County of Webster v. Nebraska Tax Equal. & Rev. Comm.
296 Neb. 751
| Neb. | 2017Background
- Webster County appealed TERC’s May 2016 order increasing the assessed value of the "Majority Land Use — Grass" subclass (agricultural/ horticultural land not receiving special value) in Webster County by 6%, which raised the subclass level of value to 72% and overall agricultural land to 69% of market value.
- The Nebraska Property Tax Administrator (Administrator) submitted annual narrative and statistical reports to TERC concluding Webster County grassland was undervalued and recommending a 9% upward adjustment; the assessment division’s sample included some sales from neighboring counties because Webster County’s internal sales were inadequate.
- TERC issued a show-cause order and held a hearing; the county assessor disputed three sales used by the division (two in-Webster sales the assessor had disqualified after changes in land use, and one Nuckolls County sale that included timber cover).
- At the hearing the assessment division’s specialist defended inclusion of the contested sales (timber cover can still qualify as grassland; sales reflect value at time of sale); after hearing, TERC voted to increase grassland values by 6% (less than Administrator’s 9% recommendation).
- Webster County argued on appeal that (1) TERC erred by relying on the Administrator’s reports because they did not attach underlying sales file details as required by statute and therefore lacked competent evidence, and (2) the assessment division included noncomparable out-of-county sales.
- The Supreme Court affirmed: Administrator’s statutory reports are competent evidence without restating every sales file item; counties bear the burden at the show-cause hearing to demonstrate the reports are unreliable; Webster failed to show the borrowed sales were noncomparable.
Issues
| Issue | Plaintiff's Argument (Webster County) | Defendant's Argument (TERC / Administrator) | Held |
|---|---|---|---|
| Whether § 77-5016(4) requires all records relied on by TERC to be made part of the record for show-cause equalization hearings | § 77-5016(4) requires TERC to include all relied-upon records, so omission of sales files made Administrator’s reports inadequate | Show-cause hearings for equalization are governed by §§ 77-5022–77-5027 procedures, not § 77-5016(4); reports need not restate every sale | Held for defendant: § 77-5016(4) does not govern these equalization show-cause proceedings |
| Whether the Administrator’s narrative and statistical reports constitute competent evidence absent the underlying sales file detail | Reports are insufficient because they did not list each sale, sale price, assessed value, and geographic details | Statutory scheme supplies access checks (ros ters, protests, sales-file access to counties and TERC); detailed restatement is not required and would be duplicative | Held for defendant: reports are competent evidence to support TERC’s order without attaching every sales file entry |
| Whether the assessment division improperly used noncomparable out-of-county sales to set level of value | Inclusion of Nuckolls (and other) sales was noncomparable due to differing characteristics (e.g., rainfall, timber cover) | Administrator may use comparable sales from similar market areas; division applied classification rules and county reporting; assessor failed to prove noncomparability | Held for defendant: county failed to demonstrate the contested sales were noncomparable |
| Burden at show-cause hearing: who must prove reliability/unreliability of Administrator’s reports | County must not bear burden; TERC/Administrator must prove accuracy | A county seeking to resist an adjustment must demonstrate why TERC should not rely on the reports | Held: burden is on county to demonstrate TERC should not rely on Administrator’s reports |
Key Cases Cited
- JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. of Equal., 285 Neb. 120 (Neb. 2013) (standard of appellate review for TERC final decisions)
- Brenner v. Banner Cty. Bd. of Equal., 276 Neb. 275 (Neb. 2008) (agency action arbitrary if made in disregard of facts)
- Blakely v. Lancaster County, 284 Neb. 659 (Neb. 2012) (agency action arbitrary if it disregards its own rules)
- In re Guardianship & Conservatorship of Kaiser, 295 Neb. 532 (Neb. 2017) (statutory interpretation reviewed de novo)
- Johnson v. Neth, 276 Neb. 886 (Neb. 2008) (presumption that public officers faithfully perform duties)