Summary 2006 WY 27

Summary of Decision issued March 14, 2006

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it is issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. You will also note when you look at the opinion that all of the paragraphs are numbered. When you pinpoint cite to a quote, you should cite to this paragraph number rather than to any page number. If you need assistance in putting together a citation from this, or any future opinion using the Universal Citation form, please contact the Wyoming State Law Library and we will provide any needed assistance.]

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court.

Case Name: BP America Production Company, f/k/a Amoco Production Company v. Department of Revenue, State of Wyoming

Citation: 2006 WY 27

Docket Number: 04-157

Appeal from the District Court of Sweetwater County, Honorable Nena James, Judge

Representing Appellant (Petitioner): John L. Bordes Jr., Robert A. Swiech and Nicole Crighton of Oreck, Bradley, Crighton, Adams and Chase, Boulder, CO. Argument by Mr. Bordes.

Representing Appellee (Respondent): Patrick J. Crank, Wyoming Attorney General; Michael L. Hubbard, Deputy Attorney General; Martin L. Hardsocg, Senior Assistant Attorney General. Argument by Mr. Hardsocg.

Date of Decision: March 14, 2006

Issue: Whether BP America’s ad valorem taxes were properly reported. [See the published decision from the Court for a complete list of the issues raised by BP America and the Wyoming Department of Revenue (DOR).]

Holding: First, the Court set out the findings and conclusions reached by the State Board of Equalization. Next, the Court summarized the petition for review in district court and included the issues raised by BP. The district court decision letter was then set out in the record. The district court affirmed the SBOE decision to permit reassessment of ad valorem taxes from production years 1980-1987. Allocation based upon well location is the appropriate method of assessment in the instant case. Wyoming statutes do not preclude the SBOE’s findings or conclusions. The accrual of interest and Sweetwater County’s involvement before SBOE were appropriate.

The standard of review of administrative agency action is the substantial evidence test. Statutory interpretation is a question of law and is reviewed de novo.

The Court states the central issue as: BP improperly allocated production from oil wells in Sweetwater County to Carbon County.

Does the SBOE’s decision to allow Sweetwater County to intervene constitute reversible error: BP did not present cogent argument nor did it cite pertinent authority that allowing intervention as a matter of right was reversible error under the circumstances of this case, especially in consideration that the evidence presented at hearing would likely have been identical whether Sweetwater County was a party or not. The Court held that SBOE’s decision to allow Sweetwater County to intervene did not require reversal.
Propriety of partial mill levies: The Court concluded 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: The Court concluded that Wyo. Stat. Ann. § 39-2-201(e) always contemplated that reporting of oil production should be done at the wellhead. The enactment of Wyo. Stat. Ann. § 39-2-213 did not constitute a change but only a restatement of the practice that was generally in place. The Court agreed 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): The Court agreed with the SBOE, the district court and DOR that § 39-2-201(j) should not be given a retroactive application.
Application of Wyo. Stat. Ann. § 39-3-102(b) and Application of the BHP case: The Court characterized the district court’s decision letter as a case of them misspeaking and not the source of an error which required reversal of either the district court’s order or the order of the SBOE.
Existence of statute of limitations on collection of ad valorem taxes: Wyoming’s ad valorem tax system is a self-reporting system. 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.
Application of Wyo. Const. art. 15 §§ 3 and 11; Wyo. Const. art. 1, § 34: BP failed to meet the burden of proof imposed on it. The arguments were not supported by reference to pertinent authority or by cogent argument.
Should the imposition of interest be modified; error in imposing interest on amended returns for 1987 and 1988: The Court concluded that the DOR’s directives with respect to the imposition of interest on taxes not timely paid were correct under the applicable laws. The SBOE’s findings and conclusions in this regard were supported by substantial evidence and are consistent with applicable law.

The decree of the district court was affirmed and the matter remanded to district court with directions that it further be remanded to SBOE for effectuation of its September 5, 2001 order.

C.J. Hill delivered the opinion of the Court.

Link to the case: http://tinyurl.com/htmjy .