William L. Miller, Miller & Fasse; and Philip A. Nicholas, Julie Wickett, Anthony, Nicholas & Tangeman, LLC, appeared on behalf of John and Billie Jean Wirth as Trustees of the Wirth Revocable Trust (Taxpayer).

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

This is an appeal from a decision of the Fremont County Board of Equalization (County Board) affirming the Assessor’s valuation of Taxpayer’s property for 2008 tax purposes. Taxpayer’s Notice of Appeal was filed with the State Board effective August 27, 2008. The Assessor and Taxpayer filed briefs as allowed by the October 1, 2008, State Board Briefing Order. Taxpayer requested oral argument by motion dated November 24, 2008. The motion was not timely filed, being due on or before October 13, 2008. The Board denied Taxpayer’s request by order dated December 18, 2008.

Taxpayer also requested, by motion dated November 24, 2008, the County Board Record be supplemented by allowing an Appendix be filed with Taxpayer’s opening brief. The Assessor objected to the requested supplementation. The Board denied the supplementation request by order dated December 18, 2008, based on the failure of Taxpayer’s request to fulfill the requirements of Rules, Wyoming State Board of Equalization, Chapter 3, § 8.

The State Board of Equalization (State Board), comprised of Thomas R. Satterfield, Chairman, and Thomas D. Roberts, Vice-Chairman

, considered the Taxpayer’s Notice of Appeal, the Opening Brief of Petitioner Wirth Revocable Trust, the Assessor’s Brief of Respondent, Petitioner Wirth Revocable Trust’s Reply Brief, the County Board Record

, and the decision of the County Board.

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

The County Board conducted a hearing on July 8, 2008, at which John Wirth and the Assessor each testified and presented exhibits. The County Board entered its Decision on July 31, 2008, affirming the Assessor’s 2008 fair market value for Taxpayer’s property. The decision was mailed to Taxpayer on July 31, 2008. [County Board Record, pp. 133-138].

The State Board is required to “hear appeals from county boards of equalization.” Wyo. Stat. Ann. § 39-11-102.1(c). Taxpayer filed a timely appeal of the County Board decision with the State Board effective August 28, 2008. Rules, Wyoming State Board of Equalization, Chapter 3 § 2.

When the State Board hears appeals from a County Board, it acts as an intermediate level of appellate review. Laramie County Board of Equalization v. Wyoming State Board of Equalization, 915 P.2d 1184, 1188 (Wyo. 1996); Union Pacific Railroad Company v. Wyoming State Board of Equalization, 802 P.2d 856, 859 (Wyo. 1990). In its appellate capacity, the State Board treats the County Board as the finder of fact. Id. In contrast, the State Board acts as the finder of fact when it hears contested cases on appeal from final decisions of the Department of Revenue (Department). Wyo. Stat. Ann. § 39-11-102.1(c). This sharp distinction in roles is reflected in the State Board Rules governing the two different types of proceedings. Compare Rules, Wyoming State Board of Equalization, Chapter 2 with Rules, Wyoming State Board of Equalization, Chapter 3. Statutory language first adopted in 1995, when the State Board and the Department were reorganized into separate entities, does not express the distinction between the State Board’s appellate and de novo capacities with the same clarity as our long-standing Rules. 1995 Wyo. Sess. Laws, Chapter 209, § 1; Wyo. Stat. Ann. § 39-1-304(a), (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. § 16-1-114(c)(ii)(B). The State Board’s review is limited to a determination of whether the County Board action is:

(a) Arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law;

(b) In excess of statutory jurisdiction, authority or limitations or lacking statutory right;

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:

When [a person] challenges a [county board]'s findings of fact and both parties submitted evidence at the contested case hearing, we examine the entire record to determine if the [county board]'s findings are supported by substantial evidence. Colorado Interstate Gas Co. v. Wyoming Department of Revenue, 2001 WY 34, ¶ 8, 20 P.3d 528, 530 (Wyo.2001); RT Commc'ns, Inc. v. State Bd. of Equalization, 11 P.3d 915, 920 (Wyo.2000). If the [county board]'s findings of fact are supported by substantial evidence, we will not substitute our judgment for that of the [county board] and will uphold the factual findings on appeal. “Substantial evidence is more than a scintilla of evidence; it is evidence that a reasonable mind might accept in support of the conclusions of the agency.” Id.

Chevron U.S.A., Inc. v. Department of Revenue, 2007 WY 79, ¶ 9, 158 P.3d 131, 134 (Wyo. 2007).

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).

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).

A. Whether the Fremont County Board of Equalization correctly assigned the burdens of proof and persuasion, when it determined that (1) the assessment made by the Fremont County Assessor was entitled to a presumption of validity, and (2) the Taxpayer did not meet its burden of providing credible evidence that the Assessor’s valuation was incorrect and unlawful.

B. Whether the County Assessor’s adjustment to the presumptively valid valuation derived by the automated CAMA System for the Taxpayer’s residence was arbitrary, capricious and an abuse of discretion.

C. Whether the County Assessor’s adjustment to the presumptively valid valuation derived by the automated CAMA System for the Taxpayer’s residence was not in accordance with law in that it violates the Rules and Regulations adopted by the Wyoming Department of Revenue.

D. Whether the County Assessor’s ad hoc use of Local Economic Areas (LEAs) and Neighborhood Adjustment Factor (NAFs) to modify the valuations derived by the automated CAMA System are adequately described in the Rules and Regulations adopted by the Wyoming Department of Revenue; did the modification employ recognized appraisal techniques adopted by the Department of Revenue.

E. Whether the County Assessor’s ad hoc use of Local Economic Areas (LEAs) and Neighborhood Adjustment Factor (NAFs) is allowed for by the Rules and Regulations adopted by the Wyoming Department of Revenue; is the use of proprietary instructions not published or adopted as rules and regulations by the Department of Revenue an unconstitutional delegation of authority.

F. Whether the County Assessor’s ad hoc use of Local Economic Areas (LEAs) and Neighborhood Adjustment Factor (NAFs) to modify the valuations derived by the automated CAMA System violates Wyoming Constitution Article 15, Section 11 requiring that all property be “uniformly valued at its full value as defined by the legislature.

The Assessor simply states the issue as: “Was the decision of the Fremont County Board of Equalization supported by substantial evidence or, in the alternative, arbitrary and capricious?” [Brief of Respondent, p. 5].

Taxpayer, in order to prevail, must establish the County Board decision is not supported by substantial evidence, and/or the County Board acted unlawfully, arbitrarily, and capriciously in affirming the Assessor’s value for 2008 tax purposes.

We conclude the decision of the County Board was neither unlawful, arbitrary, nor capricious. We further conclude there was substantial evidence in the County Board record supporting the County Board decision.

1. Taxpayer owns residential property at 8 Sylvan Way, Dubois, Fremont County, Wyoming. [County Board Record, Vol. I, pp. 25, 28]. The property consists of four lots, a 2430 square foot, single story ranch-style home, and a 1620 square foot detached garage. [County Board Record, Vol. I, pp. 31-33].

2. Taxpayer filed a Statement to Contest 2008 Property Tax Assessment with the County Board on May 23, 2008. [County Board Record, Vol. I, p. 22].

3. On May 28, 2008, Mr. and Mrs. Wirth discussed the valuation of Taxpayer’s property with the Assessor. The Assessor, based on information provided by the Wirths, reduced the land value for Taxpayer’s property by $54,000, from $215,000 to $161,000, to account for a lake and two ditches on two of Taxpayer’s lots. [County Board Record, Vol. I, p. 121; Transcript, p. 37]. The Assessor issued an amended assessment schedule on May 27, 2008, reducing the fair market value of Taxpayer’s property to $555,166. [County Board Record, Vol. I, p. 28, 73].

4. The County Board held a hearing on July 8, 2008, on Taxpayer’s appeal. [County Board Record, Vol. I, p. 1; Transcript, p. 1].

5. John Wirth testified on behalf of Taxpayer. He has a Ph.D. in engineering with a dissertation in statistical arts. He is involved in the mail order business, and does statistics every day. [County Board Record, Transcript, p. 11].

6. The fair market value of Taxpayer’s property was $312,700 in 1999. The value has increased each year over the prior year except in 2002. The amended 2008 fair market value was $555,166, an increase of 15% over the 2007 value. [County Board Record, Vol. I, pp. 4, 13; Transcript, pp. 12-13 ].

7. Taxpayer has no problem with the calculation of what Wirth characterizes as the “initial assessed value” produced by the CAMA system. [County Board Record, Transcript, p. 14 ].

8. Taxpayer agrees Wyoming does not have a minimum sales sample size to be used in calculating a market adjustment. [County Board Record, Transcript, p. 18].

9. Wirth quoted what he asserted was an International Association of Assessing Officers (IAAO) standard which concluded a ratio study with fewer than five sales tends to have exceptionally poor reliability and is not very useful. [County Board Record, Vol. I, p. 6; Transcript, p. 19].

10. Wirth presented what he termed a “Monte Carlo” simulation to buttress Taxpayer’s assertion a sample size of only three sales will not yield an accurate sales ratio. [County Board Record, Vol. I, pp. 8, 15-20; Transcript, pp. 22-24].

11. Wirth stated his opinion that because the number of sales in the Dubois area dropped from 27 in 2006 to 14 in 2007, the prices should be going down as well. [County Board Record, Vol. I, p. 11;Transcript, pp. 26-27].

12. Wirth discussed a number of sales listed by the MLS (Multiple Listing Service) which had occurred in the two or three days prior to the County Board hearing, and his opinion the median of those sales was significantly lower than the prior two years. [County Board Record, Transcript, p. 26].

13. Wirth asserted the small sales sample size and lack of time trend analysis indicated the Assessor calculations for the LEA in which Taxpayer’s property is located are not reliable, and do not meet the requirements of the Department Rules. He asserted the value of Taxpayer’s property should be set at the 2007 level less an adjustment similar to the adjustment made by the Assessor for 2008 based on two of the lots being encumbered with a lake and two ditches. [County Board Record, Transcript, p. 28].

14. Wirth believes Taxpayer’s property in 2008 is worth between $430,00 and $450,000. [County Board Record, Transcript, p. 66].

15. The Assessor is a certified Wyoming tax appraiser. She is in her third term as Fremont County Assessor, and has 18 years experience in the Fremont County Assessor’s Office. [County Board Record, Transcript, p. 32].

16. The 2008 fair market value for Taxpayer’s property is $555,166. The land value is $161,034. The house value is $345,754. The outbuilding or garage value is $48,378. There is a total of 7.2 acres in four lots. [County Board Record, Vol. I, pp. 28-29, 119; Transcript, p. 32].

17. The market value of the structures was determined using the RealWare Computer-Assisted Mass Appraisal system (CAMA) as required by the Department pursuant to Wyo. Stat. Ann. § 39-11-202(c)(xv), and Rules, Wyoming Department of Revenue, Chapter 9, § 6(d.). The RealWare system uses the Marshal & Swift costing system. [County Board Record, Vol. I, pp. 78, 119; Transcript, p. 32].

18. Field appraisers from the Assessor’s office measure each house in each LEA or neighborhood. They also assign to each house a condition from poor to excellent, and a quality from low to excellent, both as defined by Marshall & Swift. [County Board Record, Transcript, p. 33].

19. Taxpayer’s house was last reviewed by the field appraisers on October 12, 2007. The structure was built in 1968, has 2430 square feet on the main floor, and 1280 square feet in the basement of finished living area. There are three bedrooms, two bathrooms with three fixtures, and one bathroom with two fixtures. The quality is average plus and the condition is average. [County Board Record, Vol. I, pp. 36-39, 119-120; Transcript, p. 33].

20. Taxpayer had no problem with the square footage of the residence nor the quality and condition assigned by the Assessor. Wirth declined, after Taxpayer’s appeal was filed, to allow the Assessor to visit the residence to verify the accuracy of the characteristics of the property on the Assessor’s records. [County Board Record, Transcript, pp. 33-34].

21. The 1620 square foot detached garage located on Taxpayer’s property was built in 1988. The quality is fair plus and the condition is good. [County Board Record, Vol. I, p. 119; Transcript, p. 34].

22. Taxpayer’s property is located in LEA 430-R. The Assessor, to assist in arriving at a market adjustment to be applied to Taxpayer’s property, reviewed the available information for three valid 2007 sales of other properties located in the same LEA. Property number one sold for $395,000, and had a 2008 assessed value of $293,493. Property number two sold for $294,000, and had a 2008 assessed value of $282,745. Property number three sold for $235,000, and had a 2008 assessed value of $269,565. [County Board Record, Vol. I, pp. 25, 120; Transcript, pp. 34-35].

23. The Assessor also considered two invalid sales which she alleged added weight and credence to her determination of the market adjustment to be applied to Taxpayer’s property. [County Board Record, Transcript, pp. 35-36].

24. The Assessor explained the mass appraisal process, which includes the CAMA system, used to value all residential property in Fremont County, including Taxpayer’s, for tax purposes. Properties are grouped into LEAs based on a multitude of factors, including but not limited to physical, geographical, economic, social and governmental. The factors are not entirely quantitative as some knowledge of the area and judgement is utilized by the Assessor. Taxpayer’s property is in LEA 430-R which contains rural properties located along the river in Dubois. [County Board Record, Vol. I, p. 121;Transcript, pp. 37-38, 51].

25. After an LEA has been determined, the land is valued, and then a cost determined for the structures through the CAMA system based on the characteristics of the structures as well as quality and condition. [County Board Record, Transcript, p. 39].

26. The characteristics of Taxpayer’s residence and garage were converted into a new CAMA system in 2008. This new system uses Marshall & Swift cost tables. The conversion to the new CAMA system of Taxpayer’s property with Marshall & Swift cost tables was partly responsible for the increase in the value of Taxpayer’s property. [County Board Record, Vol. I, p. 122; Transcript, pp. 38-40, 53].

27. The cost value of a structure as determined by the CAMA system is modified by a neighborhood adjustment factor to achieve an acceptable sales ratio. The factor is based on the ratio of the cost value to prior year sales price for properties in the same LEA. The cost value of a property in Dubois, as calculated by the Assessor, was generally 60 percent of a property’s sales price. The Assessor’s target sales ratio in LEA 430-R was 96 percent. The Assessor thus calculated a neighborhood adjustment factor of 1.6 for Taxpayer’s structures by dividing 96 percent by 60 percent [96/60 = 1.6]. The cost value of Taxpayer’s structures was multiplied by 1.6 to reach market value. [County Board Record, Vol. I, pp. 87, 122; Transcript, pp. 40-41, 43-44, 49-50, 55-56, 62-63].

28. The Assessor also testified concerning State Board equalization standards, and her compliance as Assessor with those standards for the 2008 tax year. There is, however, no indication the County Board relied on this information in reaching its ultimate decision. [County Board Record, Vol. I, p. 122; Transcript, pp. 41-43, 54].

29. The County Board issued its decision on July 31, 2008, affirming the Assessor’s revised 2008 fair market value for Taxpayer’s property. The County Board, in its decision, concluded Taxpayer had not fulfilled its burden of going forward and ultimate burden of proof, and had not provided credible evidence that the Assessor’s valuation was incorrect or unlawful. [County Board Record, Transcript, pp. 133-137].

30. The State Board is authorized to “hear appeals from county boards of equalization.” Wyo. Stat. Ann. § 39-11-102.1(c). Taxpayer filed a timely appeal of the County Board decision with the State Board effective August 27, 2008. Rules, Wyoming State Board of Equalization, Chapter 3 § 2.

31. 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.”

32. The Wyoming Constitution, article 15 § 11(d), requires “[a]ll 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.”

33. Broken into its component parts, the constitutional standard requires: (1) a rational method; (2) equally applied to all property; and (3) essential fairness. It is the burden of one challenging an assessment to prove by a preponderance of the evidence that at least one of these elements has not been fulfilled. Basin Electric Power Coop. v. Dept. of Revenue, 970 P.2d 841, 852 (Wyo.1998).

34. The Legislature has required all property in Wyoming to be valued annually at fair market value. Wyo. Stat. Ann.§ 39-13-103(b)(ii). The statutory valuation date is January 1 of each year; all taxable property must be valued and assessed for taxation in the name of the owner of the property on that date. Wyo. Stat. Ann. § 39-13-103(b)(i).

[T]he amount in cash, or terms reasonable equivalent to cash, a well informed buyer is justified in paying for a property and a well informed seller is justified in accepting, assuming neither party to the transaction is acting under undue compulsion, and assuming the property has been offered in the open market for a reasonable time.

36. Each county assessor annually determines the fair market value of residential real property within their county. Wyo. Stat. Ann. 18-3-204(a)(i), (ii), (vi); Wyo. Stat. Ann. 39-13-103(b)(i). In so doing, the assessor must “[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).

37. The Department has a corresponding statutory obligation 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), (xix). The Department is required to “[p]rescribe the system of establishing the fair market value of all property valued for property taxation to ensure that all property within a class is uniformly valued.” Wyo. Stat. Ann. § 39-11-102(c)(xv). In particular, the Department must “prescribe by rule and regulation the appraisal methods and systems for determining fair market value using generally accepted appraisal standards.” Wyo. Stat. Ann. § 39-13-103(b)(ii).

38. The Department has promulgated rules which establish appraisal techniques which may be used by an assessor. Rules, Wyoming Department of Revenue, Chapter 9, § 6. These techniques include the Sales Comparison Approach, the Cost Approach, and the Income or Capitalized Earnings Approach. Rules, Wyoming Department of Revenue, Chapter 9, § 6 (a.), (b.), (c.). The Department Rules also include a number of definitions pertinent to this matter, including “Appraisal Foundation” and “Replacement Cost.” Rules, Wyoming Department of Revenue, Chapter 9, § 4 (g.), § 6 (b.)(v.)(F.). 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).

39. The Department’s Rules provide for use of a CAMA system. Rules, Wyoming Department of Revenue, Chapter 9, § 6 (d.). CAMA “automates the comparable sales and replacement cost methods.” Britt v. Fremont County Assessor, 2006 WY 10, ¶ 39, 126 P.3d 117, 128 (Wyo. 2006).

40. By rule, the Department has defined its own additional and independent responsibility to monitor the assessors’ use of CAMA systems:

(i) Annually, the Ad Valorem Tax Division shall monitor each Wyoming county to discuss and ensure utilization of the Department approved CAMA systems and compliance with all Department directives and orders with regard to appraisal method and valuation methodologies. The results shall be compiled by identifying current issues of concern and presented to the Department of Revenue Director no later than January 31^st.

41. The Department also prescribes how the various valuation methods are to be evaluated and utilized by an assessor:

Section 6. Appraisal Methods. The appraisal techniques which may be used by the County Assessor or the Ad Valorem Tax Division under written agreement with a county include the approaches described in this section. Each approach used shall be an appropriate method for the type of property being valued; that is, the property shall fit the assumptions inherent in the appraisal method in order to calculate or estimate the fair value of the property. Each approach used shall also consider the nature of the property or industry, and the regulatory and economic environment within which the property operates.

Section 7. Reconciliation. The appraiser shall weigh the relative significance, applicability and appropriateness of the indications of value derived from the approaches to value or methods outlined above, and will place the most weight and reliance on the value indicator which, in his professional judgment, best approximates the value of the subject property. The appraiser shall evaluate all alternative conclusions and reconcile the value indicators to arrive at a final estimate of value. For market value, the final estimate is that value which most nearly represents what the typical, informed, rational purchaser would pay for the subject property and a rational seller would accept if it were available for sale on the open market as of the date of the appraisal, given all the data utilized by appraisers in their analyses.

42. In valuing real property and improvements for tax purposes, the assessor must take into consideration depreciation. Rules, Wyoming Department of Revenue, Chapter 9 § 6(b.)(iv.). Depreciation is defined as:

(d.)"Depreciation" means a loss of utility and hence value from any cause. Depreciation may take the form of physical depreciation, functional obsolescence, or economic obsolescence.

(i.) "Physical Depreciation" means the physical deterioration as evidenced by wear and tear, decay or depletion of the property.

(ii.) "Functional Obsolescence" means the impairment of functional capacity or efficiency, which reflects a loss in value brought about by such factors as defects, deficiencies, or super adequacies, which affect the property item itself or its relation with other items comprising a larger property.

(iii.) "Economic Obsolescence" means impairment of desirability or useful life arising from factors external to the property, such as economic forces or environmental changes which affect supply-demand relationships in the market. The methods to measure economic obsolescence may include, but are not limited to:

(A.) Capitalization of the income or rent loss attributable to the negative influence;

(B.) Comparison of sales of similar properties which are subject to the negative influence with others which are not.

43. An assessor is also required to take into consideration appreciation. Rules, Wyoming Department of Revenue, Chapter 9 § 6(b.)(iii.). Appreciation is defined as “an increase in value due to an increase in cost to reproduce, value over the cost, or value at some specified earlier point in time, brought about by greater demand, improved economic conditions, increasing price levels, reversal of depreciating environmental trends, or other factors as defined in the market.” Rules, Wyoming Department of Revenue, Chapter 9 § 6(b.)(v.)(A.).

44. The determination of fair market value inevitably involves a degree of discretion:

Early on, Justice Blume recognized a truth inherent in the area of property valuation: “There is no such thing as absolute value. A stone cannot be other than a stone, but one man may give a different valuation to a piece of land than another.” Bunten v. Rock Springs Grazing Ass’n, 29 Wyo. 461, 475, 215 P. 244, 248 (l923). Accordingly, this court has consistently interpreted Wyo. Const. art. 15, § 11 to require “only a rational method [of appraisal], equally applied to all property which results in essential fairness.”

Basin Electric Power Coop. v. Dept. of Revenue, 970 P.2d 841, 857 (Wyo.1998) quoting Holly Sugar Corp. v. State Board of Equalization, 839 P.2d 959, 964 (Wyo.1992). The Wyoming Supreme Court has recently reiterated the “rational method” standard. Britt v. Fremont County Assessor, 2006 WY 10, ¶ 18, 126 P.3d 117, 123 (Wyo. 2006).

45. An assessor’s valuation is presumed valid, accurate, and correct. This presumption survives until overturned by credible evidence. Britt v. Fremont County Assessor, 2006 WY 10, ¶ 23, 126 P.3d 117, 125 (Wyo. 2006); Thunder Basin Coal Company v. Campbell County, Wyoming Assessor, 2006 WY 44, ¶ 13, 132 P.3d 801, 806 (Wyo. 2006); Teton Valley Ranch v. State Board of Equalization, 735 P.2d 107, 113 (Wyo. 1987). A mere difference of opinion as to value is not sufficient to overcome the presumption. J Ray McDermott & Co. v. Hudson, 370 P.2d 364, 370 (Wyo. 1962); Thunder Basin Coal Company v. Campbell County, Wyoming Assessor, 2006 WY 44, ¶¶ 13, 48, 132 P.3d 801, 806, 816 (Wyo. 2006). The presumption is especially valid where the Assessor valued the property according to the Department’s Rules and Regulations which provide for the use of the CAMA system in the assessment of real property. Rules, Wyoming Department of Revenue, Chapter 9 § 6(b.), (d.). “The burden is on the taxpayer to establish any overevaluation.” Hillard v. Big Horn Coal Co., 549 P.2d 293, 294 (Wyo. 1976).

46. The Wyoming Supreme Court has described the burden of proof for a taxpayer challenging a county assessor’s valuation:

A strong presumption favors the Assessor’s valuation. “In the absence of evidence to the contrary, we presume that the officials charged with establishing value exercised honest judgment in accordance with the applicable rules, regulations, and other directives that have passed public scrutiny, either through legislative enactment or agency rule-making, or both.” Amoco Production Co. v. Dept. of Revenue, 2004 WY 89, ¶ 7, 94 P.3d 430, 435 (Wyo. 2004). The Britts [i.e., the protesting taxpayers] had the initial burden of presenting evidence sufficient to overcome the presumption. Id., ¶ 8. If the Britts successfully overcame the presumption, then the county board was “required to equally weigh the evidence of all parties and measure it against the appropriate burden of proof.” CIG v. Wyoming Dept. of Revenue, 2001 WY 34, ¶ 10, 20 P.3d 528, 531 (Wyo. 2001). The burden of going forward would then have shifted to the Assessor to defend her valuation. Id. Above all, the Britts bore “the ultimate burden of persuasion to prove by a preponderance of the evidence that the valuation was not derived in accordance with the required constitutional and statutory requirements for valuing . . . property.” Id.

47. The Wyoming Supreme Court has recognized the validity of valuations derived from the CAMA system. Gray v. Wyoming State Board of Equalization, 896 P.2d 1347 (Wyo. 1995), Britt v. Fremont County Assessor, 2006 WY 10, ¶ 17, 126 P.3d 117, 123 (Wyo. 2006). In fact, the Wyoming Supreme Court rejected the use of actual sales price for properties in favor of the value established by the CAMA system because of the equality and uniformity which result from its use. Gray, supra, at 1351.

48. Our evaluation of this appeal turns, at least in part, on the question of whether there is substantial evidence in the record which reasonably supports the County Board’s decision. In determining whether the required substantial evidence is present, the State Board will not substitute its judgement for findings reasonably supported by evidence in the County Board record. Laramie County Board of Equalization v. State Board of Equalization, 915 P.2d 1184, 1188-1189 (Wyo. 1996); Holly Sugar Corp. v. Wyoming State Board of Equalization, 839 P.2d 959 (Wyo. 1992); Sage Club, Inc. v. Employment Sec. Comm’n., 601 P.2d 1306, 1310 (Wyo. 1979). While substantial evidence may be less than the weight of the evidence, it cannot be clearly contrary to the overwhelming weight of the evidence. The Wyoming Supreme Court has stated “[s]ubstantial evidence is a term of art best described as relevant evidence that a reasonable mind can accept as adequate support for an agency’s conclusion.” Sidwell v. State Workers’ Compensation Div., 977 P.2d 60, 63 (Wyo. 1999).

49. Taxpayer asserts the County Board incorrectly applied the burden of proof by failing to appropriately shift that burden to the Assessor. As the Wyoming Supreme Court pointed out in Britt, the protesting taxpayer has the initial burden of presenting sufficient evidence to overcome the presumption in favor of the assessor. If the taxpayer meets that burden, the burden of going forward shifts to the assessor to defend their valuation. The ultimate burden of proof - burden of persuasion - is, however, always borne by the protesting taxpayer. We thus consider Taxpayer’s assertion in light of this authority. Supra, ¶ 46.

50. Taxpayer’s burden of proof assertion is based on the single argument that Wirth’s “thoughtful analysis of the IAAO Standards, statistical bases for the Assessor’s work product, and the DOR’s Rules and Regulations” supports a conclusion the use by the Assessor of a small sales sample size in calculations for LEA 430-R is unreliable, and does not meet the requirements of Department Rules. [Opening Brief of Petitioner Wirth Revocable Trust, p. 15].

51. We note Taxpayer’s argument neither identifies the specific Department Rule which the Assessor is allegedly to have violated, nor does Taxpayer direct us to any testimony by Wirth which identifies any such Rule. Without identification of a specific Rule, we are unable to reach any conclusion on how the sample size utilized by the Assessor would be violative of any Department Rule. This is particularly true since the Department Rules do not specify a minimum sample size other than to require the Assessor to consider “an adequate number of reliable arms-length sales” of properties similar to the property being valued, a point recognized by Taxpayer. Supra, ¶ 8; Rules, Wyoming Department of Revenue, Chapter 9. § 6(a.).

52. Taxpayer also argues the sales sample size used by the Assessor is too small when considered in light of IAAO Standards. The issue of whether a Wyoming assessor is bound by such standards has been previously considered by this Board. Our previous conclusion, which we reiterate herein, is that IAAO Standards, including any on sales sample size, are not binding on a Wyoming assessor:

87.As we have already explained, the Legislature has vested the Department with the authority to adopt rules to constrain the valuation methodology used by county assessors to determine the taxable value of property for ad valorem purposes. Supra ¶¶ 53, 54, 60, 61. The Department has issued such rules. See generally, Rules, Wyoming Department of Revenue, Chapter 9. To interpret these rules, we apply rules of statutory interpretation. State ex rel. Department of Revenue v. Buggy Bath Unlimited, Inc., 2001 WY 27, ¶6, 18 P.3d 1182, 1185 (Wyo. 2001). “Initially, we make an inquiry respecting the ordinary and obvious meaning of the words employed according to their arrangement and connection. We construe together all parts of the statute in pari materia, giving effect to each word, clause, and sentence so that no part will be inoperative or superfluous.” In re WJH, 2001 WY 54, ¶ 7, 24 P.3d 1147, 1150 (Wyo. 2001).

88.The Department’s Rules include a definition of the Appraisal Foundation. Rules, Wyoming Department of Revenue, Chapter 9, § 4(g). The definition identifies the International Association of Assessing Officers as a regular institutional member of the Appraisal Foundation. Id. The Department’s Rules, however, go no further in the direction of adopting IAAO standards or USPAP. See generally, Rules, Wyoming Department of Revenue, Chapter 9. This absence is a significant omission in light of the Department’s definition. In the absence of such an affirmative adoption of IAAO and USPAP standards by rule, we can not and must not apply the IAAO and USPAP standards as Wyoming law. In so concluding, we reject any assertion the IAAO and USPAP standards govern in the absence of specific Departmental rules to the contrary.

Lowes HIW, Inc., Docket No. 2005-115, May 19, 2006, 2006 WL 3327976 (Wyo. St. Bd. Eq.). See also, D Bar D Ranch LLC, Docket No. 2005-113, July 20, 2006, 2006 WL 3327975, ¶ 102 (Wyo. St. Bd. Eq.).

53. Taxpayer also argues there is no express authorization for the Assessor’s “manually-created” adjustment to what Taxpayer asserts is the “presumptively valid valuation derived by the automated CAMA System” for Taxpayer’s structures. The application of such an adjustment is thus unlawful as well as arbitrary, capricious, and an abuse of discretion. Taxpayer again relies, in part, for support of this assertion upon its argument the number of comparable sales used by the Assessor to determine a market adjustment factor was inadequate pursuant to IAAO Standards. Taxpayer does not challenge, and in fact concedes, the validity and legality of the CAMA System used in determining the fair market value of real property. [Opening Brief of Petitioner Wirth Revocable Trust, p. 15-20].

54. We have already stated our conclusion IAAO Standards are not binding on a Wyoming assessor. Such Standards therefore do not support Taxpayer’s argument on this issue as well. Supra, ¶ 52.

55. The Department has approved, by rule, three appraisal techniques - sales comparison, cost, and income - which an assessor may use to achieve the required fair market value for all property in the county. Supra, ¶¶ 37, 38, 41. The Department Rules in addition provide for use of a CAMA system. Supra, ¶ 39.

56. The Department Rules further require an assessor to reconcile the appraisal techniques and CAMA system, and the values derived thereby, to arrive at “that value which most nearly represents what the typical, informed, rational purchaser would pay for the subject property and a rational seller would accept if it were available for sale on the open market as of the date of the appraisal, given all the data utilized by appraisers in their analyses.” Supra, ¶ 41. Such reconciliation clearly involves the discretion recognized by the Wyoming Supreme Court in Bunten. Supra, ¶ 44.

57. The use of the sales comparison approach in conjunction with the CAMA system is thus clearly authorized, and arguably even required by the Department Rules. Supra, ¶¶ 37, 38, 41.

58. The sales comparison approach “models the behavior of the market by comparing the properties being appraised (subjects) with similar properties that have recently sold (comparable properties)…Comparable properties are selected for similarity to the subject property…. [A] market value for the subject property is estimated from the...sales prices of the comparable properties.” Property Appraisal and Assessment Administration, p. 153 (IAAO, 1990).

59. The factor required to adjust replacement cost values, as determined in the CAMA system, to market value are denominated “market adjustment factors,” and are based on sales ratio studies or other market analysis. Glossary for Property Appraisal and Assessment, p. 84 (IAAO, 1997). Supra, ¶¶ 26, 27; Rules, Wyoming Department of Revenue, Chapter 9, § 6(b.)(v.)(F.).

60. A sales ratio is the ratio of appraised value to the sales price of a property. Glossary for Property Appraisal and Assessment, p. 125 (IAAO, 1997).

61. The Assessor’s calculation of a market adjustment for Taxpayer’s structures used an algebraic calculation to determine the factor required to raise the fair market value of all structures in LEA 430-R to a target sales ratio of 96%. The CAMA system then uses the derived factor, in this case, 1.6, to raise the cost value for all structures in LEA 430-R to fair market value. Britt v. Fremont County Assessor, 2006 WY 10, ¶ 39, 126 P.3d 117, 128 (Wyo. 2006). Supra, ¶¶ 27, 39.

62. The development of a market adjustment factor is thus simply a generally accepted element of the sale comparison approach which the Department has specifically authorized. Supra, ¶¶ 37, 38, 39, 58, 59, 60. We see no need for the Department, once it has authorized a valuation approach, to then detail in its Rules every element or process involved in utilizing the approved valuation approach. Such a conclusion is particularly appropriate in light of the requirement an assessor and any other state or county employee acting as a “property tax appraiser” who makes valuation judgements for purposes of ad valorem taxation must be certified by the Department based on training in the technical, legal and administrative aspects of the appraisal and assessment process. Wyo. Stat. Ann. §§ 18-3-201(b), (c), (d), (e).

63. Taxpayer further asserts the designation by the Assessor of LEAs, and the use of market adjustment factors, violates Department Rules, does not employ recognized appraisal techniques adopted by the Department, and is violative of the uniformity requirements of the Wyoming Constitution, article 15, § 11. Taxpayer contends the Assessor’s actions in using LEAs and market adjustment factors were illegal. [Opening Brief of Petitioner Wirth Revocable Trust, pp. 20-25].

64. Taxpayer, in support of its argument the actions of the Assessor were illegal, again cites for support the IAAO Standards which we have previously concluded are not applicable to Wyoming assessors. Supra, ¶ 52. Such Standards are thus not authority for this argument either.

65. Taxpayer also attempts to rely for support of its argument the Assessor’s actions were illegal on an Appendix to its Opening Brief. The Board denied Taxpayer’s request the Appendix be added as a Supplement to the County Board Record based on Taxpayer’s failure to fulfill the requirements of Rules, Wyoming State Board of Equalization, Chapter 3, § 8. [Opening Brief of Petitioner Wirth Revocable Trust, pp. 21, 24]. The material contained in the Appendix is, as a result, not a part of the County Board Record, and thus can not be considered by this Board as support for any argument by Taxpayer.

66. Taxpayer argues that because the LEAs and market adjustment factors are not calculated by the CAMA system, the Department has not formally adopted an appraisal technique which allows their use. The Department has, however, adopted the sales comparison approach as one of the approved valuation techniques available to assessors. The testimony and evidence presented by the Assessor at the County Board hearing as to how and why she developed LEA 430-R, and its use in conjunction with the sales comparison valuation approach and the CAMA system, clearly established why both the creation of LEAs and market adjustment factors are “approved,” if approval is necessary, as essential components of determining a value for structures under the Department Rules. Supra, ¶¶ 24, 27, 39, 62.

67. Taxpayer’s constitutional argument simply restates its prior assertion that basing a market adjustment factor on three comparable sales “is irrational, and results in a high degree of unfairness for Fremont county taxpayers.” [Opening Brief of Petitioner Wirth Revocable Trust, p. 25]. This assertion of “unfairness” by Taxpayer is not persuasive in light of the fact the Department only requires an “adequate number” of sales for sales comparison purposes. Supra, ¶ 51.

68. The overarching tenor of Taxpayer’s evidence, and argument on appeal that use by the Assessor of three comparable sales within a designated LEA to develop a market adjustment factor is improper is, in actuality, a challenge to the methods authorized by the Department to be used by all Wyoming assessors to value residential structures. Taxpayer offered very little if any evidence at the County Board hearing as to how the actions of the Assessor incorrectly valued the structures on its property.

69. This Board, as an intermediate level of appellate review, is charged with the responsibility of reviewing county board decisions within defined parameters. Rules, Wyoming State Board of Equalization, Chapter 3, § 9; Supra, pp. 3-4. It is that standard which must be the overall focus of this Board’s review of a county board decision. Supra, ¶ 48.

70. The Assessor complied with the requirements of state law in determining the value for Taxpayer’s property by using the cost approach adjusted to account for appreciation as prescribed in Chapter 9 of the Rules promulgated by the Department. Rules, Wyoming Department of Revenue, Chapter 9 § 6(b.). Specifically, the Assessor employed the CAMA system supplied by the Department as well as the approved sales comparison approach to value of Taxpayer’s structures. The use of the CAMA system in conjunction with the sales comparison approach to valuation is specifically authorized and entitles the Assessor’s value to be afforded a presumption of correctness. Supra ¶¶ 17, 27, 38, 39, 41, 42, 43, 45, 47.

71. Taxpayer did not present any evidence directly challenging the CAMA system or its use by the Assessor. Taxpayer in fact concedes the validity and accuracy of the CAMA system. Supra, ¶¶ 7, 53. A taxpayer can not prevail, however, by simply having an opinion contrary to that of the Assessor and the Department Rules on how property should be valued. As we have noted, a mere difference of opinion is not sufficient to overcome the presumption in favor of the Assessor’s valuation. Supra ¶ 45.

72. The CAMA system ensures all residential real estate is valued using the same rational method. By its uniform application, the constitutional requirements of uniformity and essential fairness are met. Supra ¶¶ 33, 45, 47.

73. The valuation derived by the Assessor using the CAMA system and the approaches to value approved by the Department is presumed valid, accurate, and correct. In this case, Taxpayer failed to present sufficient evidence to prove by a preponderance of the evidence the CAMA system and the sales comparison approach used by the Assessor were not a rational method, were not equally applied to all property, or did not achieve essential fairness. The decision of the County Board affirming the Assessor’s valuation is supported by substantial evidence. We further conclude, based on our review of the County Board record, the County Board decision was neither unlawful, arbitrary, nor capricious.

IT IS THEREFORE HEREBY ORDERED the Fremont County Board of Equalization Order affirming the Assessor’s 2008 valuation of Taxpayer's property is affirmed.

Pursuant to Wyo. Stat. Ann. §16-3-114 and Rule 12, Wyoming Rules of Appellate Procedure, any person aggrieved or adversely affected in fact by this decision may seek judicial review in the appropriate district court by filing a petition for review within 30 days of the date of this decision.

I hereby certify that on the _____ day of March, 2009, I served the foregoing DECISION AND ORDER by placing a true and correct copy thereof in the United States Mail, postage prepaid, and properly addressed to the following:

William L. Miller

Miller & Fasse

710 North 8^th West

Riverton WY 82501

Eileen Oakley

Fremont County Assessor

450 N. Second St., Room 210

Lander WY 82520

Jodi Darrough

Deputy Fremont County Attorney

450 N. Second St., Room 170

Lander WY 82520

John Wirth

PO Box 867

Dubois WY 82513

Philip A. Nicholas

Julie Wickett

Anthony, Nicholas & Tangeman, LLC

170 North Fifth Street

Laramie WY 82070