BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF WYOMING
IN THE MATTER OF THE APPEAL OF )
MARY BANNISTER FROM
A DECISION OF THE CROOK COUNTY ) Docket
BOARD OF EQUALIZATION - 2003 )
PROPERTY VALUATION )
Dave and Mary Bannister, Petitioners,
(Petitioners) appearing by and through James L. Edwards, of Stevens, Edwards &
Susan Redding, Crook County Assessor, (Assessor)
This is an appeal from the Crook 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, briefs filed
pursuant to a Briefing Order (Locally Assessed Property) dated September 18, 2003, and
oral arguments that were heard on January 2, 2004. The Petitioners appealed a decision of
the County Board affirming the Assessor’s valuation of their real property in Crook
County, Wyoming, as not agricultural. Petitioners ask the State Board to remand this case
to the County Board with a directive that Petitioners’ property be assessed as
agricultural and valued at productive value. We reverse the County Board’s decision as
being arbitrary, capricious, an abuse of discretion and unsupported by the substantial
PROCEEDINGS BEFORE THE COUNTY BOARD
The County Board conducted a hearing on July 2,
2003. An order “Denying Protest for Agricultural Value” was entered on August 5, 2003.
A “Case Notice for Review” was filed with the State Board on August 22, 2003, and
after receiving briefs the State Board heard oral arguments on January 2, 2004.
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
(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 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 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 the 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.
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 conclusions.
Clark v. State ex rel. Wyoming Workers’
Safety and Compensation Division, 934 P.2d 1269, 1272 (Wyo. 1997).
The Petitioners find fault with the County Board’s
decision in two areas:
1. Whether the County Board’s finding that the
Petitioners’ land was not agricultural within the definition of Wyo. Stat. Ann.
§39-13-103(b)(x)(B)(IV) was supported by substantial evidence and was not arbitrary,
capricious, an abuse of discretion or not otherwise in accordance with law?
2. Whether the County Board properly found the
Petitioners’ land was “land in transition” and therefore not agricultural land and
if the finding was supported by substantial evidence and was not arbitrary, capricious, an
abuse of discretion or not otherwise in accordance with law?
The Assessor’s Brief did not materially
disagree with these two issues but added an issue that the land was platted and therefore
If land is assessed as agricultural it is valued
on the objective value of what the land is capable of producing under normal conditions.
The value is not based on what the land is actually producing but on what the soils,
temperature, moisture and other factors would allow.
FACTS PRESENTED TO THE COUNTY BOARD
are the owners of 159.83 acres in Crook County, State of Wyoming. The land is located
within the boundaries of a much larger historical ranch and was sold using a brochure that
calls the area “Kara Kreek Ranches”. [Exhibit 6; Transcript, pp. 15-16].
Assessor issued an Assessment Notice for Petitioners’ property on April 23, 2003.
Petitioners filed an appeal from the assessment notice on May 13, 2003. [Record, pp.
hearing on the appeal was held by the County Board on July 2, 2003. [Record, p. 011].
June 4, 2003, Petitioners filed with the Assessor an Affidavit for Agricultural Land
Classification for Assessment Year 2003. There is no residence on the property. The
Petitioners have planted 35 acres of winter wheat, 12 to 15 acres of oats, 12 to 15 acres
of millet and are selling hay from the bottom land. The hay should sell for a between
$5,000 and $6,000. The Petitioners anticipate plowing an additional 35 acres in 2004.
[Transcript, pp. 94-96].
land has been used for agricultural purposes from 1961 to present. [Transcript, pp. 15-16,
the hearing the Petitioners presented a lease from George Strong to lease pasture from
Arnola Davis and Petitioners for approximately five weeks in November and December at the
rate of $10 per head per month for 146 cows. Mr. Strong paid both parties $1,700.00 on
December 20, 2002, for the lease. [Record, p. 139]. Petitioners received $1,175.00 from
the lease. [Transcript, p. 114].
sellers of the property to Petitioners filed a “Dedication Map of 66' Public Access and
Utility Easements of Kara Kreek Ranches, Located in Sections 3, 4, 5, 9 and 10, T49N,
R64W, and Sections 32, 33 and 34, T50N, R64W, 6th P.M., Crook County, Wyoming”
with the Crook County Clerk on March 11, 2002. [Assessor’s Exhibit 5]. The County Clerk
testified that even though the map had been filed with the Clerk, it did not qualify as a
subdivision for recording purposes and she had not indexed the property as she had other
subdivisions. The map had never been formally approved by the County Commissioners or any
other governing body. An easement map does not qualify as a plat, and thus the land is not
disqualified from being classified as agricultural.
Patrick Donahue, the realtor who sold the land to Petitioners, had developed a sales
brochure that emphasized the recreational value of the property. [Assessor’s Exhibit 6].
The sales brochure does not disqualify the land from being classified as agricultural.
sellers developed an easement map to dedicate roads for access to the property and to
dedicate rights of way for utilities. However, this map is not the equivalent of a plat.
Mr. Donahue was the agent for the sellers for the land to Petitioners and he is still
selling some of the original historical Kara Kreek Ranch. Mr. Donahue verified that the
sellers of the historical ranch were not bound to sell the tracts as described in the
easement map, and in fact, they had not sold land in accordance with the tracts described
on the map. [Assessor’s Exhibit 5]. If the map had been a plat the sellers of the
historical ranch would have been required to file an amended plat to sell tracts of land
other than that shown on the map. This is additional evidence the map is not a plat.
preparation for the easement map, the owner of the property had the property surveyed and
corner markers were placed. [Transcript, p. 77]. The survey and corner markers do not
disqualify land from being classified as agricultural.
Bruce Gose testified that he had previously owned the land and used it as part of a larger
agricultural operation. Mr. Gose had assisted in planting some of the land.
Donahue testified that the land was used in the past for grazing and hay production. He
testified that the use of the land was more agricultural than it had been in the past.
Cash crops are now being raised, and the hay bottoms are now being worked. [Transcript,
pp. 67-68]. There is no evidence to contradict the use of the land for agricultural
purposes or that the agricultural use was not to the productive capability of the land.
Assessor agreed at the hearing that three of the four criteria for classifying land as
agricultural had been met, those being: 1) the use of the land for agriculture; 2) the
agricultural use met the productive capability of the land; and 3) the gross revenue
exceeded $500 if not leased and $1,000 if leased. [Record, pp. 18, 117]. Although an
Assessor cannot bind the County Board, the Assessor’s acquiescence is evidence that the
requirements of agricultural classification have been met.
further evidence of the Assessor’s agreement that the land was agricultural, the
Assessor assessed Petitioners’ tractor, which was used on the land, as agricultural
equipment rather than residential personal property. [Record, p. 116].
County Board denied Petitioners’s Protest for Agricultural Value on August 3, 2003.
appealed to the State Board by Case Notice for Review filed August 22, 2003.
DISCUSSION OF APPLICABLE LAW AND PETITIONERS’ ISSUES
timely filed an appeal from the County Board decision.
Board has jurisdiction to hear and determine all issues raised by the Petitioners pursuant
to Wyo. Stat. Ann. §39-13-109(b).
Wyoming Constitution, Article 15, §11 states that:
(a) All property, except as in this constitution
otherwise provided, shall be uniformly valued at its full value as defined by the
legislature, in three (3) classes as follows:
(i) Gross production of minerals and mine
products in lieu of taxes on the land where produced;
(ii) Property used for industrial purposes as
defined by the legislature; and
(iii) All other property, real and personal.
(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. (Emphasis added).
Statute Annotated Section 39-13-103(b)(ii) provides a bright line test:
(b) Basis for tax. The following shall apply:
* * *
(ii) All taxable property shall be annually
valued at its fair market value. Except as otherwise provided by law for specific
property, the department shall prescribe by rule and regulation the appraisal methods and
systems for determining fair market value using generally accepted appraisal standards:
* * *
(x) The following
shall apply to agricultural land:
* * *
(B) Contiguous or non contiguous parcels of land
under one (1) operation owned or leased shall qualify for classification as agricultural
land if the land meets each of the following qualifications:
(I) The land is
presently being used and employed for an agricultural purpose;
(II) The land is
not part of a platted subdivision;
(III) If the land
is not leased land, the owner of the land has derived annual gross revenues of not less
than five hundred dollars ($500.00) from the marketing of agricultural products, of if the
land is leased land the lessee has derived annual gross revenues of not less than one
thousand dollars ($1,000) from the marketing of agricultural products; and
(IV) The land has
been used or employed, consistent with the land’s size, location and capability to
produce as defined by department rules and the mapping and agricultural manual published
by the department, primarily in an agricultural operation, or the land does not meet this
requirement and the requirement of subdivision (III) of this subparagraph because the
* * *
(C) If needed, the county assessor may require
the producer to provide a sworn affidavit affirming that the land meets the requirements
of this paragraph. When deemed necessary, the county assessor may further require
supporting documentation. (Emphasis added).
Statute Annotated Section 39-13-101(a)(iii) provides the following definition:
(iii) “Agricultural land,” as used in W.S.
39-13-103(b)(x), means land which meets the requirements of W.S. 39-13-103(b)(x) for the
purpose of tax assessment;
Statute Annotated Section 39-13-101(a)(viii) provides the following definition:
(viii) “Agricultural purpose,” as used in
W.S. 39-13-103(b)(x), means the following land uses when conducted consistent with the
land’s capability to produce;
(A) Cultivation of the soil for production of
(B) Production of timber products or grasses for
(C) Rearing, feeding, grazing or management of
demonstrated that the land was used to grow crops, hay and graze cattle. This is
consistent with the statutory definition of “agricultural purpose”, and meets the
first qualification for agricultural land.
testified that the annual gross revenue is greater than $500.00, and their testimony was
not refuted. Petitioners met the second qualification for agricultural land.
paragraph 36 of its order, the County Board found:
36. The land is deemed non-agricultural because
1)Not enough evidence was shown of what is the lands [sic] capability to produce; 2) The
land is in active transition from agricultural to residential or commercial use as shown
by the division of the land into some 30+ smaller parcels for the purpose of sale and
development; 3) The protestant’s use of the land alone by itself does not raise the
expectation of monetary incentive consistent with the lands [sic] capability to produce.
We cannot ascertain what evidence was meant by
the County Board to support its conclusion. The Petitioners testified about the amount of
land that was being farmed and grazed. Mr. Donahue testified the land was being used for
more agricultural purposes than in the past. In fact more land is being farmed and more
hay is being cultivated than had occurred in the past. This evidence was not refuted and
therefore meets the requirement that the land has been used “consistent with the land’s
size, location and capability to produce.” There was no evidence the land was not being
used to its capacity. In fact, the unrefuted evidence is that the land was “more
agriculture” than when it was part of the historical ranch. The only evidence that more
productivity could be achieved is that all of Petitioners’ land is not being actively
farmed. That is not enough evidence, because not all land in Wyoming can be farmed. If
there had been evidence that this land had historically been more productive, then the
County Board’s conclusion could have been supported.
fact that this land had once been part of a larger ranch does not demonstrate this parcel
of land is in transition from agricultural. There is no evidence that this parcel is for
sale or that residential or commercial uses are actively being pursued.
final qualification is whether the land is part of a platted subdivision. The County Board
found the land was not platted. The Assessor argues the land is part of a platted
subdivision because of Chapter 10, Section 3 of the Rules of the Department of Revenue
(b) “Platted Subdivision” means for the
purpose of Chapter 13 of Title 39, the creation of a lot, parcel or other unit of land; or
division of a lot, parcel, or other unit of land into one or more parts that has received
approval from the governing body in whose jurisdiction the property resides at the time of
creation and is recorded in the records of the county clerk.
This land is part of a division of a unit of land
and the division is recorded in the records of the county clerk as an easement map.
However, the governing body, the Crook County Commissioners, did not approve the division
of land. There was no evidence of the Crook County Commissioners ever reviewed the
easement map. The County Clerk testified that the recorded map did not qualify as a
subdivision. The Assessor argues that the formal approval of the division was not
necessary to qualify for a platted subdivision because the Crook County Subdivision
regulations exempt land that has this type of easement map from requiring a plat. This
does not address the very language of the Department’s rule because the rule demands approval by the governing body. For a platted
subdivision to occur the minutes of the governing body need to reflect formal action.
Adopting an exemption is not formal approval.
The last qualification under the current statute
was met for the land to be classified as agricultural.
Assessor argues that the State Board’s decision In the Matter of the Appeal of Mark
and Kathy Loveland, Docket 2001-144, 2002 WL 31440193, (Loveland) is
controlling. The Loveland decision is not controlling because that matter was
decided prior to the effective date of Laws 2002, Special Session, Chapter 92, §1, which
was January 1, 2003. Under the old statute the term “primary purpose of obtaining a
monetary profit”, Wyo. Stat. Ann. §39-13-103(a)(iii), was used. The element of
intent to obtain a profit was eliminated. That language was repealed and replaced by the
measurement of gross revenue. The subjective test of “primary purpose” has been
replaced by a bright line test of a specific dollar amount. The statutory change has
negated the precedent of the Loveland case.
Department has adopted a rule, Chapter 10, Section 3, which guides Assessors about what is
(c) “Non-agricultural lands” shall include
but not be limited to lands as:
* * *
(ii) Lands in active transition from agricultural
use to residential, commercial or industrial use, which includes creation or division of a
tract, parcel or other unit of land for the purpose of sale or development for such use.
While it is true that the land was divided the
other portion of the rule has not been met.
of the evidence demonstrates that the land is being used for agricultural purposes. The
record is devoid of evidence that the land is going to be used for residential, commercial
or industrial use. Since the language of the rule has not been met, the County Board was
arbitrary and capricious and abused its discretion in finding that the land in question
was “lands in active transition” in accordance with the Department’s rule.
Petitioners argue that the “land in active transition” rule exceeds the Department’s
authority and is in conflict of the statute. We find no need to address this argument
because the facts in this case do not support a finding that this land was “in
decision of the County Board affirming the Assessor’s classification of Petitioners’
property was not supported by substantial evidence, was not in accordance with procedures
required by law, and was arbitrary, capricious and inconsistent with law.
IT IS THEREFORE HEREBY ORDERED that the Crook County
Board of Equalization Order denying the Petitioners’ protest and affirming the 2003
assessment of Petitioners’ property is reversed
and this matter is remanded to the Crook County
Board of Equalization to direct the Crook County Assessor to classify the land as
agricultural and value the land according to the capability of the land to produce
agricultural products under normal conditions.
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 17th day of February, 2004.
STATE BOARD OF EQUALIZATION
A. Coates, Chairman
B. Minier, Vice-Chairman
Thomas R. Satterfield
Wendy J. Soto, Executive Secretary