County of Douglas v. Nebraska Tax Equal. & Rev. Comm.
296 Neb. 501
| Neb. | 2017Background
- The Nebraska PTA prepared a sales-ratio report for Douglas County dividing residential property into valuation-area subclasses and recommending adjustments: increase Areas 3 and 4 by 7% and no change for Area 2.
- TERC issued an order to show cause and, after a hearing at which the county’s chief field deputy (Baines) testified, voted to increase Areas 3 and 4 by 7% and decrease Area 2 by 8%.
- Baines testified that prior assessment practices in Douglas County (e.g., lack of sales verification, possible sales-chasing) undermined the reliability of the state sales file; he advocated model recalibration and reappraisal instead of blanket equalization.
- Douglas County moved to reconsider before TERC’s written order, submitting an affidavit alleging (1) the PTA included sales the county marked non-arm’s-length without required notice and (2) misallocation of sales among valuation areas; TERC denied the motion 2–1.
- The Nebraska Supreme Court reviewed whether TERC’s adjustments conformed to law, were supported by competent evidence, and were not arbitrary or capricious; it reversed TERC’s Area 2 decrease, affirmed the increases to Areas 3 and 4, and upheld denial of reconsideration.
Issues
| Issue | Plaintiff's Argument (County) | Defendant's Argument (TERC/PTA) | Held |
|---|---|---|---|
| Whether TERC’s 8% decrease to Area 2 valuation was lawful and supported by evidence | Area 2’s statistics were skewed by low‑value sales and severe dispersion (high COD, PRD), so blanket equalization is improper; reappraisal/model recalibration required | TERC relied on PTA median showing Area 2 outside statutory range and acted to equalize | Court reversed: decrease unsupported—COD (48.43) and PRD (1.22) show lack of central tendency and vertical inequity; equalization inappropriate; reappraisal required |
| Whether TERC’s 7% increases to Areas 3 and 4 were lawful and supported by evidence | County argued underlying sales data unreliable (Baines’ testimony about poor prior practices and possible sales‑chasing), so medians can’t be credited | PTA’s statistics (medians, CODs, PRDs, narrow 95% confidence intervals) reliably showed underassessment | Court affirmed: PTA’s data supplied competent evidence; quality statistics and narrow confidence intervals supported equalization |
| Whether TERC abused discretion by denying motion to reconsider based on county’s post‑hearing affidavit | County argued PTA included county‑marked non‑arm’s‑length sales without required notice and misallocated sales among areas; presented affidavit after hearing | TERC noted county could have accessed and challenged sales file at hearing and affidavit failed to show impact on ratios | Court affirmed: denial not an abuse—county delayed and failed to show material impact of alleged errors |
| Whether PTA improperly used the AVU to assert sale usability or violated notice rules | County argued discrepancies between AVU and PTA report showed improper inclusion of non‑arm’s‑length sales and lack of required notice | TERC/PTA: AVU is assessment matching vehicle; sales usability comes from monthly sales worksheets; county didn’t allege the sales worksheet categorizations differed from PTA’s use | Court affirmed reasoning: county failed to allege or prove PTA included sales the county had marked nonusable in the sales worksheets or that notice requirement was breached |
Key Cases Cited
- County of Douglas v. Nebraska Tax Equal. & Rev. Comm., 262 Neb. 578, 635 N.W.2d 413 (2001) (background on TERC equalization authority and process)
- Douglas County v. Archie, 295 Neb. 674, 891 N.W.2d 93 (2017) (standards for judicial review of TERC and mass appraisal principles)
- State v. Cerritos‑Valdez, 295 Neb. 563, 889 N.W.2d 605 (2017) (abuse of discretion definition applied to administrative rulings)
- Kinsey v. Colfer, Lyons, 258 Neb. 832, 606 N.W.2d 78 (2000) (agency power to reconsider prior decisions)