BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF
MATTER OF THE APPEAL OF )
ARNOLA M. DAVIS FROM
OF THE CROOK COUNTY ) Docket
BOARD OF EQUALIZATION - 2003 )
DECISION AND ORDER
Arnola M. Davis,
Petitioner, (Petitioner) appearing by and through James L. Edwards, of Stevens, Edwards
& Hallock, P.C.
Crook County Assessor, (Assessor) appearing pro-se.
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, Member, considered the hearing record and
decision of the County Board, briefs filed pursuant to a Briefing Order (Locally Assessed
Property) issued September 18, 2003, and oral arguments that were heard on January 2,
2004. The Petitioner appealed a decision of the County Board affirming the Assessor’s
valuation of the real property in Crook County, Wyoming, as non-agricultural. Petitioner
asks the State Board to remand this case to the County Board with a directive that
Petitioner’s property be assessed as agricultural and valued at productive value. We
reverse the County Board’s decision as being arbitrary, capricious and an abuse of
discretion and unsupported by substantial evidence.
PROCEEDINGS BEFORE THE
The County Board
conducted a hearing on July 2, 2003. An Order “Denying Protest for Agricultural Value”
was entered 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. Wyoming State Board of Equalization Rules, 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 Wyoming State Board of
Equalization Rules, Chapter 2 and Wyoming State Board of Equalization Rules, 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:
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
Board of Equalization Rules, 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.
If land is assessed
as agricultural it is valued on the objective value of what the land is capable to produce
under normal conditions. The value is not set by what the land is actually producing but
by what the soils, temperature, moisture and other factors would allow.
finds fault with the County Board’s decision in two areas:
1. Whether the
County Board’s finding that the Petitioner’s 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 Petitioner’s 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
Brief did not materially disagree with these two issues but added an issue that the land
was platted and therefore not agricultural.
FACTS PRESENTED TO THE
is the owner of 122.69 acres in Crook County, State of Wyoming. The land is located within
the boundaries of a much larger historical ranch. A sales brochure calls this area “Kara
Kreek Ranches”. [Exhibit 6; Transcript, pp. 15-16].
Assessor issued an Assessment Notice for Petitioner’s property on April 23, 2003.
Petitioner 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, Petitioner filed with the Assessor an Affidavit for Agricultural Land
Classification for Assessment Year 2003. In the affidavit Petitioner represented that the
land was being used for the cultivation of soil for production of crops and rearing,
feeding, grazing or management of livestock. She represented that the land is not leased
and that she has derived gross revenues of not less than five hundred dollars ($500.00)
from the marketing of agricultural products from the subject land. [Transcript, p. 123].
She asserted that 41 acres were dry crop land with wheat, oats, millet and hay grass and
that 80 acres was range land for cattle. [Record, pp. 157-158]. Petitioner testified that
she had planted 12 acres of millet, 22 acres of grass for hay and the remainder of the
land was used for range land and had been fenced for grazing. [Transcript, pp. 53-54,
115]. There is no residence on the property. [Transcript, p. 9].
land has been used for agricultural purposes from 1961 to present. [Transcript, pp. 15-16,
the hearing the Petitioner presented a lease from George Strong to lease pasture from
Petitioner and Dave Bannister 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 $1700.00 on
December 20, 2002, for the lease. [Record, p. 139]. Petitioner received $425.00 from the
lease. [Transcript, p. 114].
sellers of the property to Petitioner 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 in the Clerk’s Office, the map did not
qualify as a subdivision map 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. We find that an easement map does not qualify
as a plat, and thus the land is not disqualified from being classified as agricultural.
realtor, who sold the land to Petitioner, 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.
9. The 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. Patrick Donahue was the agent for the
sellers of the land to Petitioner and he is still selling some of the original historical
Kara Kreek Ranch. Mr. Donahue verified that the sellers of the Kara Kreek Ranch were not
bound to sell the tracts as described in the easement map and in fact had not sold land in
accordance with the tracts described on the map. [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 that 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
agriculture 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. [Exhibit 5].
County Board denied Petitioner’s Protest for Agricultural Value on August 3, 2003.
appealed to the State Board by Case Notice for Review filed August 22, 2003.
APPLICABLE LAW AND PETITIONER’S ISSUES
timely filed an appeal from the County Board decision.
Board has jurisdiction to hear and determine all issues raised by the Petitioner 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:
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 §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
* * *
(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
(I) The land is presently being used and employed for an
(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 producer:
* * *
(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.
Statute Annotated Section 39-13-101(a)(iii) provides the following definition:
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:
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 crops; or
(B) Production of
timber products or grasses for forage; or
feeding, grazing or management of livestock.
demonstrated that the land was used to grow crops, hay and graze cattle. This use 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 her testimony was not
refuted. Petitioner met the second qualification for agricultural land.
Donahue testified the land was being used for more agricultural purposes than in the past.
In fact more land is being farmed and the hay is being cultivated more than 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” which is
another criteria to be classified as agricultural land. In paragraph 38 of its order the
County Board found:
failed to show that the land was used for an agricultural purpose conducted consistent
with the lands capability to produce agricultural products. The protestant’s use of the
land alone by itself does not raise the expectation of monetary incentive consistent with
the lands capability to produce. Only a small portion of the land was farmed and the
Protestant had no idea what kind of crop she expected to get off of the land. The
protestant did not even own a tractor.
We cannot ascertain
evidence to support this conclusion. The Petitioner testified about the amount of land
that was being farmed and grazed. The Petitioner’s lack of a tractor has nothing to do
with the fact that the land is being tilled. There was no evidence the land was not being
used to its capacity, in fact the unrefuted evidence is that the land was “more
agricultural” than when it was part of a historical ranch. The observation that only a
portion of land was being farmed does not indicate the land was not being employed
consistent with the land’s ability to produce because much land in Wyoming cannot be
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. The Department of Revenue Rules, Chapter 10, Section 3 state:
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
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 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 exempts land that has this type of
easement map from requiring a plat. This does not address the very language of the
Rule because the Rule demands approval of
the governing body. There is no evidence that the Crook County Commissioners formally
approved the division. For a platted subdivision to occur, the minutes of the governing
body need to reflect the formal action on the part of the governing body on that plat.
Adopting an exemption is not formal approval.
qualification under the current statute was met for the land to be classified as
Assessor argues that the Board 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. That language was repealed. The element of intent to
obtain a profit was eliminated, 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
Department has adopted a rule, Chapter 10, Section 3, that guides Assessors about what are
lands” shall include but not be limited to such 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 “land in active transition” in accordance with the Department’s Rule.
Petitioner argues that the “land in active transition” Rule exceeds the Department’s
authority and is in conflict of the statute. We need not address this argument because the
facts in this case do not support a finding that this land was “in transition.”
decision of the County Board affirming the Assessor’s classification of Petitioner’s
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 Petitioner’s protest and affirming the 2003
assessment of Petitioner’s property is reversed
and this case is remanded to the Crook County Board
of Equalization to direct the Crook County Assessor to classify the land as agricultural
and assess the land according to the capability of the land to produce agricultural
products under normal conditions.
THIS SPACE INTENTIONALLY LEFT BLANK
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 11th day of February, 2004.
STATE BOARD OF EQUALIZATION
A. Coates, Chairman
B. Minier, Vice-Chairman
Wendy J. Soto,