BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF WYOMING
IN THE MATTER OF THE APPEAL OF )
WILLIAM B. WALES FROM A ) Docket No. 2004-121
DECISION OF THE PLATTE COUNTY )
BOARD OF EQUALIZATION - 2004 )
PROPERTY VALUATION )
DECISION AND ORDER
APPEARANCES
William B. Wales, Petitioner, (Petitioner) appearing pro-se.
Lynda J. Chaffin, Platte County Assessor, (Assessor) appearing pro-se.
DIGEST
This is an appeal from a decision of the Platte County Board of Equalization (County Board). The State Board of Equalization (State Board), comprised of Alan B. Minier, Chairman, Thomas R. Satterfield, Vice-Chairman and Thomas D. Roberts, Board Member, considered the hearing record and decision of the County Board, Petitioner’s Notice of Appeal filed with the State Board dated August 12, 2004, and the parties oral arguments heard on December 28, 2004. Neither party filed a brief as allowed by the State Board’s Briefing Order dated September 24, 2004.
The Petitioner appealed a decision of the County Board affirming the Assessor’s valuation of his real property in Platte County, Wyoming. Petitioner argues that the County Board’s decision affirming the Assessor’s classification of a portion of Petitioners’ property as irrigated crop land rather than dry crop land and the Assessor’s use of the Wyoming Department of Revenue’s Agricultural Land Valuation Study in valuing Petitioner’s agricultural land is arbitrary, capricious, an abuse of discretion and unsupported by the substantial evidence.
PROCEEDINGS BEFORE THE COUNTY BOARD
The County Board conducted a hearing on July 19, 2004. A “Decision on Appeal” was entered by the County Board on August 3, 2004. A notice of appeal of the County Board decision was filed with the State Board on August 12, 2004.
JURISDICTION
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 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, §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:
(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 law; or
(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).
ISSUES
From Petitioner’s argument we discern that he has two complaints with respect to the County Board’s decision:
a.That a portion of the property should be classified as non-irrigated agricultural property.
b.That the valuation of agricultural property set by the Department fails to account for the effect of drought.
We conclude agricultural land is valued and assessed 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. It is the responsibility of the Department to develop values which must be followed by the assessor and County Board.
FACTS PRESENTED TO THE COUNTY BOARD
1. The Petitioner owns 160 acres of land located on 229 Olson Road, Wheatland, Wyoming. The legal description is NE1/4 of Section 16, Township 23 North, Range 68 West of the 6th P.M.. [Hearing Tape; County Board Record, p. 35].
2. The Petitioner appeared on his own behalf at the Platte County Board of Equalization hearing. The Assessor appeared on behalf of herself. [Hearing Tape].
3. The Assessor sent a Notice of Assessment to all Platte County landowners for the 2004 tax year. [County Board Record, p. 32].
4. On June 4, 2004, Petitioner filed a STATEMENT TO CONTEST PROPERTY TAX ASSESSMENT for his 2004 property tax. The two reasons for the protest were: 1) the assessment was incorrect because the Assessor took an arbitrary and capricious stand regarding the classification of a portion of the land in question as irrigated land without regard for the guidelines set forth in the State of Wyoming 2003 Agricultural Land Valuation Study; and 2) the production values set by the Department did not reflect the loss of production due to drought. [Hearing Tape; County Board Record, p. 13].
5. The County Board scheduled a hearing for July 19, 2004 at 3:00 p. m. to hear Petitioner’s appeal. [County Board Record, p. 2].
6. Petitioner explained to the County Board that the land in question is irrigated by a circular pivot sprinkler and the sprinkler does not cover the corners of the land in question. [County Board Record, p. 36]. He presented the County Board with a copy of the State of Wyoming 2003 Agricultural Land Valuation Study. [Hearing Tape; County Board Record, p. 21]. He read into the record a portion of page 7-2.
When valuing irrigation crop land, a usable water right or irrigation wells must be present. A functional irrigation system of ditches, pipes, sprinklers or other irrigation improvements are required to achieve irrigated production and are considered part of the production value.
[Hearing Tape; County Board Record, p. 47]. Petitioner told the County Board that the corners of his property do not have irrigation structures and should not be classified as irrigated crop land.
7. The Petitioner requested that the acreage in land classification IR-V be changed from 46 acres to 9 acres. [Hearing Tape; County Board Record, p. 37].
8. The Petitioner brought to the County Board’s attention Article 15, Section 11(b) of the Constitution of the State of Wyoming which states “agricultural and grazing lands which shall be valued according to the capability of the land to produce agricultural products under normal conditions.” [Hearing Tape]. He told the County Board that because of the drought his production was down 30%. To substantiate his claim that these years of drought were not normal conditions, he produced a letter from Dallas Mount, an Educator from the University of Wyoming Extension Service. [Hearing Tape; County Board Record, p. 14].
9. The Petitioner testified he had no argument with the way the Department figured the values of production and that he understands the Assessor is required to follow rules and regulations. However, since the drought began, there have been no adjustments for the loss of production. He testified that valuations and tax assessments should reflect the loss of production during drought years. [Hearing Tape].
10. After the Petitioner’s presentation to the County Board, the Assessor questioned him about the corners not covered by the sprinkler, asking Petitioner if these parcels were irrigated, were they capable of producing a crop. He admitted that if the parcels had water that they were capable of producing a crop. [Hearing Tape].
11. The County Board asked why the areas outside the sprinkler system seemed to differ. The Petitioner told the County Board that the sprinkler system only covered 280 degrees rather than 360 degrees because of the location of the farmstead, stack-yards and out- buildings. He explained that the sprinkler system did have an end gun that irrigated about 2 extra acres. He repeated that the State of Wyoming’s Land Valuation Study stated if there were no irrigation structures present the land should be classified as non-irrigated land. [Hearing Tape.]
12. The Assessor presented her case to the County Board of Equalization by reviewing the 2004 Assessment for the Petitioner’s property. [Hearing Tape; County Board Record, p. 43.]
13. The Assessor did not break down the classification and productive values on the notice of assessment. She told the County Board that her office was assessing the Petitioner’s 160 acre farm as: 69 acres IR-II, 43 acres IR-III, 46 acres IR-V; and 2 acres for farmstead. [Hearing Tape; County Board Record, p. 82].
14. There is nothing in the record that explains how the Assessor arrived at the figures for each class. However, it is apparent that the land in question was classified by the Assessor as IR-V. [Hearing Tape.]
15. In closing, the Assessor told the County Board she believed the 160 acres of land is classified correctly and it is the Petitioner’s choice to irrigate all of it. His choice does not affect the capability of the land to produce. [Hearing Tape.] The entire 160 acre property has a water right. The landowner paid the irrigation district assessment on all the land and received a water allotment from the irrigation district. [County Board Record, p. 74].
16. The County Board denied Petitioner’s contest of his property tax assessment on August 3, 2004. [County Board Record, pp. 17-19].
17. Petitioner filed a notice of appeal with the State Board on August 12, 2004.
DISCUSSION OF PETITIONER’S ISSUES AND APPLICABLE LAW
18. Petitioner timely filed an appeal from the County Board decision.
19. The State Board has jurisdiction to hear and determine all issues raised by the Petitioner pursuant to Wyo. Stat. Ann. §39-13-109(b).
Irrigated Crop Land Classification.
20. The first issue raised by Petitioner concerns the classification of a portion of his farm land as irrigated crop land. The crux of this controversy stems from the following language contained in the Department’s Mapping and Agricultural Manual:
The Department’s valuation model requires certain attributes to be present on the land for production to occur. When valuing irrigated crop land, a usable water right or irrigation wells must be present. A functional irrigation system of ditches, pipes, sprinklers or other irrigation improvements are required to achieve irrigated production and are considered part of the production value. When valuing range land, fences and stockwater wells/facilities are required and are included in the production value. These assets are all included in the taxable productivity value of agricultural land and therefore are not valued separately.
[2004 Agricultural Land Valuation Study, §7, p. 7-2, County Board Record, p. 47].
21. Petitioner’s argument is based on the fact that his pivot irrigation system does not irrigate the corners of his property. The Assessor’s argument and the County Board’s decision are based on the capability of the land to produce.
22. The primary consideration in classifying agricultural land for assessment purposes is the land’s capability to produce agricultural products. Wyo. Const. art. XV §11(b); Wyo. Stat. Ann. §39-13-103(b)(x)(B)(IV); Rules, Wyoming Department of Revenue, Chapter 11, §4 (a)(ii).
23. The Wyoming Constitution, Article 15, §11(b) provides in pertinent part that: “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.” (emphasis added.)
24. Wyoming Statutes Annotated Section 39-13-103(b)(x)(B) provides in pertinent part:
(B) Contiguous or noncontiguous 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:
* * *
(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, . . . (emphasis added.)
25. Consistent with Wyo. Stat. Ann. §39-13-103(b)(x)(B)(IV), the Department’s Rules further establish that “[t]he Mapping and Agricultural Manual is the Department’s official source for general mapping and agricultural land valuation standards for all County Assessors.” Rules, Wyoming Department of Revenue, Chapter 11, §4(a); [County Board Record, p. 66].
The classification of agricultural land, for assessment purposes, shall be based on the Mapping and Agricultural Manual in which the soil’s capability to produce vegetation will be determined for three principal agricultural uses; irrigated crop land, dry crop land and rangeland. (emphasis added.)
Rules, Wyoming Department of Revenue, Chapter 11, §4(a)(ii); [County Board Record, p. 66].
26. The Department is required to confer with, advise and give necessary instructions and directions to the county assessors as to their duties, and to promulgate rules and regulations necessary for the enforcement of all tax measures. Wyo. Stat. Ann. §39-11-102(c)(xvi) and (xix). In particular, the Department “shall 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).
27. The Department has adopted rules concerning the classification, valuation, methodology and assessment of agricultural land.
These rules are intended to describe the methods and procedures for classifying agricultural land as to type, whether irrigated, dry cropland, rangeland, timberland or other; and to describe the valuation methodology to be used to determine the taxable value of agricultural land for ad valorem tax purposes. The manuals, formulae, methods, systems, computations, standards, guidelines and criteria to be used by the County Assessors and Ad Valorem Tax Division to determine taxable value are set forth herein.
Rules, Wyoming Department of Revenue, Chapter 11, §2; [County Board Record, p. 63].
28. The Rules of the Department define “Irrigated Crop Land” as “any land, which has water applied to it by artificial means for the purpose of producing food or fiber, or Christmas, ornamental and nursery trees.” The Rules define “Dry Crop Land” as “any land which is harvested by mechanical means, and is used in the production of cereal grains and row crops, alfalfa, legumes or grass hay, including sub-irrigated hay meadows, or Christmas, ornamental and nursery trees.” The Rules define “Rangeland” as “any land which is used for livestock production, and cannot or has not been cultivated by mechanical means.” Rules, Wyoming Department of Revenue, Chapter 11, §3(g), (h) & (j); [County Board Record, p. 64].
29. An assessor is “responsible for developing and maintaining current maps, in accordance with the Mapping and Agricultural Manual, which depict all three categories of agricultural land use, which include irrigated crop land, dry crop land and rangeland.” Rules, Wyoming Department of Revenue, Chapter 11, §4(b)(iii). An assessor is required to adhere to the standards and productivity sources as specified in the Department’s Mapping and Agricultural Manual. Rules, Wyoming Department of Revenue, Chapter 11, §4(b).
30. The Mapping and Agricultural Manual sets out the three steps for classifying agricultural land productivity. The steps are: 1) Identify ownership, 2) Identify land use (irrigated crop land, dry crop land and range land) and 3) Identify productivity. Mapping and Agricultural Manual, §5, p. 5-1 (July 30, 1996).
31. In identifying land use, the Mapping and Agricultural Manual recognizes that any one or all three categories of agricultural land, irrigated crop land, dry crop land and rangeland, may be found in any given parcel.
To properly value each agricultural parcel, these categories must be correctly identified and located. This is accomplished through the use of Natural Resources Conservation Service’s Soil Surveys, color infrared photography, aerial photography and U.S.G.S. [United States Geological Survey] orthophotos.
Mapping and Agricultural Manual, §5, p. 5-1 (July 30, 1996).
32. Finally, Wyoming law requires that water and reservoir rights originating in Wyoming and appurtenant to and beneficially used in connection with lands within Wyoming shall be assessed and taxed with the lands. Wyo. Stat. Ann. §39-13-103((b)(xi)(A).
33. At the County Board hearing, Petitioner conceded that he has water rights for irrigation of all of his land and could irrigate the entire parcel if the proper irrigation system were installed. However, the corners of his property were not reached by the current pivot irrigation system. [Hearing Tape.] The Petitioner variously described this land as either dry cropland or fallow, without demonstrating either status.
34. The Assessor argued that because Petitioner has water rights of 160 acres covering his entire property and the capability of irrigating the entire parcel, the classification of the entire parcel, with the exception of the homestead, as irrigated crop land was proper. The County Board affirmed the Assessor’s classification concluding:
Agriculture land which have valid adjudicated and available water rights should be determined to be irrigated lands even if the land owner chooses to apply the water elsewhere.
[County Board Record, p. 85].
35. An 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 Regulation, 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 burden is on the Taxpayer to establish any overvaluation.” Hillard v. Big Horn Coal Co., 549 P. 2d 294 (Wyo. 1976).
36. The County Board record lacks any evidence by Petitioner to challenge the Assessor’s classification of the property based upon productive capacity.
37. Based on the applicable constitutional provision; the Wyoming Statutes and Rules and Regulations of the Department, which require the Assessor to classify agricultural land based on its capability to produce; the Petitioner’s water rights for the entire parcel; and the absence of evidence of Natural Resources Conservation Service’s Soil Surveys, color infrared photography, aerial photography and U.S.G.S. orthophotos to establish a different land classification, we conclude the decision of the County Board affirming the Assessor’s land classification was not arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law.
38. Further we conclude that there was substantial evidence in the record to support the findings of the County Board.
Agricultural Land Values.
39. Petitioner’s second issue relates directly to the values applied to his land by the Assessor. He maintains that the agricultural land values developed by the Department and used by the Assessor fail to properly take into account the results of the drought conditions experienced in Platte County.
40. The authority to determine the taxable value of agricultural lands is vested in the Department.
The department [of revenue] 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 on 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.
Wyo. Stat. Ann. §39-13-103 (b)(x)(A).
41. The Department, pursuant to statute, has adopted Rules, Chapter 11, Ad Valorem Classification, Valuation, Methodology and Assessment for Designated Agricultural Land, which provides:
The “Mapping and Agricultural Manual” produced by the Department
of Revenue is the official standard for mapping and agricultural land
productivity specification and valuations for property tax purposes in
accordance with Wyoming Statute 39-13-103(b)(x)(B)(IV).
Rules, Wyoming Department of Revenue, Chapter 11, §3(s).
42. The Department Rules, Chapter 11, §5 require the Department to develop valuation amounts for agricultural land using the “Mapping and Agricultural Manual.” The determined value is based upon the capacity of the land to produce forage or crops. The Department publishes this valuation information through the annual Agricultural Land Valuation Study.
Valuation amounts for agricultural land for assessment purposes shall be based upon the Department’s Mapping and Agricultural Manual, and shall be published annually by January first or as soon thereafter as possible by the Department. The valuation of agricultural land is based upon the land’s capability to produce forage or crops.
Rules, Wyoming Department of Revenue, Chapter 11, §5(a). The annual Agricultural Land Valuation Study is, in form and function, an order, procedure or formulae of the Department.
43. An assessor is required to annually value property within the assessor’s county for tax purposes at its fair market value. In completing this task the assessor is required to “[f]aithfully and diligently follow and apply the orders, procedures and formulae of the department of revenue or orders of the State Board of Equalization for the appraisal and assessment of all taxable property.” Wyo. Stat. Ann. §18-3-204(a)(ix).
44. In addition, “[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.” Wyo. Stat. Ann. §39-13-102(d).
45. The Department’s annual Agricultural Land Valuation Study, as an order, procedure, and formulae, is binding on the assessor and neither the Assessor nor the County Board had the authority to deviate from the valuation ranges established by the Department.
46. The Department is not a party to this appeal. Rules, Wyoming State Board of Equalization, Chapter 3, §4. If Petitioner has a grievance with the Department for failing to adequately take drought conditions into account when setting a range of values for the County Assessor, his remedy does not lie in this appeal for the action of the County Assessor.
ORDER
IT IS THEREFORE HEREBY ORDERED that the Platte County Board of Equalization Order denying the Petitioners’ protest and affirming the 2004 assessment of Petitioners’ 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.
Dated this _______ day of January, 2005.
STATE BOARD OF EQUALIZATION
________________________________
Alan B. Minier, Chairman
________________________________
Thomas R. Satterfield, Vice-Chairman
________________________________
Thomas D. Roberts
ATTEST:
_________________________________
Wendy J. Soto, Executive Secretary