IN RE TOWN OF THERMOPOLIS
| Decision Date | 07 May 2002 |
| Docket Number | No. 01-194.,01-194. |
| Citation | 45 P.3d 1155,2002 WY 70 |
| Parties | In the Matter of the Appeal of the TOWN OF THERMOPOLIS FROM A DECISION OF THE STATE BOARD OF EQUALIZATION-2000 PROPERTY VALUATION (TOWN OF THERMOPOLIS, PARCEL 2486-OLD WEST WAX MUSEUM). Town of Thermopolis, Appellant (Petitioner), v. Shelley Deromedi, Hot Springs County Assessor, Appellee (Respondent). |
| Court | Wyoming Supreme Court |
Michael S. Messenger of Messenger & Jurovich, P.C., Thermopolis, Wyoming, Representing Appellant.
Dan O. Caldwell III, Hot Springs County and Prosecuting Attorney, Thermopolis, Wyoming, Representing Appellee. Before LEHMAN, C.J., and GOLDEN, HILL, KITE, JJ., and SPANGLER, D.J., Retired.
[¶ 1] In a companion decision, we held that by establishing a public museum to house donated western wax figures and provide other scientific, educational, and cultural activities and displays, Appellant Town of Thermopolis (Town) had acted with a governmental purpose that entitled it to its requested exemption from property tax for the tax year 1999. In this appeal, Appellee Hot Springs County Assessor (Assessor) denied the same tax exemption for the tax year 2000. The Hot Springs County Board of Equalization (CBOE) reversed the Assessor's decision; the CBOE was reversed by the Wyoming State Board of Equalization (SBOE), and the district court certified the appeal to this Court.
[¶ 2] For the tax year 1999, although the museum was not yet operating, we found that the evidence did support the CBOE's findings and conclusions, and we upheld its decision to grant the Town its requested tax exemption. When the CBOE considered this issue in 2000, the museum was operating, and it found that strong evidence supported a decision to grant the Town its tax exemption. We agree that the record of evidence strongly supports the CBOE's decision, and for the same reasons stated in our decision for the 1999 tax year, we reverse and reinstate the CBOE decision granting the property tax exemption for the year 2000. Deromedi v. Town of Thermopolis, 2002 WY 69, 45 P.3d 1150.
[¶ 3] The Town presents the following issue for our review:
Was the decision of the Hot Springs County Board of Equalization that real property assessed to the Town of Thermopolis by the Hot Springs County Assessor is used primarily for a governmental purpose and is therefore exempt from property taxation pursuant to Wyo. Const. Art. 15, § 12 and Wyo. Stat. Ann. § 39-11-105(a)(v) arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law, or unsupported by substantial evidence?
The Assessor states that the issues are:
[¶ 4] In 1997, the Town received donated western wax museum figures. It sought and received a community development grant that it used to purchase property to house the figures and establish a museum with several different kinds of displays, objects, and activities. The Assessor denied the Town's tax exemption requests in both 1999 and 2000, and the Town objected, contending that the museum was used primarily for a governmental purpose. The Town received a contested case hearing before the CBOE in each of those years. For the year 2000, the Town also challenged the Assessor's valuation method. However, the CBOE upheld it, and the Town does not challenge that ruling in this appeal.
[¶ 5] In 1999, when the CBOE first considered the nature of the museum's purpose, the museum was still establishing itself but was to be operated in part by the for-profit corporation, Big Horn Prospecting, Inc (BHP). When the matter came before the CBOE in 2000, the museum was operating and found to hold the historical wax museum, the "old Mac's Bar," numerous artifacts, maps, etchings, interpretative materials, a historical teddy bear collection and other educational displays. The museum also contained a textile studio for displays, spinning, weaving, a studio and a gallery for art and handcrafts, and accommodations for public and private meetings.
[¶ 6] The CBOE found that the primary purpose of the museum was to provide educational and recreational benefit to the citizenry and to economically benefit the local economy in general, although its purpose also included enhancing sales tax revenues, and promoting tourism. BHP charged admission fees, but use of the gallery for public meetings was provided at no charge. Operating rights were granted to BHP in exchange for $1,000.00 per year rent. Additionally, the Town subsidized the museum in the amount of $1,200.00 annually for providing water, sewer and sanitation services. The Town was also obligated to assume some financial obligations until BHP showed positive cashflow. At the time of the hearing, BHP had lost $129,992.02, but was expected to eventually break even. The Big Horn Basin Foundation, a non-profit organization, operated some of the facilities and programs.
[¶ 7] For its first legal conclusion, the CBOE applied a Department of Revenue rule1 that states in part that if a service is rendered gratuitously, supported by taxes, and rendered for the public welfare or enjoyment generally, the property associated with providing such service is exempt. Based on the museum's present financial condition, the CBOE concluded that the Town is gratuitously providing the public with museum services and benefits and not for a commercial purpose.
[¶ 8] Secondly, the CBOE examined subsection (v) of the Department of Revenue rule which states: "where a city enters the field of private competitive business for profit or into activities which may be and frequently are carried on through private enterprises," the property would not be exempt. The CBOE found that, generally, public museums serve a governmental purpose, and concluded that, because the museums were different in nature and purpose, this museum did not compete with the Dinosaur Center, BHP's privately owned and operated museum. [¶ 9] For its third legal conclusion, the CBOE determined that the museum was a recreational facility, and the gallery an auditorium, within the meanings intended in Wyo. Stat. Ann. § 39-11-105(a)(v)(D)2 for which charges had not exceeded the cost of operating and maintaining it, and this entitled the Town to the exemption. Based on these three conclusions, the CBOE determined that the Town should be granted the exemption.
[¶ 10] The Assessor appealed the decision to the SBOE which reversed after again concluding, as it had in its earlier decision, that the primary purpose was economic development which is not a governmental function. It found that the museum's current unprofitability was irrelevant because the Town intended that the museum be profitable, and it rejected the conclusion that the Town's museum was not a competitor with the dinosaur museum. The Town filed a petition for review, and the district court certified the appeal to this Court pursuant to W.R.A.P. 12.09(b).
[¶ 11] As stated in our first decision, our standard of review for cases arising from a county board contested case proceeding, appealed to a state agency, and finally arriving in this Court on appeal is as follows:
Since in this case the county board was the finder of the fact and the state board heard no additional testimony, we will treat the state board as an intermediate level of review and accord deference only to the county board's findings of fact. Thus, the primary focus of our review will be whether the county board's decision was lawful and supported by substantial evidence.
Laramie County Bd. of Equalization v. Wyo. State Bd. of Equalization, 915 P.2d 1184, 1188 (Wyo.1996) (quoting Union Pacific Railroad Co. v. Wyo. State Bd. of Equalization, 802 P.2d 856, 859 (Wyo.1990)).
The party challenging the sufficiency of the evidence has the burden of demonstrating the agency's decision is not supported by substantial evidence. If the agency action is supported by substantial evidence, its decision should be reversed only for errors of law. If the agency did not apply the correct rule of law, or applied it incorrectly, this Court does not defer to the agency's conclusion. The agency's errors of law are corrected by this Court.
Id. (quoting Butts v. Wyo. State Bd. of Architects, 911 P.2d 1062, 1065 (Wyo.1996)).
[¶ 12] The scope of appellate review of agency decisions is provided by statute:
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... ... Shelley Deromedi, Hot Springs County Assessor, Appellant (Petitioner), ... Town of Thermopolis, Appellee (Respondent) ... Supreme Court of Wyoming ... May 7, 2002. 45 P.3d 1151 Dan O. Caldwell III, Hot Springs ... ...