BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF WYOMING
IN THE MATTER OF THE APPEAL OF )
JAMES HULSEY FROM A DECISION )
OF THE FREMONT COUNTY BOARD ) Docket No. 2001-163
OF EQUALIZATION - 2001 )
PROPERTY VALUATION )
FINDINGS OF FACT
CONCLUSIONS OF LAW
DECISION AND ORDER
APPEARANCES
James Hulsey, Petitioner, appearing pro se.
Eileen Oakley, Fremont 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 5, 2001. The appeal arises from a decision of the Fremont County Board of
Equalization (County Board) affirming the Assessor's classification of Petitioner's land
as rural residential. Petitioner contends 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 graze horses for use in a dude ranch business.
On appeal, the State Board must consider the following issue:
Was the County Board decision affirming the classification of Petitioner's land as rural residential, 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
Petitioner filed an appeal with the County Board challenging the 2001 estimate of fair
market value established by the Assessor for his property. Petitioner argues the Assessor
wrongfully assigned a fair market value to the property. He asserts the Assessor's
classification and assessment of the property as rural residential is incorrect and the
property should be classified as agricultural because: (1)The primary purpose of the
property is to make a monetary profit; 2) The property is used for the rearing, feeding
and management of livestock; and 3) The use of the property is consistent with the
productive capability of the land.
The Assessor did not classify Petitioner's property as agricultural because it is
operated as a dude ranch. The primary purpose is use of commercial buildings and rental of
horses and is therefore not agricultural.
The County Board's Order dated August 6, 2001, found Petitioner failed to present
enough evidence supporting the intent to use the land as agricultural. "The only
purpose of the dude ranch facility is renting of horses for recreational purposes which is
specifically excluded from agricultural classification." Therefore, the County Board
held that the Assessor properly assessed Petitioner's property as rural residential.
Petitioner filed a letter with the State Board on August 29, 2001, appealing the County
Board's Order.
FINDINGS OF FACT
1. Petitioner owns 185 acres in Fremont County. The property has been operated as a
dude ranch since 1980. [County Board Record p.10].
2. Petitioner appealed to the County Board the classification and value of his land in Fremont County. The property was historically classified by the Assessor as agricultural land and thus valued based on productivity rather than market value. In 2001, the Assessor reclassified the lands to rural residential and valued the land on its 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 6, 2001. [County Board Record p.100]. Petitioner's notice of appeal to the State Board was filed on August 29, 2001. The Notice of Appeal was filed within thirty (30) days of the Order.
3. Petitioner filed a letter with the Board on October 22, 2001, stating his intent to rely on the Notice of Appeal as his opening brief. The Assessor filed a letter stating her intent to rely on the County Board record on December 20, 2001. [State Board File].
4. Both the Assessor and Petitioner stipulated the market value was correct if the
property is to be assessed at the market value level rather than at agricultural class. [Transcript
of County Board Hearing, p.11].
5. Petitioner introduced advertisements of the dude ranch to demonstrate an intent to
make a profit. [County Board Record pp. 32, 38].
6. Horses graze the acreage and then the horses are rented to the guests of the ranch
and the general public to ride. The primary purpose of the horses is for rental. [County
Board Record p.10, 35, 42].
7. Exhibit 1-4 of the County Board record is a brochure for the property. It
illustrates the property is used primarily for the recreation of the guests. It not only
advertises horse back riding but mountain biking, fishing, photography, snowmobiling, and
other activities. [County Board Record pp. 32].
8. There is no evidence the horses are used for breeding or other agricultural
purposes.
9. 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
10. Petitioner's Notice of Appeal was timely filed and the State Board has jurisdiction
to determine this matter.
11. The Board's inquiry is limited to whether the classification of Petitioner's 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.
12. 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.
13. 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).
14. 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. (emphasis added)
Rules, Wyoming Department of Revenue, Chapter 10, 3(a)(ii).
15. The Department of Revenue's rules define "non-agricultural lands"
as "Commercial land used for retail stores and shops, commercial parking, high-rise
structures, shopping centers, offices, apartment houses, warehouses, commercial feed lots,
dude ranch facilities, and other commercial or income purposes." Rules,
Wyoming Department of Revenue, Chapter 10, 3(c)(vi) (emphasis added). Also, under the
classification of "non- agricultural lands" the rules list "resort or
recreational lands, including dude ranch facilities, summer homes or mountain
cabins." Rules, Wyoming Department of Revenue, Chapter 10, 3(c)(ix)
(emphasis added). It is presumed a valuation is accurate and correct if the value is
established in accordance with the applicable rules that have passed public scrutiny
through agency rule-making. CIG v. Wyoming Dept. of Revenue, 20 P.3d 528, 531
(Wyo. 2001), citing Chicago Burlington & Quincy Railroad Company v. Bruch, 400
P.2d 494, 499 (Wyo. 1965).
16. Petitioners argue the term "facilities," as used in the subsections cited
above only describes buildings. He presents no cogent argument nor persuasive authority in
support of this position. The subsections describe "non-agricultural lands," not
structures. Furthermore, it would be illogical that only structures and not the attendant
land should be taxed as all other property in the State, and that by default land not
containing structures should fall within the agriculture exception.
17. It is logical to consider dude ranches and the renting of horses as a commercial
venture rather than an agricultural venture. The horses on a dude ranch serve as
entertainment and a tourist attraction rather than a venture to raise food or fiber from
the land. We therefore will not set aside the rule of the Department of Revenue.
18. The Assessor classified the land as unplatted rural residential in accordance with
the Department of Revenue's rules. She 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 Petitioner to demonstrate that the land
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).
19. Petitioner did not carry his 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 Petitioner's 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.
ORDER
IT IS THEREFORE HEREBY ORDERED:
The decision of the Fremont County Board of Equalization affirming the Assessor's
classification of the property as rural residential 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 26th day of April, 2002.
STATE BOARD OF EQUALIZATION
Edmund J. Schmidt, Chairman
Roberta A. Coates, Vice-Chairman
Sylvia Lee Hackl, Member
ATTEST:
Wendy J. Soto, Executive Secretary