BEFORE THE STATE
BOARD OF EQUALIZATION
FOR THE STATE OF
IN THE MATTER OF THE APPEAL OF )
ASSESSOR FROM )
A DECISION OF THE LARAMIE COUNTY ) Docket
EQUALIZATION - 2003 )
PROPERTY VALUATION (Faass
DECISION AND ORDER
Froeliecher, Laramie County Attorney for Petitioner, Brenda Arnold, Laramie County
Daniel B. Frank,
Attorney at Law, for John R. Faass, (Taxpayer).
This is an appeal
from a decision by the Laramie 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 hearing
record and decision of the County Board and briefs filed pursuant to a Briefing Order
(Locally Assessed Property) dated September 18, 2003. The Petitioner appealed a decision
of the County Board reversing the Assessor’s 2002 valuation of the real property as
residential rather than agricultural. The property, consisting of 291.75 acres located at
1817 County Road 119A, Mountain Starr Route, Cheyenne, Wyoming is owned by John R. And
Carolyn S. Faass.
PROCEEDINGS BEFORE THE
The County Board,
Jack B. Knudson, Chairman, and Jeff Ketcham, Vice Chairman, conducted a hearing on June
20, 2003, with Hearing Officer Wallace L. Stock presiding. The Taxpayer called one
witness, John R. Faass. The Petitioner called one witness, Brenda Arnold, Laramie County
Assessor. Supporting documents were admitted into the record.
The County Board’s
findings of fact addressed the testimony offered on behalf of the parties. In summary, the
County Board reversed the Assessor’s decision to classify the subject property as
residential land rather than agricultural land and determine a fair market value of
The County Board
concluded that the Taxpayer has always utilized his property as agricultural for grazing
but had not done so for the past few years because of drought conditions which were beyond
The State Board 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 the 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 State Board 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, § 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:
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.
Since the State
Board Rules are patterned on the judicial review provision of the Wyoming Administrative
Procedure Act, we look to precedent under Wyo. Stat. Ann. § 16-3-114(c) for guidance. For
example, we must apply this substantial evidence standard:
Our task is to
examine the entire record to determine if substantial evidence exists to support the
[county board’s] findings. We will not substitute our judgment for that of the [county
board] if [its] decision is supported by substantial evidence. Substantial evidence is
relevant evidence which a reasonable mind might accept in support of the agency’s
Clark v. State
ex rel. Wyoming Workers’ Safety and Compensation Division, 934 P.2d 1269, 1272 (Wyo.
initially identified three issues with the County Board’s decision.
the Assessor correctly valued the Taxpayer’s property as non-agricultural at a value of
the Assessor correctly required all agricultural producers to complete a sworn affidavit
affirming that the producer’s land was agricultural.
the County Board of Equalization’s decision to reclassify the majority of the Taxpayer’s
property as agricultural was not in accordance with law, was arbitrary, capricious, and an
abuse of discretion, and was unsupported by substantial evidence in the record.
Notice of Appeal, pp.1-2].
We have organized
our review of the County Board decision around these three issues.
FACTS PRESENTED TO THE
the 2002 Wyoming Legislative session the legislature changed the statute concerning
agricultural land classification. These changes took effect January 1, 2003. The changes
in the statute set out the requirements for the determination of agricultural land. The
Department of Revenue (Department) prescribes a form of sworn statement to be used by the
property owner to declare that the property meets the statutory requirements for
classification as agricultural land. [Transcript, p. 32].
Assessor sent a packet of information to all owners of properties that had been
historically valued as agricultural. The packets included a copy of the new statute, Wyo.
Stat. Ann. § 39-13-103, and the agricultural land affidavit that the Department requires
assessors to use. The packets were sent out by the Assessor in December 2002. [Transcript,
land owned by Mr. and Mrs. John Faass was purchased in two parts. The first 130 acres was
purchased in November of 1978 from Dr. Robert Alberts and included the home, a barn and
improvements. The second portion of land, 160 acres in area, was purchased from Warren
Livestock in 1998. The Taxpayer testified that he purchased the land for grazing and to
keep any new subdivision away, because the land “was right in [his] front window.”
asked what use he made of the property over the years, the Taxpayer replied that he had
horses on the land. Warren Livestock grazed sheep and cattle in 1997, 1998 and 1999. The
land was not used in 2000, 2001 or 2002 even though the Taxpayer had offers to lease the
land. The Taxpayer declined to lease the land because the grass was virtually nonexistent
and was burning up. [Transcript, p. 11].
Taxpayer testified that he received the information packet from the Assessor. He filled
the papers out and sent the application to the Assessor’s Office in late December 2002.
[Transcript, p. 12]. He testified that he did not fill out part 3 of the form because he
had not marketed over $500 of agricultural product. The Taxpayer did not understand that
he had to complete all of the form to qualify for the agriculture exemption
classification. [Transcript, p. 14]. The Assessor did not receive any form of an
application from the Taxpayer. [Transcript p. 39].
January the Assessor began to call all the historical agricultural land owners that she
had not heard from. She talked to the Taxpayer who indicated that he had not had any
livestock on the property in 2002. Based on that conversation, she removed the Taxpayer’s
land from the agriculture land classification. [Transcript, p. 33].
March 11, 2003, an assessment schedule reflecting a total value of $573,743 was sent to
the Taxpayer. The Assessor met with the Taxpayer on April 15, 2003 concerning the rise in
value. The taxpayer was interested in knowing how the value had been calculated and the
reason for the large increase in value. The Assessor explained the changes in the law, and
how the Taxpayer could receive an agriculture classification for future years but not the
year 2002, since each year stands alone for tax purposes. [Transcript, p. 34].
April 22, 2003, the Assessor sent Mr. Gautreau, the senior county field appraiser from her
office, to meet with the Taxpayer. After an interior and exterior inspection numerous
changes in the characteristics of the property were made. An amended assessment was sent
out. The total value of the property changed was from $573,743 to $501,333. (The main
reason for the increase from last year’s value was the land value change from
agriculture to residential.)
Assessor testified that she did not receive an Application for Agricultural Classification
form from the Taxpayer. Based on the information she had, the Assessor believed the values
were accurate for unplatted land and the land did not meet the agriculture land
classification requirement. [Transcript, p. 38]. There was no Application for Agricultural
Classification form from the Taxpayer entered into evidence at the County Board hearing.
Therefore, there is no evidence that the Application was filed.
making her decision the Assessor informed the County Board that she was using the
Department’s rules and regulations and the approved appraisal method of
Computer-Assisted Mass Appraisal System (CAMA). CAMA uses sales information to arrive at
the estimated land value. [Transcript, p. 39].
Taxpayer did not provide any evidence to show that the land was incapable of supporting
grazing for the tax period under protest. He referred to drought conditions but did not
submit any documents to support the argument that his land should not be used for grazing.
APPLICABLE LAW AND PETITIONER’S ISSUES
15, Section 11 of the Wyoming Constitution 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 Corp., 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. §
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 reasonably time.
Wyo. Stat. Ann.
legislature, in turn, has required the Department of Revenue 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).
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 three issues raised by the Assessor 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); Amax Coal v. State Board of Equalization,
819 P.2d 825 (Wyo. 1991); 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.
Assessor valued Taxpayer’s property as non-agricultural at $501,333.00.
Taxpayer did not present any evidence at the hearing to show that the Assessor’s values
were not correct, nor did he disagree with the assessment. His only disagreement was the
classification of the land from agricultural to residential. [Transcript, p. 19].
Taxpayer did not provide the requisite sworn affidavit.
Assessor required all historically agricultural land owners to provide a sworn affidavit. Wyo.
Stat. Ann. § 39-13-103(b)(x). However, the Taxpayer did not do this. The Taxpayer was
given the opportunity to submit a sworn affidavit before the hearing and during the
hearing. He failed to do so.
cross examination the Taxpayer told the County Board that he had filled out the
application and sent it into the Assessor’s Office, but he did not have it notarized and
he had not had anything grazing on his property for the years 2000, 2001 and 2002 other
than the state’s antelope. [Transcript, p. 23]. In fact, no Application was ever
produced to the County Board and the record is void of any evidence that the Application
was filed with the Assessor or the County
County Board of Equalization’s decision was not in accordance with law, was arbitrary,
capricious, and an abuse of discretion as well as unsupported by substantial evidence in
Statute Annotated Section 39-13-103 (b)(x)(A) states:
shall determine the taxable value of agricultural land and prescribe the form of the sworn
statement to be used by the property owner to declare that the property meets the
requirements of subparagraph (B) . . . . In determining the taxable value for assessment
purposes under this paragraph, the value of agricultural land shall be based in the
current use of the land, and the capability of the land to produce agricultural products
including grazing and forage, based on the average yields of lands of the same
classification under normal conditions.
To qualify for
classification as agricultural land, the property must meet each of the qualifications of Wyo. Stat. Ann. §
39-13-103 (b)(x)(B). The form with the sworn statement was furnished to all historical
agricultural land owners, including the Taxpayer. The Taxpayer testified that he did not
mark the section that called for deriving an annual gross revenue of not less than $500
because he had received no revenue from the land during 2002. [Transcript p. 12]. He also
did not have the form notarized. [Transcript, p. 23]. There was no showing the land was
used for agricultural purposes. The County Board violated the law when it classified the
property as agricultural [County Board Findings of Fact, Conclusions of Law and Order, p.
93]. The decision of the County Board was arbitrary, capricious, an abuse of discretion,
contrary to law, and unsupported by any substantial evidence that appeared in the record.
on the record before us, we conclude there is substantial evidence to support the action
of the Assessor on all three points. We likewise conclude that on all three points the
Taxpayer did not overcome the presumption in favor of the Assessor’s valuation and
Taxpayer did not demonstrate that the land was used for agricultural purposes in 2002, he
did not demonstrate the income threshold for agricultural activities and he failed to file
the sworn statement the Assessor required.
Statute Annotated Section 39-13-102 (d) provides that “[t]he county board of
equalization has no power to and shall not set tax policy nor engage in any administrative
duties concerning assessments which are delegated to the board, the department or the
county assessor.” Therefore the County Board must find that the land was not being used
for agricultural purposes and the agricultural income threshold was not met. Further, the
County Board cannot reverse the Assessor’s decision to require a sworn statement. Wyo.
Stat. Ann. § 39-13-102 (d).
IS THEREFORE HEREBY ORDERED: The decision of the County Board overturning the
Assessor’s valuation and classification of the Taxpayer’s property is hereby reversed and the Assessor’s valuation and
classification as residential land 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 8th day of January, 2004.
STATE BOARD OF EQUALIZATION
A. Coates, Chairman
B. Minier, Vice-Chairman
Wendy J. Soto,