Nebraska Advance Sheets

HAROLD WARP PIONEER VILLAGE FOUND. v. EWALD 19

Cite as 287 Neb. 19

Harold Warp Pioneer Village Foundation, appellant, 

v. Doug Ewald, Tax Commissioner, 

et al., appellees.

___ N.W.2d ___

Filed December 13, 2013. Nos. S-13-129, S-13-165.

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. An appellate court reviews questions of law arising during appellate review of decisions by the Tax Equalization and Review 

Commission de novo on the record.

Appeals from the Tax Equalization and Review Commission. 

Reversed and remanded with directions.

Daniel L. Aschwege, of Knapp, Fangmeyer, Aschwege, 

Besse & Marsh, P.C., for appellant.

Jon Bruning, Attorney General, and Jonathan D. Cannon, 

Special Assistant Attorney General, for appellees Doug Ewald 

and Ruth Sorensen.

Heavican, C.J., Wright, Connolly, Stephan, McCormack, 

Miller-Lerman, and Cassel, JJ.

Stephan, J.

The Harold Warp Pioneer Village Foundation (Foundation) 

owns and operates the Pioneer Village Museum in Minden, 

Nebraska. The Foundation also owns and operates a nearby 

motel and campground; both are used primarily by museum 

visitors. For many years, the museum, the motel, and the campground have all been granted property tax exemptions. When 

the Kearney County Board of Equalization granted the exemptions for 2011, state tax officials appealed to the Nebraska Tax 

Equalization and Review Commission (TERC), contending 

the motel and campground were not entitled to exemptions. 

TERC agreed, and the Foundation has appealed from those 
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20 287 NEBRASKA REPORTS

determinations. We conclude that the motel and campground 

are beneficial to the museum and reasonably necessary to further its educational mission and are therefore entitled to property tax exemptions.

BACKGROUND

The Foundation is a Nebraska nonprofit corporation which 

owns and operates the museum. The museum is an educational 

institution designed to preserve history and technology for 

future generations. The museum displays approximately 50,000 

exhibits in 28 buildings on 20 acres of land. A museum patron 

wishing to view every exhibit offered would need to visit the 

museum every day for more than 1 week. Approximately 30 

percent of museum patrons spend more than 1 day viewing 

the exhibits.

The Foundation also owns and operates an 88-room motel 

and a campground located near the museum. The campground 

offers sites for recreational vehicles and tents. The motel and 

campground are open to the public, but their primary purpose 

is to lodge patrons of the museum. Of the 17,072 guests of the 

motel and campground in 2010, only 4.2 percent did not attend 

the museum. There are no other lodging facilities in Minden 

or Kearney County suitable to accommodate museum patrons. 

The closest campground is 12 miles away, and the closest 

motel is approximately 20 miles away. Without the revenue 

generated by the motel and campground, the museum would 

not have sufficient funds to continue its operations.

The Foundation applied for and was granted property tax 

exemptions for the museum, the motel, and the campground 

every year from 1984 to 2010. In 2011, the Foundation again 

applied for these property tax exemptions. The county assessor 

recommended an exemption be granted for the museum but 

denied exemptions for the motel and campground. However, 

the board granted all three exemptions.

Doug Ewald, the Nebraska Tax Commissioner, and Ruth 

Sorensen, the Nebraska Property Tax Administrator, perfected 

appeals to TERC. One appeal challenged the exemptions for 

the motel, and another appeal challenged the exemption for 

the campground. TERC conducted a consolidated hearing and 
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HAROLD WARP PIONEER VILLAGE FOUND. v. EWALD 21

Cite as 287 Neb. 19

ultimately determined that because the motel and campground 

were not used exclusively for educational purposes, neither 

was entitled to tax exemptions under Nebraska law.1 The 

Foundation filed timely appeals, which we consolidated for 

briefing and oral argument.

ASSIGNMENTS OF ERROR

The Foundation assigns that TERC erred in finding that 

(1) the motel and campground were not used exclusively for 

educational purposes, (2) competent evidence was presented 

to rebut the presumption that the board faithfully performed 

its duties and had sufficient competent evidence to make its 

determinations, and (3) the board’s decision was arbitrary 

or unreasonable.

STANDARD OF REVIEW

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

for errors appearing on the record.2 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

[3] An appellate court reviews questions of law arising 

during appellate review of decisions by TERC de novo on 

the record.4

ANALYSIS

The property tax exemption at issue in these cases is governed by § 77-202. With certain exceptions not applicable 

to this case, the statute provides that property in Nebraska 

1 See Neb. Rev. Stat. § 77-202(1)(d) (Supp. 2011).

2 Neb. Rev. Stat. § 77-5019(5) (Cum. Supp. 2010); Krings v. Garfield 

Cty. Bd. of Equal., 286 Neb. 352, 835 N.W.2d 750 (2013). See Bethesda 

Found. v. Buffalo Cty. Bd. of Equal., 263 Neb. 454, 640 N.W.2d 398 

(2002).

3 Lozier Corp. v. Douglas Cty. Bd. of Equal., 285 Neb. 705, 829 N.W.2d 652 

(2013); Schuyler Apt. Partners v. Colfax Cty. Bd. of Equal., 279 Neb. 989, 

783 N.W.2d 587 (2010).

4 Lozier Corp. v. Douglas Cty. Bd. of Equal., supra note 3.
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22 287 NEBRASKA REPORTS

“owned by” an educational organization “for the exclusive 

benefit” of that organization is exempt from property tax if it 

is “used exclusively for educational” purposes.5 An educational 

organization includes “a museum or historical society operated exclusively for the benefit and education of the public.”6

“Exclusive use” means the predominant or primary use of the 

property as opposed to incidental use.7

The relevant facts summarized above are not in dispute. 

The parties agree that the museum is operated exclusively for 

educational purposes. They also agree that the primary purpose 

of both the motel and the campground is to provide lodging 

for museum patrons. But the parties disagree as to whether the 

motel and campground are “used exclusively” for educational 

purposes so as to be entitled to property tax exemptions.

The Foundation argues that because approximately 95 percent of the motel and campground guests are museum patrons, 

the motel and campground are used exclusively to further the 

educational purposes of the museum. In essence, the Foundation 

concedes that the motel and campground are not educational 

in and of themselves. But it argues that they should be considered to be used for educational purposes because they are 

beneficial to the museum and reasonably necessary to support 

its operation, which is an educational purpose. In other words, 

the Foundation asks us to view the entire global structure of 

its operation as one integrated body that exclusively promotes 

educational purposes.

On the other hand, the Tax Commissioner and the Property 

Tax Administrator ask us to focus more narrowly on the use 

of the motel and campground. They contend that because 

these facilities are used only for lodging, which itself is not 

an educational use, any incidental benefit they may have 

to the museum is not sufficient to exempt them from property taxation.

5 § 77-202(1)(d).

6 § 77-202(1)(d)(B).

7 See, 350 Neb. Admin. Code, ch. 40, § 005.03 (2013); Fort Calhoun Bapt. 

Ch. v. Washington Cty. Bd. of Eq., 277 Neb. 25, 759 N.W.2d 475 (2009); 

Bethesda Found. v. Buffalo Cty. Bd. of Equal., supra note 2.
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HAROLD WARP PIONEER VILLAGE FOUND. v. EWALD 23

Cite as 287 Neb. 19

TERC concluded on the basis of the undisputed facts that 

the Foundation was not entitled to exemptions for the motel 

and campground. Under our standard of review, we must 

decide whether this determination “conforms to the law.”8 In 

the context of this case, we regard this as a question of law 

which we review de novo on the record.9

TERC found our 1961 decision in Doane College v. County 

of Saline10 to be “controlling.” In that case, Doane College 

applied for tax-exempt status for two separate facilities located 

on its campus. One was a residence reserved for the college 

president, and the other was an apartment complex located on 

campus and provided for the exclusive use of new faculty. The 

county board determined that neither property was tax exempt. 

Doane College appealed to the district court—this was prior 

to the existence of TERC—and that court determined that the 

president’s residence was exempt but the faculty apartments 

were not.

Doane College then appealed to this court. We affirmed the 

judgment of the district court. In doing so, we found various 

factors supporting the exemption for the president’s residence, 

including that the president was required to live in the residence; that the residence was used as a reception area for faculty, foreign visitors, and trustees; and that the residence was 

used for various student gatherings. We also noted that one 

room of the residence was used as the president’s library and 

office. We held that this evidence demonstrated that the residence was used exclusively for educational purposes, because 

the primary or dominant use of the property was for education, 

and that thus, the president’s residence was exempt from property taxation.

We concluded that the faculty apartments were not exempt, 

reasoning they were located on the main campus and were 

rented at fair market value to new faculty who were permitted but not required to reside there. We noted that more than 

8 Lozier Corp. v. Douglas Cty. Bd. of Equal., supra note 3; Schuyler Apt. 

Partners v. Colfax Cty. Bd. of Equal., supra note 3.

9 Id.

10 Doane College v. County of Saline, 173 Neb. 8, 112 N.W.2d 248 (1961).
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24 287 NEBRASKA REPORTS

two-thirds of the faculty resided elsewhere. And we reasoned 

that although faculty residing in the apartments sometimes met 

with students there, any educational use of the faculty apartments was remote, and that their primary or dominant use was 

not for educational purposes. We also specifically noted that 

the apartments were in direct competition with privately owned 

property for renters.

As in Doane College, the issue in this case is not whether 

the Foundation uses its property for an educational purpose, 

but, rather, how much of its property is used for that purpose. 

Two cases decided by this court after Doane College provide 

the proper analytical framework for resolving this issue. Lariat 

Boys Ranch v. Board of Equalization11 involved a contiguous 

1,000-acre tract owned by a nonprofit corporation which operated it as a “ranch home” for “indigent and wayward boys.” 

The property owner contended that the entire tract was used 

for this purpose and was therefore exempt. The county, on the 

other hand, contended that the exemption should be limited to 

the 5 acres on which the boys’ residences and school building were located. The county argued that the remaining land, 

most of which was used for grazing and farming, should not 

be exempt. We held that the entire tract was exempt because it 

was reasonably needed to promote the nonprofit’s educational 

goals and was not excessive for that purpose. We noted that the 

determination of which facilities were reasonably necessary to 

carry out the educational goals of an entity should be undertaken on a case-by-case basis.

We again addressed the issue of whether specific property 

should be included within an exemption granted to a nonprofit 

corporation in Immanuel, Inc. v. Board of Equal.12 In that 

case, it was undisputed that the property owner was entitled to 

tax exemptions for its hospital and hospital grounds because 

they were used for charitable purposes. The hospital built a 

childcare facility on its campus for the exclusive use of its 

employees in order to promote recruitment and retention of 

11 Lariat Boys Ranch v. Board of Equalization, 181 Neb. 198, 199, 147 

N.W.2d 515, 516 (1966).

12 Immanuel, Inc. v. Board of Equal., 222 Neb. 405, 384 N.W.2d 266 (1986).
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Cite as 287 Neb. 19

professional employees. The hospital appealed from a denial 

of its application for tax exemption for the childcare facility. This court determined the childcare facility was entitled 

to the requested exemption. Distinguishing Doane College, 

upon which the county relied, we held that the childcare 

facility directly benefited the hospital by alleviating staffing 

problems and thus aided the primary nursing care to patients, 

and was therefore “reasonably necessary for the operation of 

the hospital.”13

Based upon the reasoning of Lariat Boys Ranch and 

Immanuel, Inc., it is clear that our inquiry in this case cannot 

be narrowly focused on whether the overnight lodging provided by the Foundation’s motel and campground is an educational purpose, as the Tax Commissioner and Property Tax 

Administrator contend. Rather, we must undertake a broader 

examination of whether those lodging facilities are reasonably necessary to the educational mission of the Foundation’s 

museum, based upon the specific facts presented here.

The record reflects that the museum is unusual if not 

unique because of the combination of two factors. First, the 

museum houses an extensive public collection which cannot 

be viewed in a single day, thus creating a demand for convenient, nearby lodging for those visitors who wish to spend 

more than 1 day viewing the museum’s exhibits. Second, the 

museum is situated in a relatively small community which 

has no public lodging facilities other than those offered by 

the Foundation.

The Tax Commissioner and Property Tax Administrator concede in their brief that the primary purpose of the Foundation’s 

motel and campground “is to lodge patrons of the Museum.”14

The record reflects that the properties are being used predominantly for that purpose. Although the motel and campground 

are open to the public, they are utilized primarily by visitors 

to the museum. In each of the years from 1990 through 2010, 

at least 95.5 percent of the persons who stayed at the motel 

and campground were museum visitors. A significant majority 

13 Id. at 411, 384 N.W.2d at 270.

14 Brief for appellees at 6.
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26 287 NEBRASKA REPORTS

of these were persons who did not reside in Nebraska. In 

2010, all of the campground guests and 99.9 percent of the 

motel guests were from outside Kearney County. It was 

estimated that 30 percent of these museum visitors viewed 

exhibits for more than 1 day; those who did and wished to 

stay overnight in Minden had to utilize the Foundation’s motel 

or campground.

The record includes a letter from the Internal Revenue 

Service dated August 18, 1983, granting the Foundation’s 

request for exemption from federal income tax under 

§ 501(c)(3) of the Internal Revenue Code. Although this document is not controlling on any of the issues in this case, it is 

instructive in its characterization of the relationship between 

the Foundation’s museum, motel, and campground. In determining that the motel and campground were not an “unrelated 

trade or business” that would be subject to income tax notwithstanding the fact that they are owned by an exempt entity, 

the Internal Revenue Service stated:

Your operation of the . . . motel [and] campground 

. . . is for the purpose of enabling your visitors to remain 

long enough to take in the full extent of your educational 

exhibits, the purpose of your exemption. Because there 

are not facilities of this type within a reasonable proximity to your exhibit, the time a visitor could or would 

spend would be sharply curtailed, i.e., to approximately 

half a day, yet it takes a full day or more to appreciate 

all your historical and educational presentations. Making 

it possible for visitors to get a full measure of the educational aspects is substantially related to the accomplishment of your exempt purposes.

(Emphasis supplied.) Although this characterization of the 

relationship of the museum and the Foundation’s lodging 

facilities was made more than 30 years ago, it reflects the 

relationship that existed in 2011 as reflected in the record in 

these cases.

On the basis of that record, we conclude that TERC erred 

in determining that the Foundation was not entitled to exemptions for its motel and campground properties. The issue is 

not whether “lodging” is an educational use in an abstract 
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IN RE INTEREST OF DANAISHA W. ET AL. 27

Cite as 287 Neb. 27

sense, but, rather, whether these specific lodging facilities 

were reasonably necessary to accomplish the educational purpose of the Foundation in the operation of its museum. Just as 

the grazing and farming lands were reasonably necessary to 

the charitable and educational purposes of the boys’ ranch in 

Lariat Boys Ranch and the childcare facility was reasonably 

necessary to accomplish the charitable purposes of the hospital 

in Immanuel, Inc., the operation of the motel and campground 

by the Foundation is reasonably necessary to the accomplishment of its educational mission.

Because we conclude that TERC erred as a matter of law in 

vacating and reversing the decisions of the board, we need not 

consider the Foundation’s remaining assignments of error.

CONCLUSION

For the reasons discussed, we reverse TERC’s decisions 

which vacated and reversed the decisions of the board, and 

we remand each cause to TERC with directions to affirm 

the board’s decision granting property tax exemptions to the 

Foundation for its motel and campground properties for the tax 

year 2011.

Reversed and remanded with directions.

In re Interest of Danaisha W. et al., 

children under 18 years of age.

State of Nebraska, appellee, v. 

Dennisca W., appellant.

___ N.W.2d ___

Filed December 13, 2013. No. S-13-218.

1. Juvenile Courts: Appeal and Error. An appellate court reviews juvenile cases 

de novo on the record and reaches its conclusions independently of the juvenile 

court’s findings.

2. Jurisdiction: Appeal and Error. A jurisdictional question which does not 

involve a factual dispute is determined by an appellate court as a matter of law.

3. Juvenile Courts: Jurisdiction: Appeal and Error. In a juvenile case, as in any 

other appeal, before reaching the legal issues presented for review, it is the duty 

of an appellate court to determine whether it has jurisdiction over the matter 

before it.