County of Douglas v. Nebraska Tax Equal. & Rev. Comm.
296 Neb. 501
| Neb. | 2017Background
- Nebraska Tax Equalization and Review Commission (TERC) issued show-cause order proposing valuation adjustments for three residential valuation-area subclasses in Douglas County (increase Areas 3 & 4 by 7%; decrease Area 2 by 8%).
- The Property Tax Administrator (PTA) submitted sales-ratio reports based on the state sales file and recommended increases for Areas 3 and 4 but recommended no change for Area 2 due to dispersion in the data.
- Douglas County’s chief field deputy, Jack Baines, testified at the show-cause hearing that county assessment practices (e.g., poor sales verification, possible sales-chasing) rendered some sales-file data unreliable; he advocated reappraisal rather than blanket equalization.
- TERC voted to implement the three adjustments; Douglas County moved to reconsider and supplied an affidavit alleging the PTA included county-designated non-arm’s-length sales and misallocated sales between valuation areas.
- TERC denied the motion to reconsider (2–1). The Nebraska Supreme Court reviewed TERC’s orders for errors on the record and affirmed in part (Areas 3 & 4) and reversed in part (Area 2).
Issues
| Issue | Plaintiff's Argument (Douglas County) | Defendant's Argument (TERC/PTA) | Held |
|---|---|---|---|
| Validity of Area 2 8% decrease | Data are highly dispersed (COD 48.43) and vertically inequitable (PRD 1.22); median unreliable; reappraisal, not equalization, required | PTA reported median > statutory range; TERC can equalize | Reversed — decrease unsupported, arbitrary and capricious; dispersion and vertical inequity require reappraisal, not blanket equalization |
| Validity of Areas 3 & 4 7% increases | Sales-file problems and county assessment practices render statistics unreliable; therefore no change | PTA’s medians (89.77, 90.08) and quality statistics (CODs, narrow 95% CIs) reliably show undervaluation; adjustments appropriate | Affirmed — TERC’s increases supported by competent evidence and not arbitrary |
| Motion to reconsider — admissibility/timing of evidence | County’s post-hearing affidavit showed PTA included county-designated non-arm’s-length sales and misallocated area sales; TERC should reconsider | Alleged discrepancies could/should have been raised at hearing; AVU does not establish PTA miscategorization; no showing of material impact | Affirmed — TERC did not abuse discretion denying reconsideration; county delayed and failed to show the alleged errors’ material impact |
| Sales-file categorization procedure | PTA included non-arm’s-length sales without required notice to county, violating regulations | AVU is not the sales-categorization vehicle; county did not allege miscategorization in sales worksheets themselves | Court found allegations insufficient to prove PTA improperly included non-arm’s-length sales; procedural claim failed |
Key Cases Cited
- County of Douglas v. Nebraska Tax Equal. & Rev. Comm., 262 Neb. 578 (Neb. 2001) (background on TERC equalization authority)
- Douglas County v. Archie, 295 Neb. 674 (Neb. 2017) (standards for review of TERC and mass appraisal principles)
- State v. Cerritos-Valdez, 295 Neb. 563 (Neb. 2017) (definition and application of abuse of discretion)