County of Webster v. Nebraska Tax Equal. & Rev. Comm.
296 Neb. 751
| Neb. | 2017Background
- Webster County challenged a TERC order increasing the assessed value of the "Majority Land Use Grass" subclass (grassland) by 6%, raising its level of value to 72% and bringing overall agricultural land to 69%.
- The Property Tax Administrator (Administrator) submitted narrative and statistical reports based on a sales file and recommended a 9% upward adjustment for Webster County grassland, using sales from surrounding counties when Webster County sales were inadequate.
- TERC issued a show-cause order and held a hearing; the County assessor disputed three sales in the assessment division's sample (two Webster County sales the assessor disqualified for changed use, and one Nuckolls County sale partly wooded).
- At the hearing the assessment division defended its inclusion of the disputed sales (noting regulatory definitions that wooded grazing land may still be classified as grassland); TERC voted to increase grassland values by 6%.
- Webster County appealed, arguing (1) the Administrator’s reports lacked competent evidence because they did not list every sale used in the statistical analysis and (2) some out-of-county sales were not comparable.
- The Nebraska Supreme Court reviewed for errors on the record and affirmed TERC, holding the Administrator’s reports were competent evidence and Webster County failed to prove noncomparability.
Issues
| Issue | Plaintiff's Argument (Webster County) | Defendant's Argument (TERC/Administrator) | Held |
|---|---|---|---|
| Whether TERC could rely on Administrator’s reports that did not list each sale used | Reports must include every sale and its data under §77-5016(4); otherwise not competent evidence | Statutory scheme (§77-5027/§77-5026) requires narrative/statistical reports sufficient to inform TERC; full sale rosters are available on request and at hearings | Held: Administrator’s narrative and statistical reports are competent evidence without listing every sale |
| Whether out-of-county sales included in the sample were noncomparable | Some borrowed sales (e.g., Nuckolls County) are not geographically/commercially comparable (different rainfall, timber cover) | Administrator may use comparable sales from similar market areas; regulatory definitions permit wooded grazing to remain classified as grassland | Held: County failed to prove noncomparability; inclusion of those sales was permissible |
| Burden of proof at a show-cause hearing to contest Administrator’s reports | Administrator must prove adequacy; County need not carry burden to disprove reports | County has burden to show why TERC should not rely on Administrator’s reports at the show-cause hearing | Held: County bears burden to demonstrate TERC should not rely on the reports |
| Whether agency disregarded its own rules or acted arbitrarily | Inclusion of unspecified sales and out-of-county comparables was arbitrary/capricious | Procedures allow use of sales files, provide notice/protest mechanisms, and permit TERC access to sales data; agency acted within rules | Held: No arbitrary or capricious action; decision supported by competent evidence |
Key Cases Cited
- JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. of Equal., 285 Neb. 120 (appellate review of TERC is for error on the record)
- Brenner v. Banner Cty. Bd. of Equal., 276 Neb. 275 (administrative decision arbitrary when made in disregard of facts)
- Blakely v. Lancaster County, 284 Neb. 659 (agency action taken in disregard of its own substantive rules is arbitrary)
- Johnson v. Neth, 276 Neb. 886 (presumption that public officers faithfully perform official duties)