Title: BP AMERICA PRODUCTION COMPANY, f/k/a AMOCO PRODUCTION COMPANY V. DEPARTMENT OF REVENUE, STATE OF WYOMING

State: wyoming

Issuer: Wyoming Supreme Court

Document:

BP AMERICA PRODUCTION COMPANY, f/k/a AMOCO PRODUCTION COMPANY V. DEPARTMENT OF REVENUE, STATE OF WYOMING2006 WY 27130 P.3d 438Case Number: 04-157Decided: 03/14/2006
OCTOBER 
TERM, A.D. 2005

 
 
BP 
AMERICA PRODUCTION COMPANY, f/k/a AMOCO PRODUCTION 
COMPANY,

 
 
Appellant

(Petitioner),

 
 
v.

 
 
DEPARTMENT 
OF REVENUE, STATE OF WYOMING,

 
 
Appellee

(Respondent).

 
 

Appeal 
from the DistrictCourtofSweetwaterCounty

The 
Honorable Nena James, Judge

 
 
Representing 
Appellant:

 
 
John L. 
Bordes Jr., Robert A. Swiech, and Nicole Crighton of Oreck, Bradley, Crighton, 
Adams & Chase, Boulder, CO.  
Argument by Mr. Bordes.

 
 

Representing 
Appellee:

 
 
Patrick 
J. Crank, Attorney General; Michael L. Hubbard, Deputy Attorney General; and 
Martin L. Hardsocg, Senior Assistant Attorney General.  Argument by Mr. 
Hardsocg.

 
 
Before 
HILL, C.J., and GOLDEN, KITE, VOIGT, and BURKE, 
JJ.

 
 

HILL, 
Chief Justice.

 
 
[¶1]      Appellant, BP 
America Production Company (formerly known as AMOCO Production) (hereafter BP1), seeks review of an order of the 
district court that affirmed actions taken by the State Board of Equalization 
(SBOE).  BP raises sixteen issues 
for our consideration and they are set out in detail below.  The Department of Revenue's (DOR's) take 
on the issues is somewhat different and those issues are also set out in detail 
below.  We will affirm the district 
court and the SBOE.

 
 
ISSUES

 
 
[¶2]      BP articulates 
these issues:

 
 
A.  PROCEDURAL

 
 
            
1.  Did the district court commit reversible error when it 
affirmed the Board's Order granting SweetwaterCounty's request for 
intervention?

                        
a.  Did the court abuse its discretion when it failed to strike 
from the record at the Board the County's testimony?

            
2.  Was the district court's decision without observance of 
procedure required by law when it affirmed the Board's reallocation of oil 
values and its authorization for the "collection" of ad valorem taxes based on 
partial mill levies?

 
 
B.  SUBSTANTIAL 
EVIDENCE

 
 
            
3.  Was the district court's decision holding wellhead 
reporting was the only approved method under the facts of this case supported by 
substantial evidence and otherwise in accordance with law?

            
4.  Was the district court's determination that Amoco's Wertz 
Dome Unit allocation method was unreasonable supported by substantial evidence 
and nether arbitrary, capricious, an abuse of discretion nor contrary to 
Wyoming 
law?

            
5.  Was the district court's refusal to consider W.S. 39-2-214 
supported by substantial evidence contained in the record and otherwise in 
accord with Wyoming law?

            
6.  Was the district court's decision concluding that the 
events triggering the Department's reallocation occurred before the enactment of 
W.S. § 39-2-211(j) on March 20, 1990 supported by substantial 
evidence?

 
 
C.  STATUTORY

 
 
            
7.  Did the district court commit reversible error when it held 
no Wyoming 
statute precluded the Department's revaluation for production years prior to 
1985?

            
8.  Did the district court commit reversible error when it held 
W.S. § 39-3-102(b) did not apply to the "collection" of ad valorem personal 
property taxes by the county under the undisputed facts in this 
case?

            
9.  Did the court commit reversible error when it relied on 
W.S. § 39-1-304(a)(xiv) and Wyoming State 
Tax Commission v. BHP, Petroleum Co. Inc., 856 P.2d 428, 436-37 (Wyo. 1993) as authority 
for affirming the Department's actions?

            
10.  Did the court commit reversible error when it relied on Union Pacific Resources Co. v. State, 
839 P.2d 356, 361 (Wyo. 1992) for its decision that no statute of limitations 
restricts the "collection" of unpaid ad valorem personal property taxes due on 
mineral production?

 
 
D.  RETROSPECTIVE/PROSPECTIVE 
APPLICATION

 
 
            
11.  Did the court commit reversible error when it held W.S. § 
39-2-201(j) required retrospective application?

            
12.  Did the court commit reversible error when it failed to 
apply existing law in its decision on appeal dated June 18, 
2004?

 
 
E.  UNITED 
STATES AND WYOMING 
CONSTITUTIONS

 
 
            
13.  Does the court's decision violate Article 15, sections 3 
and 11 of the Wyoming Constitution?

            
14.  Does the court's decision violate the Fourteenth Amendment 
of the United States Constitution and Article 1, section 34 of the Wyoming 
Constitution?

 
 
F.  INTEREST

 
 
            
15.  If the Final Determination issued February 28, 1994 is 
upheld, should interest be modified based on the facts of this 
case?

            
16.  Did the court commit reversible error when it upheld the 
Board's imposition of interest on production years 1987 and 1988 when those 
production years were not included in the Final Determination Letter dated 
February 28, 1994 nor appealed by Amoco to the Board?

 
 
[¶3]      DOR refines the 
issues to these:

 
 
1.  Was 
the State Board's rejection of [BP's] production allocation method, because it 
was arbitrary and inaccurate, supported by substantial 
evidence?

2.  Was 
the State Board's affirmation of the Department's requirement that Amoco report 
oil production on a wellhead basis and by county supported by substantial 
evidence?

3.  Was 
Amoco statutorily required to use an allocation method which reflected a 
wellhead volume measurement and wellhead production location to report tax 
liability to the Department of Revenue?

4.  Does 
the State Board's order allowing SweetwaterCounty to intervene require reversal of 
the State Board's and District Court's decisions affirming the Department of 
Revenue's determination that Amoco's oil production be reallocated and 
additional ad valorem taxes be paid?

5.  Did 
the State Board and District Court properly affirm the Department's final 
determination that Amoco pay additional ad valorem tax to SweetwaterCounty totaling only the difference between applicable 
mill levies imposed in Carbon and SweetwaterCounties between tax years 1981 through 
1987?

6.  Did 
the State Board and District Court correctly rule that WYO. STAT. § 39-2-201(j) 
did not bar the Department's final decision requiring Amoco to correct its 1981 
through 1987 tax reports and to remedy misallocated production 
volumes?

7.  Did 
the State Board and District Court correctly rule that WYO. STAT. § 39-2-214 (a) 
did not bar the Department's final decision requiring Amoco to correct its 1981 
through 1987 tax reports and to remedy misallocated production 
volumes?

8.  Did 
the State Board and District Court correctly rule that WYO. STAT. § 39-3-102(b) 
did not bar the Department's final decision requiring Amoco to correct its 1981 
through 1987 tax reports and to remedy misallocated production 
volumes?

9.  Did 
the State Board and District Court correctly affirm the imposition of 
interest?

 
 
FACTS 
AND PROCEEDINGS

 
 
[¶4]      This is indeed a 
complex case, at least in a procedural sense.  It is also complicated because the 
record is almost 3,000 pages in length.  
The Board Record, or Agency Record, accounts for almost 2,500 of those 
pages, and, for the most part, does not appear to be in any particular 
order.  There is no index for the 
agency record.  While the 
Department's brief is very helpful in parsing this lengthy record, it is 
apparent that BP's brief was designed as much to further obfuscate the record, 
as it was to portray the facts and proceedings in any organized 
fashion.

 
 
[¶5]      While it is not a 
traditional sort of "fact," it is important to an understanding of this case 
that we take note of Wyo. Stat. Ann. § 39-2-201(e) (Michie 1985 and Michie 
1977):

 
 
            
(e)  Annually, on or before the dates hereafter indicated, or 
as soon thereafter as the taxable value is determined, the board shall certify the valuation 
determined by the board to the county assessor of the county in which the 
property is located, to be entered upon the assessment rolls of the 
county:

(i)  June 
1, mines and mining claims, pipeline 
companies, electric utilities and other public utilities;  [Emphasis added.]

 
 
That 
statute continued forward into 1990.  
However, in 1990, Wyo. Stat. Ann. § 39-2-213 (Michie 1990) was 
enacted:

 
 
§ 39-2-213.  Location 
of production for reporting purposes.

 
 
            
For mines and mining claims, the taxpayer shall report the location of 
the production to the county and tax district in which the well, mine or mining 
claim is located, based upon the actual taxable production produced by the well 
or mine in each county or tax district.  
Other reasonable methods of reporting the location of production may be 
approved by the department upon written request of the taxpayer, or taxing 
jurisdiction.2

 
 
[¶6]      A significant 
part of BP's argument is that until 1990, there was no statute that required 
reporting of oil production at the wellhead.  Continuing that argument, BP asserts 
that the 1990 amendment, which carries through to this day, specifies wellhead 
reporting and this circumstance bolsters BP's contention that prior to the 1990 
enactment, wellhead reporting was not required.

 
 
[¶7]      At the core of 
this controversy is the circumstance that production from BP wells located in 
SweetwaterCounty was being attributed to CarbonCounty.  BP reported that production accurately 
to the Wyoming Oil and Gas Conservation Commission (WOGCC) for at least two of 
the years at issue here, but reported it differently to DOR for tax 
purposes.  Of consequence in this 
regard is that the mill levy in CarbonCounty was significantly lower than the 
same sort of mill levy in SweetwaterCounty.  Thus, SweetwaterCounty received less tax revenue than it should have, 
and CarbonCounty received more tax 
revenue than it should have.

 
 
[¶8]      The Department 
has charitably characterized this misreporting of production as a form of tax 
avoidance scheme.  BP, on the other 
hand, emphasizes that the Wertz Dome Unit straddles Carbon and Sweetwater 
counties, and that water was injected into the field so as to cause the oil to 
migrate toward wells.  A water flood 
program changes the whole structure and pattern of a formation and can result in 
the production of oil that originated in one area of the formation in 
another.  BP contends there was a 
"strong likelihood" that minerals were moving across county lines because of the 
water flood project:  "In fact, 
because of the water flood project, the original location of the minerals is 
unclear, and the minerals were more on the character of a pool of reserves.3"  During this time period, BP also 
directionally drilled wells so that a wellhead located in one county could have 
a bottom hole in another county.

 
 
[¶9]      In a letter dated 
December 13, 1989, the Board of County Commissioners of SweetwaterCounty informed the Department of Revenue 
of these circumstances:

 
 
            
We reviewed oil production and sales from all wells operated by Amoco 
Production Company in the Wertz Dome unit in Sweetwater County, Wyoming for the years 1980 through 1988.  We compared sales as reported by Amoco 
to the Mineral Tax Division (MTD) on forms ATD-4 (Annual Report for Oil and/or 
Gas Produced), with sales reported to the Wyoming Oil & Gas Conservation 
Commission (WOGCC) on their Form-2 (Operator's Monthly Report of Wells).  It appears that not all county sales 
have been reported to the MTD which would result in additional taxes due the 
county.  We respectfully request 
your assistance in the collection of these apparently unreported 
taxes.

 
 
[¶10]   BP responded to that letter on May 
8, 1990, stating:

 
 
We have 
reviewed the finding of the auditors retained by the Sweetwater County Board of 
Commissioners on the [Wertz Field].  
Although the auditors reviewed production data back to 1980, we have 
limited our scope of review to the 1988 [& 87] production years as a result 
of the passage of S.F. 83, Enrolled Act No. 48.  [Wyo. Stat. Ann. § 39-2-201(j), 
infra.]

 
 
For the 
period in question, we have discovered that production has been reported from 
several wells to the incorrect county and taxing jurisdiction.  In accordance to our findings, we have 
made the appropriate changes to reflect the recordings to proper leases.  These changes are made on the ATD Form 
4(b) attached hereto for your review.

 
 
Thus, BP 
recognized that its reports for tax years 1987 and 1988 were in error, but 
contended that the Department was statutorily prohibited from going back and 
considering tax years 1980-86.

 
 
[¶11]   As is evident from the record, and 
as emphasized by BP, there is an apparent lull in the "proceedings" until 
1994.  In a letter dated February 
28, 1994, the Department, through the MTD, informed BP 
that:

 
 
The 
Department has determined that Amoco Production Company improperly allocated 
production from the Wertz Dome Unit between Sweetwater and CarbonCounties for the 1980-1986 production 
years.  Amoco was first notified of 
this discrepancy and directed to amend the related ad valorem gross products tax 
returns on December 14, 1989.

 
 
The 
attached schedules detail the revised allocation between the counties.  It is the Department's understanding 
that SweetwaterCounty will bill Amoco only 
for the difference in mill levies between the two counties.  See attached correspondence 
copies.

 
 
[¶12]   BP appealed that determination in a 
letter dated March 28, 1994.  Of 
central importance to that appeal was the enactment in 1990 of Wyo. Stat. Ann § 
39-2-201(j) (Michie 1990) (and see 1990 Wyo. Sess. Laws Ch. 52, § 2, p. 111).  BP asserted that it had conversations 
with the "Department's [DOR's] Mineral Tax Division," and the "Chairperson at 
the Board [SBOE]" suggested that such legislation would "affect BP's liability, 
if any, to SweetwaterCounty" for the period 1980-86, and so BP 
limited its response to DOR's request to the years 1987 and 1988.  That statute 
provided:

 
 
            
(j)  For mines and mining claims, the board may presume that 
the property is located in the county in which production is reported by the 
taxpayer pursuant to W.S. 39-2-208.  
The board shall not direct any county to provide relief for taxes paid on 
taxable valuation which was erroneously reported and certified to the wrong 
county unless the taxpayer files or is directed to file amended returns within 
two (2) years of the date of the original certification of the production.  Unless there is evidence of bad faith or 
willful disregard of production circumstances, no taxpayer shall be required to 
pay taxes on production which was erroneously reported and certified to the 
wrong county if relief for taxes paid is not allowed under this provision.4

 
 
[¶13]   The Board summarized the issue in 
that appeal like this:

 
 
Was the 
DOR's [Department's] decision on review to change the allocation of petitioner's 
oil production from its Wertz Dome Unit for 1980 through 1988 between Carbon and 
Sweetwater counties supported by substantial evidence, according to procedures 
required by law, and neither arbitrary, capricious, nor inconsistent with 
law?

 
 
[¶14]   The Board refused to give a 
retrospective application of Wyo. Stat. Ann. § 39-2-201(j) to BP's claims and 
generally affirmed the Department's determination.  BP appealed that decision to this Court, 
and in our opinion we concluded that BP had been denied due process of law.  Thus, we remanded to the Board so that 
it could conduct a contested case hearing.  
Amoco Production Company v. 
Wyoming State Board of Equalization, 7 P.3d 900 (Wyo. 2000) (decided July 
13, 2000, rehearing denied August 3, 2000).

 
 
[¶15]   On September 6, 2000, SweetwaterCounty moved to intervene in these 
proceedings.  The Board granted that 
motion on September 28, 2000.  BP 
filed motions before the Board to vacate SweetwaterCounty's intervention, as well as to disqualify 
SweetwaterCounty's attorneys, but the 
Board denied all those motions.  
Following a three-day contested case hearing, the Board issued its 
Findings of Fact, Conclusions of Law, Decision and Order on September 5, 
2001.  On October 5, 2001, a 
petition for review under W.R.A.P. 12 was filed in the district court.  SweetwaterCounty was not permitted to participate in this stage 
of the proceedings nor has SweetwaterCounty participated in any way in the 
appeal to this Court.

 
 
[¶16]   We set out below the findings and 
conclusions reached by the Board on September 5, 2001:5

 
 
DIGEST

 
 
This 
matter was considered by the State Board of Equalization (SBOE) members, Edmund 
J. Schmidt, Chairman, Roberta Coates, Vice-Chairman, and Sylvia Hackl, Member, 
in a contested case hearing conducted from February 12, 2001, through February 
14, 2001, pursuant to a hearing order dated October 19, 2000.  Roberta Coates, Vice-Chairman, acted as 
hearing officer.  This matter arises 
from a remand of an earlier SBOE decision dated May 19, 1999, by the Wyoming 
Supreme Court in Amoco Production Company 
v.  WyomingState Board of Equalization, 7 P.3d 900 (Wyo. 2000).  The remand 
occurred because counsel for Petitioner, an experienced counsel appearing before 
the SBOE, argued he was not accorded due process because he did not have an 
opportunity to develop facts.  
Counsel actively and willingly participated in an expedited handling of 
the case and had never objected to the expedited process until an adverse 
decision was rendered.  The remand 
directed the SBOE to conduct a contested case hearing to promote full and fair 
development of the factual issues presented in the case.

 
 
The 
factual issues arise from a review conducted by a contract auditor at the 
request of the Sweetwater County Board of CountyCommissioners (SweetwaterCounty).  The review examined 1980 through 1988 
oil production from Petitioner's Wertz Dome Unit.  Although the parties have identified 
many sub-issues, the issue is:

 
 
Was the 
Wyoming DOR decision to change the allocation of Petitioner's oil production 
from its Wertz Dome Unit for 1980 through 1988 between Carbon and Sweetwater 
Counties supported by substantial evidence, according to procedures required by 
law, and neither arbitrary, capricious, or inconsistent with 
law?

 
 
ALL 
STATUTORY CITATIONS USED IN THIS DECISION AND ORDER REFERENCE TITLE  39, PRIOR TO RECODIFICATION WHICH WAS 
EFFECTIVE MARCH 6, 1998.

 
 
JURISDICTION

 
 
The SBOE 
is mandated to review decisions of the DOR on assessments of property and tax 
determinations and to hold hearings after due notice pursuant to the Wyoming 
Administrative Procedures Act and prescribed rules and regulations.  Wyo. Stat. § 39-1-304(a) and Wyo. Stat. § 39-1-304(a)(ix).  An appeal from a DOR decision must be 
filed with SBOE within thirty (30) days of the final administrative decision at 
issue.  Rules, Chapter 2, § 5(a), WyomingState Board of 
Equalization.

 
 
The SBOE 
is required to "[d]ecide all questions that may arise with reference to the 
construction of any statute affecting the assessment , levy, and collection of 
taxes, in accordance with the rules, regulations, orders, and instructions 
prescribed by the department."  
Wyo. Stat. § 39-1-303(a)(iv).6

 
 
The 
Notice of Appeal was timely filed, and the SBOE has jurisdiction to hear the 
case.  SweetwaterCounty filed a proper motion for intervention, and the 
SBOE entered an Order joining SweetwaterCounty in the case on September 6, 
2000.  The SBOE is required to 
decide all issues relating to this appeal and give a written decision, citing 
findings of fact and conclusions of law following a hearing.  Rules, Chapter 2, § 32, WyomingState Board of 
Equalization.

 
 
DISCUSSION

 
 
Petitioner 
filed an appeal with the SBOE challenging the DOR's reallocation of its Wertz 
Dome Unit 1980 through 1986 oil production between Carbon and SweetwaterCounties.  For that period, the DOR determined, 
based upon a contract review performed by Rocky Mountain Auditing Services at 
the request of SweetwaterCounty, that Petitioner's oil 
production had been incorrectly reported as produced from CarbonCounty 
instead of SweetwaterCounty.  For the time period at issue, CarbonCounty had  a lower mill levy than 
Sweetwater.

 
 
The 
review findings were communicated to Petitioner who requested and was granted 
additional time to analyze the findings.  
During this period, Wyoming Statute § 39-2-201(j) was enacted.  Thereafter, Petitioner asserted the 
newly enacted statute limited the DOR review to two years and filed amended 
returns for 1987 and 1988 production.  
Petitioner failed to respond to 1980 through 1986 review 
findings.

 
 
In 
addition to the alleged limitation in Wyoming Statute 39-2-201(j), Petitioner 
asserts:  (1) for the time period at 
issue, the DOR permitted the use of varying allocation methodologies other than 
the methodology employed by Sweetwater County; (2) Petitioner's allocation 
methodology for production years 1980 through 1983 was reasonable and was 
reported to and accepted by the DOR; (3) the exclusive use of wellhead location 
(in the county where the oil is produced) as an allocation method is 
unreasonable for the Wertz Dome Unit; (4) there is no authority for the issuance 
of an assessment, or tax bill, based upon a mill levy difference between two 
counties; and (5) the tax has been proscribed.

 
 
The DOR 
asserts:  (1) Wyoming Statute § 
39-2-201(j) does not apply to this situation because it is not applied 
retroactively; (2) additional ad valorem taxes are due and owing to Sweetwater 
County because of its higher mill levy; and (3) actual well location is the best 
available indicator of an accurate reporting of production location particularly 
in the absence of any other reasonable basis for reporting 
production.

 
 
Intervenor 
Sweetwater County asserts:  (1) 
Wyoming Statute § 39-2-201(j) does not apply: (2) neither the DOR nor petitioner 
has authority to exempt oil physically produced in Sweetwater County from its 
taxing authority by improper "allocation" to another county; (3) Petitioner 
lacks standing to contest Sweetwater County's proposal to afford it a credit for 
taxes paid to Carbon County; and (4) Petitioner owes statutory interest 
calculated from the date the taxes should have been paid had the production been 
properly reported to the correct taxing jurisdiction.

 
 
The 
evidence submitted with the parties' briefs does not indicate Petitioner has 
ever paid any additional ad valorem taxes to SweetwaterCounty.

 
 
It is 
important to note in this appeal SweetwaterCounty is not seeking to recover taxes for 
mis-allocated volumes.  Rather, it 
is willing to accept the production mis-allocated to CarbonCounty 
as being reported to and taxes paid thereon to SweetwaterCounty.  It is only asserting Petitioner owes 
additional ad valorem taxes on the amount attributable to SweetwaterCounty's higher mill 
levy.

 
 
FINDINGS 
OF FACT

 
 
General 
Facts Common to All Issues:

 
 
1.  Petitioner 
was the only working interest owner and operator of the wells at issue in the 
Wertz Dome Unit during the tax period.  
The tax period at issue is production years 1980 through 1986; tax years 
1981 through 1987.  [Stipulation 
1].

 
 
2.  The 
wells in the Wertz Dome Unit produce oil from the Madison and Tensleep 
formations, through wells located in SweetwaterCounty and CarbonCounty. [Stipulation 4].  The Madison is a limestone formation while the 
Tensleep is a tightly compacted sandstone formation.  [Transcript Vol. 1, pp. 
40-41].

 
 
3.  During 
the period at issue, Petitioner was injecting water into the Wertz Dome Unit 
formations to induce pressure back into the reservoir and sweep oil to producing 
wells. [Transcript Vol. 1, pp. 41-45].  
It is possible, through the injection process that, oil could be swept 
from one county and [be] produced in another depending on the permeability of 
the rock and the rate of water pressure.  
[Transcript Vol. 1, pp. 46-48].

 
 
4.  For 
the tax period, SweetwaterCounty had a higher mill levy than 
CarbonCounty due to an increase for the Community College in 
SweetwaterCounty.  The actual mill levy difference in 
SweetwaterCounty compared to Carbon 
Count's levy for the tax years at issue is the following, according to Exhibit 
319:

 
 
            
1981:  2.640 
mills

            
1982:  6.570 
mills

            
1983:  7.400 
mills

            
1984:  7.760 
mills

1985:  7.310 mills

1986:  4.944 mills

1987:  6.340 mills

 
 
5.  An 
audit was performed by the Wyoming Department of Audit (DOA) for this time frame 
and included production from the Wertz Dome formation.  This audit found the Petitioner had 
reported production to CarbonCounty which should have been reported 
to LincolnCounty.  [Transcript Vol. 1, p.85].  The audit did not check to see if 
production was being reported to the correct county as between SweetwaterCounty and CarbonCounty.  [Transcript Vol. 2, p. 
231].

 
 
Whether 
Petitioner Reasonably Reported Production:

 
 
6.  Petitioner 
did not measure oil volumes at the wellhead but it did measure the oil at the 
LACT7 (custody transfer meters) unit 
located at three Wertz Dome Facilities.  
[Transcript Vol. 1, pp. 48, 58, 62].  Petitioner tested three producing wells 
at least twice a month.  Then, using 
a representative well test of the actual daily volumes that were coming from 
each of the wells, and metering done at the LACT units, Petitioner was able to 
determine how much oil came from a particular well.  Petitioner then allocated that volume of 
production back to the wells.  
[Transcript Vol. 1, pp. 48-49, 62-63, 67-68, 70-71, and 76].  The monthly production volume from each 
well was reported to the Wyoming Oil and Gas Conservation Commission (WOGCC) and 
the federal government.  [Transcript 
Vol. 1, pp. 49, 70, 112].  The 
testing process resulted in a "pretty good number" for individual well 
production in that it was very close to actual metering results, with errors of 
maybe 2 or 3 percent.  [Transcript 
Vol. 1, p. 103].

 
 
7.  For 
production years 1980 through 1983, Petitioner allocated 34% of all oil produced 
from the Madison and Tensleep formations to SweetwaterCounty, and 66% of the production to CarbonCounty.  [Transcript Vol. 2, p. 143, Exhibit 
112].  We will refer to this 
allocation as the 66/34 split.

 
 
8.  Petitioner 
could have generated for tax purposes the same production reports it generated 
for the WOGCC from the computers that generated the tax reports in Tulsa, Oklahoma.  [Transcript Vol. 1, pp. 90, 101, 108, 
126, 130].

 
 
9.  The 
DOR had no written policy from 1980 through 1986 for allocation of downhole 
commingled production in two counties.  
The DOR accepted any reasonable method to allocate production between two 
counties  [Transcript Vol. 1, p. 
178].  The DOR accepted one method 
other than wellhead location for allocation of production.  [Transcript Vol. 1, pp. 179-180].  The other allocation method was for the 
Anschutz Ranch Unit which allocated production in Utah to both Utah and 
Wyoming as 
determined by pore volumes, a sophisticated measurement of oil within a 
formation.  The allocation of 
Anschutz Ranch was approved by the United States Bureau of Land Management.  [Transcript Vol. 2, pp. 
198-199].

 
 
10.  Randy 
Bolles, the administrator of the DOR's Mineral Tax Division, correctly observed 
that Wyoming's 
tax system is a self-reporting system.  
Thus, the DOR had no way of knowing how Petitioner allocated production 
between counties at the time of filing of tax reports.  [Transcript Vol. 3, pp. 134-136, 
142].

 
 
11.  For 
production years 1980 through 1983, Petitioner admits its reporting of 
production did not relate to actual production by well or group of wells.  [Transcript Vol. 1, p. 92].  Petitioner also admits its reporting of 
production did not relate to any reservoir pore volume analysis, or to the ratio 
of the number of producing wells in each county compared to the total number of 
producing wells in the unit.  
[Transcript Vol. 1, p. 159, Vol. 2, pp. 139-140].  No person could explain the reason 
Petitioner used the 66/34 split.  
[Transcript Vol. 1, pp. 93, 122, 166, Vol. 2, pp. 136, 140].  Because the Unit agreement was developed 
in 1937, Petitioner surmised the 66/34 split allocation was devised because it 
was easy.  [Transcript Vol. 2, p. 
150].

 
 
12.  Mr. 
Bruce Cartwright, the former tax representative for Petitioner, hypothesized the 
66/34 split was based on a lease acreage basis of 40 acres per production 
well.  However, this calculation 
results in 60% acreage in CarbonCounty and 40% in SweetwaterCounty.  [Transcript Vol. 2, p. 99, Vol. 3 P. 168].  Because this calculation does 
not match the 66/34 split, we reject this explanation.

 
 
13.  Petitioner 
opined that the 66/34 split could have been based on the unit agreement and its 
"recital" of lease-surface acreage, by county.  [Transcript Vol. 1, pp. 141-143].  This was based on testimony of Mr. Paul 
Syring, a current employee of Petitioner, who went through Petitioner's records 
and attempted to recreate the rationale for the split; however, he did not have 
any first-hand knowledge of its origins.  
Mr. Syring did not know of anyone who could explain the split.  [Transcript Vol. 1, pp. 165-166].  Petitioner's lease-surface acreage 
calculations were based on the wrong legal description for the unit.  [Transcript Vol. 3, p. 169].  The recital of the unit agreement was 
incorrect and the actual lease surface acreage calculations were 60% to 
40%.  [Transcript Vol. 1, p. 
168].  We therefore reject this 
explanation.

 
 
14.  For 
production years 1980 through 1983, Petitioner produced a copy of a DOR document 
entitled "Form 1," ATD Form 1.  This 
form purports to allow a taxpayer to group wells for tax reporting purposes, if 
approved by the DOR.  The well 
groupings are based on the API numbers as assigned to each well by the WOGCC. 
Petitioner alleges this form was sent to the DOR in 1981.  Petitioner also alleges the DOR accepted 
the form by a return mailing showing its approval.  [Transcript Vol. 2, p. 27, Exhibit 
137].

 
 
15.  The 
well grouping report has an attachment identifying a list of wells, including 
those in the Wertz Dome Unit, with a hand-written notation suggesting production 
was to be split on a 66/34 basis.  
[Exhibit 137].  The 
instructions on the form indicate the well grouping must be in the same 
county.  [Transcript Vol. 2, p. 
80].

 
 
16.  The 
well grouping report was introduced and admitted on the testimony of Mr. 
Cartwright who neither prepared nor filed the document, nor wrote the "alleged 
notation," nor witnessed its preparation, nor had any personal knowledge 
concerning when the notes in the document were made, nor had any personal 
knowledge about the processes that the DOR followed in 1981 concerning the 
submission and return of the well grouping report.  [Transcript Vol. 2, pp. 27, 32, 163, 
Exhibit 137].  Mr. Cartwright was 
not employed by Petitioner at the time the well grouping report was filed, nor 
could he explain what the DOR did with the form.  [Transcript Vol. 2, p. 163].  Although Mr. Cartwright testified he saw 
two copies of the well grouping report, and one was stamped by the DOR, 
Petitioner failed to introduce the stamped copy at the hearing.  [Transcript Vol. 2, pp. 39-40].  Petitioner did not produce the returned 
document showing the form or content of any DOR "approval" of the 
allocation.  [Transcript Vol. 2, p. 
39].  We reject the concept that the 
DOR accepted or approved the form due to lack of evidence.  The only support for the proposition 
that the DOR approved the form was the testimony of a witness not employed by 
Petitioner when the form was supposedly submitted.

 
 
17.  The 
tax form instructions on the ATD Form 4 directed a producer to record the 
quantity of gas as measured at the wellhead.  [Transcript Vol. 2, p. 
126].

 
 
18.  The 
API number assigned to a well by the WOGCC identifies the location of the well 
by the state and the county.  The 
API number is important to identify the location of a well.  [Transcript Vol. 1, pp. 106-107].  All wells must be in the same field as 
assigned by the WOGCC, in the same county and in the same taxing district to be 
in a group.  [Transcript Vol. 1, p. 
191, Vol. 3, p. 58, Exhibit 334, exhibit 137].

 
 
19.  Well 
groupings were allowed by the DOR for the convenience of the taxpayer in 
reporting.  [Transcript Vol. 1, p. 
111, Vol. 2, p. 20].  One reason to 
file an ATD Form 1 was to identify production to the proper taxing jurisdiction 
and county.  [Transcript Vol. 2, pp. 
88-89].

 
 
20.  Ad 
valorem taxes are a tax on production, which Petitioner acknowledged.  [Transcript Vol. 1, p. 153].  However, a royalty owner agreement to 
split production has no relevance to property taxes because oil should be taxed 
where it is produced.  [Transcript 
Vol. 2, p. 98].

 
 
21.  This 
SBOE declines to accept the well grouping report as proof of the DOR's 
"approval" of Petitioner's allocation, nor do we find the document binding on 
the DOR because of the exhibit's lack of foundation, and Petitioner's inability 
to provide a rational explanation of the 66/34 split.

 
 
22.  No 
other taxpayer allocates oil production on a lease acreage basis or allocates 
production on a flat percentage.  
[Transcript Vol. 3, p. 147].

 
 
23.  Petitioner 
used four different methods for allocating production from the Wertz Dome field 
between Sweetwater and Carbon counties.  
[Transcript Vol. 3, p. 108].  
For the 1984 year Petitioner reported volumes of production according to 
producing well locations for the Madison 
formation production and used the same percentage for the Madison formation in 
1985.  Petitioner reported volumes 
to the DOR in 1984 and 1986 according to producing well location in the Tensleep 
formation and a completely unexplained percentage for 1985.  [Exhibit 300, 501].  No witness for Petitioner could explain 
why different methods were used.  
For production years 1984 through 1986, Petitioner asserts its reporting 
by allocation for these production years was "a mistake" and in error.  [Transcript Vol. 1, pp. 133, 141-142, 
Vol. 2, pp. 43, 147, 150-51].

 
 
24.  In 
the late 1980's, Sweetwater County contracted with Mr. Richard W. Ryan of Rocky 
Mountain Auditing Services to conduct an audit of Amoco's production in 
Sweetwater County.  [Transcript Vol. 
3, pp. 74-75, 77].

 
 
25.  Mr. 
Ryan could not ascertain a legal or factual basis for allocating Wertz Dome oil 
production from both formations on the basis of a 66/34 split for production 
years 1980 through 1983.  
[Transcript Vol. 3, pp. 167-68].

 
 
26.  During 
the course of the audit, Mr. Ryan compared the production Petitioner reported 
for tax filings on Form ATD-4, with the production reported on Form 2 to the 
WOGCC.  [Transcript Vol. 3, pp. 77, 
165].  He determined Petitioner had 
reported production from wells located in SweetwaterCounty to CarbonCounty for tax purposes.  [Transcript Vol. 3, p. 
80-81].

 
 
27.  Mr. 
Ryan reallocated Petitioner's production for Wertz Dome on the basis of where 
the wells actually produced, and how much each of those wells produced, as 
reported to the WOGCC.  [Transcript 
Vol. 3, pp. 85, 162, 175].  In 
determining the reallocation Mr. Ryan took into consideration instances on both 
sides of the county line where a surface location might be different than 
bottomhole location.  [Transcript 
Vol. 3, p. 103].  Thus, 
CarbonCounty was assigned production from a well located in 
CarbonCounty despite the fact that the downhole of the well 
was located in SweetwaterCounty.  [Transcript Vol. 3, p. 174].  Mr. Ryan also checked the status of each 
well to determine if it was an injection well or a production well according to 
information reported by Petitioner  
to the WOGCC.  [Transcript 
Vol. 3, pp. 174-75].  As a result of 
the reallocation, Ryan estimated that Petitioner failed to report to Sweetwater 
County taxable value of $8,615,796 for production from the Madison formation for 
production years 1980 through 1988, and $72,188, 837 for production from the 
Tensleep formation for production years 1980 through 1988 [Exhibit 501].  Ryan's calculations contained a minor 
error because they included some production in the Lakota and Flathead 
fields.  [Transcript Vol. 1, p. 
88].

 
 
The 
Effect of Wyoming Statute § 
39-2-201(j):

 
 
28.  Prior 
to the passage of Wyoming Statute § 39-2-201(j) and before the Petitioner 
responded to the DOR, the tax representative for Petitioner, Mr. Bruce 
Cartwright, claimed to have consulted with the Chairperson of the SBOE.  [Transcript Vol. 2, pp. 55-56].  It was Mr. Cartwright's understanding 
that pending legislation would affect Petitioner's tax liability for the 
mis-allocated reports.  [Transcript 
Vol. 2, pp. 58-59].  No exhibits or 
writings were introduced to corroborate Mr. Cartwright's memory.  Petitioner did not request a ruling from 
the DOR about the retroactivity of the statute pursuant to Wyoming Statute § 
39-6-304(j).  [Transcript Vol. 2, 
pp. 192, 210].

 
 
29.  Wyoming 
Statute § 39-2-201(j) became effective on March 20, 1990, and reads as 
follows:

 
 
            
[Text of statute omitted, see infra.]

 
 
31.  [Sic, 
no ¶ 30]  There was no evidence that 
CarbonCounty's value was reduced, or that CarbonCounty was ordered to provide tax relief 
to the Petitioner.  [Transcript Vol. 
2,  p. 170].  The only amount requested of Petitioner 
is the difference, due to the different mill levies.  There is no showing CarbonCounty would be harmed by Petitioner 
paying the difference.  [Exhibit 
508].

 
 
Whether 
Interest Should Accrue:

 
 
32.  Fifty 
percent (50%) of ad valorem tax is due and payable on November 10th 
of the year following the production year in question, and the remaining fifty 
percent (50%) of the tax is due and payable on May 10th of the succeeding calendar year.  Wyo. Stat. § 39-3-101(a). 8 

 
 
33.  On 
December 13, 1989, Mr. Ryan brought his findings to the DOR.  The DOR forwarded the findings to 
Petitioner by way of letter dated December 14, 1989.  [Stipulations 10, 11: Exhibits 
112-114].  The DOR letter directed 
Petitioner to review its records and explain the apparent discrepancies or amend 
its reports.  [Exhibit 
114].

 
 
34.  On 
January 9, 1990, Petitioner requested an additional sixty days to respond to the 
auditor's findings.  [Exhibits 302, 
503].  On January 11, 1990, the DOR 
granted Amoco's request and gave Petitioner until March 9, 1990, to 
respond.  [Exhibits 503, 
504].

 
 
35.  On 
May 8, 1990, Petitioner responded and admitted the production had been reported 
to the wrong county "for the period in question" but refused to amend its 
filings for years prior to 1988 and 1987 because of the enactment of Wyoming 
Statute § 39-2-201(j).  The 
Petitioner did change its filings in accordance with the auditor's findings and 
filed amended returns for 1987 and 1988 production using the same allocation the 
auditor found.  [Exhibits 120, 
505].  Petitioner did not address 
the 1980 through 1986 production issue and did not provide an explanation for 
the earlier years allocation.  The 
Petitioner did not provide the ATD Form 1, well grouping report, in response to 
the DOR inquiry.  [Transcript Vol. 
3, p. 55].

 
 
36.  On 
July 2, 1990, the SBOE issued Special Directive 90-355 to Sweetwater and 
CarbonCounties dealing with 1987 
and 1988 production.  [Exhibit 
506].

 
 
37.  On 
February 28, 1994, the DOR sent a final determination letter to petitioner 
demanding additional taxes be paid to SweetwaterCounty as a result of the wrong allocation 
for tax years 1981 through 1987.  
[Exhibit 108].  There is no 
explanation for the four year delay from Petitioner's response to the DOR final 
determination.  [Transcript Vol. 3, 
p. 62].  The final determination 
letter was an appealable communication and Petitioner filed the instant 
appeal.  [Transcript Vol. 2, 
p.207].

 
 
38.  On 
February 28, 1994, the DOR advised SweetwaterCounty there was additional taxable value 
attributable to Petitioner for tax years 1981 through 1987 as a result of 
reallocation.  The DOR understood 
SweetwaterCounty would only bill for the difference in mill levy 
between CarbonCounty and SweetwaterCounty.  [Exhibits 115, 307, 
508].

 
 
39.  On 
October 21, 1997, SweetwaterCounty sent a letter to Amoco demanding 
the additional mill levy monies and interest.  [Exhibit 311].

 
 
40.  On 
June 7, 1999, SweetwaterCounty sent another tax bill.  [Exhibit 319, Transcript Vol. 3, pp. 
20-21].

 
 
41.  Petitioner 
has not made any payments to SweetwaterCounty for the 1980 through 1986 
production years.  [Transcript Vol. 
3, p. 22].

 
 
42.  Any 
Conclusion of Law below which includes a finding of fact may also be considered 
a Finding of Fact, and is therefore incorporated herein by this 
reference.

 
 
CONCLUSIONS 
OF LAW

 
 
General 
Conclusions of Law

 
 
43.  The 
letter of appeal by Petitioner was timely filed and this SBOE has jurisdiction 
to determine this matter.

 
 
44.  The 
Petitioner has the burden of going forward and the ultimate burden of 
persuasion.  Rules, Chapter 2, § 19, WyomingState Board of 
Equalization.

 
 
The 
Applicability of Wyoming Statute § 
39-2-201(j)

 
 
46.  [sic, 
there is no ¶ 45]  Our threshold 
inquiry is whether or not Wyoming Statute § 39-2-201(j) is applicable as 
asserted by Petitioner.  Wyoming 
Statute section § 39-2-201(j) was enacted by Chapter 52 of the 1990 Wyoming 
Session Laws.  This law was signed 
on March 20, 1990, and reads as follows:

 
 
[Text of 
statute omitted, see infra.]

 
 
We hold 
this statute does not affect the tax liability of 
Petitioner.

 
 
47.  We 
conclude Wyoming Statute § 39-2-201(j) does not apply to preclude the action 
taken by DOR in 1994.  In 1989 the 
DOR demanded that Petitioner respond to allegations of mis-allocation of oil 
production between Sweetwater and CarbonCounties.  The production, the discovery of the 
mis-allocation and the notice of the mis-allocation all occurred prior to the 
enactment and effective date of Wyoming Statute § 
39-2-201(j).

 
 
48.  Retrospective 
application of statutes to events occurring before their enactment is not 
favored.  Johnson v. Safeway Stores, Inc., 568 P.2d 908 (Wyo. 1977); State ex rel. Lynch v. Board of 
CountyCommissioners, 75 Wyo. 435, 296 P.2d 986 (Wyo. 1956); Mustanen v. Diamond Coal & Coke, 50 
Wyo. 462, 62 P.2d 287 (Wyo. 
1936).

 
 
49.  Wyoming 
Statute § 8-1-107 provides in relevant part "[i]f a statute is repealed or 
amended, the repeal or amendment does not affect pending actions, 
prosecutions or proceedings, civil or criminal ." (Emphasis 
added).

 
 
50.  The 
events triggering the reallocation and consequential increased liability for 
taxes occurred long before the March 20, 1990, effective date of Wyoming Statute 
§ 39-2-201(j).  The production 
occurred prior to the effective date, the demand for an explanation occurred 
prior to the effective date, and therefore Wyoming Statute § 39-2-201(j) would 
have to be retroactively applied for Petitioner's argument to be 
valid.

 
 
51.  It 
is a well established rule in Wyoming law that statutes are not applied 
retroactively unless retroactivity is expressly provided for in the 
statute.  Edgcomb v. LowerValley 
Power & Light, 922 P.2d 850, 859 (Wyo. 1996).

 
 
52.  In 
any event, even if Wyoming Statute § 39-2-201(j) were retroactive, it would not 
preclude the actions of the DOR.  
The production reported from 1980 through 1986 was not reported pursuant 
to Wyoming Statute § 39-2-208, therefore Wyoming Statute § 39-2-201(j) is not 
applicable.

 
 
53.  Wyoming 
Statute § 39-2-201(j) does not create a statute of limitations for the benefit 
of a taxpayer, nor does it shield a taxpayer from being required to review 
discrepancies and file amended returns.  
Wyoming Statute § 39-2-201(j) protects counties from valuation 
adjustments and budget problems caused by late-filed amended returns that shift 
production from one county to another.

 
 
54.  There 
is nothing in the record showing that the DOR directed CarbonCounty to provide any relief for taxes 
paid.  The only taxes at issue are 
the higher mill levies in SweetwaterCounty.

 
 
55.  Mr. 
Cartwright testified that a past Chairman of the SBOE thought Wyoming Statute § 
39-2-201(j) would apply retroactively to the case at hand.  [See Finding of Fact No. 21].  We find no authority to hold the DOR and 
SweetwaterCounty are estopped from 
collecting taxes or that they are bound by statements not made in 
writing.

 
 
56.  Petitioner 
could have requested an interpretation of Wyoming Statute § 39-2-201(j) in 
accordance with Wyoming Statute § 39-6-304(j).9  Petitioner knew of procedures but failed 
to ask for an interpretation.  The 
record is thus void of the required elements of equitable 
estoppel.

 
 
The 
DOR's Allocation by Well Location Was 
Reasonable

 
 
57.  Our 
next inquiry is whether the DOR's action in reallocating Petitioner's Wertz Dome 
Unit oil production between Carbon and SweetwaterCounties is reasonable, not arbitrary, 
capricious or an abuse of discretion, and in accordance with 
law.

 
 
58.  The 
SBOE has held that a taxpayer, by statute, has a duty to fully and accurately 
report all production volumes.  PG&E Resources Company, BOE Docket 
No. 95-35 (Nov. 10, 1992).

 
 
59.  Petitioner 
offers various theories why the original allocation was reasonable.  Petitioner reported the allocation for 
three of the years on a 66/34 split.  
Petitioner attempts to explain the split as based on lease acreage or due 
to a grouping request.  We reject 
the Petitioner's explanation and find the DOR reallocation was the only 
reasonable method of determining tax liability in this 
case.

 
 
60.  The 
DOR and the SBOE have the responsibility to correct errors which are disclosed 
in an audit.  Amax Coal v. State Board of 
Equalization, 896 P.2d 1329, 1334-1335 (Wyo. 1995).  See also, Thunder Basin Coal Company v. 
State Board of Equalization, 896 P.2d 1336 (Wyo. 1995).

 
 
61.  Based 
on the rule of Amax, supra, we hold the DOR has the authority 
and corresponding duty to correct Petitioner's erroneous reporting of its Wertz 
Dome Unit oil production for the period 1980 through 1988 on the basis of the 
contract audit performed at the request of SweetwaterCounty.

 
 
62.  Accordingly 
we hold the DOR's decision to correct Petitioner's reporting for the period 1980 
through 1986 to reflect reporting on a well location basis is supported by 
substantial evidence, is in accordance with procedures required by law, and is 
neither arbitrary, capricious, nor inconsistent with law.

 
 
63.  Petitioner 
has failed to meet its burden of proving it accurately reported its production 
to the proper county.  We base this 
on the record:

            
a.  Petitioner's production reports of [to] the DOR were 
different from its own filings with the WOGCC;

            
b.  Petitioner's reports were not based upon actual 
production;

            
c.  The method petitioner used to allocate production might not 
reflect the actual production during the years in 
question;

            
d.  The actual percentage of producing wells in the counties 
might be different from that which petitioner reported for that county; 
and

            
e.  Petitioner could not identify a rational and consistent 
basis for how it allocated production between Sweetwater and CarbonCounties.

 
 
A.  It 
was not reasonable to allocate the production on a lease acreage 
basis.

 
 
64.  Petitioner 
allocated production during tax years 1980 through 1983 on the 66/34 split.  [See Finding of Fact No. 7].  None of Petitioner's witnesses could 
explain the rationale for the split.  
Petitioner changed its reported allocation in 1984 forward and this was 
characterized as a "mistake" and an "error."  [See Finding of Fact No. 24].  Petitioner failed to prove its 
allocation between Sweetwater and Carbon Counties was 
accurate.

 
 
65.  Wyoming statutes provide 
that all taxable property shall be valued and assessed for taxation in the 
county in which the property is located.  
Wyo. Stat. §§ 39-2-101(a)(i)10  and 39-2-201(e).11  The DOR's regulation provides taxable 
value is to be certified to the county in which the mine or mining claim is 
located and that "mine or mining claim" shall mean any property which produces a 
mineral.  Rules, Chapter XXI, Sec. 4(g) and 11(c), 
Department of Revenue.  Wyoming 
Statute § 39-2-202(a) provides for production to be valued for tax purposes "at 
the mouth of the mine where produced, after the mining or production process is 
completed."  Wyoming Statute § 
39-2-202(b)(i)12 defines "mouth of the mine" as 
"the point at which a mineral is brought to the surface of the ground."  The law applicable to the production 
years at issue permitted allocation by well location.  In fact, Petitioner used well location 
to allocate some of its production.  
It was appropriate for the DOR to conclude that allocating production by 
well location was permitted by law.

 
 
66.  Petitioner 
failed to provide the DOR with information as to how it allocated 
production.  It failed to provide 
information in 1990 and did not produce information during the discovery phase 
of the instant contested case.  
Under cross-examination by counsel for SweetwaterCounty, the Petitioner's tax 
representative, Mr. Cartwright, admitted the 66/34 allocation used for 1980 
through 1983 had nothing to do with the volumes produced from the wells in the 
specific groups.  He likewise 
admitted the allocation had nothing to do with hydrocarbon pore volume analysis 
nor with any ratio of producing wells to the total number of wells contained in 
the Wertz Dome Unit.  Moreover, he 
admitted that the company's reports for 1984 through 1985 were in error.  [See Finding of Fact 
11].

 
 
67.  Mr. 
Cartwright attempted to explain the 66/34 ratio by stating that it was derived 
from a calculation based on the amount of acreage in the Wertz Dome Unit that 
lies within a particular county.  He 
testified he personally had not made that calculation and was unable to do so 
without the notes of someone else who had made the calculation.  He also testified that by attributing a 
40 acre parcel to each well in the Unit, he had arrived at approximately a 60/40 
split, although he admitted this rough calculation was many years after the tax 
years in question and the unit had changed substantially.  Mr. Syring, another of Petitioner's 
witnesses also attempted to explain the split using the lease acreage recital in 
the lease agreement, but this description did not accurately describe the lease 
acreage contained within the Wertz Dome Unit and thus his calculation was 
flawed.  The SBOE concludes that 
Petitioner was unable to satisfactorily explain how the 66/34 split was 
derived[, and] [r]elied on a couple of unauthenticated, handwritten notes by an 
unidentified source.

 
 
B.  Grouping Request 
Form.

 
 
68.  Petitioner 
argued a well grouping request form that it submitted in January 1981, to the 
DOR was the document that set forth the 66/34 split and was the document used by 
the DOR to approve the allocation.  
[Exhibit 137].  We do not 
accept the allegation that this form was actually used by the DOR for the 
purpose which Petitioner alleges, that is, to approve a hand-written note on the 
allocation of production between Carbon and SweetwaterCounties.  First, there was no evidence such form 
was in the DOR's records.  Second, 
the form introduced into evidence by petitioner had no written verification on 
the form indicating approval by the DOR or even that it had been seen by the 
DOR.  Finally, the well grouping 
request form was never produced in 1990 when the DOR originally requested 
Petitioner review its records and provide an explanation as to how the 
production was reported.

 
 
69.  Even 
if the SBOE was to agree with Petitioner's assertion that the DOR approved and 
accepted the well grouping request form, the handwritten allocation on the form 
by an unidentified employee of Petitioner would not automatically indicate 
approval to the allocation method because the form's instructions were to group 
wells in the same 
county.  [Emphasis in 
original.] The form represented that the wells were in the same county and the 
legal descriptions seem to indicate that all Wertz Dome Unit wells located in 
Range 89 West were in CarbonCounty while wells located in Range 90 
West were located in SweetwaterCounty.  Since an ATD-4 form, which is the tax 
form used to report the volumes and values to DOR, required volumes to be 
measured at the wellhead, any other method of reporting production would have 
been a departure from the forms.

 
 
C.  
Conclusion.

 
 
70.  Petitioner 
failed in its burden of proof to demonstrate that the DOR's allocation based on 
well location was incorrect.  In the 
absence of a statute permitting tax reporting by allocation, Petitioner's duty 
was to report its production where produced, not where "allocated."  There is no evidence Petitioner reported 
its severed oil where it was located and produced for production years 1980 
through 1983.  Consequently, 
Petitioner failed to demonstrate the DOR's allocation of production on the basis 
of well location was unreasonable or inconsistent with 
law.

 
 
71.  The 
DOR's allocation decision is reasonable and supported by the record.  Petitioner acknowledged that it could 
report its production by well location as it did to the WOGCC.  [See Finding of Fact No. 
6].

 
 
72.  Petitioner 
failed in its duty to fully and accurately report its Wertz Dome Unit production 
for the period 1980 through 1988.

 
 
73.  Because 
Petitioner has filed amended returns for its 1987 and 1988 Wertz Dome Unit 
production, and because the DOR has not contested those returns we hold 
Petitioner's reporting for those years is correct.

 
 
Ability 
to Pay Mill Levy Difference

 
 
74.  Petitioner 
argues SweetwaterCounty may not issue a tax bill which reflects only 
the mill levy difference between Carbon and SweetwaterCounties.  SweetwaterCounty is in effect granting a credit for 
taxes paid to another taxing authority, resulting in a tax bill reflecting the 
difference in mill levies.  There is 
no authority holding that SweetwaterCounty cannot give such a credit in law or 
in equity.

 
 
75.  Petitioner 
complains about receiving credit for taxes paid to CarbonCounty.  Petitioner benefits from this situation 
and is not harmed.  Therefore, 
Petitioner lacks standing to assert a claim of error associated with tax dollars 
it cannot claim, and therefore lacks standing to advance this argument.  Board of Com'rs v. Searight Cattle Co., 
3 Wyo. 777, 31 P. 268, 273 (1892); Valley 
Forge Christian College v. Americans United for Separation of Church & 
State, 454 U.S. 464, 474-75, 102 S. Ct. 752, 40 L. Ed. 2d 700 (1982); State ex rel. Bayou Liquors, Inc. v. City of 
Casper, 906 P.2d 1046, 1048 (Wyo. 1995).

 
 
Audit by 
SweetwaterCounty Instead of 
Department of Revenue

 
 
76.  Petitioner 
claims the demand for additional taxes must fail because SweetwaterCounty performed the audit.  The Wyoming Supreme Court has already 
acknowledged the practice of the DOR accepting the work of a county auditor and 
assessing accordingly.  Union Pacific Resources Co. v. State, 
839 P.2d 356, 378-81 (Wyo. 1992).

 
 
77.  The 
record reflects the DOR independently reviewed the work of the SweetwaterCounty auditor and made an independent 
inquiry.  The DOR met independently 
with the Petitioner, as reflected by the notes of the meeting contained in 
Exhibit 120.

 
 
The 
Forms Used by the DOR to Notify the Petitioner and SweetwaterCounty Were 
Unusual

 
 
78.  Petitioner 
claims the forms used to notify SweetwaterCounty of a change, and the form notifying 
Petitioner of the additional tax are not the typical forms used, and therefore 
the claim for additional taxes must fail.  
Petitioner timely filed an appeal of the letter.  The DOR sent a notice of valuation 
change on the same day.  [Exhibit 
508].  Therefore, Petitioner 
experienced no harm or prejudice and fully understood the need to appeal.  In fact the Petitioner is making the 
same form-over-substance argument that was rejected by the Wyoming Supreme Court 
in this controversy.  Amoco Production Company v. WyomingState Board of Equalization, 7 P.3d 900, 904 (Wyo. 2000).

 
 
Limitation 
on Collection of Delinquent Taxes

 
 
79.  Petitioner 
argues Wyoming Statute § 39-3-102(b)13 restricts or "proscribes" 
SweetwaterCounty's right to collect 
delinquent taxes.  This statute 
provides:

 
 
Annually, 
the county treasurer shall declare any taxes remaining unpaid on May 11 
delinquent, and on or before May 21 shall certify a list of delinquent taxes and 
taxpayers, indicating the years for which payment is delinquent, which 
constitutes the delinquent tax roll or list of the county for the years covered 
thereby.  The county treasurer shall 
stamp upon each line of the delinquent tax roll "Delinquent May 11, 19" but 
failure to do so does not invalidate subsequent collection proceedings.  All personal property taxes not 
collected within ten (10) years from the time the taxes were levied shall be 
canceled and are thereafter uncollectible.

 
 
80.  The 
statute limiting the collection of delinquent taxes does not apply to unreported 
taxes in a self-reporting system.  
An important case in understanding that statutes of limitation generally 
do not apply to tax collection is Union 
Pacific Resources Co. v. State, 839 P.2d 356 (Wyo. 1992).  In that case, the court cited Wyoming constitutional 
provision Article 3, § 40 for the proposition that there is no statute of 
limitations for mineral tax collections.  
Id. at 
369.

 
 
81.  The 
record clearly shows Petitioner was notified about the taxes due by the contract 
auditor for SweetwaterCounty.  Applying Wyoming Statute § 39-3-102(b) 
would result in rewarding Petitioner for its failure to properly report and pay 
taxes.

 
 
Failure 
to Send a Tax Bill

 
 
82.  Petitioner 
claims SweetwaterCounty's failure to issue a 
tax bill is a fatal flaw.  The tax 
statute creates the liability on the taxpayer to pay a tax bill, not the 
county's issuance of a bill.  The 
statute prescribes the amount to be paid.  
Moncreif v. WyomingState 
Board of Equalization, 856 P.2d 440 (Wyo. 1993).  Wyoming statutes are clear that a tax notice 
or demand for payment is not necessary to create a tax liability.  Wyo. Stat. § 39-3-101(e).14

 
 
Interest 
on Taxes

 
 
83.  The 
assessment of interest in this matter is authorized by Wyoming Statute § 
39-3-101:15

 
 
(a)  Taxes 
provided by this act are due and payable at the office of the county treasurer 
of the county in which the taxes are levied.  Fifty percent (50%) of the taxes are due 
on and after September 1 and payable on and after November 10 in each year and 
the remaining fifty percent (50%) of the taxes are due on and after March 1 and 
payable on and after May 10 of the succeeding calendar year except as hereafter 
provided.  If the entire tax is paid 
on or before December 31, no interest or penalty is 
chargeable.

(b)  The 
balance of any tax not paid as provided by subsection (a) of this section is 
delinquent after the day on which it is payable and shall bear interest at 
eighteen percent (18%) per annum until paid or collected.

 
 
84.  The 
interest obligation is modified by the requirement that the taxpayer knows or 
should reasonably know the entire tax liability, or the correct valuation for 
assessment, when the tax is due.  Kunard v. Enron Oil & Gas Co., 869 P.2d 132 (Wyo. 1994); and Moncrief v. WyomingState Bd. Of Equalization, 856 P.2d 440 (Wyo. 
1993).  Therefore, to determine if 
interest accrues, the SBOE is compelled to determine if the taxpayer knew or 
should have known the production should have been reported to SweetwaterCounty instead of CarbonCounty.

 
 
85.  We 
feel it is necessary to examine each tax year and intervening periods to 
determine if interest should accrue.

 
 
86.  For 
production years 1980 through 1983, Petitioners reported its production on the 
66/34 split.  Interest would accrue 
for tax years if there was a showing the Petitioner knew or should have known 
tax was due to SweetwaterCounty.  We believe Petitioner did not know of 
the tax problem until the letter of inquiry from the DOR dated December 14, 
1989.  However, we believe 
Petitioner did not take reasonable steps to address its tax problem after 
notification.  Therefore, interest 
should accrue on the 1980 through 1983 additional tax obligation from the date 
Petitioner acknowledged the receipt of the DOR's letter, January 9, 1990, until 
paid.  [Exhibits 302, 
503].

 
 
87.  For 
production years 1984 through 1986 the record indicates that petitioner paid its 
tax obligation based on well location, at least for a portion of the time.  This action indicates that petitioner 
had knowledge of the proper tax reporting method.  For those times and fields when taxes 
were paid on well location, no interest is due.  For the tax years and fields when taxes 
were not paid based on location, interest is due from the date the taxes should 
have been paid; November 10 and May 10.

 
 
88.  It 
appears taxes for 1987 and 1988 were paid appropriately but late.  Interest is due from the date the taxes 
were originally due until the date they were actually 
paid.

 
 
[¶17]   On October 5, 2001, BP filed a 
petition for review in the district court in accordance with W.R.A.P. 12.  In the district court, BP raised these 
issues:

 
 
1.         
Does W.S. §39-2-201(j) apply to the tax period and, if so, does it 
benefit taxpayers?

            
a.  Does W.S. §8-1-107 apply to limit W.S. §39-2-201(j) to 
prospective application when, at the time of the enactment of W.S. §39-2-201(j) 
there was no pending action, prosecution or proceeding?

            
b.  Is the Department estopped from now claiming W.S. 
§39-2-201(j) does not apply when the former Chairman of the Board previously 
told Amoco that it applied and the Director expressed a similar 
opinion?

2.         
Does W.S. §39-3-102(b) restrict the County's right to collect the 
allegedly delinquent taxes at issue in this matter?

3.         
Does W.S. 39-14-208(b)(ii) preclude the Department from changing values 
prior to production year 1985?

4.         
Was the County's intervention proper and, if so, timely when it delayed 
filing a Motion for Intervention until six years after the commencement of the 
action and after the Supreme Court had remanded the case back to the 
Board?

            
a.  Was the County a "person" and "a real party in 
interest?"

5.         
Should Nancy Freudenthal and Davis & 
Cannon have been disqualified from representing SweetwaterCounty as a result of her prior 
involvement in the matter as Chairman of the Board?

            
a.  Do the Board's rules overrule the Rules of professional 
responsibility?

            
b.  Did Nancy Freudenthal and 
Davis & Cannon violate the Rules of Professional responsibility in her and 
their representation of SweetwaterCounty?

6.         
Is wellhead the only acceptable method for reporting down-hole commingled 
production in a unit when, during the tax period, the Department accepted any 
reasonable method for reporting down-hole commingled 
production?

7.         
Did the Department abuse its discretion by issuing the February 28, 1994 
letter without conducting any review of the County's 
findings?

8.         
Can Amoco be required to pay an ad valorem tax without an assessment and 
for a partial mill levy?

9.         
Can Amoco be required to pay a tax  
when it never received a tax bill?

10.       Was Amoco's 
method of reporting the production from the Wertz Dome Unit for the tax period 
reasonable?

11.       Was Notice 
of Valuation Change 90-355 res judicata for a further proceeding on production 
years 1980 through 1986?

12.       Should 
Amoco be required to pay interest on any underpayment based on the facts of this 
matter?  [Vol. I, 
2-3]

 
 
[¶18]   After comprehensive briefing by the 
parties, the district court issued this decision letter on June 18, 
2004:

 
 
            
This case comes before the Court on appeal from the State Board of 
Equalization (SBOE) administrative hearing.  After reviewing the record and other 
pertinent documents, the Court finds that substantial evidence supports the 
SBOE's decision in favor of the Wyoming Department of Revenue (DOR), 
reallocating ad valorem taxes assessed from 1981-1987 by Amoco Production 
Company (Amoco), currently known as BP America Production Company, at the Wertz 
Dome field in southwest Wyoming and affirms it.  The Court specifically 
finds:

 
 
            
1.  The DOR did not approve Amoco's arbitrary method of 
allocation;

            
2.  Wyoming statutes do not preclude the SBOE's 
findings of fact and conclusions of law;

            
3.  Accrual of interest began with DOR's notification to Amoco; 
and

            
4.  SweetwaterCounty's representation and involvement 
before the SBOE did not constitute harmful error.

 
 
Background

 
 
            
Amoco Production Company challenges the SBOE finding that Amoco owes 
additional ad valorem taxes on its Wertz Dome oil production.  During production years 1980 to 1986 
(tax years 1981-1987), Amoco fully reported ad valorem taxes.  Because the field straddles Carbon and 
SweetwaterCounty lines, it was 
impossible to determine in which county the oil originated and difficult to 
calculate and divide the ad valorem taxes between the counties.  (R. Vol. 9 at 158-59.)  Amoco arbitrarily allocated 66% 
production to CarbonCounty and 34% to SweetwaterCounty.  SweetwaterCounty had the higher mill levy.  (SBOE Findings of Fact, Conclusion of 
Law and Decision and Order at 4.)  
SweetwaterCounty retained an 
independent auditor to review Amoco's allocation method, and that auditor 
discovered an imbalance in production reporting.  The DOR requested that Amoco amend its 
forms or explain "the apparent discrepancies."  (Letter from Peterson to Cartwright of 
12/14/89.)

 
 
            
On May 2, 1990, Amoco filed amended returns for the production years 
1987-1988 and relied upon W.S. § 39-2-201(j), which had been enacted on March 
20, 1990.  In 1994, the DOR again 
requested reallocation of ad valorem taxes for production years 1980 to 
1986.  (Findings of Fact, supra, at 9 ¶ 35; In re 1988 & 1989 
Assessment of Amoco Prod. Co.'s 1987 & 1988 
Oil Prod., SBOE Special Directive 90-355 (July 2, 1990).)  Amoco challenged the DOR request for 
reassessment before the SBOE in February 2001.  The DOR sought "additional ad valorem 
taxes on the amount attributable to the SweetwaterCounty's higher mill levy."  (Findings of Fact, supra, at 3.)  The SBOE found in favor of the DOR and 
this timely appeal followed.

 
 
Standard 
of Review

 
 
            
The Court must review the SBOE administrative decision according to the 
Wyoming Administrative Procedure Act (WAPA).  The court will:

 
 
Hold 
unlawful and set aside agency action, findings and conclusions found to 
be:

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

. . . 
.

      
(D)  Without observance of procedure required by law; 
or

      
(E)  Unsupported by substantial evidence in a case reviewed on 
the record of an agency hearing provided by statute.

 
 
W.S. § 
16-3-114(c)(ii)(A), (D), (E) (LexisNexis 2003).  Substantial evidence is the appropriate 
test "when factual findings are involved and both parties submit evidence."  Newman v. State ex rel. Wyo. Workers' Safety 
and Compensation Div., 2001 WY 91, ¶ 22,  49 P.3d 163, ¶ 22 (Wyo. 2002).  Therefore, the SBOE's findings must be 
upheld as long as this court determines that the record contains "relevant 
evidence which a reasonable mind might accept in support of the conclusions of 
the agency."  State ex rel. Wyo. Dep't of Revenue v. Union 
Pacific R.R. Co., 2003 WY 54, ¶ 8, 67 P.3d 1176, ¶ 8 (Wyo. 2003) (quotations 
omitted).

 
 
            
Unless there is credible evidence to the contrary, DOR tax assessments 
"are presumed valid, accurate and correct."  Airtouch Communications, Inc. v. Dep't of 
Revenue, State of Wyoming, 2003 WY 114, ¶ 12, 76 P.3d 342, ¶ 12 (Wyo. 2003) 
(citations omitted).  Amoco must 
"prove by a preponderance of the evidence" that the ad valorem reassessment of 
Sweetwater County's Wertz Dome production during 1980-1986 was "not derived in 
accordance with the required constitutional and statutory requirements for 
valuing state-assessed property."  
Airtouch, ¶ 12 (citation 
omitted).  The petitioner must 
present "credible evidence" to overcome the presumption that the tax assessments 
are accurate; "a mere difference of opinion as to the value is not 
sufficient."  Id.  If the presumption is successfully 
overcome, the burden "shifts to the DOR to defend its valuation."  Id., ¶ 12 
(citation omitted).

 
 
Discussion

 
 

            
This appeal considers whether Amoco's ad valorem taxes were properly 
reported.  Wyoming's ad valorem tax, 
a self-reporting tax system, is a tax "according to value," W.S. § 
39-13-101(a)(i) (LexisNexis 2003), and is based upon the ownership or interest 
in "the gross production of minerals for the previous calendar year."  Wyo. DOR Rules ch. 6 § 5(a)(i) (Oct. 12, 
1995) (http://soswy.state.wy.us).  The ad valorem tax is calculated 
according to the appropriate county mill levy.  Union Pacific Res. Co. v. State, 839 P.2d 356, 361 (Wyo. 1992).  Once the taxpayer reports ad valorem 
taxes to the DOR, the DOR verifies the taxable value of the property.  (R. Vol. 11 at 
135.)

 
 
            
The DOR found that Amoco had not properly calculated the value of 
SweetwaterCounty's oil production 
from the Wertz Dome unit; consequently, the DOR demanded tax amendments.  The SBOE findings in favor of the DOR 
were proper for four reasons.  
First, substantial evidence supports the SBOE's holding that the DOR did 
not approve Amoco's method of allocation.  
Second, no Wyoming statute precludes the SBOE's 
findings.  Third, the accrual of 
interest against Amoco began with proper notification from the DOR.  Fourth, SweetwaterCounty's participation and representation 
before the SBOE did not constitute harmful error.

 
 
            
1.  Substantial evidence supports the conclusion that the 
DOR did not approve Amoco's method of allocation.

 
 
            
The DOR expected that Amoco would measure its production at the mouth of 
each well on the Wertz Field, rather than arbitrarily allocate its 
production.  Upon its administrative 
review before the SBOE, Amoco bore the burden to prove "that the methodology 
used and valuations reached by DOR were not supported by substantial evidence 
available in the agency record."  Airtouch, ¶ 13.  By this standard, it is immaterial 
whether other methodologies exist, as long as the methodology used by the DOR 
was supported by substantial evidence.  
Amoco failed to meet its burden; the well-head methodology was supported 
by substantial evidence.  
Consequently, the SBOE properly upheld the DOR's disapproval of Amoco's 
production allocation for two reasons.  
First, the DOR had only approved an allocation based upon the location of 
the wells.  Second, Amoco's 
allocation method was unreasonable.

 
 
            
a.  SBOE properly held that DOR had only approved allocation 
based upon the location of the wells.

 
 
            
The SBOE ruled that the DOR had approved allocation based upon well 
location, but had not approved Amoco's arbitrary allocation method.  The legislature has specified that oil 
production be reported in the county in which the well is located unless the 
taxpayer requests, in writing, to use another reasonable 
method.

 
 
For 
mines and mining claims, the taxpayer shall report the location of the 
production to the county and tax district in which the well, mine or mining 
claim is located, based upon the actual taxable production produced by the well 
or mine in each county or tax district.  
Other reasonable methods of reporting the location of production may be 
approved by the department upon a written request of the taxpayer or taxing 
jurisdiction.

 
 
W.S. § 
39-2-213 (Michie 1994) (repealed).  
According to the evidence, Amoco failed to produce any documentary proof 
demonstrating that the DOR approved of the 66/34 allocation.  (R. Vol. 9 at 159.)  One witness testified that he "believed" 
the DOR approved the allocation "whether through response or inaction."  (R. Vol. 9 at 151.)  This weak statement does not constitute 
sufficient evidence to overcome Amoco's burden proof in this case.  Further, Amoco's allocation method was 
unreasonable because Amoco did not "provide a rational explanation for the 66/34 
split."  (Findings of Fact, supra, at 7, ¶ 21.)  Amoco failed to demonstrate that the 
"methodology used and the valuations reached by DOR were not supported by 
substantial evidence."  Airtouch, ¶ 13.

 
 
            
b.  The evidence supports the SBOE's holding that Amoco's 
allocation method was unreasonable.

 
 
            
Amoco allocated Wertz Dome oil production by arbitrarily determining that 
66% originated in CarbonCounty and 34% originated in SweetwaterCounty.  The SBOE determined that substantial 
evidence demonstrated that the 66/34 allocation was unreasonable.  The SBOE found that Amoco's reports to 
the DOR conflicted with Amoco's filings with the Wyoming Oil and Gas 
Conservation Commission; Amoco's reports and allocation method "were not based 
upon actual production;" and Amoco failed to "identify a rational and consistent 
basis for how it allocated production between Sweetwater and CarbonCounties."  (Findings of Fact, supra, at 12 ¶ 
63.)  The evidence also indicates 
that Amoco failed to accurately report production to the appropriate 
county.

 
 
            
Upon review, the Court is not required "to determine which of the various 
appraisal methods is best or most accurately estimates fair market value; 
rather, it is to determine whether substantial evidence exists to support usage 
of the chosen method of appraisal."  
Airtouch, ¶ 12.  Substantial evidence supports the DOR's 
rejection of Amoco's allocation, especially in light of Amoco's inability to 
justify the 66/34 split.

 
 
            
While numerous witnesses suggested diverse hypotheses of the reasoning 
behind the 66/34 allocation, this diversity only serves to prove the point.  According to the witnesses, the 66/34 
split was variously used for ease and convenience (R. Vol. 9 at 111), based upon 
the ratio of land leased in each county (R. Vol. 9 at 142-43), and based on a 
calculation of the 40-acre spacing between wells (R. Vol. 10 at 41-42).  Even Amoco's taxation employees could 
not agree on a consistent basis for the allocation.  (Compare testimony from Paul Syring, 
employed in Amoco's Property Tax Department, at R. Vol. 9 at 111, and testimony 
from Bruce Cartwright, Amoco's former taxation representative, at R. Vol. 10 at 
41-42).  Mr. Cartwight admitted that 
the 66/34 allocation did not reflect the actual volumes produced at each 
well.  (R. Vol. 10 at 139-140.)  Richard Ryan, independent auditor for 
SweetwaterCounty, testified that 
Amoco inconsistently allocated production.  
The evidence does not justify Amoco's allocation 
method.

 
 
            
2.  No Wyoming statute precludes the SBOE's Findings 
of Fact or Conclusions of Law.

 
 
            
Amoco presents three arguments to support its position that Wyoming statutes prohibit 
the DOR's reassessment of ad valorem taxes.  First, Amoco argues that W.S. § 
39-2-201(j) applies retroactively to limit ad valorem reassessment to 1988-1989 
only.  Second, Amoco claims that 
W.S. § 39-3-102, providing cancellation of uncollected taxes ten years after 
levy, and § 39-2-403, allowing additions of omitted property to assessment rolls 
within five years, prevent the DOR's reassessment.  Finally, Amoco contends that W.S. § 
39-14-208(b)(ii) prevents tax amendments prior to 1985.

 
 
            
The Court will examine each statute, inquiring "into the ordinary and 
obvious meaning of the words employed by the legislature according to the manner 
in which those words are arranged."  
Wyodak Res. Dev. Corp. v. 
Wyo. Dep't of 
Revenue, 2002 WY 181, ¶ 18, 60 P.3d 129, ¶ 18 (Wyo. 2002).  Unambiguous terms bind the Court "to the 
results so expressed."  Id.  If there is more than one reasonable 
interpretation, the statute is ambiguous, and the court will engage the "general 
principles of statutory construction."  
Id.  The court will "affirm an agency's 
conclusions of law when they are in accordance with the law" and will correct an 
erroneous application of the law.  
Union Pacific R.R. Co., ¶ 8 
(citations omitted).

 
 
            
a.  W.S. § 39-2-201(j) does not apply retroactively to limit 
reassessment to 1988-1989.

            
. . . .

 
 
 On 
December 14, 1989, the DOR required Amoco to amend its ad valorem tax assessment 
for erroneously allocating production from the Wertz Dome Unit.  The DOR's requirement initiated the 
proceedings in this case.  Applying 
§ 39-2-201(j) would require explicit, statutory language of retroactivity, as 
this case had already commenced.

 
 
            
Section 39-2-201(j) will therefore not be applied retroactively to the 
events that gave rise to this lawsuit.  
Tax measures "will be construed prospectively only if there is a doubt 
whether the statute was intended to be retroactive."  Belco Petroleum Corp. v. State Bd. Of 
Equalization, 587 P.2d 204, 210 (Wyo. 1978) (citations omitted).  "A statute is not necessarily 
retroactive because it draws on antecedent facts for its operation."  Wyo. Refining Co. v. Bottjam, 695 P.2d 647, 
650 (Wyo. 
1985).

 
 
            
Amoco asserts that § 39-2-201(j) should be applied retroactively in this 
case because an SBOE opinion indicated that W.S. § 39-2-201(j) would operate 
retroactively.  After receiving the 
DOR notification to amend its ad valorem tax reports, Amoco met with the former 
SBOE chairman and discussed "tax policy" behind the then-pending W.S. § 
39-2-201(j).  (R. Vol. 10 at 
57.)  The evidence indicates, 
however, that Amoco continued its independent review, and relied upon its 
discussion with the chairman only to "forestall any need to file amended 
returns,"  (R. Vol. 10 at 59.)  A taxpayer may "act in reliance upon a 
written interpretation" of a statute by the SBOE.  W.S. § 39-6-304(j) (Michie 1994).  Basic rules of statutory construction 
require that effect be given to every word of a statute, because it is presumed 
that the legislature has not included useless words.  State Board of Equalization v. Tenneco Oil 
Co., 694 P.2d 97, 99 (Wyo. 1985).  The legislature specifically used the 
term "written" in this statute; taxpayers thus may only rely upon a written 
interpretation.  Amoco did not 
acquire the necessary written interpretation of retroactivity of § 
39-2-201(j).

 
 
            
Amoco has argued that W.S. § 39-2-201(j) is a statute of limitations, is 
remedial, and should be applied retroactively.  (Br. Of Appellant 
at 41.)  There is a presumption 
against the retroactivity of statutes of limitation, Wyo. Refining, 695 P.2d  at 650; likewise 
no statute of limitations restricts the "collection of unpaid severance and ad 
valorem taxes due upon mineral production."  Union Pacific Res., 839 P.2d  at 
380.  Amoco attempts to distinguish 
its case from Union Pacific Resources 
by asserting that, unlike Union Pacific 
Resources, Amoco did not fail to report the entirety of its productivity, 
but only failed to properly allocate taxes.  (Br. Of Appellant 
at 44.)

 
 
            
Amoco's argument is flawed for two reasons.  First, the language in Union Pacific Resources does not limit 
itself to unreported taxes, but instead refers to "unpaid severance and ad 
valorem taxes."  Id.  This language includes not only 
unreported taxes, but also improperly allocated (and thus unpaid) taxes.  Second, there is a difference between 
failing to properly allocate value and failing to properly include property in a 
tax assessment.  Amoco, in failing 
to properly report its ad valorem taxes, has failed to properly include property 
in a tax assessment, because an ad valorem tax relates to the ownership interest 
in the mineral produced.  The 
Wyoming 
legislature "has given express authority for the Department of Revenue to 
reassess undervalued property under W.S. § 39-1-304(a)(xiv)."  Wyo. State Tax Comm'n v. BHP Petroleum Co. Inc., 856 P.2d 428, 436-437 (Wyo. 1993).  The court has held "that the omitted 
property statute does not limit the State's power under W.S. 39-1-304(a)(xiv) to 
reassess property that was undervalued."  
Id.   Thus, Union Pacific Resources is applicable, 
and Amoco's failure to reassess the taxable value of SweetwaterCounty wells must be remedied.  [Footnote 
omitted.]

 
 
            
The SBOE found no other Wyoming statute capable of making W.S. § 
39-2-201(j) applicable.  Of 
particular concern was W.S. § 8-1-107 (LexisNexis 2003) which states, "If a 
statute is repealed or amended, the repeal or amendment does not affect pending 
actions ."  The application of § 
8-1-107 is moot.  The SBOE correctly 
found that the events triggering the reallocation of taxes occurred before March 
20, 1990, the effective date of W.S. § 39-2-201(j).  (Findings, supra, at 11 ¶ 50.)  As W.S. § 39-2-201(j) never applied in 
the first place, W.S. § 8-1-107 cannot make it apply now.

 
 
            
b.  W.S. § 39-3-102, providing for cancellation of uncollected 
taxes ten years after levy, and W.S. § 39-2-403, allowing additions of omitted 
property to assessment rolls within five years, do not prevent the DOR's 
reassessment.

 
 
            
Amoco argues that W.S. § 39-3-102 (Michie 1994) (repealed), which limits 
the collection of ad valorem taxes to ten years, and W.S. § 39-2-403, which 
limits reassessments of omitted property to five years, restrict the DOR 
reassessment of ad valorem taxes.  
Amoco further argues that it was arbitrary and capricious for the SBOE to 
find that neither statute affected the inapplicability of W.S. § 
39-2-201(j).

 
 
            
Amoco's reliance upon § 39-3-102 to restrict the collection of delinquent 
taxes in SweetwaterCounty is misplaced.  The statute indicates, "All personal 
property taxes not collected within ten (10) years from the time the taxes were 
levied shall be cancelled and are thereafter uncollectible.  W.S. § 39-3-102(b) (repealed).  The court has determined that Tile 39, 
Article 3, applies exclusively to reassessments by the county rather than by the 
state.

 
 
Article 
2 of [Title 39 of the Wyoming Statutes] covers state assessments, and Article 3 
covers county assessments.  
Id.  With mineral assessments, the SBOE is 
required to calculate and set the assessment.  W.S. 39-2-201(e) (Cum.Supp.1992).  With other types of property, the task 
of calculating and setting the assessment belongs to the county assessor.  Under the mineral assessment procedure, 
although the County does enter the assessment on the tax rolls, the 
certification of the assessment is done by the State.  

 
 

BHP 
Petroleum Co. Inc., 856 P.2d  at 436-437.  As an Article 3 
provision, the ten-year limitation found in § 39-3-102 applies to the collection 
by the county rather than the state.  
Section 39-3-102 is inapplicable to the current 
case.

 
 
            
Wyoming Statute § 39-2-403 limits to five years the addition of omitted 
property in assessment rolls.  
"Property omitted from prior year tax lists discovered by the county 
assessor shall be added to the assessment roll and taxes computed and collected 
for the period the property was omitted not exceeding five (5) years."  W.S. § 39-2-403(c) (repealed).  Like its analysis of § 39-3-102, the 
court limited the applicability of § 39-2-403(c) to county assessments.  BHP Petroleum Co. Inc., 856 P.2d  at 
437.  Therefore, the SBOE is not 
precluded from reassessing and levying ad valorem taxes on omitted property 
values, such as the Wertz Dome production values in SweetwaterCounty.

 
 
            
c.  W.S. § 39-14-208(b)(ii) does not prevent tax reassessment 
for the years prior to 1985.

 
 
            
Amoco contends that the law prevents the DOR from changing mineral values 
for production years before 1985.  
Amoco did not raise the issue of the applicability of § 39-14-208 during 
the SBOE hearing.  The SBOE did not 
consider the issue during its February 12-14, 2001 hearing.  In fact, the record indicates that Amoco 
first raised the issue in its proposed Findings of Fact and Conclusions of Law 
filed with the SBOE April 5, 2001.  
Opposing parties were not given an opportunity to address this issue 
before the SBOE.

 
 
            
The court disfavors hearing issues raised for the first time on 
appeal.  "As we have consistently 
stated over many years, Wyoming appellate courts do not review issues 
raised for the first time on appeal.  
This rule is equally applicable to appeals from administrative decisions 
as to those from district courts."  
Shaffer v. Wyo. Workers' 
Compensation Div., 960 P.2d 504, 507-508 (Wyo. 1998) (citations omitted).  The only exceptions to this rule are 
"jurisdictional issues and issues of such a fundamental nature that they must be 
considered."  In re Pohl v. Bailey Co., 980 P.2d 816, 
819 (Wyo. 
1999) (quotations omitted).  As this 
case falls into neither category, the applicability of W.S. § 39-14-208 will not 
be considered by this Court.

 
 
3.  The 
accrual of interest began with proper notification by the DOR to 
Amoco.

 
 
Amoco 
challenges the SBOE determination of interest and the adequacy of the 
reassessment notification.  First, 
Amoco asserts that the SBOE's decision to charge interest was arbitrary and 
capricious.  Second, Amoco 
challenges the adequacy of the DOR notice of additional tax 
liability.

 
 
The law 
assesses interest according to the delinquency of the tax.  The tax is delinquent when the taxpayer 
"knew or reasonably should have known" that the tax was not paid when due.  Kunard v. Enron Oil & Gas Co., 869 P.2d 132, 134 (Wyo. 1994) (quotation omitted).  The taxpayer "knows or should reasonable 
know" its tax liability "when the tax is due."  Id. 
at 134.  "[U]nderpaid ad valorem tax 
is delinquent on the date it should have been paid, not only the later date of 
notification and demand."  Kunard, 869 P.2d  at 135 (quotations 
omitted).  If the taxpayer disagrees 
with a tax bill, the taxpayer may pay principle amount of taxes due "in 
protest."  Payment in protest stays 
the accrual of interest and, upon a favorable disposition by the SBOE, allows a 
refund of the controverted taxes.  
(R. Vol. 11 at 22.)  Amoco 
did not pay its taxes in protest, and thus interest 
accrued.

 
 
First, 
Amoco argues that the SBOE arbitrarily assessed interest.  The SBOE examined each production year 
in question and allocated interest based upon when Amoco knew or should have 
known of its tax liability.  For 
example, the SBOE found that during 1980-1983, Amoco "did not take reasonable 
steps to address its tax problem after notification," and interest accrued 
beginning with notice to Amoco on January 9, 1990.  (Findings of Fact, supra, at 16-17.)  From 1984 to 1986 Amoco owed interest 
for the portion of the time when "taxes were not paid based on location."  (Supra.)  For the years 1987 to 1988, Amoco paid 
the reassessed taxes late, and the SBOE found interest was due "from the date 
the taxes were originally due until the date they were actually paid."  (Supra.)  Substantial evidence demonstrates that 
the SBOE appropriately assessed an accrual of interest.

 
 
Second, 
Amoco argues that the SBOE arbitrarily required Amoco to pay additional tax 
without a bill or a Notice of Valuation Change (NOVC), the customary form sent 
to taxpayers for value amendments.  
"Failure to send notice, or to demand payment of taxes, does not 
invalidate any taxes due."  W.S. § 
39-3-101(e) (Michie 1994) (repealed).  
The SBOE agreed that a tax notice was "not necessarily to create a tax 
liability."  (Findings of Fact, supra, at 16 ¶82.)

 
 
In 
February 1994, the DOR informed the Sweetwater County Assessor by letter, with a 
copy sent to Amoco, that ad valorem reallocation would be necessary for the tax 
years 1981-1987 on the Wertz Dome Field.  
(R. Vol. 12, Ex. 115.)  The 
text of the letter identified itself as a "notice of valuation change."  Although the letter was not the 
customary format for a NOVC (R. Vol. 10 at 54), the letter plainly informed 
Amoco to amend its ad valorem tax reports.  
Because Amoco partially complied with the DOR notice in 1990, it cannot 
logically claim that the failure to fully amend the ad valorem reports was 
attributable to the failure to send an NOVC.  Amoco was properly 
notified.

 
 
4.  Sweetwater 
County's 
representation and involvement before the SBOE did not constitute reversible 
error.

 
 
Two 
procedural errors are alleged.  
First, Amoco argues that SweetwaterCounty should not have been permitted to 
intervene in the SBOE hearing.  
Second, Amoco argues that the former SBOE chairman should not have been 
permitted to represent SweetwaterCounty in the hearing before the 
SBOE.

 
 
a.  SweetwaterCounty's intervention before the SBOE was 
justifiable and does not constitute reversible error.

 
 
Amoco 
argues that SweetwaterCounty's intervention into the SBOE 
hearing was procedurally erroneous.  
Appellant quotes SBOE Rules ch. 2 § 13(a), which addresses the joinder of 
persons before the SBOE. More appropriately, Rules ch. 2 § 14(a) permits 
intervention by a county into an SBOE hearing.

 
 
Upon 
timely motion, any person, including a board of county commissioners, may be 
permitted to intervene in a case  when the movant claims an interest relating 
to the matter or transaction which is the subject of the case and is so situated 
that the disposition of the case may as a practical matter impair or impede his 
ability to protect that interest.

 
 

SBOE 
Rules ch. 2 § 14(a) (Oct. 22, 2001) (http://soswy.state.wy.us).  SweetwaterCounty asserted an interest that may have 
been impeded without intervention.  
Amoco does not deny this, but claims that SweetwaterCounty's intervention was not timely.  Even if Amoco is correct, the SBOE did 
not commit harmful error.  Amoco has 
not shown, nor does the evidence suggest, that SweetwaterCounty's intervention influenced the 
SBOE's decision or harmed Amoco's rights.  
Because Amoco cannot show it was harmed, and because SweetwaterCounty's interest in intervening was 
justifiable and intervention is discretionary within the SBOE rules, this Court 
cannot say that the intervention was unreasonable.

 
 
            
. . . .

 
 
Decision

 
 
            
The Court affirms the SBOE decision to permit reassessment of ad valorem 
taxes from production years 1980-87.  
Allocation based upon well location is the appropriate method of 
assessment in this case.  Wyoming statutes do not 
preclude the SBOE's findings or conclusions.  The accrual of interest and SweetwaterCounty's involvement before the SBOE were 
appropriate.  The Court's Mandate of 
Affirmance follows.

 
 
[¶19]   On July 16, 2004, BP filed a notice 
of appeal seeking review in this Court.  
The final brief for this case was filed on May 16, 2005, and the Court 
took the case under advisement after hearing oral argument on June 23, 
2005.

 
 
STANDARD 
OF REVIEW

 
 
[¶20]   The applicable standard of review 
has been well summarized in our prior decisions:

 
 
            
Wyo. 
Stat.  Ann. § 16-3-114 provides for 
judicial review of administrative agency action.  In particular, Wyo. Stat.  Ann. § 16-3-114(c)(ii) requires the 
reviewing court to "[h]old unlawful and set aside agency action, findings and 
conclusions found to be:"

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

      
(B)  Contrary to constitutional right, power, privilege or 
immunity;

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

      
(D)  Without observance of procedure required by law; 
or

      
(E)  Unsupported by substantial evidence in a case reviewed on 
the record of an agency hearing provided by statute.

 
 
We have 
held that "the substantial evidence test is the appropriate standard of review 
in appeals from [Wyoming Administrative Procedure Act] contested 

case 
proceedings when factual findings are involved and both parties submit 
evidence."  Newman v. State ex rel. Wyoming Workers' 
Safety and Compensation Div., 2002 WY 91, ¶ 22, 49 P.3d 163, 171 
(Wyo.2002).  In 
addition,

 
 
[w]hen 
we are reviewing cases [that] have been certified to us pursuant to W.R.A.P. 
12.09(b), we apply the appellate standards [that] are applicable to a reviewing 
court of the first instance.  Hepp v. State ex rel. Wyoming Workers' 
Compensation Division, 881 P.2d 1076, 1077 (Wyo.1994).  When we are conducting our 
review,

 
 
"[o]ur task is to examine the 
entire record to determine whether substantial evidence supported the hearing 
examiner's findings.  We will not 
substitute our judgment for that of the hearing examiner when substantial 
evidence supports his decision.  
Substantial evidence is relevant evidence [that] a reasonable mind might 
accept in support of the agency's conclusions."  

 
 

Latimer 
v. Rissler & McMurry Co., 902 P.2d 706, 708-09 (Wyo.1995) (citations omitted).  

 
 
"We do 
not, however, defer to an agency's conclusions of law.  'Instead, if the "correct rule of law 
has not been invoked and correctly applied, ... the agency's errors are to be 
corrected."  '  Thunder Basin Coal Company v. Study, 866 P.2d 1288, 1291 (Wyo.1994) (quoting Devous v. Wyoming State Board of Medical 
Examiners, 845 P.2d 408, 414 (Wyo.1993))."  

 
 

Celotex 
Corporation v. Andren, 917 P.2d 178, 180 (Wyo.1996).  

 
 

JM v. 
Department of Family Services, 922 P.2d 219, 221 (Wyo.1996).  The 
burden of proving a lack of substantial evidence is upon the party appealing an 
agency's determination.  Mountain Fuel Supply Co. v. Public Service 
Com'n of Wyoming, 662 P.2d 878, 883 
(Wyo.1983).  And specifically, the 
burden of proof with respect to tax valuation is on the party asserting an 
improper valuation.  Amoco Production Co. v. Wyoming State Bd. of 
Equalization, 899 P.2d 855, 858 (Wyo.1995) (quoting TetonValley Ranch v. State Bd. of 
Equalization, 735 P.2d 107, 113 (Wyo.1987)).

 
 
            
"Statutory interpretation is a question of law and is reviewed de 
novo."  State ex rel. Wyo. Dept. of Revenue v. 
Powder River Coal Co., 2004 WY 54, ¶ 5, 90 P.3d 1158, 1159 (Wyo.2004).  

 
 
When 
interpreting statutes, we follow an established set of guidelines.  First, we determine if the statute is 
ambiguous or unambiguous.  A statute 
is unambiguous if its wording is such that reasonable persons are able to agree 
as to its meaning with consistency and predictability.  Unless another meaning is clearly 
intended, words and phrases shall be taken in their ordinary and usual 
sense.  Conversely, a statute is 
ambiguous only if it is found to be vague or uncertain and subject to varying 
interpretations.  Parker Land & Cattle Co. v. Wyoming Game & Fish 
Comm'n, 845 P.2d 1040, 1042-43 (Wyo.1993).  

 
 

Powder 
River Coal Co., 2004 
WY 54, ¶ 5, 90 P.3d  at 1160.

 
 

Williams 
Production RMT Company v. State Department of Revenue, 2005 
WY 28, ¶¶6-8, 107 P.3d 179, 182-83 (Wyo. 2005); also see BP America Production Company v. Department 
of Revenue, 2005 WY 60, ¶¶10-13, 112 P.2d 596, 601-03 (Wyo. 2005); and Amoco Production Company v. Board of 
Equalization, 2001 WY 1, ¶5, 15 P.3d 728, 730-32 (Wyo. 
2001).

 
 
DISCUSSION

 
 
[¶21]   BP posits this as the central issue 
in this case:  "[W]hether any 
statute or rule existed during the production years at issue [1980 through 1986] 
that specifically required the taxpayer to report volumes and values for the 
gross products tax in the county where the well was physically located when the 
leases and underlying reservoir crossed county lines and no metering or sales 
occurred at the wellhead?"  However, 
as noted above, BP raises at least fifteen other issues, as well as a number of 
sub-issues.  As has been its 
strategy from the outset of this case, BP attempts to distract this Court from 
the essential issue, which is that it improperly allocated production from oil 
wells in Sweetwater County (which had a higher mill levy) to Carbon County 
(which had a lower mill levy).  BP 
insists quite rightly that it reported all of its production, but really never 
accepts that the problem is that it did not accurately report that production 
for ad valorem tax purposes, and that is what we are concerned about in this 
case. 

 
 
Does the 
SBOE's Decision to AllowSweetwaterCounty to Intervene Constitute Reversible 
Error

 
 
[¶22]   This contention looks to our 
decision in the case Amoco Production 
Company v. Department of Revenue, 2004 WY 89, ¶¶9-27, 94 P.3d 430, 436-442 
(Wyo. 2004), for its vitality.  BP 
asserts that this Court must reverse the district court's decision and remand 
this matter back to the SBOE with instructions that SweetwaterCounty be dismissed from the proceedings 
"along with the testimony and evidence made before the [SBOE]."  The instant case differs from the case 
cited immediately above in that here SweetwaterCounty did not take a position adverse to that of the 
DOR, indeed SweetwaterCounty's position mirrored that of the 
DOR.  Id., at ¶24, 94 P.3d  at 440-41.  It also differs in 
that SweetwaterCounty, at least arguably, 
had a legally protected interest in "a quantities validation program for 
collection:"

 
 
Remembering 
our rule of strict construction, and given that the legislature has made no 
further amendments to the relevant tax statutes, we find that the legislature 
did not intend to expand the role of the counties in the valuation process.  We have previously summarized the roles 
of the parties in the property valuation process:

 
 
There 
exists then, under current state taxation methodology, three state players and 
the counties:  the state Department 
of Revenue with the collection and taxation supervision responsibilities;  the State Board of Equalization with a 
semi-judicial appeal and supervisory responsibility;  and the Mineral Audit Division of the 
Department of Audit with a delinquency audit responsibility;  and finally, county governments which 
have a direct pecuniary interest in the collection of the ad valorem tax.  Value is established by the Department 
of Revenue subject to appeal to the State Board of Equalization with the 
function of the counties regarding ad valorem tax only limited to a quantities 
validation program for collection.  

 
 

Union 
Pacific Resources Co. v. State, 839 P.2d 356, 377 (Wyo.1992).  We 
believe the role of the counties remains the same.  The only difference is that now a county 
can bring a contested case before the Board to challenge Department findings as 
to quantity or any similar alleged error.  
A county cannot challenge a decision by the Department regarding 
valuation methodology or any substantive decision regarding the application of a 
chosen valuation methodology, including the definition of inputs into valuation 
equations.

 
 

Id., at 
¶20, 94 P.3d. at 439.

 
 
[¶23]   Although we also held that the 
SBOE's rule on intervention16 was null and void, here SweetwaterCounty's intervention was arguably proper 
under W.R.C.P. 24(a).  Id., at ¶¶14-16, 
94 P.3d  at 437-38.  A continuation 
of our holding in the Amoco 
Production case was this:

 
 
            
The Department, in its brief, presents no argument as to the propriety of 
the intervention by UintaCounty into the administrative case.  Instead, the Department argues that this 
Court should review the merits of the issue presented by UintaCounty in the name of judicial 
economy.  The Department informs 
this Court that it has accepted the ruling of the Board on this issue and has 
informed all affected taxpayers to include production taxes and royalties as 
direct production costs.  The 
taxpayers, predictably, have appealed the Department's decision.  The Department argues that, since this 
Court will have to decide the issue at some point, it might as well do so 
now.  This argument, however, 
ignores the procedural posture of this case.  We have already held that UintaCounty had no authority to intervene.  We have also held that UintaCounty cannot legally challenge the 
initial decision by the Department on this issue.  Thus, this issue has no place in this 
particular proceeding at this stage.  
Judicial economy cannot be invoked as a pretext for this Court to issue 
an advisory opinion.  We decline to 
review the issue on the merits.  The 
contested case should have proceeded without the intervention of UintaCounty 
or a review of the issue brought by UintaCounty.  UintaCounty is dismissed from this appeal.  Upon remand, UintaCounty, as well as the issue it presented, 
must be dismissed from the action.

 
 

Id., at 
¶26, 94 P.3d  at 441.

 
 
[¶24]   Amoco simply does not present 
cogent argument nor does it cite pertinent authority that allowing intervention 
as a matter of right was reversible error under the circumstances of this case, 
especially in consideration of the circumstance that the evidence presented at 
hearing would likely have been identical whether Sweetwater County was a party 
or not.  We hold that the SBOE's 
decision to allow SweetwaterCounty to intervene does not require 
reversal.

 
 
Propriety 
of Partial Mill Levies

 
 
[¶25]   BP contends that the SBOE, the DOR, 
and Sweetwater County all lack statutory authority to make "use of partial mill 
levies in the collection of ad valorem taxes on increased mineral values for 
production years 1980-1986."

 
 
[¶26]   We embark on this discussion by 
making reference to our own description of the DOR's and the SBOE's role in the 
taxation process:

 
 
A 
comparison of the roles of the Department and the Commission as established by 
the legislature demonstrates that the Department, acting through the Board, is 
vested with pervasive and sole authority over all aspects of the taxation of 
Wyoming 
citizens and business entities, including the construction of any statute 
affecting the assessment, levying, and collection of taxes.  The Commission is empowered to adopt 
rules and regulations and act administratively to prevent waste and encourage 
the conservation of Wyoming's oil and gas resources.  The Commission must make its decisions 
and promulgate its orders by its discerning conclusions as to what will either 
prevent or remediate waste.

 
 

Kerr-McGee 
v. Wyoming Oil and Gas Conservation 
Commission, 903 P.2d 537, 544 (Wyo. 1995).

 
 
[¶27]   Our response to this argument need 
only be brief.  Partial mill levies 
were not used.  BP had paid only a 
part of the mill levy on production in SweetwaterCounty.  BP was required to make up the 
difference.  The "mineral values" 
were not "increased," they simply were allocated to the proper production 
location (i.e., county).  BP is not 
aggrieved in any way by the accommodations that needed to be made in order to 
work out the knotty problem created by its improper acts, and we are not 
persuaded that those accommodations were in any way in violation of the 
standards set out in Wyo. Stat. Ann. § 16-3-114(c) (LexisNexis 
2005).

 
 
[¶28]   Moreover, we have long held that 
administrative agencies have certain implied powers necessary to fulfillment of 
their statutory purposes.  Of 
course, those implied powers are only those derived by necessary implication 
from express statutory authority granted to the agency.  See Billings v. Wyoming Board of Outfitters and 
Guides, 2001 WY 81, ¶24, 30 P.3d 557, 569 (Wyo. 2001); and Cody Gas Company v. Public Service 
Commission, 748 P.2d 1144, 1147-48 (Wyo. 1988).  A more comprehensive statement of the 
concept of implied powers in this setting is this:

 
 
            
Generally, administrative agencies have the implied or incidental powers 
that are reasonably necessary in order to carry out the powers expressly 
granted.  The reason for implied 
powers is that, as a practical matter, the legislature cannot foresee all the 
problems incidental to carrying out the duties and responsibilities of the 
agency.  However, the inherent or 
implied power of an administrative agency is not 
boundless.

 
 
            
Courts disagree as to how much latitude administrative agencies have with 
respect to implied powers.  Some 
courts say wide latitude must be given to administrative agencies in fulfilling 
their duties.  Some of these courts 
even say that the authority does not have to be "necessary" to effectuate the 
expressly delegated authority, but only "appropriate."  Other courts say that powers should not 
be extended by implication beyond what may be necessary for their just and 
reasonable execution.  Still other 
courts state that implied powers are "necessarily implied," and that necessary 
implication is an implication which yields so strong a probability of intent to 
allow these powers that any intention to the contrary cannot be 
supposed.

 
 
2 
Am.Jur.2d Administrative Law § 57 at 
80-81 (2004).

 
 
[¶29]   We conclude that the DOR, the 
county assessor, and the county treasurer possessed the authority to effectuate 
the remedy that the DOR structured for this matter.

 
 
Is Use 
of Wellhead Reporting Supported by Substantial Evidence/Lawful/Arbitrary 
/Capricious

 
 
[¶30]   The supporting structure for this 
argument is BP's contention that it was not possible to ascertain with certainty 
exactly from where the oil production at issue here was originating, even though 
it did have the capacity to accurately measure production from each well at 
issue in this case.  Therefore, it 
was necessary for BP to use some measurement method other than wellhead 
production.  The supporting 
structure for this argument quickly collapses, however, because BP was unable to 
offer a measurement method that was more sound than that of measuring the 
production at the wellhead.  Even 
though wellhead production was not completely accurate, it was considerably more 
accurate than any alternative method and the record supports a conclusion that 
BP knew that was the case, or at least it should have known that was the 
case.  BP further contends that when 
all of the statutes and constitutional provisions that it deems pertinent to 
this discussion are read together, it "clearly shows a lack of legislative 
intent to focus on the physical location of the wellhead."  Rather, BP continued, the focus should 
be "on the value of the gross product which is valued after the 
production process is completed." [Underscoring in the original.]  We conclude that Wyo. Stat. Ann. § 
39-2-201(e) (Michie 1977 and 1985) always contemplated that reporting of oil 
production should be done at the wellhead, and any other construction of those 
statutes is speculation.  The 
enactment of Wyo. Stat. Ann § 39-2-213 (Michie 1990) did not constitute a 
"change," but only a restatement of what general practice had always been 
contemplated, the practice that was generally in place, and the practice that 
should generally continue.  Any 
other construction of that statute would be purely speculative.  We deem those statutes to be unambiguous 
but if we were to engage in speculation, we would conclude that the legislature 
intended to "clarify" what it had always intended so as to eliminate problems 
such as those with which we deal here today.

 
 
[¶31]   Moreover, BP's argument in this 
regard is weakened by the fact that some of its reports to the WOGCC were based 
on wellhead production, not on its 66/34 split theory.  It appears to be correct that methods 
other than wellhead production may be approved by the DOR, but we agree with DOR 
that substantial evidence supports the SBOE's determination that no such "other 
method" was approved by DOR, and no other method was generally recognized in the 
industry during this time frame.  We 
also agree with DOR's contention, which both the district court and the SBOE 
adopted, that the only correct method for reporting production, under the circumstances of this case, 
was by well location.  That 
conclusion is supported by substantial evidence as set out above and is 
consonant with the governing statutes.  
Furthermore, we agree with the district court that the SBOE's decision in 
this regard was not arbitrary or capricious.

 
 
Application 
of Wyo. Stat. 
Ann. § 39-2-214(a)

[¶32]   BP also relies to a great extent on 
the application of Wyo. Stat. Ann. § 39-2-214(a) (Michie 1997) (enacted in 
1991), contending that it precludes the SBOE from making the decision that it 
made.  That statute 
provides:

 
 
            
(a)  Effective until March 1, 1994, the department is 
authorized to rely on final audit findings under W.S. 9-2-2003, taxpayer amended 
returns or department review, and to certify mine product valuation amendments 
for production in calendar year 1985 and thereafter, to the county assessor of 
the county in which the property is located, to be entered upon the assessment 
rolls of the county and taxes computed and collected thereon subject to appeal 
under subsection (g) of this section.

 
 
[¶33]   In particular, BP contends that the 
district court erred in concluding that BP did not raise this issue below.  It is evident from the SBOE's order that 
this statute did not enter into its reasoning process.  The district court declined to address 
it because it was not raised below.  
We agree with the district court and the DOR that BP failed to clearly 
join this matter as an issue below, or to ask the SBOE to reconsider its order 
in light of its failure to address the statute BP now places as central to the 
resolution of this dispute  
Therefore, we will not further consider it here.17

 
 
Application 
of Wyo. Stat. 
Ann. § 39-2-201(j)

 
 
[¶34]   We agree with the SBOE, the 
district court, and DOR that § 39-2-201(j) should not be given a retroactive 
application.  See Pohl v. Wyoming Workers' Safety and 
Compensation Division, 980 P.2d 816, 820 (Wyo. 1999) (and cases cited therein).  We also conclude that the SBOE's 
findings that the events triggering the dispute in this case occurred prior to 
the enactment of § 39-2-201(j) are supported by substantial evidence.  This holds true as well for the 
conclusion that it was BP's failure to timely remedy the problems identified in 
the DOR's 1990 directive that delayed the final resolution of this matter.  What BP characterized as "waiver" based 
on "delay" simply is not supported by the record below.  Moreover, by its very terms § 
39-2-201(j) applies only to production "reported pursuant to W.S. 
39-2-208."  Wyo. Stat. Ann. § 
39-2-208 (Michie 1997) was also enacted in 1990, so the 1980-86 production at 
issue here could not have been reported under § 39-2-201(j).  Thus, this issue (or as presented by BP, 
combination of issues) does not mandate reversal of either the district court or 
the SBOE.

 
 
Application 
of Wyo. Stat. 
Ann. 39-3-102(b) and Application of the BHP Case

 
 
[¶35]   BP contends that the "district 
court committed reversible error when it confused the statutory provisions in 
Title 39, Chapter 2 (Assessment), Articles 2 and 3 with Title 39, Chapter 3 
(Collection) and thereafter held W.S. § 39-3-102(b) applies exclusively to 
assessments by the county (Ch.2, Art. 3) rather than revaluations (Ch.2, Art. 2) 
initiated by the state."  BP also 
contends that the district court erred in relying on Wyoming State Tax Commission v. BHP 
Petroleum, Inc., 856 P.2d 428 (Wyo. 1993).

 
 
[¶36]   While the district court's decision 
letter may not be a model of clarity in this regard, it is readily evident that 
if there was any error at all, it was a matter of the district court misspeaking 
and not the source of an error which requires reversal of either the district 
court's order or the order of the SBOE.  
The district court's application of the subject statute and the BHP Petroleum case did not create an 
error that requires reversal of this case.  
See SBOE's findings 
79-81.

 
 
Existence 
of Statute of Limitations on Collection of Ad Valorem 
Taxes

 
 
[¶37]   BP contends that the district court 
and the SBOE erred in adopting the position that there was no statute of 
limitations which prohibited the collection of ad valorem personal property 
taxes.  This proposition is premised 
upon Wyo. Const., art. 3, § 4018 and Union Pacific Resources Company v. 
State, 839 P.2d 356 (Wyo. 1992), wherein we addressed statute of 
limitations concerns at some length.  
We conclude that BP misconstrues the position of the DOR, the conclusions 
of the district court, and misrepresents the applicability of various statutes 
cited in detail above.

 
 
[¶38]   As the SBOE found in its order, 
Wyoming's ad valorem tax system is a self-reporting system, something of a 
magnanimous social contract designed to make the tax collector as unobtrusive as 
possible.  By its very nature, it 
requires mineral producers to fully and accurately report mineral production in 
order that the system can function.  
If reporting is not accurate, and especially where reporting of 
production is not fully accurate by design, then that contract is broken.  Without accurate reports, an accurate 
assessment cannot be ascertained and without an accurate assessment, an accurate 
tax cannot be imposed and collected.  
The various statutes of limitations are designed to further flesh out the 
self-reporting system, and they bring the tax assessment and tax collection 
process to a state of repose when the conditions for their application are 
met.  However, where the 
self-reporting system has broken down and the process is tainted from its point 
of origin, statutes of limitations simply cannot, as a general rule, be called 
into play. 

 
 
[¶39]   In short, we cannot find in BP's 
arguments the thread of a rationale that requires reversal of the district court 
or the SBOE.

 
 
Application 
of Wyo. Const. 
art. 15, §§ 3 and 11; Wyo. Const. art. 1, § 
34

 
 
[¶40]   Laws are presumed to be 
constitutional and all doubts are resolved in favor of constitutionality.  The statute's challenger bears the 
burden of showing unconstitutionality beyond any reasonable doubt.  Hede v. Gilstrap, 2005 WY 24, ¶6, 107 P.3d 158, 163 (Wyo. 2005).  Article 
15, § 3 provides:

 
 
All 
mines and mining claims from which gold, silver and other precious metals, soda, 
saline, coal, mineral oil or other valuable deposit, is or may be produced shall 
be taxed in addition to the surface improvements, and in lieu of taxes on the 
lands, on the gross product thereof, as may be prescribed by law;  provided, that the product of all mines 
shall be taxed in proportion to the value thereof.

 
 
[¶41]   Article 15, § 11 
provides:

 
 
(a)  All 
property, except as in this constitution otherwise provided, shall be uniformly 
valued at its full value as defined by the legislature, in three (3) classes as 
follows:

(i)  Gross 
production of minerals and mine products in lieu of taxes on the land where 
produced;

(ii)  Property 
used for industrial purposes as defined by the legislature;  and

(iii)  All 
other property, real and personal.

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

            
(c)  The legislature shall not create new classes or subclasses 
or authorize any property to be assessed at a rate other than the rates set for 
authorized classes.

            
(d)  All taxation shall be equal and uniform within each class 
of property.  The legislature shall 
prescribe such regulations as shall secure a just valuation for taxation of all 
property, real and personal.

 
 
[¶42]   Article 1, § 34 provides:  "All laws of a general nature shall have 
a uniform operation."

 
 
[¶43]   BP has failed to meet the burden 
imposed on it in this regard.  
Moreover, these arguments are not supported by reference to pertinent 
authority or by cogent argument and we need not address them 
further.

 
 
Should 
the Imposition of Interest be Modified; Error in Imposing Interest on Amended 
Returns for 1987 and 1988

 
 
[¶44]   After careful examination of the 
record, we conclude that the DOR's directives with respect to the imposition of 
interest on taxes not timely paid were correct under the applicable laws.  We conclude that the SBOE's findings and 
conclusions in this regard are supported by substantial evidence and are 
consistent with applicable law.  See findings 86 and 87.  The district court did not err in 
affirming this portion of the SBOE's decision.

 
 
CONCLUSION

 
 
[¶45]   The order of the district court 
affirming the actions taken by the SBOE is affirmed.  This matter is remanded to the district 
court with directions that it further be remanded to the SBOE for effectuation 
of its September 5, 2001 order.

 
 
FOOTNOTES

 
 

1BP will also 
be referred to as Amoco in some quoted material.

 
 

2The current 
version of this statute is found at Wyo. Stat. Ann. § 39-14-207(a)(iii) 
(LexisNexis 2005):

 
 
(iii)  For crude oil, lease condensate or natural gas, the 
taxpayer shall report the location of the production to the county and tax 
district in which the well or property is located, based upon the actual taxable 
production produced by the well or property in each county or tax district.  Other reasonable methods of reporting 
the location of production may be approved by the department upon written 
request of the taxpayer or taxing jurisdiction;

            

 
 

3Pools of oil 
such as those at issue here are described as "fugacious:"  "not fixed in a certain place: wandering (unlike other minerals  oil 
and gas are ~ -- Robert Kratovil)."  
Webster's Third New International Dictionary 918 
(1986).

 
 

4The current 
version of this statute is found at Wyo. Stat. Ann. §§ 39-13-103(b)(xv), 
39-14-107(a)(iii), 39-14-207(a)(iv), 39-14-307(a)(iii), 39-14-407(a)(iii), 
39-14-507(a)(iii), 39-14-607(a)(iii), and 39-14-707(a)(iii) (LexisNexis 
2005).

 
 

5Record 
references are in the parties' original findings, and we include them here for 
the convenience of our readers who may wish to examine the agency 
record.

 
 

6Although the 
statute has evolved somewhat since it appeared as Wyo. Stat. Ann. § 39-1-303 
(Michie 1977), we refer our readers to Wyo. Stat. Ann. § 39-11-102 (LexisNexis 
2005) for the broad delegation of responsibility and power given to the 
DOR.

 
 

7"LACT 
meter," is an acronym for "lease automatic custody transfer" 
meter.

 
 

8The current 
version of this statute is found at Wyo. Stat. Ann. §§ 39-13-107(b)(i)(D), 
39-14-107(b)(ii), 39-14-307(b)(ii), 39-14-407(b)(ii), 39-14-507(b)(ii), 
39-14-607(b)(ii), and 39-14-707(b)(ii) (LexisNexis 
2005).

 
 

9The current 
version of this statute is found at Wyo. Stat. Ann. §§ 39-14-109(a)(ii), 
39-14-209(a)(ii), 39-14-309(a)(ii), 39-14-409(a)(ii), 39-14-509(a)(ii), and 
39-14-609(a)(ii) (LexisNexis 2005). 

 
 

10The current 
version of this statute is found at Wyo. Stat. Ann. § 39-13-103(b)(i)(A) 
(LexisNexis 2005).

 
 

11The current 
version of this statute is found at Wyo. Stat. Ann. §§ 39-13-102(o), 
39-14-102(d), 39-14-202(a)(iii), 39-14-302(d), 39-14-402(c), 39-14-502(c), 
39-14-602(c), and 39-14-702(d) (LexisNexis 2005).

 
 

12The current version of this statute is 
found at Wyo. Stat. Ann. §§ 39-14-101(a)(vi), 39-14-301(a)(vi), 
39-14-401(a)(vi), 39-14-501(a)(vi), 39-14-601(a)(vi), and 39-14-701(a)(vi) 
(LexisNexis 2005).

 
 

13The current 
version of this statute is found at Wyo. Stat. Ann. § 39-13-110(a) (LexisNexis 
2005).

 
 

14The current 
version of this statute is found at Wyo. Stat. Ann. §§ 39-14-107(b)(i), 
39-14-207(b)(i), 39-14-307(b)(i), 39-14-407(b)(i), 39-14-507(b)(i), and 
39-14-607(b)(i) LexisNexis 2005).

 
 

15The current 
applicable statute is now Wyo. Stat. Ann. § 39-14-108(c) (LexisNexis 
2005).

 
 

16The SBOE's 
rule on intervention subsequently has been 
modified:

 
 
Section 
14.  
Intervention.

 
 
            
(a)  As authorized by the Wyoming Administrative Procedure Act, 
any person or agency may be admitted as a party to a proceeding before the Board 
if entitled as of right to do so.  
Upon timely application, any applicant, may be permitted to intervene in 
a case:  (1) when a statute confers 
an unconditional right to intervene: or (2) when the applicant claims an 
interest relating to the matter or transaction which is the subject of the case 
and is so situated that the disposition of the case may as a practical matter 
impair or impede his ability to protect that interest, unless the applicant's 
interest is adequately represented by existing 
parties.

 
 
            
(b)  Any applicant, desiring to intervene shall file an 
application to intervene with the Board and serve a copy on all parties in the 
case.  The application shall state 
the grounds therefore, set forth the position for which intervention is sought, 
and advise the parties that should they wish to contest the application they 
must file with the Board and serve on all parties and the applicant a written 
response within fifteen (15) days of service of the application.  No application to intervene shall be 
filed within twenty (20) days of a hearing.

 
 
5 Weil's Code of Wyoming Rules, Board of 
Equalization, Rules of Practice and Procedure for Cases Before the Wyoming State 
Board of Equalization, Chapter 2, Section 14, 211000 002-3 through 002-4 
(2005).

 
 

17However, we 
note in passing that it appears to be clear that the statute would not, in any 
event, have the effect that BP claims it should have.  1991 Wyo. Sess. Laws, ch. 257, sec. 2, at 
806:

 
 
            
Section 2.  W.S. 39-2-214(a) through (d) as created 
by this act does not limit or affect audits that have been commenced, audit 
findings that have been issued, or mine product valuation amendments which have 
been filed with or approved by the state board of equalization or the department 
prior to the effective date of this act.

 
 

18§ 40. Debts to state or 
municipal corporation cannot be released unless otherwise prescribed by 
legislature.

 
 
            
No obligation or liability of any person, association or corporation held 
or owned by the state or any municipal corporation therein shall ever be 
exchanged, transferred, remitted, released, postponed or in any way diminished 
except as may be prescribed by the legislature.  The liability or obligation shall not be 
extinguished except by payment into the proper treasury or as may otherwise be 
prescribed by the legislature in cases where the obligation or liability is not 
collectible.