed in the State Board’s first final determination only. As a result, the record before this Court is devoid of any evidence calculating the appropriate adjustment to be applied. Katy, therefore, is not entitled to any relief on this issue.

    For the foregoing reasons, this Court finds that Katy takes nothing by way of its petition, and the final determination of the State Board is therefore AFFIRMED.

Footnote: It also appears that the State Board placed some reliance on testimony presented by Brenda Conner, the township assessor, at the rehearing. Ms. Conner’s testimony was, however, merely her opinion that the grades should be raised. (See Trial Tr. at 19-21.) An opinion alone carries no evidentiary value. See Hoogenboom-Nofziger v. State Bd. of Tax Comm’rs, 715 N.E.2d 1018, 1023 (Ind. Tax Ct. 1999)

Footnote: At trial, and in their briefs, the parties discuss the standard used for establishing grade. More specifically, the parties debate whether an improvement’s grade (i.e., the quality of materials, workmanship, and design) should be determined as of the time the improvement is built, or as of the time of assessment. Nevertheless, neither party presented any evidence to support their arguments, and therefore the Court will not address the issue.

Footnote: In effort to further quantify its obsolescence entitlement, Katy had also offered a comparison sales method. Nevertheless, Katy did nothing more than supply some sales data from three supposedly comparable properties, as well some pages from an appraisal textbook. Katy’s tax consultant made no mention of this method at the State Board rehearing, nor did he testify about this method at trial. Given Katy’s failure to explain and link the method to the instant case, the Court will not now craft Katy’s argument.