Rocky Mountain Oil and Gas Ass'n v. State Bd. of Equalization
Decision Date | 31 December 1987 |
Docket Number | No. 87-194,T-I,87-194 |
Citation | 749 P.2d 221 |
Parties | ROCKY MOUNTAIN OIL AND GAS ASSOCIATION, acting through its Wyoming Division, the Petroleum Association of Wyoming; Amoco Corporation; Mountain Fuel Supply Company; Champlin Petroleum Company; Colorado Interstate Gas Company; Conoco, Inc.; Exxon Company U.S.A.; Mid-America Pipeline Company; Panhandle Eastern Pipeline Company; Phillips Petroleum Company; Shell Oil Company; Marathon Oil Company; Texaco, Inc.; AT &nterstate Division; the Wyoming Mining Association; Kerr-McGee Coal Corporation; Associated General Contractors of Wyoming, Inc.; Wyoming Taxpayers Association; and Wyoming Retail Merchants Association, Petitioners, v. STATE BOARD OF EQUALIZATION, DEPARTMENT OF REVENUE AND TAXATION, and the State of Wyoming, Respondents. |
Court | Wyoming Supreme Court |
Jan. 19, 1988.
Marilyn S. Kite, Patrick R. Day, and William L. Combs of Holland & Hart, Cheyenne, for petitioners.
Joseph B. Meyer, Atty. Gen., Michael L. Hubbard, Sr. Asst. Atty. Gen., for respondents.
Before BROWN, C.J., and THOMAS, CARDINE, URBIGKIT and MACY, JJ.
A Wyoming ad valorem taxation rule adopted by the State Board of Equalization establishing differing amounts for assessment ratios comes to this court for a constitutional inquiry of fair-equal-and-uniform requirements, and separation-of-power limitations by district court certification of the challenge to the validity of the administrative agency rule: Can the State Board of Equalization establish a de facto tier property taxation (assessment) system by administrative rule ?
In December 1986, the State Board of Equalization (state board), as a constitutionally established taxation entity, promulgated a rule to provide varying property tax assessment ratios from 8% to 11.5% to be applied to the initially determined current value to establish computed "assessed value" for ad valorem taxation. This reduction percentage is designated variously as the property class "assessment ratio" or "debasement factor." 1 It is these reduction percentages used to factor down the full-value property class appraisals that are presented to this court in litigative conflict. In ad valorem taxation, the first procedure, as the intended starting point, is to establish current value (full value, current market value, fair value) as the appraisal sequence. Secondly, how, then, from that intended full-value determination, the tax is to be determined, becomes the issue in this case by analysis whether constitutional amendment and statutory attribution can occur by historical disregard and avoidance by the introduction of an intermediate or second-stage operative class assessment value reduction computation as the assessment ratio/debasement factor sequence. The third stage, or the taxation computation sequence, is to apply the mill levies and compute the actual property tax.
Predictably, from numerous prior hearings followed by objection at the public hearing held on the proposed assessment (divider) rule, challenge came by petition for judicial review as certified to this court by the district court pursuant to Rule 12.09, W.R.A.P. 2 A joint stipulation of facts of 18 pages, a loose-leaf volume of 38 exhibits, and a 248-page record constitute the non-contested, factual record for review. Petitioners, as rule objectors, include five trade associations and a number of individual entities primarily of a mineral-development and utility nature. 3 In curious distinction to many if not most other states with more active litigative history, this proceeding is the first general and broad-based offense against the Wyoming general property-tax operational system specifically attacking any classification or de facto tier, assessment percentage or debasement factor process.
Petitioners posit their appeal by statement of two issues:
The State defines the subjects to be addressed as:
The Wyoming Constitution, written in convention concluding on September 30, 1889 and effective upon admission to statehood on July 10, 1890, included three provisions which relate specifically to ad valorem property taxation:
Article 1, § 28, Wyoming Constitution.
Article 1, § 34, Wyoming Constitution.
Article 15, § 11, Wyoming Constitution. 4
In application of the distribution-of-powers structure of Art. 2, § 1, Wyoming Constitution:
"The powers of the government of this state are divided into three distinct departments: The legislative, executive and judicial, and no person or collection of persons charged with the exercise of powers properly belonging to one of these departments shall exercise any powers properly belonging to either of the others, except as in this constitution expressly directed or permitted."
Article 15, § 13, Wyoming Constitution, provides for absolute legislative responsibility:
"No tax shall be levied, except in pursuance of law, and every law imposing a tax shall state distinctly the object of the same, to which only it shall be applied." 5
On December 12, 1910 a constitutional amendment was adopted deleting the state auditor, treasurer, and secretary of state from the constituency of the board by providing: "The legislature shall provide by law for a state board of equalization." Article 15, § 9, Wyoming Constitution. The duties of the state board of equalization as originally enumerated continued:
Article 15, § 10, Wyoming Constitution.
The section was simplified and restated by constitutional amendment, effective November 18, 1986:
"The duties of the state board shall be to equalize the valuation on all property in the several counties and such other duties as may be prescribed by law." 6
Problems of inequality of taxation were clearly reflected by litigation including in early days Baker v. Paxton, 29 Wyo. 500, 215 P. 257 (1923); Bunten v. Rock Springs Grazing Association, 29 Wyo. 461, 215 P. 244 (1923), and by every authoritative study of the system. See Report Made to the Special Legislative Committee on Organization and Revenue by Griffenhagen & Associates (1933), a 1960 Legislative Property Valuation and Equitableness of Relative Tax Levies study, and the 1981 Legislative Service Office (LSO) Management Audit of the Ad Valorem Tax Division of the State Board of Equalization.
During the 1984 through 1987 legislative sessions, 31 bills and 5 joint resolutions for constitutional amendments were filed for introduction, of which 14 bills and one constitutional amendment were successfully enacted and approved. 7 These legislative efforts during that four-year period were directed and detailed in the field of the ad valorem property tax, with the unfortunate result that all efforts in legislative approval or constitutional amendment to authorize any assessment ratio system ended in complete failure either by lack of votes to introduce or enact, or by veto of the one bill that was passed. General success in legislative attention to structure, form, and sufficiency of the assessment sequence was, however, clearly attained in legislative...
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