BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF WYOMING
MATTER OF THE APPEAL OF )
RJ LAND AND DEVELOPMENT, INC. FROM )
A DECISION OF THE WASHAKIE COUNTY
BOARD OF EQUALIZATION - 2003 )
PROPERTY VALUATION )
Nicholas G. Healey, of Dray, Thomson &
Dyekman, P. C., for Petitioner RJ Land and Development, Inc. (Petitioner)
Kathy Treanor, Washakie County Assessor
This is an appeal from a decision by the Washakie
County Board of Equalization (County Board). The State Board of Equalization (State
Board), comprised of Roberta A. Coates, Chairman, Alan B. Minier, Vice-Chairman and Thomas
R. Satterfield, Board Member, considered the County Board hearing record, County Board
decision, briefs filed pursuant to a Amended Briefing Order (Locally Assessed Property)
dated January 23, 2004, and oral argument on April 21, 2004. On July 30, 2003, the
Petitioner appealed a decision issued by the County Board.
PROCEEDINGS BEFORE THE COUNTY BOARD
The County Board conducted a hearing on July 2,
2003. Warren A. Bower testified on behalf of the Petitioner, and the Assessor, Kathy
Treanor, testified on her own behalf. Supporting documents from both parties were admitted
into the record.
The County Board concluded that the Petitioner
had not presented sufficient credible evidence to overcome the presumption that the
Assessor’s valuation was valid, particularly where the Assessor has valued the property
according to the Department of Revenue’s rules and regulations, using the CAMA system.
The County Board upheld the Assessor’s assessment of the property.
The State Board of Equalization is required to
“hear appeals from county boards of equalization.” Wyo. Stat. Ann.
§39-11-102.1(c). A timely appeal from the County Board decision was filed with the
State Board. Rules, Wyoming State Board of Equalization, Chapter 3, §2.
STANDARD OF REVIEW
When the State Board hears appeals from a county
board, it acts as an intermediate level of appellate review. Laramie County Board of
Equalization v. Wyoming State Board of Equalization, 915 P.2d 1184, 1188 (Wyo. 1996); Union
Pacific Railroad Company v. Wyoming State Board of Equalization, 802 P.2d 856, 859
(Wyo. 1990). In its appellate capacity, the State Board treats a county board as the
finder of fact. Id. In contrast, the State Board acts as the finder of fact when it
hears contested cases on appeal from final decisions of the Wyoming Department of Revenue
(Department). Wyo. Stat. Ann. §39-11-102.1(c). This sharp distinction in roles is
reflected in the State Board Rules governing the two different types of proceedings. Compare
Rules, Wyoming State Board of Equalization, Chapter 2 and Rules, Wyoming State
Board of Equalization, Chapter 3. Statutory language first adopted in 1995, when the
Board of Equalization and the Department were reorganized into separate entities, does not
express the distinction between the State Board’s appellate and de novo capacities with
the same clarity as our long-standing Rules. 1995 Wyo. Sess. Laws, Chapter 209, §1;
Wyo. Stat. Ann. §39-1-304(a).
By Rule, the State Board’s standards for review
of a county board’s decision are nearly identical to the Wyoming Administrative
Procedure Act standards which a district court must apply to hold unlawful and set aside
agency action, findings of fact, and conclusions of law. Wyo. Stat. Ann.
§16-3-114(c)(ii). However, unlike a district court, the State Board will not rule on
claims that a county board has acted “[c]ontrary to constitutional right, power,
privilege or immunity.” Wyo. Stat. Ann. §16-1-114(c)(ii)(B). The State Board’s
review is limited to a determination of whether a county board action is:
(a) Arbitrary, capricious, an abuse of discretion
or otherwise not in accordance with law;
(b) In excess of statutory jurisdiction,
authority or limitations or lacking statutory right;
(c) Without observance of procedure required by
(d) Unsupported by substantial evidence.
Rules, Wyoming State Board of Equalization,
Chapter 3, §9.
The Supreme Court in Laramie County Board of
Equalization v. Wyoming State Board of Equalization, 915 P.2d 1184 Wyo. P. 1189
(1996), agreed that the State Board’s role is the following:
We examine the entire record to determine if
there is substantial evidence to support an agency’s [county board’s] findings. If the
agency’s [county board’s] decision is supported by substantial evidence, we cannot
properly substitute our judgement for that of the agency [county board], and must uphold
the findings on appeal. Substantial evidence is relevant evidence which a reasonable mind
might accept in support of the conclusions of the agency. It is more than a scintilla of
Petitioner contends that the County Board’s
decision is unsupported by substantial evidence, as well as arbitrary, capricious and
contrary to law, for two reasons:
A. The fair market value determined by the County
Assessor does not comport with the statutory requirement that the property’s fair market
value reflect what a well-informed buyer would pay to purchase the Property; and
B. A 40% discount applied by the County Assessor
was arbitrary and contrary to law.
We will uphold the decision of the County Board.
FACTS PRESENTED TO THE COUNTY BOARD
RJ Land Development, Inc., owns 18 unimproved lots located in the City of Worland,
Washakie County, Wyoming. [Hearing Tape]. The lots are located in a platted subdivision.
[Hearing Tape; Petitioner’s Exhibit 2].
A. Bower is the President of RJ Land Development, Inc., and appeared on its behalf at the
hearing of the County Board of Equalization. [Hearing Tape]. Assessor, Kathy Treanor,
appeared on behalf of herself, with the assistance of County Attorney G. Albert Sinn.
[County Board Record, p. 11].
to 2003, the Washakie County Assessor valued the 18 lots as agricultural land. The lots
are located next to a large farming operation. [Hearing Tape; Exhibit 1].
January 1, 2003, a platted subdivision could no longer be classified as agricultural land.
Wyo. Stat. Ann. §39-13-103(b)(x). As a courtesy, the Assessor notified potentially
affected taxpayers of this change. [Hearing Tape; Exhibit F].
lots sit adjacent to currently improved residential lots of similar size. [Hearing Tape].
The lots are bordered by a primary county road, and could be provided utilities via the
county road and other improved lots. [Hearing Tape]. The Assessor viewed the highest and
best use of the property as being residential. [Hearing Tape; Exhibit 6].
Assessor acknowledges that she had no comparable sales of unimproved vacant lots. [Hearing
Tape]. She used a CAMA model to determine the value of the lots, but applied an adjustment
because the lots were unimproved. [Hearing tape]. The Assessor used the same CAMA approach
to value other platted subdivisions in Washakie County, although without the adjustment
unique to the Petitioner. [Hearing Tape].
a part of its general attack on the Assessor’s valuation, the Petitioner specifically
objects to a discount of 40% that the Assessor applied to the CAMA computed value, even
though this discount reduced the computed value. The Assessor applied this discount based
on guidelines from the Department titled, in pertinent part, “Land Influence Factors
& Guidelines.” [Hearing Tape; Exhibit J]. Further, the Assessor applied a factor of
40% that was specifically suggested by the guideline for an “Unimproved Building site
with neither public sewer or water
available.” [Exhibit J, record page 83, (emphasis in original)].
all times, the Assessor was mindful of the published regulations and guidelines of the
Department and State Board of Equalization, as well as the general requirement that sold
and unsold property cannot be valued differently. [Hearing Tape; Exhibits G, H, I, J].
a check on her results, the Assessor used data from fifty-four valid improved property
sales over the four preceding years to calculate values for unimproved lots in alternative
way. She used two established alternative methods, the Allocation Method and the
Abstraction Method. [Hearing Tape; Assessor’s Exhibits M, N, O; Petitioner’s Exhibit
6]. She concluded from these alternative value calculations that land values were already
somewhat low, but took her results as a further justification for her use of the land
influence factor found in the Department’s guidelines. [Hearing Tape; Exhibit J]. The
Assessor did not prepare any calculations of the cost to develop the subdivision because
she did not view the subject property as land in transition. [Hearing Tape]. There is no
dispute that the land had been used the same way for twenty-five years. [Hearing Tape].
Assessor’s valuation of the 18 lots for 2003 was $228,845, a substantial increase from
the 2002 valuation of $28,733. [Exhibit D].
behalf of the Petitioner, Mr. Bower stated that no one has offered to buy the property for
at least twenty-five years. [Hearing Tape]. However, the record includes no indication
that Petitioner has made any effort to solicit buyers. [Hearing Tape].
Bower offered information from a variety of sources, including Marshall Swift guidelines,
in support of an argument that the cost to develop the subdivision could not be squared
with the Assessor’s valuation. [Hearing Tape; Exhibits 8, 9, 10, 11, 12, 13]. Based on
his calculations, Mr. Bower states that the appropriate valuation for all 18 of the lots
under a cost approach should be $23,500. [Exhibit 13].
Bower stated that he had declined to vacate the plat due to the value of the investment he
had already made in obtaining the plat. [Hearing Tape]. He secured an estimate to show
that the cost of staking the lots, submitting a plat and working with the city planning
office to secure approval of a plat would be $12,000. [Hearing Tape; Exhibit 15].
Assessor and Mr. Bower sought to secure information from the Department concerning the
source of the 40% discount factor. [Hearing Tape; Exhibit 4]. The Department’s response
was not detailed. [Exhibit 7]. However, the Department identified the original source of
the discount factor as the firm of Cole Layer Trumble. [Exhibit 7]. Mr. Bower, himself a
Certified Assessment Evaluator with extensive prior experience as an employee of the
Department, volunteered his familiarity with the expertise of Cole Layer Trumble in the
field of appraisal. [Exhibit 3; Hearing Tape].
filed a timely appeal to the County Board of Equalization. [Exhibit A].
Washakie County Board of Equalization heard Petitioner’s appeal on July 2, 2003. [County
Board Record, p. 11]. William L. Glanz, John Dent and Terrence D. Wolf were present as
County Board Members. [County Board Record, p. 11]. Attorney William R. Shelledy Jr. acted
as Hearing Officer. [County Board Record, p. 11].
County Board issued its Findings of Fact, Conclusions of Law and Order on July 30, 2003.
[County Board Record, pp.103-107]. The County Board’s Conclusions of Law rested on the
well-know presumption in favor of the Assessor’s valuation; the support provided for
that presumption by a value reached with the CAMA system; and the Assessor’s general
compliance with applicable statutes, rules, and regulations.
DISCUSSION OF APPLICABLE LAW AND PETITIONER’S ISSUES
Wyoming Constitution, Article 15, §11, requires all property “be uniformly assessed for
taxation, and the legislature shall prescribe such regulations as shall secure a just
valuation of taxation of all property, real and personal.”
Early on, Justice Blume recognized a truth
inherent in the area of property valuation: ‘There is no such thing as absolute value. A
stone cannot be other than a stone, but one man may give a different valuation to a piece
of land than another.’ Bunten v. Rock Springs Grazing Ass’n, 29 Wyo. 461, 475,
215 P. 244, 248 (1923). Accordingly, this court has consistently interpreted Wyo. Const.
Art. 15, § 11 to require ‘only a rational method [of appraisal], equally applied to all
property which results in essential fairness.’
Basin Electric Power Coop. v. Dept. of
Revenue, 970 P.2d 841, 857 (Wyo.1998) quoting: Holly Sugar Corp. v. State Board of
Equalization, 839 P.2d 959, 964 (Wyo.1992).
into its component parts, the constitutional standard requires: (1) a rational method; (2)
equally applied to all property; and (3) essential fairness. It is the burden of one
challenging an assessment to prove by a preponderance of the evidence that at least one of
these elements has not been fulfilled. Basin Electric Power Coop., 970 P.2d at 852.
property must be valued annually at fair market value. Wyo. Stat. Ann. §39-13-103(b)(ii).
Further, all taxable property must be valued and assessed for taxation in the name of the
owner of the property on January 1. Wyo. Stat. Ann. §39-13-103(b)(i)(A).
market value is defined as:
The amount in cash, or terms reasonably
equivalent to cash, a well informed buyer is justified in paying for a property, and a
well informed seller is justified in accepting, assuming neither party to the transaction
is acting under undue compulsion, and assuming the property has been offered in the open
market for a reasonably time.
Wyo. Stat. Ann. §39-11-101(a)(vi).
legislature, in turn, has required the Department to “prescribe by rule and regulation
the appraisal methods and systems for determining fair market value using generally
accepted appraisal standards,” Wyo. Stat. Ann. §39-13-103(b)(ii), and required
assessors to “[f]aithfully and diligently follow and apply” those rules for the
appraisal and assessment of all taxable property. Wyo. Stat. Ann. §18-3-204(a)(ix).
Department has promulgated rules prescribing the methods for valuing property. The
acceptable methods include a sales comparison approach, a cost approach, an income or
capitalized earning approach, and the CAMA system. Rules, Wyoming Department of
Revenue, Chapter 9, §6 (a), (b), (c), and (d).
Assessor’s valuation is presumed valid, accurate, and correct. This presumption 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 overcome the presumption. J. Ray McDermott & Co. v. Hudson, 370
P.2d 364, 370 (Wyo. 1962). The presumption is especially valid where the Assessor valued
the property according to the Department’s Rules and Regulations, which provide for the
use of the CAMA system in the assessment of real property. Rules, Wyoming Department of
Revenue, Chapter 9 §6(b), (d). “The burden is on the Taxpayer to establish any
overvaluation.” Hillard v. Big Horn Coal Co., 549 p.2d 294 (Wyo. 1976).
Wyoming Supreme Court has recognized the validity of valuations derived from the CAMA
system. Gray v. Wyoming State Board of Equalization, 896. P.2d 1347 (Wyo. 1995). In
fact, the Wyoming Supreme Court rejected the use of actual sales price for properties in
favor of the value established by the CAMA system because of the equality and uniformity
derived by its use. Id. at 1351.
of the issues raised by the Petitioner turn on the question of whether or not there is
substantial evidence in the record that reasonably supports the County Board decision. In
determining whether or not there is substantial evidence in the record, the State Board
will not substitute its 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, 1188-1189; Holly Sugar Corp. v. Wyoming State Board of
Equalization, 839 P.2d 959 (Wyo. 1992); Sage Club, Inc. 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.
The Wyoming Supreme Court has stated, “[s]ubstantial evidence is a term of art best
described as relevant evidence that a reasonable mind can accept as adequate support for
an agency’s conclusion.” Sidwell v. State Workers’ Compensation Div., 977
P.2d 60, 63 (Wyo. 1999).
A. Petitioner’s claim that the assessment
does not reflect statutory fair market value
directs our attention to the fact that it has and expects to have no prospective buyers
for the lots, then argues that the assessment cannot therefore satisfy the “well-informed
buyer” test found in the statutory definition of fair market value. Wyo. Stat. Ann.
§39-11-101(a)(vi). We do not need to recite that definition to conclude that
Petitioner has made the mistake of ignoring another pertinent provision of statute that
constrains the authority of the Assessor to determine value:
All taxable property shall annually be valued at
its fair market value. Except as otherwise provided by law for specific property, the
department [of revenue] shall prescribe by rule and regulation the appraisal methods and
systems for determining fair market value using generally accepted appraisal standards;
Wyo. Stat. Ann. §39-13-103(b). The
record includes ample evidence that the Assessor was at all times guided by the pertinent
procedures and regulations for determining fair market value. The Petitioner’s reliance
on its own interpretation and application of the general statutory definition of fair
market value does not provide a basis in law for challenging the valuation of an assessor
who has complied with the Department’s requirements as prescribed under Wyo. Stat. Ann.
the extent that Petitioner is instead claiming that the Assessor has failed to take into
account the economic environment in which the property operates, we conclude that there is
substantial evidence to the contrary. This includes, but is not limited to, the Assessor’s
use of the two alternative approaches as a check on her value.
next argues that the Assessor has failed to follow simple economic principles by
inadequately accounting for profit and the agricultural characteristics of Petitioner’s
lots. Taken even in the most favorable light, these arguments amount to mere differences
of opinion with the Assessor’s exercise of judgment, and cannot overturn the presumption
that the Assessor’s valuation is accurate, valid, and correct. Teton Valley
Ranch, 735 P.2d at 113 (Wyo. 1987).
next argues that its own failure to honor an Improvements Agreement with the City of
Worland means that it must stop all development activity, and hence that the property must
be overvalued because it is legally impossible to proceed with development. We note that
the Petitioner did not raise this argument to the County Board. [Hearing Tape; Exhibits 1,
2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17]. Instead, the argument was raised
for the first time on appeal to this Board, based on a passing remark made by the Assessor
during the hearing before the County Board. [Hearing Tape]. This circumstance alone would
be enough to dismiss the argument and support the decision of the County Board. See: RT
Communications v. Public Service Commission, 2003 WY 145 ¶39, 79 P3d 36, 49 (2003).
Petitioner also failed to demonstrate at the time of the hearing that securing an
Improvement Agreement was in fact a legal impediment. Further, the Assessor’s remark was
more in the nature of a comment on the Petitioner’s absence of diligence in promoting
the property, and the County Board could correctly have viewed the remark as irrelevant.
Either way, the Petitioner did not and has not come forward with credible evidence to
overturn the presumption that the Assessor’s valuation is accurate, valid, and
correct. Teton Valley Ranch, 735 P.2d at 113 (Wyo. 1987).
its Reply Brief to this Board, the Petitioner argued that the Assessor could have, and
should have, used sales of comparable agricultural land to reach a fair market value. The
Assessor plainly chose to value Petitioner’s land at its highest and best use, and this
argument does nothing to persuade us that the Assessor’s judgment was incorrect. Perhaps
more important, the legislature has specifically stated that platted subdivisions do not
qualify as agricultural land. Wyo. Stat. Ann. §39-13-103(b)(x). In effect, the
Petitioner argues that the Assessor should have acted in a way to circumvent the intent of
the legislature. The argument has no merit.
B. Petitioner’s claim that the 40% discount was
arbitrary and contrary to law
attacks the Assessor’s use of a Department guideline, without apparently being aware of
the statutory authority of the Department to “[c]onfer with, advise and give necessary
instructions and directions to county assessors as to their duties under the laws of the
state.” Wyo. Stat. Ann. § 39-11-102(c)(xvi). The Department’s guidelines, thus
supported by statute, have greater force and effect than the Petitioner supposes. There
is substantial evidence in the record that the Assessor thoughtfully and diligently
followed the Department’s guidelines.
attacks the Assessor’s judgment in employing the guidelines. However, this is once again
a mere difference of opinion about how the guidelines ought to be applied, and
insufficient to overturn the presumption that the Assessor’s valuation is
accurate, valid, and correct. Teton Valley Ranch, 735 P.2d at 113 (Wyo. 1987).
Petitioner argues that the guideline itself is arbitrary because the 40% discount has not
been substantiated by sufficient logic or authority. Contrary to this argument, Mr. Bower
acknowledged the expertise of the original authority for the guideline, the firm of Cole
Layer Trumble. There is also no question that, from the standpoint of the Assessor, the
guideline originated with the Department. This once again boils down to a matter of
judgment, with the twist that Mr. Bower believes that the Assessor and the Department are
obliged to substantiate the source and validity of the 40% figure. However, the burden
rested on the Petitioner to mount a challenge to the 40% figure before the County Board,
and it did not do so. We conclude that the County Board correctly determined that the
Petitioner did not come forward with credible evidence to overturn the presumption that
the Assessor’s valuation is accurate, valid, and correct. Teton Valley Ranch, 735
P.2d at 113 (Wyo. 1987).
conclude that the County Board’s decision was supported by substantial evidence, and was
not arbitrary, capricious, or contrary to law.
INTENTIONALLY LEFT BLANK
IT IS THEREFORE HEREBY ORDERED that the Order of the
Washakie County Board of Equalization affirming the Assessor’s 2003 assessed valuation
of $228,845 of the Petitioner’s property, being 18 lots located in the City of Worland,
Washakie County, Wyoming shall be and the same is affirmed.
Pursuant to Wyo.
Stat. Ann. §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 at
the appropriate district court by filing a petition for review within 30 days of the date
of this decision.
this 21st day of May, 2004
STATE BOARD OF EQUALIZATION
A. Coates, Chairman
B. Minier, Vice-Chairman
Thomas R. Satterfield, Board Member
Wendy. J. Soto, Executive Secretary