BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF WYOMING
IN THE MATTER OF THE APPEAL OF )
SEAN SMELTZER FROM )
A DECISION OF THE LARAMIE COUNTY ) Docket No. 2005-92
BOARD OF EQUALIZATION - 2005 )
PROPERTY VALUATION )
DECISION AND ORDER
Sean Smeltzer, appearing pro se, (Petitioner or Taxpayer).
Peter H. Froelicher, Laramie County Attorney on behalf of Brenda Arnold, the Laramie County Assessor (Respondent or Assessor).
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, and hearing record and decision of the County Board.
Petitioner’s Notice of Appeal was filed with the State Board effective August 24, 2005. Petitioner and the Assessor filed briefs as allowed by the State Board’s Briefing Order issued October 25, 2005. Neither party requested oral argument.
Petitioner appeals the County Board decision affirming the Assessor’s 2005 fair market valuation of his property. We will evaluate the Taxpayer’s claims against our standard of review, which is whether the ruling of the County Board was arbitrary, capricious, unsupported by substantial evidence, and/or contrary to law. Rules, Wyoming State Board of Equalization, Chapter 3, § 9. We affirm the decision of the County Board.
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, affirming the Assessor’s 2005 fair market value, $154,759, for Petitioner’s 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 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).
Under our standards of review, the Petitioner must argue that the County Board decision is unsupported by substantial evidence, and/or the County Board arbitrarily and capriciously determined the property’s value for 2005 tax purposes.
We conclude the decision of the County Board was neither unlawful, arbitrary, nor capricious. We further conclude there was substantial evidence in the record supporting the Assessor’s valuation.
FACTS PRESENTED TO THE COUNTY BOARD
1. Petitioner owns residential property at 1223 East 20th, Cheyenne, Laramie County, Wyoming. [County Board Record, pp. 35, 40-41].
2. The Assessor sent Petitioner a Notice of Assessment for the 2005 tax year in March, 2005. The Notice indicated a 2005 fair market value of $158, 097. [County Board Record, p. 40; County Board Findings, ¶ 5].
3. Petitioner, on March 28, 2005, requested a review of the characteristics of his property. The Assessor, on March 29, 2005, based upon an error in the finished basement square footage identified by the requested review, issued an supplemental assessment schedule reducing the fair market value to $154,759. [County Board Record, pp. 23, 41; County Board Findings, ¶ 5].
4. On April 27, 2005, Petitioner filed with Laramie County a Petition For Appeal. [County Board Record, p. 35]. The Laramie County Clerk sent a letter to Petitioner advising him of the June 13, 2005, hearing before the County Board. [County Board Record, p. 1A].
5. The Assessor and her staff viewed the property at issue on May 4, 2005. [County Board Record, p. 23].
6. The County Board held a hearing on Petitioner’s appeal on June 13, 2005. [County Board Record, pp. 1A, 1].
7. Petitioner appeared pro se at the County Board hearing. Peter H. Froelicher, Laramie County Attorney, appeared at the hearing with the Assessor. [County Board Record, p. 2].
8. Petitioner agrees 95-97% of the assessments by the Assessor are correct. He believes however his property falls within the 3-5% which have an assessed value much higher than fair market value. [County Board Record, p. 11]
9. Petitioner’s main argument rests on the fact his property was valued at $126,000 for 2004, and now, 12 months later, is valued at $158,000. He asserts his property can not have increased in value to that extent in one year, and should be valued at $132,000. His assertion is based, at least in part, on conversations by Petitioner with unnamed real estate appraisers in Cheyenne. No one other than Petitioner, however, testified at the County Board hearing. [County Board Record, pp. 12-14; County Board Findings, ¶¶ 1, 2].
10. Petitioner presented a fee appraisal by Hastings & Associates for the property at issue which indicated a market value as of August 15, 2003, of $123,000. The comparable sales used by the fee appraiser all occurred in 2002. [Exhibit 1, County Board Record, pp. 36-38; County Board Findings, ¶ 3].
11. The Assessor testified she had been Laramie County Assessor since 1995, and a certified Wyoming property tax appraiser since 1989. [County Board Record p. 20; County Board Findings, ¶ 4]. She 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 process starts with replacement cost new which uses the residential structure characteristics to determine what the cost would be to build the structure in 2005 using current labor and material prices. The replacement cost new is then adjusted for depreciation based on the original construction date. This RCNLD value is then adjusted based on the open market sales in the area or neighborhood. The resulting value of $132,236 is the value of the residential structure, to which $742 is added for some miscellaneous improvements, and $21,781 for the land value for a total assessed value of $154,759. [County Board Record pp. 20-28; County Board Findings, ¶¶ 6, 7, 8, 9].
Assessor also pointed out the 2004 fair market value had been reduced after the initial
assessment based on a change in the quality of workmanship and construction. The quality
of workmanship remained the same in 2005 as adjusted in 2004. [County Board Record pp. 24,
13. The County Board issued its decision on July 28, 2005, which affirmed the Assessor’s supplemental fair market value of $154, 759. [County Board Record pp. 64-71].
DISCUSSION OF ISSUES AND APPLICABLE LAW
14. Petitioner’s Notice of Appeal to the State Board was timely filed. 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 of Revenue 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, article 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.”
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).
18. 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.
19. 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).
20. 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).
21. 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).
22. 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).
23. 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), Britt v. Fremont County Assessor, 2006 WY 10, ¶ 17, _______ P.3d _______, 2006 WL 123267 (Wyo. 2006). 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 which result from its use. Gray, supra, at 1351.
24. Each issue raised by Petitioner turns on the question of whether there is substantial evidence in the record which 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).
25. 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 and sales comparison approaches 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.
26. The Taxpayer did not demonstrate 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 fee appraisal he presented do 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, ¶ 22.
27. The fee appraisal of Taxpayer’s property is not sufficient to call into question the Assessor’s value in part because the comparable sales used by the fee appraiser occurred in 2002. The comparable sales used by the assessor occurred in 2004, and thus being closer in time to the statutory assessment date of January 1, 2005, are more relevant and persuasive as to 2005 value.
28. The Taxpayer attached a Market Evaluation Report to his opening brief. This Report was not presented as evidence at the County Board hearing, therefore it is not contained in the County Board record, and can not be considered by this Board on appeal. We note nevertheless the Report gives an estimated market value as of August 22, 2005. The estimated value is of questionable relevance even if considered since it post-dates the statutory assessment date of January 1, 2005, by over 8 months.
29. Finally, the taxpayer requests the Board extend the due date for payment of his 2005 property taxes. The tax payment schedule is statutory, this Board is therefore without authority to alter the mandated payment due dates. Wyo. Stat. Ann. § 39-13-107(b)(i)(D).
30. We further conclude there is substantial evidence in the record to support the valuation of the Assessor. The Assessor testified how the CAMA based valuation was reached.
IT IS THEREFORE HEREBY ORDERED the Laramie County Board of Equalization Order affirming the valuation of Petitioner's 2005 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 the appropriate district court by filing a petition for review within 30 days of the date of this decision.
Dated this _______ day of February, 2006.
STATE BOARD OF EQUALIZATION
Alan B. Minier, Chairman
Thomas R. Satterfield, Vice-Chairman
Thomas D. Roberts, Board Member
Wendy J. Soto, Executive Secretary