BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF
MATTER OF THE APPEAL OF )
LOWE’S HIW, INC. FROM
OF THE LARAMIE COUNTY ) Docket
BOARD OF EQUALIZATION - 2003 )
DECISION AND ORDER
Lowe’s HIW, Inc.,
Petitioner, (Petitioner), appearing by and through James R. Belcher and Lawrence J. Wolfe,
of Holland & Hart, LLP.
Laramie County Assessor, (Assessor), appearing by and through Peter Froelicher, Laramie
This is an appeal
from 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, briefs filed pursuant to a Briefing Order (Locally Assessed
Property) dated October 17, 2003, and oral arguments heard on February 2, 2004. The
Petitioner appealed a decision of the County Board affirming the Assessor’s valuation of
the real property and improvements in Laramie County, Wyoming. Petitioner asks the State
Board to remand this case to the County Board with a directive that Petitioner’s
property be assessed at the amount the Petitioner incurred to build the structure. We
affirm the County Board’s decision as being supported by substantial evidence.
PROCEEDINGS BEFORE THE
The County Board
conducted a hearing on June 17, 2003. An Order was entered July 29, 2003, affirming the
Assessor’s valuation. A Notice of Appeal was filed with the State Board on August 28,
2003. After receiving briefs, the State Board heard oral arguments on February 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 State 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 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 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
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.
finds fault with the value the Assessor assigned to the improvements located in Laramie
County, Wyoming. The Petitioner argues that its construction costs should set the value of
its new, unique improvements.
We affirm the
FACTS PRESENTED TO THE
Petitioner is the owner of a warehouse at 2723 Christensen Parkway in Laramie County,
Wyoming. The warehouse was completed in 2002. The main building is 1,119,750 square feet
and the guard house is 1,152 square feet. It is located on 167 acres. [Exhibit A].
the Assessor valued the property based on the best information available because
Petitioner failed to report the personal property for the facility. The Assessor used the
best information she had available, a press release to estimate the value of the personal
property as of March 1 deadline. Wyo. Stat. Ann. §39-13-103(b)(v). After the
Petitioner received the original assessment schedule, the Petitioner provided information
about the personal property and the Assessor reduced the value of the personal property to
a value acceptable to the Petitioner. [Transcript pp. 26-27, 29, 53].
Petitioner is not questioning the value of the land or personal property as assigned by
the Assessor. [Exhibit 1, p. 67].
Assessor’s field agents visited the property and took pictures and measurements to
verify the characteristics and measurements of the improvements. The Petitioner has not
presented any evidence that the measurements or characteristics are incorrect.
[Transcript, p. 30].
Assessor used the cost method to value the improvements by using the Computer Assisted
Mass Appraisal (CAMA) system to input the characteristics and the measurements. The CAMA
system then utilized the Boeckh cost tables with adjustments to assign a value to the
characteristics and measurements. [Transcript, p. 32]. The method used is a cost method
using the assistance of a computer.
Boeckh cost table is a national model of the average cost of specific attributes and
measurements. The values derived from the Boeckh tables for each improvement are then
added to derive a base cost. [Transcript, p. 48].
are adjustments to the base cost derived from the application Boeckh tables. The
adjustments in this valuation consisted of a story height adjustment, and a percent good
adjustment. [Exhibit A, pp. 127-130]. There were not adjustments for time and location or
Assessor derived a value for the improvements from the CAMA system as follows:
[Exhibit A, p. 125]
Petitioner believes the value of the improvements to be $34,461,195. [Exhibit 1, p. 67,
Exhibit A, p. 130; Transcript, p. 33].
presented four contracts dated in 2001 for the construction of the improvements. The total
of the those contracts were $34,461,195. Those contracts were as follows:
[Exhibit 1, pp.
No other contracts,
fee invoices, loan fees or indirect costs were presented.
presented offering prices, listings of various sized warehouses in other states. The
listings did not show the characteristics of the buildings. These listings were not actual
sales information. [Exhibit 6, pp. 111-118]. Petitioner calculated the price per square
foot for the listing prices and calculated that those listing prices were less than the
price per square foot for the Assessor’s value.
prices are not indicative of fair market value because the listing price may not amount to
a sale and further a listing price does not indicate if the sale meets the criteria for a
fair market sale.
County Board denied Petitioner’s protest in an order dated July 29, 2003.
appealed to the State Board by Notice of Appeal filed August 28, 2003.
APPLICABLE LAW AND PETITIONER’S ISSUES
timely filed an appeal from the County Board decision.
State Board has jurisdiction to hear and determine all issues raised by the Petitioner
pursuant to Wyo. Stat. §39-13-109(b).
Wyoming Constitution, Article XV, §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.
taxable property must be valued annually at fair market value. Wyo. Stat. Ann.
§39-13-103(b)(ii). Fair market value is defined as:
[T]he 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.
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 & Company 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 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.
this case, the Assessor utilized the CAMA system to value Petitioner’s property.
Petitioner demonstrated no error or inaccuracy in the Assessor’s use of the CAMA system.
Department has promulgated rules for methods to value taxable property. The acceptable
methods are a sales comparison approach, a cost approach, an income or capitalized
earnings approach and the Computer Assisted Mass Appraisal (CAMA). Rules, Wyoming
Department of Revenue, Chapter 9, §6 (a), (b), (c) and (d).
Department has defined cost in its rules:
consists of all components of expense incurred in the building or manufacture of real and
(I) “Direct costs”
include, but are not limited to, materials, labor, supervision, equipment rentals,
installation of components, and utilities.
costs” include, but are not limited to architecture and engineering, building permits,
title and legal expenses, insurance, interest and fees on construction loans, taxes
incurred during construction, advertising and sales expenses, and reasonable overhead and
Department of Revenue Chapter 9, §6(b)(v).
Department allows the cost to be calculated using various approaches:
(A) Costs may be
estimated on the basis of typical reproduction or replacement costs.
reproduction and replacement costs may be estimated by the quantity survey method, the
unit-in-place method, the comparative unit method, or the trended original cost method.
(C) The appraiser
may use cost manuals where available or may design his own. Such manuals shall be based on
actual costs and shall indicate which indirect costs are included. Such manuals shall also
provide normal depreciation and age-life information.
Department of Revenue, Chapter 9, §6(b)(iii).
CAMA method employed by the Assessor utilized cost tables in valuing the property. The
CAMA system used a cost manual method by applying the Boeckh tables.
only attack on the Assessor’s use of the Boeckh method is that it was not adjusted for
the Cheyenne area. The County Board could reject this attack because there was no evidence
to demonstrate that a location and time adjustment was necessary.
27. The Petitioner
advocates that the “Quantity survey method” should have been used. The Department
Rules define the method:
survey method” means the procedure for estimating cost which requires complete
itemization of all construction, labor, and material costs, by components and
sub-components, and of all indirect costs. The method is most often used to derive a
reproduction cost for a specific property or special-purpose property for which other
methods may not be sufficiently accurate.
Department of Revenue, Chapter 9, §6(b)(v).
Assessor does not have to consider the “Quantity survey method” if the necessary
information to utilize this approach is unavailable. In this case, the necessary costs to
use the “Quantity survey method” were not available. However, if an Assessor
receives the necessary cost information to consider the “Quality survey method” then
the Assessor must use the reconciliation process to determine if the value from the “Quality
survey method” is more reliable than the value from CAMA or other methods in accordance
with Department of Revenue Rule Chapter 9 §7. This reconciliation process is an exercise
of appraisal judgment.
record shows the costs presented to the Assessor and the County Board by the Petitioner
were insufficient for use of the “Quantity survey method.” Below is a table of the
cost information needed to apply the method, compared to the cost information that was
Cost Information Needed
Cost Information Supplied
Title and Legal
Interest and fees
on construction loans
also argues that because this is the largest building in Wyoming it was more cost
efficient to build and therefore the value should be decreased. There is no testimony or
documentary evidence to support this argument. The only evidence that might have
demonstrated such a trend was the listing of offering prices of various sized warehouses.
This exhibit fails to demonstrate a correlation between the size and the listing prices.
[Exhibit 6, p. 111].
Petitioner confused construction costs with the “Cost Approach.” Construction costs
are not the “Cost Approach” because the “Cost Approach” is estimating the typical
reproduction or replacement costs, not actual construction costs. This distinction is
important to recognize because of uniformity of assessment. Uniformity can only be
achieved if all similarly situated property is valued in a uniform manner not by giving a
property a value because the owner was a good negotiator and the next property a higher
value because the owner was a poor negotiator. The value demanded by our Wyoming
Constitution is “full value” or fair market value. Wyo. Const. art. XV 15 §11.
If a company can obtain a “good deal” when constructing an improvement the value is
still fair market value.
decision of the County Board affirming the Assessor’s value of Petitioner’s property
was supported by substantial evidence, was in accordance with procedures required by law,
and was not arbitrary, capricious nor inconsistent with law.
IT IS THEREFORE HEREBY ORDERED that the Laramie County
Board of Equalization Order Denying the Petitioner’s Protest and Affirming the 2003
Assessment of Petitioner’s property 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 23rd day of February, 2004.
STATE BOARD OF EQUALIZATION
A. Coates, Chairman
B. Minier, Vice-Chairman
Thomas R. Satterfield
Wendy J. Soto,