BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF WYOMING
IN THE MATTER OF THE APPEAL OF )
LARAMIE COUNTY ASSESSOR FROM )
A DECISION OF THE LARAMIE COUNTY ) Docket No. 2005-78
BOARD OF EQUALIZATION - 2005 )
PROPERTY VALUATION (Philp Property) )
DECISION AND ORDER
Peter H. Froelicher, Laramie County Attorney, on behalf of Brenda Arnold, the Laramie County Assessor (Petitioner or Assessor).
Duncan Philp, appearing pro se (Respondent or Taxpayer).
This is an appeal from a decision of the Laramie 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 respective briefs as well as the hearing record and decision of the County Board.
Petitioner’s Notice of Appeal was filed with the State Board effective August 3, 2005. Petitioner and Respondent filed briefs as allowed by the State Board’s Briefing Order issued September 14, 2005. Neither party requested oral argument.
The Assessor appeals a decision of the County Board reducing the 2005 valuation of the Philp Property by directing the Assessor to delete from her 2005 fair market value analysis the higher of two valid 2004 open market sales of comparable property. We reverse the decision of the County Board and reinstate the Assessor’s valuation.
PROCEEDINGS BEFORE THE COUNTY BOARD
The County Board conducted a hearing on June 13, 2005. Findings of Fact, Conclusions of Law and Order were entered by the County Board on July 28, 2005, directing the Assessor to delete from her 2005 fair market value analysis the higher of two valid 2004 open market sales of comparable property.
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 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; Wyo. Stat. Ann. § 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).
The Assessor asserts the County Board decision directing her to delete from her 2005 fair market value analysis the higher of two valid 2004 open market sales of comparable property
is not in accordance with law, is an abuse of discretion, is arbitrary and capricious, and is not supported by substantial evidence.
We conclude the decision of the County Board was arbitrary, capricious, and unsupported by substantial evidence. We further conclude there was substantial evidence in the record supporting the Assessor’s valuation.
FACTS PRESENTED TO THE COUNTY BOARD
1. Respondent owns residential property at 4832 Monroe Avenue, Carpenter, Laramie County, Wyoming. [County Board Record, pp. 5, 59].
2. The Assessor sent Respondent a Notice of Assessment for the 2005 tax year in March, 2005. The Notice indicated a 2005 fair market value of $44,787. [County Board Record, p. 59].
3. Respondent, on March 18, 2005, requested a review of the characteristics of his property. The Assessor, on March 18, 2005, verified the characteristics for the property at issue. [County Board Record, p. 30].
4. On March 18, 2005, Respondent filed a Petition For Appeal. [County Board Record, p. 57]. The Laramie County Clerk sent a letter to Respondent advising him of the June 13, 2005, hearing before the Laramie County Board of Equalization. [County Board Record, pp. 1-A, 58].
5. The County Board held a hearing on Respondent’s appeal on June 13, 2005. [County Board Record, p. 1].
6. Respondent appeared pro se at the County Board hearing. Peter H. Froelicher, Laramie County Attorney, appeared at the hearing with the Assessor. [County Board Record, pp. 2, 7, 11].
7. Respondent testified he has lived in Carpenter for four years, and has noticed his property value and property taxes have gone up, however nothing has changed in the Town of Carpenter. [County Board Record p. 12].
8. Respondent is disabled, living on a fixed income, and is concerned he will not be able to pay his taxes if they continue to increase incrementally each year. [County Board Record p. 13].
9. Respondent submitted numerous pictures of his property, both interior and exterior, as well as other properties and the surrounding area in Carpenter to support his assertion the condition of other property in Carpenter actually depreciates the value of a home in Carpenter. [County Board Record pp. 13-22; Exhibit 2 (p. 56)].
10. Respondent further testified he had reviewed the assessor values for what he felt were the two best-looking homes in Carpenter, and they were valued at only $50,000 or $55,000. [County Board Record p. 23; Exhibit 1 (p. 55)].
11. The Assessor testified she has been Laramie County Assessor since 1995, and a certified Wyoming property tax appraiser since 1989. [County Board Record p. 28]. She stated the fair market value of the property at issue for 2005 was $44,787 as determined using the Wyoming Computer Assisted Mass Appraisal System (CAMA) as mandated by the Wyoming Department. [County Board Record pp. 29-30].
12. The Assessor described the process utilized to list property characteristics in CAMA to determine replacement cost new less depreciation (RCNLD), and how RCNLD is then adjusted by open-market sales data for other similar homes. The Assessor’s office has historically been denied access to the property at issue, however, an on-site inspection was performed on May 4, 2005. The property characteristics for the structures on the property were entered into the CAMA system. The quality of construction for this house was rated as a bit less than average. A replacement cost new less depreciation for the Philp’s house, as determined by the CAMA system, is $27,464. A market adjustment of 50% is then applied based upon other residential sales in the Town of Carpenter to arrive at a residence value of $41,196. The land value of $2079 is then added to arrive at a 2005 assessed market value of $44,787. [County Board Record pp. 30-35, 40-42].
13. The County Board issued its decision on July 28, 2005, directing the Assessor to delete from her 2005 fair market value analysis the higher of two valid 2004 open market sales of comparable property. The County Board described the sale as an “aberration for sales in that (Carpenter) area.” [County Board Record pp. 70-75].
DISCUSSION OF ISSUES AND APPLICABLE LAW
14. Petitioner’s Notice of Appeal to the State Board was filed timely. The State Board has jurisdiction to hear and determine all issues properly raised pursuant to Wyo. Stat. Ann. § 39-13-109(b)(ii).
15. 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).
16. 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).
17. The Wyoming Constitution, art. 15, § 11, requires all property “be uniformly assessed for taxation, and the legislature shall prescribe such regulations as shall secure a just valuation of taxation of all property, real and personal.”
18. “Early on, Justice Blume recognized a truth inherent in the area of property valuation: ‘There is no such thing as absolute value. A stone cannot be other than a stone, but one man may give a different valuation to a piece of land than another.’ Bunten v. Rock Springs Grazing Ass'n, 29 Wyo. 461, 475, 215 P. 244, 248 (1923). Accordingly, this court has consistently interpreted Wyo. Const. art. 15, § 11 to require ‘only a rational method [of appraisal], equally applied to all property which results in essential fairness.’”
Basin Electric Power Coop. v. Dept. of Revenue, 970 P.2d 841, 857 (Wyo.1998) quoting Holly Sugar Corp. v. State Board of Equalization, 839 P.2d 959, 964 (Wyo.1992).
19. Broken into its component parts, the constitutional standard requires: (1) a rational method; (2) equally applied to all property; and (3) essential fairness. It is the burden of one challenging an assessment to prove by a preponderance of the evidence that at least one of these elements has not been fulfilled. Basin Electric Power Coop., 970 P.2d at 852.
20. All property must be valued annually at fair market value. Wyo. Stat. Ann.§ 39-13-103(b)(ii). Further, all taxable property must be valued and assessed for taxation in the name of the owner of the property on January 1. Wyo. Stat. Ann. § 39-13-103(b)(i)(A).
21. Fair market value is defined as:
[T]he amount in cash, or terms reasonable 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. § 39-11-101(a)(vi).
22. The Department has promulgated rules prescribing the methods for valuing property. The acceptable methods include a sales comparison approach, a cost approach, an income or capitalized earning approach, and the CAMA system. Rules, Wyoming Department of Revenue, Chapter 9, § 6(a), (b), (c), and (d).
23. 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 Mc Dermott & 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 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).
24. The 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 Wyoming Supreme 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.
25. Each issue raised by the Assessor turns on the question of whether there is substantial evidence in the record that reasonably supports the County Board’s decision. In determining whether there is substantial evidence in the record, the State Board will not substitute its judgement of findings reasonably supported by evidence in the County Board Record. Laramie County Board of Equalization v. State Board of Equalization, 915 P.2d 1184, 1188-1189 (Wyo. 1996); Holly Sugar Corp. v. Wyoming State Board of Equalization, 839 P.2d 959 (Wyo. 1992); Sage Club, Inc. v. Employment Sec. Comm’n., 601 P.2d 1306, 1310 (Wyo. 1979). While substantial evidence may be less than the weight of the evidence, it cannot be clearly contrary to the overwhelming weight of the evidence. The Wyoming Supreme Court has stated “[s]ubstantial evidence is a term of art best described as relevant evidence that a reasonable mind can accept as adequate support for an agency’s conclusion.” Sidwell v. State Workers’ Compensation Div., 977 P.2d 60, 63 (Wyo. 1999).
26. The County Board Record indicates the Assessor complied with the requirements of state law in determining the value for the Taxpayer’s property by using the cost approach as well as the sales comparison approach to value the property as prescribed in Chapter 9 of the Rules promulgated by the Department. Rules, Wyoming Department of Revenue, Chapter 9, § 6(a). The uncontroverted testimony of the Assessor showed that she followed the Department’s Rule.
27. The Taxpayer did not demonstrate that the Assessor’s CAMA based results were incorrect. While the Taxpayer is obviously of the opinion that a review of what he believes are comparable properties and the condition of the area surrounding his property does not support the Assessor’s 2005 value, he can not prevail simply by having an opinion contrary to that of the Assessor. As we have already noted, a mere difference of opinion is not sufficient to overcome the presumption in favor of the Assessor’s valuation. Supra, ¶ 23.
28. The County Board simply directed the Assessor to delete from her 2005 fair market value analysis the higher of two valid 2004 open market sales of comparable property. The County Board is not authorized to compromise valuations, or to order a valuation which does not take into account the requirements of the Department’s Rules. “The county board of equalization has no power to and shall not set tax policy or engage in any administrative duties concerning assessments which are delegated to the [state] board, the department, or the county assessor.” Wyo. Stat. Ann.§ 39-13-102(d). The County Board’s substituted value is therefore unlawful as well as arbitrary and capricious.
29. The County Board’s value is likewise unsupported by substantial evidence. It is not the result of a CAMA based recalculation, or of any justifiable alternative valuation method consistent with the Department’s Rules.
30. We further conclude there is substantial evidence in the record to support the valuation of the County Assessor.
IT IS THEREFORE HEREBY ORDERED the Laramie County Board of Equalization Order modifying the valuation of Respondent's 2005 property is reversed. The Assessor's 2005 valuation of Respondent's property of $44,787 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.
Dated this _______ day of December, 2005.
STATE BOARD OF EQUALIZATION
Alan B. Minier, Chairman
Thomas R. Satterfield, Vice-Chairman
Thomas D. Roberts, Board Member
Wendy J. Soto, Executive Secretary