Mahan v. State Bd. of Tax Com'rs, 49T10-9204-TA-00020
| Decision Date | 25 October 1993 |
| Docket Number | No. 49T10-9204-TA-00020,49T10-9204-TA-00020 |
| Parties | Robert W. MAHAN and Theodosia P. Mahan, Petitioners, v. STATE BOARD OF TAX COMMISSIONERS, Respondent. |
| Court | Indiana Tax Court |
John R. Rumple, Sharpnack, Bigley, David & Rumple, Columbus, for petitioners.
Pamela Carter, Atty. Gen., Marilyn S. Meighen, Deputy Atty. Gen., Indianapolis, for respondent.
The Petitioners, Robert W. Mahan and Theodosia P. Mahan (the Mahans), appeal the final determination of the Respondent, the State Board of Tax Commissioners (the State Board), assessing a parcel of the Mahans' Bartholomew County commercial property for the March 1, 1989, assessment.
I. Whether the State Board's 1991 amendment of the 1988 Bartholomew County Land Valuation Order is effective for the March 1, 1989, assessment.
II. Whether the State Board properly addressed the question of primary and secondary use in assessing the property.
III. Whether the State Board properly graded the buildings on the property.
In 1986 and 1987, acting under the statutory mandate of IND.CODE 6-1.1-4-13.6, the Bartholomew County Land Valuation Commission (the Commission) collected data and determined the values of all Bartholomew County land for the 1989 reassessment. Upon completion, the Commission forwarded its recommendations and proposed order to the State Board for final approval and issuance of the Land Order. Sometime during this process, however, information was omitted. Thus the recommendations sent to the State Board were incomplete.
The State Board issued the Land Order on August 24, 1988. By that time, the local assessors had already begun the reassessment process, employing the values the Commission intended to submit to the State Board. Due to the discrepancies, the State Board's Land Order had some lower values than the Commission's proposed order. The State Board was informed of the discrepancies and amended the Land Order in March of 1991 to conform with the Commission's proposed order.
Prior to the amendment, the Land Order provided that commercial and industrial platted parcels in Columbus Township were to be valued according to the front foot method. These properties were further divided into several zones, and the parcels within Zone 5 were to have a maximum high value of $250 per front foot. The Commission's proposed order, though, had called for a maximum high value of $450 per front foot. The State Board's March 1991 Amended Land Order sanctioned both a $450 maximum high front foot value in Zone 5 and a square foot valuation method for commercial parcels in all zones.
The Mahans own commercial property in Zone 5 of Bartholomew County, Indiana, on which they operate an automobile dealership. The Mahan parcel was valued under the square foot method. The State Board issued its final determination on March 6, 1992. The Mahans filed this appeal on April 20, 1992. Additional facts will be supplied as necessary. 1
When acting within the scope of its authority, the State Board is accorded great deference. Wirth v. State Bd. of Tax Comm'rs (1993), Ind.Tax, 613 N.E.2d 874, 876 (citing Centrium Group v. State Bd. of Tax Comm'rs (1992), Ind.Tax, 599 N.E.2d 242, 243). Accordingly, the court will reverse the State Board's final determination only when it is unsupported by substantial evidence, constitutes an abuse of discretion, exceeds statutory authority, or is arbitrary or capricious. Id. (citing Hatcher v. State Bd. of Tax Comm'rs (1992), Ind.Tax, 601 N.E.2d 19, 20).
IC 6-1.1-4-13.6, passed by the legislature in preparation for the 1989 general reassessment, provided for the establishment of county land valuation commissions throughout the state. Each commission was to determine the values of all commercial, industrial, and residential land within the county. IC 6-1.1-4-13.6(e). Subsequently, the State Board was to review the determinations made by the commission and make the modifications it deemed necessary to provide uniformity and equality. IC 6-1.1-4-13.6(f). After the State Board had completed its review, it was required to
give notice to the county and township assessors of its decision on the values. Within twenty (20) days after that notice, the county assessor or any township assessor in the county may appeal the values to the state board. The state board shall hold a hearing on the appeal in the county. The state board shall give notice of the hearing under IC 5-3-1.
IC 6-1.1-4-13.6(g). The final stage in the process provided for dissemination of the State Board's final decision:
[t]he county assessor shall notify all township assessors in the county of the values as determined by the commission and as modified by the state board on review or on appeal. Township assessors shall use the values as determined by the commission and modified by the state board in making assessments.
IC 6-1.1-4-13.6(h) (emphasis added).
While the statutory procedure was followed in Bartholomew County, the problem arose because the Land Order issued by the State Board was based on insufficient information from the Commission. This led to a conflict between the values intended by the Commission and actually used by the assessors on one hand, and the values expressed in the Land Order on the other. The issue therefore becomes two-fold: first, whether the values determined by the Commission or the values expressed by the State Board in the initial Land Order control; and secondly, whether the March 1991 Amended Land Order, conforming with the Commission's original intended figures, has any effect on the 1989 assessment.
Land values are determined based on the appropriate unit values: front foot value, square foot value, acreage value, and site value. See 50 I.A.C. 2.1-2-1(b). According to the initial Land Order issued by the State Board in August of 1988, the land located in Zone 5 was to be assessed using the front foot method, with values ranging from a low of $150 per front foot to a high of $250 per front foot. In the case at bar, however, assessment of the Mahans' Zone 5 property was calculated based on the square foot method, although a square foot price was not indicated until the Amended Land Order was adopted in March of 1991. Consequently, the Mahans argue their parcel should have been priced pursuant to the front foot method, as designated by the initial Land Order. The Mahans are correct.
IC 6-1.1-4-13.6(g) mandates the State Board to give notice of its final determination to the affected county and township assessors. IC 6-1.1-4-13.6(g). In turn, any of the assessors may petition the State Board for further review. Id. Regardless of any further review, the State Board's ultimate final setting of values is binding on the assessors under subsection (h): "[t]ownship assessors shall use the values as determined by the commission and modified by the state board in making assessments." IC 6-1.1-4-13.6(h) (emphasis added).
In the present case, when the State Board issued the initial Land Order, the Bartholomew County assessor, as well as the Bartholomew County township assessors, had the right to seek review. While the Zone 5 front foot valuation method and the $250 maximum high value were contained in the initial Land Order, there was no provision for square footage valuations in Zone 5. The error could easily have been corrected by appeal under IC 6-1.1-4-13.6(g). None was taken, however, and the township assessor was required to use the values, "modified by the state board," to make assessments. See IC 6-1.1-4-13.6(h). To allow any other reading would eviscerate the plain meaning of subsection (h), which is stated in mandatory terms. Moreover, "[t]he State Board has the final authority under IND.CODE 6-1.1-4-13.6 to set the values in county land valuation orders." Wirth, 613 N.E.2d at 878 (emphasis added). The initial 1989 assessment using the square foot valuation was therefore improper, and the initial Land Order, not the assessors' figures, is binding.
When the Amended County Land Valuation Order was adopted in 1991, one of the amendments added a square foot value for commercial applications. The State Board was well within its implicit authority to amend the Land Order, see Miller v. Gibson County Solid Waste Management Dist. (1993), Ind.Tax, 622 N.E.2d 248, 259, (citing Northern Indiana Pub. Serv. Co. v. Citizens Action Coalition (1989), Ind., 548 N.E.2d 153, 158); however, the 1991 amendment can be applied only prospectively, and thus the amendment does not ratify the 1989 actions of the local assessors. The Amended Land Order, like the initial Land Order, is the State Board's final pronouncement on the valuation of Bartholomew County realty. It is binding on county officials and constitutes a State Board rule subject to the same rules of construction as statutes. See Johnson County Farm Bureau Coop. Ass'n v. Indiana Dep't of State Revenue (1991), Ind.Tax, 568 N.E.2d 578, 586, aff'd (1992), Ind., 585 N.E.2d 1336.
The general rule of statutory construction is that statutes are to be given prospective effect only, unless the enacting body unambiguously and unequivocally intended retrospective effect as well. State ex rel. Indiana State Bd. of Dental Examiners v. Judd (1990), Ind.App., 554 N.E.2d 829, 832 (citing Turner v. Town of Speedway (1988), Ind.App., 528 N.E.2d 858, 863). Like other rules of construction, this one is applicable to regulatory enactments as well as statutes. Manns v. State Dep't of Highways (1989), Ind., 541 N.E.2d 929, 936 (citing State ex rel. Uzelac v. Lake Criminal Court (1965), 247 Ind. 87, 212 N.E.2d 21). Amendments, too, are to operate prospectively, Fort Wayne National Corp. v. Indiana Department of State Revenue (1993), Ind.Tax, 621 N.E.2d 668, 673, and retroactive application of even remedial amendments is disfavored when existing rights would be infringed. Brane v. Roth (1992), Ind.App., 590 N.E.2d...
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