BEFORE THE STATE BOARD OF EQUALIZATION

FOR THE STATE OF WYOMING

IN THE MATTER OF THE APPEAL OF )

CENTRAL WYOMING COLLEGE FROM )

A DECISION OF THE FREMONT COUNTY ) Docket No. 2008-01

BOARD OF EQUALIZATION - 2007 )

PROPERTY VALUATION )

DECISION AND ORDER

APPEARANCES

Frank B. Watkins, for Fremont County Community College District, Central Wyoming College (CWC or Taxpayer).

Jodi A. Darrough, Deputy Fremont County Attorney, for Eileen Oakley, Fremont County Assessor (Assessor).

DIGEST

Fremont County Community College District, generally known as Central Wyoming College (CWC), appealed a Fremont County Board of Equalization (County Board) decision affirming both the Assessor’s denial of exempt status for a number of lots in the CWC Technical Research Park a/k/a Business Park (Research Park), and the fair market value assigned by the Assessor to those lots. 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 County Board hearing record, the County Board decision, and the parties’ briefs. The State Board heard oral argument on May 20, 2008.

We evaluate Taxpayer’s claims against our standard of review, which is whether the ruling of the County Board was arbitrary, capricious, unsupported by substantial evidence, and/or contrary to law. Rules, Wyoming State Board of Equalization, Chapter 3, § 9.

PROCEEDINGS BEFORE THE COUNTY BOARD

The County Board conducted a hearing on October 9, 2007, and thereafter entered a Decision of the Fremont County Board of Equalization on December 4, 2007. The Decision affirmed both the Assessor’s denial of exempt status for specified lots in the Research Park, and the fair market value placed by the Assessor on those lots.

JURISDICTION

The State Board is required to “hear appeals from county boards of equalization.” Wyo. Stat. Ann. § 39-11-102.1(c). On January 4, 2008, the Taxpayer filed a timely appeal of the County Board decision with the State Board. Rules, Wyoming State Board of Equalization, Chapter 3, § 2. The State Board has jurisdiction to consider this matter.

STANDARD OF REVIEW

When the State Board hears appeals from a County 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 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 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;

(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. [citations omitted].

Clark v. State ex rel. Wyoming Workers’ Safety and Compensation Division, 934 P.2d 1269, 1272 (Wyo. 1997). See also, Thunder Basin Coal Company v. Campbell County, Wyoming Assessor, 2006 WY 44, ¶ 12, 132 P.3d 801, 806 (Wyo. 2006).

We review the findings of ultimate fact of a county board of equalization de novo:

“When an agency’s determinations contain elements of law and fact, we do not treat them with the deference we reserve for findings of basic fact. When reviewing an ‘ultimate fact,’ we separate the factual and legal aspects of the finding to determine whether the correct rule of law has been properly applied to the facts. We do not defer to the agency’s ultimate factual finding if there is an error in either stating or applying the law.”

Basin Elec. Power Co-op., Inc. v. Dep’t of Revenue, State of Wyo., 970 P.2d 841, 850-51 (Wyo. 1998)(citations omitted).

Britt v. Fremont County Assessor, 2006 WY 10, ¶ 17, 126 P.3d 117, 123 (Wyo. 2006).

We must also apply this “arbitrary and capricious” standard:

Even if sufficient evidence is found to support the agency’s decision under the substantial evidence test, this [Board] is also required to apply the arbitrary-and-capricious standard as a “safety net” to catch other agency action which might have violated the Wyoming Administrative Procedures Act. Decker v. Wyoming Medical Comm’n, 2005 WY 160, ¶ 24, 124 P.3d 686, 694 (Wyo. 2005). “Under the umbrella of arbitrary and capricious actions would fall potential mistakes such as inconsistent or incomplete findings of fact or any violation of due process.” Id. (quoting Padilla v. State ex rel. Wyoming Workers’ Safety and Comp. Div., 2004 WY 10, ¶ 6, 84 P.3d 960, 962 (Wyo. 2004)).

State ex rel. Wyoming Workers’ Safety and Comp. Div. v. Madeley, 2006 WY 63, ¶ 8, 134 P.3d 281, 284 (Wyo. 2006).

ISSUES

The Taxpayer, under the State Board’s standards of review, must establish the County Board decision affirming the Assessor’s denial of exempt status for specified lots in the Research Park, and affirming the fair market value placed by the Assessor on those lots for 2007 tax purposes, was not supported by substantial evidence and/or was arbitrary, capricious, or contrary to law. The Taxpayer identified the following issues for review:

A. Is the CWC Campus Business Park real property exempt from taxation?

B. Is Assessor’s taxation of the Campus Business Park equal and uniform?

C. Did the Fremont County Assessor err in the valuation of the CWC Campus Business Park managed by the Central Wyoming College Foundation?

[Opening Brief of Appellant Fremont County Community College District, d/b/a Central Wyoming College, p. 6].

We will examine Taxpayer’s contentions within the framework of our standard of review and Wyo. Stat. Ann. § 39-11-105, which sets out the requirements for exemption from taxation.

FACTS PRESENTED TO THE COUNTY BOARD

1. The Fremont County Community College District, Central Wyoming College (CWC) owns, and has been assessed, for real property in the vicinity of the college which is platted as the CWC Technical Research Park. The parcels at issue for which the Assessor denied exempt status are Lots 1, 3, 5, 7, 8, 9, and 15, CWC Technical Research Park; Lot 2, CWC Technical Research Park, Second Addition; and Lot 2, CWC Technical Research Park, Third Addition. The assessment and valuation of any improvements on each parcel is not an issue. [County Board Record, Vol. I, pp. 91-92; Exhibits E1-E28 and H1-H3].

2. Each of the parcels is subject to one of three property lease agreements as well as a Management Lease Agreement between CWC and the Central Wyoming College Foundation (Foundation), formerly known as the Central Wyoming Community College Foundation. The expiration of the initial term of each lease was extended to December 31, 2096, by amendment recorded May 26, 2006. [County Board Record, Exhibits F1, F2, F3, F4, F5].

3. Each of the three property leases, in essence, provided:

2.That Lessee, in consideration of the aforementioned lease, agrees to pay all expenses incurred in improving said property, including but not limited to, the construction and maintenance of roads, extension of utilities, including water and sewer facilities.

Lessee further agrees to assume all costs and expenses incurred in the management and supervision of said premises, including, but not limited to, the costs of accounting, record keeping, attorney fees and all other expenses incurred in the negotiation(s), preparation(s) and execution of leases to third parties.

3.Lessee further agrees that any residue income it receives from the improvement and management of said property shall be used for the benefit of Central Wyoming College as stated in the purposes of the Foundation.

[County Board Record, Exhibits F2, F3, F4].

4. The Management Lease Agreement contained essentially the same language except “Foundation” was used rather than “Lessee.” [County Board Record, Exhibit F5].

5. The Foundation in turn leased each of the parcels to the businesses indicated:

CWC Technical Research Park

Lot 1 - Community Entry Services

Lot 3 - Sparky Olson

Lot 5 - Wind River Development

Lot 7 - HI Mountain Jerky

Lot 8 - Sparky Olson

Lot 9 - Small World Daycare & Black Acre

Lot 15 - FF Investments

CWC Technical Research Park, Second Addition

Lot 2 - Two Day Corporation

CWC Technical Research Park, Third Addition

Lot 2 - Idea Corporation (leased to Brunton).

[County Board Record, Exhibits A, E3, E6, E9, E12, E15, E18, E19, E22, E25, E28, H2, H3].

6. The Assessor initially informed a representative of the Foundation of her conclusion the parcels were not entitled to exempt status by letter dated February 28, 2007. [County Board Record, Exhibit I1]. The Foundation responded in writing by letters dated March 19, 2007, and May 1, 2007, setting forth its argument why the properties should be exempt. [County Board Record, Exhibits H2, H3].

7. The Assessor issued a 2007 Notice of Assessment establishing a fair market value and assessed value for each of the parcels at issue on April 25, 2007. [County Board Record, Exhibits E1, E4, E7, E10, E13, E16, E20, E23, E26]. CWC challenged both the denial of exemption and the fair market value of each property by Statements of Contest dated May 24, 2007, and May 25, 2007. The valuation of the improvements on each property was not challenged. [County Board Record, Vol. I, pp. 1-26; Transcript, p. 12].

8. Eileen Oakley testified she was the Fremont County Assessor, and certified as a Wyoming property tax appraiser. [County Board Record, Transcript, p. 12].

9. The Assessor testified to her understanding all property in Wyoming is taxable unless specifically exempt. She cited the Wyoming Constitution, article 15, § 12, as the constitutional basis for exempting property. She further stated the statute she used to determine if the property at issue was taxable or exempt was Wyo. Stat. Ann. § 39-11-105, in particular § 39-11-105(a)(xxv) addressing “schools,” and § 39-11-105(a)(xxvi) addressing charitable associations. She stated her belief the Foundation would qualify as a charitable association. [County Board Record, Transcript, pp. 12-13].

10. The Assessor also testified that in making a determination on the taxability of the properties at issue, she reviewed the Rules of the Wyoming Department of Revenue, Chapter 14, in particular §§ 2(c), 4(a), 4(b), 10(d), 11(b), 11(d), and 14(e), which address exempt properties. She stated she considered both the ownership and use elements discussed by the Department Rules. [County Board Record, Transcript, pp. 12-16; Exhibit C].

11. The Assessor asserted all of the lots at issue were being used by the lessees from the Foundation for private profit, and therefore the real property, even if owned by CWC, could not be exempt. She argued this conclusion was reinforced by an advertising flyer issued by the Foundation showing the availability of lots in the Research Park. [County Board Record, Transcript, pp. 17-19; Exhibit A, p. 4, Exhibit G].

12. The Assessor stated she was not assessing lots in the Research Park which were not being leased to private businesses. [County Board Record, Transcript, p. 18; Exhibit H2].

13. The Assessor testified the issue of the taxability of the lots in question first arose in 2006 while her office was working on the plat for the CWC Technical Research Park, Third Addition. The Assessor realized at that point the lots were being leased and used commercially, and assessed the lots for 2006. Neither CWC nor the Foundation questioned the taxability of the lots until receiving the tax notices in October, 2006, by which time the period for challenging the valuation and lack of exemption had expired. The Foundation questioned why the lots in the Third Addition were being assessed while lots in the rest of the Research Park were not. [County Board Record, Transcript, pp. 18-19; Exhibit A].

14. The Assessor stated that in 2007 her office reviewed all of the lots in the entire Research Park, and assessed all those being used commercially. The Assessor did not assess those lots which were not being used for commercial purposes. She communicated her conclusions to Joe Geraud, CWC Foundation President, by letter dated February 28, 2007. [County Board Record, Transcript, pp. 18-19; Exhibit I1].

15. The Foundation, by letter dated March 19, 2007, responded to the Assessor’s letter of February 28. The Foundation indicated the more recent Foundation leases to commercial entities provided the lessee was to pay all taxes which may be assessed. The older leases only require the lessee to pay taxes assessed on their improvements. [County Board Record, Transcript, pp. 18-19; Exhibit I2].

16. The Assessor argued the provision in the more recent leases indicated to her the Foundation may have believed the lots were not exempt. [County Board Record, Transcript, p. 19].

17. With regard to valuation, the Assessor testified at least some of the lots were assessed in 2006. She valued and assessed all commercial lots in 2007 at $30,000 per acre for the first ten acres, and $10,000 for each additional acre. She stated these values are equivalent to $0.68/sq. ft for the first ten acres and $0.23/sq. ft. for any additional acreage, and other commercial property in the same neighborhood as the Research Park was also being valued on the same basis. [County Board Record, Transcript, pp. 19-20; Exhibits J, K, pp. 1-2].

18. The Assessor testified the commercial property along Main Street in Riverton was valued in 2007 at $4.12/sq. ft; the area north of Main Street to Pershing was valued at $4.00/sq. ft; and the north Federal area in the vicinity of Wal-Mart was valued at $5.00/sq. ft. [County Board Record, Transcript, pp. 20-21; Exhibits K, pp. 3-8].

19. The Assessor also testified to a number of commercial land sales in Riverton in 2005 and 2006, all of which were parcels smaller than the lots at issue. She stated there had not been any large acreage sales in 2005 and 2006. [County Board Record, Transcript, p. 21; Exhibits M, N].

20. The Assessor asserted the information she reviewed on comparable sales justified and supported the value of $30,000 per acre for the first ten acres placed on the lots in the Research Park. [County Board Record, Transcript, pp. 21-22].

21. The Assessor, in response to a question from counsel for CWC, testified she was not aware of any “non-typical conditions” which required consideration in valuing the lots at issue. She also stated the fact the lots were subject to a long-term lease between CWC and the Foundation, and the fact CWC was to receive the “residue income” from the Foundation did not affect the value of those lots for tax purposes. The Assessor’s position was that the market value of the lots was not affected by the long-term lease. [County Board Record, Transcript, pp. 24-30].

22. The Assessor testified, in her opinion, there is no question CWC is a school as referenced in Wyo. Stat. Ann. § 39-11-105(a)(xxv). She asserted, however, the lots in question could not be exempt because they were being used for private profit. [County Board Record, Transcript, pp. 30-33].

23. The Assessor stressed she must look to the use of the property when considering the statutory reference to “private profit.” She asserted if the property is used for private profit, even if owned by a school, the property should not be exempt. If the property is used for a commercial purpose, it is taxable. [County Board Record, Transcript, pp. 30-35].

24. The Assessor testified her policy is to assess all property used for a commercial purpose or for private profit, even if owned by a school, a church, or a government entity. [County Board Record, Transcript, pp. 37-38].

25. Jay Nielson, Vice-President of Administrative Services, testified on behalf of CWC. He stated his primary responsibilities were to oversee the financial assets and physical properties of CWC. He testified CWC is funded primarily by state appropriation and the assessment of tuition and fees to students. [County Board Record, Transcript, pp. 44-45].

26. Nielson, in response to questions by CWC counsel, indicated CWC does not generate private profit, does not issue stock, does not distribute any dividends, and is exempt from sales and use tax. [County Board Record, Transcript, p. 45].

27. Nielson testified the main CWC campus contains 193.40 acres, of which the Research Park comprises 50 acres. [County Board Record, Transcript, pp. 45-46; Exhibit 6].

28. Nielson stated that if CWC is required to pay tax on the properties, funding would have to be reallocated from other areas by cutting services or raising student fees, and working with the State for increased funding. [County Board Record, Transcript, pp. 46-47].

29. Nielson stated CWC looks to the Foundation to help raise money, and in some instances purchase property for CWC operations. Nielson also stated it was his understanding the Foundation uses the revenue from the Research Park to support CWC scholarships and other CWC funding requests. The funds from the Foundation are not used for operational expenses of CWC. [County Board Record, Transcript, pp. 47-48, 51].

30. Nielson also testified the CWC administration does not actively participate in the management of the Research Park. The active management is handled by the Foundation. [County Board Record, Transcript, pp. 48-49].

31. Dr. JoAnne MacFarland, CWC President, testified on behalf of CWC. Dr. MacFarland stated she had been president of CWC for nearly nineteen (19) years. She stated CWC was established in 1966, and the Foundation was established in 1967 for the sole purpose of supporting CWC. She indicated a portion of the original CWC property was designated as the Research Park in 1967 with the intent of leasing the Park to support CWC, and to locate businesses near CWC which would enhance the educational aspects of CWC. She stated that CWC has final authority on what businesses or entities locate within the Research Park, and has first right of refusal on any improvements located in the Research Park which are offered for sale. [County Board Record, Transcript, pp. 52-53].

32. Dr. MacFarland stated the Foundation is recognized by statute as the investment and fund-raising entity for CWC, and in fact State funds have been directed to the Foundation. [County Board Record, Transcript, p. 54].

33. Dr. MacFarland stated her opinion the main function of the Research Park is educational. [County Board Record, Transcript, pp. 57-58].

34. In response to a question from counsel for the Assessor, Dr. MacFarland agreed CWC would continue to exist and function even if one or more of the current Lessees from the Foundation failed to renew their leases. [County Board Record, Transcript, pp. 57-58].

35. Joseph R. Geraud, as President of the Foundation, testified on behalf of CWC. He indicated the Foundation is recognized as tax exempt by the IRS under a § 501(c) classification. He stated the persons who lease Research Park lots from the Foundation are required to build their own buildings, subject to certain restrictions imposed by the Foundation, and are required to seek approval from both the Foundation and CWC before any building can be sold or transferred. He also noted neither CWC nor the Foundation had received a tax notice on any of the lots until 2006. [County Board Record, Transcript, pp. 59-68, 73].

36. Geraud also testified the original leases by the Foundation on lots in the Research Park only required the lessee to pay taxes on the improvements. Taxes on the real property were not addressed. The more recent leases require the lessee to pay all taxes assessed, both on the improvements and on the real property. [County Board Record, Transcript, pp. 67-68].

37. Geraud did not know how much of the lease rental payments the Foundation receives for the lots in the Research Park was actually provided to CWC, but estimated it was about $38,000. [County Board Record, Transcript, pp.74, 77-78].

38. Geraud also testified that the “Criteria for the Tenants of the Central Wyoming College Industrial Park” were objectives which, although possibly difficult, the Lessees were expected to fulfill. [County Board Record, Transcript, pp. 75-77; Exhibit 8].

39. Bill Urbigkit, Riverton Director of Public Works and Airport Manager, testified on behalf of CWC. He indicated the personal property located on property which the airport leases to private individuals is taxed, however, the real property is exempt. [County Board Record, Transcript, pp. 78-80].

40. Alan Moore, a certified public accountant and President of the not-for-profit corporation, Idea Inc., testified on behalf of CWC. He stated the financial auditors of CWC believed the Foundation to be such an integral part of CWC that the Foundation has been included within the audited financial statements of CWC. He suggested this was in part based on the fact that if the Foundation should dissolve, all of its assets would be transferred to CWC. [County Board Record, Transcript, pp. 83-84].

41. Mike McDonald testified on behalf of CWC. He stated he has been a real estate appraiser in Fremont County for approximately thirty (30) years. Although he had “never run into” similar leases, he offered his opinion the Research Park is a unique property in Riverton because of its ties to CWC, and because of the 90-year leases between CWC and the Foundation. He also stated his opinion the Research Park real property had no value because of the long-term leases, and the fact that, in his opinion, no one would be willing to buy the property as encumbered by those leases. He argued that with the long term leases in place, you could not arrive at a fair market value for lack of a willing buyer of the property. [County Board Record, Transcript, pp. 88-92].

42. We will refer to certain additional aspects of the record as we consider each of CWC’s issues. E.g., infra, ¶¶ 29, 100, 102, 103.

DISCUSSION OF ISSUES AND APPLICABLE LAW

43. Taxpayer’s Notice of Appeal to the State Board was timely filed on January 4, 2008. The State Board has jurisdiction to hear and determine all issues properly raised pursuant to Wyo. Stat. Ann. § 39-13-109(c).

44. An assessor’s duty to exempt property from ad valorem taxation rests on the state constitution, state statute, and rules promulgated by the Department of Revenue. The Wyoming Constitution, article 15, § 12 provides:

Exemptions from taxation.

The property of the United States, the state, counties, cities, towns, school districts and municipal corporations, when used primarily for a governmental purpose, and public libraries, lots with the buildings thereon used exclusively for religious worship, church parsonages, church schools and public cemeteries, shall be exempt from taxation, and such other property as the legislature may by general law provide.

45. The Wyoming Legislature has enacted a list of thirty-seven types of property exempt from property taxation. During this litigation, the parties or Board members identified four which may apply:

a) The following property is exempt from property taxation:

* * *

(iii) Property owned and used by counties primarily for a governmental purpose;

(iv) Property of a Wyoming school district owned and used primarily for a governmental purpose excluding teacherages;

* * *

(xxv) Property used for schools, orphan asylums or hospitals to the extent they are not used for private profit;

(xxvi) Property used by a secret, benevolent and charitable society or association, including any fraternal organization officially recognized by the University of Wyoming or any community college, and senior citizens centers to the extent it is not used for private profit nor primarily for commercial purposes by the society, association or center, or lessee thereof;

Wyo. Stat. Ann. § 39-11-105(a)(iii), (a)(iv), (a)(xxv) & (a)(xxvi). By the time of the hearing of this matter, CWC was relying on only two subsections, the one pertaining to “property used for schools” and the one pertaining to “property owned and used by counties.” [Record of Oral Argument].

46. 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). A county assessor has a corresponding duty to“[f]aithfully and diligently follow and apply the…formulae of the department of revenue…for the appraisal and assessment of all taxable property.” Wyo. Stat. Ann. § 18-3-204(a)(ix). The Department of Revenue has enacted a chapter of rules entitled, “Ad Valorem Tax Exemption Standards.” Rules, Wyoming Department of Revenue, Chapter 14. 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). However, “[a]n administrative rule or regulation which is not expressly or impliedly authorized by statute is without force and effect if it adds to, changes, modifies, or conflicts with an existing statute. Conversely, a rule or regulation which is expressly or impliedly authorized by the enabling statute will be given force and effect.” [citations omitted]. Diamond B Services, Inc. v. Rhode, 2005 WY 130, ¶ 60, 120 P.3d 1031, 1048 (Wyo. 2005).

A. Exempt Status

47. The Department tax exemption Rules “provide a reference to accepted definitions, procedures and criteria for the exemption from assessment and taxation of real and personal property,” and to serve “as a ready reference to commonly encountered problems.” Rules, Wyoming Department of Revenue, Chapter 14, § 1 (a), (b) (all citations are to the Rules in the form they existed in 2007; the Department changed the numbering of some paragraphs of Chapter 14 in 2008; see fn 1, supra).

48. The Rules establish a presumption which applies in this case:

For publicly owned property the assessor begins with the legal presumption the property is exempt.

Rules, Wyoming Department of Revenue, Chapter 14, § 2(a)(i). A presumption imposes upon the party against whom it is directed the burden of proving that the nonexistence of the presumed fact is more probable than its existence. Wyoming Rules of Evidence, Rule 303(a).

49. Section 2(a)(i) generally echoes established case law arising from the statutory exemption for the “property of Wyoming cities and towns owned and used primarily for a governmental purpose”:

Although under Title 39, taxation of property is generally the rule, the exemptions provided for by § 39-11-105(a)(v) require that we apply the rule that where the established policy of the state is to exempt publicly owned property, the burden is placed on the taxing authority to establish taxability. City of Cheyenne v. Bd. of County Comm’rs of the County of Laramie, 484 P.2d 706, 708-09 (Wyo. 1971). The mere ownership of property by a town does not exempt the property; it must also be used primarily for governmental purposes. Id. at 709. When a town uses the property in a proprietary manner, the property is not exempt from taxation. Town of Pine Bluffs v. State Board of Equalization, 79 Wyo. 262, 288, 333 P.2d 700, 710 (Wyo. 1958). The taxable status of property owned by a governmental entity must be determined as a question of fact by the use made of the property. City of Cheyenne v. Sims, 521 P.2d 1347, 1349 (Wyo. 1974).

In re Deromedi, 2002 WY 69, ¶ 10, 45 P.3d 1150, 1153 (Wyo. 2002); In re Town of Thermopolis, 2002 WY 70, ¶ 13, 45 P.3d 1155, 1160 (Wyo. 2002).

50. This Board has previously concluded:

The Rules describe considerations typically involved in determining whether a property should be exempt:

(i) Ownership of the property;

(ii) Use of the property; and/or

(iii) Type of property.

Rules, Wyoming Department of Revenue, Chapter 14, § 2 (c). We take this to be a summary of the character of the many exemptions, rather than a directive to an assessor. Exemption are typically framed in terms of ownership, e.g., Wyo. Stat. Ann. § 39-11-105(a)(xviii), (xxi), (xxii), (xxxvi), (xxxvii); use of property, e.g., Wyo. Stat. Ann. § 39-11-105(a)(vii), (xx); type of property, e.g., Wyo. Stat. Ann. § 39-11-105(a)(x), (xii), (xv); or some combination of ownership, use, and type, e.g., Wyo. Stat. Ann. § 39-11-105(a)(iii), (iv), (v), (xiv), (xxvii), (xxxv).

Cheyenne LEADS, Inc., Docket No. 2007-52, March 14, 2008, 2008 WL 755826 , ¶ 74 (Wyo. St. Bd. Eq.).

51. The principal exemption at issue in this case is framed in terms of use. Wyo. Stat. Ann. § 39-11-105(a)(xxv) provides an exemption for: “Property used for schools, orphan asylums or hospitals to the extent they are not used for private profit.”

52. The Assessor and CWC agree that CWC is a school for the purposes of Wyo. Stat. Ann. § 39-11-105(a)(xxv). [Record of Oral Argument; see Opening Brief of Appellant, pp. 9-10; see Brief of Respondent, p. 9]. “[O]ur rules of statutory construction focus on discerning the legislature’s intent. In doing so, we begin by making an ‘inquiry respecting the ordinary and obvious meaning of the words employed according to their arrangement and connection.’” Parker Land and Cattle Company v. Wyoming Game and Fish Commission, 845 P.2d 1040, 1042 (Wyo.1993). In its ordinary and obvious meaning, “school” may include colleges and universities. Webster's New World College Dictionary, 4th Edition (2002), definition 1, p. 1140.

53. However, the Assessor is bound by the Department’s Rules, supra, ¶ 46, which elaborate on the requirements of the statute. The section of the Rules entitled “Schools, orphan asylums and hospitals - W.S. 39-11-105(a)(xxv)” provides:

(a) The fundamental basis for this exemption is the benefit conferred upon the public by schools, orphan asylums and hospitals, and the consequent relief, to some extent, of the burden upon the state to educate, care and advance the interests of its citizens. Such institutions thus confer a benefit upon the general citizenry of the state and render an essential service for which they are relieved of certain burdens of taxation.

(b) “Schools” means property owned by private educational institutions and used primarily to provide “traditional education” equivalent to public education. “Traditional education” means systematic instruction in useful branches of learning afforded through methods common to public schools and educational institutions, directed at an indefinite class of persons, which benefits the general public indirectly because it is of a nature ordinarily provided by the government at taxpayer expense.

(i) “Traditional” may include courses offering specialized instruction such as those centered around teaching outdoor leadership and practical field experience to professionals in the field of outdoor education.

(ii) “Traditional” does not include continuing education or education for the professional advancement of an organization's members.

(iii) An entity is rebuttably presumed to be a “school” if it possesses a license and teacher certification from the Wyoming Department of Education, or evidence of courses for which college or university credit is given.

* * *

(d) The property of schools, orphan asylums and hospitals shall not be used for private profit (see Section 11(b)-(c) of this Chapter for relevant criteria)....

Rules, Wyoming Department of Revenue, Chapter 14, Section 10.

54. The Department’s definition of “schools” is grammatically unsatisfactory. The Department does not define a school as an institution, compare Black’s Law Dictionary, 8^th Edition (2004), p. 1372, or even as the “buildings, classrooms, laboratories, etc. of any such establishment.” Compare Webster's New World College Dictionary, 4th Edition (2002), definition 2, p. 1140. Instead, the Department defines schools as property owned by private educational institutions. Substituting this language in the statute, one has an exemption for “Property used for [property owned by private educational institutions], orphan asylums or hospitals etc.,” which borders on nonsense. At the very least, the definition awkwardly commingles concepts of use and ownership.

55. On the record made in this case, it is not necessary to consider whether CWC is a private educational institution or must otherwise be deemed a school. Subsection (iii) of the same subsection of the Rules which defines “school” includes a further presumption: “An entity is rebuttably presumed to be a ‘school’ if it possesses . . . evidence of courses for which college or university credit is given.” Rules, Wyoming Department of Revenue, Chapter 14, Section 10(b)(iii). The Assessor concluded CWC was a school, both implicitly [Exhibit A] and explicitly. [County Board Record, Transcript, pp. 31, 39-40]. The Assessor specifically referred to the course credits awarded by CWC. [County Board Record, Transcript., p. 40]. Jo Anne McFarland, president of CWC, confirmed CWC’s award of credits. [County Board Record, Transcript, pp. 54-55]. The Assessor made no effort whatsoever to rebut the presumption that CWC is a school.

56. In view of the general presumption of Section 2(a)(i) and the express presumption of Section 10(b)(iii) of the Department’s Rules, the correct result is that CWC is a school for the purposes of this case. Happily, this result is consistent with the settled practice of treating CWC as a school which qualifies for the exemption of Wyo. Stat. Ann. § 39-11-105(a)(xxv). It is also the result urged by both parties. [Record of Oral Argument]. One nonetheless hopes the Department would consider revising its definition to clarify the applicability of this exemption to community colleges. The ideal, of course, would be clarification by the legislature.

57. One may be concerned that relying on the presumption in this manner has the effect of ignoring the significance of private educational institutions and traditional education in the balance of Section 10(b). The Board agrees with the premise, but disagrees with the concern. The effect may be an entirely intentional consequence of the Rules, i.e., to grant school status to any institution offering courses for which college or university credit is given without regard to whether it is otherwise a private educational institutions providing traditional education. An institution offering college-level courses is not necessarily the same as a private educational institution providing traditional education. However, the rebuttable presumption spares the Assessor the difficulty, in marginal cases, of conducting a factual investigation into whether an institution is public or private in whole or in part, and whether it provides traditional education.

58. Because CWC was a school, the State Board must address the remaining issues concerning the application of Wyo. Stat. Ann. § 39-11-105(a)(xxv).

59. The lots at issue are all occupied by commercial enterprises. Each enterprise occupies its lot under a lease from the CWC Foundation. Supra, ¶ 5. The CWC Foundation leases the lots from CWC, which is still the owner. Supra, ¶ 2. The leases from CWC to the Foundation extend to 2096. [County Board Record, Exhibit F1]. The CWC Foundation must use “any residue income it receives from the improvement and management” of the lots “for the benefit of Central Wyoming College as stated in the purposes of the Foundation.” [County Board Record, Exhibits F2, F3, F4, F5]. The Foundation otherwise pays CWC nothing. [County Board Record, Exhibits F2, F3, F4, F5]. Allowable costs and expenses are specified in paragraph 2 of each lease between CWC and the Foundation. [County Board Record, Exhibits F2, F3, F4, F5].

60. The essence of the Assessor’s position is that the commercially leased lots are not exempt because they run afoul of the statutory words limiting the exemption for property used for schools, i.e., “to the extent they are not used for private profit.” Wyo. Stat. Ann. § 39-11-105(a)(xxv). The Assessor also relies on pertinent provisions of the Department’s Rules.

61. CWC’s principal argument rests on the grammar of the statute: “The statute exempts school property as long as the school itself is not used for private profit. In W.S. § 39-11-105(a)(xxv) the word ‘they’ refers to ‘schools, orphan asylums or hospitals’ not the word ‘property.’” [Opening Appeal Brief of Appellant, p. 10]. CWC correctly draws attention to a difficulty in the Assessor’s position; in her original presentation to the County Board, the Assessor paraphrased the statute by substituting the word “it” for “they,” describing the exemption as one for “property used by schools…to the extent it [i.e., the property, rather than the school] is not used for private profit.” [County Board Record, Exhibit A].

62. However, CWC paraphrases the statute by ignoring the words, “to the extent,” and focuses only on the “school itself.” Assuming that the statutory “they” refers to the three types of institutions, CWC’s reading of the exemption should be “Property used for schools…to the extent [the schools] are not used for private profit.” [Opening Appeal Brief of Appellant, p. 9-12]. The ordinary and obvious meaning of “extent” is “the space, amount, or degree to which a thing extends; size, length, breadth.” Webster's New World College Dictionary, 4th Edition (2002), definition 1, p. 503. The statute calls for a scalar determination – the degree to which CWC may be used for private profit – rather than an either/or determination. The lots in the Research Park are devoted to commercial use, and to that degree, CWC is being used for private profit.

63. By giving no meaning to the words “to the extent,” CWC fails to apply the principle that one must give effect to every word and clause of the statute. Chevron U.S.A., Inc. v. Department of Revenue, 2007 WY 79, ¶ 15, 158 P.3d 131, 136 (Wyo. 2007).

64. The Assessor’s interpretation at least gives a plausible meaning to all of the words of the statute. She has interpreted “to the extent” by identifying the lots as elements of the school’s property which are being used for private profit, and refused the exemption accordingly.

65. CWC makes two types of arguments against the Assessor’s identification and segregation of the commercial lots. The first argument is that the Assessor is improperly apportioning “the amount of governmental use by CWC,” contrary to the holding of State Board of Equalization v. City of Lander, 882 P.2d 844, 851 (Wyo. 1994). The argument is not persuasive because the case rests on a different exemption, one for city or town halls “owned and used primarily for a governmental purpose.” Id., p. 847; Wyo. Stat. Ann. § 39-11-105(a)(v); see also Wyo. Stat. Ann. § 39-11-105(a)(iii),(iv), supra, ¶ 45 [regarding counties and school districts]. This is an either/or requirement. Once an assessor determines whether or not there is a use primarily for a governmental purpose under an exemption with that statutory language, no question of degree remains. The words “to the extent” do not appear in the statutory exemption for cities and towns, or in the exemptions for counties or school districts.

66. The second argument is that the lease arrangement between CWC and the CWC Foundation is a factual circumstance which precludes a determination that CWC itself is in any way being used for private profit. To state the argument another way, the commercial lessees were engaged in commercial enterprises for profit, and the Foundation was engaged with those enterprises, but CWC – having placed its property under a lease lasting through 2096 – was not. However, CWC continued to own the lots, and enjoyed the financial benefit of making them available for commercial lease. The Assessor could reasonably have concluded that the underlying economic reality was a use for profit and applied the statutory test as she did. The County Board properly upheld her for doing so.

67. The Assessor and the County Board might have reached the same result by a different thought process. This Board considered the practical effect of a 99-year lease in BP Pipelines North America Inc., Docket No. 2005-117, July 21, 2006, 2006 WL 3327977 (Wyo. St. Bd. Eq.). In that case, we concluded that the property in question, a golf course constructed on a former refinery site in Natrona County, was the property of a local joint powers board for tax exemption purposes. The Board analyzed the effects of the lease as follows:

Record title to the property at issue is held by BP Pipelines North America, Inc. Supra, ¶ 1. The property is, however, subject to a 99-year lease, the terms of which clearly indicate the “real ownership,” the “realities of ownership,” the right to control and enjoy the benefits of the property, are held by the Joint Powers Board. The Joint Powers Board controls any and all construction on the property in question. The Joint Powers Board has subleased portions of the property. BP (Amoco), under the lease, retained only the risk and control of existing environmental problems along with access to remediate those problems. Supra, ¶¶ 7, 8, 16, 19. In realistic terms, the only attribute or indicia of ownership held by BP (Amoco), is naked legal title.

BP Pipelines North America Inc., ¶ 32. Pursuing this line of reasoning suggests the Foundation might be more appropriately identified as the owner and taxpayer, and accordingly entitled to a charitable exemption under Wyo. Stat. Ann. § 39-11-105(a)(xxvi), but even so the Foundation is directly privy to the leases with the commercial lessees. The use of CWC’s lots for commercial purposes simply becomes clearer, and so does the conclusion that the property should not be exempt from taxation. These are essentially quid pro quo transactions which negate the characterizations of charity or benevolence necessary to sustain the exemption under Wyo. Stat. Ann. § 39-11-105(a)(xxvi). Cheyenne LEADS, Inc., Docket No. 2007-52, March 14, 2008, 2008 WL 755826 , ¶¶ 82-85 (Wyo. St. Bd. Eq.).

68. The divergent views of the parties suggest that the statute may be ambiguous, that is, “vague or uncertain and subject to varying interpretations.” Wyoming Department of Revenue v. Exxon Mobil Corp., 2007 WY 112, ¶ 30, 162 P.2d 515, 526 (Wyo. 2007). However, neither party has so argued. More important, the Assessor is bound to comply with Rules and other binding guidance from the Department of Revenue. Supra, ¶ 46. There are various Rules which apply to the Assessor’s decision to deny an exemption in this case.

69. Chapter 14, Section 10 of the Department’s Rules is entitled, “Schools, orphan asylums and hospitals – W. S. 39-11-105(a)(xxv).” Section 10 has four subsections. Only subsection 10(d) addresses the issue of private profit: “The property of schools, orphan asylums and hospitals shall not be used for private profit (see Section 11(b)-(c) of this Chapter for relevant criteria).” On its own, this sentence adds little additional insight to the statute.

70. The material cross-referenced by Section 10(d) likewise provides little guidance. Chapter 14, Section 11 pertains to a different exemption; Section 11 is titled, “Secret, benevolent and charitable societies and associations – W. S. 39-11-105(a)(xxvi).” Subsection 11(b) provides: “To be exempt under this section [presumably, Wyo. Stat. Ann. § 39-11-105(a)(xxvi)], the institution shall fulfill the above definitions [i.e., the definitions of “secret,” “charity,” and “benevolent” found in subsection 11(a)], and operate primarily for non-commercial purposes without any element of profit.” Taken literally, the cross-reference suggests that CWC must be a secret, benevolent or charitable society or association, even though CWC does not seek exemption under Wyo. Stat. Ann. § 39-11-105(a)(xxvi). [Record of Oral Argument]. We do not believe the Department could properly require CWC to be a “secret, benevolent or charitable society or association” as well as a “school” in order to qualify for the exemption under § 105(a)(xxv), and accordingly ignore that possible reading.

71. That leaves only the requirement of subsection 11(b) that CWC operate “without any element of profit,” which again adds little further guidance to an assessor. CWC argues that it operated without any element of profit, [Opening Brief of Appellant, p. 10], but the Assessor took a contrary view based on the commercial leases. In the first instance, this a question of fact which the County Board has resolved in favor of the Assessor. [County Board Decision and Order, p. 5]. Since there is no dispute about the commercial character of the leases or the commercial activity of the lessees, there is substantial evidence to support the County Board’s determination.

72. Subsection 11(c) is somewhat more helpful, although not uniformly so. For example, the Assessor must consider whether CWC “derives funds mainly from public and private charity, holding them in trust to be expended only for charitable and benevolent purposes.” This consideration is plainly related to the exemption for secret, charitable or benevolent societies or associations. We would again conclude that this goes beyond what the Department can require for a “school” under § 105(a)(xxv).

73. There is pertinent guidance in subsection 11(c)(iv): “The matter of private profit concerns the way property is used, not solely the ownership thereof. The entire use of the property by all concerned shall be considered.” “Entire use” supports the Assessor’s decision to explore the details of CWC’s use of its property, rather than confining herself to the highest and broadest levels of CWC purpose and activity. “All concerned” suggests that the Assessor was correct in addressing the significance of the commercial lessees. As a whole, the subsection argues for the Assessor’s attention to use, rather than CWC’s attention to ownership.

74. Subsection 11(d) – not included in the cross-reference from subsection 10(d) – would be determinative if it applied. Subsection 11(d) prohibits the exemption for “use of property or any portion thereof to provide services, merchandise, area or activities for a charge, which are generally obtainable from any commercial enterprise and are collateral to the purpose of the secret, benevolent and charitable society for association.” Section 11(d)(ii) continues, “The use of property for commercial purpose is controlling, not whether or not a profit is actually made nor how the revenue is ultimately used.” If this guidance applied, it would directly support the Assessor’s action. Presumably this is one reason that CWC chose not to rely on the exemption for secret, charitable and benevolent societies and associations.

75. Section 14 of the Department’s Rules applies to “Lease or rental of property” without reference to any specific exemption. One subsection required the Assessor to act as she did. Regarding the leasing of publicly owned property, subsection 14 (c) states, “If, however, governmental property is used by a lessee for non-governmental purposes, the property is not exempt.” If we focus on the use made of the property by the commercial lessees, the property is not exempt. Even if we focus on the use made of the property by the Foundation, that use is unavoidably intertwined with the use made by the commercial lessees, and the result should be the same. In contrast, we note the Assessor made no effort to collect tax for lots leased for purposes not associated with commercial activity. [See County Board Record, Transcript, p. 56].

76. Subsection 14(e) identifies who must pay the property tax. It states, “If a lease arrangement results in taxability of property owned by an exempt entity, the exempt entity owes the tax.” Applied to this case, CWC owes the tax.

77. CWC argues that Section 14 does not apply because it is inconsistent with the requirements of statute. This argument is an extension of the assertion that the Assessor may look only far enough to determine whether CWC, as an institution, is operated without any element of private profit. [Opening Brief of Appellant, p. 10]. As factual support for this assertion, CWC cites evidence in the transcript that its primary funding is by state appropriation with the support of a 4-mill county assessment, together with tuition and fees. Further, the institution itself does not generate any private profit, does not issue stock, and does not distribute dividends to shareholders. [Transcript, p. 45, cited in Opening Brief of Appellant, p. 10]. This argument is unpersuasive because it fails to account for the statutory words, “to the extent.” Supra, ¶ 63.

78. CWC also argues that the Department’s Rules do not apply because the circumstances of this case are so unusual. In support of this argument, CWC refers to the Chapter 14, Section 1(b), which in pertinent part states:

All questions of exemption cannot be addressed and answered by rule. These standards are to serve, together with applicable law and Departmental guidelines, as a ready reference to commonly encountered problems. The general law governing exemptions is found in Art. 15, § 12, Wyoming Constitution and W.S. 39-11-105.

Rules, Wyoming Department of Revenue, Chapter 14, Section 1(b). CWC has expressly argued that since the case is not one that is “commonly encountered,” the Department’s Rules do not apply. [County Board Record, Exhibit I3, p. 2]. This is a misreading of Section 1(b).

79. Chapter 14, Section 1(b) is merely a general statement of the purposes of the Rules. It is akin to Chapter 14, Section 2 (c), which this Board took “to be a summary of the character of the many exemptions, rather than a directive to an assessor.” Supra, ¶ 50. The Assessor must sort through the Rules to determine what guidance, if any, applies. The Rules do not require or authorize the Assessor to make a threshold determination about whether the case is unusual, and if so, to dispense with the Department’s Rules entirely.

80. We have concluded that the County Board properly upheld the Assessor’s determination that Wyo. Stat. Ann. § 39-11-105(a)(xxv) did not apply to CWC properties subject to commercial leases. It remains for us to determine whether any other exemption might apply, in part because the Department’s Rules recognize that “Taxpayers may claim exemption on the basis of one or more statutory provisions.” Rules, Wyoming Department of Revenue, Chapter 14, § 13(a). To do so, we must consider whether a community college is a type of entity which may be eligible for some other exemption

81. A community college district is a distinct body corporate encompassing a defined geographic area with elected district board members and the power to levy and collect tax. Wyo. Stat. Ann. §§ 21-18-301; 21-18-302; 21-18-304(a)(vii). A community college district has the requisite “distinctive badges” which make it a political subdivision:

The criteria for identifying a “political subdivision” are found in Witzenberger State ex rel. Community Development Authority, 575 P. 2d 1100, reh’rg denied, 577 P. 2d 1386 (Wyo. 1978). There, we concluded that a “‘political subdivision’ must be an entity of the same kind or class as a county, city, township, town or school district,” Witzenburger, 575 P.2d at 1112, and that it would be characterized by certain distinctive badges including a prescribed geographic area, a requirement for having officers duly elected by the inhabitants of that area at a public election, and a legal power to levy and collect taxes. Witzenburger. This is still the applicable test. While the list we have recited is not all-inclusive, any “body politic” not possessing at least these three basic attributes cannot be a “political subdivision.” See Witzenberger.

Weston County Hospital Joint Powers Board v. Westates Construction Company, 841 P.2d 841, 846 (Wyo. 1992). See also, Eastern Laramie County Solid Waste Disposal District v. State Board of Equalization, 9 P.3d 268, 271 (Wyo. 2000). CWC is a duly organized community college district, a body politic, and a political subdivision. As a political subdivision, CWC “is unit of local government, not state government.” Witzenberger ex rel. Community Development Authority, 575 P. 2d at 1112.

82. By characterizing CWC as a political subdivision, we limit the universe of possible exemptions. Political subdivisions are specifically named in various sections of the Wyoming Constitution, e.g. art. 15, §§ 7, 19; art. 16, §§ 3, 4, 6, 7, 8, 10, 11. “In construing constitutional provisions, we follow the same rules that govern the construction of statutes.” Cantrell v. Sweetwater County School District No. 2, 2006 WY 57, ¶ 6, 133 P.3d 983, 985 (Wyo. 2006). “When the legislature specifically uses a word in one place, we will not interpret that word into other places where it was not used.” Qwest Corporation v. Public Service Commission of Wyoming, 2007 WY 97, ¶25, 161 P.3d 495, 501 (Wyo. 2007). The omission of any reference to political subdivisions in art. 15, § 12, implies that political subdivisions have no specific constitutional entitlement to a property tax exemption. Without specific constitutional authorization, an exemption for CWC must arise from the legislative action authorized under art. 15, § 12, i.e., “such other property as the legislature may by general law provide.” Wyo. Const., art. 15, § 12.

83. Of the thirty-seven items listed in Wyo. Stat. Ann. § 39-11-105(a), none specifically apply to either community colleges or political subdivisions. Wyo. Stat. Ann. § 39-11-105(a). It remains for us to address the three other exemptions considered during the course of this case.

84. In its Opening Brief, CWC noted that “Wyo. Stat. Ann. § 39-11-105(a) enumerates various property exempt from taxation including (iii) property owned and used by counties primarily for a governmental purpose….” [Opening Brief of Appellant, p. 7]. CWC did not pursue the application of this exemption in its briefing or during oral argument, and understandably so. A community college generally cannot be confused or equated with any of the twenty-three counties defined by Wyoming Statute. Wyo. Stat. Ann. § 18-1-101. Specifically, CWC cannot be equated with Fremont County. Wyo. Stat. Ann. § 18-1-101(g).

85. During oral argument, the possibility of exempting CWC as a school district under Wyo. Stat. Ann. § 39-11-105(a)(iv) was discussed. [Record of Oral Argument]. CWC agreed that it was not a school district. [Record of Oral Argument]. This conclusion is supported by he definitions section of the Wyoming Community College System Code, which defines “school district” as “excluding community colleges and community college districts.” Wyo. Stat. Ann. § 21-18-102(a)(xiv). The same result is required by the statutory definitions of elementary, secondary, and unified school districts. Wyo. Stat. Ann. §§ 21-3-102, 21-3-103, 21-3-104. The school district exemption does not apply to community colleges.

86. Finally, the Assessor’s brief considered the possibility of applying the statutory exemption for property used by a secret, benevolent and charitable society or association, under Wyo. Stat. Ann. § 39-11-105(a)(xxvi). [Brief of Respondent, pp. 10-12]. As we have already noted, that exemption would not apply, under the Board’s analysis in Cheyenne LEADS, Inc., supra, ¶ 67, or under the plain language of the Department’s Rules, Chapter 14, § 11(d), supra, ¶ 74. CWC did not attempt to claim this exemption. [See generally Opening Brief of Appellant].

B. Uniformity

87. CWC asserts the Assessor is not enforcing “equal and uniform taxation” in contravention of the Wyoming Constitution because she does not assess school sections owned by the State of Wyoming and leased for grazing, nor the real property owned by the Riverton Airport which it leases for construction of private hangars. CWC argues in both situations the land is being used for private profit, is therefore not being used primarily for a governmental purpose, and thus should not be exempt.

88. CWC correctly states the “Wyoming Constitution requires all taxation to be equal and uniform within each class of property,” citing art. 15, § 11 (a) of the Wyoming Constitution. [Opening Brief of Appellant, p. 12]. In its entirety, the cited provision states:

§ 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. All taxable property shall be valued at its full value as defined by the legislature except agricultural and grazing lands which shall be valued according to the capability of the land to produce agricultural products under normal conditions. The percentage of value prescribed for industrial property shall not be more than forty percent (40%) higher nor more than four (4) percentage points more than the percentage prescribed for property other than minerals.

(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.

89. CWC argues the Assessor and the Department’s Rules fail to meet this constitutional uniformity standard from the perspective of other potentially exempt property, such as grazing lessees and airport hangars. [Opening Brief of Appellant, pp. 12-14]. A variation on this theme has apparently been an element of CWC’s position since the inception of the dispute. [E.g., County Board Record, Exhibit I2].

90. The fallacy in CWC’s argument is that exemptions are not granted under article 15, § 11, but rather under a separate section of the Wyoming Constitution, article 15, § 12. That section, read in its entirety, states no requirement for exemptions to be equal or uniform:

§ 12. Exemptions from taxation.

91. CWC cannot rely on art. 15, § 12, as an authority which requires uniformity in the granting of exemptions. In fact, article 15, § 11, highlights a significant distinction by its title: “Uniformity of assessment required.” The uniformity requirement applies only to property which is subject to taxation – which by definition does not include exempt property. Even when it applies, the uniformity requirement is carefully phrased. Article 15, § 11, provides for three classes of property. Wyo. Const., art. 15, § 11(a). The legislature has adopted variations in the taxable value (as opposed to fair market value) of property in these three classes. Wyo. Stat. Ann. § 39-13-103(b)(iii). Article 15, § 11(b) also allows an exception for agricultural and grazing lands, which are valued according to the capability of the land to produce under normal conditions, and the legislature has enacted a statute which so provides. Wyo. Stat. Ann. § 39-13-103(a)(x).

92. In the absence of a uniformity requirement for exempt property, CWC’s complaints about the treatment of grazing lands and airport hangars have no analytical basis. Instead, art. 15, § 12, Wyo. Stat. Ann. § 39-11-105, and Chapter 14 of the Department’s Rules are best viewed as a kind of checklist which obliges an assessor to work her way through a hierarchy of principles to determine what exemption may apply to the facts at hand, and what limits may apply to that exemption. In so doing, the assessor must pay careful attention to the language which is the source of each exemption. For example, CWC’s argument appears to suppose that there is a “governmental purpose” test which applies to all exemptions, [Opening Brief of Appellant, p. 13], yet this is plainly not so. Supra, ¶ 45. There is no “governmental purpose” test related to the principal exemption at issue in this case, Wyo. Stat. Ann. § 39-11-105(a)(xxv), presumably because the exemption is not limited to governmental entities like counties and school districts. The record includes substantial evidence that the Assessor properly analyzed and applied the pertinent requirements of the constitution, statute, and rules.

C. Valuation

93. The Assessor testified she established a fair market value for the Research Park lots at issue by reference to what she deemed, in her professional opinion, to be comparable sales in the Riverton area, and pointed to the fact the fair market value she established was the lowest per square foot value, by a significant percentage, as compared to other commercial property in the Riverton area. Supra, ¶¶ 17, 18, 19, 20.

94. On the matter of valuation, yet another presumption comes into play. This presumption supports an assessor’s determination of fair market value:

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)….

Britt v. Fremont County Assessor, 2006 WY 10, ¶ 23, 126 P.3d 117, 125 (Wyo. 2006).

95. CWC, as the party asserting an improper valuation, 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.” Britt v. Fremont County Assessor, 2006 WY 10, ¶ 23, 126 P.3d 117, 125 (Wyo. 2006). The County Board took this burden into account when ruling. [County Record, Decision of the Fremont County Board of Equalization, p. 5]. “Differences of opinion are not a sufficient basis on which to reverse a County Board’s decision.” Thunder Basin Coal Company v. Campbell County, Wyoming Assessor, 2006 WY 44, ¶ 48, 132 P.3d 801, 816 (Wyo. 2006).

96. The only evidence presented by CWC challenging the fair market value established by the Assessor for the Research Park lots was the testimony of Mike McDonald, a real estate appraiser in Fremont County. McDonald offered his opinion that Research Park lots had no fair market value as encumbered by the long term leases between CWC and the Foundation, even though he was not familiar with this type of lease. He asserted no one would willingly buy a lot in the Research Park because of the encumbering long-term leases. Supra, ¶ 41.

97. McDonald did not, in his testimony, provide any authority for his opinion nor any empirical data to support his no-value conclusion. He merely stated an opinion while conceding the slender foundation for that opinion. Supra, ¶ 41. The County Board could have found this was not sufficient credible evidence to overturn the value established by an assessor which presumptively has been determined in compliance with Wyoming statutes, and the Rules of the Department and this Board. Supra, ¶¶ 94, 95.

98. CWC also based its challenge of the Assessor’s determination of value on Chapter 9 of the Department’s Rules, which “describe the valuation methodology to be used to determine the taxable value of property valued and assessed by County Assessors for ad valorem tax purposes.” Rules, Wyoming Department of Revenue, Chapter 9, § 2. Section 6 of Chapter 9 is devoted to appraisal techniques which may be used by a county assessor. Rules, Wyoming Department of Revenue, Chapter 9, § 6. Section 6 directly addresses the sales comparison approach method, Section 6(a); the cost approach method, Section 6(b); the income or capitalized earnings approach method, Section 6(c); the use of Computer Assisted Mass Appraisal (CAMA), Section 6(d); the Department’s obligation to monitor use of CAMA systems, Section 6(e); and the use of certain specified reference materials, Section 6(f). Id. From this set of principles, CWC focused on one item.

99. In its entirety, Section 6(a) provides as follows:

(a.) The Sales Comparison Approach. The comparable sale approach is an appropriate method of valuation when there is an adequate number of reliable arms-length sales and the properties subject to such sales are similar to the property being valued. Comparable sales shall be adjusted to reflect differences in time, location, size, physical attributes, financing terms or other differences which affect value. The use of this approach to value depends upon:

(i.) The availability of comparable sales data;

(ii.) The verification of sales data;

(iii.) The degree of comparability or extent of adjustment necessary for time differences; and

(iv.) The absence of non-typical conditions affecting the sales price.

Rules, Wyoming Department of Revenue, Chapter 9, Section 6(a) (emphasis supplied). CWC’s complaint rests entirely on subsection 6(a)(iv).

100. CWC argues that the Assessor “did not consider a non-typical condition affecting the sales price,” arguing that the long-term lease between CWC and the CWC Foundation (supra, ¶ 2) was a non-typical condition affecting the sales price. [Opening Brief of Appellant, p. 14]. CWC treated this as a claim established by fact. It relied on the views of Joe Geraud, a retired law professor and president of the CWC Foundation for five years [CWC cited to Transcript, pp. 63-65]; on the views of McDonald, the real estate appraiser who concluded the CWC Business Park land had no value [CWC cited to Transcript, pp. 89-92]; and on bits of the cross-examination of the Assessor [CWC cited to Transcript, pp. 25, 30, 89, 90].

101. The County Board, in its capacity as a finder of fact, did not accept CWC’s view of the facts. The County Board specifically rejected McDonald’s opinion, finding that “A zero valuation is not credible evidence.” [Decision of the Fremont County Board of Equalization, p. 4, ¶ 8].

102. The County Board implicitly disagreed with CWC’s evaluation of the significance of the Assessor’s admission, under cross-examination, that “she did not consider the long term lease and admitted the lease was non-typical.” [Opening Brief of Appellant, p. 14]. There is ample evidence to support the County Board’s rejection of CWC’s view. CWC ignored the Assessor’s testimony that she “didn’t feel the [lease] reduced the value of the lot.” [County Board Record, Transcript, p. 26]. While agreeing that such a lease may be a non-typical condition, she disagreed that it affected the value of the property. [County Board Record, Transcript, p. 30]. In short, the Assessor addressed both of CWC’s points; CWC simply drew different inferences than the County Board. The Assessor also presented evidence to comprehensively explain what data she considered in determining the value for the properties at issue. [County Board Record, Transcript, pp. 20-30, Exhibits J, K, L, M]. The Assessor presented the County Board a reasonably complete picture of the manner in which she had exercised her judgment. [Decision of the Fremont County Board of Equalization, p.4, ¶¶ 9, 10]. Taking the record as a whole, there was substantial evidence to support the County Board’s decision.

103. The County Board likewise implicitly disagreed with CWC’s evaluation of Geraud’s testimony. Even though Geraud could testify that the long-term lease was a non-typical condition, he had no expertise enabling him to testify to the effect of the lease on sales price, and did not do so. [County Board Record, Transcript, pp. 63-65]. Further, Geraud’s testimony suggested that leases between government entities and private lessees are not unusual: “And much of our economic development today could not take place unless we did have leases of government – quote, government finance property types in private enterprise.” [County Board Record, Transcript, pp. 64-65].

104. In sum, the County Board could have disagreed with, and did disagree with CWC’s view that the Assessor failed to consider non-typical conditions under Chapter 9, Section 6(a)(iv) of the Department’s Rules.

105. The County Board correctly affirmed the Assessor’s value for the Research Park lots in question.

106. Finally, we would agree with CWC that there was no evidence of unfair governmental competition, [Reply Brief of Appellant, pp. 3-4], but this issue was merely a responsive argument raised by the Assessor, [Brief of Respondent, p. 12], and of no significance for the disposition of this case.

ORDER

IT IS THEREFORE HEREBY ORDERED the Decision of the Fremont County Board of Equalization affirming the Assessor’s denial of exempt status for the specified lots in the CWC Technical Research Park, as well as the fair market value assigned to said lots by the Assessor, 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 September, 2008.

STATE BOARD OF EQUALIZATION

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Alan B. Minier, Chairman

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Thomas R. Satterfield, Vice-Chairman

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Thomas D. Roberts, Board Member

ATTEST:

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Wendy J. Soto, Executive Secretary

Thomas D. Roberts, Board Member, concurring.

I concur in the result based upon an analysis different from the Majority.

1. All property in Wyoming, as a general proposition, is subject to taxation:

(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.

Wyo. Const., art. 15, § 11.

2. The Wyoming Legislature has affirmed an intent that all property is subject to taxation, unless prohibited by law or expressly exempted:

Property subject to taxation. All property within Wyoming is subject to taxation as provided by this act except as prohibited by the United States or Wyoming constitutions or expressly exempted by W.S. 39-11-105.

Wyo. Stat. Ann. § 39-11-103(a)(i).

3. The Constitution of the State of Wyoming states a general exemption from taxation when property is owned by a designated governmental entity and used “primarily for a governmental purpose”:

Wyo. Const., art. 15, § 12.

4. The Legislature has chosen to expressly exempt from taxation “[p]roperty of a Wyoming school district owned and used primarily for a governmental purpose excluding teacherages” and “[p]roperty used for schools…to the extent they are not used for private profit.” Wyo. Stat. Ann. § 39-11-105(a)(iv) & (a)(xxv), Supra, ¶ 45.

5. CWC asserts the word “they” in Wyo. Stat. Ann. § 39-11-105(a)(xxv) refers to “schools, orphan asylums or hospitals,” not the word “property.” CWC frames the question at issue therefore as whether the “schools, orphan asylums or hospitals” are used for private profit, not whether the property is so used. [Opening Brief of Appellant Fremont County Community College District, d/b/a Central Wyoming College, p. 10].

6. Even under a reading of the statute proposed by CWC, Wyo. Stat. Ann. § 39-11-105(a)(xxv) is not applicable.

7. The Department Rules, which 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)], and to which an assessor is bound to adhere (Wyo. Stat. Ann. § 18-3-204(a)(ix)), interpret the term “schools” in Wyo. Stat. Ann. § 39-11-105(a)(xxv) to mean “property owned by private educational institutions and used primarily to provide ‘traditional education’ equivalent to public education.” Supra, ¶¶ 46, 53.

8. A community college district is a distinct body corporate encompassing a defined geographic area with elected district board members and the power to levy and collect tax. Wyo. Stat. Ann. §§ 21-18-301; 21-18-302; 21-18-304(a)(vii). A community college district thus has the requisite “distinctive badges” which make it a political subdivision:

There, we concluded that a “‘political subdivision’ must be an entity of the same kind or class as a county, city, township, town or school district,” Witzenburger, 575 P.2d at 1112, and that it would be characterized by certain distinctive badges including a prescribed geographic area, a requirement for having officers duly elected by the inhabitants of that area at a public election, and a legal power to levy and collect taxes. Witzenburger. This is still the applicable test.

9. CWC is a duly organized community college district, a body corporate, and thus a political subdivision of Fremont County and the State of Wyoming. Wyo. Stat. Ann. § 21-18-301. As a political subdivision of Fremont County and the State of Wyoming, CWC is a public entity, not a “private educational institution” as contemplated by the Department Rules in defining the term “schools.” CWC, because it is a public entity, does not fulfill the “[t]he fundamental basis for this exemption” which is “the benefit conferred upon the public by schools…, and the consequent relief, to some extent, of the burden on the state to educate… it citizens. Such institutions thus confer a benefit upon the general citizenry of the state and render an essential service for which they are relieved of certain burdens of taxation.” Rules, Wyoming Department of Revenue, Chapter 14, § 4(a). CWC, because it is a public entity, is funded, in part, by taxation, through state appropriation, and quite likely by a district ad valorem tax which it is authorized by statute to levy. It therefore does not relieve the “general citizenry” of “certain burdens of taxation.” CWC is not a “private educational institution” within the contemplation of the Department when it adopted its Rules interpreting Wyo. Stat. Ann. § 39-11-105(a)(xxv). The exemption from taxation set forth in that statutory provision is thus not applicable to the property at issue as owned by CWC. Supra, ¶¶ 31, 45, 53.

10. The Assessor, to some extent, based her denial of exempt status on Wyo. Stat. Ann. § 39-11-105(a)(xxvi):

Property used by a secret, benevolent and charitable society or association, including any fraternal organization officially recognized by the University of Wyoming or any community college, and senior citizens centers to the extent it is not used for private profit nor primarily for commercial purposes by the society, association or center, or lessee thereof;

11. It might well be that the Foundation would qualify as a “benevolent and charitable society or association,” thus the nature of the use of the property, by either the Foundation or its lessees, would be determinative of its exempt status. There is, however, no dispute in the County Board Record that the uses of the lots at issue by the lessees from the Foundation are “primarily for commercial purposes.” Each lessee from the Foundation is engaged in a commercial endeavor. A commercial endeavor as a business or industry is, in fact, one of the criteria established by the Foundation for leasing a lot in the Research Park. [County Board Record, Exhibit 8]. Exemption of the lots under Wyo. Stat. Ann. § 39-11-105(a)(xxvi) would therefore not be appropriate even if the parcels at issue were owned by the Foundation.

12. Any exemption of the property at issue thus arguably must rest on an interpretation of Wyo. Stat. Ann. § 39-11-105(a)(iv).

13. Under Wyo. Stat. Ann. § 39-11-105(a)(iv), the property of “a Wyoming school district owned and used primarily for a governmental purpose” is exempt from ad valorem taxation. Supra, ¶ 45. A decision on whether the County Board properly denied exemption of the Research Park property owned by CWC is correct thus rests on the answers for two questions. The first question is whether CWC is a school district within the scope of Wyo. Stat. Ann. § 39-11-105(a)(iv). The second question, on which my initial discussion will concentrate, asks whether the Research Park property is “used primarily for a governmental purpose?”

14. The reasoning behind exemption of government owned property used primarily for a governmental purpose is to:

[P]revent an escalating spiral of unnecessary taxation and administrative costs with no benefit to the public. 16 Eugene McQuillin, The Law of Municipal Corporations, § 44.57 at 206 (3rd ed. 1994). If one governmental entity chooses to tax the property of another governmental entity, the governmental entity forced to pay taxes may have to levy and collect new taxes to meet the demands of the tax. 2 Cooley, supra, § 621 at 1313. The effect of such a tax spiral is that the public would be taxing itself to raise money to pay itself. Id. The only benefit of such a system is that it satisfies a bureaucratic desire for exactitude by taking money out of one pocket and putting it in another. Id. at 1317.

State Board of Equalization v. City of Lander, 882 P.2d 844, 850 (Wyo. 1994).

15. The issue of “primarily for a governmental purposes” has been discussed a number of times by the Wyoming Supreme Court. The Court, in 2002, stated the general outline for discussion of the issue, citing three of its earlier decisions:

Although under Title 39, taxation of property is generally the rule, the exemptions provided for by § 39-11-105(a)(v) require that we apply the rule that where the established policy of the state is to exempt publicly owned property, the burden is placed on the taxing authority to establish taxability. City of Cheyenne v. Bd. of County Comm'rs of the County of Laramie, 484 P.2d 706, 708-09 (Wyo.1971). The mere ownership of property by a town does not exempt the property; it must also be used primarily for governmental purposes. Id. at 709. When a town uses the property in a proprietary manner, the property is not exempt from taxation. Town of Pine Bluffs v. State Board of Equalization, 79 Wyo. 262, 288, 333 P.2d 700, 710 (Wyo.1958). The taxable status of property owned by a governmental entity must be determined as a question of fact by the use made of the property. City of Cheyenne v. Sims, 521 P.2d 1347, 1349 (Wyo.1974).

Deromedi v. Town of Thermopolis, 2002 WY 69, ¶ 10, 45 P.3d 1150, 1153-1154 (Wyo. 2002). See also, Town of Thermopolis v. Deromedi, 2002 WY 70 ¶ 13, 45 P.3d 1155, 1160 (Wyo. 2002) and State Board of Equalization v. City of Lander, 882 P.2d 844, 848 (Wyo. 1994).

16. The Court in City of Cheyenne v. Board of County Commissioners of the County of Laramie set out a test to help answer the question of fact as to the taxable status of property owned by a government entity:

Neither do we think, as the county seems to contend, that the mere renting of the buildings to a lessee engaged in a profit-making venture is of itself a use for nongovernmental purposes. It depends upon the circumstances. The test, as we view it, is whether or not those buildings were primarily used and being so used as reasonably necessary or essential facilities to the efficient operation and maintenance of the airport. If so, the improvements were not subject to taxation. If not, the tax imposed was proper.

City of Cheyenne v. Board of County Commissioners of the County of Laramie, 484 P.2d 706, 709 (Wyo. 1971). See also, State Board of Equalization v. City of Lander, 882 P.2d 844, 848 (Wyo. 1994).

17. A Department of Revenue Rule sets out a similar test:

The leasing of publicly owned property is not, of itself, a use for nongovernmental purposes if the primary use is reasonably necessary to the efficient provision of a governmental function or service. The fact a governmental entity accomplishes such function through a lessee will not affect the exemption. If, however, governmental property is used by a lessee for non-governmental purposes, the property is not exempt.

Rules, Wyoming Department of Revenue, Chapter 14, § 14(c).

18. The Lessees of the lots at issue from the Foundation were all engaged in a commercial activity as required by the criteria for leasing a lot in the Research Park. Concurrence, supra, ¶ 11. In addition, the uses of the lots by the Lessees were not “reasonably necessary to the efficient provision of a government function or service” in contrast to the airport facilities discussed by the Court in City of Cheyenne v. Board of County Commissioners of the County of Laramie, supra. As the Court stated, the test herein is whether the lots were used and had been used as necessary facilities for the efficient operation of CWC. The evidence presented to the County Board was sufficient for it to conclude the Assessor had properly applied this test in establishing taxability. Supra, ¶¶ 29, 31, 34.

19. The net income to the Foundation generated by leasing the lots at issue appears to eventually provide some support for CWC, including scholarships and property purchases. The funds supplied by the Foundation, as testified by Jay Nielson, were not used nor required for operational expenses. Supra, ¶ 29.

20. The fact the businesses which utilize the lots in the Research Park also provide educational opportunities and even employment for CWC students does not transform the lots into necessary or essential facilities for the efficient operation of CWC. Supra, ¶ 34.

21. A number of the witnesses testifying on behalf of CWC at the County Board hearing asserted that because CWC is supported in great part by tax revenues, it was illogical to require it to pay tax on its real property. Such an argument in effect was a reference to the reasoning cited previously as to why properties with a governmental purpose should be exempt. Concurrence, supra, ¶ 14.

22. The response to the argument that payment of tax by CWC is “illogical” is at least three-fold. First, as the County Board properly concluded, the Research Park lots at issue are not being used for a governmental purpose. Second, the testimony at the County Board hearing indicated the more recent leases on Research Park lots required the lessees to pay all property taxes assessed on the property. Supra, ¶ 36. With regard to the older leases, as they are subject to renewal, adding a requirement the lessee pay all taxes assessed would certainly be a possibility. Third, such an argument overlooks the fact that because property taxes are distributed to a variety of taxing entities including the state, community colleges, municipalities, fire districts, and special districts, government entities owning properties are not simply paying taxes to themselves.

23. The evidence in the County Board record being sufficient to support a conclusion the lots in question in the Research Park were not “being used primarily for a governmental purpose,” and thus not eligible for exemption, it is therefore not necessary to address the question of whether a community college is a school district under Wyo. Stat. Ann. § 39-11-105(a)(iv).

STATE BOARD OF EQUALIZATION

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Thomas D. Roberts, Board Member

ATTEST:

________________________________

Wendy J. Soto, Executive Secretary