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299 Nebraska Report

BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.

Cite as 299 Neb. 933

Betty L. Green Living Trust and Richar

Living Trust, appellants, v. Morr

Board of Equalization, app

___ N.W.2d ___

Filed May 11, 2018. No. S-17-873.

1. Taxation: Judgments: Appeal and Error. Appellate courts review 

decisions rendered by the Tax Equalization and Review Commission for 

errors appearing on the record.

2. Judgments: Appeal and Error. When reviewing a judgment for errors 

appearing on the record, an appellate court’s inquiry is whether the decision conforms to the law, is supported by competent evidence, and is 

neither arbitrary, capricious, nor unreasonable.

3. Taxation: Appeal and Error. Questions of law arising during appellate 

review of the Tax Equalization and Review Commission’s decisions are 

reviewed de novo on the record.

4. Administrative Law: Judgments. Whether an agency decision conforms to the law is by definition a question of law.

5. Administrative Law: Judgments: Words and Phrases. Agency action 

is arbitrary, capricious, and unreasonable if it is taken in disregard of the 

facts or circumstances of the case, without some basis which would lead 

a reasonable and honest person to the same conclusion.

6. Taxation: Valuation: Presumptions: Evidence. A presumption exists 

that a board of equalization has faithfully performed its official duties in 

making an assessment and has acted upon sufficient competent evidence 

to justify its action. That presumption remains until there is competent 

evidence to the contrary presented, and the presumption disappears 

when there is competent evidence adduced on appeal to the contrary. 

From that point forward, the reasonableness of the valuation fixed by 

the board of equalization becomes one of fact based upon all the evidence presented.

7. Taxation: Valuation: Proof: Appeal and Error. The burden of showing a valuation to be unreasonable rests upon the taxpayer on appeal 

from the action of the board of equalization.

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

07/20/2018 09:10 AM CDT
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8. Taxation: Valuation: Proof. The burden of persuasion imposed on 

a complaining taxpayer is not met by showing a mere difference of 

opinion unless it is established by clear and convincing evidence that 

the valuation placed upon the property when compared with valuations 

placed on other similar property is grossly excessive and is the result of 

a systematic exercise of intentional will or failure of plain duty, and not 

mere errors of judgment.

9. Taxation: Valuation: Witnesses. A resident owner who is familiar with 

his or her property and knows its worth is permitted to testify as to its 

value without further foundation. This principle rests upon the owner’s 

familiarity with the property’s characteristics, its actual and potential 

uses, and the owner’s experience in dealing with it.

Appeal from the Tax Equalization and Review Commission. 

Affirmed.

Timothy L. Moll and Anthony M. Aerts, of Rembolt Ludtke, 

L.L.P., for appellants.

Travis R. Rodak, Morrill County Attorney, for appellee.

Heavican, C.J., Miller-Lerman, Cassel, Stacy,

JJ., and Colborn and Samson, District Jud

Miller-Lerman

NATURE OF CASE

This appeal involves the valuations of certain grassland 

properties owned by the Betty L. Green Living Trust and the 

Richard R. Green Living Trust (the Trusts). The Trusts appeal 

from the July 18, 2017, order of the Tax Equalization and 

Review Commission (TERC) which affirmed the valuations 

which had been established by the Morrill County assessor and 

were approved by the Morrill County Board of Equalization 

(the Board). We affirm TERC’s order.

STATEMENT OF FACTS

Between them, the Trusts own five grassland parcels of 

agricultural and horticultural land located in Morrill County, 

Nebraska, the assessed valuations of which for tax year 2016 

were the subject of protests. In its order, TERC dismissed 
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the case involving a sixth property for lack of jurisdiction. 

The Trusts do not challenge that part of the decision, and 

therefore, we discuss only the five parcels that are at issue in 

this appeal.

For tax year 2016, the assessor determined the assessed 

valuations of the five properties to be $144,025, $106,260, 

$166,080, $157,410, and $186,470, for a total of $760,245. The 

Trusts protested the assessments to the Board and requested 

assessed valuations of $100,249, $41,824, $132,076, $91,627, 

and $78,966, respectively, for a total of $444,742. The Board 

accepted the assessor’s valuations and denied the protests. The 

Trusts appealed to TERC.

As they argued to the Board and to TERC, the Trusts assert 

in this appeal that the assessor used a method of valuation that 

was flawed when applied to grassland properties such as the 

properties at issue in this case. TERC noted in its order that 

valuation of agricultural and horticultural land is governed 

by, inter alia, chapter 77, article 13, of the Nebraska Revised 

Statutes and the regulations adopted thereunder by the Property 

Tax Administrator and the Nebraska Department of Revenue’s 

property assessment division (PAD). TERC found Neb. Rev. 

Stat. § 77-1363 (Cum. Supp. 2016) to be relevant to this case. 

Section 77-1363 provides as follows:

Agricultural land and horticultural land shall be divided 

into classes and subclasses of real property under section 77-103.01, including, but not limited to, irrigated 

cropland, dryland cropland, grassland, wasteland, nurseries, feedlots, and orchards, so that the categories reflect 

uses appropriate for the valuation of such land according to law. Classes shall be inventoried by subclasses 

of real property based on soil classification standards 

developed by the Natural Resources Conservation Service 

of the United States Department of Agriculture as converted into land capability groups by the Property Tax 

Administrator. County assessors shall utilize soil surveys 

from the Natural Resources Conservation Service of the 
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United States Department of Agriculture as directed by 

the Property Tax Administrator. Nothing in this section 

shall be construed to limit the classes and subclasses 

of real property that may be used by county assessors 

or [TERC] to achieve more uniform and proportionate valuations.

TERC described the law and regulations relevant to valuation in this case as follows:

In Nebraska agricultural land and horticultural land 

classes shall be inventoried by subclasses of real property 

based on soil classification standards developed by the 

Natural Resources Conservation Service (NRCS) of the 

United States Department of Agriculture as converted 

into land capability groups (LCG) by the Property Tax 

Administrator. County assessors are required to utilize 

these LCGs as directed by the Property Tax Administrator. 

The Property Tax Administrator and the Nebraska 

Department of Revenue’s [PAD] has adopted and promulgated Rules and Regulations to carry out their duties 

pertaining to the classification of agricultural and horticultural land by LCGs. These rules and regulations state 

that the conversion legend for all LCGs is prepared by the 

PAD according to the dryland capability classification of 

each soil that shows, in a general way, the suitability of 

each soil for most kinds of field crops. This conversion 

legend shows the LCGs for each soil in a county whether 

in grassland, dryland or irrigated cropland.

PAD’s regulations require county assessors to inventory and categorize each parcel of agricultural land using 

the following classes: (1) irrigated cropland; (2) dryland 

cropland; (3) grassland; and (4) wasteland. The county 

assessor is then required to use a soil conversion legend 

created by PAD to assign agricultural land to an appropriate LCG.

For grassland the LGCs 1G1, 1G, 2G1, 2G, 3G1, 3G, 

4G1, and 4G should generally progress from very high 
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yields of forage to very low yields of forage. In addition 

to the soil conversion legend, the regulations provide 

LCG definitions and guidelines for use by county assessors for purposes of assessing agricultural and horticultural land. The regulations also permit county assessors to 

develop additional LCG sub-classifications if needed to 

achieve uniform and proportionate valuation.

Much of the case that the Trusts presented to TERC was 

based on testimony and exhibits provided by Gerald W. Green, 

who is the trustee of the Trusts. Green testified regarding 

his experience and study in the area of agricultural land 

valuation. Through Green, the Trusts presented evidence to 

TERC which purported to show that the land capability groups 

(LCG) assignments determined by the PAD for grassland soil 

types present in Morrill County, when compared to Natural 

Resources Conservation Service range production ratings, did 

not progress from very high yields of forage to very low yields 

of forage. In other words, the Trusts argued that grassland 

soil types assigned to the 1G1 classification should have the 

highest yields of forage while those assigned to the 4G classification should have the lowest yields of forage. The evidence 

presented through Green purported to show that this expectation was not the case and that instead, a full range of yields 

of forage was present in each LCG classification and some 

soils classified as 4G had higher yields of forage than some 

soils classified as 1G. Green opined that the LCG assignments were random, arbitrary, and virtually meaningless and 

that therefore, the LCG’s established by the PAD for grassland 

classifications did not meet the requirements of the applicable 

regulations and did not result in assessments that were uniform 

and proportionate.

Green proposed an alternate valuation methodology that 

did not use the LCG’s determined by the Property Tax 

Administrator and instead categorized grassland properties by 

the Natural Resources Conservation Service range production 

rating. Valuations would be determined by using comparable 
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sales in Morrill County and nearby counties and making “a 

determination of what buyers are paying for livestock carrying capacity or in other words, $/AUM (Animal Unit Month).” 

Such “$/AUM” could then be “applied to all grassland parcels 

to come up with a valuation that is based on the current market 

conditions and the individual parcel’s productivity.” The Trusts 

calculated their requested valuations for the subject properties 

by determining a dollar value per animal unit month (AUM) 

based on sales of other grassland properties in Morrill County 

and then applying that dollar value per AUM to AUM’s for 

the subject properties. This process resulted in the requested 

assessed valuations noted above.

In its order of July 18, 2017, TERC acknowledged the 

Trusts’ evidence and stated that “[t]he LCG assignments for 

each grassland soil type according to the Rules and Regulations 

of the Department of Revenue for grassland in Morrill County 

appear to be flawed when looking at the [Natural Resources 

Conservation Service] production ratings for each soil type 

compared to its assigned LCG.” In its order, TERC nevertheless found that while the Trusts showed potential flaws in the 

LCG assignments for grasslands, they “failed to demonstrate 

that this flaw has resulted in assessed value determinations 

in Morrill County that are incorrect or grossly excessive and 

the result of systematic will or failure of a plain legal duty.” 

In reaching this determination, TERC noted the assessor had 

testified that she valued the Trusts’ properties “in the same 

way that she valued all agricultural and horticultural property in Morrill County, and that this valuation followed the 

requirements of law imposed upon her.” The assessor “looked 

at all sales, not just sales containing only grassland, to determine the assessed values for agricultural and horticultural land 

values in all classes, irrigated, dryland and grassland.” With 

respect to the specific properties at issue in this case, the court 

described the assessor’s procedure, relating that “there were 

no sales of properties with the same soil types as those on the 

[Trusts’ properties] so she utilized her training and experience 
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along with the sales information pertaining to similar rough 

rocky ridge areas to determine the assessed values for” the 

Trusts’ properties. The assessor, the court wrote, had noted in 

this regard that sales of such “rough rocky ridge areas in and 

around Morrill County were influenced by factors other than 

productivity alone.”

As compared to the assessor’s approach, TERC emphasized 

that the valuation methodology urged by the Trusts “focused 

on a single factor, production of forage, as the basis for [the] 

entire analysis, alleging that no other factors apply to grassland values in Morrill County.” TERC noted that the assessor “testified that she had no market information to indicate 

that a reclassification of grassland soil types from the flawed 

LCG’s . . . was warranted when determining assessed values 

for Morrill County.” TERC noted that although the assessor acknowledged that production capability was one factor 

to be considered when valuing grassland, the assessor also 

“testified that the sales she utilized indicated that there were 

other factors at work in the market beyond production of 

forage alone,” and that she “determined the assessed values 

for grassland in Morrill County based on all of the evidence 

before her,” which included both the concerns presented by 

the Trusts as well as the legal requirements imposed on her in 

making assessments.

Taking all this into consideration, TERC found that

while the [Trusts have] demonstrated that there are flaws 

in the LCGs classified as grassland determined by the 

PAD, the [Trusts have] failed to demonstrate that this 

flaw has resulted in assessed value determinations in 

Morrill County that are incorrect or grossly excessive 

and the result of systematic will or failure of a plain 

legal duty.

TERC further found that the Trusts did not establish by clear 

and convincing evidence that the valuations placed on their 

properties, when compared to valuations placed on similar 

property, were grossly excessive and the result of systematic 
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will or failure of a plain legal duty and not mere error 

of judgment.

TERC concluded that there was “not competent evidence to 

rebut the presumption that the . . . Board faithfully performed 

its duties and had sufficient competent evidence to make its 

determination.” TERC further concluded that there was “not 

clear and convincing evidence that the . . . Board’s decision 

was arbitrary or unreasonable.” TERC therefore denied the 

Trusts’ appeals and affirmed the valuations determined by 

the Board.

The Trusts appeal TERC’s order.

ASSIGNMENTS OF ERROR

The Trusts claim, restated and renumbered, that TERC 

erred when it (1) improperly applied the standard of review, 

(2) concluded that they failed to rebut the presumption of 

correctness as to the Board’s determinations, and (3) found 

that the Board’s valuations were not arbitrary, capricious, and 

unreasonable.

STANDARDS OF REVIEW

[1,2] Appellate courts review decisions rendered by TERC 

for errors appearing on the record. Platte River Crane Trust 

v. Hall Cty. Bd. of Equal., 298 Neb. 970, 906 N.W.2d 646 

(2018). When reviewing a judgment for errors appearing on 

the record, an appellate court’s inquiry is whether the decision 

conforms to the law, is supported by competent evidence, and 

is neither arbitrary, capricious, nor unreasonable. Id.

[3,4] Questions of law arising during appellate review of 

TERC’s decisions are reviewed de novo on the record. County 

of Webster v. Nebraska Tax Equal. & Rev. Comm., 296 Neb. 

751, 896 N.W.2d 887 (2017). Whether an agency decision conforms to the law is by definition a question of law. Id.

[5] Agency action is arbitrary, capricious, and unreasonable if it is taken in disregard of the facts or circumstances of 

the case, without some basis which would lead a reasonable 

and honest person to the same conclusion. County of Douglas 
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Cite as 299 Neb. 933

v. Nebraska Tax Equal. & Rev. Comm., 296 Neb. 501, 894 

N.W.2d 308 (2017).

ANALYSIS

The Trusts generally claim that TERC erred when it affirmed 

the Board’s decision accepting the assessor’s valuations of their 

properties for the 2016 tax year. The Trusts specifically argue 

that TERC misapplied the standard of review, that TERC erred 

when it found that the Trusts did not rebut the presumption of 

correctness of the Board’s decision, and that TERC erred when 

it failed to find the Board’s decision to be arbitrary, capricious, 

and unreasonable. We reject these assignments of error and 

affirm TERC’s order.

Standards of Review.

With regard to the standard of review that TERC is to use 

when reviewing decisions of county boards of equalization, 

Neb. Rev. Stat. § 77-5016(9) (Cum. Supp. 2016) provides 

as follows:

In all appeals, excepting those arising under section 

77-1606, if the appellant presents no evidence to show 

that the order, decision, determination, or action appealed 

from is incorrect, [TERC] shall deny the appeal. If the 

appellant presents any evidence to show that the order, 

decision, determination, or action appealed from is incorrect, such order, decision, determination, or action shall 

be affirmed unless evidence is adduced establishing that 

the order, decision, determination, or action was unreasonable or arbitrary.

[6-8] We have held that the language of § 77-5016(9) creates a presumption that a board of equalization has faithfully 

performed its official duties in making an assessment and has 

acted upon sufficient competent evidence to justify its action. 

JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. of Equal., 285 Neb. 

120, 825 N.W.2d 447 (2013). That presumption remains until 

there is competent evidence to the contrary presented, and 

the presumption disappears when there is competent evidence 
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adduced on appeal to the contrary. Id. From that point forward, the reasonableness of the valuation fixed by the board 

of equalization becomes one of fact based upon all the evidence presented. Id. The burden of showing such valuation to 

be unreasonable rests upon the taxpayer on appeal from the 

action of the board. Id. We have further stated that the burden 

of persuasion imposed on a complaining taxpayer is not met by 

showing a mere difference of opinion unless it is established 

by clear and convincing evidence that the valuation placed 

upon the property when compared with valuations placed on 

other similar property is grossly excessive and is the result of a 

systematic exercise of intentional will or failure of plain duty, 

and not mere errors of judgment. Id. The burden of persuasion 

always remains with the taxpayer. See id.

The Trusts assert that TERC misapplied the foregoing standards in this case. They argue that TERC erred when it found 

the Trusts failed to rebut the presumption of validity afforded 

by § 77-5016(9) to the Board and that it compounded the 

error by applying a presumption in favor of the Board when 

it found that the Board’s valuation of their property was not 

arbitrary, capricious, and unreasonable.

We believe that although TERC’s order as written lends itself 

to confusion, TERC did not err in its application of the correct 

standards of review. The confusion appears to result from the 

fact that TERC both concluded that there was “not competent 

evidence to rebut the presumption that the . . . Board faithfully 

performed its duties and had sufficient competent evidence to 

make its determination” and also stated that there was “not 

clear and convincing evidence that the . . . Board’s decision 

was arbitrary or unreasonable.” From these and other statements in the order, the Trusts contend that TERC improperly 

applied a presumption of reasonableness to the Board’s valuations. We reject the Trusts’ assignment of error claiming that 

TERC applied an incorrect standard of review.

It is well settled that TERC’s threshold determination should 

be whether the taxpayer presented competent evidence to rebut 
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the presumption in favor of the Board. Brenner v. Banner Cty. 

Bd. of Equal., 276 Neb. 275, 753 N.W.2d 802 (2008); US 

Ecology v. Boyd Cty. Bd. of Equal., 256 Neb. 7, 588 N.W.2d 

575 (1999). TERC’s determination of that question may often 

be informed by considering whether the taxpayer has presented 

evidence that would call into question whether the valuation 

adopted by the Board is reasonable. That is, evidence tending 

to show that the valuation is questionable can serve toward 

rebutting the presumption that the Board faithfully performed 

its duties. And where a taxpayer overcomes the presumption 

of validity for the county’s valuation, the reasonableness of 

the valuation fixed by the board of equalization becomes a 

question of fact based on all of the evidence presented. JQH 

La Vista Conf. Ctr., supra.

The Evidence.

With the foregoing explanation in mind, and as we discuss 

below, we read TERC’s order in this case as having concluded 

that the Trusts did not present competent evidence to rebut 

the presumption. See § 77-5016(9). Having concluded that the 

Trusts did not rebut the presumption, TERC did not need to, 

nor did it, make a fact finding regarding the reasonableness 

of the Board’s valuations. A fortiori, TERC did not apply an 

improper presumption relative to a hypothetical reasonableness determination.

Reading the order in this manner, we review TERC’s decision for errors appearing on the record. Our inquiry is whether 

TERC’s decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable. See Platte River Crane Trust v. Hall Cty. Bd. of Equal., 

298 Neb. 970, 906 N.W.2d 646 (2018). As discussed below, we 

conclude under this standard of review that TERC’s decision 

conforms to the law, is supported by competent evidence, and 

is neither arbitrary, capricious, nor unreasonable.

The Trusts rely on JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. 

of Equal., 285 Neb. 120, 825 N.W.2d 447 (2013), in support 
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of their argument that TERC erred when it concluded that they 

had failed to rebut the presumptions regarding the Board’s 

determinations. In JQH La Vista Conf. Ctr., we reviewed 

TERC’s decision which had affirmed a board of equalization’s 

valuations. We first determined that “TERC was incorrect 

when it concluded that the presumption of correctness was 

not overcome by competent evidence.” Id. at 126, 825 N.W.2d 

at 452. Because we determined that the taxpayer in that case 

had rebutted the presumption, we then examined whether the 

taxpayer had shown by clear and convincing evidence that the 

board’s valuation was unreasonable. Because we determined 

that the taxpayer “failed to meet its burden of showing that 

the county’s valuation was unreasonable and arbitrary,” we 

ultimately affirmed TERC’s decision. Id. at 129, 825 N.W.2d 

at 454.

In reaching the initial conclusion in JQH La Vista Conf. 

Ctr. that the taxpayer had overcome the presumption of validity, we reasoned that the taxpayer had done so by presenting 

the appraisals of a certified appraiser who testified that the 

appraisals were prepared in conformity with uniform standards 

of appraisal practice. We noted that “[t]he appraisals provided 

three alternative valuations of the [subject property], using 

each of the three methods provided for by” Neb. Rev. Stat. 

§ 77-112 (Reissue 2009). JQH La Vista Conf. Ctr., 285 Neb. at 

126, 825 N.W.2d at 453.

We note at this point that under Neb. Rev. Stat. § 77-201(1) 

(Cum. Supp. 2016), all real property, unless expressly exempt, 

is subject to taxation and is to be valued at its actual value. 

Agricultural and horticultural land is valued for taxation 

purposes at 75 percent of its value, but the starting point 

for determining taxable value is still actual value. Under 

§ 77-112, which we cited in JQH La Vista Conf. Ctr., “[a]ctual 

value . . . means the market value of real property in the 

ordinary course of trade.” Section 77-112 provides, “Actual 

value may be determined using professionally accepted mass 

appraisal methods, including, but not limited to, the (1) sales 
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comparison approach using the guidelines in section 77-1371, 

(2) income approach, and (3) cost approach.” Ultimately in 

JQH La Vista Conf. Ctr., we concluded that the taxpayer had 

rebutted the presumption of correctness of the board’s decision by presenting appraisals for the subject property, which 

appraisals were performed by a certified appraiser using 

approved methods.

In contrast to the evidence presented by taxpayers in JQH 

La Vista Conf. Ctr., the Trusts in this case attempted to rebut 

the presumption of validity by presenting valuations of their 

properties that were determined using a method that was 

not shown to be a “professionally accepted mass appraisal 

method[].” See § 77-112. The Trusts did not present evidence 

of alternate valuations calculated using methods of valuation 

that were authorized under the relevant statutes and regulations, and as we discuss below, the method urged by the Trusts 

was not appropriate. That is, we believe the Trusts’ evidence 

and methodology did not tend to show that the Board and the 

assessor failed to faithfully perform their duties or that they did 

not have sufficient competent evidence to make their determination of valuations in accordance with the law and regulations 

that govern the assessment process. The evidence in this case 

indicates instead that the Board and the assessor followed the 

relevant statutes and regulations to arrive at valuations for the 

Trusts’ properties.

TERC acknowledged that the Trusts’ evidence may have 

indicated a possible flaw in the methodology developed by the 

PAD to classify grassland properties, which methodology the 

assessor was required to employ. The assessor generally testified that she used the classifications required by the PAD and 

then valued the properties using a sales comparison approach 

based on such classifications. TERC determined that the evidence showed that the assessor and the Board followed the 

law imposed on them and valued the properties using a professionally accepted mass appraisal method. That is, TERC determined that the evidence did not indicate that the Board in this 
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case neither failed to faithfully perform its duties nor made its 

determinations based on incompetent evidence.

The Trusts’ arguments were directed to flaws in the classifications promulgated by the PAD rather than to failures on 

the part of the assessor or the Board in applying the methods 

imposed on them by law. The Trusts argued in part that the 

assessor should have made additional subclassifications based 

on productivity of the soil for grassland purposes. However, 

the assessor generally testified that in applying a sales comparison approach, she compared the subject properties to sales 

of what she determined to be comparable properties based on 

various factors, including but not limited to productivity as 

grassland. In particular, she noted that the subject properties 

were characterized by areas of “rocky, rough ground” and 

that she compared the subject properties to other properties 

with similar rough, rocky features. TERC determined that the 

Trusts did not rebut the presumption of correctness, and in 

comparison, it noted that the Trusts’ alternate methodology 

had focused on a single factor—productivity—rather than 

the multiple factors that the assessor considered in making 

sales comparisons.

The Trusts generally used sales comparisons to calculate 

a valuation per AUM, which they asserted to be the best 

measure of productivity for grassland purposes. The Trusts 

calculated a valuation per AUM for the comparison properties based on AUM for those properties and then calculated 

an alternate valuation for their properties by multiplying that 

“$/AUM” by AUM for their properties. The Trusts did not 

demonstrate or present evidence to show that this method was 

a recognized professionally accepted mass appraisal method in 

addition to those identified in § 77-112. The method appeared 

to be a modified sales comparison approach in which sales 

of other grasslands were considered but were adjusted based 

entirely on the single feature of productivity. As noted above, 

TERC rejected this approach because it focused on a single 

feature, as compared to the assessor’s testimony that she 
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considered various features of the properties to determine 

comparable sales.

We recognize that the Trusts’ reliance on AUM as a measure of productivity for grasslands finds some support in the 

law governing property valuation. Under § 77-112, an income 

approach is specifically noted as an appropriate professionally 

accepted mass appraisal method, and the regulations set forth 

an income approach for valuing grasslands based on AUM 

in appropriate circumstances. See 350 Neb. Admin. Code, 

ch. 11, § 005.03 (rev. 2009). This income approach generally 

requires capitalizing net cash rents, and specifically “in the 

case of grassland use,” net cash rents are to be determined as 

“cash rent per [AUM].” § 005.03A(3). However, in this case, 

the Trusts did not present evidence of cash rent per AUM and 

did not capitalize net cash rent in accordance with the income 

approach as set forth in this regulation. Instead, the Trusts 

used the modified sales comparison approach described above 

in which they adjusted valuations based on the sole factor of 

AUM. Given the law in this area, the valuations that resulted 

from the Trusts’ approach were not competent evidence to 

rebut the presumption that the Board faithfully performed 

its duties and had sufficient competent evidence to make 

its determination.

[9] In connection with competent evidence, we note that the 

Trusts argue that TERC erred by rejecting Green’s testimony 

which they assert was “competent evidence” to rebut the presumption of correctness. Brief for appellants at 17. They rely 

on cases in which we have said that a resident owner who 

is familiar with his or her property and knows its worth is 

permitted to testify as to its value without further foundation 

and that this principle rests upon the owner’s familiarity with 

the property’s characteristics, its actual and potential uses, 

and the owner’s experience in dealing with it. See Brenner 

v. Banner Cty. Bd. of Equal., 276 Neb. 275, 753 N.W.2d 802 

(2008). The Trusts argue that because an owner may so testify, Green’s testimony in this case was competent evidence to 
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Nebraska Supreme Court Advance S

299 Nebraska Report

BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.

Cite as 299 Neb. 933

rebut the presumption in favor of the Board. However, these 

principles relate to admissibility and foundation requirements 

for a resident owner’s testimony regarding the value of his or 

her property. And although this sort of testimony is admissible 

evidence, it does not automatically lead to the conclusion that 

such evidence constitutes competent evidence contrary to the 

presumption. That determination involves considering not only 

whether the taxpayer presented admissible evidence but specifically whether the substance of the evidence presented by 

the taxpayer was competent to rebut the presumption that the 

Board faithfully performed its duties and had sufficient competent evidence to make its determinations.

In this case, TERC did not dismiss Green’s testimony out 

of hand. Instead, TERC allowed Green to testify regarding 

the value of the property, but after considering his testimony, 

TERC concluded that it did not serve to rebut the presumption. 

As discussed above, we conclude that TERC did not err when 

it determined that Green’s testimony and other evidence presented by the Trusts did not rebut the presumption of validity 

regarding the Board’s determinations.

CONCLUSION

We conclude that TERC’s decision—in which it concluded 

that the Trusts did not present competent evidence to rebut the 

presumption that the Board faithfully performed its duties and 

had sufficient competent evidence to make its determinations—

conforms to the law, is supported by competent evidence, and 

is neither arbitrary, capricious, nor unreasonable. We therefore 

affirm TERC’s order.

Affirmed

Wright, J., not participating