BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF
IN THE MATTER OF THE APPEAL OF )
ASSESSOR FROM )
A DECISION OF THE FREMONT COUNTY
EQUALIZATION - 2003 )
(Britt Property) )
DECISION AND ORDER
Terrance R. Martin,
Deputy County Attorney for the Petitioner, Fremont County Assessor Eileen
Timothy J. and
Janet R. Britt, (Taxpayers) not appearing before the State Board.
This is an appeal
from a decision by the Fremont 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 and the Assessor’s brief filed pursuant to a
Briefing Order (Locally Assessed Property) dated November 7, 2003. The Assessor appealed
the decision the County Board made on September 4, 2003 altering the Assessor’s 2002
valuation of the residential property of Timothy J. and Janet R. Britt. The property is
located on a United States Forest Service lease in the Shoshone National Forest, Pinnacle
Height Subdivision, Lot 4, Fremont County, Wyoming.
PROCEEDINGS BEFORE THE
The County Board
conducted a hearing on July 14, 2003 with Hearing Officer, Teresa M. McKee presiding. The
Taxpayer, Timothy Britt, the Assessor, Eileen Oakley, and the Deputy Assessor, Tara Berg,
testified at the County Board Hearing. Supporting documents were admitted into the record.
The County Board
concluded in its decision that the Taxpayers’, through Mr. Britt’s testimony, had
presented sufficient, credible evidence to overcome the presumption that the Assessor’s
valuation was valid. The Board found “generally in favor of the taxpayers” and ordered
that the Taxpayers be given unspecified relief consistent with the County Board’s
decision. [Record, Findings of Fact, Decision and Order, p. 79].
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. 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 of Revenue 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, Section 1, Wyo. Stat. §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 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:
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;
observance of procedure required by law; or
(d) Unsupported by
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, 1189 (Wyo. 1996) affirmed the State Board’s standard of review.
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 judgment 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 evidence.
The Assessor raises
two issues with the County Board’s decision.
She asserts the
County Board of Equalization’s findings; (1) were unsupported by substantial evidence;
and (2) arbitrarily and capriciously determined the property’s market value for 2003
property tax purposes. [Petitioner’s Notice of Appeal].
FACTS PRESENTED TO THE
disputed property owned by the Taxpayers was purchased in 1995 for $80,000. The 690 square
foot cabin was built in 1944. It has an 80 square foot porch on the front and a 184 square
foot enclosed porch on the south side. The cabin is on a United States Forest Service
lease in the Shoshone National Forest.
April 23, 2003, the Assessor, issued a tax assessment schedule to the Taxpayers, for the
cabin, located at 3 E. Pinnacle Lane west of Dubois, Wyoming. The Assessor estimated the
market value of the building at $87,200.00. No value was assigned to the federal land or
the lease on which the building is situated. [Record, p. 5].
May 23, 2003, the Taxpayers filed a Statement to Contest Property Tax Assessment. They
were given a hearing before the Fremont County Board of Equalization on July 14, 2003.
[Record, p. 7].
the County Board hearing, the Taxpayers presented an oral and written statement concerning
the cabin and the terms of the lease from the United States Forest Service. The Taxpayers
argued that a substantially large part of the purchase price of the property, and sales
price if they should sell it, is for the right to the lease, not for the structure.
[Record, Exhibit 5, p. 27].
Taxpayers presented the Board with a construction estimate for the replacement of the
Britt cabin from Oard Construction of Dubois, Wyoming. This estimate for a 650 square foot
structure was $65,000. The contractor did not testify. The contractor’s estimate did not
include any porches and was smaller than the existing cabin. [Record, Exhibit 4, p. 26].
the written comments presented to the County Board, Mr. Britt testified that he thought
the best comparable sale was the property to the north of his cabin. The cabin to the
north originally sold for $87,000 in 1995 and had severely deteriorated. The cabin to the
north had been part of a personal bankruptcy after 1995. The lien holder had sold the
cabin after receiving it from the bankruptcy estate for $50,000. [Record, Exhibit 5, p.
27]. The cabin to the north is currently assessed at $65,000. Ms. Berg, the Deputy County
Assessor, did not consider the property to the north as a comparable because it was not in
the same condition as the Britt cabin or the other properties being used for comparables.
[Record, Tape Recording of Hearing].
Assessor’s market value in the 2003 assessment schedule for the Taxpayers’ building
was $87,200. Ms. Berg, the Deputy County Assessor, presented to the Board a list of three
comparable cabin sales in the area and explained how each was used in the assessment
process. Ms. Berg also explained how these sales, which are all located on federal leases,
were entered into the Computer Assisted Mass Appraisal system (CAMA). [Record, Exhibit I,
(Britt) @ 3 East
No. 1 @ 48 W.
No. 2 @ 39 Breccia
No. 3 @ 35 Breccia
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.’
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).
Fair market value is defined as:
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 reasonable time.
Wyo. Stat. Ann.
legislature, in turn, has required the Department of Revenue (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.
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 assessor’s determination of value must lead to
fair value and the burden is on the taxpayer to establish an 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 Assessor turns 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 (Wyo 1996); Holly Sugar Corp. v. Wyoming
State Board of Equalization, 839 P.2d 959 (Wyo. 1992); 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. 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 to support an agency’s conclusion.” Sidwell v. State Worker’s
Compensation Div., 977 P.2d 60, 63 (Wyo. 1999).
value of personal property for the purpose of taxation should be estimated according to
the fair actual cash market value or the price that the property would sell for in the
usual course of business” and the assessor “should take into consideration all factors
which relate to value.” J. Ray McDermott & Co. V. Hudson, 370 P.2d 364, 368 (Wyo.
County Board of Equalization’s findings were unsupported by substantial evidence.
County Board “generally agreed” with the Taxpayers that the property was being
assessed in part for the value of the lease. [Record, Findings Of Facts, Decision and
Order, p. 79, ¶8]. The Assessor testified that the value of the lease was not being
taxed. Only the improvements on the government lease were being taxed. The improvements on
government leases are not exempt from taxation under Wyo. Stat. Ann. §39-11-105
record shows that the Assessor complied with all requirements of the state law in
determining the value for the Taxpayers’ property by using the CAMA system pursuant to
Wyo. Stat. Ann. §39-11-102, relying on the sales comparison approach to value the
property as prescribed in Chapter 9 of the Rules and Regulations promulgated by the
Wyoming Department of Revenue. The Taxpayers presented no evidence that the Assessor had
incorrectly applied CAMA or that the sales used for comparison approach were not correct.
County Board Findings of Fact states that the Taxpayers did not believe the comparable
sales were realistic and that the cabin adjacent to his had sold for $50,000. [Record,
Findings of Fact, Decision and Order, p. 78, ¶1, 2]. The County Board should not have
accepted the purchase of the property from a bankruptcy sale since it was not an
arms-length-sale and did not meet the definition of fair market value. Wyo. Stat. Ann.
County Board findings arbitrarily and capriciously determined the property’s market
value for 2003 property tax purposes.
Oard Construction estimate to build a replacement cabin is not substantial evidence to
overcome the presumption in favor of the Assessor. The estimate is for a building that is
smaller than the structure that would be replaced. The estimate did not include the
replacement of the existing porches. There is no evidence that all the costs needed to do
a cost method estimate are included. Those other costs might include costs for
architecture and engineering fees, building permits, legal expenses, insurance, interest
and fees on the construction loans, taxes incurred during construction, advertising and
sales expenses, and reasonable overhead and profit. Therefore, the County Board would be
arbitrary and capricious to accept the construction cost estimate as a value to supplant
the value derived by the Assessor using the CAMA system.
County Board incorrectly discounted comparable sales, which the Assessor offered in
support of her valuation. The sales relied upon by the Assessor were of properties
comparable in size and location to the Taxpayers’ property. All the comparable sales
were also located on United States Forest Service leases. The Assessor met her burden of
explaining the value determined for the Taxpayers’ property.
evidence of the sale of the cabin to the north of the Taxpayers’ cabin is not sufficient
to overcome the presumption of the correctness of the Assessor’s value. A purchase from
a bankruptcy estate is not an open market, fair market sale. A purchase from a bankruptcy
estate is an invalid sale because the seller is under compulsion to sell the property and
the buyer has additional legal expenses and time when purchasing from a bankruptcy estate.
Therefore, the evidence of the bankruptcy sale of the cabin to the north should not have
been considered as evidence to overcome the Assessor’s value. Wyo. Stat. Ann.
Wyoming Supreme Court has rejected the actual sales price of property in favor of the
value established by CAMA system because of the uniformity derived from the use of the
CAMA system and has recognized the validity of the system. Gray v. Wyoming State Board
of Equalization, 896 P.2d 1347 (Wyo. 1995).
are several discrepancies between the County Board’s Findings of Fact and the tape
recording of the hearing: Item 3 the size of the porch on the south side of the cabin is 8
x 23 rather than 10 x 23. There is a smaller porch on the front of the cabin. The cabin
has both water and electricity.
on the record before us, we conclude there is not substantial evidence to reject the
decision of the Assessor. We conclude the Assessor supported the argument in favor of her
decision of the County Board ordering the Assessor to adjust the valuation of the
Taxpayers’ property was not supported by substantial evidence, it was not in accordance
with procedures required by law, and was arbitrary, capricious and inconsistent with the
THIS SPACE INTENTIONALLY LEFT BLANK
IT IS THEREFORE HEREBY ORDERED that the decision of the
Fremont County Board of Equalization Order overturning the Assessor’s valuation of the
Taxpayers’ property, shall be and the same is reversed,
and the Assessor’s valuation of $87,200.00 shall be reinstated.
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 6th day of April, 2004
STATE BOARD OF EQUALIZATION
A. Coates, Chairman
B. Minier, Vice-Chairman
Thomas R. Satterfield, Member
Wendy. J. Soto,