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 of agricultural land in Webster County by 6%, after the Property Tax Administrator (Administrator) recommended a 9% increase to correct an undervaluation.
- Nebraska law requires county assessors to submit transfer statements and abstracts; the assessment division maintains a statewide sales file and produces narrative and statistical reports evaluating level of value and quality of assessment by class/subclass.
- The Administrator’s report used a 3-year sales study and supplemented Webster County sales with comparable sales from surrounding counties (Adams, Clay, Nuckolls, Kearney, Franklin) because Webster’s in-county sales were insufficient.
- At the show-cause hearing the Webster County assessor disputed three sales used by the division (two in-county sales she had disqualified after changes in use, and one Nuckolls County parcel partly wooded).
- TERC reviewed the Administrator’s reports, heard testimony (including from the Administrator’s agricultural land specialist), considered requested supplemental analyses, and voted to increase grassland assessments by 6%, raising the grassland level of value to 72% and overall agricultural to 69%.
Issues
| Issue | Plaintiff's Argument (Webster County) | Defendant's Argument (TERC/Administrator) | Held |
|---|---|---|---|
| Whether TERC could rely on the Administrator’s narrative/statistical reports without including the underlying sales-file entries for every transaction | § 77-5016(4) requires records relied on by TERC be part of the record; therefore the Administrator must list each sale, price, assessed value, and geographic data used | § 77-5027(3) does not require that level of detail; reports need only provide sufficient statistical and narrative information and counties have opportunity to contest via show-cause hearings and access to the sales file | Court held the Administrator’s reports are competent evidence without restating every sales-file entry; statutes interpreted conjunctively and procedure provides checks via rosters, protests, and access to sales files |
| Whether sales from other counties used by the Administrator were noncomparable and thus improperly used to adjust Webster County values | At least some out-of-county sales (notably Nuckolls County) were not geographically or functionally comparable (argument points to differing rainfall, timber cover) and should not have been used | Statute allows use of sales from similar market areas or adjoining counties when in-county samples are inadequate; assessment division classifications and field verification support comparability | Court held Webster failed to demonstrate noncomparability. The disputed Nuckolls parcel fell within assessment-division definitions (wooded grazing still classified as grassland) and the assessor offered no contrary evidence |
| Burden of proof at a show-cause hearing to oppose Administrator’s reports | Administrator must bear burden to show underlying data; otherwise counties cannot effectively rebut | County must show why TERC should not rely on Administrator’s reports; § 77-5026 gives counties the chance and burden to demonstrate errors | Court held burden lies with county to demonstrate TERC should not rely on the reports; assessor failed to meet it |
| Whether TERC acted arbitrarily or contrary to its rules by relying on the reports | Inclusion of unspecified sales or use of out-of-county data was arbitrary and capricious | TERC followed statutory/regulatory scheme, had access to sales files, and afforded hearing/protest procedures; action was within statutory authority | Court found TERC’s decision supported by competent evidence and not arbitrary or capricious; affirmed |
Key Cases Cited
- JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. of Equal., 285 Neb. 120 (statutory standard for appellate review of TERC orders)
- Brenner v. Banner Cty. Bd. of Equal., 276 Neb. 275 (definition of arbitrary agency action)
- Blakely v. Lancaster County, 284 Neb. 659 (agency must follow its substantive rules)
- In re Guardianship & Conservatorship of Kaiser, 295 Neb. 532 (statutory interpretation is question of law)
- In re Interest of Nizigiyimana R., 295 Neb. 324 (plain-meaning rule for statutes)
- In re Interest of Tyrone K., 295 Neb. 193 (in pari materia construction)
- Johnson v. Neth, 276 Neb. 886 (presumption that public officers perform duties faithfully)