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

Clay Griffith, appearing pro se, on behalf of Mary Jane Griffith and the Allen Griffith Testamentary Trust (Respondents or Taxpayers).

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. The Assessor filed a brief as allowed by the State Board’s November 8, 2004, Briefing Order. The Respondents did not file a brief. Neither party requested oral argument.

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

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).

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 to develop values which must be followed by the Assessor and County Board.

1. Respondents own or control 1,860.48 acres of agricultural land in Fremont County, Wyoming, containing 640 acres of irrigated crop land classified as follows:

Classification	Area
R3CIII	152.2 acres
R3CIV	89.5 acres
R3CVI	298.3 acres

2. Clay Griffith appeared at the County Board hearing on behalf of Respondents. Terrance R. Martin, Deputy Fremont County Attorney, appeared at the hearing on behalf of the Assessor. [Hearing Tape].

3. On April 14, 2004, the Assessor sent 2004 tax year Notices of Assessment to the Respondents which included the irrigated crop lands. [County Board Record, p. 6].

4. On May 5, 2004, Respondents filed a Statement To Contest 2004 Property Tax Assessment. [County Board Record, pp. 1-3].

5. On May 24, 2004, the County Board of Equalization scheduled a July 28, 2004 hearing in the matter of Respondents’ protest. [County Board Record, p. 3].

6. Mr. Griffith testified Respondents bought the farm in November, 2002. He lives on the farm and is a trustee of the Allen Griffith Testamentary Trust. He was at the hearing because his taxes had gone up 23 percent. [Hearing Tape].

7. Mr. Griffith testified he was a ranch broker and full partner in Western Land Service. The sale of Respondents’ farm in 2002 was the last sale in the Riverton Valley. His firm has approximately $50 million worth of farms listed with the real estate firm, but did not sell any in 2003. Actual value of farms in the area has not gone up, it has gone down. His taxes however have increased from $3,357 in 2003 tax year to $4,139 for 2004 tax year. [County Board Record, Exhibit A, p. 6; Hearing Tape].

8. Mr. Griffith testified a farm purchaser wants to grow hay and make a profit of five to ten percent which determines the values of farms. In 2002, 2003, and 2004 there has been no profit in raising hay.[Hearing Tape].

9. He testified he believed the formula used to value irrigated crop lands is almost a form of gross income tax. However, if the County Board were to examine his federal tax returns, they would find that he got money back because they did not make a profit on the farm. He did not feel the formula used to determine the production value took into account his actual expenses. [Hearing Tape].

10. Mr. Griffith testified that in valuing these farms based on productivity, you have to also take into account the actual conditions in a given year in addition to the soils, slope and moisture. If you are on a side stream and had no water at all, then you would be taxed on hay that you did not produce under the formula. He objected to the formula’s assumption that everyone employs the same farm practices. [Hearing Tape]. He bought a farm that by statute was categorized as equal to all other farms when in fact it was not equal. [Hearing Tape].

11. Mr. Griffith testified the former owner of the property auctioned off the hay on the property in 2003 and received $85.00 per ton for the hay. [Hearing Tape].

12. Mr. Griffith presented a map of Respondents’ land highlighted to show the portion of the irrigated crop lands that did not produce anything but weeds in 2003 because of the drought. Of the 640 acres of irrigated crop land, 315 acres were fallow and not in production due to the drought. He testified that the irrigated area produced hay with so many weeds it could not be sold. The hay was used to feed his cows. He estimated the hay produced and fed to his cows in 2003 was worth $60.00 per ton. [Hearing Tape].

13. Mr. Griffith expressed his opinion that values should be based on Fremont County’s water assessment or average hay production. [Hearing Tape].

14. Mr. Griffith testified that the 2003 tax amount of $3,357.00, with the Assessor’s adjustment for the two buildings which had been added to the assessment schedule, was acceptable. [Hearing Tape].

15. Mr. Griffith testified he was concerned as a realtor, producer and member of the community, that profits decrease over time. The land remains the same yet the productivity of these farms are going down. To properly rotate crops requires a capital improvement of over $100 per acre. The formula used to value his land assumes everyone follows the same farming practices and produces the same crop which is not true. A sugar beet grower is assessed the same as a hay grower. [Hearing Tape].

16. The Assessor testified Respondents’ total taxable value was $597,070. The buildings were valued using the CAMA system, the two houses were valued at $134,400 and the outbuildings were valued at $91,500. The valuation of the buildings was not protested. The taxable value of the 1,860.48 acres of agricultural land, including 640 acres of irrigated crop land, was $371,170. A portion of the 23 percent tax increase was attributable to the increased value of the two houses and inclusion of two outbuildings in valuation. Respondents’ land qualifies for agricultural valuation. [County Board Record, Exhibit A, p. 6; Hearing Tape].

17. The Assessor testified that the Wyoming Constitution requires all property be valued at full value except agricultural and grazing lands which are valued according to the land’s ability to produce agricultural products under normal conditions. [Hearing Tape].

18. The productive value was determined using the 2004 Agricultural Land Value Study [Exhibit D] and the Mapping and Agricultural Manual described in Wyo. Stat. Ann. §39-11-102. The Assessor explained the constitutional requirements for agricultural valuation are also described in Wyo. Stat. Ann. §39-13-103. The Department must determine the taxable value of agricultural land. The Department figured productive value in its 2004 Agricultural Land Valuation Study. [County Board Record, p. 24]. The Assessor is given a range of values by the Department, and she must stay within that range. [Hearing Tape].

19. The Assessor characterized Mr. Griffith’s testimony as a discussion of market values. She explained that agricultural land is not based on market value. Rather, the production values are two-thirds to three-fourths of what the market value would be for the same land.

20. For proper classification the Assessor considers: a) soil type, b) slope, and c) rain fall. Using the 2004 Agricultural Land Valuation Study as a guideline and Department of Revenue Rules, Chapter 11, she obtained a value for each soil classification. The Assessor testified the values used for Fremont County range from $255 to $1,147 per acre depending on the soil classification. Because of the drought, she used the lowest possible values for each land classification. [Hearing Tape; County Board Record, Exhibit E, p. 33].

21. The Assessor testified she cannot deviate from the range of valuation figures provided by the Department. The commodity values of hay come from the Wyoming Agricultural Statistics Service. For irrigated land the value is to be based on the price of all hay reported in dollars per ton. [County Board Record, p. 21]. She explained that production expenses are taken into consideration in the Department’s formula. [Hearing Tape; County Board Record, p. 24].

22. The Assessor testified the Wyoming Constitution and Statutes require the values to be based on average production. If an agricultural producer finds the values based on soils condition, slope and climatic conditions are incorrect, she would gladly consider a change in land classification. If there isn’t water and it looks like the condition is not temporary, she would consider changing the land’s productive class. However, Land Resource Areas, based on average rainfall and growing season, are generally the same for this area. [Hearing Tape].

23. On August 2, 2004 the County Board 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, p. 61].

24. Finally, we note the County Board hearing officer stated the County Board would take judicial notice of questions and answers from a prior hearing. However, the hearing officer failed to specify the evidence noticed, and the record does not contain any evidence from another County Board hearing. Therefore, we base our decision in this case on the evidence contained in the record before us.

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

27. The issue raised by 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 and the formula used for land production values.

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

29. 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.”

30. 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.

31. 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).

32. 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).

33. 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).

34. The Department’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. 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.

35. The Department’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 is 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. . . .

36. 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).

37. 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 293, 294 (Wyo. 1976).

38. The County Board record lacks any evidence by Respondent challenging the Assessor’s productivity classification. By Department 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).

39. 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).

40. 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).

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

42. Based on the applicable constitutional provision; the Wyoming Statutes; and the Rules and Regulations of the Department which require the assessor to classify agricultural land based on its capability to produce under normal conditions, we conclude the decision of the County Board ordering the Assessor to recalculate the value of taxpayer’s irrigated agricultural 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 tax year 2002 (which is inconsistent with the Respondent’s request that taxes be set at the 2003 amount), was arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law.

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

44. 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 based on the Department’s formula for determining values or the range of values established by the Department for use by 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 Respondent’s 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.