County of Douglas v. Nebraska Tax. Equal. & Rev. Comm.
296 Neb. 501
Neb.2017Background
- The Nebraska Property Tax Administrator (PTA) produced a statewide equalization report recommending valuation adjustments for Douglas County residential subclasses based on sales ratio studies using the state sales file.
- PTA found Areas 3 and 4 underassessed (medians ~89.8% and 90.1%) and recommended a 7% increase; Area 2 had a median of 104.82% but showed extreme dispersion and vertical inequity, so PTA recommended no change.
- At TERC’s show-cause hearing, Douglas County’s chief field deputy Jack Baines challenged the reliability of the county’s historical sales data (citing lack of sales verification and possible sales-chasing) and argued reappraisal/model recalibration was the appropriate remedy rather than blanket equalization.
- TERC voted to decrease Area 2 by 8% and increase Areas 3 and 4 by 7%; Douglas County moved to reconsider, supplying an affidavit alleging the PTA included sales the county had marked non-arm’s-length and misallocated sales among valuation areas.
- TERC denied the motion to reconsider (2–1). The Nebraska Supreme Court granted bypass review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TERC’s 8% decrease to Area 2 was supported by competent evidence and was reasonable | Douglas County: PTA’s median was skewed by many low‑value sales and the dataset showed high dispersion and vertical inequity; reappraisal, not equalization, required | TERC/PTA: median indicated out‑of‑range and TERC has authority to adjust class/subclass values | Court: Reverse as to Area 2 — decrease unsupported; high COD (48.43%) and PRD (1.22) show lack of central tendency; reappraisal, not equalization, is the proper remedy |
| Whether TERC’s 7% increases to Areas 3 and 4 were supported by competent evidence | Douglas County: sales file unreliable due to Douglas County assessment practices and alleged inclusion of non‑arm’s‑length/misallocated sales | TERC/PTA: statistics (median, COD, PRD, confidence intervals) are reliable; Baines’ testimony did not prove wholesale data unreliability | Court: Affirm as to Areas 3 & 4 — PTA’s statistics were reliable (narrow 95% confidence intervals; CODs within/near range); TERC did not act unreasonably |
| Whether TERC abused its discretion by denying the motion to reconsider | Douglas County: alleged PTA improperly included sales county marked nonusable and misallocated sales among areas; TERC should have reopened record | TERC: AVU is not the vehicle for sales usability; county could have raised discrepancies at hearing; affidavit lacked showing of material impact | Court: Affirm denial — abuse‑of‑discretion standard; county delayed and failed to show how alleged errors would change results |
| Standard of appellate review for TERC orders and motions to reconsider | N/A (legal question framed) | N/A | Court: Review of TERC on the record for conformity with law, supported by competent evidence, and not arbitrary/capricious; motions to reconsider by administrative bodies reviewed for abuse of discretion |
Key Cases Cited
- County of Douglas v. Nebraska Tax Equal. & Rev. Comm., 262 Neb. 578, 635 N.W.2d 413 (2001) (discusses TERC’s equalization role and mass appraisal principles)
- Douglas County v. Archie, 295 Neb. 674, 891 N.W.2d 93 (2017) (describes standards for agency review and reliance on sales ratio statistics)
- State v. Cerritos-Valdez, 295 Neb. 563, 889 N.W.2d 605 (2017) (articulates abuse of discretion standard)
- Kinsey v. Colfer, Lyons, 258 Neb. 832, 606 N.W.2d 78 (2000) (administrative agencies authorized to reconsider their adjudicatory decisions)