County of Douglas v. Nebraska Tax Equal. & Rev. Comm.
296 Neb. 501
| Neb. | 2017Background
- TERC held statewide equalization hearings and the PTA submitted a sales-ratio report for Douglas County recommending no change to Area 2 and +7% to Areas 3 and 4 (residential subclasses), based on assessment-to-sales medians and quality statistics.
- PTA reported medians: Area 2 = 104.82% (skewed by many low-value sales), Area 3 = 89.77%, Area 4 = 90.08%; overall county median = 92%.
- Douglas County’s chief field deputy, Jack Baines, testified concerns about county assessment practices (lack of sales verification, possible sales-chasing) and supplied an affidavit after TERC voted; he argued the sales file data were unreliable.
- TERC voted to decrease Area 2 by 8% and increase Areas 3 and 4 by 7%; it denied Douglas County’s motion to reconsider (2–1).
- Nebraska Supreme Court review: whether TERC’s orders conformed to law, were supported by competent evidence, and were not arbitrary, capricious, or unreasonable; and whether denial of reconsideration was an abuse of discretion.
Issues
| Issue | Plaintiff's Argument (Douglas County) | Defendant's Argument (TERC/PTA) | Held |
|---|---|---|---|
| Whether TERC’s 8% decrease for Area 2 was supported by competent evidence | PTA’s median was unreliable given skew from low-value sales and county’s quality problems; equalization cannot fix nonuniformity—reappraisal required | TERC relied on PTA report medians and statistics to equalize; adjustment was a permissible equalization exercise | Reversed: decrease for Area 2 was unsupported and arbitrary; reappraisal, not equalization, required to fix dispersion |
| Whether TERC’s +7% for Areas 3 and 4 was supported by competent evidence | Baines: sales-file unreliability (lack of verification, possible sales-chasing) made PTA statistics unreliable so no adjustment should be ordered | PTA: medians and quality metrics (COD, PRD, narrow confidence intervals) support that medians are reliable and areas are out of statutory range | Affirmed: TERC’s increases for Areas 3 and 4 were supported by competent evidence and not arbitrary |
| Whether TERC abused discretion by denying motion to reconsider (new affidavit/evidence) | County: affidavit showed PTA improperly included county-designated non-arm’s-length sales and misallocated sales among valuation areas; thus TERC should reopen and vacate order | TERC: allegations could/should have been raised at hearing; AVU is not the sales-worksheet vehicle; affidavit was vague on material impact | Affirmed: denial of reconsideration was not an abuse of discretion; county delayed and failed to show material impact |
| Whether alleged improper inclusion/misclassification of sales in PTA’s report invalidated TERC’s orders | County: PTA included sales county had marked non-usable and misassigned sales across valuation areas, undermining report | PTA/TERC: county did not allege the sales-worksheet categorizations differed from state’s; AVU is annual assessment data, not the means to challenge sales usability; no showing of effect on medians | Denied: allegations insufficiently specific and could have been presented at hearing; no proof of impact, so TERC did not err |
Key Cases Cited
- County of Douglas v. Nebraska Tax Equal. & Rev. Comm., 262 Neb. 578 (2001) (discusses TERC equalization authority and framework)
- Douglas County v. Archie, 295 Neb. 674 (2017) (administrative-review principles and standards for TERC/ratio studies)
- State v. Cerritos-Valdez, 295 Neb. 563 (2017) (definition of abuse of discretion standard in Nebraska)