Conroy v. Keith Cty. Bd. of Equal., 846 N.W.2d 634

Background

Central Nebraska Public Power & Irrigation District (Central), a political subdivision providing irrigation and electricity, made its required annual payment in lieu of taxes under Neb. Const. art. VIII, § 11 for tax year 2011.
Central owned 13 parcels around Lake McConaughy that it leased to private parties (commercial and residential); lessees generally owned improvements.
The Keith County assessor issued Notices of Taxable Status for those parcels, asserting they were leased for nonpublic purposes and thus taxable; Central protested under Neb. Rev. Stat. § 77-202(1)(a) (public-purpose exemption).
The Keith County Board of Equalization approved Central’s protests and recommended not taxing the land; the Nebraska Department of Revenue (Tax Commissioner and Property Tax Administrator) appealed to TERC.
TERC affirmed the Board but based its decision on Central’s payment in lieu under article VIII, § 11—holding Central not liable for additional property taxes—and ordered no assessed value or separate tax obligation for the parcels; the Department appealed to the Nebraska Supreme Court.
The Supreme Court concluded TERC correctly held Central personally not liable for property taxes for 2011 because § 11’s payment is "in lieu of all other taxes," but vacated portions of TERC’s order that purported to extinguish any separate tax obligations of the lessees (TERC lacked jurisdiction over lessees who were not parties).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Central’s payment under art. VIII, § 11 relieves Central of property tax liability for 2011	Department: § 11 shouldn’t preclude taxation if property not used for public purpose; § 2 public-purpose requirement controls	Central: § 11 payment is in lieu of other taxes, so Central isn’t liable for additional property taxes	Held: § 11 payment is "in lieu of all other taxes" — Central not liable for additional property taxes for 2011 (affirmed)
Whether article VIII, § 11 must be read to include a public-purpose limitation from art. VIII, § 2	Department: § 11 must be read in light of § 2; public-purpose requirement applies	Central: § 11’s plain text has no public-purpose limitation and controls as a specific provision	Held: §§ 2 and 11 can be harmonized; § 11 contains no public-purpose limitation on Central’s payment relieving its tax liability (affirmed)
Whether lessees can be assessed property taxes despite Central’s § 11 payment	Department: TERC should have considered taxing lessees under statutory scheme when property not used for public purpose	Central/Board: TERC limited its decision to Central’s liability; lessees were not parties	Held: Lessees may be taxed under Neb. Rev. Stat. § 77-202.11, but TERC lacked jurisdiction to determine lessees’ obligations here; TERC’s language extinguishing lessees’ obligations vacated
Whether TERC properly took "statutory notice" of legislative history instead of judicial notice	Department: TERC erred by not taking judicial notice and considering legislative history fully	TERC: followed its rules on statutory notice; matter not outcome-determinative here	Held: Court need not resolve; legislative-history issue unnecessary to decide constitutional questions (no relief granted)

Key Cases Cited

Lozier Corp. v. Douglas Cty. Bd. of Equal., 285 Neb. 705 (standard of review for TERC decisions)
Pinnacle Enters. v. City of Papillion, 286 Neb. 322 (jurisdictional questions of law)
Banks v. Heineman, 286 Neb. 390 (constitutional interpretation principles)
City of North Platte v. Tilgner, 282 Neb. 328 (giving constitutional text its plain meaning)
Garrotto v. McManus, 185 Neb. 644 (specific constitutional clause prevails over general clause)
Chapin v. Neuhoff Broad.-Grand Island, Inc., 268 Neb. 520 (rule on statutory exceptions: items not excluded are covered)
In re Interest of Trey H., 281 Neb. 760 (power to vacate void orders/remand for lack of jurisdiction)
Holdsworth v. Greenwood Farmers Co-op, 286 Neb. 49 (court need not address unnecessary issues)