BEFORE THE STATE BOARD OF EQUALIZATION

FOR THE STATE OF WYOMING

IN THE MATTER OF THE APPEAL OF )

RATTLESNAKE GRAZING ASSOCIATION )

FROM A DECISION OF THE NATRONA )                Docket No. 2001-204

COUNTY BOARD OF EQUALIZATION - )

2001 PROPERTY VALUATION )

FINDINGS OF FACT

CONCLUSIONS OF LAW

DECISION AND ORDER

APPEARANCES

Rattlesnake Grazing Association, by and through Marvin L. Bishop, III of Bishop, Bishop & Yaap, Attorneys for Petitioner.

Susan D. DeWitt, Natrona County Assessor, by and through William W. Harden, Attorney for Natrona County Assessor.

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 February 5, 2002. The appeal arises from a decision of the Natrona County Board of Equalization (County Board) affirming the 2001 valuation by the Natrona County Assessor of agricultural property owned by Rattlesnake Grazing Association (Petitioner) located in Natrona County, Wyoming. The issue is:

Was the County Board decision affirming the Assessor's value of Petitioner's property supported by substantial evidence, according to 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 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 appealed to the County Board its 2001 assessment of rangeland located in Natrona County, Wyoming. The Assessor testified at the County Board hearing that she valued Petitioner's property in accordance with the Wyoming statutes and the rules of the Department of Revenue. The Assessor assigned a value of $717,995.58 to the production value of agricultural land using the Department of Revenue's land productivity classification and valuation rules.

Petitioner argued at the County Board hearing that its agricultural property was worth less than the value assigned by the Assessor because it leases rangeland from the United States Bureau of Land Management (BLM) which restricts not only the number of animal unit months (AUMs) for the BLM land but also the number of AUMs for private deeded land. Petitioner presented an estimate of value by a real estate broker based on the number of AUMs allowed by the BLM. Consequently, Petitioner argued that the value should be only $438,643.63.

The County Board issued its decision in November, 2001, affirming the Assessor's valuation. Petitioner appealed the decision to the State Board on December 12, 2001.

FINDINGS OF FACT

1. The Petitioner owns 19,549 acres of agricultural property consisting primarily of rangeland located in Natrona County, Wyoming. [County Board Record p. 6].

2. The Petitioner not only ranches its private deeded lands but also leases BLM and Wyoming State lands which are all mixed together. The private, federal and state lands are commingled so that livestock can freely graze anywhere. The BLM through the grazing contract, allows a limited number of AUMs to be grazed on the BLM land. Because of the vast size of the land, the privately owned land, the assessed land, is not fenced off from the BLM land. [County Board Record p. 5].

3. The Assessor valued the property at $717,995.58. [County Board Record p. 3]

4. The Petitioner filed an appeal with the County Board on June 12, 2001.[County Board Record p. 1].

5. The County Board held a contested case proceeding on November 13, 2001. [County Board Record p. 24].

6. The County Assessor valued Petitioner's property using the prescribed methodology provided by the Wyoming Department of Revenue Rules Chapter 11. The Department's rules prescribe that rangeland be valued using the AUMs the soil type would support. Using the soil types and a five-year weighted average for average conditions, a range of values is provided to the Assessor to value lands containing those types of soil. The Department provides current agricultural land studies to the assessors who apply the information to all properties falling within the appropriate category. [County Board Record p. 8, County Board Transcript p. 15]. Valuing land using the range of values set by the Department results in all agricultural lands in the state being valued uniformly. [County Board Record p. 1].

7. The land belonging to Petitioner contains five types of soil with five different productive values. [County Board Record pp. 8, 9-23, County Board Transcript p. 15].

8. The Petitioner introduced a letter from Neal Hilston, broker for Hilston Ranch Realty. Mr. Hilston estimated a value for the land by computing the number of AUMs allowed under the Petitioner's contract with the BLM, dividing that number by the total assessed acres, and then calculating the value using the Department of Revenue multipliers for the AUMs per acre. However, the letter itself cautioned: "This is not an appraisal and should not be used as one." [County Board Record pp. 5-7].

9. The Petitioner's methodology does not consider the productivity of the land it only calculates value by using contractual restrictions. [County Board Record p. 8, County Board Transcript p. 15].

10. The Assessor testified that she valued Petitioner's property in accordance with the mass appraisal procedures set forth by the Department. She also provided documentation of the soil analysis of Petitioner's property upon which she relied in determining the productivity value of the land. [County Board Record pp. 9- 23, County Board Transcript pp. 15-18, 20-21].

11. The County Board issued its final order affirming the value set by the Assessor in November, 2001. [County Board Record p. 1].

12. Petitioner filed a notice of appeal with the State Board on December 12, 2001. [State Board Record].

13. 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

14. Petitioner's notice of appeal was timely filed and the State Board has jurisdiction to determine this matter.

15. Agricultural property shall be valued by considering its current use and the capacity of the land to produce agricultural products. Wyo. Stat. 39-13-103(b)(x).

16. Article 15, Section 11, of the Wyoming Constitution provides:

(a) All propertyshall be uniformly assessed for taxation, and the legislature shall prescribe such regulations as shall secure a just valuation for taxation of all property, real and personal.

(b) ... All taxable property shall be valued at its full value as defined by the legislature except agricultural and grazing lands which shall be valued according to the capability of the land to produce agricultural products under normal conditions.

17. The Department has promulgated rules for the method to value agricultural property. The acceptable method is based upon land productivity. Rules, Department of Revenue, Chapter 11, Section 5 (a), (b)(i), and (b)(ii)(c).

18. It is important to note that the Department rules contain definitions and formulas to value agricultural properties. There are three categories of agricultural properties consisting of irrigated crop land, dry crop land and rangeland. Rules, Department of Revenue, Chapter 11 Section 5 (b)(ii). Each category is valued by a different formula. The Department rules for agricultural valuation are annually updated to provide current productivity numbers. Wyo. Stat. 39-13-103(b)(ii).

19. The Assessor utilized the Department rules and classification of land to value Petitioner's property.

20. Our inquiry is limited to whether the 2001 value established by the County Assessor and 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.

21. The County Board is limited to hear and determine the complaint of any person relative to any property assessed or valued. Wyo. Stat. 39-13-102(c)(iv).

22. An assessor's valuation is presumed valid, accurate, and correct, a presumption which survives until overturned by credible evidence. Teton Valley Ranch v. State Board of Equalization, 735 P. 2d 107,113 (Wyo. 1987). A mere difference of opinion as to value is not sufficient to overturn this presumption. J. Ray McDermott & Company v. Hudson, 370 P. 2d 364, 370 (Wyo. 1962). The presumption is especially valid where, as herein, the Assessor valued the property according to the Department's Rules and Regulations which prescribe use of the formulas and land classifications in the assessment of agricultural property. Rules, Department of Revenue, Chapter 11. The Wyoming Supreme Court has recognized the validity of the valuations derived from the CAMA system in Gray v. Wyoming State Board of Equalization, 896 P.2d 1347 (Wyo. 1995). Although the valuation of agricultural property does not involve the CAMA system, we believe that the same principle as set forth in Gray applies because the Department Rules have been properly promulgated and correctly used by the Assessor.

23. The burden of going forward and the ultimate burden of persuasion is upon the Petitioner and shall be met by a preponderance of the evidence. Rules, Wyoming State Board of Equalization, Chapter 2, 19.

24. One question before us is whether there is substantial evidence in the record that reasonably supports the conclusions 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, 915 P.2d 1184, 1188-1189 (Wyo.1996); Amax Coal v. State Bd. of Equalization, 819 P.2d 825 (Wyo. 1991); Sage Club, Inc. v. Employment Sec. Comm'n., 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 of Wyoming, 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 v. State Bd. of Equalization, 819 P.2d 825 at 828 (Wyo. 1991).

25. 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., 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 Bd. of Equalization, 819 P.2d 825(Wyo. 1991). "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 Bd. Of Equalization 896 P.2d 1347 (Wyo. 1995).

26. This matter has been considered twice by the State Board. In the Matter of The Appeal of Susan DeWitt, Natrona County Assessor, Docket No.96-4, July 11, 1996, 1996 WL 392968 (Wyo St. Bd. Eq.) and In the Matter of The Appeal by the Natrona County Assessor from a Decision of the Natrona County Board of Equalization Concerning the 1999 Assessment of Property Owned by Rattlesnake Grazing Assoc., Docket 99-133, March 14, 2000, 2000 WL 290314 (Wyo. St. Bd. Eq.). In both cases the County Board found in favor of the Petitioner and the presumption was in favor of the Petitioner. This time, the County Board found in favor of the Assessor and the presumption is in favor of the Assessor's value. In the previous cases, the State Board affirmed the decision of the County Board in favor of the Petitioner because the Assessor had not introduced adequate evidence to support the assessed valuation. In the Matter of the Appeal by the Natrona County Assessor (Rattlesnake Grazing Association), 2000 WL 290314 (Wyo. Stat Bd. Eq.). The prior decisions are not determinative of this case, however, because each tax year stands on its own. An assessor must assess property on an annual bases. Wyo. Stat. 39-13-109. In this case, after the Petitioner attempted to justify a lower valuation for the land through the exhibit of a real estate broker, the Assessor introduced evidence of the thorough analysis performed for each acre of Petitioner's land in determining productivity. This information, coupled with the Assessor's testimony about her compliance with the Department's Rules regarding agricultural valuation, was sufficient for the County Board to rule in the Assessor's favor.

27. Finally, the valuation methodology introduced by the Petitioner is flawed. The BLM contractually required Petitioner to restrict use of its deeded rangeland to coincide with the restriction placed by the federal government on the use of the BLM lands that were situated adjacent thereto. Such restriction certainly was within the contractual authority of BLM to prevent overgrazing. However, Wyoming law requires that agricultural lands be valued in accordance with their productivity and not in accordance with outside contractual restrictions. If land were valued according to contracts then there would be no uniformity. Those able to negotiate better deals would be taxed differently than those who do not negotiate as effectively. Uniformity is key to taxation. Wyo. Const. Art. 15 11.

28. The County Board's order affirming the value of the Assessor is supported by substantial evidence and is not arbitrary and capricious.

THIS SPACE INTENTIONALLY LEFT BLANK

ORDER

IT IS THEREFORE HEREBY ORDERED:

The decision of the Natrona County Board of Equalization accepting the Assessor's 2001 fair market value 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 23^rd day of May, 2002.

STATE BOARD OF EQUALIZATION

Edmund J. Schmidt, Chairman

Roberta A. Coates, Vice-Chairman

Sylvia Lee Hackl, Member

ATTEST: