County of Douglas v. Nebraska Tax Equal. & Rev. Comm.
296 Neb. 501
| Neb. | 2017Background
- The Nebraska Property Tax Administrator (PTA) produced a county report for Douglas County using the state sales file and recommended adjustments: increase valuations for Areas 3 and 4 by 7% and no change for Area 2. TERC ordered +7% for Areas 3 and 4 and -8% for Area 2 after a show-cause hearing.
- Douglas County’s chief field deputy, Jack Baines, testified the underlying sales data was unreliable (sales not verified, possible sales-chasing) and that county records showed many sales the county marked non-arm’s-length.
- The PTA’s statistics: Area 2 median = 104.82% but COD = 48.43% and PRD = 1.22 (indicating severe dispersion and regressivity); Areas 3 and 4 medians = 89.77% and 90.08% with CODs and confidence intervals showing reasonable reliability.
- Douglas County moved to reconsider after TERC’s vote, submitting an affidavit alleging the PTA included county-designated non-arm’s-length sales and misallocated sales between valuation areas; TERC denied the motion 2–1.
- The Nebraska Supreme Court reviewed for error on the record: whether TERC’s adjustments conformed to law, were supported by competent evidence, and were not arbitrary, capricious, or unreasonable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TERC lawfully decreased Area 2 valuation by 8% | County: PTA’s median is unreliable because of extreme dispersion, vertical inequity, and skew from low‑value sales; decrease is not supported and reappraisal (not equalization) is the proper fix | TERC/PTA: median supports adjustment; overall statistics warrant equalization | Court: Reversed for Area 2 — decrease unsupported; COD and PRD show lack of central tendency and reappraisal, not equalization, is required |
| Whether TERC lawfully increased Areas 3 and 4 by 7% | County: Underlying sales file is unreliable (unverified sales, possible sales‑chasing); thus medians should not be used | TERC/PTA: quality statistics (COD, PRD, narrow 95% confidence intervals) show medians are reliable | Court: Affirmed for Areas 3 & 4 — competent evidence supports +7% increases; TERC’s reliance on PTA data was not unreasonable |
| Whether TERC abused discretion by denying motion to reconsider | County: Presented affidavit and AVU comparison showing miscategorized non-arm’s-length sales and misallocated sales between areas; TERC should have reopened the record | TERC: Alleged discrepancies could/should have been raised at the hearing; affidavit did not show actual impact on ratios or that sales worksheets differed from AVU | Court: Affirmed denial — TERC did not abuse discretion; county delayed and failed to show the alleged errors’ impact |
| Standard and proper use of sales file and statistics in equalization | County: Reliability concerns mean mass appraisal standards require rejection of flawed sales data | TERC/PTA: Must rely on generally accepted mass appraisal techniques and PTA reports unless clear proof of unusable data | Court: Applied IAAO principles — where COD/PRD/confidence intervals show reliability, equalization is appropriate; where data lacks central tendency, reappraisal is proper remedy |
Key Cases Cited
- County of Douglas v. Nebraska Tax Equal. & Rev. Comm., 262 Neb. 578 (Neb. 2001) (discusses TERC equalization authority and standards)
- Douglas County v. Archie, 295 Neb. 674 (Neb. 2017) (administrative review principles and reliance on PTA reports)
- State v. Bao, 269 Neb. 127 (Neb. 2005) (motion‑to‑reconsider/new‑trial standards referenced for abuse‑of‑discretion review)
- State v. Cerritos‑Valdez, 295 Neb. 563 (Neb. 2017) (definition of abuse of discretion standard applied to administrative decisions)