BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF WYOMING
IN THE MATTER OF THE APPEAL OF )
RUSSELL & SUSAN MAGARITY FROM )
A DECISION OF THE TETON COUNTY ) Docket No. 2005-93
BOARD OF EQUALIZATION - 2005 )
PROPERTY VALUATION )
DECISION AND ORDER
Russell Magarity, appearing pro-se, on behalf of himself and his spouse (Petitioners).
Keith M. Gingery, Deputy Teton County Attorney, on behalf of the Teton County Assessor (Assessor).
This is an appeal from a decision of the Teton 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, and heard oral argument on January 20, 2006. Petitioners’ Notice of Appeal was filed with the State Board effective August 30, 2005. Both parties filed briefs as allowed by the State Board’s October 25, 2005, Briefing Order.
Petitioners appealed the County Board decision denying their appeal of the Assessor’s 2005 valuation of their home and the lot on which the home is located.
We evaluated Petitioners’ claims against our standard of review, which is whether the ruling of the County Board was arbitrary, capricious, unsupported by the substantial evidence, and/or contrary to law. Rules, Wyoming State Board of Equalization, Chapter 3, § 9. We affirm the County Board’s decision.
PROCEEDINGS BEFORE THE COUNTY BOARD
The County Board conducted a hearing on July 18, 2005, and on August 1, 2005, entered its Findings of Fact, Conclusions of Law, and Decision, denying Petitioners’ appeal.
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).
Petitioners filed their Notice of Appeal and Opening Brief in narrative form, without an express statement of the issues they would have the State Board decide. As always, the fundamental issues in the case are whether there was substantial evidence before the County Board to support the Assessor’s 2005 valuation of Petitioners’ property, and whether the Assessor’s 2005 valuation of Petitioners’ property was otherwise in accordance with law.
Based on our review of Petitioners’ Notice of Appeal and Opening Brief, we understand that Petitioners would frame the issues in a somewhat different way. We therefore also address the following specific sub-issues:
1. Were the County Assessor and members of her staff qualified by law to make valuation judgments used as a basis for ad valorem taxation?
2. Did the County Assessor arbitrarily employ multipliers or other cost adjustments when relying on a Computer Assisted Mass Appraisal system to determine the value of the improvements to Petitioners’ property?
No. The County Assessor did make such adjustments, but did not do so arbitrarily.
3. Did the County Assessor’s valuation fail to reach an accurate value per acre?
4. Did the County Assessor fail to take into account the attributes of Petitioners’ property, including nearby properties, when determining the value of Petitioners’ property for ad valorem taxation?
5. Did the County Assessor fail to recognize depreciation when relying on a Computer Assisted Mass Appraisal system to determine the value of Petitioners’ property for ad valorem taxation?
6. Was the County Board arbitrary in accepting the construction costs the County Assessor's independent appraiser used when valuing Petitioners’ property by the cost approach?
7. Did the decision of the County Assessor, as affirmed by the County Board, violate constitutional standards for uniform valuation, taking into account the valuation of properties adjacent to or nearby Petitioners’ property?
FACTS PRESENTED TO THE COUNTY BOARD
1. Russell and Susan Magarity own and reside on 4.66 acres at 3440 Tucker Ranch Road, in the Tucker Ranch Subdivision of Teton County, Wyoming. [County Board Record, p. 12; Hearing Tape; County Board Finding No. 1]. The Magarity property is improved as follows:
|Main House||3,575 square feet||year built 1998|
|Guest House||1,080 square feet||year built 1994|
|Garage attached to Guest House||864 square feet||year built 1994|
|Barn||1,938 square feet||year built 1999|
|Habitable space above barn||767 square feet||year built unknown|
|Covered cooking pavilion||492 square feet||year built unknown|
[County Board Record, p. 12; Hearing Tape]. By computation, Petitioners’ total habitable space is 5,422 square feet.
2. Cathy Toolson is the Teton County Assessor. [Hearing tape].
3. At all times, the Assessor and her staff were certified as property tax appraisers by the Wyoming Department of Revenue. [County Board Record, pp. 33-35; Hearing Tape].
4. On or about April 15, 2005, the Assessor sent Petitioners an Assessment Schedule listing the total market value of their property as $2,504,284. [County Board Record, p. 16]. The Schedule showed the value of the lot to be unchanged from the previous year, at $1,000,000. [County Board Record, p. 16]. The Schedule showed the value of improvements to the lot to have increased from the previous year, rising to $1,504,284 from $1,359,074. [County Board Record, p. 16].
5. Russell Magarity contacted the Assessor’s office on May 2, 2005, to complain of the increase in value, and sought information about the Assessor’s “working papers” for his property. [Hearing tape; County Board Record, p. 18]. Magarity was not pleased with the information the Assessor’s office provided.
6. Magarity learned that when the Assessor calculated the value of his improvements, she used a multiplier based on recent sales. [Hearing tape]. Margarity doubted such an adjustment could reach fair market value, or was consistent with market data. [Hearing tape; County Board Findings]. At the hearing before the County Board, the Assessor identified four recent comparable sales of improved property as follows:
|Sale Date||Sale Amount||Living Area||Location||Lot Size|
|10/15/2003||$3,050,000||6833 Sq. Ft.||Lot 3, So. Wilderness||3.09 Acres|
|10/29/2004||$3,100,000||3656 Sq. Ft.||Lot 88, John Dodge||7.37 Acres|
|3/02/2004||$7,400,000||7572 Sq. Ft.||Lot 8, Tucker Ranch||5.15 Acres|
|5/12/2004||$8,978,326||9451 Sq. Ft.||Lot 25, Tucker Ranch||6.98 Acres|
[Hearing tape; County Board Record, p. 18]. The Assessor located each property on an aerial photograph introduced into the record. [Hearing tape; County Board Record, p. 30]. She named the first sale as providing the best comparable for Petitioners’ property, stating that the first comparable was a larger home, with a smaller lot, in a somewhat better location. [Hearing tape].
7. Based on his experience as a real estate agent, Magarity concluded the Assessor had not adequately accounted for the proximity to his lot of (1) a KOA campground, and (2) an affordable housing development. [Hearing tape].
8. At the Assessor’s office, Magarity noticed plaques on the wall which attested to the Department’s certification of the Assessor and her staff as property tax appraisers. [Hearing tape]. Seeing no similar certification by the Wyoming Certified Real Estate Appraiser Board, Magarity concluded the Assessor and her staff were not qualified to appraise his property. [Hearing tape].
9. In response to Margarity’s May 2 complaint, the Assessor’s office inspected Petitioners’ property on May 3, 2005. [Hearing tape; County Board Record, p. 18].
10. As a result of the May 3 inspection, the Assessor concluded the class and condition of Petitioners’ guest house had been rated too highly, and made appropriate corrections. [Hearing tape; County Board Record, p. 18]. However, the inspection revealed two improvements – a cooking pavilion and habitable space in Petitioners’ barn – which had been added to the property without a building permit. [Hearing tape; County Board Record, p. 18]. In the absence of a building permit, the Assessor was unaware of these improvements, which had not been included in her original calculation of value. [Hearing tape; County Board Record, p. 18]. The Assessor added the two improvements to her schedule of Petitioners’ property and revised her calculations accordingly. [Hearing tape]. She mailed a corrected Assessment Schedule on May 6, 2005. [Hearing tape; County Board Record, p. 18].
11. The revised Assessment Schedule listed a grand total market value of $2,458,747. [Hearing tape; County Board Record, p. 31; County Board Finding Nos. 2, 3]. This market value was $45,537 less than the original 2005 value for improvements. [Compare County Board Record pp. 16, 31]. The value of Petitioners’ lot remained unchanged at $1,000,000. [Compare County Board Record pp. 16, 31]. The effect of the change was to reduce Petitioners’ estimated tax levy by $256.06. [Compare County Board Record pp. 16, 31].
12. Because this reduction did not satisfy Petitioners, the Assessor agreed to retain an independent Certified Appraiser, Debbie LaJeunesse, to estimate the market value of Petitioners’ property. [Hearing tape; County Board Record, pp. 37-52]. At the Petitioners’ request, LaJeunesse was directed to confine her appraisal to a single approach to value, the Cost Approach. [Hearing tape; County Board Record, p. 18]. Generally speaking, the Assessor would not confine her estimate of value to a cost approach, because market activity in the Petitioners’ area warranted use of a market based approach. [Hearing tape]. In an appraisal dated June 30, 2005, LaJeunesse concluded that the market value of Petitioners’ property under a cost approach was $2,700,000 (rounded). [Hearing tape; County Board Record, pp. 39-40].
13. At the hearing held July 18, 2005, the County Board directed the Assessor to proceed first, and to explain the basis for her valuation of Petitioners’ property. [Hearing tape]. The Assessor’s testimony is reflected in a summary document, with photographs, prepared for the hearing. [County Board Record, pp. 17-30]. She explained how she determined the value of Petitioners’ improvements, and how she determined the value of Petitioners’ lot. [Hearing tape].
14. The Assessor determined the value of Petitioners’ improvements using the County’s Computer Assisted Mass Appraisal (CAMA) system. [Hearing tape]. Generally speaking, the CAMA system generates a replacement cost, relying on field data about the dimensions of, and quality of construction of, a taxpayer’s buildings. [Hearing tape]. For those county assessors using the type of CAMA system employed by Teton County [see Rules, Wyoming Department of Revenue, Chapter 9, Section 6(d)(i), which states the authorized alternatives], the Department provides for annual updates of cost tables, varied by zip codes. [Hearing tape]. CAMA computed the replacement cost with depreciation, and the Assessor adjusted the result to reflect the market in a taxpayer’s area. [Hearing tape]. Market adjustments are calculated locally based on a sales ratio study. [Hearing tape].
15. In support of her explanation, the Assessor introduced CAMA system printouts for the main house [County Board Record, p. 21], guest house [County Record, p. 24], and habitable barn space [County Board Record, p. 26]. The Assessor walked through the main points of each of the calculations, identifying construction category, depreciation, and market adjustment as appropriate. [Hearing tape].
16. The Assessor testified that the depreciation in Teton County’s CAMA system is done by effective years, a calculation which is incorporated into tables built into the system. [Hearing tape]. The depreciation for the main house is reflected as an item entitled “PHCF” on the Assessor’s information display. [County Board Record, p. 21]. The application of the PHCF factor is plainly shown in the calculation of value for the four items related to the main house. [County Board Record, p. 21]. The depreciation used for the guest house and barn is clearly labeled as such on the printouts in the record. [Hearing tape; County Board Record, pp. 24, 26].
17. The Assessor does market adjustments to meet a state standard for a final value lying between 95% and 105% of actual market value. [Hearing tape].
18. Although Magarity was critical of the Assessor’s use of multipliers, he was prepared to assume that the Assessor had followed her normal practices and was in compliance with state law. [Hearing tape]. When pressed, he could not identify any aspect of state law that the Assessor had violated. [Hearing tape].
19. The Assessor does not use CAMA to determine the value of taxpayer land. Instead, the Assessor begins with recent land sales. The Assessor identified four recent Vacant Land Sales as sources of comparison data:
|Sale Date||Sale Amount||Location||Lot Size|
|5/3/2002||$1,150,000||Lot 90, John Dodge||6.60 acres|
|6/21/2002||$1,175,000||Lot 89, John Dodge||6.70 acres|
|8/13/2002||$1,725,000||Lot 87, John Dodge||6.90 acres|
|7/21/2003||$1,700,000||Lot 16, Tucker Ranch||6.80 acres|
[Hearing tape; County Board Record, p. 18]. On a per-acre basis, the former two of these properties are less valuable than the Assessor’s 2005 value for Petitioners’ lot, and the latter two are more valuable. [By computation].
20. Magarity initially stated that his lot was valued as one of the highest in Tucker Ranch. He later conceded the Assessor had assigned higher values to other lots. [Hearing tape].
21. Magarity was also critical of the Assessor’s use of lots rather than acres as a unit of valuation [Hearing tape], although there was no real dispute that sales occur in Tucker Ranch and similar developments on a lot basis rather than an acreage basis. [Hearing record]. There appeared to be no real dispute that one of Magarity’s neighbors in Tucker Ranch had a lot also valued at $1,000,000, but with more acres. [County Board Record, pp. 76-77]. Similarly, there was no dispute that valuations per acre elsewhere in Teton County, specifically including valuations in the affordable housing development [County Board Record, p. 87], were less than Petitioners’ valuation per acre.
22. At oral argument before the State Board, it became clear that Magarity questioned the Assessor’s estimate of the market value of Petitioners’ lot strictly on the basis of a price per acre different than other properties. [Oral argument]. The State Board did not understand Magarity to otherwise contest the accuracy of the Assessor’s estimate of fair market value. [Oral argument]. Petitioners did not introduce any competent appraisal evidence to contradict the Assessor’s value, such as a competent independent appraisal of their own. [Hearing tape].
23. On the aerial photograph in the record, the Assessor showed the location of the four referenced Vacant Land Sales. [Hearing tape; County Board Record, pp. 18, 30]. She discussed the quality of the comparables with the County Board. [Hearing tape]. Among other pieces of evidence, the Assessor introduced a photograph depicting Petitioners’ unobstructed view of the Tetons. [County Board Record, p. 29].
24. The Assessor supported her conclusions by referring to the independent Certified Appraiser’s report. [Hearing tape]. The independent Certified Appraiser identified six potential comparable land sales, four with 2005 sale dates, and two under contract as of the date of the appraisal. [County Board Record, p. 42]. She specifically identified two of the six comparables as being similar to Petitioners’ property:
. . . Comp 2 is a larger lot that is adjacent to the subdivision road like the subject, another street is perpendicular to this lot and the lot is in closer proximity to busy Highway 390 so has more noise that the subject’s location – overall appeal is considered to be similar to the subject.
* * *
. . . Comp 4 is just slightly larger than the subject, is at the subdivision entry and lacks subject’s large mature trees so has less privacy from neighborhood traffic than the subject’s site, is not adjacent to the nearby KOA campground but does back to four other smaller residential properties in other subdivisions and two other Tucker Ranch lots to the south – overall appeal is considered to be very similar to the subject.
[County Board Record, p. 42]. The sale price of Comp 2 was $1,450,000; the sale price of Comp 4 was $1,200,000. [County Board Record, p. 42]. In both instances, the price per acre was higher than the Assessor’s valuation for Petitioners’ lot on a per acre basis. [County Board Record, p. 42; Petitioners’ per acre value of $214,592 by computation]. In fact, all six of the independent Certified Appraiser’s comparables had a higher per acre than the Assessor’s value of the Petitioners’ lot. [County Board Record, p. 42].
25. On the strength of her six comparables, the independent Certified Appraiser estimated the fair market value of Petitioners’ lot to be $1,125,000 [County Board Record, p. 42], or $125,000 greater than the Assessor’s market value.
26. In addition to the six comparables, the independent Certified Appraiser identified a single acre lot that was adjacent to both affordable housing and the KOA campground. [County Board Record, p. 42]. The Assessor called this parcel to the County Board’s attention, noting that its sale price for this lot was $450,000. [Hearing tape; County Board Record, p. 42]. The independent Certified Appraiser excluded this lot from consideration as a comparable, due to its small size. [County Board Record, p. 42]. Russell Magarity also dismissed the significance of this single acre sale, on the ground that the seller was offering two other acres for $125,000 apiece. [Hearing record].
27. The Assessor continued her testimony with a discussion of photographs of the Petitioners’ property. [County Board Record, pp. 22-23, 25, 27-29]. The Assessor specifically noted that it was difficult to see either the affordable housing or KOA campground about which the Petitioners complained [Hearing tape], an observation supported by photographs taken May 3 and June 21, 2005. [County Board Record pp. 27-28].
28. Regarding the neighboring properties, the independent Certified Appraiser reported:
The eastern section of the KOA that abuts the subject is used for tent campers and some tents could be seen from the subject improvements. This portion of the KOA is heavily treed though and only used during the summer months, therefore, the majority of the camping/rv traffic is shielded from the subject. I was not able to see any of the affordable housing development from the subject’s improvements because of vegetation.
The appraiser was not able to determine that proximity to the KOA campground (or other commercial uses) or that the affordable housing development is a detriment to [Petitioners’] property. Interviews with some market participants and local Realtors indicate that some potential purchasers would find these neighbors less appealing than some and would probably increase the marketing time but no specific adjustment could be abstracted from sales having similar type locations.
[County Board Record, p. 41].
29. Magarity strongly believed the value of his property should be adjusted downward based on the neighboring properties [Hearing tape; County Board Findings], even though they were at least two hundred yards away. Magarity opined that people located on those properties found Tucker Ranch to be a nice place to walk. [Hearing tape]. He viewed the effect of the neighboring properties as a type of external obsolescence. [Hearing tape; County Board Findings]. The Assessor’s work sheet for Petitioners’ main house specifically shows functional and economic obsolescence as “.00.” [County Board Record, p. 21].
30. The independent Certified Appraiser estimated the overall market value of Petitioners’ property to be $2,700,000 in round numbers. [County Board Record, p. 40]. Her Cost Approach estimate of the value of Petitioners’ improvements was $1,570,254. [County Board Record, p. 40]. The crux of this cost approach calculation was her estimate of replacement cost per square foot, applied to the square footage of each of the various improvements to Petitioners’ property. [County Board Record, p. 40]. She identified the source of her unit cost estimates as “surveys of local custom home builders and supplemented with information from the Marshall and Swift Cost Estimating Service.” [County Board Record, p. 40]. She included “soft or indirect costs and entrepreneurial profit” in her unit costs. [County Board Record, p. 40].
31. The Assessor explained that the independent Certified Appraiser included the value of a sprinkler system in a category of miscellaneous site improvements, listed at $77,500. [Hearing tape]. The Assessor did not consider this yard improvement to be a permanent improvement, and therefore did not include that value in her estimate. [Hearing tape].
32. Magarity welcomed the appraisal by an independent appraiser, and volunteered that the independent appraiser in this case was “a very competent lady,” but nonetheless disagreed with her conclusions. [Hearing tape]. A significant point of disagreement was her estimate of replacement costs per square foot. Magarity produced a memorandum from his own contractor showing costs per square foot significantly lower than those of the independent Certified Appraiser. [Hearing tape; County Board Record, p. 88]. On its face, the memorandum does not purport to reflect market costs. [County Board Record, p. 88]. Nor does the memorandum disclose whether its estimates include soft and indirect costs, and entrepreneurial profit. [County Board Record, p. 88].
33. As one of the principal remaining issues, Magarity stated that he could not understand the Assessor’s depreciation calculations. [Hearing tape]. As an alternative, he suggested the use of United States Internal Revenue Service (IRS) depreciation rates, which reach a result much more favorable to him – apparently including complete depreciation of his property over 27 ½ years, after which point it would presumably be valueless. [Hearing tape]. Magarity said he was familiar with the IRS standard “because I own a lot of property.” [Hearing tape]. He conceded that the IRS standard was the only one he could come up with, and was not suggesting that the state use “federal government stuff.” [Hearing tape]. Nor did Magarity attempt to explain how depreciation rates suitable for federal income taxation can or should also be suitable in the context of state property taxation, in which the objective is to reach a fair market value each year.
34. The Assessor testified that the Department does not allow county assessors to use IRS depreciation tables. [Hearing tape].
35. Finally, Magarity explained to the County Board why his experience with real estate led him to doubt the Assessor’s valuation, and her credentials. [Hearing tape; County Board Findings].
36. Magarity testified to the County Board that he does not know how much he would ask for his house if he were to put it on the market for sale. [Hearing tape].
37. The County Board found the Assessor determined the fair market value of Petitioners’ property to be $2,458,747, and the Assessor’s value was supported by an independent appraisal rendered by Debbie LaJeunesse. [County Board Findings, Nos. 2, 3, 4].
38. The County Board found the Petitioners filed a timely appeal with the County Board. [County Board Findings, No. 7].
39. The County Board found the Petitioners failed to sustain their burden of proving that the Assessor improperly valued their land. [County Board Findings, No. 8].
40. The State Board incorporates certain additional references to the record in the following discussion.
DISCUSSION OF PETITIONERS’ ISSUES AND APPLICABLE LAW
41. Petitioners’ 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).
42. Petitioners have questioned the constitutional premises of the assessment in this case. We accordingly begin with the pertinent section of the Wyoming Constitution:
§ 11. Uniformity of assessment required.
(a) All property, except as in this constitution otherwise provided, shall be uniformly valued at its full value as defined by the legislature, in three (3) classes as follows:
(i) Gross production of minerals and mine products in lieu of taxes on the land where produced;
(ii) Property used for industrial purposes as defined by the legislature; and
(iii) All other property, real and personal.
(b) The legislature shall prescribe the percentage of value which shall be assessed within each designated class. . .
(c) The legislature shall not create new classes or subclasses or authorize any property to be assessed at a rate other than the rates set for authorized classes.
(d) All taxation shall be equal and uniform within each class of property. The legislature shall prescribe such regulations as shall secure a just valuation for taxation of all property, real and personal.
Wyo. Const., art. 15 § 11.
43. The Legislature has required all property in Wyoming to be valued annually at fair market value. Wyo. Stat. Ann.§ 39-13-103(b)(ii). 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). The statutory valuation date is January 1 of each year; all taxable property must be valued and assessed for taxation in the name of the owner of the property on that date. Wyo. Stat. Ann. § 39-13-103(b)(i)(A).
44. The determination of fair market value inevitably involves a degree of discretion:
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 (l923). 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). The Wyoming Supreme Court has recently reiterated the “rational method” standard. Britt v. Fremont County Assessor, 2006 WY 10, ¶ 18, 126 P.3d 117, 123 (Wyo. 2006).
45. The county assessor must annually determine the fair market value of residential real property within the assessor’s county. In doing so, 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).
46. The Department is required by law 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 must “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). The Department has promulgated those rules, which specifically provide for use of a computer assisted mass appraisal (CAMA) system. Rules, Wyoming Department of Revenue, Chapter 9, § 6(a), (b), (c), and (d). CAMA “automates the comparable sales and replacement cost methods.” Britt, 2006 WY 10, ¶ 39, 126 P.3d at 128. The Wyoming Supreme Court has recognized the validity of valuations derived from a CAMA system. Gray v. Wyoming State Board of Equalization, 896 P.2d 1347 (Wyo. 1995).
47. The Wyoming Supreme Court recently described the burden of proof for a taxpayer challenging a County Assessor’s valuation as follows:
A strong presumption favors the Assessor’s valuation. “In the absence of evidence to the contrary, we presume that the officials charged with establishing value exercised honest judgment in accordance with the applicable rules, regulations, and other directives that have passed public scrutiny, either through legislative enactment or agency rule-making, or both.” Amoco Production Co. v. Dept. of Revenue, 2004 WY 89, ¶ 7, 94 P.3d 430, 435 (Wyo. 2004). The Britts [protesting taxpayers] had the initial burden of presenting evidence sufficient to overcome the presumption. Id., ¶ 8. If the Britts successfully overcame the presumption, then the county board was “required to equally weigh the evidence of all parties and measure it against the appropriate burden of proof.” CIG v. Wyoming Dept. of Revenue, 2001 WY 34, ¶ 10, 20 P.3d 528, 531 (Wyo. 2001). The burden of going forward would then have shifted to the Assessor to defend her valuation. Id. Above all, the Britts bore “the ultimate burden of persuasion to prove by a preponderance of the evidence that the valuation was not derived in accordance with the required constitutional and statutory requirements for valuing . . . property.” Id.
Britt, supra, 2006 WY 10, ¶ 23, 126 P.3d at 125.
48. A mere difference of opinion as to value is not sufficient to overcome the presumption in favor of an assessor’s valuation. J. Ray Mc Dermott & Co. v Hudson, 370 P.2d 364, 370 (Wyo. 1962).
Were the Assessor and members of her staff qualified by law to make valuation judgments used as a basis for ad valorem taxation?
49. Petitioners contend that the Assessor and her staff were not properly qualified:
. . .A copy of the Department of Revenue’s certification of an employee as a property tax appraiser supported by WS 18-3-201, qualifications for certification, does not make one qualified to provide a uniform and fair appraisal. WS 1977 Title 39-2-102 as prescribed by the Wyoming Legislature, and the Wyoming Real Estate Commission make another standard quite clear. . .
. . . [The assessors] seem to base arbitrary and capricious assessments on having been “certified” by the Department of Revenue to print out abstracts, and are therefore not certified property appraisers as required by Wyoming real estate licensing law under statute 33 Chap. 39 where true appraisal standards would apply. . .
[Petitioners’ Opening Brief, pp. 2, 4]. Petitioners are apparently unaware that W. S. 1977, § 39-2-102 was repealed in 1998. Wyoming Session Laws 1998, Chapter 5, Section 4.
50. Petitioners are otherwise incorrect as a matter of law. Wyoming law distinguishes between appraisers who make valuation judgments for tax purposes, and appraisers who develop and communicate real estate appraisals under a valid permit from the State. The different types of certification are plainly reflected in the record. The Assessor and her deputies were certified by the Department as Property Tax Appraisers. Supra, ¶ 3. In contrast, Debbie LaJeunesse held a Certified Real Estate Appraiser Permit issued by the Wyoming Certified Real Estate Appraisal Board. [County Board Record, p. 52].
51. The Department must certify any county employee, including the elected County Assessor, “who makes valuation judgments used as a basis for ad valorem taxation.” Wyo. Stat. Ann. § 18-3-201(c), (d). Such persons are defined by statute as being “property tax appraisers.” Wyo. Stat. Ann. § 18-3-201(c). By the adoption of formal Rules, the Department has more explicitly described what persons are property tax appraisers:
(j) “Property Tax Appraiser” means all employees of . . . any County Assessors office, including county assessors, who are engaged in the supervision of appraisal programs and personnel who are involved in the following functions: making appraisals and preparing appraisal reports; listing properties in which judgments are made as to quality of construction, condition of improvements, and presence of obsolescence; grading and valuing land; collecting and analyzing income and operating expense information and calculating capitalization rates; conducting assessment ratio studies; testifying in hearings or defending appraisals before appeal boards; and analyzing statistical data used in evaluating the accuracy and uniformity of appraisals.
Rules, Wyoming Department of Revenue, Chapter 13, § 3(j). More generally, the Department has established a mandatory system of education and training for county assessors and ad valorem property tax appraisers, which includes standards and criteria for the certification required by statute. Rules, Wyoming Department of Revenue, Chapter 13 (“Assessor and Property Tax Appraiser Education and Certification”). Agency rules and regulations adopted pursuant to statutory authority have the force and effect of law. Doidge v. State Board of Charities and Reform, 789 P.2d 880, 883-884 (Wyo. 1990); Swift v. Sublette County Board of County Commissioners, 2002 WY 32, ¶ 10, 40 P.3d 1235, 1238 (2002).
52. Petitioners correctly identify the Certified Real Estate Appraiser Act, Wyo. Stat. Ann. §§ 33-39-101 to 33-39-130, as the source of Wyoming law governing certified real estate appraisers. However, they neglect to note that the Certified Real Estate Appraiser Act “does not apply to any person who does not hold himself out as, or offer to perform services as a certified real estate appraiser.” Wyo. Stat. Ann. § 33-39-103. The statute defines “certified real estate appraiser” as a “person who develops and communicates real estate appraisals and who holds a valid permit issued to him for either general or residential real estate under the provisions of the act.” Wyo. Stat. Ann. § 33-39-102(a)(xii).
53. The two different types of certification are not always mutually exclusive. One of the ways an individual may qualify for property tax appraiser certification by the Department is by “[e]arning and maintaining a current status of professional designation from one of the appraisal organizations of the Appraisal Foundation or from the Wyoming Real Estate Appraisers Board.” Rules, Wyoming Department of Revenue, Chapter 13, § 5(b)(ii). At the same time, a person qualifying to be a property tax appraiser becomes subject to the Department’s requirements for continuing education from a specified list of accredited courses. Rules, Wyoming Department of Revenue, Chapter 13, § 5(d), 6(a); see Chapter 13, § 4.
54. Wyoming law required the Assessor to be certified by the Department in order to be qualified to make judgments for tax valuation purposes, and the record demonstrates such certification. No alternative certification would do. The County Board committed no error.
Did the Assessor arbitrarily employ multipliers or other cost adjustments when relying on a Computer Assisted Mass Appraisal system to determine the value of the improvements to Petitioners’ property?
55. The Assessor broadly explained how she used the CAMA system to determine a value for the improvements to Petitioners’ property. The principal inputs to the system are the use, dimensions, age, and condition of the property. Supra, ¶ 14. For Teton County and other counties using the same CAMA system, the Department annually provides for adjustments to replacement costs in the system by reference to zip codes, to account for varying costs around the State. Supra, ¶ 14. After depreciation, the resulting value is further adjusted for local market conditions. Supra, ¶ 14. This description is essentially the same as the testimony presented to the Wyoming Supreme Court in its leading case on CAMA systems. The Assessor in that case testified:
I don’t exactly understand how he [Appellant Gray] arrived at his figures, but when you enter the data on any specific type of building you have use codes, you have land codes, you have structure codes, you have quality grade, you have condition and function, you have all these items that go in to build a replacement cost new less depreciation on any specific type of building. . .
Gray, supra, 896 P.2d at 1350. The Wyoming Supreme Court also noted that, “[The CAMA] system does not eliminate judgments made by the assessor, which significantly influence the ‘system’ value estimate.” Gray, supra, 896 P.2d at 1350, n. 2.
56. The record in this case also includes the principal printouts showing specific calculations related to Petitioners’ property. [County Board Record, pp. 21, 24, 26]. The Assessor provided an explanation of these calculations [Hearing tape], and was available for cross-examination by Petitioners. [Hearing tape]. Petitioners did not challenge the substance of the Assessor’s explanation, and all but conceded that the Assessor followed standard procedures in estimating the value of Petitioners’ improvements. Supra, ¶ 18.
57. At the County Board hearing, Russell Magarity stated he assumed the Assessor was in compliance with the law, and was instead challenging the law. [Hearing tape]. He nonetheless presented no evidence to support a challenge to CAMA system as authorized by law. He merely disagreed with its results. [Hearing tape]. By law, Petitioners’ challenge fails if they present nothing more than a difference of opinion. Supra, ¶ 48. Their position is all but indistinguishable from that of taxpayers in a case recently decided by the Wyoming Supreme Court: “The Britts do not challenge the CAMA method, nor do they clearly assert the Assessor employed CAMA improperly.” Britt, supra, 2006 WY 10, ¶ 39, 126 P.3d at 128.
58. In their Opening Brief, Petitioners complained of four details regarding the application of multipliers. The first detail concerned the use of multipliers “without any foundation toward a fair and uniform assessment of values which have the right to such an assessment individually compared.” [Petitioners’ Opening Brief, p. 3]. We interpret this as an argument that the best and exclusive evidence of fair market value is an actual transaction price. The Wyoming Supreme Court has expressly rejected this argument. Gray, supra, 896 P.2d 1351-1353. Instead, Wyoming Supreme Court specifically recognized that a CAMA system serves uniformity interests that may not be served by exclusive reliance on actual sales prices: “Reliance upon actual sales prices . . . may well lead to discrimination and lack of equality and uniformity.” Gray, supra, 896 P.2d at 1351.
59. Alternatively, if Petitioners are arguing that they are entitled to an appraisal by a certified real estate appraiser as the basis for their property tax valuation, we have already concluded that they are not. Supra, ¶¶ 49-54. In this case the Assessor chose to arrange for an independent appraisal, the results of which supported the Assessor. Petitioners failed to produce any competent countervailing independent appraisal at the hearing before the County Board, and have therefore failed to respond to the presumption in favor of the Assessor’s valuation.
60. Petitioners supported their uniformity argument with a citation to Sunday Lake Iron Co. v. Wakefield Township, 247 U. S. 350, 38 Sup. Ct. 495 (1918). If we set aside the question of whether discrimination under federal law means the same now as it did in 1918, Sunday Lake Iron Co. merely reiterates well established burdens of proof indistinguishable from those established under Wyoming law:
It is also clear that mere errors of judgment by officials will not support a claim of discrimination. There must be something more – something which in effect amounts to an intentional violation of the essential principle of practical uniformity. The good faith of such officers and the validity of their actions are presumed; when assailed, the burden of proof is upon the complaining party.
Sunday Lake Iron Co., 38 Sup. Ct. at 495.
61. The second detail concerns a market adjustment of 70% made to the Assessor’s cost calculations. [Petitioners’ Opening Brief, p. 3]. The 70% market adjustment applied only to the main house [County Board Record, p. 21]; the market adjustments for the guest house and habitable space over the barn were 55%. [County Board Record, pp. 24, 26]. The Assessor explained that she performed local market studies as the basis for the adjustments, and that the adjustments were required to meet state standards. Supra, ¶¶ 14, 17. Petitioners offered no countervailing evidence, but were content to claim that the “number was completely without justification,” pointing to nearby housing projects. Petitioners did nothing to counter the Assessor’s evidence concerning the similarity between Petitioners’ property and other properties in their upscale neighborhood, and the Assessor’s position was amply supported by the thoughtful analysis of the independent appraiser. [County Board Record, p. 41]. There was substantial evidence to support the Assessor’s action, and little more than suspicion on the part of the Petitioners.
62. The third detail concerns “[u]se of Market Data multiplier on top of input of market data, which even if supported by the State seems to border on discrimination when done by ‘zip code’ and contrary to statutes.” [Petitioners’ Opening Brief, p. 3]. The Petitioner confuses two different types of adjustments. The zip code adjustment is a cost adjustment to the model, provided under the auspices of the Department, intended to reflect variations in costs around Wyoming. Supra, ¶ 14. The market adjustment is based on local data. Supra, ¶ 14. Because the Assessor’s local data showed that a neighborhood such as Tucker Ranch commanded a premium market value, it was up to Petitioner to demonstrate the contrary by evidence. Similarly, if Petitioners questioned the cost adjustments made at the behest of the Department, they must do more than articulate a concern. The Assessor’s explanation and documentation constituted substantial evidence to support her adjustments.
63. The fourth detail is a complaint that “There is no consistent, uniform or fair method for applying designations of class of construction. . .particularly since appraisers do not have access inside homes.” [Petitioners’ Opening Brief, p. 3]. The uncontested testimony of the Assessor is that she takes quality of construction into account, and in fact adjusted the class and condition of Petitioners’ guest house when given an opportunity to inspect it closely. [Hearing record; County Board Record, p. 18]. We therefore take Petitioners’ point to turn on the Assessor’s ability to have access to the homes of taxpayers.
64. By statute, “[t]he county assessor or his deputies or any representative of the department [of revenue] may examine any property.” Wyo. Stat. Ann. § 39-13-103 (b)(v). By Rule, County Assessors must have “a program to review all taxable properties within their jurisdiction at least once every four years in order to assure the property characteristic data is correct.” Rules, Wyoming Department of Revenue, Chapter 9, Section 3(d). Neither statute nor rule specifies the detail of property characteristic data to be collected, nor that such data be collected through access to the inside of homes. In fact, the principal data concerning the characteristics of a specific property can be obtained by measurement and inspection outside. The same data can be corrected if a taxpayer has reason to believe an assessor’s inspection is for some reason incorrect, which is precisely what occurred in this case. [County Board Record, p. 18]. Indeed, Petitioners made a point of their cooperation with the Assessor’s inspection, and the inspection of the independent Certified Appraiser. [Hearing tape].
65. The fact that the Assessor may from time to time refine her analysis of the physical characteristics of a particular piece of property does not mean that her county-wide inventory of physical characteristics is defective. Petitioners presented no evidence to show that such was the case. Indeed, the templates used by the Assessor to value all similar properties assure that she will approach each property in much the same way. [County Board Record, pp. 21, 24, 26]. The formal training and certification provided by the Department also assure consistency. Supra, ¶ 51. Substantial evidence therefore supported the Assessor’s valuation in this case, and the Petitioner made no showing that the Assessor’s valuation practices were otherwise not in accordance with law.
Did the Assessor’s valuation fail to reach an accurate value per acre?
66. Although the County Board recognized the Petitioners’ burden of proof [County Board Findings of Fact and Conclusions of Law, Nos. 7 and 8], it nonetheless directed the Assessor to justify her valuation before it heard Petitioners’ complaints. [Hearing tape]. It is more difficult for us to be certain of Petitioners’ principal points than it would be if they had proceeded first. That difficulty is compounded by the narrative form of Petitioners’ brief, which does not identify their main points with precision. We will treat this case as one in which the Petitioners had an unusually clear statement of the Assessor’s valuation when Russell Magarity made his presentation to the County Board.
67. The Assessor determined the value of Petitioner’s lot based on information about sales she considered, to a greater or lesser degree, to be comparable. Supra, ¶¶ 6, 19. The Assessor did not employ CAMA to determine the values in question. Supra, ¶ 19.
68. To estimate the market value of Petitioners’ land, the Assessor relied on sales of lots, improved or vacant – not of acres. Supra, ¶¶ 6, 19. Petitioners did not demonstrate that these land sales were invalid, or that the Assessor’s use of these sales was arbitrary.
69. Based on the Assessor’s evidence, the County Board was informed that the value of a given lot was a function of several factors, including but not limited to its size. These other factors include proximity to the nearby highway, proximity to water, and in the case of Petitioners, the presence of mature trees. Supra, ¶¶ 6, 23, 24. Petitioners’ trees were depicted in part in the photographs the Assessor introduced into the record. [County Board Record, pp. 20, 22, 23, 25, 27, 28, 29, 30].
70. Petitioners insist that uniform appraisal requires the Assessor to value Teton County land on a per acre basis. [Petitioners’ Opening Brief, pp. 2-3]. In Petitioners’ view, the result of doing so is to demonstrate that their acres are valued higher than those of a neighboring Tucker Ranch property also valued at $1,000,000, but with more acres. [Hearing tape; County Board Record, pp. 76-78]. Petitioners’ lot is also valued much higher on a per acre basis than lots in the affordable housing development. [County Board Record, p. 87]. The County Board was not obliged to accept this reasoning as persuasive, for three reasons.
71. First, the pertinent market is for lots, not for acres. The lots are sold on the basis of their particular features, only one of which is acreage. More specifically, it is not difficult to understand why Petitioners’ lot, with mature trees, would be as valuable as a larger neighboring lot with fewer or no trees. In fact, the County Board had no reason to assume all characteristics of real property but acreage should be ignored. While there are presumably parts of Wyoming where that assumption may be true, the Assessor’s evidence plainly showed that Tucker Ranch in Teton County is not one of those places. It was Petitioners’ burden to account for the different lot characteristics, but they did not do so.
72. The same rationale applies to lots in the affordable housing development. The market plainly recognizes that real estate within Tucker Ranch is more valuable than real estate in the affordable housing neighborhood, and the Assessor is bound by law to account for these differences.
73. Second, insofar as Petitioners argue that the County Board should have based its decision on the universe of lots selected by Petitioners to make their point [County Board Record, pp. 76-87], they argue nothing more than their own opinion of value, different from that of the Assessor. This is not enough to carry their burdens. Supra, ¶¶ 47-48.
74. Third, the evidence in the record simply does not support Petitioners’ implicit claim that the Assessor overvalued their land. Calculated on a per acre basis, the Assessor determined the value of Petitioners’ lot to be $214,592 per acre. For comparables, the Assessor relied on four vacant land sales which took place before the statutory valuation date of January 1, 2005. Supra, ¶ 19. Two of these sales indicated a per acre value greater than that of Petitioners, and two indicated a lesser value. Supra, ¶ 19. The independent Certified Appraiser relied on four sales and two pending sales, all after January 1, 2005, and in each instance the per acre value was greater than the value assigned to Petitioners’ lot by the Assessor. Supra, ¶ 24. Petitioners made no effort, before the County Board or on appeal to the State Board, to dispute the per acre values for the universe of sales identified by the Assessor or the independent Certified Appraiser.
Did the Assessor fail to take into account the attributes of Petitioners’ property, including nearby properties, when determining the value of Petitioners’ property for ad valorem taxation?
75. Petitioners state their point about the degrading effect of neighboring properties in this way:
To say that there is no impact from the proximity to low income housing project and the KOA Campground borders on capriciousness, and incredulity. This is the very definition of obsolescence. Completely disregarding the impact of these two obsolescence factors resting on the sale of a 1 acre parcel nearby, does not take into account the appraisals and prices on offer for the two adjoining lots of 125 thousand per acre by Mr. Ben Stemgood. . .
[Petitioners’ Opening Brief, p. 3]. Petitioners go on to make two factual assertions, concerning original pricing of Tucker Ranch lots and sales of the low income housing complex, that are unsupported in the record made before the County Board. Id. Our review is confined to the record made before the County Board. Rules, Wyoming State Board of Equalization, Chapter 3, Section 9. We therefore disregard those assertions.
76. The Assessor and the independent Certified Appraiser both considered Petitioners’ argument about the proximity of the campground and affordable housing, and rejected it for reasons that appear in the record. Supra, ¶¶ 27, 28. For example, the independent Certified Appraiser’s report specifically stated that, “[n]o major repair items, functional deficiencies, or external obsolescence were noted during the inspection.” [County Board Record, p. 40]. To the extent that this is a difference of opinion between Petitioners and the Assessor, Petitioners cannot prevail on the basis of their opinion alone. Supra, ¶ 48.
77. Much the same can be said of the significance of the sale of a one acre parcel for $495,000, and Petitioners’ insistence that two adjoining acres were on sale for only $125,000 apiece. The total of $745,000 for those three acres was still higher on a per-acre basis than the Assessor’s value of $1,000,000 for Petitioner’s 4.66 acres. See supra, ¶ 24. We also note that this is an issue of marginal importance, since the independent Certified Appraiser did not rely on the sale of the $495,000 acre in reaching her conclusions. Supra, ¶ 26.
78. Petitioners acknowledge the definition of economic obsolescence found in the Rules of the Department. [Oral argument to State Board]. The Assessor is bound to follow such directions of the Department. Supra, ¶¶ 45, 46. Economic obsolescence is a form of depreciation. Rules, Wyoming Department of Revenue, Chapter 9, § 4(d). When used in the specific context of determining value by the cost approach, the Department’s Rule also lists specific methods to measure economic obsolescence:
(D) “Depreciation” means a loss of utility and hence value from any cause. Depreciation may take the form of physical depreciation, functional obsolescence, or economic obsolescence.
* * *
(III) “Economic Obsolescence” means impairment of desirability or useful life arising from factors external to the property, such as economic forces or environmental changes which affect supply-demand relationships in the market. The methods to measure economic obsolescence may include, but are not limited to:
(1.) Capitalization of the income or rent loss attributable to the negative influence;
(2.) Comparison of sales of similar properties which are subject to the negative influence with others which are not.
(3.) Identification of factors specifically analogous to the property, i.e. Investments, capacities and/or industry relationships.
Rules, Wyoming Department of Revenue, Chapter 9, § 6(b)(v)(D).
79. Of the three methods specified in Section 6(b)(v)(D)(III), Petitioners were prepared to rely on only the second. [Oral argument]. Yet they made no demonstration of negative influence. Instead, Petitioners demanded that the Assessor, the County Board, and this Board accept the negative influence as a given, in the face of the reasoned positions taken by the Assessor and the independent Certified Appraiser. At a minimum, the County Board was not obliged to share Petitioners’ prejudice, which the record shows to be the only evidence Petitioners’ offered.
80. Finally, Petitioners cite Bunten v. Rock Springs, supra, to argue that, “just as grazing land was held to bear a reasonable relation in value to that in other counties; surely land adjoining one’s property bears a relation to value.” [Petitioners’ Opening Brief, p. 2]. If there is any holding in Bunten on the quoted point, it is that higher valuations placed on lands in counties adjoining Sweetwater County did not make a prima facie showing of fraudulent valuation. Bunten, supra, 215 P. at 253-254. Otherwise, Justice Blume’s opinion in Bunten is a masterful disquisition on the contours of judicial deference to the discretion exercised by taxation authorities acting in good faith. We find nothing in Bunten to aid the Petitioners’ cause.
Did the Assessor fail to recognize depreciation when relying on a Computer Assisted Mass Appraisal system to determine the value of Petitioners’ property for ad valorem taxation?
81. The Assessor expressly testified to depreciation in the Teton County CAMA system, and introduced documentation demonstrating that her replacement costs had in fact been adjusted for depreciation. Supra, ¶¶ 15, 16. Although the Petitioners complain of “mis-use of depreciation schedules by CAMA,” [Petitioners’ Opening Brief, p. 3], they introduced no evidence to show that the Assessor had misused the CAMA system.
82. The independent Certified Appraiser took her own approach to depreciation. The details of her analysis were fully disclosed in her appraisal, which included a breakdown on a building by building basis. [County Board Record, p. 40]. While Petitioners complain that the independent Certified Appraiser “inconsistently applied depreciation rates,” [Petitioners’ Opening Brief, p. 3], the rationale for her rates was clear, and not contested by the introduction of any evidence to discredit that rationale. [County Board Record, p. 40].
83. Petitioners’ only evidence of alternative rates of depreciation came in the form of Russell Magarity’s proposal to use Internal Revenue Service depreciation rates, based on his own familiarity with those rates. Supra, ¶ 33. However, the County Board was free to discount this testimony based on the Assessor’s testimony, and additional testimony of Russell Magarity. The Assessor testified that the State does not allow the use of IRS rates. Supra, ¶ 34. Russell Magarity’s conceded that (1) the IRS standard was the only one he could come up with, and (2) he was not suggesting the state must adopt federal standards. Supra, ¶ 33. This Board further notes that Petitioners have made no effort to explain how depreciation rates which apply in a federal income tax regime can or should provide insight into the annual fair market value determination of a local property tax regime. Supra, ¶ 33.
84. At the hearing before the County Board, Russell Magarity stated that his problem with the Assessor’s depreciation was that he simply did not understand what the Assessor had done. Supra, ¶ 33. He did not demonstrate that the Assessor had a duty imposed by statute or otherwise to make him understand her valuation. Further, the tenor of his testimony at the County Board hearing indicated no predisposition to a good faith effort to understand the Assessor’s explanation. [Hearing tape].
85. At oral argument before the State Board, Magarity expanded his attack to specifically address the rates of depreciation used in the CAMA system. [Oral argument]. Generally speaking, these rates were in the realm of 1% annually or less. [Oral argument; County Board Record, pp. 21, 24, 26 by computation]. It is not clear that this argument was fairly presented to the County Board for its consideration. In any event, it was once again simply a matter of opinion which cannot sustain Petitioners’ burdens. Supra, ¶¶ 47, 48.
86. The Assessor’s use of depreciation was supported by substantial evidence, and otherwise in accordance with law.
Was the County Board arbitrary in accepting the construction costs the Assessor’s independent appraiser used when valuing Petitioners’ property by the cost approach?
87. At hearing, Petitioner Russell Magarity complained that he disagreed with the unit cost per square foot used by the independent appraiser in her cost approach analysis. Supra, ¶ 32. The independent appraiser’s report identified the source of her costs as “Teton Appraisals Cost Files and surveys of local log home builders, Marshall and Swift Cost Service.” Supra, ¶ 30. Magarity stated that his own contractor suggested a lower unit cost, supra, ¶ 32, and that in contacts with unspecified other contractors, “they laughed at the appraiser’s costs.” [Hearing tape]. This is, of course, nothing more than a difference of opinion. Supra, ¶ 48.
88. As important, the independent Certified Appraiser was using an estimate of costs that included soft costs, indirect costs, and entrepreneurial profit. Supra, ¶ 30. Petitioners’ contractor made no similar representation. Supra, ¶ 32. The County Board would not have been able to tell if Petitioners’ contractor provided a cost estimate that would reach a representative market value. If the Petitioners’ contractor were merely providing an estimate of his own costs, without the additional economic considerations that would be included in the contractor’s price for the market at large, the stated value would be too low.
89. When the independent Certified Appraiser focused exclusively on the cost approach, she did so because the Assessor was accommodating a request of Petitioners. Supra, ¶ 12. The cost approach is only one of three approaches to value. Rules, Wyoming Department of Revenue, Chapter 9, §6(a), (b), (c). A taxpayer has no right to require the Assessor to determine value by a method the taxpayer prefers. Further, in this case the Assessor testified that she would use a market based approach rather than a cost approach in Petitioners’ area, because there is market activity. Supra, ¶ 12. While the report of the independent Certified Appraiser supported the Assessor’s estimate of market value, the County Board could have entirely ignored the independent Certified Appraiser’s estimate of the value of Petitioners’ improvements.
90. It bears adding that Petitioners were never entitled to an independent appraisal at public expense. One of the virtues of statewide use of CAMA systems is the generally modest expense of mass appraisals. No statute or rule requires a county to bear the expense of an independent appraisal for a taxpayer dissatisfied with an assessor’s valuation.
91. At the same time, we recognize that, as a practical matter, an independent appraisal of land values may be necessary to defend an assessor’s land valuation, as distinct from the value of improvements calculated by CAMA. See William P. Saunders, Docket No. 2001-160, March 28, 2002, 2002 WL 655065 (Wyo. St. Bd. Eq.).
Did the decision of the Assessor, as affirmed by the County Board, violate constitutional standards for uniform valuation, taking into account the valuation of properties adjacent to or nearby Petitioners’ property?
92. In making their constitutional claim, Petitioners rely on (1) their evidence of values of nearby properties, (2) the Assessor’s use of lot comparisons to value Petitioners’ property, rather than a value per acre, and (3) the alleged absence of method for applying measures of a class of construction, on the ground that appraisers do not have access to the inside of homes. [Petitioners’ Opening Brief, pp. 2-3]. We have already considered and rejected all three arguments. Supra, ¶¶ 75-80, 66-74, 63-65.
93. The Board accordingly concludes there was substantial evidence in the record to support the decision of the County Board, and the County’s Board’s decision is otherwise in accordance with law.
IT IS THEREFORE HEREBY ORDERED that the Findings of Fact, Conclusions of Law, and Decision of the Teton County Board of Equalization are hereby 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