EQUALIZATION STANDARDS AND PROCEDURES (LOCAL ASSESSMENTSASSESSMENTS)

Section 1. Authority.

These rules are promulgated by the State Board of Equalization (Board) under the authority of W.S. 16-3-102 and W.S. 39-1-304.

Section 2. Purpose.

These rules are intended to establish the criteria by which the Board will annually determine whether each county is in compliance with the fair market value standard and, if noncompliance is found, establish procedures for equalizing property values or otherwise re- ducing the inequitable assessment bias.

Section 3. Definitions.

1. (a) As used in this chapter, the following definitions apply:

   1. (i) "Abstract" means the abstract of the assessment roll as provided by W.S. 39-1-304(a)(ii);
   2. (ii) "CAMA" means either the CLT or WYS computer assisted mass appraisal system utilized by county assessors;
   3. (iii) "Class of property" means, as used in these rules, residential improved, commercial improved, residential vacant, and commercial vacant.
   4. (iv) "Coefficient of dispersion" (COD) means the average deviation of a group of numbers from the median expressed as a per- centage of the median;
   5. (v) "Coefficient of variation" (COV) means the standard deviation expressed as a percentage of the mean;
   6. (vi) "Confidence level" means the required degree of confi- dence in a statistical test or confidence interval. A 50% confidence level means one can be 50% confident the population parameter, such as the median ratio of appraised values to market values, falls in the indicated range;
   7. (vii) "Equalization order" means an order of the Board issued pursuant to W.S. 39-1-304(a)(ii) directing a county board of equaliza- tion to implement a program to bring a county into compliance with the standards contained in Section 6 of this chapter;
   8. (viii) "Hearing" means an opportunity to comment, without contested case procedures, which is conducted by the Board at which time information may be presented to the Board by a county board of equalization and the county assessor, regarding analyses or other data indicating reasons why an equalization order is in error;
   9. (ix) "Level of appraisal" means the overall ratio of ap- praised values to market values. In the case of nonnormal distribu- tion, level of appraisal shall be indicated by the median. In the case of normal distribution, level of appraisal shall be indicated by the mean.
   10. (x) "Mean" is the result of adding all the values of a variable and dividing by the number of values;
   11. (xi) "Median" means the midpoint or middle value when a set of values is ranked in order of magnitude; if the number of values is even, the midpoint or average of the two middle values;

   12. (xii) "Mill levy report" means the report prescribed by W.S.

       39-1-304(a)(v);

   13. (xiii) "Price-related differential" (PRD) is the mean divided by the weighted mean. A PRD above 1.03 tends to indicate assessment regressivity a PRD below .98 tends to indicate assessment progressivity;
   14. (xiv) "Reappraisal" means the mass appraisal of one or more classes of property, or a portion thereof, within a jurisdiction completed prior to submission of the next abstract;
   15. (xv) "Representative sample" for a subgroup means a sample which, at a minimum, shall be a sample of sufficient numbers of sales to represent .5% of the total number of properties in that class of properties.

   16. (xvi) "VHAAS" means the vertical and horizontal assessment adjustment system, the rights to the use thereof are owned by the state of Wyoming:

       1. (A) "Horizontal inequities" means differences in the levels of assessment of groups of properties;
       2. (B) "Vertical inequity" means differences in the lev- els of assessment of properties related to the value ranges of the properties. That is, properties of higher value have assessment lev- els different from properties of lower value.
   17. (xvii) "Weighted mean" is an average in which the observa- tions are weighted based on some criterion.

Section 4. Abstract Review.

1. (a) Upon receipt of the abstract from the county assessor, the Board shall review it for mathematical accuracy. The Board shall take information from CAMA within two (2) working days of receipt of the abstract. Information will be used to perform the statistical studies listed in Section 5 of this chapter. If the valuations contained in the abstract are:

   1. (i) In compliance with the appraisal standards contained in Section 6 of this chapter, the Board will acknowledge, on or before July 1, without correction the abstract values, allowing the assessor to proceed with mill levy actions.
   2. (ii) Not in compliance with the appraisal standards con- tained in Section 6 of this chapter, the Board will perform additional statistical studies to ensure the overall level of noncompliance is not the result of undue influence by subgroups containing insufficient numbers of sales or non-representative sales. Additional studies shall be performed on those subgroups listed in Section 5, subsection
2. (b) . Additional subgroups may be developed, which are jurisdiction specific, with the assistance of the jurisdiction involved. Following the analysis of the additional studies, if the Board determines the overall appraisal standards are in compliance based on the additional studies and analysis, the Board will acknowledge without correction the abstract values, allowing the assessor to proceed with mill levy actions.
3. (iii) Not in compliance with the appraisal standards con- tained in Section 6 of this chapter, even after the additional studies contained in subparagraph (ii) of this section have been made, the Board will commence the procedures contained in Section 7 of this chapter. Following the implementation of an equalization order the county assessor shall submit a corrected abstract for review and ac- knowledgment.

Section 5. Statistical Studies.

1. (a) The Board shall annually conduct studies of appraised values and sales prices based on information contained in the CAMA system for vacant and improved residential and commercial properties. The stud- ies may include the following:

   1. (i) Tests for representativeness;
   2. (ii) Tests for sample size;
   3. (iii) Tests for normality;

   4. (iv) Measures of central tendency (level of appraisal) at a 95% confidence level including:

      1. (A) Median;
      2. (B) Mean; and
      3. (C) Weighted mean.

   5. (v) Measures of variability (uniformity of appraisals), including:

      1. (A) Coefficient of dispersion (COD);
      2. (B) Coefficient of variation (COV);
      3. (C) Price related differential (PRD); and
      4. (D) VHAAS.
   6. (vi) Comparison of the previous years appraised value with the current years appraised value. This may be completed for both sold and unsold properties within a class of improved or vacant prop- erties.

2. (b) For purposes of additional studies, properties may be ana- lyzed by the following characteristics, providing subgroups analyzed in additional studies have a sufficient number of sales to provide a representative sample, in cooperation with the jurisdiction involved.

   1. (i) Market Area
   2. (ii) Quality Grade
   3. (iii) Year Built/Effective Age
   4. (iv) Value Range
   5. (v) Jurisdiction specific strata.
3. (c) In jurisdictions where sales in subgroups are not represen- tative due to limited sales, prior year sales may be included in the study until a representative sample is achieved. This analysis will be done in cooperation with the county assessor to ensure accuracy of data, and to develop time adjustment factors if necessary.

Section 6. Appraisal Standards and Compliance.

1. (a) The following are the standards used by the Board to deter- mine if a county is in compliance with the fair market value standard.

   If a county is in compliance with the fair market value standard, no equalization order will be considered.

   1. (i) Level of Appraisal. The level of appraisal for resi- dential and commercial, improved and vacant, shall be between .95 and 1.05. To determine compliance with this standard, a 95% confidence interval will be computed around the county's level of appraisal and the confidence interval must include one or more points in the range of .95 to 1.05.

   2. (ii) Appraisal Uniformity.

      1. (A) The COD for improved residential properties shall be 15 or less;
      2. (B) The COD for improved commercial properties shall be 20 or less;
      3. (C) The COD for vacant residential land shall be 20 or less.
      4. (D) The COD for vacant commercial land shall be 20 or less.

      5. (E) The PRD shall be between .98 and 1.03 for residen- tial and commercial properties. After testing the PRD, if a county does not meet the PRD standard, the Board shall trim five percent

         (5%) , two and one half percent (2.5%) from each end, to allow for outliers.

      6. (F) The aggregate change in market value of sold prop- erties shall vary no more than 5% from the aggregate change in market value of unsold properties within a class.

Section 7. Procedures for Implementing Action Taken By Board.

1. (a) The Board shall make its initial decision on action to be taken through analysis of the statistical studies. Upon completion of its analysis:

   1. (i) If the Board determines a county is not in compliance with the overall level of appraisal as stated in Section 6(a)(i).

      1. (A) the Board shall informally notify and provide all documentation and test results to the county assessor of its initial findings and preliminary intended equalization action and confer with the assessor to explain the reasons for the indicated action, afford- ing the assessor the opportunity to review, respond and explain any misunderstanding or indicated errors in the statistical studies.
      2. (B) if the Board determines current year equalization action is still necessary following discussion as provided in para- graph (a)(i)(A) of this section, it will provide not less than twenty

      3. (20) days notice of the proposed action to the board of equalization and assessor of the county in which the property is situated. If requested, the state board of equalization shall provide an opportu- nity for a hearing to the board of equalization and assessor of the affected county. The hearing shall be held in the affected county and provide an opportunity for comment and presentation of information.

         If, after the hearing, the Board determines equalization is still necessary, it will issue an equalization order and work with the county board of equalization and county assessor to determine the best method by which to effect the equalization action.

   2. (ii) If the Board determines a county is not in compliance with appraisal uniformity as stated in Section 6(a)(ii).

      1. (A) the Board shall informally notify the county as- sessor of its initial findings and meet with the assessor to explain the reasons for the indicated action, affording the assessor or desig- nee the opportunity to review, respond and explain any misunderstand- ing or indicated errors in the statistical studies.

      2. (B) if the Board determines a county is out of compli- ance and reappraisal is more appropriate to correct assessment bias, the Board may order reappraisal to bring the county into compliance.

         The reappraisal shall be completed prior to submission of the next abstract.

      3. (C) if the Board determines any inequities can be remedied during the next year through changed work practices, the Board will communicate its recommendation to the Department of Revenue pursuant to W.S. 39-1-304(a)(ii). If the Board has recommended work practice changes and the same noncompliance issue is present in the next appraisal cycle, the Board may issue an equalization order to correct these uniformity issues.

Section 8. Mill levy reports.

1. (a) Upon receipt of the mill levy report from the county asses- sor, the Board shall review it for mathematical accuracy and compli- ance with statutory and constitutional provisions. If it appears the information contained in the mill levy report:

   1. (i) Is in compliance, the Board will acknowledge without correction the report, allowing the assessor to proceed with complet- ing the tax roll.
   2. (ii) Is not in compliance, the Board will contact the county assessor to attempt to resolve any apparent discrepancies. If the discrepancies cannot be so resolved, the Board will acknowledge the report, stating its objections. The Board will advise the attorney general of its objections to any mill levy report.

Section 9. Construction and limitation.

1. (a) The provisions of this chapter, which is intended to further just and equal distribution of the burden of taxation, shall be liberally, rather than strictly construed.
2. (b) Nothing in this chapter creates or modifies private rights or procedures available to the public unless expressly stated or oth- erwise provided for by law.