BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF WYOMING
IN THE MATTER OF THE APPEAL OF )
T.R. AND EMILY SHELBY FROM )
A DECISION OF THE SHERIDAN COUNTY ) Docket No. 2001-153
BOARD OF EQUALIZATION - 2001 )
PROPERTY VALUATION )
FINDINGS OF FACT
CONCLUSIONS OF LAW
DECISION AND ORDER
APPEARANCES
T. R. and Emily Shelby, Petitioners, appearing pro se.
Paul Fall, Sheridan County Assessor, appearing pro se.
DIGEST
This matter was considered by the State Board of Equalization (State Board) consisting of Edmund J. Schmidt, Chairman, Roberta A. Coates, Vice-Chairman, and Sylvia Lee Hackl, Member, on written information pursuant to a Briefing Order (Locally Assessed Property) dated October 25, 2001. The appeal arises from a decision of the Sheridan County Board of Equalization (County Board) affirming the assessor's classification of Petitioners' land as commercial. Petitioners contend the decision of the County Board was in error, and the land should properly be classified as agricultural, because the land is being used and has been used to harvest hay pursuant to a lease entitling the owners to a portion of the yield.
On appeal, the State Board must consider the following issue:
Was the County Board decision affirming the classification of Petitioners' land as commercial, supported by substantial evidence, in accordance with procedures required by law, and neither arbitrary, capricious, nor inconsistent with law?
JURISDICTION
The State Board is mandated to "hear appeals from county boards of equalization . . . upon application of any interested person adversely affected" and to hold hearings after due notice pursuant to the Wyoming Administrative Procedure Act and prescribed rules and regulations. Wyo. Stat. 39-11-102.1(c). An appeal from a county board of equalization decision must be filed with the State Board within thirty (30) days from entry of the county board decision. Rules, Wyoming State Board of Equalization, Chapter 3, 2.
DISCUSSION
Petitioners filed an appeal with the County Board challenging the 2001 estimate of fair market value established by the Assessor for their property. Petitioners argue the Assessor wrongfully assigned a fair market value to the property. They assert the Assessor's classification and assessment of the property as commercial land is incorrect because: (1) the property has a agricultural use, 2) The property had an agricultural use for the prior two years, 3) the taxpayer obtained a monetary profit from the agricultural use and 4) the agricultural use is permitted by the zoning authority.
The Assessor did not value Petitioners' property agricultural because: (1) the lots are smaller than 35 to 40 acres, (2) agricultural use, as defined by Wyo. Stat. 39-2-103(a)(i) (recodified as Wyo. Stat. 39-13-101), is not met, (3) the property is platted and zoned for commercial and industrial use.
The County Board's Order dated August 7, 2001, found Petitioners had failed to present enough evidence supporting the intent to use the land as agricultural. "The evidence presented by the Petitioners of their intent to use the land for agricultural purposes does not offset their actions of annexation, subdivision, and rezoning, which indicate their intent to use the land for commercial purposes." Therefore, the County Board held that the Assessor properly assessed Petitioners' property as commercial.
Petitioners filed a letter with the State Board on September 4, 2001, appealing the County Board's order.
FINDINGS OF FACT
1. Petitioners appealed to the County Board the classification and value of five parcels of land owned in Sheridan County. The parcels were historically classified by the Assessor as agriculture and thus valued based on productivity rather than market value. In 2001 the Assessor reclassified the lands to a commercial classification and valued the land on the estimated market value. The County Board held a hearing and upheld the classification and value as determined by the Assessor. The County Board order is dated August 7th, 2001. [County Board Record p.67]. Petitioners' notice of appeal to this SBOE was filed on September 4, 2001. The Notice of Appeal was filed within thirty (30) days of the Order.
2. Petitioners filed an opening brief on November 28, 2001. The Assessor filed a response brief on December 19, 2001. Petitioners filed a reply brief on January 11, 2002. [SBOE File.]
3. Petitioners purchased the property in 1986 from the United States Small Business Administration. Petitioners subdivided the property into seven (7) lots varying in size from one (1) to nine (9) acres. In 1987 the property was annexed into the city of Sheridan and the zoning was changed to B-1 Business, Parcel 1 was zoned M-1, Industrial District. [County Board Record p. 55]. One lot, Lot 3, is not under appeal. Lot 3 is in the middle of the property and has a nursing home located on it. [County Board Record p. 3].
4. Roy Dygert has been cutting alfalfa on the property and has maintained the property by plowing and planting grass, controlling the weeds, removing the snow and maintaining the fence. He also placed irrigation equipment on the property. [Tape Recording of County Board Hearing]. Dygert sells the alfalfa and pursuant to an "Agriculture Lease" between Dygert and Petitioners. The proceeds of the sale of the alfalfa is to be split with Dygert receiving 75% of the proceeds and Petitioners receiving 25%. [County Board Record p. 6]. The record is either inaudible or void of evidence as to whether or not Petitioners actually received any monies from Dygert's activities.
5. The Sheridan County Assessor's Office applied the Computer Assisted Mass Appraisal (CAMA) method to determine the fair market value of the property. [Tape Recording of County Board Hearing].
6. The County Board found Petitioners had told the Assessor's office the reason for maintaining the lots in an agricultural condition was to create a view for the patients at the nursing home. Mr. Shelby affirmed during the County Board hearing that this was the reason. He later testified the primary purpose of the land use was for agricultural profits. [County Board Record p. 65].
7. Petitioners failed to present any evidence as to the fair market value of the property. [County Board Record p. 66].
8. Any Discussion above or Conclusion of Law below which includes a finding of fact may also be considered a Finding of Fact and, therefore, is incorporated herein by this reference.
CONCLUSIONS OF LAW
9. Petitioners' Notice of Appeal was timely filed and the State Board has jurisdiction to determine this matter.
10. This State Board's inquiry is limited to whether the classification of Petitioners' land, as affirmed by the County Board is: (a) arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law; (b) in excess of statutory jurisdiction or authority; (c) without observance of procedures required by law; or (d) unsupported by substantial evidence. Rules, Wyoming State Board of Equalization, Chapter 3, 9.
11. The controlling issue before us is whether there is substantial evidence in the
record that reasonably supports the conclusion reached by the County Board. As a reviewing
body, we will not substitute our judgment for findings reasonably supported by evidence in
the County Board record. Laramie County Board of Equalization v. State Board of
Equalization, 915 P.2d 1184, 1189 (Wyo. 1996); Amax Coal v. State Board
of Equalization, 819 P.2d 825 (Wyo. 1991); Sage Club, Inc. v. Employment Security
Commission, 601 P.2d 1306, 1310 (Wyo. 1979). While substantial evidence may be less
than the weight of the evidence, it cannot be clearly contrary to the overwhelming weight
of the evidence. As the Wyoming Supreme Court has stated, substantial evidence "is
more than a mere scintilla of evidence or suspicion of a fact to be established." Mountain
Fuel Supply Company v. Public Service Commission, 662 P.2d 878, 882 (Wyo. 1983).
"Substantial evidence is relevant evidence which a reasonable mind might accept in
support of the conclusions of the agency." Amax Coal, 819 P.2d at 828.
12. The Wyoming Supreme Court has held that "an agency's action is arbitrary and capricious and must be reversed if any essential finding is not supported by substantial evidence." Amax Coal West, Inc. v. State Board of Equalization, 896 P.2d 1329, 1335 (Wyo. 1995), citing Majority of Working Interest Owners in Buck Draw Field Area v. Wyoming Oil and Gas Conservation Commission, 721 P.2d 1070, 1079 (Wyo. 1986), and Amax Coal v. State Board of Equalization, supra. "Substantial evidence is that quantum of relevant evidence which would be accepted by a reasonable mind as adequate to support the conclusion." Gray v. Wyoming State Board of Equalization, 896 P.2d 1347, 1348 (Wyo. 1995). The taxpayer requesting agricultural classification for property has the burden of proving compliance with the statutory requirements for that classification. Appeal of the Natrona County Assessor (Pedro/Aspen, Ltd.), 1996 W.L. 308448 (Wyo. St. Bd. Eq. 94-270).
13. Section 39-13-101(a)(iii) of the Wyoming Statutes defines agricultural land as "land which has been used or employed during the previous two (2) years and presently is being used and employed for the primary purpose of obtaining a monetary profit as agricultural or horticultural use or any combination thereof . . .." The Department of Revenue's rules reiterate this definition, and add, "[A]gricultural land shall generally include land actively farmed or ranched to obtain a fair rate of return." Rules, Wyoming Department of Revenue, Chapter 10, 3(a) (February 11, 1999). The Department of Revenue's rules further define "primary purpose of obtaining a monetary profit" as:
[T]he owner shall pursue agricultural or horticultural activity for a reasonable profit or at least upon the expectation of reasonable profit consistent with the productive capability of the land in question. The profit or reasonable expectation thereof shall be viewed from the standpoint of the fee owner and measured on the basis of the productive capability of the land in question.
Rules, Wyoming Department of Revenue, Chapter 10, 3(a)(ii).
14. The Department of Revenue's rules also define "non-agricultural lands" as "[p]arcels of land forty (40) acres or less, whether subdivided or not, unless the landowner provides proof that such land should otherwise be classified as agricultural land." Rules, Wyoming Department of Revenue, Chapter 10, 3(c)(x) [emphasis supplied].
15. The Assessor classified the land as commercial in accordance with the Department of Revenue's rules. He then valued the land accordingly. An assessor's valuation is presumed valid, accurate and correct, which presumption survives until overturned by credible evidence. Basin Electric Power Coop. v. Dept. of Revenue, 970 P.2d 841, 851 (Wyo. 1998). The burden was on Petitioners to demonstrate that the land - five parcels of less than 40 acres each - was being "used or employed during the previous two (2) years and presently [was] being used and employed for the primary purpose of obtaining a monetary profit as agricultural or horticultural use." Wyo. Stat. 39-13-1-1(a)(iii); Rules, Wyoming Department of Revenue, Chapter 10, 3(c)(x); Appeal of the Natrona County Assessor (Pedro/Aspen, Ltd.), supra. 'Substantial evidence' is a term of art, best described as relevant evidence that a reasonable mind can accept as adequate to support an agency's conclusion." Sidwell v. State Worker's Compensation Div., 977 P.2d 60, 63 (Wyo. 1999).
16. In this case, the only evidence of record supporting Petitioner's contention that the land should be classified as agricultural was the oral testimony of Roy Dygert and the Petitioners, and an "Agriculture Lease". There was no documentary evidence Petitioners had been paid any money for the agriculture activities on the property and there was no evidence the Petitioners claimed agricultural income with the Internal Revenue Service. Oral testimony, unsupported by adequate documentary evidence, has been deemed insufficient to justify classifying land as agricultural. Appeal of K. M. Reeb, 1998 W.L. 918633 (Wyo. St. Bd. Eq. 97-228); Appeal of Natrona County Assessor (Marshall), 1996 W.L. 308470 (Wyo. St. Bd. Eq. 94-276); Appeal of the Albany County Assessor (Bishop), 1991 W.L. 214673 (Wyo. St. Bd. Eq. 91-91); see also Appeal of Natrona County Assessor (Pedro/Aspen, Ltd.), supra.
17. Petitioners did not carry their burden of affirmatively documenting compliance with
the statutory requirements to justify an agricultural classification. Appeal of the
Natrona County Assessor (Pedro/Aspen, Ltd.), supra. The County Board's decision is
supported by substantial evidence, and its order affirming the Assessor's classification
and valuation of Petitioners' land is not arbitrary and capricious. Amax Coal West,
Inc. v. State Board of Equalization, supra, citing Majority of Working
Interest Owners in Buck Draw Field Area v. Wyoming Oil and Gas Conservation Commission,
supra, and Amax Coal v. State Board of Equalization, supra.
18. We find the County Board's order particularly helpful when it finds: "The evidence presented by the Petitioners of their intent to use the land for agricultural purposes does not offset their actions of annexation, subdivision, and rezoning, which indicate their intent to use the land for commercial purposes." We agree the primary purpose of Petitioners as demonstrated by the rezoning and annexation was to use the land for purposes other than agricultural. To overcome such demonstrated intent, more evidence of agriculture use is required than Petitioners presented in this matter.
THIS SPACE INTENTIONALLY LEFT BLANK
ORDER
IT IS THEREFORE HEREBY ORDERED:
The decision of the Sheridan County Board of Equalization affirming the assessors commercial classification of the property at issue shall be, and the same is, hereby affirmed, and the value assigned is affirmed.
Pursuant to Wyo. Stat. 16-3-114 and Rule 12, Wyoming Rules of Appellate Procedure, any person aggrieved or adversely affected in fact by this decision may seek judicial review in the appropriate district court by filing a petition for review within 30 days of the date of this decision.
DATED this 27th day of March, 2002.
STATE BOARD OF EQUALIZATION
Edmund J. Schmidt, Chairman
Roberta A. Coates, Vice-Chairman
Sylvia Lee Hackl, Member
ATTEST:
Wendy J. Soto, Executive Secretary