Case Title: Holly Sugar Corp. v. State Bd. of Equalization for State of Wyo.

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1992-10-14T00:00:00Z

Document:
Holly Sugar Corp. v. State Bd. of Equalization for State of Wyo.1992 WY 133839 P.2d 959Case Number: 92-13Decided: 10/14/1992Supreme Court of Wyoming
HOLLY SUGAR 
CORPORATION, Appellant (Petitioner),

v.

STATE 
BOARD OF EQUALIZATION FOR the STATE OF WYOMING, Appellee 
(Respondent).

Appeal from District Court, GoshenCounty, John T. Langdon, 
J.

 Bob C. 
Sigler and Jerry M. Smith, of Sigler and Smith Law Office, Torrington, Stanley 
K. Hathaway, Hathaway, Speight, Kunz, Trautwein & Barrett, Cheyenne, for appellant.

Joseph 
B. Meyer, Atty. Gen., Michael L. Hubbard, Sr. Asst. Atty. Gen., Thomas D. 
Roberts, Sp. Asst. Atty. Gen., Cheyenne, for appellee.

Before 
MACY, C.J., and THOMAS, CARDINE, 
URBIGKIT* and GOLDEN, 
JJ.

* Chief Justice at time of oral 
argument.

GOLDEN, Justice.

 [¶1.]     Holly Sugar Corporation 
petitioned the Goshen County District Court to review an order of the State 
Board of Equalization which for 1990 tax purposes set the fair market value 
(FMV) of its Torrington, 
Wyoming sugar factory at 
$18,886,898. The State Board's order affirmed and modified in part an order of 
the Goshen County Board of Equalization which had set the FMV of the Torrington factory at 
$21,401,812. Upon stipulation of the parties, the district court certified the 
case to this court for review pursuant to Wyo.R.App.P. 12.09. We will reverse 
and remand.

ISSUES

 [¶2.]     Holly presents these 
issues:

1. 
Whether the findings of fact, conclusions of law and order of the State Board of 
Equalization, determining that the fair market value of appellant's Torrington factory for the 
year of 1990 is the sum of $18,886,898, are arbitrary, capricious, contrary to 
law and not supported by substantial evidence.

2. 
Whether the decision of the State Board of Equalization determining the 
valuation of the Holly Sugar factory at Torrington, to be more than double the 
valuation fixed for a very similar factory owned by appellant at Worland, 
Wyoming, violates the equal and uniform requirements for valuation on all 
property in the several counties as prescribed and set forth in Article 15, 
Sections 10 and 11 of the Wyoming Constitution, and whether the State Board of 
Equalization has the obligation to equalize and make uniform the taxation within 
the same class of property.

3. 
Whether the increase in the assessed valuation of appellant's Torrington factory 
for 1990, is in violation of Chapter 73, Section 3, of the Wyoming Session Laws 
of 1988, insofar as the increased valuation exceeds the 1989 assessed valuation 
by more than twenty-five percent.

4. 
Whether the failure of the Goshen County Board of Equalization to adopt rules of 
practice and regulations prescribing contested case procedures under the Wyoming 
Administrative Procedure Act, as required by Section 16-3-102 W.S., denied 
appellant due process.

5. 
Whether the order of limited remand issued by the State Board of Equalization, 
under date of June 13, 1991, remanding to the Goshen County Board of 
Equalization for amendment of its written decision to include basic factual 
findings utilizing only the evidence in the record, occurring after the briefs 
had been filed and after final arguments by the parties to the State Board of 
Equalization, was lawful and whether the same affords due process to 
appellant.

FACTS

 [¶3.]     Holly Sugar Corporation 
consists primarily of eight sugar factories located in various Western States. 
It is a wholly owned subsidiary of Imperial Holly Sugar Corporation. Imperial 
Holly was formed in 1988 following the consummation of an acquisition and merger 
agreement between Imperial Sugar Company and Holly. The acquisition and merger 
took place in three essential steps: first, Imperial Sugar purchased two-thirds 
of Holly stock by public tender offer of $108 per share; second, Imperial Sugar 
merged with Holly and became Imperial Holly; and third, the remaining one-third 
of Holly stock was converted into Imperial Holly stock on a one-for-three ratio. 

 [¶4.]     Holly has one sugar 
factory in Worland, WashakieCounty and another in Torrington, Goshen 
County, Wyoming. Both 
factories were constructed in the 1920's. Thos. Y. Pickett & Company, Inc. 
(Pickett) estimated the FMV of the two factories for the 1987, 1988 and 1989 tax 
years using the Reproduction Cost New Less Depreciation (RCNLD) method of 
appraisal.1 FMV under the RCNLD method is 
calculated essentially as follows: FMV = (reproduction cost new - [physical 
depreciation + functional obsolescence + economic obsolescence]).2 The estimated FMVs of the Worland 
and Torrington 
factories were relatively close in 1987, 1988 and 1989. Illustrative are the 
1989 figures: Worland - $7,020,045 and Torrington - $9,734,850.

 [¶5.]     In 1990, WashakieCounty employed the services of Pickett, while 
GoshenCounty did not. Pickett 
established a 1990 FMV for the Worland factory at $8,139,785; the Goshen County 
Assessor established a 1990 FMV for the Torrington factory at $30,399,680. The 300 
percent increase in the estimated FMV of the Torrington factory from 1989 to 1990 resulted 
in a corresponding increase in tax liability, i.e., from $82,197.42 to 
$272,893.52. This increase occurred primarily because the Goshen County Assessor 
did not allow a FMV adjustment for functional or economic obsolescence, while 
Pickett in WashakieCounty allowed its customary adjustment of 
61.9 percent.

 [¶6.]     Following receipt of 
its 1990 tax notice, Holly submitted a letter of protest and filed a motion for 
a hearing before the Goshen County Board of Equalization. The CountyBoard denied both Holly's request for a 
reduction in valuation and its motion for a hearing. Holly appealed the denial 
of its motion for a hearing to the State Board of Equalization. On October 16, 
1990, the State Board ordered the CountyBoard to afford Holly an evidentiary 
hearing in compliance with the Wyoming Administrative Procedure Act and issue a 
written decision on or before December 31, 1990.

 [¶7.]     The CountyBoard held a contested case hearing on 
December 18 and 19, 1990. Holly presented testimonial evidence from corporate 
financial and engineering executives, from the Torrington factory manager, and from the 
president of Consilium, Inc., a professional appraisal company. This testimonial 
evidence, supported by numerous exhibits, covered such topics as the Holly 
buy-out; capital expenditures on the Worland and Torrington factories; physical, production and tax 
similarities between the two factories; the current state of the sugar industry; 
and the FMV of the Torrington factory as estimated by the market, 
income and cost methodologies of appraisal. The essence of Holly's case was that 
the Worland and Torrington factories are similar and that they 
should be taxed similarly. Holly contended that the true FMV of the Torrington factory was in 
the neighborhood of $10,000,000, rather than $30,000,000 
dollars.

 [¶8.]     The Goshen County 
Assessor presented testimonial evidence from office personnel, as well as from a 
representative of the Ad Valorem Division of Wyoming's Department of Revenue and 
Taxation. The thrust of this testimony, which was also supported by numerous 
exhibits, was that the Goshen County Assessor valued the Torrington factory in accordance with RCNLD guidelines 
contained in the "State of Wyoming 
Industrial Facilities Handbook." The Deputy County 
Assessor explained that, as outlined by the handbook, she took the original 
installation costs associated with the Torrington factory and trended those figures up 
to present value to determine reproduction cost. A trending table was provided 
by the state. She next multiplied the reproduction cost by a "percent good" 
factor taken from a state-provided depreciation table to arrive at a RCNLD 
figure of $30,399,680. The Deputy County Assessor explained that she did not 
adjust the RCNLD figure for functional or economic obsolescence because Holly 
had failed to provide her with sufficient information.

 [¶9.]     On December 24, 1990, 
the CountyBoard issued an order in which it established the FMV 
of the Torrington factory at $21,401,812. The 
CountyBoard reached this figure by adjusting the CountyAssessor's FMV figure of $30,399,680 for 
functional obsolescence in the amount of $7,331,000 and for economic 
obsolescence in the amount of $1,666,868. The CountyBoard did not explain how it arrived at 
its obsolescence figures, but did explain that continued application of 
Pickett's combined obsolescence adjustment of 61.9 percent was not warranted due 
to management, market and facility improvement.

 [¶10.]  Holly appealed the CountyBoard's order to the State Board. The 
State Board accepted briefs and held oral argument on June 12, 1991. On June 13, 
1991, the State Board issued an order of limited remand to the CountyBoard, directing it to amend its order to 
include basic findings of fact from the existing record to support its FMV 
figures. The State Board instructed the CountyBoard to submit its amended order by July 
2, 1991, and provided that written arguments would be received from the parties 
until July 15, 1991.

 [¶11.]  On July 1, 1991, the CountyBoard submitted an amended order which 
revealed how it had arrived at the figures for functional and economic 
obsolescence. As regards functional obsolescence, the CountyBoard 
explained that it adopted, with minor exceptions, the figures from a 1986 
Consilium appraisal of the Torrington factory. As regards economic 
obsolescence, the CountyBoard explained that it used information 
from Holly's income statement to calculate the figure according to a formula in 
"Estimating Economic Obsolescence of Operating Industrial Plants," written by 
Tom Skogstad (Assessment Digest, Nov/Dec 1983). Holly filed an objection and 
response to the amended order on July 12, 1991, arguing that the State Board did 
not have authority to issue an order of limited remand and that the CountyBoard's figures for functional and 
economic obsolescence were not supported by reason or 
evidence.

 [¶12.]  The State Board issued an order on August 
16, 1991, in which it affirmed and modified in part the CountyBoard's order. The State Board concluded 
that an additional adjustment of $921,600 should be allowed for functional 
obsolescence due to electrical generating incapacity. It also determined that 
the CountyBoard's figure for economic 
obsolescence was the product of substantial interpretation of Holly's income 
statement, largely unexplained, and not supported by the record. Accordingly, 
the State Board adopted the economic obsolescence figure of $3,260,182 from the 
1986 Consilium appraisal. Making the foregoing adjustments in value, the State 
Board ordered the FMV of the Torrington factory established at 
$18,886,898.

 [¶13.]  Holly petitioned the Goshen County 
District Court to review the State Board's order. Upon stipulation of the 
parties, the district court certified the case to this court for review pursuant 
to Wyo.R.App.P. 12.09.

STANDARD 
OF REVIEW

 [¶14.]  We review administrative cases certified 
to us pursuant to Wyo.R.App.P. 12.09 according to the standards applicable to a 
reviewing court of first instance. The scope of our review is defined by Wyo. 
Stat. § 16-3-114(c) (1990) and dictates a two-step analysis. First, we review 
the whole record to determine if there is substantial evidence to support the 
agency's findings of fact. Substantial evidence is that quantum of relevant 
evidence that a reasonable mind might accept as adequate to support a 
conclusion. If substantial evidence exists, we cannot substitute our judgment 
for that of the agency, although different conclusions may have been drawn from 
the evidence. Second, we determine whether the agency's action is otherwise 
lawful. If it is, it will be sustained, and if it is not, it will be corrected. 
Mekss v. Wyoming Girls' School, 813 P.2d 185, 
200 (Wyo. 
1991).

DISCUSSION

 [¶15.]  Before delving into the record, we 
comment upon Holly's fifth issue. Holly asserts that this case must be reversed 
because the State Board's order of limited remand poisoned the whole 
adjudicatory and review process. We disagree.

 [¶16.]  The CountyBoard is an agency subject to the 
provisions of the Wyoming Administrative Procedures Act. See Wyo. Stat. § 
16-3-101(b)(i) (1990). Section 16-3-110 requires an administrative agency to 
issue a written decision which contains findings of fact and conclusions of law 
following a contested case. The findings of fact must enable a reviewing 
tribunal to trace the agency's reasoning from the evidence in the record to its 
eventual findings of ultimate fact and legal conclusions. E.g., Jackson v. State ex rel. Wyoming Workers' Comp., 786 P.2d 874, 878 (Wyo. 
1990).

 [¶17.]  In the instant case, the State Board was 
unable to determine the manner in which the CountyBoard arrived at its obsolescence figures. 
Rather than issue a final order merely stating that there was an insufficient 
basis for meaningful review, the State Board issued an order of limited remand 
so the CountyBoard could supplement its 
findings of fact. While we encourage agencies to be thorough in the first 
instance, we detect no principle of law that was violated by the State Board's 
order. See 2 Am.Jur.2d Administrative Law § 764 (1962). Had the State Board 
usurped the role of the CountyBoard by dictating the findings of fact to 
be made on the evidence or had it not provided for an opportunity to respond to 
the amended order, we would have a different situation. The State Board's order 
of limited remand served only to expedite the end that presumably all parties 
desired - substantive review of the CountyBoard's order. With similar intent, we 
proceed on appeal with a substantive review of the record as it relates to the 
order of the State Board and the amended order of the CountyBoard.

 [¶18.]  Holly contends, as it has contended from 
the inception of this case, that the FMV of its Torrington factory is much lower than 
$30,399,680, $21,401,812, or even $18,886,898. Holly criticizes the County and 
State Boards for not relying upon the testimony of its expert, Steve Olson of 
Consilium Inc. Mr. Olson testified concerning the Torrington factory fee appraisal that Consilium 
had performed in anticipation of this litigation. He explained that Consilium 
appraised the factory using the cost (RCNLD), income and market methodologies. 
It was Mr. Olson's opinion that the market, or comparative sales, method of 
appraisal best reflected the FMV of the Torrington factory and that such FMV was 
$9,756,000.

 [¶19.]  As set-forth above, our task is not to 
determine which of various appraisal methods is best or most accurately 
estimates FMV; rather, it is to determine whether substantial evidence exists to 
support usage of the RCNLD method of appraisal, and, if so, whether substantial 
evidence exists to support the manner in which it was used. SeeTetonValley Ranch v. State Bd. of 
Equalization, 735 P.2d 107 (Wyo. 1987). In making these determinations, we 
look to the record of the CountyBoard and afford deference only to its 
findings of fact. Union Pacific R.R. Co. v. WyomingState 
Bd. of Equalization, 802 P.2d 856, 862 (Wyo. 1990).

 [¶20.]  Proper evaluation of the record as it 
relates to the propriety of using the RCNLD method of appraisal requires a legal 
backdrop. Challenges to the valuation of property for the purpose of ad valorem 
tax assessment generally are rooted in Wyo. Const. art. 15, § 11, which in its 
amended form provides in relevant part:

(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.

* * * * 
* *

(d) All 
taxation shall be equal and uniform within each class of property.3

 [¶21.]  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 (1923). 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." Teton, 735 P.2d  
at 115 (Urbigkit, J., summarizing Wyoming value-assessment-taxation 
jurisprudence in a concurring opinion).

 [¶22.]  The CountyBoard 
found that the RCNLD method of appraisal was a rational means of determining the 
FMV of Holly's Torrington factory. The State Board upheld this 
finding as being supported by substantial evidence. Holly does not contend that 
the RCNLD approach is necessarily an irrational method of appraisal, but rather 
argues that the market approach is a more rational method of appraisal. As 
indicated by our foregoing discussion, however, Holly's argument is misguided. 
The record is replete with evidence which supports the County and State Boards' 
findings regarding the RCNLD approach. Both Consilium and Pickett used the RCNLD 
approach in their appraisals, as did the Goshen County Assessor. In fact, RCNLD 
was the method prescribed to the counties by the Ad Valorem Division of 
Wyoming's Department of Revenue and Taxation for the valuation of industrial 
property. Accordingly, we hold that substantial evidence exists to support the 
use of the RCNLD method of appraisal to determine the FMV of Holly's Torrington 
factory.

 [¶23.]  The CountyBoard 
found that the RCNLD value of Holly's Torrington factory was $30,399,680, absent 
necessary adjustments for functional and economic obsolescence. The State Board 
also upheld this finding as being supported by substantial evidence. Holly does 
not seriously attack the evidentiary basis for these findings. Rather, the push 
of Holly's argument regarding the application of the RCNLD appraisal method is 
that neither the CountyBoard nor the State Board made sufficient 
adjustment for functional or economic obsolescence. Specifically, Holly contends 
that there was no evidence in the record to support the County and State Boards' 
use of 1986 obsolescence figures to answer a 1990 obsolescence problem. We 
agree.

 [¶24.]  The CountyBoard found that blind adherence to 
Pickett's combined obsolescence adjustment of 61.9 percent was not warranted due 
to management, market and facility improvements. Again, the State Board 
determined that substantial evidence existed to support this finding. Our review 
of the record confirms the determination of the State Board. The manner in which 
both Boards calculated functional and economic obsolescence is, however, 
suspect.

 [¶25.]  The CountyBoard calculated its figure for functional 
obsolescence as follows: 

      8. The Goshen 
County Board of Equalization determined the amount of functional obsolescence 
using Petitioner's Exhibit 11 (Consilium Report) as a basis for its finding. 
Functional obsolescence is calculated for Petitioner's property on pages 67 
through 70 of "Exhibit C" of the Consilium report. The Goshen County Board of 
Equalization adopted the calculations and figures set forth therein, with the 
following qualifications:

     a) FUEL COST - The Goshen County Board of 
Equalization allowed $2,436,000.00 which was the full amount calculated by 
Consilium.

     b) ELECTRIC GENERATORS - The County Board 
disallowed any credit for the incapacity of internal electric generation, as the 
production of electricity is not an essential function of a sugar 
factor[y].

     c) BULK STORAGE CAPACITY - The County 
Board allowed $220,000.00 in this category, which is the amount Consilium 
calculated minus $660,000.00, being the sum the County Board determined to be 
excess labor. This deduction was made because excess labor costs, as calculated 
by Consilium, were allowed in full in that category as [set] forth 
below.

     d) EXCESS LABOR COSTS - The County Board 
allowed $4,675,000.00 which was the full amount calculated by 
Consilium.

     The amount of 
functional obsolescence properly allowable in the valuation of Petitioner's 
property in 1990 is:

Fuel 
      Cost       
      -

$2,436,000.00 
      

Bulk 
      Storage -

220,000.00

Excess 
      Labor - 

4,675,000.00

Total 
      Functional Obsolescence

7,331,000.00

 [¶26.]  Upon review, the State Board gave this 
assessment:

     21. Petitioner's 
evidence under the cost approach resulted in an estimated functional 
obsolescence as of January, 1990, of $9,896,000 (employing the methods used in 
the 1986 appraisal). Petitioner's estimate of functional obsolescence in the 
1986 appraisal was $8,913,000. The county board approved a total functional 
obsolescence of $7,331,000, relying upon the capitalized cost information from 
the 1986 appraisal and its opinion that certain costs either should not be 
allowed or were included in other categories. We conclude Petitioner's evidence 
of functional obsolescence as an adjustment to RCNLD in the January, 1990, 
appraisal is incomplete, and the higher 1990 functional estimate when compared 
against the 1986 appraisal is unexplainable given the capital investments which 
have been made since 1986 to improve functionality within the factory, the 
county board['s] use and reliance on the 1986 cost figures is appropriate and 
supported by the record.

     22. Relying upon the 
1986 detail included in the 1990 appraisal, we conclude the county board['s] 
estimate of redundant labor costs associated with insufficient bulk storage 
capacity is reasonable. The disallowance, however, of capitalized costs 
associated with undercapacity in the facility's internal electric generator, 
based upon a decision that the production of electricity is not an essential 
function of a sugar factory is not supported by the record. The unimpeached, 
uncontradicted testimony indicates a modern sugar plant would replace multiple, 
old style, inefficient, low pressure boilers with a more efficient system, 
reducing the plant's operating costs. Electricity is a substantiated cost of the 
production of sugar, and excess costs associated with this inefficiency results 
in the inability of the facility to adequately perform the sugar refinement 
process. We conclude therefore this cost category is an appropriate adjustment 
for functional obsolescence and should have been allowed. The only evidence in 
the record was presented by Petitioner, and supports an additional functional 
obsolescence adjustment of $921,600. The Board concludes this to be a 
reasonable, necessary adjustment absent other evidence or testimony to the 
contrary.

 [¶27.]  The record substantiates the State 
Board's evaluation of the functional obsolescence figures contained in 
Consilium's 1990 appraisal of the Torrington factory. There is no evidence in the 
record, however, to support either the CountyBoard's or the State Board's reliance upon 
"Exhibit C" of the 1990 Consilium appraisal to determine functional 
obsolescence. Exhibit C is a 1986 appraisal which Consilium made of Holly's 
Torrington 
factory in relation to a similar tax dispute. It was not introduced as evidence 
for the purpose of establishing 1990 obsolescence figures, but rather was 
contained in the 1990 Consilium appraisal because it was used as a springboard 
from which Consilium made its 1990 appraisal. The evidence in the record 
contradicts an inference that the variables which led to the 1986 functional 
obsolescence figures have remained static.

 [¶28.]  The CountyBoard calculated its figure for economic 
obsolescence as follows:

     9. The Goshen County 
Board of Equalization determined the allowable economic obsolescence based upon 
Respondent's "Exhibit M" (Holly Sugar Income Statement) and calculated using the 
procedures set forth in "Estimating Economic Obsolescence of Operating 
Industrial Plants", written by Tom Skogstad (ASSESSMENT DIGEST, Nov/Dec 1983) 
which was previously provided to the Goshen County Assessor by the Ad Valorem 
Tax Division, Wyoming Department of Revenue and Taxation, using Holly's figures 
for the years of 1989 and 1990 to calculate the "normal". The amount of economic 
obsolescence properly allowable in the valuation of Petitioner's property in 
1990 is $1,666,868.00.

 [¶29.]  The State Board responded in this manner 
after review:

     25. The county board's 
economic obsolescence calculations are essentially unexplained, but necessarily 
must be the result of substantial interpretation of Petitioner's cost and income 
information within the framework of a methodology in a published article. There 
was no opportunity for Petitioner to identify the interpretation given to its 
financial information, nor whether the application of the methodology was 
appropriate under the circumstances to value the facility at issue. We therefore 
find the county board conclusions on economic obsolescence to be unexplained and 
unjustified, and are consequently, arbitrary and unsupported by the 
record.

The 
record also substantiates the State Board's assessment of the CountyBoard's economic obsolescence calculation. 
The State Board, however, went on to state:

      26. Petitioner's 
analysis of economic obsolescence under the cost approach within the 1990 
appraisal is however also unexplained, other than by general reflections of the 
state of the sugar industry over time and during changing economic conditions. 
Petitioner has a more detailed application of the methodology in the 1986 
appraisal. Lacking any other appropriate information and calculation, the State 
Board accepts the 1986 information, and concludes the capitalized economic 
disadvantage suffered by the facility at issue is $3,260,182, not Petitioner's 
unexplained, undocumented figure of $6,570,000.

 [¶30.]  The State Board's criticism of 
Consilium's 1990 appraisal is well taken. However, its attempt to assuage Holly 
by adopting the economic obsolescence figures from the 1986 appraisal suffers 
from the same deficiencies as we identified during our discussion of functional 
obsolescence. Therefore, and for all of the reasons stated above, we hold that 
the County and State Boards' usage of the 1986 functional and economic 
obsolescence figures to answer a 1990 obsolescence problem was arbitrary and 
capricious as such action was not supported by substantial evidence. We reverse 
the order of the State Board and remand this case to the CountyBoard for a hearing on 1990 functional and 
economic obsolescence.

 [¶31.]  In light of our resolution of this case, 
it would be premature to address whether the percentage disparity in the 
adjustment made for functional and economic obsolescence between the Worland and 
Torrington 
factories violates the equal and uniform taxation provisions of the Wyoming 
Constitution. Nor would it be timely to resolve Holly's claim that the 1990 rise 
in assessed value of its Torrington facility contravenes the twenty-five 
percent limit contained in chapter 73, section 3 of the 1988 Wyoming Session 
Laws. Holly's claim to have been denied due process on account of the CountyBoard's failure to adopt rules of 
procedure is without merit.

DISPOSITION

 [¶32.]  The order of the State Board of 
Equalization which established the FMV of Holly's Torrington factory at $18,886,898 is reversed. 
This case is remanded to the Goshen County Board of Equalization for an 
evidentiary hearing to determine on competent evidence the 1990 adjustments for 
functional and economic obsolescence.

FOOTNOTES

 1 RCNLD is also used as 
an abbreviated form of the Replacement Cost New Less Depreciation method of 
appraisal. The terms reproduction and replacement were used loosely throughout 
the record; however, there appears to be a technical distinction between them. 
The replacement approach starts with the cost of building a state-of-the-art 
facility and then makes necessary adjustments, while the reproduction approach 
starts with the cost of rebuilding exactly what exists and then makes necessary 
adjustments. Because the reproduction approach was the one applied in this case, 
we use RCNLD to denote that methodology.

2 The terms functional obsolescence 
and economic obsolescence have been defined as follows:

"Functional 
obsolescence - This is the adverse effect on value resulting from defects in 
design that impair utility. It can be caused by changes over the years that have 
made some aspect of the structure, material or design obsolete by current 
standards."

"Economic 
Obsolescence - This is the adverse effect on value resulting from influences 
outside the asset itself. This includes changing property or land use patterns, 
adverse economic climates, legislative or legal changes, ruinous competition and 
other such external forces."

3 Prior to the 1988 amendment, Wyo. 
Const. art. 15, § 11 provided: "All property, except as in this constitution 
otherwise provided, shall be uniformly assessed for taxation, and the 
legislature shall prescribe such regulations as shall secure a just valuation 
for taxation of all property, real and personal."