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COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.

Cite as 296 Neb. 751

County of Webster, appellant, v

Nebraska Tax Equalization

Review Commission, appell

___ N.W.2d ___

Filed May 26, 2017. No. S-16-583.

1. Taxation: Judgments: Appeal and Error. By statute, an appellate court 

reviews an order from the Tax Equalization and Review Commission 

that is defined as a “final decision” under Neb. Rev. Stat. § 77-5019(5) 

(Cum. Supp. 2016) for error 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. Administrative Law: Words and Phrases. An administrative agency’s 

decision is arbitrary when it is made in disregard of the facts or circumstances without some basis which would lead a reasonable person to the 

same conclusion.

4. Administrative Law. Agency action taken in disregard of the agency’s 

own substantive rules is also arbitrary and capricious.

5. Taxation: Appeal and Error. Questions of law arising during appellate review of Tax Equalization and Review Commission decisions are 

reviewed de novo on the record.

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

7. Statutes. Statutory interpretation presents a question of law.

8. Statutes: Legislature: Intent. A court gives statutory language its 

plain and ordinary meaning and will not look beyond the statute to 

determine the legislative intent when the words are plain, direct, and 

unambiguous.

9. ____: ____: ____. Components of a series or collection of statutes 

pertaining to a certain subject matter are in pari materia and should 

be conjunctively considered and construed to determine the intent of 

Nebraska Supreme Court Online Library

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

06/30/2017 09:11 AM CDT
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the Legislature, so that different provisions are consistent, harmonious, 

and sensible.

10. Taxation. The procedures for a hearing to show cause why an adjustment should not be made to a county’s valuation of a class or subclass 

of real property are not governed by Neb. Rev. Stat. § 77-5016(4) (Cum. 

Supp. 2016).

11. ____. Neb. Rev. Stat. § 77-5027(3) (Cum. Supp. 2016) does not require 

the Property Tax Administrator to set out every property sale that the 

assessment division has included in its statistical analyses.

12. Taxation: Evidence. The Property Tax Administrator’s annual narrative and statistical reports are sufficient competent evidence to support 

the Tax Equalization and Review Commission’s equalization orders 

without including the sales file information for each real property 

transaction.

13. ____: ____. If necessary to determine the level of value and quality of 

assessment in a county, the Property Tax Administrator may use sales of 

comparable real property in market areas similar to the county or area in 

question or from another county as indicators of the level of value and 

the quality of assessment in a county.

14. Taxation: Words and Phrases. A comparable real property is one that 

is similar to the property being assessed in significant physical, functional, and location characteristics and in its contribution to value.

15. Taxation: Evidence. Because the Property Tax Administrator’s reports 

are sufficient competent evidence to support a change in valuation, Neb. 

Rev. Stat. § 77-5026 (Reissue 2009) requires a county to demonstrate 

that the Tax Equalization and Review Commission should not rely on 

the reports.

16. Public Officers and Employees: Presumptions. Absent contrary evidence, public officers are presumed to faithfully perform their official duties.

Appeal from the Tax Equalization and Review Commission. 

Affirmed.

Sara J. Bockstadter, Webster County Attorney, for appellant.

Douglas J. Peterson, Attorney General, and L. Jay Bartel for 

appellee.

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

Kelch, and Funke,
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Funke, 

NATURE OF CASE

Webster County appeals from a May 2016 order adjusting 

value issued by the Tax Equalization and Review Commission 

(TERC) which increased the “Majority Land Use Grass” subclass of the agricultural and horticultural land class of real 

property not receiving special value within Webster County 

in the amount of 6 percent. Webster County timely appealed. 

We affirm.

BACKGROUND

Before discussing TERC’s order, we explain the reporting 

requirements and equalization procedures that are relevant to 

the parties’ dispute.

Reporting and Compiling of

Property Transac

Every person who records a transfer of real property with a 

county register of deeds must file a real estate transfer statement prescribed by the Tax Commissioner.1

 The record shows 

that the transfer statement contains the type of transfer that was 

made and the type of property that was transferred. The register 

of deeds forwards the transfer statement to the county assessor, 

who processes it according to rules promulgated by Nebraska’s 

Property Tax Administrator (Administrator) and sends the 

statement to the Tax Commissioner.2 The Administrator is the 

chief administrative officer of the Department of Revenue’s 

property assessment division.3

The record also shows that county assessors must use the 

transfer statements to provide the following information to the 

assessment division within 45 days of a recorded transfer: a 

nine-digit code that identifies the parcel of property, a sales 

1 See Neb. Rev. Stat. § 76-214 (Cum. Supp. 2016).

2 See id.

3 See Neb. Rev. Stat. § 77-701(1) (Cum. Supp. 2016).
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number that the county assigns to the transaction, and a code 

that indicates whether the assessor has qualified the transfer 

as an arm’s-length transaction, with or without adjustments to 

the sales price. The Administrator uses the transfer statement 

information to maintain a “sales file” of all arm’s-length real 

property transactions in the state.4

By statute, to overturn a county assessor’s determination 

about a sale’s qualification as an arm’s-length transaction, the 

assessment division must review the sale and determine that 

the assessor is incorrect.5 By regulation, if an assessor fails 

to provide any reason to adjust a sales price or disqualify a 

sale, the assessment division can include the sale in the sales 

file without adjustment.6 If the assessor provides a reason for 

an adjustment or disqualification that complies with accepted 

mass appraisal techniques, the property assessment division 

cannot include or exclude the property until it verifies the sale 

and determines that it does not agree with the assessor.7 When 

the assessment division disagrees with the assessor, it must 

notify the assessor within 7 days that it will include or exclude 

a property sale from the sales file.8 The assessor then has 30 

days to file a protest with the Tax Commissioner.9

The Administrator is required to make the sales file available to county assessors, as well as the data used to develop 

and maintain the sales file.10 Twice a year, the assessment 

division provides county assessors with rosters that show real 

property transactions by county and by class and subclass 

4 See Neb. Rev. Stat. § 77-1327(2) (Cum. Supp. 2016).

5 See id.

6 See 350 Neb. Admin. Code, ch. 12, § 003.04A (2014).

7 See id., § 003.04C.

8 See id., § 003.04D.

9 See id., § 003.04E.

10 See, Neb. Rev. Stat. § 77-1377 (Reissue 2009); 350 Neb. Admin. Code, 

ch. 12, § 001.03 (2014).
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of property.11 An assessor can request additional rosters and 

additional information.12 Upon request, the assessment division must also provide the sales file database to TERC, county 

boards of equalization, and county assessors for use in the 

assessment and equalization of property valuations.13

After an assessor receives a sales file roster, he or she can 

protest the assessment division’s inclusion, exclusion, adjustment to a sale, or failure to adjust a property sale.14 An assessor must file the protest within 30 days of receiving the roster 

and is entitled to a hearing before the Tax Commissioner.15 The 

burden of proving that a sales roster should be altered is on 

the assessor.16

Tax Assessment Repo

Requiremen

Nebraska’s property tax equalization laws require all county 

assessors to annually prepare and file “an abstract of the 

property assessment rolls of locally assessed real property” 

on forms prescribed by the Tax Commissioner.17 The assessor 

must file the abstract with the Administrator,18 and the form 

must include the county’s assessed tax valuations for real property, by class and subclass.19 Agricultural and horticultural land 

is a class that includes several subclasses, including irrigated 

cropland, dryland cropland, grassland, and wasteland.20

11 See 350 Neb. Admin. Code, ch. 12, § 003.05 (2014).

12 See id.

13 See, § 77-1377; 350 Neb. Admin. Code, ch. 12, § 003.08 (2014).

14 See 350 Neb. Admin. Code, ch. 12, § 004.01 (2014).

15 See id., §§ 004.01C and 004.01D.

16 See id., § 004.02.

17 Neb. Rev. Stat. § 77-1514(1) (Cum. Supp. 2016).

18 See id.

19 See, id.; 350 Neb. Admin. Code, ch. 60, § 002.02A (2014).

20 See Neb. Rev. Stat. §§ 77-1359 and 77-1363 (Cum. Supp. 2016).
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The Administrator files annual reports regarding these 

abstracts with TERC. The reports contain the assessment division’s statistical analyses and the Administrator’s opinion on 

the level of value and quality of assessment for each type of 

real property, by class and subclass, in each county.21 For agricultural and horticultural land, the study period of each county’s sales data is 3 years.22 The assessment division performs 

assessment ratio studies, based on the sales file, of a county’s 

average level of assessment, the degree of assessment uniformity, and the overall compliance with assessment requirements for each major class.23 The Administrator can require 

tax assessors and other taxing authorities to report an assessed 

value and other features of property assessment.24

Statutory Equalizat

Procedur

After receiving the Administrator’s reports, TERC must 

annually equalize the value or special value of assessed real 

property as submitted by the county assessors.25 For the purpose of assessing property taxes, nonexempt agricultural and 

horticultural land, “as defined in section 77-1359,” is valued at 

75 percent of its actual value.26

Actual value of real property for purposes of taxation 

means the market value of real property in the ordinary 

course of trade. . . . Actual value is the most probable 

price . . . that a property will bring if exposed for sale 

in the open market, or in an arm’s length transaction, 

between a willing buyer and willing seller, both of whom 

are knowledgeable concerning all the uses to which the 

21 See, § 77-1327(3); Neb. Rev. Stat. § 77-5027(3) (Cum. Supp. 2016).

22 See 350 Neb. Admin. Code, ch. 12, § 003.07A(3) (2014).

23 § 77-1327(3).

24 § 77-1327(5).

25 Neb. Rev. Stat. § 77-5022 (Cum. Supp. 2016).

26 Neb. Rev. Stat. § 77-201(2) (Cum. Supp. 2016).
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real property is adapted and for which the real property is 

capable of being used.27

But under Neb. Rev. Stat. § 77-5023(1) (Reissue 2009), 

TERC can adjust the “value of a class or subclass of real property” in any county “so that all classes or subclasses of real 

property in all counties fall within an acceptable range.” “An 

acceptable range is the percentage of variation from a standard 

for valuation as measured by an established indicator of central tendency of assessment.”28 TERC’s regulations provide that 

“[i]ndicators of central tendency include the mean, median, 

and mode.”29

TERC’s final equalization order states that it uses an 

“assessment/sales ratio” to measure and evaluate the level 

and uniformity of assessed values and that the level of value 

for any class or subclass is indicated by the median ratio. 

Under regulations promulgated by TERC and the assessment 

division, an assessment/sales ratio is determined by dividing a property’s assessed value by its selling price.30 For 

example, a property that has a tax assessment value of $59,500 

and sold for $85,000 is assessed at 70 percent of its selling 

price. The real property transactions that are analyzed for a 

class or subclass are collectively referred to as a “sample.”31

The assessment division’s preferred measure of central tendency in a sample is the median (middle) ratio or average 

of the two median ratios, which ratio is also referred to as 

the “level of value” for a class or subclass.32 The division 

defines “level of value” to mean the “most probable overall 

opinion of the relationship of assessed value to actual value 

27 Neb. Rev. Stat. § 77-112 (Reissue 2009).

28 § 77-5023(2) (emphasis supplied).

29 442 Neb. Admin. Code, ch. 9, § 002.10 (2011).

30 See id., § 002.02. See, also, 350 Neb. Admin. Code, ch. 12, § 002.04 

(2014).

31 See 350 Neb. Admin. Code, ch. 17, § 004.01 (2013).

32 See, id., § 004.01B; 350 Neb. Admin. Code, ch. 12, § 002.09 (2014).
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for a political subdivision.”33 But “[i]f the sample of sales is 

not representative of the properties in the county or market 

area, the Division may expand its analysis to include sales in 

adjoining counties that share similar market and geographic 

characteristics.”34

In sum, these regulations show that the “level of value” 

for a class or subclass operates as the “established indicator 

of central tendency of assessment.”35 The level of value for 

agricultural and horticultural land must reflect that the county 

valuates such property at 69 to 75 percent of actual value to 

fall within the acceptable range of variation.36

If TERC makes an initial determination that the level of 

value for a class or subclass does not fall within the acceptable range, then it must issue a notice to the county and set 

a date for a hearing.37 “At the hearing the county assessor 

or other legal representatives of the county may appear and 

show cause why the value of a class or subclass of real 

property of the county should not be adjusted.”38 Under 

§ 77-5023(3), any increase or decrease that TERC makes to a 

class or subclass must adjust its level of value to the midpoint 

of the acceptable range of variation. Under another subsection 

of that statute, any increase or decrease in property values 

that TERC makes to a subclass must result in the level of 

value for the entire class falling within the acceptable range 

of variation.39

With these simplified statistical methods and procedural 

requirements set out, we turn to the facts of this case.

33 350 Neb. Admin. Code, ch. 12, § 002.03 (2014).

34 350 Neb. Admin. Code, ch. 17, § 004.01B(2) (2013); § 77-5027(5).

35 § 77-5023(2).

36 Id.

37 See Neb. Rev. Stat. § 77-5026 (Reissue 2009).

38 Id.

39 See § 77-5023(4).
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Administrator’s Repo

for Webster Count

After the Webster County assessor filed her assessment 

abstracts with the Administrator, the Administrator filed with 

TERC the assessment division’s reports and her certified 

opinion that the assessed valuations for the subclass of grassland should be adjusted upward in Webster County by 9 

percent. The report stated that in analyzing Webster County’s 

agricultural assessments, the assessment division considered 

real property in the surrounding counties of Adams, Clay, 

Nuckolls, Kearney, and Franklin to be comparable. The report 

stated that because the sales of agricultural property within 

Webster County were inadequate to produce a reliable analysis, sales from these surrounding counties were also included 

in the sample.40 Additionally, the assessment division included 

three Webster County grassland transactions in the sample 

that had sold as grassland but were later disqualified by 

the assessor.

The report concluded that “[w]ithin the statistical analysis, 

the 80% majority land use for each class contains a sufficient 

number of sales.” It noted that grassland values in the region, 

like those in most of the state, had increased in recent years. 

But it concluded that Webster County’s values for grassland 

were not equalized with the surrounding counties and that the 

level of value for grassland was below the acceptable range of 

variation and did not meet generally accepted mass appraisal 

practices. The administrator recommended a 9-percent upward 

adjustment to bring the level of value for the grassland subclass up to 72 percent and “result in an overall level of value 

for agricultural land of 69%.”

Show Cause Or

After receiving the Administrator’s recommendation, TERC 

issued an order for Webster County to show cause why the 

40 See § 77-5027(5).
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proposed upward adjustment should not be made. The order 

set out the Administrator’s conclusions that the level of value 

for grassland “by the median for the strata Majority Land Use 

> 80% Grass . . . is 66.07% of actual or fair market value.” 

The order stated that the level of value for grassland was not 

within the acceptable range of variation to a reasonable degree 

of certainty and scheduled a hearing.

Show Cause Hea

On April 26, 2016, a hearing was held at which representatives of Webster County appeared to present evidence and 

argument as to why the proposed adjustments should not be 

made. The county assessor testified that using the State’s database of property sales, she incorporated four grassland sales 

from other counties to determine the level of value for grassland in Webster County. She “borrowed” two grassland sales 

from Franklin County and two from Nuckolls County.

But the assessor disputed three other sales that the assessment division incorporated to assess the level of value for 

grassland in Webster County. She argued that one sale from 

Nuckolls County should not have been included, because part 

of the parcel contained tree cover. She stated that Webster 

County did not separate grassland from timberland; if a parcel 

was less than 80 percent grassland, she classified the property 

as wasteland.

Additionally, the assessor argued that the assessment 

division had improperly included two grassland sales from 

Webster County, sold in the first year of the 3-year study 

period, because the owners had substantially changed their 

use of the property. She stated that although the properties 

were grassland when purchased, within a couple of years, the 

owners started using the parcels as dry cropland. When she 

originally included these two sales as grassland in her 2016 

abstracts, she concluded that the level of value for grassland 

in Webster County was 66.07, which is below the acceptable 

range of 69 to 75 percent of actual value. But she stated that 
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she contacted the owners before preparing her final abstracts 

and after concluding that they had purchased the grassland 

properties with the intent to use the land as dry cropland, she 

disqualified these sales for use in the 3-year study. For the 

same reason, she adjusted the sales price for other grassland 

property sales.

In sum, the assessor determined the level of value for 

grassland by excluding the two grassland sales from the first 

year of the study period, making adjustments to other sales, 

and incorporating four grassland sales from other counties 

into her study. She concluded that the level of value for 80 

percent grassland property in Webster County was 69.93 percent, which was within the acceptable range of variation. She 

conceded that she had not increased the value of grassland in 

Webster County for 2016 despite increasing it in the previous 

2 years. She stated that her goal for 2016 was to “leave the 

farmers alone” because “we’ve hit them so hard for so many 

years.” She further stated that although her level of value for 

grassland was low, she knew she would have to increase those 

valuations in 2017 when she could no longer include the oldest 

and lowest sales prices in the 3-year study period.

Sarah Scott, an agricultural land specialist, testified for the 

assessment division. The Administrator’s reports showed that 

the division used 17 sales of grassland to evaluate the level 

of value for that subclass in Webster County. Scott stated 

that the division had incorporated four of these sales from 

Nuckolls County and Franklin County. She said that the difference between the assessor’s analysis and the assessment division’s analysis was four property transactions that the division 

included and the assessor did not. One was an in-kind property 

exchange for which the assessor had not provided a reason 

to disqualify it. One was the sale of a parcel in Nuckolls 

County that contained a wooded portion. The final two were 

the grassland sales that the assessor had disqualified because 

the owners had substantially changed the property’s use to 

dry cropland.
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Scott explained that even if the assessor had changed the 

classification of the two Webster County properties, the assessment division could still use those sales in determining the 

value of grassland—because at the time those properties were 

sold, their sale price represented the value of grassland. She 

stated that this determination was not automatic; it is made 

after consulting with the assessor. But she believed that the 

assessor had earlier agreed with a field liaison that the two 

sales were representative of the value of grassland at the 

time of the sales. The assessor admitted that when Scott contacted her about these sales, she did not argue with her about 

including them in the analysis. And she admitted that she had 

included the in-kind property exchange in her analysis after 

discussing the transaction with Scott.

Most important, she agreed that her dispute with the 

Administrator boiled down to three property sales: the two 

Webster County sales she had disqualified and the partially 

wooded property sale from Nuckolls County that the assessment division had incorporated. She stated that she “didn’t 

really have a problem” with incorporating sales from Nuckolls 

County but pointed out that a college professor had told 

her Nuckolls County was not really comparable, because 

Webster County did not get much rain. She admitted, however, 

that she had not been able to find any evidence to support 

that belief.

Regarding the Nuckolls County parcel, Scott stated that 

under the assessment division’s regulations, timber cover over 

grassland is properly classified as grassland. She stated that 

the parcel would still be classified as grassland even if it 

contained 25 percent timber. And she testified that Nuckolls 

County had reported it as an 80-percent grassland sale.

Finally, Scott testified that in the area of the state where 

Webster County is located, grassland prices had increased by 

15 to 20 percent—because high commodity prices had encouraged buyers to purchase grassland and convert it to dry cropland. Because the value of grassland in Webster County did 
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not reflect this market trend, she believed the assessed values 

should be increased.

After this testimony, TERC received valuation analyses 

that it had requested from the Administrator. These analyses 

excluded two agricultural sales, one of which was a grassland 

sale. Excluding these two sales resulted in a level of value of 

67.82 percent for grassland and an overall level of value of 69 

percent for agricultural property. After a recess, the commissioners voted to increase the assessed value of grassland by 6 

percent. One of the two commissioners explained that he was 

motivated to depart from the Administrator’s recommendation 

of a 9-percent increase because of the effect of high commodity prices on the grassland property market.

Order Adjusting 

TERC’s May 2016 order stated that the level of value for 

grassland in Webster County was 66.07 percent, which was the 

same level of value that the assessment division reached without excluding any property sales from the sample. This statement indicates that TERC chose not to exclude any properties 

from the sample, and nothing in its order states otherwise. 

But consistent with TERC’s vote at the hearing, it ordered the 

assessor to increase Webster County’s assessment valuation 

of grassland by 6 percent. This increase caused the level of 

value for “Majority Land Use Grass” to be 72 percent of fair 

market value and the overall level of value for agricultural and 

horticultural land in Webster County to be 69 percent of fair 

market value.

ASSIGNMENTS OF ERROR

Webster County assigns, restated, that in adjusting the level 

of value for grassland upward by 6 percent, TERC improperly 

relied on the Administrator’s statistical reports and opinion, 

because they (1) were not supported by competent evidence 

and (2) incorporated noncomparable property sales, contrary to 

statutory requirements.
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STANDARD OF REVIEW

[1,2] By statute, we review a TERC order that is defined as 

a “final decision” under Neb. Rev. Stat. § 77-5019(5) (Cum. 

Supp. 2016) for error on the record.41 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.42

[3,4] An administrative agency’s decision is arbitrary when 

it is made in disregard of the facts or circumstances without 

some basis which would lead a reasonable person to the same 

conclusion.43 Agency action taken in disregard of the agency’s 

own substantive rules is also arbitrary and capricious.44

[5-7] Questions of law arising during appellate review of 

TERC decisions are reviewed de novo on the record.45 Whether 

an agency decision conforms to the law is by definition a 

question of law.46 Statutory interpretation presents a question 

of law.47

ANALYSIS

Webster County contends TERC relied on a statistical analysis that was not supported by competent evidence and incorporated property sales from other counties that were not comparable to grassland in Webster County. Webster County further 

contends that the report did not set out information about 

41 See JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. of Equal., 285 Neb. 120, 

825 N.W.2d 447 (2013).

42 Id.

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

(2008).

44 Blakely v. Lancaster County, 284 Neb. 659, 825 N.W.2d 149 (2012).

45 Brenner, supra note 43.

46 Blakely, supra note 44.

47 In re Guardianship & Conservatorship of Kaiser, 295 Neb. 532, 891 

N.W.2d 84 (2017).
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each real property transaction that was used for the statistical analysis.

Assessment Division’s Statisti

Narrative Reports Were Suffic

Competent Evidence to Su

TERC’s Adjustmen

Webster County argues that under Neb. Rev. Stat. 

§ 77-5016(4) (Cum. Supp. 2016), all records and documents 

on which TERC relies, apart from specified evidence, must 

be made part of the record, and that this statute precludes 

TERC from considering any other factual information or 

evidence. It argues that because the inclusion or exclusion 

of a property sale can affect the level of value analysis and 

require an adjustment, the assessment division must include 

the actual sales it relies on in the reports that it presents to 

TERC. Webster County further argues that TERC erred in 

relying on the Administrator’s reports for Webster County, 

because those reports failed to show (1) the actual property 

sales that the Administrator relied on to support her opinion, (2) the selling price and assessed value of each property 

sale on which the Administrator relied, and (3) the geographic characteristics for each sold property on which the 

Administrator relied.

TERC counters that § 77-5027(3), which sets out the criteria for the Administrator’s annual reports and opinions, does 

not require the level of specificity for which Webster County 

argues. TERC contends that such detail would be neither 

feasible nor desirable. Instead, it points to § 77-5026, under 

which a “county assessor or other legal representatives of the 

county may appear and show cause why the value of a class or 

subclass of real property . . . should not be adjusted” if TERC 

schedules an adjustment hearing.

We disagree with Webster County’s interpretation of 

§ 77-5016(4), and we agree with TERC’s interpretation of 

§§ 77-5026 and 77-5027(3).
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[8,9] A court gives statutory language its plain and ordinary 

meaning and will not look beyond the statute to determine the 

legislative intent when the words are plain, direct, and unambiguous.48 Components of a series or collection of statutes 

pertaining to a certain subject matter are in pari materia and 

should be conjunctively considered and construed to determine the intent of the Legislature, so that different provisions 

are consistent, harmonious, and sensible.49

[10] First, the procedures for a hearing to show cause 

why an adjustment should not be made to a county’s valuation of a class or subclass of real property are not governed 

by § 77-5016(4). Under Neb. Rev. Stat. § 77-5013 (Cum. 

Supp. 2016), TERC has exclusive jurisdiction over appeals 

and petitions regarding matters within its jurisdiction.50 Section 

77-5016 specifically refers to those types of hearings and sets 

out the procedural and evidentiary requirements for them. But 

a show cause hearing to determine the validity of an adjustment does not arise from a petition or appeal. Instead, it is part 

of TERC’s equalization procedures pursuant to Neb. Rev. Stat. 

§ 77-5022 et seq. (Reissue 2009 & Cum. Supp. 2016).

Under § 77-5022, TERC is required to “annually equalize 

the assessed value . . . of all real property as submitted by 

the county assessors on the abstracts of assessments.” Section 

77-5023(1) grants TERC the power to increase or decrease 

the value of a class or subclass of real property in any county 

or taxing authority or of real property valued by the state so 

that all classes or subclasses of real property in all counties 

fall within an acceptable range. Finally, § 77-5026 requires 

TERC to provide notice to the counties of any undervalued or 

overvalued class or subclass of real property and the right to 

request a hearing to contest TERC’s determination. None of 

these statutes set forth evidentiary requirements for the process of changing valuations.

48 In re Interest of Nizigiyimana R., 295 Neb. 324, 889 N.W.2d 362 (2016).

49 In re Interest of Tyrone K., 295 Neb. 193, 887 N.W.2d 489 (2016).

50 See Neb. Rev. Stat. § 77-5007 (Cum. Supp. 2016).
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[11] Second, TERC correctly argues that § 77-5027(3) 

does not require the Administrator to set out every property 

sale that the assessment division has included in its statistical 

analyses. It merely requires that the Administrator’s annual 

report and opinion contain statistical and narrative reports 

sufficient to inform TERC of the level of value and the quality of assessments for the classes and subclasses of property 

within a county. If the Legislature had intended the reports 

to include this information, it would have specified that 

requirement.

Equally important, the reporting requirements and equalization procedures that we have set out above illustrate that 

including the data for every property sale is not a necessary 

requirement for TERC to rely on the Administrator’s reports. 

To recap, each county assessor must inform the assessment 

division of the real property transfers in the county and classify those properties by class and subclass. The assessment 

division then provides all county assessors with biannual rosters of the individual property transactions in the sales file, by 

county and by class and subclass of property. If an assessor 

disagrees with the inclusion of a property in the roster, it can 

request more information from the assessment division and 

file a protest.

Similarly, the assessment division must notify an assessor 

if it disagrees with the assessor’s disqualification or adjustment of a property sale in the assessor’s annual abstracts. The 

assessor can then file a protest if he or she disagrees with the 

division’s inclusion, exclusion, adjustment, or failure to adjust 

a property sale.

Additionally, upon request, the assessment division must 

provide the sales file database to TERC. So if TERC has 

concerns about the report, it has access to the same sale 

files information that a county assessor does. Another check 

against mistakes exists in the show cause hearing itself. That 

is, the Legislature has authorized county representatives to 

appear before TERC to show why it should not rely on the 

Administrator’s reports.
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[12] These procedural requirements ensure that a property is not included in the sales file without an opportunity for a county assessor to correct a perceived mistake.51

Additionally, the county assessor appeared to know which 

properties that the assessment division had incorporated from 

other counties, because she argued that one of the sales was 

not comparable to grassland in Webster County. To require 

the assessment division to essentially restate the sales rosters 

in its annual reports to TERC would be unnecessarily duplicative and costly. Whether the Administrator’s report should 

include that information is a decision for the Legislature to 

make, and it has chosen not to do so. We conclude that the 

Administrator’s annual narrative and statistical reports are 

sufficient competent evidence to support TERC’s equalization 

orders without including the sales file information for each 

real property transaction.

County Assessor Failed to Demonstrat

Property Assessment Division Inco

Property Sales From Other Cou

That Were Not Comparabl

Webster County argues that “at least some of the sales” 

from other counties used by the assessment division were not 

geographically comparable to grassland in Webster County.52

However, the record indicates that it disputed only the one 

grassland property in Nuckolls County as not comparable.

[13] If necessary to determine the level of value and quality 

of assessment in a county, the Administrator may use sales of 

comparable real property in market areas similar to the county 

or area in question or from another county as indicators of the 

level of value and the quality of assessment in a county.53

[14] Webster County correctly argues that a comparable real 

property is one that is “similar to the property being assessed 

51 § 77-1327.

52 Brief for appellant at 12.

53 § 77-5027(5).
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in significant physical, functional, and location characteristics 

and in [its] contribution to value.”54 But the county assessor 

failed to show that any sales the assessment division incorporated from other counties were not comparable to grassland 

property in Webster County.

[15] As explained, under § 77-5026, a hearing arises from 

a TERC order to show cause why an assessment adjustment 

should not be made to a class or subclass of property. Because 

the Administrator’s reports are sufficient competent evidence 

to support a change in valuation,55 § 77-5026 requires a county 

to demonstrate that TERC should not rely on the reports. This 

burden is consistent with a county assessor’s burden to demonstrate to the Tax Commissioner that a sales roster for the 

county should be adjusted.

The record shows that the Administrator used four borrowed grassland sales: two from Franklin County and two from 

Nuckolls County. The Administrator also used two sales within 

Webster County which the assessor had previously deemed 

not comparable because the use of the land had substantially 

changed from grassland to dry cropland.

The assessor testified that the Franklin County sales were 

comparable to Webster County, but that the Nuckolls County 

sales were not comparable, because Nuckolls County receives 

more rainfall than Webster County. However, Webster County 

provided no evidence to support the assessor’s belief that 

Nuckolls County received more rainfall. Further, the assessor 

also testified that she “didn’t really have a problem” with the 

Nuckolls County sales. In fact, she incorporated two property 

sales from Nuckolls County for her own analysis.

At the show cause hearing, the county assessor admitted 

that her dispute with the Administrator’s reports involved three 

property sales: a parcel that contained tree cover in Nuckolls 

County and two parcels of grassland from Webster County that 

the assessor had disqualified as being substantially changed.

54 Neb. Rev. Stat. § 77-1371 (Cum. Supp. 2016).

55 See § 77-5027(3) and (4).
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The assessor agreed that she had not argued with Scott 

about the division’s inclusion of the two sales from Webster 

County, and Webster County has not raised these property 

sales on appeal. Because the assessor stipulated as to which 

property sales she disputed, those were the only disputes properly before TERC. Further, the only disputed property which 

was raised in Webster County’s brief is the one regarding 

the Nuckolls County parcel with tree cover. As a result, the 

Nuckolls County property is the only disputed parcel before 

us on appeal.

As previously mentioned, the disputed sale from Nuckolls 

County was partially covered with timber. The assessor testified that the parcel was 75-percent grassland and 25-percent 

timber. For this reason, Webster County argues that the property could not satisfy the 80-percent majority land use standard 

for property classifications. Webster County also contends that 

Scott, the division’s agricultural land specialist, admitted this 

property comprised 75-percent grassland and 25-percent timber 

and that as a result it was not comparable.

The parties have not pointed to a statute or regulation that 

shows TERC or the assessment division imposes an 80-percent 

majority land use standard for property classifications. However, 

because the standard was mentioned in the Administrator’s 

report, at the adjustment hearing, and in TERC’s orders, we 

assume for this appeal that the standard exists. But Webster 

County’s argument that the Nuckolls County parcel did not 

satisfy the 80-percent land use standard is refuted by the record 

and the assessment division’s regulations.

The assessment division defines grassland as follows:

Grassland is the state and condition of the range based 

on what it is naturally capable of producing. Grassland 

includes all types of grasses . . . used for grazing or 

mowed for hay. . . . Areas of wooded grazing land are 

classified as grassland not timberland or wasteland. When 

there are significant areas of trees or timber on a parcel, 

and it can no longer be grazed, consideration needs to be 
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given to placing the affected acres in the forestland and 

timberland category.56

Consistent with its definition of grassland, the assessment 

division defines timberland and forestland to be “land which 

is wooded by nature or humans and consisting of a dense 

growth of trees and underbrush such that it is not suitable 

for grazing.”57

Scott testified that under these regulations, timber cover 

over grassland is properly classified as grassland, even if this 

characteristic comprised 25 percent of a parcel. Equally important, she testified that Nuckolls County had reported the sale of 

this property as an 80-percent grassland sale.

[16] Absent contrary evidence, public officers are presumed 

to faithfully perform their official duties.58 So just as we assume 

that the land use standard exists, we also assume that the 

county assessor for Nuckolls County properly applied it. The 

Webster County assessor presented no evidence to show that 

tree cover rendered 25 percent of the Nuckolls County parcel 

unusable for grazing. We conclude that Webster County failed 

to show that the Administrator’s reports included property sales 

that were not comparable to grassland in Webster County.

CONCLUSION

We conclude that the Administrator’s required reports under 

§ 77-1327 are competent evidence to support a TERC equalization order without including the sales file information for 

each real property transaction. We conclude that at a show 

cause hearing, a county has the burden to demonstrate that 

TERC should not rely on the Administrator’s reports. Finally, 

we conclude that Webster County failed to meet that burden. 

Accordingly, we affirm.

Affirmed

56 350 Neb. Admin. Code, ch. 14, § 002.31 (2014).

57 Id., § 002.29.

58 Johnson v. Neth, 276 Neb. 886, 758 N.W.2d 395 (2008).