Terrance R. Martin, Deputy Fremont County Attorney, on behalf of Eileen Oakley, Fremont County Assessor (Petitioner or Assessor).

Lloyd and Jerry Dechert, (Respondent or Taxpayer), appearing pro-se, on behalf of Lloyd and Annette Dechert and Jerry and Renee Dechert.

This is an appeal from a decision of the Fremont 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 was filed with the State Board effective August 31, 2004. Both parties filed a brief as allowed by the State Board’s October 8, 2004, Briefing Order. Neither party requested oral argument.

The Assessor appealed the County Board decision ordering the Assessor to recalculate the value of the Respondent’s irrigated crop land in Fremont County, Wyoming. The Assessor argues that the County Board’s decision to recalculate the taxable value of the Respondent’s property using a figure of $81.00 per ton for hay, or in the alternative to assess the agricultural property at the same amount assessed for the 2002 tax year, was arbitrary, capricious, unsupported by the substantial evidence, and contrary to law.

The County Board conducted a hearing on June 28, 2004. A “Decision on Appeal” was entered by the County Board on August 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.

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;

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 Petitioner argues the County Board decision is unsupported by substantial evidence, and the County Board arbitrarily and capriciously determined the property’s production value for 2004 tax purposes.

We conclude that 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 of Revenue to develop values which must be followed by the Assessor and County Board.

1. The Respondent owns 1,098.29 acres of agricultural land in Fremont County, Wyoming, consisting of four (4) parcels:

	Area	Location	Owners
Parcel 1	312.22 acres	Missouri Valley Road	Lloyd D. & Annette W. Dechert Jerry D. & S. Renee Dechert
Parcel 2	160.0 acres	Missouri Valley Road	Lloyd C. & Annette W. Dechert
Parcel 3	70.0 acres	Missouri Valley Road	Lloyd & Annette Dechert
Parcel 4	556.07 acres	Tunnel Hill Road	Lloyd & Annette Dechert

2. Lloyd Dechert and his son, Dr. Jerry Dechert (a part owner of Parcel 1), appeared on their own behalf at the County Board hearing. Terrance R. Martin, Deputy Fremont County Attorney, appeared at the hearing on behalf of Eileen Oakley, the Fremont County Assessor. [Hearing Tape].

3. On April 14, 2004, the Assessor sent 2004 tax year Notices of Assessment to the Respondents for the four (4) parcels of land. [County Board Record, pp. 57- 60].

4. On April 22, 2004, the Respondent filed a Statement To Contest 2004 Property Tax Assessment for each of the four (4) parcels along with a cover letter and copies of 98 tickets for hay sold. [County Board Record, pp. 2-26].

5. On May 24, 2004, the County Board of Equalization scheduled a hearing for June 28, 2004, in the matter of the four (4) protests of Respondent. [County Board Record, p. 43].

6. At the hearing, the Respondent testified that he was not there to protest the land value but to protest (1) the increase in value, and (2) the way the land value was obtained. As one of the largest hay producers in Fremont County, he felt he had a good idea what the actual price of hay per ton was for the 2004 tax year. He produced 98 tickets for sales of hay which he sold for an average of $90.00 per ton. [County Board Record, pp. 2-26]. Delivered hay cubes sold for $110.00 to $130.00 per ton. Poorer quality hay sold for $60.00 to $75.00 per ton. [County Board Record, pp. 112-113, 123]. He testified that he was protesting the use of $110.00 per ton by the Department of Revenue. He testified he thought the value should be $81.00 per ton. [Hearing Tape].

7. The Respondent produced a letter from Matt Vredenburg, Vice President of the First Interstate Bank of Riverton, Wyoming. Mr. Vredenburg’s letter stated that the bank had reviewed five of its customers’ records, including those of the Respondent, and concluded the weighted average selling price for hay in 2003 was $76.00 per ton using a random sample totaling 6,500 tons of hay. [Hearing Tape; County Board Record, p. 49].

8. The Respondent showed the County Board the 2001, 2002 and 2003 Midvale Irrigation District Crop Production Reports. The Midvale Irrigation Project is located in central Fremont County. These reports are required of all federal irrigation projects by the U.S. Bureau of Reclamation and are used to confirm repayment contracts based on land productivity. The reports reflected:

Respondent, Lloyd Dechert, testified that he did not get more for his hay per acre in those years, he got less, but his taxes went up every year. [Hearing Tape; County Board Record, pp. 50-52].

9. The Respondent’s next witness was Dr. Jerry Dechert, a part owner of the one of the parcels under appeal. Dr. Dechart testified that he had a Ph.D. in finance, had been a consultant in the area of quality control, and had done a great deal of computer modeling. He did an analysis of where the values for taxation came from. He produced data from the USDA Agricultural Statistics Service web site for the last thirteen (13) years. The data showed that 2001 and 2002 were what he called bubble years. In other words, in Dr. Dechert’s view they were not typical. He testified that this creates a problem and he presented the County Board with four different approaches for crop valuation.

a) The five (5) year weighted average that the Department of Revenue uses to come up with a value of $96.37 per ton.

d) An average using Midvale figures for last five (5) years showing a value of $81.00 per ton.

Dr. Dechart testified that focusing on hay prices, two of the thirteen years were not realistic figures. He disagreed with the way the Department uses the five year weighted average and believes the Department needs to use an equal weighted average for assigning a value for hay. [Hearing Tape; County Board Record, p. 54].

10. Dr. Dechert recommended the County Board look at the Midvale Irrigation District information for valuing hay using an equal weighted average of $81.00 per ton for Fremont County. He felt that this was a fairer figure in light of the information he had received from the Wyoming Agricultural Statistics Service (the Service). [County Board Record, p. 55]. The Service could not tell him where the samples came from, what kind of hay was produced, how much hay in tons was produced, or how many acres of hay were grown. The Service’s sample consisted of 1,150,000 tons of hay produced from 400,000 acres in 2001. The Service sampled approximately twenty-one producers each month. This process and formula has been in place for approximately twenty years. [Hearing Tape; County Board Record, p. 55].

11. The County Board questioned Dr. Dechert about where the $110.00 per ton came from and was told that Dick Coulter, Director of Wyoming Agricultural Statistics Service furnished a chart showing the production from June, 2001, through May, 2002. The average price per ton from two hundred fifty-two reports was $110.00 per ton. [County Board Record, p. 93]. However, the names and figures from the individual reports were confidential. Also, Midvale had a sample return of 76 percent where the state’s sample was around 4 percent. Dr. Dechert testified again that he believed the Midvale five year average of $81.00 per ton was more representative of Fremont County prices. [Hearing Tape].

12. The Assessor told the County Board that this was an important presentation and she wanted to go into more detail. She testified that the four parcels of land total 1,098 acres. The Respondent’s land qualifies for agricultural valuation. The Wyoming Constitution states that all agricultural property will be valued according to the land’s ability to produce agricultural products under normal conditions. The Department figured productive value in its 2004 Agricultural Land Valuation Study. [County Board Record, p. 77]. The Assessor is given a range of values by the Department and she must stay within that range. There are other factors that must be considered for proper classification: a) soil type, b) slope, and c) rain fall. Using the Agricultural Land Valuation Study as a guideline from Department of Revenue Rules, Chapter 11, she obtains a value for each soil classification. The Assessor can not deviate from the range of valuation figures that come from the Department, in this case she used the lowest figure possible. The commodity values of hay comes from the Service. [County Board Record, pp. 96-97].

13. The Assessor testified that she had questioned the figures in a letter to the Service and received the same answers to her questions as the Respondent had received from Dick Coulter, of the Wyoming Agricultural Statistics Service. [County Board Record, pp. 55-56, 91-93].

14. The County Board questioned the Assessor as to whether she could change these values. The Assessor testified that two years ago she had used figures outside the range given to her from the Department. She received a directive from the State Board of Equalization to change all the tax notices that were outside the range. She had to send amended tax notices to many taxpayers even though it was just a few dollars in each case. So in a word, no, she could not change the values. [Hearing Tape].

15. Before the hearing closed the Respondent testified that he was not protesting the land values, he was protesting the increase each year in value. He felt the figures given to the Assessor were just plain wrong. He did not want the Assessor to recalculate his taxes and would be happy with the same tax value he had the year before. [Hearing Tape].

16. On August 2, 2004 the Fremont County Board of Equalization issued its decision ordering the Assessor to recalculate the taxpayer’s agricultural property using $81.00 per ton for hay, or in the alternative, to assess the agricultural property at the same amount assessed for the 2002 tax year. [County Board Record, pp.104-107].

18. The State Board has jurisdiction to hear and determine all issues raised by the Petitioner pursuant to Wyo. Stat. Ann. §39-13-109(b)(ii).

19. The issue raised by the Respondent at the County Board hearing and by the County Board’s decision concerns the valuation of irrigated crop land: specifically, the price per ton of hay used in the valuation process. At the County Board hearing, Respondent produced tickets showing he was receiving an average price of $90.00 per ton. Respondent also produced the crop report from the Midvale Irrigation District showing an average price for hay produced during the 2003 production year of $75 per ton. Respondent’s argument, and the County Board’s decision, is based on Dr. Dechert’s opinion that the price of hay used to value irrigated crop land should be based on the five year average price reported to the Midvale Irrigation District of $81.00 per ton, rather than the 5 year weighted average used by the Department of Revenue.

20. The Assessor argues that the County Board erred in ordering her to deviate from the values established by the Department of Revenue’s 2004 Agricultural Land Valuation Study which is the basis for valuation of irrigated crop land.

21. The Wyoming Constitution, Article 15, §11(b) provides in pertinent part that: “[a]ll 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.”

22. The authority to determine the taxable value of agricultural lands is vested in the Department of Revenue.

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.

23. The primary consideration in classifying agricultural land for assessment purposes is the land’s capability to produce agricultural products under normal conditions. Wyo. Const. art. 15, §11(b); Wyo. Stat. Ann. §39-13-103(b)(x)(A); Rules, Wyoming Department of Revenue, Chapter 11, §4(a)(I).

24. 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).

25. The Department has adopted Rules, Chapter 11, Ad Valorem Classification, Valuation, Methodology and Assessment for Designated Agricultural Land. Consistent with Wyo. Stat. Ann. §39-13-103(b)(x)(A), the Department’s Rules provide 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. 68].

26. The Department of Revenue’s 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 of Revenue. 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 formula of the Department.

27. The Department of Revenue’s Rules for the valuation of irrigated crop land further provide:

The gross income from irrigated crop land is based on the price of all hay reported in dollars per ton by the Wyoming Agricultural Statistics Service. This price information in converted to a 5 year weighted average. The gross income from irrigated crop land is calculated using the 5 year weighted average price of all hay per ton. . . .

Rules, Wyoming Department of Revenue, Chapter 11, §5(b)(ii)(A)(I). [County Board Record, p. 70].

28. An assessor is required to select a value “. . . within the range of values for the current year as published in the Ad Valorem Tax Division’s Agricultural Land Valuation Study.” Rules, Wyoming Department of Revenue, Chapter 11, §5(c)

29. 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 Regulations. Rules, Wyoming Department of Revenue, Chapter 11. “The burden is on the Taxpayer to establish any overvaluation.” Hillard v. Big Horn Coal Co., 549 P. 2d 294 (Wyo. 1976).

30. The County Board record lacks any evidence by Respondent challenging the Assessor’s productivity classification. By Department of Revenue Rule, valuation of irrigated crop lands is based on values established by the Wyoming Agricultural Statistics Service each year for the entire state. Rules, Wyoming Department of Revenue, Chapter 11, §5(b)(ii)(A)(I). Therefore, the valuation is not based on values from a particular county or a specific irrigation district. Rules, Wyoming Department of Revenue, Chapter 11, §5(b)(ii)(A)(I); supra ¶ 27.

31. 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).

32. 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).

33. The Department’s annual Agricultural Land Valuation Study, as an order, procedure, and formula, is binding on an assessor. Neither the Fremont County Assessor, nor the County Board have the authority to deviate from the valuation ranges established by the Department.

34. 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, we conclude the decision of the County Board ordering the Assessor to use $81.00 per ton for valuation was arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law.

35. We conclude there was no substantial evidence in the record to support the County Board’s alternative figures for the 2004 tax year. By law, the County Board was obliged to limit its review to the range of values established by the Department for use by the Assessor.

36. The Department is not a party to this appeal. Rules, Wyoming State Board of Equalization, Chapter 3, §4. If the Respondent has a grievance with the Department of Revenue for setting a range of values for the County Assessor, the remedy does not lie in this appeal.

IT IS THEREFORE HEREBY ORDERED that the Fremont County Board of Equalization Order instructing the Assessor to revalue the Petitioners’ property is reversed and the Assessor’s 2004 assessment of Respondent’s property is 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 the appropriate district court by filing a petition for review within 30 days of the date of this decision.