County of Douglas v. Nebraska Tax Equal. & Rev. Comm.
296 Neb. 501
Neb.2017Background
- TERC held statewide equalization and the PTA submitted a sales-ratio report recommending adjustments to residential valuation areas in Douglas County: increase Areas 3 and 4 by 7% and leave Area 2 unchanged.
- PTA’s report measured assessment-to-sales ratios using the state sales file; residential acceptable range is 92–100% (median preferred), with quality checks (COD, PRD, confidence intervals).
- Area 2 median was 104.82% with a very high COD (48.43%) and PRD 1.22, indicating severe dispersion and regressive vertical inequity; medians for sales >$15k and >$30k were nearer the acceptable range.
- Areas 3 and 4 medians were 89.77% and 90.08% with acceptable/narrow CODs (≈15.27 and 12.49) and tight 95% confidence intervals wholly below the 92% threshold.
- At the show-cause hearing Douglas County’s chief field deputy (Baines) testified sales-file data were unreliable (e.g., lack of sales verification, possible sales-chasing); nevertheless TERC voted to increase Areas 3 and 4 and decrease Area 2.
- Douglas County filed a post-vote motion to reconsider with an affidavit alleging the PTA included sales county-designated as non-arm’s-length and misallocated sales among valuation areas; TERC denied the motion. County appealed; Supreme Court affirmed in part and reversed in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TERC's 8% decrease of Area 2 was supported by competent evidence | Douglas: Area 2 shows extreme dispersion and vertical inequity (high COD, PRD); median is unreliable and reappraisal, not equalization, is the correct remedy | TERC/PTA: Report median indicated out-of-range value warranting decrease | Court: Reversed — decrease unsupported; arbitrary and capricious; reappraisal required because data do not cluster around a central tendency |
| Whether TERC's 7% increases for Areas 3 and 4 were supported by competent evidence | Douglas: Underlying sales file unreliable (sales-chasing, verification failures); thus statistics are unreliable | TERC/PTA: COD, PRD, and narrow confidence intervals show medians are reliable and outside statutory range | Court: Affirmed — increases supported by competent evidence and not arbitrary or unreasonable |
| Whether denial of motion to reconsider was an abuse of discretion | Douglas: Presented affidavit alleging improper inclusion/misclassification in state sales file; TERC should reconsider/vacate | TERC: Alleged discrepancies could/should have been raised at hearing; motion’s allegations were not shown to affect results | Court: Affirmed — TERC did not abuse discretion in denying the motion |
| Whether PTA violated regulations by including county-designated non-arm’s-length sales without notice | Douglas: AVU comparison shows county-designated nonusable sales were included in PTA’s study, violating notice rules | TERC: AVU is not the mechanism for sales usability categorizations; county did not allege differences between sales worksheets and PTA’s categorizations | Court: Claim rejected — allegations insufficient to show PTA improperly included non-arm’s-length sales |
Key Cases Cited
- County of Douglas v. Nebraska Tax Equal. & Rev. Comm., 262 Neb. 578, 635 N.W.2d 413 (discusses TERC equalization authority and standards for review)
- Douglas County v. Archie, 295 Neb. 674, 891 N.W.2d 93 (recent precedents on administrative review and equalization principles)
- State v. Cerritos-Valdez, 295 Neb. 563, 889 N.W.2d 605 (defines abuse of discretion standard)
- State v. Bao, 269 Neb. 127, 690 N.W.2d 618 (procedural standards on motions for reconsideration/new trial)