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

Lyle and Colleen David (Respondent or Taxpayer) on behalf of themselves and Finlayson Pavillion Family Ltd. Partnership, appearing pro-se.

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 Briefing Order dated October 8, 2004. Neither party requested oral argument.

The Assessor appealed a decision of the County Board ordering the Assessor to recalculate the assessed value of Respondent’s irrigated property in Fremont County, Wyoming. The Assessor argues that the County Board’s decision to recalculate the assessed value of the taxpayer’s irrigated agricultural land using a price of $81.00 per ton of hay, or in the alternative, to assess the property at the same amount assessed for tax year 2002 was arbitrary, capricious, unsupported by 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 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, §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 raises two objections to the County Board’s decision: 1) the County Board decision was unsupported by substantial evidence; and 2) the County Board decision arbitrarily and capriciously determined the property’s 2004 production value for tax purposes. [State Board Record, Petitioner’s Notice of Appeal].

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.

1. The Respondent owns or controls 3 parcels of land in Fremont County, Wyoming, consisting of approximately 729.55 acres, including the homestead. Of this total, approximately 568 acres are classified as irrigated crop land by the Assessor. [Hearing Tape; County Board Record, pp. 20-22]. The three parcels of land are:

	Location	Area	Owner
Parcel 1	Shady Lane	161.41 Ac.	Finlayson Pavillion Family Ltd. Partnership
Parcel 2	Gabes Road	471.25 Ac.	Finlayson Pavillion Family Ltd. Partnership
Parcel 3	Missouri Valley Rd	96.89 Ac.	Lyle and Colleen David

All parcels are located in Township 3 North, Range 2 East in Fremont County, Wyoming. Colleen David is the Operations Manager for the Finlayson Pavillion Family Ltd. Partnership. [County Board Record, pp.11-4; Hearing Tape].

2. The Assessor sent Respondent Notices of Assessment for the 2004 tax year on April 14, 2004. [County Board Record, pp. 20-22].

3. On May 13, 2004, Respondent filed a STATEMENT TO CONTEST PROPERTY TAX ASSESSMENT for each of the three parcels. [County Board Record, pp. 1-6]. On June 14, 2004, the Respondent wrote a letter to the County Assessor advising that it is a cow calf operation and feeding hay. Respondent protested the way property taxes were computed on the basis of hay sales. [County Board Record, p. 14]. The Respondent attached to the letter evidence later admitted at the hearing, including calf prices, expense information used for federal taxes, and crop reports from the Midvale Irrigation District for the 2002 and 2003 production years. Midvale Irrigation District is a federally financed irrigation project located in central Fremont County. The crop productivity report is required by the federal government for all federally financed irrigation projects to confirm repayment contracts. [County Board Record, pp. 15-19].

4. The County Board scheduled a hearing for June 28, 2004 at 3:00 p.m. to hear Respondent’s appeal. [County Board Record, p. 7]. At the hearing, Colleen David testified on behalf of the Taxpayer. The Assessor was represented by Terrance R. Martin, Deputy County Attorney, and testified on her own behalf at the hearing. [Hearing Tape].

5. The Respondent testified that she understood taxes were based on $109.00 per ton of hay but she operates a cow/calf operation and sells very little hay. Respondent’s hay is not prime hay; it is a mixture of grass and alfalfa. Respondent feeds most of its hay to its own cows. [Hearing Tape].

6. The Respondent provided the County Board with the crop reports from the Midvale Irrigation District for 2002 and 2003. These reports were generated from questionnaires sent to all water users in the irrigation district. Midvale has a sixty-five to seventy-five percent return on the questionnaires. The Respondent felt its hay would be in the class of “other hay” since she raised grass hay. Respondent pointed out that the $109.00 per ton hay did not reflect hay from its irrigated crop land. [Hearing Tape; County Board Record, pp. 15-16].

7. The Respondent gave the County Board copies of Riverton Livestock Auction receipts to show how the prices for cattle fluctuate using actual prices received for cattle. Respondent also included receipts from the Mountain Agronomy Center to show the type of expenses incurred in its cow/calf operations. [County Board Record, pp. 17-19].

8. The Respondent testified that after looking at hay price figures in the Assessor’s Exhibit H she had an objection to being taxed on the value of hay prices from other areas of the state. [Hearing Tape; County Board Record, p. 58].

9. The Hearing Officer asked the Respondent what she thought the taxes should be and the basis for that figure. Respondent testified that she did not think the weighted average made any sense when examining the actual figures from Midvale Irrigation District, and that if she had to pick a figure it would be at the same level as tax year 2002. [Hearing Tape].

10. The Respondent testified that “she was a little ignorant as to how the Assessor came up with the figures for valuation of agricultural land” but did understand there were different classes of land. Respondent’s main objection was concerning the average price of hay in the 2004 Agricultural Land Valuation Study of $84.50 for 2000, $109.00 for 2001 and $110.00 for 2002. [Hearing Tape].

11. On cross examination, Respondent was asked how Midvale Irrigation District came up with the figures and what kind of return it had. Respondent testified that the district sends out a questionnaire each year to all water users and had a sixty-two percent return in 2002 and seventy-six percent return in 2003. The Irrigation District figures were not weighted but straight line averages. [Hearing Tape].

12. Respondent testified that she sold hay for $75 per ton in 2003 and $85 per ton in 2002 on a contract with Don Abernathy. Respondent then fed the hay to Mr. Abernathy’s cows for that price. [Hearing Tape].

13. The Assessor explained that the Taxpayer’s three parcels totaled 729.55 acres, including the two acre homestead. All three parcels qualify for agricultural land classification. [Hearing Tape; County Board Record, pp. 20-22].

14. The Assessor reviewed the process of establishing the value of irrigated agricultural land in Fremont County. She explained the Wyoming statutes give the Department the authority to set agricultural land values. Her land classification is based on climate and productivity data as well as the length of growing season which are all considered in the selection of the Land Resource Area (LRA). The second area in the classification process is the soil type which is based on the soil survey information which comes from the United States Department of Agriculture Natural Resource Service. This soils information is very similar to information the Midvale Irrigation District uses. She explained that the Department annually sets a range of agricultural land values which all assessors in the state must use. The values are contained in the Department of Revenue’s 2004 Agricultural Land Value Study and show the five (5) year weighted average cost per ton of hay. [Hearing Tape]. She presented the 2004 agricultural valuation worksheet to the County Board showing the values she assigned to each classification of land. [County Board Record, p. 50]. She pointed out the David properties have only one LRA but the values varied for different soil types from a low of $255 per acre to a high of $1,147 per acre. [Hearing Tape; County Board Record, pp. 36-50].

15. In an effort to better understand where the Department’s figures came from, the Assessor wrote to Mr. Dick Coulter, the director of the Wyoming Agricultural Statistics Service. [County Board Record, p. 51]. She felt the figures were not representative of what was happening in Fremont County. [Hearing Tape]. She nevertheless valued agriculture lands at the lowest possible values furnished to her by the Department. These values are based on average production for the entire state of Wyoming, as required by the Wyoming Constitution. The Assessor told the County Board she thinks the formula and rules are fine but she concedes the commodity values from the Wyoming Agricultural Statistics Service do not reflect the actual hay prices in Fremont County. [Hearing Tape].

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

18. The State Board has jurisdiction to hear and determine all issues properly 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.

20. Article 15, section 11(b) of the Wyoming Constitution 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.”

21. 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.

22. 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).

24. 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].

25. The Department’s Rules, Chapter 11, §5(a) 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.

26. 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 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, pp. 31-32].

27. 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). [County Board Record, p. 35].

28. 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).

29. 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). 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.

30. 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, an 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).

31. 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).

32. 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.

33. 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, 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.

34. We further 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 was obliged to limit its review to the range of values established by the Department for use by the Assessor.

35. 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 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 Respondents’ 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 at the appropriate district court by filing a petition for review within 30 days of the date of this decision.