BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF WYOMING
IN THE MATTER OF THE APPEAL OF )
MARK AND KATHY LOVELAND FROM )
A DECISION OF THE CROOK COUNTY ) Docket No. 2002-95
BOARD OF EQUALIZATION - 2002 )
PROPERTY VALUATION )
FINDINGS OF FACT
CONCLUSIONS OF LAW
DECISION AND ORDER
Mark and Kathy Loveland, Petitioners, appearing pro-se.
Susan Redding, Crook County Assessor, appearing pro-se.
This matter was considered by the State Board of Equalization (State Board) consisting of Roberta A. Coates, Chairman, and, Alan B. Minier, Vice-Chairman, on written information and argument pursuant to a Briefing Order (Locally Assessed Property), dated September 26, 2002. It arises from a decision by the Crook County Board of Equalization (County Board) concerning the 2002 valuation of property owned by Petitioners located in Crook County, Wyoming. The issue is:
Was the County Board decision that Petitioners’ property is not agricultural land supported by substantial evidence, according to 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 hold hearings after due notice pursuant to the Wyoming Administrative Procedures 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.
The State Board is required to "[d]ecide all questions that may arise with reference to the construction of any statute affecting the assessment, levy, and collection of taxes, in accordance with the rules, regulations, orders, and instructions prescribed by the department." Wyo. Stat. § 39-11-102.1(c)(iv).
Petitioners filed an appeal with the County Board challenging the 2002 estimate of fair market value established by the Crook County Assessor (Assessor) for property owned by Petitioners. The County Board held a hearing on July 15 and 16, 2002, and subsequently upheld the Assessor’s assessment in a decision issued August 7, 2002. Petitioners then filed a Notice of Appeal with the State Board on August 28, 2002.
On appeal, Petitioners argue their property should have been classified as agricultural. They assert the Assessor’s classification and assessment of their property as non-agricultural land is incorrect because the property has been utilized as agricultural land for the previous two years and is presently being utilized as agricultural land with the primary purpose of obtaining a monetary profit.
The Assessor valued Petitioners’ property as non-agricultural because: (1) the property is in active transition from agricultural land to residential land; (2) the land was being used primarily for a residential purpose; and (3) the land had not been assessed or used for agricultural purposes for at least the past two years.
The County Board’s Order Denying Protest for Agricultural Value found Petitioners failed to present sufficient evidence to overcome the presumption of correctness of the Assessor’s classification and valuation. The County Board found Petitioners’ land to be in active transition from agricultural land to residential land, used primarily for residential purposes. Further, the County Board found that Petitioners’ land had not been used for agriculture in the past two years and that Petitioners’ could not show a reasonable expectation of profit from the agricultural use of the land.
Based on our review of the evidence presented to the County Board, we agree with the conclusion of the County Board that Petitioners’ property did not qualify for agricultural classification for 2002 valuation purposes.
FINDINGS OF FACT
1. The County Board issued its Order Denying Protest for Agricultural Value on August 7, 2002. [County Board Record pp. 103-114]. Petitioners’ Notice of Appeal was filed with the State Board on August 28, 2002, within thirty days of the County Board’s order.
2. Petitioners filed an Opening Brief on November 12, 2002. The Assessor filed a Response Brief on January 15, 2003. Petitioners filed a Reply Brief on January 30, 2003. [State Board File.]
3. Petitioners own a 48.02 acre tract of land in Crook County, Wyoming, which they purchased in April 2000. [County Board Record, p. 0016; County Board Hearing, Tape 1, Side B]. The property was not part of a legally platted subdivision when the Petitioners purchased the property. [County Board Hearing, Tape 2, Side A]. However, the land was covered by the restrictive covenants for the Kara Kreek Ranches subdivision from the time they were filed on April 28, 2000, until they were terminated by action of the landowners in late 2001. [County Board Record, pp. 78-84].
4. Petitioners were in the process of completing the construction of a two story residence on their property on the assessment date, January 1, 2002. The Assessor estimated it was 54% complete on that date. [County Board Record, pp. 0016, 0046-0049].
5. The Assessor assessed Petitioners’ real property as residential land and assigned it a fair market value of $62,430, excluding improvements. [County Board Record, p. 0016]. Petitioners disagree with the Assessor’s classification of their land and believe it should be classified as agricultural land. [County Board Record, pp. 001-004].
6. Petitioners presented no evidence to the County Board showing crop production or other agricultural use of the lands by them in the year 2000. Petitioners did present evidence that prior to their purchase of 48.02 acres, the 451 acre tract of land of which it was a part was valued as agricultural land in 1999 and 2000. [County Board Record, pp. 0072-0074].
7. A Lease Agreement was attached to Petitioners’ Notice of Appeal to the State Board. [State Board Record]. However, Petitioners failed to show good reason for failing to present the evidence at the County Board hearing.
8. Petitioners produced evidence at the County Board hearing that in August 2001 they sold 18.93 tons of hay for $1325 and one 10 year old sorrel gelding horse for $3000. [County Board Record, pp. 0027, 0028. 0075, 0076]. Petitioners provided a copy of their 2001 Internal Revenue Service Schedule F, Profit or Loss from Farming, reflecting the sale of the horse and $1,300 for the sales of livestock, produce, grains and other products they raised. [County Board Record, p. 0077].
9. The Assessor testified the land was not classified as agricultural because the land was purchased primarily for a residence. In support of her position, she pointed to the subdivision of surrounding property into numerous 40 acre parcels. She also stated her opinion that Petitioners’ primary purpose was not to obtain a monetary profit. [County Board Record, Tape 1, Side A].
10. The County Board found Petitioners’ land to be in active transition from agricultural land to residential land, used primarily for residential purposes. Further, the County Board found that Petitioners’ land had not been used for agriculture in the past two years and that Petitioners’ could not show a reasonable expectation of profit from the agricultural use of the land. [County Board Record, p. 0112, ¶¶ 26-29].
11. 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
12. Petitioners’ Notice of Appeal was timely filed and the State Board has jurisdiction to determine this matter.
13. Our inquiry is limited to whether the 2002 assessed value established by the Assessor and confirmed by the County Board is: (a) arbitrary, capricious and 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.
14. In considering the issue of substantial evidence, the question is whether there is evidence of record to be reasonably relied upon in coming to 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. Sage Club, Inc., v. Employment Sec. Comm'n., 601 P.2d 1306 (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 many courts have stated, "[i]t 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). See also: Squillace v. Wyoming State Employees’ and Officials’ Group Insurance Board of Administration, 933 P.2d 488, 490-491 (Wyo. 1997).
15. In the absence of evidence to the contrary, the law assumes public officials have performed their duties properly, unless the official act in question appears irregular on its face. Therefore, a county assessor, acting in an official capacity, is presumed to act with knowledge of what she is doing. 29 Am. Jur. 2d. Public Officials § 203 at 224.
16. The Constitution of the State of Wyoming in Article 15, Section 11 (b) provides:
(b) The legislature shall prescribe the percentage of value which shall be assessed within each designated class. 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. The percentage of value prescribed for industrial property shall not be more than forty percent (40%) higher nor more than four (4) percentage points more than the percentage prescribed for property other than minerals.
16. The statute in effect for 2002 defined 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 is to be agricultural land for the purpose of tax assessment unless legally zoned otherwise by a zoning authority.
Wyo. Stat. § 39-13-101(a)(iii).
17. The applicable Department of Revenue rule provided in pertinent part:
(a) “Agricultural land” means 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 unless legally zoned otherwise by a zoning authority. Agricultural land shall generally include land actively farmed or ranched to obtain a fair rate of return.
(i) “Agricultural” means cultivation of the soil, the production of forage or crops, and the rearing, feeding, and management of livestock, poultry, bees, fish, or other animal species in domestic or captive environments.
(ii) “Primary purpose of obtaining a monetary profit” means the owner shall pursue agricultural or horticultural activity for a reasonable profit or at least upon the expectation of a reasonable profit consistent with the production 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.
(A) “Reasonable profit or expectation of profit” shall not be affected by independent intervening causes of production failure or non-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.
* * *
(C) The assessor shall also consider that certain activities which appear to be agricultural in nature do not by themselves qualify land for agricultural assessment. The activity, by itself, either does not raise the expectation of profit consistent with the land or the activity occurs after the agricultural product has been raised and harvested.
* * *
(II) Grazing on land by any animal kept as a hobby will not be considered agricultural unless accompanied by other agricultural activities which would generate an expectation of profit consistent with the land.
(c) “Non-agricultural lands” shall include but not be limited to lands as
described in the state of Wyoming Appraisal Manual for Non-Agricultural
Land as published by the Department of Revenue, Ad Valorem Division:
(ii) Lands in active transition from agricultural use to residential
or commercial use;
Rules, Wyoming Department of Revenue, Chapter 10, § 3.
18. To qualify lands as agricultural, a taxpayer must show:
1) The property has a current agricultural use;
2) The property had an agricultural use for the prior two years;
3) The taxpayer must obtain a monetary profit from the agricultural use; and
4) The agricultural use must be permitted by the zoning authority.
In the Matter of the Appeal of Paul T. Von Gontard, et. al., from a Decision of the Teton County Board of Equalization, 1994 WL 17966 (Wyo. State Board of Equalization).
19. The record indicates the property was classified as agricultural for 1999 and 2000 as a part of a much larger parcel. However, in April of 2000, the character of Petitioners’ parcel changed; it was severed from the larger parcel. In addition the character of the area was also changing because of the subdivision and sale of the surrounding area as parcels of the Kara Kreek Ranches subdivision. [County Board Record, pp. 0029, 0031].
20. Petitioners presented no evidence at the County Board hearing that they engaged in any agricultural operations in 2000 after acquiring their parcel or that they received a monetary profit in 2000. Because of Petitioners’ failure to introduce evidence of agricultural use in 2000, the land cannot be classified as agricultural in 2002. In the Matter of the Appeal of Janine Perrignon from a Decision of the Lincoln County Board of Equalization, 1998 WL 918628 (Wyo. State Bd. of Equalization); Wyo. Stat. § 39-13-101(a)(iii); Rules, Wyoming Department of Revenue, Chapter 10, § 3(a)(ii).
21. The limited hay production in 2001 does not qualify the land for an agricultural classification. If Petitioners had demonstrated monies were made from hay production commensurate with the ability of the land to produce hay, then an agricultural classification may have been appropriate. In the Matter of the Appeal of Laurie C. Sain from a Decision of the Fremont County Board of Equalization, 1997 WL 291710 (Wyo. State Board of Equalization). In that case, the petitioner was able to prove she sold hay and increased production with proper water and management, that she had sprayed for leafy spurge and that she had improved ditch irrigation. Such activities demonstrated the land was being used and improved with an expectation of achieving monetary gain. No such demonstration was made in this case.
22. Petitioners did not present substantial evidence of their intent to manage their property to produce a monetary profit from hay production or of any actions to improve the property to make the any hay production more profitable. In the Matter of the Appeal of Cleveland Holloway from a Decision of the Park County Board of Equalization, 1999 WL 284864 (Wyo. State Bd. of Equalization); Rules, Wyoming Department of Revenue, Chapter 10, § 3(a)(ii).
23. The only evidence in the record concerning the use of the land for a horse operation is the sale of one horse. There is no evidence in the record that the Petitioners have other horses, that they intend to use the land to support a horse operation, or that they intend to obtain a monetary profit from such an operation. Absent such evidence, the isolated sale of one horse will not qualify Petitioners’ land as agricultural. In the Matter of the Appeal of Brenda L. Arnold, Laramie County Assessor for a decision of the Laramie County Board of Equalization (Paul J. Steele), 1997 WL 345863 (Wyo. State Bd. of Equalization).
24. There is substantial evidence on the record to support the County Board’s conclusion that Petitioners’ property was in the process of transition from agricultural purposes to residential. See: Rules, Wyoming Department of Revenue, Chapter 10, § 3, (c)(ii). Restrictive covenants for the Kara Kreek Ranch property owners were filed in the County records on April 28, 2000, and remained in effect in effect until late 2001. In addition, the Kara Kreek Ranches sales brochure clearly indicates that the agricultural nature of the Kara Kreek Ranches has been diminished and the properties are being sold primarily for their recreational, residential and hobby use, not agricultural use. [County Board Record, p. 31].
25. In an appeal from a County Board decision to the State Board, additional evidence may be allowed only “[i]f it is shown to the satisfaction of the Board the additional evidence is relevant to a material issue before the Board, and is not repetitious of evidence or testimony taken before the county board of equalization, and there was good reason for failure to present it in the proceedings before the county board of equalization . . .” Rules, Wyoming State Board of Equalization, Chapter 3, § 8. Petitioners’ failed to show there was good reason for their failure to present the lease attached to their Notice of Appeal to the County Board. Therefore, their implied request to supplement the record must be denied.
26. The County Board’s Order Denying Protest for Agricultural Value is supported by substantial evidence and is in accord with the law. Petitioners did not meet their burden of proof before the County Board.
THIS SPACE INTENTIONALLY LEFT BLANK
IT IS THEREFORE HEREBY ORDERED:
A. Petitioners’ request to present additional evidence to the State Board of Equalization is denied; and
B. The Crook County Board of Equalization Order Denying Protest for Agricultural Value and decision affirming the 2002 non-agricultural classification and assessment of Petitioners’ property located in Crook County, Wyoming, 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 6th day of March, 2003.
STATE BOARD OF EQUALIZATION
Roberta A. Coates, Chairman
Alan B. Minier, Vice-Chairman
Wendy Soto, Executive Secretary