BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF WYOMING
IN THE MATTER OF THE APPEAL OF )
CHUCK HOELZEN FROM A )
DECISION OF THE FREMONT COUNTY ) Docket No. 2006-103
BOARD OF EQUALIZATION - 2006 )
PROPERTY VALUATION )
DECISION AND ORDER
Chuck Hoelzen (Hoelzen or Taxpayer) appeared pro se.
Eileen Oakley, Fremont County Assessor (Assessor or Respondent) appeared pro se.
This is an appeal by Taxpayer from a decision of the Fremont County Board of Equalization (County Board), denying Taxpayer agricultural classification for 67.7 acres of land.
Taxpayer filed a Notice of Appeal with the State Board of Equalization (State Board) on September 5, 2006. Taxpayer filed a brief on November 1, 2006, as allowed by the State Board’s October 5, 2006, Briefing Order. The Assessor filed a Response to Petitioner’s Brief standing on the County Board record and objecting to Taxpayer’s attempt to introduce evidence with his brief which was not offered at the County Board hearing or in compliance with the Rules of the State Board of Equalization. Neither party requested oral argument.
The State Board, comprised of Alan B. Minier, Chairman, Thomas R. Satterfield, Vice-Chairman, and Thomas D. Roberts, Board Member, considered the hearing record, the decision of the County Board and the parties’ briefs.
We evaluate Taxpayer’s claims against our standard of review which is whether the decision 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.
PROCEEDINGS BEFORE THE COUNTY BOARD
The County Board conducted a hearing on July 18, 2006, and entered a Decision denying the Taxpayer’s protest on August 8, 2006.
The County Board found the Taxpayer did not meet the burden of providing credible evidence that the Assessor’s valuation was incorrect or unlawful.
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. The State Board has jurisdiction to decide this matter.
STANDARD OF REVIEW
When a County Board decision is appealed to the State Board, the State Board 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; § 39-1-304(a), (currently Wyo. Stat. Ann. § 39-11-102.1(c)).
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. § 16-3-114(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.
Romero v. Davy McKee Corp., 854 P.2d 59, 61 (Wyo. 1993).
The Taxpayer filed this appeal complaining generally that the County Board failed to take into account income related to his property. Under our standards of review, the Taxpayer must establish that the decision of the County Board is unsupported by substantial evidence, and/or the County Board acted arbitrarily and capriciously.
The County Board found the Assessor’s valuation of the property was valid, accurate, correct, and should be upheld. We affirm the Decision of the County Board.
FACTS PRESENTED TO THE COUNTY BOARD
1. Hoelzen owns 67.7 acres of land located at No. 1 Grandview Court, Riverton, in Fremont County, Wyoming. [County Board Record, Exhibit C, p. 9].
2. On or about May 10, 2006, the Assessor sent Taxpayer an Assessment Schedule listing the total market value of his property at $87,100 for 2006. Of this total $56,850 was the value of the Taxpayer’s land, the amount at issue in this proceeding. The Assessor valued the Taxpayer’s one acre home site at $23,500 and the remaining 66.7 at $33,350 or $500 per acre. [County Board Record, Hearing Tape; Exhibit A, p. 6].
3. Hoelzen filed a sworn Statement to Contest 2006 Property Tax Assessment with the County Board dated June 8, 2006. The statement listed the following reasons why he thought the assessment was incorrect:
a) The land was not valued on its agricultural value.
b) The hay, pasture and minnow production in 2005 was $2,800.
c) The land value should be $14,000 not $56,800.
d) The purchase price of the land was $10,000 and the assessed value was a 569% increase over the purchase price and is not reasonable.
e) The 2006 agricultural usage will not change from 2005.
[County Board Record, p. 1].
4. A hearing before the County Board was held on July 18, 2006. [County Board Record, p. 3].
5. This was the second year Hoelzen appealed the Assessor’s valuation of his land. Hoelzen previously appealed the Assessor’s 2005 valuation of his property to the County Board. The County Board affirmed the Assessor’s 2005 valuation, and Hoelzen then appealed that County Board decision to the State Board.
6. The State Board affirmed the County Board’s decision on the 2005 valuation of Taxpayer’s property on July 14, 2006. Chuck Hoelzen, Docket No. 2005-91, July 14, 2006 2006 WL 3327965, (Wyo. St. Bd. Eq.). The State Board decision was not available to Hoelzen when he filed his 2006 appeal or as he prepared for the 2006 hearing. Hoelzen told the County Board he received the State Board decision in his 2005 appeal the afternoon before the July 18, 2006, County Board hearing. [County Board Record, Hearing Tape].
7. Neither the Taxpayer nor the Assessor sought to continue the 2006 hearing.
8. Hoelzen told the County Board his land had been used for agriculture since he bought it in October of 1991. [County Board Record, Hearing Tape].
9. Approximately 12 years ago the Army Corps of Engineers did a survey and verbally advised Taxpayer that 31.67 acres of his land was a natural wetland. [County Board Record, Hearing Tape].
10. The Taxpayer told the County Board that fourteen permits were required from various agencies to convert the wetlands on his property to waterfowl habitat by building ponds. There is a Wildlife Agreement in place that does not allow any agricultural use of this area. [County Board Record, Hearing Tape].
11. Taxpayer testified his land has an allocated water right from the Le Clair Irrigation Ditch Company for 28 acres. He is, however, only able to irrigate 22.7 acres. The Taxpayer conceded the 28 acre figure used by the Assessor in her productive capability calculations was correct because of the irrigation water right. Taxpayer noted a great deal of work would be required to use his full 28 acre water right. The remaining 13.3 acres of Taxpayer’s land is comprised of the area around his house, ditches, roads, and land with heavy alkali. [County Board Record, Hearing Tape].
12. Hoelzen complained the Assessor, for the purpose of her calculations of productive capacity, used standard manuals and assumed that his land could produce 3 to 4 tons per acre of alfalfa hay. [County Board Record, Hearing Tape].
13. Taxpayer asserted the Assessor made no effort to determine the actual productive capacity of his land. Hoelzen thought the Assessor was improperly using the standard manual to determine the production figures used to value his land. [County Board Record, Hearing Tape].
14. Hoelzen testified it would be impossible for his land to produce 84 tons of hay, the production capacity calculated by the Assessor for the 2005 hearing using 3 to 4 tons of hay production per acre. [County Board Record, Hearing Tape].
15. Hoelzen stated he contacted the Rocky Mountain Agronomy Center to determine what types of alfalfa would work on his land, knowing that alfalfa will grow on sub-irrigated ground. He testified he was told the high water table, high Ph and salt conditions prevent good alfalfa growth. [County Board Record, Hearing Tape]. Hoelzen did not introduce any report into the record nor call any witness to testify on the subject.
16. Hoelzen read into the record a statement which he represented to be a portion of a University of Nebraska study, publication number G1456, that “alfalfa grown on sub-irrigated sites wet soil should be at least three feet.” He told the County Board the report also stated “alfalfa is poorly sited to saline and shallow soils.” He advised the County Board the water table at his property is about two feet on the high end and one foot on the bottom. Taxpayer offered to furnish a copy of the report to the Assessor but did not introduce the report or call any witness to testify on the subject. [County Board Record, Hearing Tape].
17. Hoelzen provided information which he represented to be from University of Wyoming Extension Service publication B1079 which stated the average yield over ten studies in Wyoming of unfertilized, unimproved grass meadows was 1.2 tons per acre. Taxpayer said these figures were more in line with what he was actually producing on his property. [County Board Record, Hearing Tape]. Hoelzen did not introduce the report or call any witness to testify on the subject.
18. Hoelzen testified the assessed value of his land was less than $10,000 until 2001. The 2004 assessment was $56,900, an almost 600% valuation increase in three years. He did not believe the change was supported by a similar increase in property valuation. [County Board Record, Hearing Tape].
19. Hoelzen told the County Board last year his land had income of $2,800 from the sale of 17 tons of hay, the lease of pasture, and the sale of minnows from the property. His income was $2,300 without the sale of minnows. He conceded the State Board had disallowed minnow production as an agricultural product. [County Board Record, Hearing Tape]. See Chuck Hoelzen, ¶ 30, Docket No. 2005-91, July 14, 2006, 2006 WL 3327965 (Wyo. St. Bd. Eq.).
20. Taxpayer presented the County Board an undated, unsworn statement from Roger Smith reciting that “I have colts for sale now and have sold colts bread (sic) from stock pastured on Mr. Hoelzen’s land for well in excess of $1000.” [County Board Record, p. 5]. Mr. Smith was not called to testify and his statement did not address when he sold colts or the nature of his horse activities.
21. Hoelzen told the County Board his lease income last year from the land was over $1,000. [County Board Record, Hearing Tape]. Mr. Smith’s statement does not state what he paid for the lease of Taxpayer’s land. [County Board Record, p. 5]. Taxpayer did not introduce the lease or any other written evidence of the lease payment.
22. Hoelzen did not present exhibits to the County Board supporting his claimed 2005 hay sales; nor did Taxpayer offer his IRS Schedule F, Profit or Loss from Farming to support his income claims.
23. Hoelzen expressed his opinion that his land met all the requirements Wyo. Stat. Ann. § 39-13-103(b)(x)(B). He said his land is presently used for agricultural production. It is not part of a platted subdivision. He expressed his opinion that his income in 2005 and in past years was consistent with the production capacity of the land. Taxpayer stated he almost doubled the maximum capacity of hay in 2005. [County Board Record, Hearing Tape].
24. Taxpayer requested the County Board overrule the Assessor’s 2006 valuation and use a taxable valuation of $5,175. He told the County Board it was his understanding the assessed valuation should be based on five years’ average income. After the Assessor explained valuation was based on formulas set in the Department Rules, Taxpayer conceded he did not understand the formulae used in assessing valuation and the $5,175 may be an erroneous calculation on his part. [County Board Record, Hearing Tape].
25. The Hearing Officer asked the Taxpayer if he wanted to submit any supporting information into the record. Taxpayer testified he could enter into the record the University of Wyoming Cooperative Extension report and the Nebraska report. Taxpayer, however, only offered copies of reports to the Assessor. He did not enter them into the record. Taxpayer testified he would like to enter into the record just the document numbers so, if the appeal goes further, the documents could be obtained readily on line. [County Board Record, Hearing Tape].
26. In conclusion Hoelzen told the County Board his position was fairly straightforward. There was a need to base the production on actual land capacity, not just a rule book that says the land can yield a certain amount. [County Board Record, Hearing Tape].
27. Eileen Oakley testified she was the Fremont County Assessor, and was certified as a tax appraiser by the Department. [County Board Record, Hearing Tape].
28. The Assessor informed the County Board the only item being appealed was the land which she valued at $56,850. She arrived at the assessed value using the Computer Assisted Mass Appraisal system (CAMA) authorized by the Department pursuant to statute. [County Board Record, Exhibit A, p.6; Hearing Tape].
29. The Assessor testified that to qualify for agricultural classification the property must meet the conditions of the statutes and rules which govern agricultural value as are outlined in the Wyoming Statutes and Chapter 10 of the Department’s Rules.
30. The first qualification is the land being used and employed for an agricultural purpose. The Assessor must also consider that certain activities which appear to be agricultural in nature do not by themselves qualify the land for agricultural assessment. She told the County Board she must consider all the requirements, not just the appearance of the land. [County Board Record, Hearing Tape].
31. The Assessor told the County Board Taxpayer’s land is not part of a platted subdivision, is larger than 35 acres and would not be required to be subdivided today. [County Board Record, Hearing Tape].
32. The Assessor told the County Board the third qualification for agricultural status is that the owner derive not less than $500 from the marketing of agricultural products. The Assessor noted Mr. Hoelzen’s protest letter stated he made $2,800. The Assessor informed the County Board that there was no supporting documentation accompanying the letter. Taxpayer did not supply any information to verify agricultural income for the 2005 production year prior to the hearing. [County Board Record, Statement To Contest 2006 Property Assessment, p. 1; Hearing Tape].
33. The Assessor testified she sends agricultural affidavits to all persons seeking agricultural status. At the time of her assessment of Taxpayer’s property in May, 2006, she did not have any information from the Taxpayer supporting agricultural classification for his land. [County Board Record, Hearing Tape].
34. She informed the County Board she subsequently received a notarized agricultural affidavit from the Taxpayer on July 5, 2006. She reported Taxpayer’s affidavit indicated he received $520 from hay sales and $1,800 from the Smith pasture lease but did not include any substantiating information. [County Board Record, Hearing Tape].
35. In assessing Taxpayer’s property, the Assessor considered the Taxpayer’s lease with Roger Smith presented during the previous year’s appeal. She informed the County Board the lease expired in January, 2006. The Assessor stated she had written to Mr. Smith asking for verification of his status as an agricultural producer making over $1,000 from the property being leased. The Assessor did not receive a reply from Mr. Smith.
36. The Assessor stated that selling horses may not qualify as an agricultural operation. The Assessor informed the County Board that Chapter 10 of the Department’s Rules state grazing on land by any animal kept as a hobby will not be considered agricultural unless accompanied by other agricultural activities which would produce a monetary incentive, and which are consistent with the land’s capability to produce. [County Board Record, Hearing Tape].
37. The Assessor revised the quantitative analysis she performed for the Taxpayer’s 2005 appeal to determine whether the Taxpayer used his land consistent with the land’s capability to produce. [County Board Record, Hearing Tape]. The Assessor used the Riverton Area Soil Survey and the soil type of Taxpayer’s property to determine the production capacity. Because Hoelzen’s property is heavily alkali, the Assessor revised her production capability calculation for Taxpayer’s property calculation downward and determined Taxpayer’s property was capable of producing between $2,500 and $5,000 in income. [County Board Record, Hearing Tape].
38. The Assessor told the County Board approximately half of the Taxpayer’s property would not qualify for agricultural classification because of the Wildlife Agreement between the Taxpayer and the U. S. Fish and Wildlife Service. The agreement provided “[t]he Cooperator agrees not to allow any agricultural use of the tract such as livestock grazing or haying unless included as part of this or an amended agreement” and there were no amendments. The Assessor told the County Board an area somewhere between the 23.8 acres covered by the agreement and the 31 acres identified by the Taxpayer as wetlands would not qualify as agricultural because of the use restriction. [County Board Record, Hearing Tape].
39. The Assessor explained to the County Board that because Taxpayer’s land was not an ideal home building site, she assessed only one acre at a primary market value for home building sites of $23,500. [County Board Record, Hearing Tape].
40. The Assessor valued the remainder of Taxpayer’s land as residential at a market value of $500 per acre. In effect the Assessor placed a minus 50% adjustment on the Taxpayer’s land based on its characteristics. Vacant land in the surrounding neighborhood was assessed at a market value of $1,000 per acre. [County Board Record, Hearing Tape].
41. The Assessor testified she did not have enough information from the Taxpayer to consider classifying the land as agricultural and could not classify 23 acres as agricultural because the Wildlife Agreement prohibited agricultural use of that portion of the land. Unless the land qualifies for agricultural classification, she is required to value the land at market value. [County Board Record, Hearing Tape].
42. In conclusion, the Assessor told the County Board she was unable to verify the amounts claimed as income by Mr. Smith or Taxpayer necessary to qualify for agricultural classification. [County Board Record, Hearing Tape].
43. We find the County Board’s findings of fact to be consistent with the testimony and evidence presented at the County Board hearing and supported by substantial evidence in the record.
DISCUSSION OF ISSUES AND APPLICABLE LAW
44. The issue raised by the Taxpayer at the County Board hearing was the Assessor’s denial of agricultural classification for his land.
45. The Wyoming Constitution article 15, §11(b) provides in pertinent part: “[a]ll taxable property shall be valued at its full value as defined by the legislature except agricultural and grazing lands which shall be valued according to the capability of the land to produce agricultural products under normal conditions.”
46. The classification of land as agricultural requires fulfilment of four statutory requirements:
(x) The following shall apply to agricultural land:
(A) The department shall determine the taxable value of agricultural land and prescribe the form of the sworn statement to be used by the property owner to declare that the property meets the requirements of subparagraph (B) of this paragraph. In determining the taxable value for assessment purposes under this paragraph, the value of agricultural land shall be based on the current use of the land, and the capability of the land to produce agricultural products, including grazing and forage, based on average yields of lands of the same classification under normal conditions;
(B) Contiguous or noncontiguous parcels of land under one (1) operation owned or leased shall qualify for classification as agricultural land if the land meets each of the following qualifications:
(I) The land is presently being used and employed for an agricultural purpose;
(II) The land is not part of a platted subdivision;
(III) If the land is not leased land, the owner of the land has derived annual gross revenues of not less than five hundred dollars ($500.00) from the marketing of agricultural products, or if the land is leased land the lessee has derived annual gross revenues of not less than one thousand dollars ($1,000.00) from the marketing of agricultural products; and
(IV) The land has been used or employed, consistent with the land's size, location and capability to produce as defined by department rules and the mapping and agricultural manual published by the department, primarily in an agricultural operation, or the land does not meet this requirement and the requirement of subdivision (III) of this subparagraph because the producer:
(1) Experiences an intervening cause of production failure beyond its control;
(2) Causes a marketing delay for economic advantage;
(3) Participates in a bona fide conservation program, in which case proof by an affidavit showing qualification in a previous year shall suffice; or
(4) Has planted a crop that will not yield an income in the tax year.
(C)If needed, the county assessor may require the producer to provide a sworn affidavit affirming that the land meets the requirements of this paragraph. When deemed necessary, the county assessor may further require supporting documentation.
Wyo. Stat. Ann. § 39-13-103(b)(x) (emphasis added).
47. The first statutory requirement to qualify for agricultural valuation is the present use and employment of the land for an agricultural purpose. Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(I). “Agricultural purpose” is defined by statute:
“Agricultural purpose,” as used in W.S. 39-13-103(b)(x), means the following land uses when conducted consistent with the land's capability to produce:
(A) Cultivation of the soil for production of crops; or
(B) Production of timber products or grasses for forage; or
(C) Rearing, feeding, grazing or management of livestock.
Wyo. Stat. Ann. § 39-13-101(a)(viii).
48. 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, except as provided by law for specific property, 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). A county assessor has a corresponding duty to annually value property within the assessor’s county, and in doing so 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).
49. The Department’s Rules specifically adopt and approve the use of CAMA systems by the county assessor to value taxable property. Rules, Wyoming Department of Revenue, Chapter 9 §§ 6, 6(d).
50. The Department Rules define “agricultural land,” and include certain other limitations on the classification of lands as agricultural:
(a) “Agricultural land” means contiguous or noncontiguous parcels of land presently being used and employed for the primary purpose of providing gross revenue from agricultural or horticultural use or any combination thereof unless part of a platted subdivision. Agricultural land shall generally include land that is actively farmed, ranched or is used to raise timber for timber products to obtain a fair rate of return.
(i) “Agricultural” means cultivation of the soil, the production of forage or crops, production of timber products; or the rearing, feeding, or management of livestock in domestic or captive environments consistent with the land’s capability to produce.
(ii) “Primary purpose of obtaining a monetary incentive” means…for leased land, the lessee has derived annual gross revenues of not less than one thousand dollars ($1,000.00) from marketing of agricultural products when conducted consistent with the lands capability to produce….
* * *
(B) The assessor shall also consider that certain activities which appear to be agricultural in nature do not by themselves qualify land for agricultural assessment. The activity, by itself, either does not raise the expectation of monetary incentive consistent with the capability of the land to produce or occurs after the agricultural product has been raised and harvested.
* * *
(II) Grazing on land by any animal kept as a hobby will not be considered agricultural unless accompanied by other agricultural activities, which would produce a monetary incentive and are consistent with the land’s capability to produce.
Rules, Wyoming Department of Revenue, Chapter 10, §§ 3(a), 3(a)(i), 3(a)(ii), 3(a)(ii)(B), 3(a)(ii)(B)(II).
51. The Department Rules also contain a definition of “non-agricultural lands:”
(c) "Non-agricultural lands" shall include but not be limited to lands as described in the State of Wyoming market valuation of Residential, Commercial and Industrial Lands as published by the Department of Revenue, Ad Valorem Tax Division:
(i) Lands classified within neighborhood boundaries as residential, commercial, industrial or rural, whether vacant or improved;
* * *
(iii) Residential subdivision lands developed with either predetermined floor plans and elevations or custom buildings;
(iv) Farmsteads with lands occupied by buildings which constitute the homesite including one or more acres of land used in direct connection with the homesite;
* * *
(x) Parcels of land forty (40) acres or less unless the landowner provides proof that such land should otherwise be classified as agricultural land.
Rules, Wyoming Department of Revenue, Chapter 10, § 3(c).
52. The Department Rules also contain a provision addressing conservation plans:
(y) “Bona fide conservation plan” means governmentally approved programs or written recommendations or plans implemented for the conservation of agricultural land or soil. This includes lands enrolled in the Conservation Reserve Program (CRP). The land must have been classified as agricultural land prior to entering any program. Conservation programs that are designed to conserve and protect wetlands and wildlife habitat are not for the purpose of conserving agricultural land and soil. As such, conservation programs that are designed to conserve and protect wetlands and wildlife habitat do not qualify or disqualify the land from the agricultural classification; all other factors must be considered pursuant to Chapter 10, Section 3 of these rules.
Rules, Wyoming Department of Revenue, Chapter 11 § 3(y).
53. Administrative rules have the force and effect of law. Wyo. Dep’t of Revenue v. Union Pacific Railroad Co., 2003 WY 54, ¶ 18, 67 P.3d 1176, 1184 (Wyo. 2003); Painter v. Abels, 998 P.2d 931, 939 (Wyo. 2000).
54. With regard to appeals of property tax matters, the Wyoming Supreme Court has stated:
The Department’s valuations for state-assessed property are presumed valid, accurate, and correct. This presumption can only be overcome by credible evidence to the contrary. In the absence of evidence to the contrary, we presume that the officials charged with establishing value exercised honest judgement 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.
The petitioner has the initial burden to present sufficient credible evidence to overcome the presumption, and a mere difference of opinion as to value is not sufficient. If the petitioner successfully overcomes the presumption, then the Board is required to equally weigh the evidence of all parties and measure it against the appropriate burden of proof. Once the presumption is successfully overcome, the burden of going forward shifts to the DOR to defend its valuation. The petitioner, however, by challenging the valuation, bears 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 state-assessed property….
Colorado Interstate Gas Company v. Wyoming Department of Revenue, 2001 WY 34, ¶¶ 9-11, 20 P.3d 528, ¶¶ 9-11 (Wyo. 2001) (citations omitted).
Airtouch Communications, Inc. v. Dep’t of Revenue, 2003 WY 114, ¶ 12, 76 P.3d 342, 348 (Wyo. 2003).
Thunder Basin Coal Co. v. Campbell County, Wyoming Assessor, 2006 WY 44, ¶ 13, 132 P.3d 801, 806 (Wyo. 2006). This presumption applies equally to an assessor’s valuation of locally assessed property. Id. at 806 n.1.
A. Present Use for Agricultural Purpose
55. The first statutory requirement to qualify for agricultural valuation is the present use and employment of the land for an agricultural purpose. Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(I).
56. The County Board concluded Taxpayer’s sale of minnows was not an agricultural use or purpose based on the State Board opinion. The raising and sale of minnows does not fall within the statutory definition of “agricultural purpose,” Wyo. Stat. Ann. § 39-13-101(a)(viii), nor does it fall under the definitions of “agricultural lands” or “agricultural” in the Department’s Rules. Rules, Wyoming Department of Revenue, Chapter 10, §§ 3(a), 3(a)(i). Chuck Hoelzen, ¶ 25, Docket No. 2005-91, July 14, 2006, 2006 WL 3327965 (Wyo. St. Bd. Eq.).
57. The production of hay for sale is an agricultural purpose and the County Board correctly concluded the Taxpayer met the first requirement of Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(I).
B. Not Part of Platted Subdivision
58. The second requirement to qualify for agricultural classification is that the owner’s land not be part of a platted subdivision. Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(II). The Taxpayer’s parcel is greater than 35 acres and would not require a subdivision to create. The Assessor did not dispute that the Taxpayer met this requirement. [County Board Record, Finding of Fact ¶ 5b, p. 12].
C. Minimum Annual Gross Revenues
59. The third requirement to qualify for agricultural valuation is that the owner establish the statutory minimum gross revenues were derived from agricultural use of the property. Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(III). The County Board correctly concluded that the sale of minnows did not qualify as agricultural revenue and does not count toward meeting this test. Nor did the Taxpayer present credible evidence he derived $500 from gross sales of hay. The Taxpayer failed to carry his burden on this point. [County Board Record, Finding of Fact ¶ 5c. p. 12].
60. We are unable to determine whether the Taxpayer’s claimed principal agricultural purpose of grazing qualifies as agricultural because the grazing was conducted by a lessee. Under the Department’s Rules, lessee qualification is incorporated into the agricultural purpose test.
61. The record is devoid of any evidence establishing the Taxpayer’s lessee “derived annual gross revenues of not less than one thousand dollars ($1,000.00) from marketing of agricultural products when conducted consistent with the lands capability to produce.” Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(III). The signed statement of Roger Smith stating that Smith produced “well in excess of $1,000" does not meet this statutory requirement because there was no supporting documentation or credible evidence as to when the Smith’s sale of horses occurred. Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(III).
62. In addition, the revenue from the lease with Smith cannot fulfill the statutory requirement if Smith, as lessee, used the leased land to graze animals kept as a hobby. Taxpayer, as lessor, failed to address this requirement of the Department’s Rules. Rules, Wyoming Department of Revenue, Chapter 10 § 3(a)(ii)(B)(II).
63. The County Board concluded the Smith statement was not dated, did not describe with specificity the revenue generated and, therefore, was unreliable. We agree with the Findings of Facts of the County Board.
64. The County Board further found the Taxpayer did not provide any documentation supporting the $2,300 income. Taxpayer did not provide receipts or other documentation to establish he derived $500 in gross revenues or his lessee derived $1,000 in gross revenues. Taxpayer did not provide invoices for sale of hay or other agriculture products for production year 2005.
65. The Taxpayer claimed to have sold hay in 2006 in order to prove his land produced the benchmark agricultural gross income required in 2005 to qualify for agricultural classification. The Assessor declined to accept the claimed income in part due to the lack of supporting documentation which an assessor may statutorily require:
If needed, the county assessor may require the producer to provide a sworn affidavit affirming that the land meets the requirements of this paragraph. When deemed necessary, the county assessor may further require supporting documentation.
Wyo. Stat. Ann § 34-13-103(b)(x)(C).
66. The County Board considered Taxpayer’s evidence concerning participation in a bona fide conservation program. Pursuant to Wyo. Stat Ann. § 39-13-103(b)(x)(B)(III)(3), a producer may provide an affidavit showing the land qualified for agricultural valuation in a previous year to qualify for agricultural valuation. The County Board found Taxpayer’s testimony that an Army Corps of Engineers survey considered 31.67 acres of his land as natural wetland insufficient to establish Taxpayer was participating in a bona fide conservation program. We find no error with the conclusion of the County Board.
D. Use Consistent With Size, Location and Capability to Produce Primarily in an Agricultural Operation
67. The Taxpayer disputed the Assessor’s calculation of the minimum expected revenue from hay production, claiming 3 to 4 tons of hay per acre could not be produced on his property. At the County Board hearing he used information represented to be from the Rocky Mountain Agronomy Center, a University of Nebraska publication, and a University of Wyoming Extension Service publication to support his claim of 1.2 tons of grass hay as the maximum amount which could be produced on his land. Supra ¶¶ 15-17. No testimony was offered with respect to the matters purportedly addressed by his conversation with the Rocky Mountain Agronomy Center or by the two reports, nor were either of the reports offered as evidence. When the Hearing Officer specifically asked Taxpayer if he wanted the reports entered as evidence, he declined.
68. The Assessor is statutorily required to use of Department’s mapping and agricultural manual. Wyo. Stat. Ann. § 39-13-103(b)(x)(A). This requirement must be used uniformly for all agricultural classification as we have described in other cases arising from Fremont County. E.g., Fremont County Assessor (Dechert Property), Docket No. 2004-125, February 4, 2005, 2005 WL 301141 (Wyo. St. Bd. Eq.).
69. The County Board concluded the Taxpayer failed to meet the third qualification for agricultural classification under Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(III), thus discussion of the fourth qualification (the use of the land consistent with the size, location and capability to produce primarily in an agricultural operation) was moot and not necessary. We concur with the County Board’s assessment.
70. The burden in this case was on the Taxpayer to present sufficient credible evidence to overcome the presumption in favor of the Assessor. Supra ¶ 54. The County Board found the Taxpayer had failed to meet that burden, primarily due to the Taxpayer’s failure to provide relevant documentation to support his claims. No hay sale invoices, lease agreements, tax return schedules or other information were provided to the County Board at the hearing. The absence of this type of information which could only be provided by the Taxpayer fully supports the decision of the County Board.
71. Taxpayer presented information to the County Board concerning the use of a portion of his property as waterfowl habitat. Supra ¶ 9-10. This use of his land neither qualified or disqualified the land from being classified as agricultural. The Taxpayer remained obligated to establish that the use of his land met the statutory requirements of Wyo. Stat. Ann. § 39-13-103(b)(x). Rules, Wyoming Department of Revenue, Chapter 11 § 3(y), supra ¶ 52.
72. All taxable property in Wyoming is to be listed, valued at its fair market value, and assessed as of January 1st of each year. Wyo. Stat. Ann. §§ 39-13-103(b)(i)(A) & (b)(ii). In determining whether agricultural land classification should be allowed, Wyo. Stat. Ann. §39-13-103(b)(x)(B)(III) specifically requires consideration of “annual gross revenues,” while Wyo. Stat. Ann. §§ 39-13-103(x)(B)(I) & (b)(x)(B)(IV), under the Assessors benchmark revenue calculations, also requires consideration of income. With an assessment date of January 1st each year, the only logical statutory focus for determining qualifying income is that which was earned in the year preceding January 1st. There is no statutory basis or authority for an Assessor to attribute revenues received after January 1st to the year prior to January 1st in order to determine fulfillment of the annual gross revenue requirement.
73. There are four exceptions to the requirement that a taxpayer’s land be used consistent with the land’s capability to produce in any given year: (1) production failure, (2) marketing delay, (3) conservation participation, or (4) crop choice. Each of these exceptions describe something that occurred, or a decision that was made prior to the statutory January 1st valuation date. Wyo. Stat. Ann. § 39-13-103(b)(x)(B)(IV)(1) through (4). Any claim that the fourth statutory requirement for agricultural classification was not met due to one of the statutory exceptions will by necessity have been established prior to the assessment date. Evidence of sales in a subsequent year is not material to a determination of whether a taxpayer established the use of the land consistent with the land’s capability to produce in the prior year.
74. If hay were raised in 2005 but not sold until 2006, income from the sale could not count toward the qualifying for agricultural status in 2005. Rather the effect of the marketing decision would be to reduce the necessity of showing the required income for 2005. There was no evidence presented of a marketing decision made in 2005 by the Taxpayer.
75. The “exception” set out by Wyo. Stat. Ann. § 39-13-102(b)(x)(B)(IV)(2) to fulfillment of the gross revenue requirements addresses a marketing decision by a legitimate agricultural producer to gain an economic advantage, i.e. earn more income. This exception clearly provides no authority or basis for reallocating income from a subsequent year to a prior year in order to meet a gross revenue requirement.
76. The ultimate burden of persuasion rested with the Taxpayer and had to be met at the County Board hearing. It was incumbent on the Taxpayer to present all relevant evidence available at the County Board hearing. A Taxpayer may not supplement the record at a later time, and deprive the County Board of the opportunity of considering the evidence in the first instance without specific application to the State Board according to its rules. See Rules, Wyoming State Board of Equalization, Chapter 3 § 8.
77. We conclude there was substantial evidence to support the determination of the County Board affirming the Assessor’s decision to deny agricultural classification of Taxpayer’s land, and the County Board’s decision was not otherwise arbitrary, capricious, or contrary to law.
IT IS THEREFORE HEREBY ORDERED the decision of Fremont County Board of Equalization upholding the Assessor’s 2006 valuation of Taxpayer’s land 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 March, 2007.
STATE BOARD OF EQUALIZATION
Alan B. Minier, Chairman
Thomas R. Satterfield, Vice-Chairman
Thomas D. Roberts, Board Member
Wendy J. Soto, Executive Secretary