W.R.A.P. 12.09(b) Certification from the District Court of
Sweetwater County The Honorable Richard L. Lavery, Judge
Representing Petitioner: Walter F. Eggers, III and JoAnn S.
DeWald, Holland & Hart LLP, Cheyenne, Wyoming. Argument
by Mr. Eggers.
Representing Respondent: Peter K. Michael, Wyoming Attorney
General; Ryan T. Schelhaas, Deputy Attorney General; Karl D.
Anderson, Senior Assistant Attorney General; Daniel P.
Solish, Senior Assistant Attorney General. Argument by Mr.
DAVIS, C.J., and BURKE [*] , FOX, KAUTZ, and BOOMGAARDEN, JJ.
Solvay Chemicals, Inc. (Solvay) appealed the Department of
Revenue's (DOR) assessment of the taxable value of soda
ash produced at its Sweetwater County trona mine to the
Wyoming Board of Equalization (Board). Solvay disputed the
calculations the DOR used to determine the amount of the
deduction for bagging some of the soda. After the contested
case hearing, the Board requested supplemental briefs to
address a question of statutory construction that had not
been raised by either party, and the Board ultimately decided
that the issue was not the amount Solvay was entitled to
deduct for bagging costs, but rather, whether it was entitled
to any bagging deduction at all. The Board concluded that the
issue disputed by the parties throughout the proceeding was
moot, reasoning that the governing statute did not allow for
a separate deduction for bagging. We decline the parties'
request that we decide the issue of statutory interpretation
as it applies to bagging cost deductions, because we find
that the Board exceeded its authority when it decided an
issue that was not before it.
One issue raised by the parties is dispositive: Whether the
Board acted without observance of the procedure required by
law when it based its order on an issue not contested or
addressed by either party during the contested case hearing.
Solvay mines trona ore from its mine in Sweetwater County,
Wyoming, and then processes it as soda ash and other
products. Solvay sells the majority of its soda ash in bulk,
and transports it to the customer by rail or truck. A small
amount of Solvay's soda ash is bagged and provided to
customers in that form, at a higher charge. Solvay incurs
increased costs for the bagging, and it historically deducted
those costs from the sales value for tax purposes.
Solvay's practice was to report the taxable value of its
bagged product based on the bulk product value. But, after an
audit of Solvay's 2010-2012 production and tax payments,
the Department of Audit (DOA) rejected Solvay's approach
and instead arrived at a lower bagging deduction, based on
its calculation of Solvay's actual bagging costs. The DOR
adopted the DOA's calculations and issued its final
determination assessment notice of additional severance tax
due, notifying Solvay of an additional $24, 524 due in
severance taxes, and interest in the amount of $13,
The DOR did not dispute that Solvay was entitled to a
deduction for bagging costs; rather, it used a different
calculation for determining the amount of the deduction.
Solvay appealed the DOR's final determination to the
The primary issue identified in Solvay's Notice of Appeal
was "Solvay believes DOR and DOA may not have properly
valued a portion of Solvay's trona/soda ash production
known as 'bagged product.'" In its Preliminary
Statement, Solvay again summarized its contention as
"DOR's and DOA's valuation of Solvay's
'bagged product' is erroneous." The DOR agreed,
identifying the first issue of fact and law in its
Preliminary Statement as "Did the [DOR] correctly value
the bagged sales of soda ash in accordance with the
law?" The correct valuation of Solvay's deduction
for bagging soda ash to determine taxable value continued to
be the central issue identified by both parties in their
pre-hearing filings, at the hearing, and in the parties'
post-hearing briefs and proposed findings of fact and
conclusions of law.
Nearly five months after the hearing, the Board, in its Order
for Supplemental Briefing, signaled that it did not consider
the calculation of the deduction for Solvay's bagged
product to be the issue; instead, the Board ordered the
parties to submit briefs answering its questions on statutory
interpretation regarding an entirely different methodology.
The Board ordered the parties to submit supplemental briefs
on these issues:
1. Are relevant parts of Wyoming Statutes sections 39-14-301
and 303 (2009-2012) ambiguous and, if so, in what respect?
2. Do the provisions in Wyoming Statute section 39-14-303(b)
(2009-2012) identify multiple valuation methods, or a single
valuation method? If you argue that subsection (b) prescribes
one valuation method, please explain and reconcile the
remaining subsection (b) provisions in support of your
interpretation. If you argue that subsection (b) offers more
than one valuation method, please identify and explain the
application of those methods and how those differ from, or
relate to, subsection (b)(ii).
The parties agreed that the statutes were unambiguous, so the
first issue was not in dispute. As to the second question, a
brief discussion of the statutory interpretation issue is
necessary to set the stage. Wyo. Stat. Ann. §
39-14-303(b) (LexisNexis 2017) provides:
(b) Basis of tax (valuation). The following shall apply:
(i) Trona shall be valued for taxation as provided in this
(ii) The department shall calculate the value of trona ore
for severance and ad valorem tax purposes by using the
individual producer's fair market value of soda ash
f.o.b. plant multiplied by the industry factor divided by the
individual producer's trona to soda ash ratio less exempt
royalties. The industry factor shall be thirty-two and
five-tenths percent (32.5%);
(iii) The value of the gross product shall be the fair market
value of the product at the mouth of the mine where produced,
after the mining or production process is completed;
(iv) Except as otherwise provided, the mining or production
process is deemed completed when the mineral product reaches
the mouth of the mine. In no event shall the value of the
mineral product include any processing functions or
operations regardless of where the processing is performed;
(v) Except as otherwise provided, if the product as defined
in paragraph (iv) of this subsection is sold at the mouth of
the mine, the fair market value shall be deemed to be the
price established by bona fide arms-length sale;
(vi) When the taxpayer and department jointly agree that the
application of the methods listed in paragraphs (i) through
(v) of this subsection does not produce a representative fair
market value for the product, a mutually acceptable
alternative method may be applied. Not later than October 1
of each year, the department shall report to the joint
minerals, business and economic development interim committee
and the joint revenue interim committee on any action taken
under this paragraph.
Section (b)(ii) adopts an "industry factor" test
whose objective was to standardize the deductions for all
trona companies and simplify what had been complicated
calculations by the producers, the DOA, and the DOR. Up until
the Board's Order for Supplemental Briefing, Solvay and
the DOR had agreed that Solvay was entitled to a deduction
for bagging costs under (b)(iv), in addition to the
"industry factor" deduction at (b)(ii). The
DOR's new position, in response to the Board's Order
for Supplemental Briefing, was that Solvay was entitled to no
additional deductions for bagging costs under (b)(iv),
because "a more reasoned (and legally accurate) approach
is to consider any and all incurred bagging expenses to be
encompassed within the scope of the 32.5% industry
factor" at (b)(ii) (a single valuation method). Solvay
continued to argue that section 303(b)(iv) allowed it to
deduct the costs of bagging, in addition to the industry
factor deduction at 303(b)(ii) (multiple valuation methods),
and it urged the Board to order the DOR to apply its approach
to calculating those costs. Solvay filed a response brief, in
which it strenuously objected to the DOR's new position,
as well as to the timing of raising the new approach.
The Board heard oral argument on the new issue. Solvay again
objected to the substance and the procedure of the DOR's
new approach. At that hearing, the Board chairman expressed
his concerns about the Board's jurisdiction in light of
the DOR's new assessment.
I just know that we don't have jurisdiction if there --
if the parties are no longer disputing from a final action.
So at that point -- I mean, I know what the answer is from
our perspective. We don't have jurisdiction.
The Board apparently resolved those jurisdictional concerns
to its satisfaction, and in its Findings of Fact, Conclusions
of Law, Decision and Order, it concluded that Solvay was not
entitled to any deduction for bagging soda ash, and it held
that the parties' dispute "over how to calculate an
additional processing deduction . . . is moot in light of our
determination that the [DOR] and Solvay initially
misinterpreted the underlying valuation methodology." It
ordered that the DOR's audit assessment was
"reversed and remanded to the [DOR] for reassessment in
accordance with" its decision. (Emphasis omitted.)
Solvay timely petitioned for review of the Board's
action, the district court granted the parties' joint
motion to certify the case to the Wyoming Supreme Court, and
this Court accepted the certified case pursuant to W.R.A.P.
Judicial review of administrative actions is generally
governed by Wyo. Stat. Ann. § 16-3-114(c), but
"[w]hether a court or agency has jurisdiction to decide
a particular matter is a question of law, subject to de
novo review." Exxon Mobil Corp. v. Wyo.
Dep't of Revenue, 2011 WY 161');">2011 WY 161, ¶ 24, 266 P.3d
944, 951 (Wyo. 2011) (citing Dir. of the Office of State
Lands & Invs., Bd. of Land Comm'rs v. Merbanco,
Inc., 2003 WY 73, ¶ 7, 70 P.3d 241, 246 (Wyo.
The Board of Equalization is created by the Wyoming
Constitution, which requires the legislature to "provide
by law for a state board of equalization," Wyo. Const.
art. 15, § 9, and describes the Board's duties as
"to equalize valuation on all property . . . and such
other duties as may be prescribed by law." Wyo. Const.
art. 15, § 10. Historically, the Board performed
valuation functions, but in 1991, the legislature separated
the Department of Revenue and Taxation from the Board and
assigned "the valuation of property for tax
assessment" to the DOR instead of the Board. Union
Pac. Res. Co. v. State Bd. of Equalization, 895 P.2d
464, 466 (Wyo. 1995) (UPRC II). The Board
"became an independent quasi-judicial organization with
constitutional and statutory duties to equalize valuation and
decide disagreements regarding statutory provisions affecting
the assessment, levy and collection of taxes."
Id. (quoting Union Pac. Res. Co. v. State,
839 P.2d 356, 363 (Wyo. 1992) (UPRC I)).
Although the Board is a quasi-judicial body, the DOR's
contention that "the Board should be treated in the same
manner as any other judicial body when construing statutes
affecting the assessment, levy and collection of taxes"
is incorrect. The Board is not, in fact, like any other
judicial body; rather, it is a creature of the legislature.
"An administrative agency is limited in authority to
powers legislatively delegated. Administrative agencies are
creatures of statute and their power is dependent upon
statutes, so that they must find within the statute warrant
for the exercise of any authority which they claim."
Exxon Mobil Corp, 2011 WY 161');">2011 WY 161, ¶ 24, 266 P.3d
at 951 (quoting Amoco Prod. Co. v. Wyo. State Bd. of
Equalization, 12 P.3d 668, 673 (Wyo. 2000) (Amoco
III) (citations omitted)). "A corollary of the rule
is that, when a statute provides a particular manner in which
a power may be executed, the agency may not exercise its
power in a different way. Any action taken by an agency
without authority is ultra vires and void." Horse
Creek Conservation Dist. v. State ex rel. Wyo. Attorney
Gen., 2009 WY 143, ¶ 30, 221 P.3d 306, 316 (Wyo.
2009) (citations omitted). See also Nancy D.
Freudenthal & Roger C. Fransen, Administrative Law:
Rulemaking and Contested Case Practice in Wyoming, 31
Land & Water L. Rev. 685, 687 (1996). A series of cases
delineating the Board's adjudicatory authority illustrate
In UPRC II, UPRC petitioned the Board to declare the
point of valuation to determine taxable value for oil and gas
production, and the Board declined to exercise jurisdiction.
895 P.2d at 465. At the time, the DOR was still considering
changes to valuation for the tax years in question.
Id. at 466. The court affirmed the Board's
decision, holding that "it would be infringing upon the
administrative function specifically assigned to the [DOR] if
it offered the relief claimed by UPRC." Id. at
467. The court there rejected UPRC's argument that the
language of Wyo. Stat. Ann. § 39-1-304(a)(iv) provided
the Board with broad authority to "[d]ecide all
questions that may arise with reference to the construction
of any statute affecting the assessment, levy and collection
of taxes."' Id. at 467 n.1, 468.
The court reminded the Board of the limitations on its
authority in Basin Electric Power Cooperative, Inc. v.
Department of Revenue, 970 P.2d 841 (Wyo. 1998). There,
the parties settled an appeal of the DOR's electric
utility appraisal. The Board then entered an Order Initiating
Review of the DOR's "assessment practices,
methodology, formulas or systems." Id. at 846.
The Board issued a report, concluding that the DOR's
valuations of one electric company were erroneous.
Id. The DOR then changed its appraisal methods in
accordance with the Board's report. Id. at 847.
The court held that the Board exceeded its authority when it
sua sponte determined that the DOR's tax
methodology was incorrect. "The fundamental flaw in the
Board's action is that it failed to acknowledge that its
authority is limited to the adjudication of taxation issues
and rulemaking." Id. at 849. The court noted
that the legislature "is clear in its mandate that the
Board and the [DOR] have separate and distinct duties."
Id. The Board has two functions-to hear contested
cases on tax appeals and to promulgate rules and regulations.
"Any other exercise of authority violates the clear
intent of the legislature." Id.
In Antelope Valley Improvement and Service District v.
State Board of Equalization, 4 P.3d 876 (Wyo. 2000), we
further clarified the distinction between the Board's
regulatory and adjudicatory functions, and the limits to the
Board's actions in its adjudicatory role. We emphasized
the Board's "separate and distinct role as an
appellate body," id. at 877, holding that when
the Board functioned in its adjudicatory capacity, "it
is not a proper party to an appeal" of its decisions.
Id. at 878. The court recognized that the Board,
when acting in its regulatory capacity, would be a proper
respondent in an appeal, but it rejected the Board's
argument that "its statutory ...