County of Douglas v. Nebraska Tax Equal. & Rev. Comm.
296 Neb. 501
| Neb. | 2017Background
- TERC held a statewide equalization hearing and the PTA submitted a sales-ratio report recommending adjustments for three residential valuation subclasses (Areas 2, 3, and 4) in Douglas County.
- PTA found Area 2 median = 104.82% (above statutory 92–100%); Areas 3 and 4 medians = 89.77% and 90.08% (below statutory range).
- PTA recommended increasing Areas 3 and 4 by 7% and no change for Area 2; TERC nevertheless voted to decrease Area 2 by 8% and increase Areas 3 and 4 by 7%.
- Douglas County challenged data quality at the show-cause hearing (chief deputy Baines testified about inadequate sales verification, potential sales-chasing, and miscategorization), but TERC relied on PTA statistics for Areas 3 and 4.
- After TERC’s vote but before the written order, Douglas County moved to reconsider and submitted an affidavit alleging the PTA used sales the county had labeled non-arm’s-length and misallocated sales between valuation areas; TERC denied the motion 2–1.
- Nebraska Supreme Court: affirmed TERC’s increases for Areas 3 and 4, reversed the decrease for Area 2, and held denial of the motion to reconsider was not an abuse of discretion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TERC lawfully and reasonably decreased Area 2 valuation by 8% | Decrease unsupported: data exhibit extreme dispersion (COD 48.43) and vertical inequity (PRD 1.22); median skewed by many low‑value sales; equalization cannot fix uniformity problems—reappraisal required | PTA/TERC relied on overall median and sought to address perceived overassessment of low‑value homes; TERC discretion to equalize countywide | Reversed for Area 2: TERC’s decrease was arbitrary/unreasonable and unsupported by competent evidence; reappraisal, not blanket equalization, is the proper remedy |
| Whether TERC lawfully and reasonably increased Areas 3 and 4 valuations by 7% | County: underlying sales data unreliable (sales verification failures, possible sales‑chasing, miscategorization) so medians cannot be trusted | PTA: ratio studies (median, COD, PRD, confidence intervals) show medians for Areas 3 and 4 are reliable indicators; TERC may reasonably credit PTA | Affirmed for Areas 3 & 4: statistics (narrow 95% CIs outside statutory range, acceptable CODs) provided competent evidence; TERC not arbitrary in relying on them |
| Whether TERC abused discretion by denying Douglas County’s motion to reconsider (new affidavit alleging improper sales inclusion/misallocation) | Motion presented evidence that PTA included sales county labeled non‑arm’s‑length and misallocated sales among areas; TERC should have held a hearing and vacated order | TERC: AVU is not the vehicle for sale‑usability decisions; County could have and should have raised these issues at the show‑cause hearing; motion lacked proof of material impact | Affirmed: denial was not an abuse of discretion—County delayed presentation of available evidence and failed to show how alleged errors would affect results |
Key Cases Cited
- County of Douglas v. Nebraska Tax Equal. & Rev. Comm., 262 Neb. 578 (Neb. 2001) (discusses TERC equalization authority and mass appraisal principles)
- Douglas County v. Archie, 295 Neb. 674 (Neb. 2017) (explains standard of review and application of mass appraisal techniques)
- State v. Cerritos-Valdez, 295 Neb. 563 (Neb. 2017) (defines abuse of discretion standard)
- State v. Bao, 269 Neb. 127 (Neb. 2005) (procedural standards for post‑judgment motions/reconsideration)