BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF WYOMING
IN THE MATTER OF THE APPEAL OF )
MARTIN T. & DOLORES D. MICHELENA )
FROM A DECISION OF THE SHERIDAN ) Docket No. 2001-157
COUNTY BOARD OF EQUALIZATION - )
2001 PROPERTY VALUATION )
FINDINGS OF FACT
CONCLUSIONS OF LAW
DECISION AND ORDER
Martin T. Michelena, Petitioner, appearing pro se.
Paul Fall, Sheridan County Assessor, appearing pro se.
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 residential. Petitioners contend that 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.
On appeal, the State Board must consider the following issue:
Was the County Board decision affirming the classification of Petitioners' land as residential, supported by substantial evidence, in accordance with procedures required by law, and neither arbitrary, capricious, nor inconsistent with law?
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.
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 land should be assessed as agriculture land because: (1) the property has an agricultural use of raising hay and grazing animals, and (2) The property had an agricultural use for prior years.
The Assessor valued Petitioners' property as residential and not agricultural because: (1) the lots are small, each less than 2 acres; (2) one lot is located within the city limits; (3) a second lot serves as the site of Petitioners' primary residence; and (4) the third lot has a mobile home used as a residence. The County Board affirmed the Assessor's valuation on August 7, 2001.
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 three parcels of land owned in Sheridan County. The parcels were historically classified by the Assessor as agricultural and thus valued based on productivity rather than market value. In 2001, the Assessor reclassified the property and valued it based on its estimated market value. The County Board held a hearing and upheld the classification and value as determined by the Assessor.
2. The County Board's order is dated August 7, 2001. [County Board Record p. 67]. Petitioners' notice of appeal to the State Board was filed on August 25, 2001. The Notice of Appeal was filed within thirty (30) days of the County Board's Order. Petitioners filed a letter on November 28, 2001, stating the intent to rely on their Notice of Appeal. The Assessor filed a response on January 25, 2002, relying on the evidence presented at the County Board hearing. [State Board of Equalization File.]
3. Two lots are platted in the Krohn subdivision. One lot is 1.69 acres and the other lot is 1.71 acres. One lot contains the primary residence of Petitioners. One lot contains a mobile home that the Petitioners' son has occupied. The third lot is 1.85 acres and is annexed to the City of Sheridan. [County Board Record pp. 13, 14, 15, Tape Recording of County Board Hearing].
4. Petitioners harvest hay on the lots in the Krohn subdivision. In 2000, the Petitioners harvested 3 tons of hay from the property and sold the hay for $105.00 per ton. There was no evidence presented at the hearing of monies earned from the land in prior years. [Tape Recording of County Board Hearing].
5. Petitioners allow their family to graze livestock on the property. [Tape Recording of County Board Hearing].
6. 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].
7. Petitioners failed to present any evidence as to the fair market value of the property. [Tape Recording of County Board Hearing].
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. The 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, 828 (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, "Agricultural 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'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).
15. The Assessor classified the land as residential 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, three parcels of less than 2 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 Petitioners' contention that the land should be classified as agricultural was the oral testimony of Mr. Michelena that Petitioners had harvested and sold hay for $105.00 per ton. There was no documentary evidence that Petitioners were paid any money for the agriculture activities on the property and there was no evidence the Petitioners had 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.
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IT IS THEREFORE HEREBY ORDERED:
The decision of the Sheridan County Board of Equalization affirming the Assessor's residential 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 11th day of April, 2002.
STATE BOARD OF EQUALIZATION
Edmund J. Schmidt, Chairman
Roberta A. Coates, Vice-Chairman
Sylvia Lee Hackl, Member
Wendy J. Soto, Executive Secretary