County of Franklin v. Tax Equal. & Rev. Comm.
296 Neb. 193
| Neb. | 2017Background
- Franklin County assessor filed county assessment abstracts for real property, including the "land use grass" subclass of agricultural land; the State Property Tax Administrator (PTA) reviewed and issued a nonbinding recommendation to increase Franklin County’s agricultural land valuations by 8%.
- Because Franklin County had few in-county grassland sales, the PTA supplemented with comparable sales from other counties; the PTA used 19 sales (9 in-county, 10 out-of-county) producing a 67% median level of value.
- The county assessor (Dallman) used 14 sales (9 in-county, 5 out-of-county within ~12 miles) producing a 74.91% median, inside the statutory acceptable range of 69–75%.
- TERC held a show-cause hearing; the PTA testified its policy allows use of comparable sales from other counties based on proximity and comparability; some PTA policy changes occurred in early 2016 but applied to PTA methodology rather than a mandatory county rule.
- TERC found the grassland subclass level of value at 66.61% (per PTA reports) was outside the acceptable range and ordered an 8% upward adjustment to reach 72%; Franklin County appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TERC improperly relied on PTA statistics (including out-of-county sales) | PTA sales beyond 12 miles were not comparable and county figures should control | PTA is statutorily authorized to provide valuation analyses and comparable sales may be used based on proximity and comparability; TERC may consider PTA data | TERC properly considered PTA statistics; use of out-of-county comparables was permissible and supported by record |
| Whether county assessment figures had a presumption of correctness entitling them to exclusive deference | County figures entered in state sales records are presumed correct under regulation and should govern | The regulation presumes correctness of county-entered figures, but the dispute concerned choice of comparables, not county-entered base figures; TERC may use all evidence presented | The presumption was inapplicable to the comparable-sales dispute; TERC did not err |
| Whether TERC failed to uniformly and proportionally equalize statewide valuations (constitutional challenge) | Franklin County claimed TERC violated Neb. Const. art. VIII by unequal/unproportional grassland valuations across counties | Differences in county valuations alone do not prove unconstitutional nonuniformity without context; many lawful reasons can explain valuation variances | No evidence supported a constitutional violation; claim rejected |
| Whether TERC erred in ordering an 8% upward adjustment and denying reconsideration | The 8% increase was unsupported/arbitrary; reconsideration should have been granted | TERC’s order was based on PTA reports, hearing evidence, and statutory equalization duties; decision was neither arbitrary nor unreasonable | Adjustment affirmed; denial of reconsideration affirmed |
Key Cases Cited
- JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. of Equal., 285 Neb. 120, 825 N.W.2d 447 (Neb. 2013) (addresses TERC review scope and use of PTA information in valuation proceedings)