Lancaster Cty. Bd. of Equal. v. Moser , 312 Neb. 757 ( 2022 )

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www.nebraska.gov/apps-courts-epub/
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
LANCASTER CTY. BD. OF EQUAL. V. MOSER
Cite as 312 Neb. 757Lancaster County Board of Equalization,
appellant, v. Brad Moser and
Mary Moser, appellees.
___ N.W.2d ___
Filed October 28, 2022. No. S-21-774.
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 deci-
sion conforms to the law, is supported by competent evidence, and is
neither arbitrary, capricious, nor unreasonable.
3. 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.
4. 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.
5. ____: ____: ____: ____. If the challenging party overcomes the pre-
sumption of validity by competent evidence, the reasonableness of the
valuation fixed by the board of equalization becomes one of fact based
upon all of the evidence presented.
6. Taxation: Valuation: Proof: Appeal and Error. The burden of show-
ing that a valuation is unreasonable or arbitrary rests upon the taxpayer
on appeal from the action of the board of equalization.
7. 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
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Cite as 312 Neb. 757placed 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.
8. Taxation: Valuation: Words and Phrases. Equalization is the process
of ensuring that all taxable property is placed on the assessment rolls
at a uniform percentage of its actual value. The purpose of equalization
of assessments is to bring the assessment of different parts of a taxing
district to the same relative standard, so that no one of the parts may be
compelled to pay a disproportionate part of the tax.
9. Taxation. While absolute uniformity of approach for taxation may not
be possible, there must be a reasonable attempt at uniformity.
10. Taxation: Valuation: Constitutional Law. The object of the uniformity
clause is accomplished if all of the property within the taxing jurisdic-
tion is assessed and taxed at a uniform standard of value.
11. Taxation: Valuation: Public Policy. No difference in the method of
determining the valuation or rate of tax to be imposed can be allowed
unless separate classifications rest on some reason of public policy or
some substantial difference of situation or circumstance that would natu-
rally suggest justice or expediency of diverse legislation with respect to
the objects classified.
12. Taxation: Valuation. Generally, taxpayers are entitled to have their
property assessed uniformly and proportionately, even though the result
may be that it is assessed at less than the actual value.
13. Taxation: Valuation: Proof. The burden of proof is on the taxpayer to
establish that the value of the property has not been fairly and propor-
tionately equalized with all other properties, resulting in a discrimina-
tory, unjust, and unfair assessment.
14. Taxation: Valuation: Constitutional Law: Statutes. The county board
of equalization has a statutory duty to fairly and impartially equalize
the values of all items of real property in the county so that all real
property is assessed uniformly and proportionately. This statutory duty
is informed, in turn, by the constitutional principles of uniformity and
proportionality set out in Neb. Const. art. VIII, § 1.
15. Taxation: Valuation: Constitutional Law. In carrying out its duty to
correct and equalize individual discrepancies and inequalities in assess-
ments within the county, a county board of equalization must give effect
to the constitutional requirement that taxes be levied uniformly and
proportionately upon all taxable property in the county.
16. ____: ____: ____. The rule of uniformity applies to both the rate of
taxation and the valuation of property.
17. Taxation: Valuation: Constitutional Law: Intent. When property
owners contend their property has been disproportionately valued as
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Cite as 312 Neb. 757compared to other comparable property, such contention must be sus-
tained by evidence that the valuation is arbitrary or capricious, or so
wholly out of line with actual values as to give rise to an inference
that the assessor and county board of equalization have not properly
discharged their duties. Mere errors of judgment do not sustain a claim
of discrimination. There must be something more, something which in
effect amounts to an intentional violation of the essential principle of
practical uniformity.
Appeal from the Tax Equalization and Review Commission.
Reversed and remanded with directions.
Patrick Condon, Lancaster County Attorney, and Daniel J.
Zieg for appellant.
David C. Solheim, of Solheim Law Firm, for appellees.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Stacy, J.
In 2018, 2019, and 2020, Mary Moser and Brad Moser
protested the valuation of their agricultural land, and the
Lancaster County Board of Equalization (County Board)
affirmed the valuations. The Mosers appealed to the Tax
Equalization and Review Commission (TERC), and after a
consolidated evidentiary hearing, TERC affirmed the County
Board’s decision regarding the 2020 tax year, but reversed its
decisions for the 2018 and 2019 tax years. For both 2018 and
2019, TERC reduced the value of the Mosers’ irrigated acres
to equalize those acres with a nearby parcel of agricultural
property. The County Board timely petitioned for review of
TERC’s decision, 1 and we moved the case to our docket. We
now reverse the decision of TERC and remand the matter with
directions to affirm the decision of the County Board.
1
See Neb. Rev. Stat. § 77-5019(2)(a)(i) (Reissue 2018).
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Cite as 312 Neb. 757I. BACKGROUND
The facts in this matter are largely undisputed. The Mosers
own approximately 116 acres of agricultural land located in
Lancaster County. The parcel number of the subject property
is 02-36-400-001-000, and it is referred to by the parties as
“Mary’s Farm.”
At all relevant times, Mary’s Farm was classified as unim-
proved agricultural land, and the acres were inventoried into
different subclasses. 2 During the 2018, 2019, and 2020 tax
years, Mary’s Farm had a center pivot irrigator, so some of the
acres were subclassified as irrigated cropland. Other acres were
subclassified as dryland cropland, grassland, and wasteland.
Under the assessment methodology and schedule of values
used by Lancaster County during the relevant tax years, the
actual value of an acre of irrigated cropland was higher than
the actual value of an acre of dryland cropland, grassland, and
wasteland, but all subclasses were assessed at the same per-
centage of actual value. 3
1. 2018 Protest
For tax year 2018, the Lancaster County assessor determined
the taxable value of Mary’s Farm was $612,500. This valuation
was based in part on property records subclassifying 88.09 of
the acres as irrigated cropland. In protesting the 2018 valu-
ation, the Mosers focused on the acres of irrigated cropland,
asserting that “[c]omparable ground 1 mile west is valued
much lower than this property.” As authorized by Neb. Rev.
Stat. § 77-1502.01 (Reissue 2018), the County Board used a
referee to hear the protest.
2
See, generally, Neb. Rev. Stat. § 77-1363 (Cum. Supp. 2020) (requiring
agricultural and horticultural land to be divided into classes and subclasses
for purposes of valuation, including, but not limited to, irrigated cropland,
dryland cropland, grassland, wasteland, nursery, feedlot, or orchard); Betty
L. Green Living Trust v. Morrill Cty. Bd. of Equal., 299 Neb. 933, 911
N.W.2d 551 (2018).
3
See, generally, Neb. Rev. Stat. § 77-201(2) (Reissue 2018) (agricultural
land “shall be valued at seventy-five percent of its actual value”).
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Cite as 312 Neb. 757In support of their protest, the Mosers submitted the 2018
property record for a neighboring parcel of agricultural land,
referred to by the parties as the “Morrison property.” This
evidence showed the Morrison property had been classified
as improved agricultural land, with some acres subclassified
as dryland cropland and other acres subclassified as grassland
and wasteland. The Morrison property record did not show
any acres of irrigated cropland, but the Mosers claimed that
the Morrison property had two center pivot irrigators. In sup-
port, they offered a “Google Earth” image which purportedly
showed center pivot irrigators, but no crop circles, in a field
represented to be the Morrison property. Based on that evi-
dence, the Mosers argued that Mary’s Farm and the Morrison
property were “comparable in soil type and both have irrigated
and dryland acres.” They argued that because the irrigated
acres on the Morrison property had been subclassified and val-
ued as dryland, the irrigated acres on Mary’s Farm should be
revalued as dryland, too.
The referee rejected the Mosers’ argument, reasoning that
the evidence adduced did not support a reduction in the valua-
tion of the irrigated acres of Mary’s Farm. The County Board
agreed with the referee. However, pursuant to an unrelated
2017 settlement between the Mosers and TERC, the County
Board reduced the 2018 assessed value of Mary’s Farm to
$598,900.
2. 2019 Protest
A similar protest process occurred in 2019. In that year, the
county assessor determined the taxable value of Mary’s Farm
was $570,300, based in part on 90.69 acres which were sub-
classified and valued as irrigated cropland. The Mosers filed
a protest, again asking that their irrigated cropland be valued
as dryland. In support, they provided the 2019 property record
file for the Morrison property, which again showed that none
of the acres on the Morrison property were subclassified or
valued as irrigated cropland. The Mosers also provided color
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Cite as 312 Neb. 757photographs of an operating center pivot in a cropfield they
represented was part of the Morrison property. And, as they
had done in 2018, the Mosers asked that the irrigated cropland
on Mary’s Farm be revalued as dryland cropland.
After reviewing the evidence provided by the Mosers, the
referee found that the Morrison property was “irrigated by
2 pivots[,] but taxed as dryland,” and recommended that the
assessor’s data on the Morrison property be corrected. However,
the referee concluded that the error in subclassifying and valu-
ing the Morrison property did “not support a valuation error
within [the] current assessment” of Mary’s Farm. The County
Board agreed with the referee and affirmed the assessor’s 2019
valuation of Mary’s Farm.
3. 2020 Protest
For the 2020 tax year, the assessor determined the taxable
value of Mary’s Farm was $551,300. The Mosers protested this
valuation, but this time they did not challenge the valuation of
the irrigated acres. Instead, they argued that their wasteland
acres were valued higher than wasteland acres in surround-
ing counties. In support, the Mosers offered information on
the standard land values for the different subclasses and soil
types in Saline County. The referee concluded that the infor-
mation provided by the Mosers did not support a valuation
error with the current assessment of Mary’s Farm. The County
Board agreed with the referee and affirmed the assessor’s
2020 valuation.
4. TERC Appeal
The Mosers appealed the 2018, 2019, and 2020 valuations
of Mary’s Farm to TERC, and a consolidated evidentiary hear-
ing was held on April 5, 2021. Mary testified on behalf of the
Mosers. She explained that in 2018 and 2019, they protested
the valuation of the irrigated acres on Mary’s Farm because
the Morrison property was located nearby and was “valued so
much lower than ours.” In support, Mary offered the evidence,
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Cite as 312 Neb. 757described above, that the Mosers had presented to the County
Board in 2018 and 2019 regarding pivot irrigators on the
Morrison property. Mary testified that the Morrison property
records for 2018 and 2019 did not show that any portion of
the Morrison property was irrigated, and she asked that the
property record for Mary’s Farm be changed to “also reflect
non-irrigated land,” because that would be “equal.”
Derrick Niederklein, the chief field deputy for the Lancaster
County assessor’s office, testified on behalf of the County
Board. Niederklein testified that in 2018 and 2019 the asses-
sor’s office did not know the Morrison property had any irri-
gated acres. He explained that usually, a property owner reports
adding a pivot irrigator, 4 and the assessor’s office also uses
aerial and oblique imagery to identify pivots. Niederklein testi-
fied that “leaving the pivot off the Morrisons’ property [was]
not an intentional act by the assessor’s office.” He admitted
that it was “not uncommon” for the assessor’s office to learn
that something was incorrect in its property records because
conditions can change from year to year, but he testified that
generally, the property records were “accurate.” Niederklein
also testified that beginning in the 2020 tax year, the irrigated
acres on the Morrison property were correctly subclassified
and valued as irrigated cropland.
In an order entered on August 24, 2021, TERC made a
finding that the irrigated acres on the Morrison property were
“comparable to irrigated acres” on Mary’s Farm. TERC further
found that the documents the Mosers had submitted to the
County Board during their 2018 and 2019 protests provided
“compelling evidence” that the Morrison property had pivot
irrigation, even though the county’s property records for 2018
and 2019 did not show that any portion of the Morrison prop-
erty was irrigated. TERC recited the rule that
4
See Neb. Rev. Stat. § 77-1318.01(1) (Reissue 2018) (requiring owner of
real property to report improvement valued at $2,500 or more to assessor).
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Cite as 312 Neb. 757[i]f taxable values are to be equalized it is necessary for
a Taxpayer to establish by clear and convincing evidence
that the valuation placed on the property[,] when com-
pared with valuations placed on other similar properties[,]
is grossly excessive and is the result of systematic exer-
cise of intentional will or failure of plain legal duty, and
not mere errors of judgment. 5
TERC then reasoned:
In the context of an appeal to this Commission, the
systematic exercise of intentional will or failure of a plain
duty is that of the County Board, not the County Assessor.
During the protest process, the [Mosers] presented the
County Board with clear evidence that the Morrison Farm
included irrigated land that was not being assessed as
irrigated land. At that point, the County Board had a plain
legal duty to equalize the assessments, even though the
result may have been that [Mary’s Farm] was assessed at
less than the actual value.
Based on this reasoning, TERC found there was clear and
convincing evidence that the County Board’s decisions in 2018
and 2019 were arbitrary or unreasonable. TERC ordered that
the irrigated acres on Mary’s Farm must be revalued as dryland
for both the 2018 and 2019 tax years. Using the county asses-
sor’s scheduled value for dryland cropland, TERC reduced the
total assessed value of Mary’s Farm by $125,715 for 2018 and
by $119,605 for 2019.
TERC concluded that no equalization was necessary for
the 2020 tax year “[b]ecause the irrigated parcels on the
Morrison farm were assessed as irrigated land” for that tax
year. Additionally, TERC rejected the Mosers’ contention that
they were entitled to have any subclass of agricultural land
in Lancaster County equalized with comparably subclassified
property in Saline County, reasoning that the scheduled values
5
See Newman v. County of Dawson, 167 Neb. 666, 94 N.W.2d 47 (1959).
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Cite as 312 Neb. 757in another taxing district did not constitute sufficient evidence
that the assessment of the Mosers’ property was incorrect, arbi-
trary, or unreasonable.
5. Petition for Judicial Review
The County Board filed this timely petition for judicial
review in the Nebraska Court of Appeals. 6 The petition chal-
lenges only TERC’s decision to reduce the valuation of Mary’s
Farm for the 2018 and 2019 tax years. We moved the matter to
our docket on our own motion.
II. ASSIGNMENTS OF ERROR
The County Board assigns, restated, that TERC erred in
reducing the valuation of Mary’s Farm because there was not
clear and convincing evidence that the value, when compared
to similar property, was grossly excessive and was the result of
a systematic exercise of intentional will or failure of plain legal
duty and not mere errors of judgment.
III. STANDARD OF REVIEW
[1-3] Appellate courts review decisions rendered by TERC
for errors appearing on the record. 7 When reviewing a judg-
ment for errors appearing on the record, an appellate court’s
inquiry is whether the decision conforms to the law, is sup-
ported by competent evidence, and is neither arbitrary, capri-
cious, nor unreasonable. 8 Agency action is arbitrary, capricious,
and unreasonable if it is taken in disregard of the facts or cir-
cumstances of the case, without some basis which would lead a
reasonable and honest person to the same conclusion. 9
6
See § 77-5019.
7
Wheatland Indus. v. Perkins Cty. Bd. of Equal., 304 Neb. 638, 935 N.W.2d
764 (2019).
8
Id.9
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Cite as 312 Neb. 757IV. ANALYSIS
The ultimate question presented in this appeal is whether
TERC’s decision to revalue the irrigated cropland on Mary’s
Farm as dryland cropland conformed to the law, was supported
by competent evidence, and was neither arbitrary, capricious,
nor unreasonable. 10 Before addressing that question, we first
review the taxpayer’s burden of proof in an appeal before
TERC. We then review the foundational principles of taxing
agricultural land in Nebraska, as well as the constitutional
requirements of uniformity and proportionality that govern our
analysis.
1. Presumption of Validity and Burden of Proof
When reviewing appeals from decisions of county boards of
equalization, TERC must follow the standard set out in Neb.
Rev. Stat. § 77-5016(9) (Reissue 2018), which provides:
In all appeals, excepting those arising [from a county tax
levy], 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 incor-
rect, such order, decision, determination, or action shall
be affirmed unless evidence is adduced establishing that
the order, decision, determination, or action was unrea-
sonable or arbitrary.
[4,5] We have held that the language of § 77-5016(9) creates
a presumption in an appeal to TERC that a board of equaliza-
tion has faithfully performed its official duties in making an
assessment and has acted upon sufficient competent evidence
to justify its action. 11 That presumption remains until there is
10
See id.
11
E.g., Wheatland Indus., supra note 7; Betty L. Green Living Trust, supra
note 2; JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. of Equal., 285 Neb. 120,
825 N.W.2d 447 (2013); Brenner v. Banner Cty. Bd. of Equal., 276 Neb.
275, 753 N.W.2d 802 (2008); Ideal Basic Indus. v. Nuckolls Cty. Bd. of
Equal., 231 Neb. 653, 437 N.W.2d 501 (1989).
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lenging party overcomes the presumption of validity by com-
petent evidence, the reasonableness of the valuation fixed by
the board of equalization becomes one of fact based upon all
of the evidence presented. 13
[6,7] The burden of showing that a valuation is unreason-
able or arbitrary rests upon the taxpayer on appeal from the
action of the board. 14 And the burden of persuasion imposed on
a complaining taxpayer is not met by showing a mere differ-
ence 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. 15
2. Taxation of Agricultural Land
Mary’s Farm and the Morrison property are both classified
as agricultural land. 16 According to § 77-1363, agricultural land
is to be inventoried and valued by class and subclass:
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, irri-
gated 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 sub-
classes of real property based on soil classification stan-
dards developed by the Natural Resources Conservation
Service of the United States Department of Agriculture as
12
Id.
13
See Wheatland Indus., supra note 7. See, also, Betty L. Green Living Trust,
supra note 2; JQH La Vista Conf. Ctr., supra note 11.
14
See id.
15
Id.
16
See § 77-201 and Neb. Rev. Stat. § 77-1359 (Reissue 2018).
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Administrator. Land capability groups shall be Natural
Resources Conservation Service specific to the applied
use and not all based on a dryland farming criterion.
County assessors shall utilize soil surveys from the
Natural Resources Conservation Service of the 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 the Tax
Equalization and Review Commission to achieve more
uniform and proportionate valuations.
And according to Neb. Rev. Stat. § 77-103.01 (Reissue 2018):
Class or subclass of real property means a group of
properties that share one or more characteristics typically
common to all the properties in the class or subclass, but
are not typically found in the properties outside the class
or subclass. Class or subclass includes, but is not limited
to, the classifications of agricultural land or horticultural
land listed in section 77-1363 . . . .
It is undisputed that during the 2018 and 2019 tax years, the
irrigated acres on Mary’s Farm were correctly subclassified as
irrigated cropland, while the irrigated acres on the Morrison
property were erroneously subclassified as dryland cropland.
It is also undisputed that the erroneous subclassification of
the Morrison property resulted in a lower assessed value than
if the acres had been correctly subclassified as irrigated crop-
land. We find no prior cases in our equalization jurisprudence
presenting a similar fact pattern. To analyze the duty of the
County Board under these unique facts, we rely on settled
principles of uniform and proportionate taxation.
3. Uniform and Proportionate Taxation
Uniform and proportionate taxation, sometimes referred to
as “equalization,” is a constitutional requirement in Nebraska.
Article VIII, § 1(1), of the Nebraska Constitution provides
in relevant part that “[t]axes shall be levied by valuation
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as otherwise provided in or permitted by this Constitution.”
And article VIII, § 1(4), governs how agricultural and horti-
cultural land is to be uniformly and proportionately valued and
taxed. It provides:
[T]he Legislature may provide that agricultural land and
horticultural land, as defined by the Legislature, shall
constitute a separate and distinct class of property for pur-
poses of taxation and may provide for a different method
of taxing agricultural land and horticultural land which
results in values that are not uniform and proportion-
ate with all other real property and franchises but which
results in values that are uniform and proportionate upon
all property within the class of agricultural and horticul-
tural land. 17
[8] We have explained the process and purpose of equaliza-
tion as follows:
“Equalization is the process of ensuring that all taxable
property is placed on the assessment rolls at a uniform
percentage of its actual value. The purpose of equaliza-
tion of assessments is to bring the assessment of different
parts of a taxing district to the same relative standard, so
that no one of the parts may be compelled to pay a dispro-
portionate part of the tax.” 18
[9-12] We have also recognized that while “absolute uni-
formity of approach for taxation may not be possible, there
must be a reasonable attempt at uniformity.” 19 The object of
the uniformity clause is accomplished “‘if all of the prop-
erty within the taxing jurisdiction is assessed and taxed at a
uniform standard of value.’” 20 No difference in the method
17
Neb. Const. art. VIII, § 1(4) (emphasis supplied).
18
Krings v. Garfield Cty. Bd. of Equal., 286 Neb. 352, 357, 835 N.W.2d 750,
754 (2013), quoting Brenner, supra note 11.
19
Constructors, Inc. v. Cass Cty. Bd. of Equal., 258 Neb. 866, 873, 606
N.W.2d 786, 792 (2000).
20
Id. at 873, 606 N.W.2d at 792, quoting County of Gage v. State Board of
Equalization & Assessment, 185 Neb. 749, 178 N.W.2d 759 (1970).
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can be allowed unless “separate classifications rest on some
reason of public policy or some substantial difference of
situation or circumstance that would naturally suggest jus-
tice or expediency of diverse legislation with respect to the
objects classified.” 21 Generally, taxpayers are entitled to have
their property assessed uniformly and proportionately, even
though the result may be that it is assessed at less than the
actual value. 22
In this case, we consider an issue of first impression in
Nebraska: whether constitutional principles of uniform and
proportionate taxation require that an isolated error in the
subclassification and undervaluation of one taxpayer’s prop-
erty must be replicated through the equalization process. As
we explain, we find no such requirement in the Nebraska
Constitution, Nebraska statutes, or Nebraska case law.
4. Facts and Law Do Not Support
TERC’s Decision
(a) Presumption of Validity
In any appeal before TERC, the threshold determination
should be whether the taxpayer presented competent evidence
to rebut the presumption of validity in favor of the board
of equalization. 23 Here, TERC made an express finding that
the Mosers had presented “competent evidence to rebut the
presumption that the County Board faithfully performed its
duties and had sufficient competent evidence to make its deter-
mination.” In arriving at this conclusion, TERC did not find
any error in the assessor’s valuation of Mary’s Farm. Rather,
TERC concluded the Mosers had presented “compelling evi-
dence of pivot irrigation on the Morrison farm” in 2018 and
2019 and had shown that the assessor’s property records for
those years taxed the Morrison property as dryland cropland.
21
Constructors, Inc., supra note 19, 258 Neb. at 874, 606 N.W.2d at 793.
22
Constructors, Inc., supra note 19.
23
See Wheatland Indus., supra note 7.
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Cite as 312 Neb. 757As such, we understand TERC to have concluded that the pre-
sumption of validity was rebutted by photographic evidence
that the Morrison property contained irrigated cropland that
was erroneously valued as dryland cropland.
The County Board has not challenged TERC’s conclusion
that the Mosers’ evidence sufficiently rebutted the presump-
tion, and we express no opinion in that regard. Because, as we
explain next, even if the Mosers’ evidence was sufficient to
rebut the presumption of validity, they did not ultimately sat-
isfy their burden to prove by clear and convincing evidence that
the valuation of Mary’s Farm was unreasonable or arbitrary. 24
(b) Mosers Did Not Meet Burden of Proof
To prove the value placed on Mary’s Farm was unreason-
able or arbitrary, 25 the Mosers had to show that when compared
to the valuations placed on similar property, the valuation of
Mary’s Farm was grossly excessive and was the result of either
a systematic exercise of intentional will or the failure of a plain
legal duty, and not a mere error of judgment. 26
(i) Grossly Excessive Valuation
We question whether the Mosers proved by clear and con-
vincing evidence that the valuation of their irrigated acres
was grossly excessive when compared to similar property. We
agree the Mosers’ evidence showed that the irrigated acres on
Mary’s Farm were valued higher than the irrigated acres on
the Morrison property. But the Mosers did not compare the
irrigated acres on Mary’s Farm to any of the irrigated acres
in the taxing district which, like their property, had been
subclassified and valued as irrigated cropland. Instead, they
compared their valuation to the valuation of irrigated acres
which had been erroneously subclassified and valued as dry-
land cropland.
24
See § 77-5016(9).
25
See id.
26
See Betty L. Green Living Trust, supra note 2.
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Cite as 312 Neb. 757But even if we set aside the different land classification
groups of Mary’s Farm and the Morrison property and assume,
without deciding, that the Mosers proved their valuation was
grossly excessive when compared to similar property, we
nevertheless conclude they failed to prove their valuation was
the result of either a systematic exercise of intentional will
or the failure of a plain legal duty, and not a mere error of
judgment. 27
(ii) Insufficient Evidence of Systematic
or Intentional Action
The Mosers offered no evidence of a systematic or inten-
tional misclassification and undervaluation of irrigated acres
in Lancaster County. Instead, they offered evidence of a single
parcel—the Morrison property—where irrigated cropland had
been erroneously subclassified and valued as dryland. And it
was undisputed that such error was unintentional and resulted
from an improvement to the property of which the asses-
sor’s office was unaware, despite its use of aerial and oblique
imagery to identify pivot irrigators. The evidence also showed
that when the county became aware of the erroneous subclas-
sification via the Mosers’ tax protests, the error was corrected
for the 2020 tax year. On this record, the Mosers failed to
prove the valuation was the result of a systematic exercise of
intentional will.
(iii) No Plain Legal Duty to Equalize
Mary’s Farm and Morrison Property
Similarly, the Mosers did not carry their burden of proving
that the valuation of Mary’s Farm resulted from the failure of
a plain legal duty and not a mere error of judgment. TERC’s
order did not explain why it determined the County Board had
“a plain legal duty to equalize the assessments” by revaluing
the irrigated acres on Mary’s Farm as dryland cropland. But
in its appellate briefing, TERC argues that once the Mosers
presented evidence that their irrigated acres were assessed at
27
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Cite as 312 Neb. 757a higher value than the irrigated acres on the Morrison prop-
erty, it “trigger[ed] a duty to equalize.” 28 We thus understand
TERC to contend that these circumstances implicated constitu-
tional principles of uniform and proportionate taxation. On this
record, we disagree.
TERC appears to have ignored the fact that a subclassifica-
tion error regarding the Morrison property was the reason for
the disparate valuations, but we cannot. When determining
whether principles of uniformity and proportionality have been
violated by disparate valuations, we have said it is appropriate
to consider the reasons offered for “why a particular valua-
tion is what it is” because, without such context, evidence of
dis­parate valuations “indicates nothing.” 29 Here, the irrigated
acres on the Morrison property were valued lower because they
had been erroneously subclassified as dryland. It was that error
in subclassification, and only that error, which caused the dis­
parate valuation about which the Mosers complain.
[13-15] The burden of proof is on the taxpayer to establish
that the value of the property has not been fairly and pro-
portionately equalized with all other properties, resulting in
a discriminatory, unjust, and unfair assessment. 30 The county
board of equalization has a statutory duty to “fairly and impar-
tially equalize the values of all items of real property in the
county so that all real property is assessed uniformly and
proportionately.” 31 This statutory duty is informed, in turn, by
the constitutional principles of uniformity and proportionality
set out in Neb. Const. art. VIII, § 1. In carrying out its duty to
correct and equalize discrepancies and inequalities in assess-
ments within the county, a county board of equalization “‘must
give effect to the constitutional requirement that taxes be
28
Brief for appellee at 8.
29
County of Franklin v. Tax Equal. & Rev. Comm., 296 Neb. 193, 201, 892
N.W.2d 142, 147 (2017).
30
Lincoln Tel. & Tel. Co. v. County Board of Equalization, 209 Neb. 465,
308 N.W.2d 515 (1981).
31
Neb. Rev. Stat. § 77-1501 (Reissue 2018).
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Cite as 312 Neb. 757levied uniformly and proportionately upon all taxable property
in the county.’” 32 We see no evidence that these constitutional
principles were implicated by the County Board’s decision to
affirm the valuation of Mary’s Farm.
[16] The rule of uniformity applies to both the rate of tax­
ation and the valuation of property. 33 And the object of the
uniformity clause is accomplished “‘if all of the property
within the taxing jurisdiction is assessed and taxed at a uni-
form standard of value.’” 34 The evidence presented in this
case and relied upon by TERC showed that in 2018 and 2019,
all agricultural land within the taxing district was assessed
and taxed at a uniform standard of value based on land clas-
sification group and soil type. Under that methodology, which
no one challenges as unreasonable or arbitrary, the scheduled
value of an acre of dryland cropland was lower than the
scheduled value of an acre of irrigated cropland of the same
soil type. The same assessment methodology was applied to
both Mary’s Farm and the Morrison property, but due to an
unknown improvement on the Morrison property, the irrigated
acres on that property were mistakenly subclassified and
valued as dryland cropland in 2018 and 2019. As such, this
case does not present a uniformity problem; rather, it presents
a classification problem that equalization would exacerbate,
not correct.
[17] A property owner’s contention that property has been
disproportionately valued as compared to other comparable
property
must be sustained by evidence that the valuation is arbi-
trary or capricious, or so wholly out of line with actual
values as to give rise to an inference that the assessor
and county board of equalization have not properly dis-
charged their duties. Mere errors of judgment do not
32
Krings, supra note 18, 286 Neb. at 358, 835 N.W.2d at 754.
33
Gordman Properties Co. v. Board of Equal., 225 Neb. 169, 403 N.W.2d
366 (1987).
34
Constructors, Inc., supra note 19, 258 Neb. at 873, 606 N.W.2d at 792.
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Cite as 312 Neb. 757sustain a claim of discrimination. There must be some-
thing more, something which in effect amounts to an
intentional violation of the essential principle of practi-
cal uniformity. 35
Here, there was no evidence of something more. The only
reason for the lower valuation of the irrigated acres on the
Morrison property was that the cropland had been erroneously
subclassified and valued as dryland because the assessor’s
office was unaware the parcel had center pivots. Our record
contains no evidence of an intentional violation of the essential
principles of uniformity or proportionality and no evidence that
would give rise to an inference that either the assessor’s office
or the County Board failed to properly discharge its duties
under the law.
We reject TERC’s suggestion that constitutional principles
of uniformity and proportionality require a county board of
equalization to replicate what has been shown to be an isolated
and unintentional error in the subclassification and undervalua-
tion of one taxpayer’s property. Were we to adopt such a rule,
it would have far-reaching consequences to our equalization
jurisprudence. As the County Board argues:
Under [TERC’s] order, all a taxpayer must do is locate a
single unknown or unreported improvement to receive a
reduction on their property value. A taxpayer with a fin-
ished basement would only need to locate a single house
with a finished basement that is unknown to a county
assessor and by the TERC’s standard, the taxpayer would
have met their burden for proving a lack of equalization.
Similarly, a residence that is built and unreported to a
county assessor would result in all improvements being
removed from the assessment roll under the TERC’s
standard. 36
And we generally agree with the County Board’s observation
that by ordering equalization in response to evidence that a
35
Newman, supra note 5, 167 Neb. at 672, 94 N.W.2d at 50.
36
Brief for appellant at 10-11.
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Cite as 312 Neb. 757single irrigated parcel was misclassified and thus undervalued,
“TERC created two parcels that are undervalued [and] imper-
missibly shifted the tax burden to every other irrigated parcel
that did not protest.” 37
The dissent suggests the County Board had a plain legal duty
to value the irrigated acres on Mary’s Farm as dryland under
the reasoning of the U.S. Supreme Court in Sioux City Bridge
v. Dakota County. 38 In that case, the Court was reviewing a
decision of the Nebraska Supreme Court which had affirmed
the denial of a tax protest over the valuation of a bridge in
Dakota County. 39 The bridge company had argued it was enti-
tled to have the valuation of the bridge reduced to 55 percent
of its true value because “other property in the district [was]
assessed at 55 [percent] of its true value.” 40 The Nebraska
Supreme Court rejected that argument and held that “when
property is assessed at its true value, and other property in the
district is assessed below its true value, the proper remedy is
to have the property assessed below its true value raised, rather
than to have the property assessed at its true value reduced.” 41
The U.S. Supreme Court granted certiorari and reversed. 42
Relying on the Due Process and Equal Protection Clauses of
the 14th Amendment to the U.S. Constitution, the Supreme
Court reasoned it was “utterly impossible for [the protesting
taxpayer] by any judicial proceeding to secure an increase in
the assessment of the great mass of under-assessed property
in the taxing district.” 43 The Court held that under such cir-
cumstances, “the right of the taxpayer whose property alone is
37
Id. at 9.
38
Sioux City Bridge v. Dakota County, 260 U.S. 441, 43 S. Ct. 190, 67 L.
Ed. 340 (1923).
39
Sioux City Bridge Co. v. Dakota County, 105 Neb. 843, 182 N.W. 485(1921).
40
Id. at 848, 182 N.W. at 487.
41
Id.
42
Sioux City Bridge, supra note 38.
43
Id., 260 U.S. at 446.
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Cite as 312 Neb. 757taxed at 100 [percent] of its true value is to have [the] assess-
ment reduced to the percentage of that value at which others
are taxed even though this is a departure from the requirement
of the statute.” 44
Sioux City Bridge is readily distinguishable from this case.
First, the holding was grounded in the 14th Amendment, not
the uniformity clause of the Nebraska Constitution, and we
do not understand the Mosers to have raised or preserved a
due process or equal protection claim in this case. Moreover,
the underassessment of property in Sioux City Bridge was
intentional and systematic—the bridge was being taxed at
100 percent of its actual value, while the “great mass” 45 of
property in the district was being taxed at 55 percent of its
actual value. That is nothing like the situation here, where the
evidence showed that dryland cropland and irrigated cropland
were taxed at the same percentage of actual value, and the
same assessment methodology and uniform valuation standards
were applied to all agricultural land in the taxing district. And
finally, although the taxpayer in Sioux City Bridge apparently
had no way to secure an increase in the intentionally under­
assessed property, the Mosers point to nothing that prevented
them from protesting the misclassification of the irrigated acres
on the Morrison property. 46 Indeed, the record indicates that
the Mosers’ protests resulted in correcting the misclassification
of irrigated acres on the Morrison property for the 2020 tax
year. We are not persuaded that the holding or the reasoning in
Sioux City Bridge has application here.
The dissent also relies on a settled proposition from our
equalization jurisprudence which states, “‘“The constitution
forbids any discrimination whatever among taxpayers, thus, if
the property of one citizen is valued for taxation at one-fourth
44
Id.45
Id.46
See Neb. Rev. Stat. § 77-1502 (Cum. Supp. 2022) (directing county clerk
to mail copy of protest to owner when person filing protest is not owner
of property).
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Cite as 312 Neb. 757its value, others within the taxing district have the right to
demand that their property be assessed on the same basis.”’” 47
But this proposition is not implicated here either, because
the Mosers’ property and the Morrison property were both
assessed at the same percentage of actual value based on sub-
classification. Again, the only reason shown for the valuation
differences between these two properties was their different
subclass. And we do not understand the dissent to be suggest-
ing that constitutional principles of uniformity and propor-
tionality are offended by a tax assessment methodology under
which each subclass of agricultural land has a different sched-
uled actual value. The Mosers have not shown unconstitutional
discrimination in the valuation of their property as compared to
the Morrison property.
We find no principled support for TERC’s conclusion that
an unintentional error in subclassifying the Morrison property
as dryland cropland imposed on the County Board a plain legal
duty to replicate that error through equalization by applying a
factually false subclassification to reduce the valuation of the
cropland on Mary’s Farm.
We instead conclude, on this record, that the Mosers failed
to prove by clear and convincing evidence that the valuation
of Mary’s Farm, when compared to the valuation of similar
property, was grossly excessive and was the result of a sys-
tematic exercise of intentional will or failure of plain duty,
and not mere errors of judgment. 48 Nor did the Mosers adduce
sufficient evidence to establish that the County Board’s deci-
sion to affirm the Mosers’ assessments in 2018 and 2019 was
unreasonable or arbitrary. 49
47
Gamboni v. County of Otoe, 159 Neb. 417, 435, 67 N.W.2d 489, 501
(1954), overruled in part on other grounds, Hansen v. County of Lincoln,
188 Neb. 461, 197 N.W.2d 651 (1972). See State v. Savage, 65 Neb. 714,
91 N.W. 716 (1902).
48
See, Betty L. Green Living Trust, supra note 2; JQH La Vista Conf. Ctr.,
supra note 11.
49
See § 77-5016(9).
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Cite as 312 Neb. 757TERC’s conclusion that the County Board had a plain legal
duty to equalize the 2018 and 2019 assessments by treating
irrigated cropland on Mary’s Farm as dryland cropland was
factually incorrect, was not supported by competent evidence,
failed to conform to the law, was unreasonable, and must
be reversed. 50
V. CONCLUSION
For the foregoing reasons, we reverse TERC’s decision
to the extent it ordered that the irrigated cropland on Mary’s
Farm be valued as dryland cropland for the 2018 and 2019 tax
years, and we remand the matter with directions to affirm the
County Board’s assessments on parcel 02-36-400-001-000 for
both tax years.
Reversed and remanded with directions.
50
See Wheatland Indus., supra note 7.
Cassel, J., dissenting.
Although the majority concedes that irrigated acres on the
Morrison property were incorrectly classified as dryland and
that as a result, the Morrison property was erroneously given a
lower value than the comparable property of Brad Moser and
Mary Moser, the majority concludes that this triggered no plain
duty to equalize the two properties. I respectfully disagree. The
Nebraska Constitution compels otherwise.
Neb. Const. art. VIII, § 1(4), plainly commands that prop-
erties within the class of agricultural land and horticultural
land must be equalized despite being in separate subclasses.
The majority effectively holds that an error in subclassifica-
tion relieved the county board of its duty to equalize. This
court thereby fails to enforce the plain duty imposed by the
constitution.
For the sake of completeness, and at the risk of some
duplication of the majority opinion, I set forth this plain con-
stitutional language, the principle commanding adherence to
the constitutional mandate, and the history of the uniformity
clause and the amendments permitting separate classification
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Cite as 312 Neb. 757of agricultural land and horticultural land. The majority here
effectively deprives an agricultural-land taxpayer of any
remedy for the misclassification of comparable agricultural
property. Because the organic law of this state requires the
action taken by the Tax Equalization and Review Commission
(TERC), I respectfully dissent.
For convenience, I refer generally to the language of article
VIII, § 1, as the uniformity clause. Insofar as it relates to the
case before this court, the uniformity clause states as follows:
The necessary revenue of the state and its governmen-
tal subdivisions shall be raised by taxation in such manner
as the Legislature may direct. Notwithstanding Article I,
section 16, Article III, section 18, or Article VIII, sec-
tion 4, of this Constitution or any other provision of this
Constitution to the contrary: (1) Taxes shall be levied by
valuation uniformly and proportionately upon all real
property and franchises as defined by the Legislature
except as otherwise provided in or permitted by this
Constitution; [and] (4) the Legislature may provide that
agricultural land and horticultural land, as defined by the
Legislature, shall constitute a separate and distinct class
of property for purposes of taxation and may provide for a
different method of taxing agricultural land and horticul-
tural land which results in values that are not uniform and
proportionate with all other real property and franchises
but which results in values that are uniform and propor-
tionate upon all property within the class of agricultural
land and horticultural land; . . . Each actual property tax
rate levied for a governmental subdivision shall be the
same for all classes of taxed property and franchises. 1
To the extent pertinent here, one can readily discern that § 1
addresses uniformity in two clauses. First, § 1(1) imposes a
general duty to levy taxes by valuation uniformly and propor-
tionately upon all real property except as otherwise allowed by
the Nebraska Constitution. Then, § 1(4) permits classification
1
Neb. Const. art. VIII, § 1 (emphasis supplied).
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Cite as 312 Neb. 757of agricultural land and horticultural land as “a separate and
distinct class of property” and imposes a uniformity require-
ment upon “all property within the class of agricultural land
and horticultural land.”
This court, TERC, and the county boards of equalization
are all bound by the Nebraska Constitution. As this court has
said:
“A written Constitution is not only the direct and basic
expression of the sovereign will, but is the absolute rule
of action and decision for all departments and offices of
government with respect to all matters covered by it and
must control as it is written until it shall be changed by
the authority that established it. . . .” 2
As I explain below, article VIII, § 1(4), commands that all agri-
cultural land and horticultural land be equalized with all other
agricultural and horticultural lands, regardless of subclasses.
Neither this court nor the tribunals below may ignore this con-
stitutional mandate.
The uniformity clause has ancient roots. It originated in
the constitution of 1875. 3 The modern language began with
the constitutional revisions of 1920, which, as relevant here,
required simply that “taxes shall be levied by valuation uni-
formly and proportionately upon all tangible property.” 4
The rules as to uniformity and equal protection of the laws
apply not only to acts of the legislative department but also
to the valuation by the assessing officers. 5 Discrimination in
valuation, where it exists, does not necessarily result from the
terms of the tax statute, but may be caused by the acts of the
taxing officer or officers. 6
2
State ex rel. Caldwell v. Peterson, 153 Neb. 402, 408, 45 N.W.2d 122, 127
(1950) (quoting 11 Am. Jur. Constitutional Law § 44).
3
See Neb. Const. art. IX, § 1 (1875).
4
Neb. Const. art. VIII, § 1 (1920).
5
Constructors, Inc. v. Cass Cty. Bd. of Equal., 258 Neb. 866, 606 N.W.2d
786 (2000).
6
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Cite as 312 Neb. 757This court has long said that the paramount object of the
constitution and the laws relative to taxation is to raise all
needful revenues by valuation of the taxable property so that
each owner of property taxed will contribute his, her, or its
just proportion of the public revenues. 7 The object of the law
of uniformity is accomplished if all property within the taxing
jurisdiction is assessed at a uniform standard of value, as com-
pared with its actual market value. 8 “Thus if the property of
one citizen is valued for taxation at one-fourth its value, others
within the taxing district have the right to demand that their
property be assessed on the same basis.” 9 In other words, this
court said, the constitution forbids any discrimination whatever
among taxpayers. 10 Numerous cases have applied the uniform­
ity clause in this way. 11
As to most real estate, Nebraska law still mandates equal-
ization with all other real estate subject to taxation. Above, I
quoted article VIII, § 1(1), which commands that “[t]axes shall
be levied by valuation uniformly and proportionately upon all
real property . . . as defined by the Legislature except as other-
wise provided in or permitted by this Constitution.” Likewise,
7
See State v. Savage, 65 Neb. 714, 91 N.W. 716 (1902).
8
See id.9
Id. at 744, 91 N.W. at 720.
10
Id.
11
See, e.g., County of Douglas v. Nebraska Tax Equal. & Rev. Comm., 262
Neb. 578, 635 N.W.2d 413 (2001); AT&T Information Sys. v. State Bd.
of Equal., 237 Neb. 591, 467 N.W.2d 55 (1991); Konicek v. Board of
Equalization, 212 Neb. 648, 324 N.W.2d 815 (1982); County of Buffalo
v. State Board of Equalization & Assessment, 158 Neb. 353, 63 N.W.2d
468 (1954); Laflin v. State Board of Equalization and Assessment, 156
Neb. 427, 56 N.W.2d 469 (1953); Homan v. Board of Equalization, 141
Neb. 400, 3 N.W.2d 650 (1942); Continental Ins. Co. v. Smrha, 131 Neb.
791, 270 N.W. 122 (1936); Chicago, R. I. & P. R. Co. v. State, 111 Neb.
362, 197 N.W. 114 (1923); State v. Fleming, 70 Neb. 523, 97 N.W. 1063(1903); State v. Savage, supra note 7; State v. Osborn, 60 Neb. 415, 83
N.W. 357 (1900); High School District v. Lancaster County, 60 Neb. 147,
82 N.W. 380 (1900); State, ex rel. Ahern, v. Walsh, 31 Neb. 469, 48 N.W.
263 (1891); Clother v. Maher, 15 Neb. 1, 16 N.W. 902 (1883).
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Cite as 312 Neb. 757a Nebraska statute requires that “[t]he county board of equal-
ization shall fairly and impartially equalize the values of all
items of real property in the county so that all real property
is assessed uniformly and proportionately.” 12 The purpose of
equalization of assessments is to bring the assessment of dif-
ferent parts of a taxing district to the same relative standard, so
that no one of the parts may be compelled to pay a dispropor-
tionate part of the tax. 13
But through amendments begun in 1984, 14 revised in 1989, 15
and completed in 1992, 16 the constitution was amended to allow
agricultural and horticultural lands to be valued disproportion-
ately from other types of real property but to require them to
be valued uniformly and proportionately with other agricultural
and horticultural lands. 17 For the reader’s convenience, I repeat
that portion of the constitution, which now reads,
the Legislature may provide that agricultural land and
horticultural land, as defined by the Legislature, shall
constitute a separate and distinct class of property for pur-
poses of taxation and may provide for a different method
of taxing agricultural land and horticultural land which
results in values that are not uniform and proportion-
ate with all other real property and franchises but which
results in values that are uniform and proportionate upon
all property within the class of agricultural land and hor-
ticultural land. 18
The principles of interpreting a constitutional provision are
well settled. The words in a constitutional provision must be
interpreted and understood in their most natural and obvious
12
Neb. Rev. Stat. § 77-1501 (Reissue 2018).
13
Krings v. Garfield Cty. Bd. of Equal., 286 Neb. 352, 835 N.W.2d 750(2013).
14
See 1984 Neb. Laws, L.R. 7, § 1.
15
See 1989 Neb. Laws, L.R. 2, § 1.
16
See 1992 Neb. Laws, L.R. 219CA, § 1.
17
See Neb. Const. art. VIII, § 1(4).
18
Neb. Const. art. VIII, § 1(4) (emphasis supplied).
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Cite as 312 Neb. 757meaning unless the subject indicates or the text suggests that
they are used in a technical sense. 19 If the meaning of a consti-
tutional provision is clear, the court will give to it the meaning
that obviously would be accepted and understood by layper-
sons. 20 Constitutional provisions are not subject to strict con-
struction and receive a broader and more liberal construction
than do statutes. 21 It is the duty of courts to ascertain and to
carry into effect the intent and purpose of the framers of the
constitution or of an amendment thereto. 22
Here, the plain language requires uniformity within the
entire class of agricultural land and horticultural land. This
court is not permitted to read into this clause words which
are not there or to omit words. I respectfully submit that the
majority does so, at least implicitly. But the plain constitutional
language commands that “all property within the class of agri-
cultural land and horticultural land” be equalized.
First, the beginning part of § 1(4) states the singular—“a
separate and distinct class”—and not a plural—“one or more
separate and distinct classes.” (Emphasis supplied.) Second,
the words “all property” immediately precede the words
“within the class.” 23 Third, the last phrase reads, “uniform
and proportionate upon all property within the class of agri-
cultural land and horticultural land”—a construction using
singular and not plural. 24 This provides a plain command to
equalize all property within the class of agricultural land and
horticultural land, and it simply does not permit equalization
only within an agricultural subclass. My reading is, I respect-
fully suggest, the way these words and phrases would be read
by a layperson.
19
State ex rel. Peterson v. Shively, 310 Neb. 1, 963 N.W.2d 508 (2021).
20
Id.21
Id.22
Id.23
Neb. Const. art. VIII, § 1(4).
24
Id. (emphasis supplied).
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Cite as 312 Neb. 757The Legislature reads § 1(4) the same way that I do. A
statute proclaims, “The Legislature finds and declares that
agricultural land and horticultural land shall be a separate and
distinct class of real property for purposes of assessment.” 25 It
then states, “The assessed value of agricultural land and hor-
ticultural land shall not be uniform and proportionate with all
other real property, but the assessed value shall be uniform and
proportionate within the class of agricultural land and horti-
cultural land.” 26 Thus, the legislative language, consistent with
that of the constitution, mandates that assessed value shall be
uniform and proportionate within the class of agricultural land
and horticultural land.
Our previous case law construed this constitutional lan-
guage the same way. We said that after the amendments to
article VIII, § 1, and the enactment of statutes pursuant to such
authority providing for a different method of taxing agricultural
and horticultural land, the constitution does not require uni­
formity between the class of agricultural and horticultural land
and other types of real estate. 27 From this development, we
drew two principles: (1) “[I]t is no longer required or proper
to equalize the value of nonagricultural, nonhorticultural land
with the value of agricultural and horticultural land,” and (2)
“[e]qualization is still required within the class of agricultural
and horticultural land, because the constitution still requires
uniformity within that class.” 28
For the sake of completeness, I note that during floor debate
of the 1984 legislation submitting an amendment of article
VIII, § 1, to the voters, senators read the phrase the same
way. Admittedly, that language was slightly different, in that
it added a sentence stating, “The Legislature may provide that
agricultural land and horticultural land used solely for agricul-
tural or horticultural purposes shall constitute a separate and
25
Neb. Rev. Stat. § 77-1359 (Reissue 2018).
26
Id.27
Krings v. Garfield Cty. Bd. of Equal., supra note 13.
28
Id. at 361, 835 N.W.2d at 756.
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Cite as 312 Neb. 757distinct class of property for purposes of taxation.” 29 One sena-
tor stated:
If you read the language very carefully, it says, I’ll just
read the last part, “shall constitute a separate and distinct
class.” Very singular. It says there will be one class, a class.
What it says is, “agricultural land and horticultural land
taken together as a group will constitute a single class.” I
think we could probably diagram that on the blackboard
and all but I believe it is very clear that it is singular and
it is just a class. We’re not creating two classes. 30
Another senator agreed “100 percent.” 31 Although the 1984
language differed slightly, it closely resembles the current con-
stitutional wording.
While another statute further divides agricultural land and
horticultural land into classes and subclasses, nothing in that
other statute suggests that a misclassification protects an assess-
ment from the requirements of uniformity and proportionality. 32
Here, TERC was reviewing the refusal of the county board
of equalization to equalize comparable agricultural proper-
ties within the same taxing district in Lancaster County. The
majority suggests that the county board had no plain duty to
correct an individual discrepancy. But our case law teaches
otherwise.
In Bartlett v. Dawes Cty. Bd. of Equal., 33 this court reiterated
three important principles. First, a county board of equalization
has the duty to correct and equalize individual discrepancies
and inequalities in assessments within the county. 34 Second, in
29
1984 Neb. Laws, L.R. 7, § 1.
30
Floor Debate, L.R. 7, 88th Leg., 1st Spec. Sess. 340 (Aug. 29, 1984)
(remarks of Senator Ron Withem).
31
Id. (remarks of Senator Peter Hoagland).
32
See Neb. Rev. Stat. § 77-1363 (Cum. Supp. 2020).
33
Bartlett v. Dawes Cty. Bd. of Equal., 259 Neb. 954, 613 N.W.2d 810(2000) (superseded by statute on other grounds as stated in Cain v. Custer
Cty. Bd. of Equal., 298 Neb. 834, 906 N.W.2d 285 (2018)).
34
See id.- 787 -
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Cite as 312 Neb. 757carrying out this function, the county board must give effect to
the constitutional requirement that taxes be levied uniformly
and proportionately upon all taxable property in the coun-
ty. 35 Finally, this basic duty of county boards of equalization
remains unchanged by enactment of the Tax Equalization and
Review Commission Act. 36
The correct remedy for equalization was recognized by the
U.S. Supreme Court nearly 100 years ago in Sioux City Bridge
v. Dakota County, 37 which reversed a decision of this court. 38
There, this court found that a property, which had a valuation
disproportionately higher than comparable property, should
not have its valuation lowered. 39 This court ruled that when a
property is assessed at its true value, and other property in the
district is assessed below its true value, the proper remedy is
to have the property assessed below its true value raised, rather
than to have property assessed at its true value reduced. 40
The U.S. Supreme Court reversed this court’s decision and
remanded the case for further proceedings. 41 The high court
stated that “such a result as that reached by [this court] is
to deny the injured taxpayer any remedy at all because it is
utterly impossible for him by any judicial proceeding to secure
an increase in the assessment of the great mass of under-
assessed property in the taxing district.” 42 The Court further
stated, “The conclusion is based on the principle that where
it is impossible to secure both the standard of the true value,
35
See id.36
See id.37
Sioux City Bridge v. Dakota County, 260 U.S. 441, 43 S. Ct. 190, 67 L.
Ed. 340 (1923).
38
See Sioux City Bridge Co. v. Dakota County, 105 Neb. 843, 182 N.W. 485(1921).
39
See id.40
See id.41
See Sioux City Bridge v. Dakota County, supra note 37.
42
Id., 260 U.S. at 446.
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Cite as 312 Neb. 757and the uniformity and equality required by law, the latter
requirement is to be preferred as the just and ultimate purpose
of the law.” 43
Because the high court applied federal constitutional law,
the majority attempts to discredit the remedy. But the basic
principle of that case is instructive. Where it is impossible to
increase the misclassified agricultural land to its true value, the
preferred remedy is to reduce the injured taxpayer’s property
value to achieve the uniformity required. To refuse to do so
deprives the taxpayer of a remedy.
This court’s more recent uniformity clause jurisprudence
has also provoked criticism. 44 The majority’s implicit applica-
tion of the uniformity clause only within a subclass is fraught
with the danger of unintended consequences. Surely, this recent
experience counsels that in interpreting the uniformity clause,
this court should strictly adhere to the constitutional text, the
enabling legislation, and our previous case law—all of which
require application of the uniformity clause to all property
within the class of agricultural land and horticultural land.
After all, “Those who cannot remember the past are con-
demned to repeat it.” 45
Properly understood, § 1(4) accomplishes two related goals.
First, it permits agricultural and horticultural lands not to be
valued uniformly and proportionately with other types of real
estate, such as residential, commercial, or industrial lands.
Second, it imposes a uniformity requirement for all lands
within the separate class of agricultural land and horticul-
tural land.
Here, the assessments were not equalized. Mary’s Farm was
comparable to the Morrison property: they were located in
close proximity to one another and both were used as irrigated
43
Id.
44
See George Kilpatrick, Personal Property Tax Post Mortem: What Lies
Ahead for Nebraska, 27 Creighton L. Rev. 25 (1993).
45
George Santayana, The Life of Reason: Reason in Common Sense 284
(Scribner’s 1905).
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Cite as 312 Neb. 757cropland. Though comparable, the Morrison property was mis-
classified as dry cropland. This led to its having a lower tax
valuation. Because the irrigated acres on the Morrison property
were assessed at a lower rate than the irrigated acres on Mary’s
Farm, the Mosers’ property was not “equalized” with the value
of other agricultural land in Lancaster County. As a result, the
Mosers paid a disproportionate part of the tax.
If a taxpayer’s property is assessed at a value in excess of
its actual value, or in excess of that value at which others are
taxed, then the taxpayer has a right to relief. 46 The right is to
have the taxpayer’s property assessment reduced to the per-
centage of the property’s value at which others are taxed. 47
TERC’s decision enforced that right.
The majority incorrectly contends that application of our
long-established uniformity clause jurisprudence would have
“far-reaching consequences.” It quotes the county board’s brief
regarding equalization that might be required due to a protest
based on a “finished basement” or a “residence that is built and
unreported.” 48
But these examples would not result in reduction of the val-
ues of all other properties. Only a taxpayer who protested and
persisted in that protest would receive equalization and only if
that taxpayer’s property were significantly overvalued in com-
parison to the undervalued property. In other words, the situa-
tion here did not require the county board to lower all irrigated
farmland valuations to the Morrison property’s level. But it did
require the county board to equalize the Mosers’ property with
the Morrison property.
This is a natural consequence of equalization at the local
level, in order to provide a remedy for a protesting taxpayer
disadvantaged by another taxpayer’s undervaluation. Here,
46
See, AT&T Information Sys. v. State Bd. of Equal., supra note 11; Zabawa
v. Douglas Cty. Bd. of Equal., 17 Neb. App. 221, 757 N.W.2d 522 (2008).
47
See, Chief Indus. v. Hamilton Cty. Bd. of Equal., 228 Neb. 275, 422
N.W.2d 324 (1988); Konicek v. Board of Equalization, supra note 11.
48
See brief for appellant at 11.
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Cite as 312 Neb. 757equalization would reduce the protesting taxpayers’ burden in
a way not required for other similarly situated taxpayers who
failed to file protests or to appeal from the denial of their pro-
tests. This matters not. Other taxpayers’ failure to exercise their
rights is no defense to granting such relief to a taxpayer who
did so exercise such taxpayer’s rights. 49
The majority purports to avoid this clear constitutional com-
mand, but it cannot hide from the reality. The majority suggests
the Mosers should have protested the Morrison property’s valu-
ation. Nothing in the statute cited by the majority 50 or in that
statute’s 2018 amendment 51 suggests an intention to displace
the traditional equalization remedy. Nothing in the county
board’s brief makes any such argument. Nor has any decision
of this court or the Nebraska Court of Appeals so held. And
this notion flies in the face of long-settled uniformity clause
jurisprudence. I have already cited our numerous cases requir-
ing equalization. And this court has repeatedly said that if the
property of one citizen is valued for taxation at one-fourth its
value, others within the taxing district have the right to demand
that their property be assessed on the same basis. 52 Here, the
owners of the Morrison property are the “one citizen” and the
Mosers are the “others within the taxing district.” The Mosers
had the right to demand assessment on the same basis.
In this situation, the county board had the plain duty to
equalize. TERC was perhaps charitable in relying only on
plain duty and not systemic discrimination. The county board’s
49
84 C.J.S. Taxation § 42 (2022) (citing Kuiters v. County of Freeborn, 430
N.W.2d 461 (Minn. 1988)).
50
See Neb. Rev. Stat. § 77-1502 (Cum. Supp. 2022).
51
See 2018 Neb. Laws, L.B. 885, § 1 (adding requirement that protest “indi-
cate whether the person signing the protest is an owner of the property or
a person authorized to protest on behalf of the owner”).
52
See, Gamboni v. County of Otoe, 159 Neb. 417, 67 N.W.2d 489 (1954),
overruled in part on other grounds, Hansen v. County of Lincoln, 188 Neb.
461, 197 N.W.2d 651 (1972); State v. Back, 72 Neb. 402, 100 N.W. 952(1904); State v. Savage, supra note 7; State v. Karr, 64 Neb. 514, 90 N.W.
298 (1902); State v. Osborn, supra note 11.
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Cite as 312 Neb. 757failure to correct the misclassification after hearing the taxpay-
ers’ protest for the first year suggests, at best, bureaucratic
ineptitude, or, worse, a disdain for taxpayers’ rights in the
equalization process. Our traditional equalization jurisprudence
places the incentive for diligence where it belongs—upon the
taxing authority.
The majority purports to limit its refusal to equalize to
“error in the subclassification and undervaluation of one tax-
payer’s property.” But there is no principled distinction, based
in law, between errors in misclassification involving multiple
tracts. Perhaps at some point, such errors might be described
as systemic. But the majority does not announce a principle
which can guide county boards of equalization and TERC in
distinguishing when misclassifications are merely “isolated
error.” And I respectfully urge that the uniformity clause does
not condone this notion. Our case law teaches otherwise.
TERC was required to faithfully apply Neb. Const. art.
VIII, § 1(4), and it did so. TERC’s decision conforms to the
law, is supported by competent evidence, and is neither arbi-
trary, capricious, nor unreasonable. I would affirm its deci-
sion. Because the majority takes a different course, I respect-
fully dissent.
Papik and Freudenberg, JJ., join in this dissent.