County of Douglas v. Nebraska Tax Equal. & Rev. Comm.
296 Neb. 501
| Neb. | 2017Background
- The Nebraska Property Tax Administrator (PTA) prepared a statewide equalization report recommending valuation adjustments for Douglas County residential subclasses (Areas 2, 3, and 4) based on assessment-to-sales ratio studies derived from the state sales file.
- The PTA reported median assessment-to-sales ratios: Area 2 = 104.82% (above statutory 92–100% range), Area 3 = 89.77%, Area 4 = 90.08% (both below range). Overall county median was 92%.
- PTA recommended increasing Areas 3 and 4 by 7% and no change for Area 2, citing dispersion and vertical inequity in Area 2 skewing the median; TERC ordered +7% to Areas 3 and 4 and −8% to Area 2 after a show-cause hearing.
- Douglas County (through chief field deputy Baines) contested the PTA data quality, alleging sales-verification failures, sales-chasing, and mismatches between county and state sales categorizations; county moved to reconsider and submitted an affidavit after TERC’s vote.
- TERC denied the motion to reconsider (2–1). The Nebraska Supreme Court reviewed whether TERC’s orders conformed to law, were supported by competent evidence, and were arbitrary, capricious, or unreasonable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TERC lawfully decreased Area 2 valuation by 8% | Douglas County: PTA/TERC relied on unreliable, skewed data; equalization inappropriate where lack of uniformity and vertical inequity exist — remedy is reappraisal, not blanket equalization. | TERC/PTA: Median > statutory range justifies adjustment; concern over low-value properties warranted county-wide decrease to address overassessment. | Reversed as to Area 2 — decrease unsupported by competent evidence; COD and PRD showed severe dispersion/regressivity that equalization could not properly cure. |
| Whether TERC lawfully increased Areas 3 and 4 valuations by 7% | Douglas County: Underlying sales file unreliable (sales-chasing, poor verification), so medians aren’t trustworthy and no equalization should be ordered. | TERC/PTA: Quality statistics (COD, PRD, narrow confidence intervals) show medians for Areas 3 and 4 are reliable and outside acceptable range, justifying equalization. | Affirmed as to Areas 3 and 4 — TERC’s decision supported by competent evidence and was not arbitrary or unreasonable. |
| Whether TERC abused discretion by denying motion to reconsider based on county’s post-hearing affidavit | Douglas County: New affidavit showed PTA included non-arm’s-length or misclassified sales without required notice; TERC should have reconsidered. | TERC: Alleged discrepancies could/should have been raised at the hearing; AVU is not the vehicle for sales usability challenges, and affidavit lacked proof of material impact. | Affirmed — denial was not an abuse of discretion; county could have raised the issues at the hearing and affidavit failed to show material effect on medians. |
| Proper remedy for assessment problems showing lack of uniformity or vertical inequity | Douglas County: Equalization is inappropriate; reappraisal/model recalibration is the correct remedy. | TERC: May use its equalization authority when medians show out-of-range levels; limited ability to target only subsets when making class/subclass adjustments. | Court agreed: reappraisal/model recalibration is the appropriate remedy for dispersion/vertical inequity (Area 2); equalization appropriate only when a reliable central tendency indicates out-of-range level (Areas 3 & 4). |
Key Cases Cited
- County of Douglas v. Nebraska Tax Equal. & Rev. Comm., 262 Neb. 578, 635 N.W.2d 413 (Neb. 2001) (discusses TERC’s equalization role and standards)
- Douglas County v. Archie, 295 Neb. 674, 891 N.W.2d 93 (Neb. 2017) (addresses review standards and application of mass appraisal principles)
- State v. Bao, 269 Neb. 127, 690 N.W.2d 618 (Neb. 2005) (abuse of discretion standard in post-judgment motions)