U.S. Ecology, Inc. v. Boyd County Bd. of Equalization

• Decision Date: 05 May 1998
• Docket Number: No. A-97-802,A-97-802
• Parties: US ECOLOGY, INC., Appellant, v. BOYD COUNTY BOARD OF EQUALIZATION, Boyd County, Nebraska, Appellee.
• Court: Nebraska Court of Appeals

Page 877

578 N.W.2d 877

6 Neb.App. 956

US ECOLOGY, INC., Appellant, v. BOYD COUNTY BOARD OF EQUALIZATION, Boyd County, Nebraska, Appellee.

No. A-97-802.

Court of Appeals of Nebraska.

May 5, 1998.

Syllabus by the Court

1. Taxation: Appeal and Error. Any person aggrieved by a final decision in a case appealed to the Tax Equalization and Review Commission, whether the decision is affirmative or negative in form, shall be entitled to judicial review in the Nebraska Court of Appeals.

2. Taxation: Appeal and Error. In an appeal from the Tax Equalization and Review Commission, the appellate court reviews for errors appearing on the record of the commission.

3. Judgments: Appeal and Error. When reviewing an order 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.

4. Taxation: Appeal and Error. An appellate court may affirm, reverse, or modify the decision of the Tax Equalization and Review Commission or remand the cause for further proceedings.

5. Evidence: Records: Appeal and Error. A bill of exceptions is the only vehicle for bringing evidence before an appellate court; evidence which is not made a part of the bill of exceptions may not be considered.

6. Taxation: Evidence: Proof: Appeal and Error. Neb.Rev.Stat. § 77-1511 (Reissue 1996) provides that the Tax Equalization and Review Commission shall hear appeals from a county board of equalization as in equity and without a jury and determine anew all questions raised before the county board of equalization which relate to the liability of the property to assessment, or the amount thereof. The commission shall affirm the action taken by the board unless evidence is adduced establishing that the action of the board was unreasonable or arbitrary or unless evidence is adduced establishing that the subject property was assessed too low.

7. Taxation: Appeal and Error. Issues not presented to a county board of equalization are not properly before the Tax Equalization and Review Commission or an appellate court.

8. Taxation: Valuation: Proof. The taxpayer bears the burden of proving that the value of a property has been arbitrarily or unlawfully fixed by a county board of equalization in an amount greater than its actual value.

9. Real Estate: Valuation: Witnesses. That a resident owner who is familiar with his property and knows its worth is permitted to testify as to its value without further foundation rests upon the owner's familiarity with the property's characteristics, its actual and potential uses, and the owner's experience in dealing with it.

10. Taxation: Valuation. In tax valuation cases, actual value is largely a matter of opinion and without a precise yardstick for determination with complete accuracy.

11. Real Estate: Valuation. The sale price and the earning capacity of a property are only factors to be considered in determining actual value or fair market value.

12. Real Estate: Agriculture: Taxation: Valuation. Neb.Rev.Stat. § 77-201 (Reissue 1996) provides that except as provided in subsection (2), all real property in this state, not expressly exempt therefrom, shall be subject to taxation and shall be valued at its actual value. Subsection (2) provides that agricultural land and horticultural land used solely for agricultural or horticultural purposes shall constitute a separate and distinct class of property for purposes of property taxation, shall be subject to taxation unless expressly exempt from taxation, and shall be valued at its taxable value.

13. Real Estate: Agriculture: Taxation: Valuation. Actual value of real property for purposes of taxation shall mean the 14. Real Estate: Agriculture: Taxation: Valuation. Agricultural land which is not being used for agricultural or horticultural purposes is not entitled to the special tax treatment accorded land used solely for agricultural or horticultural purposes and is to be valued at 100 percent of its actual value.

market value of real property in the ordinary course of trade. Actual value may be determined using professionally accepted mass appraisal techniques, including, but not limited to: (1) comparison with sales of real property of known or recognized value, taking into account location, zoning, and current functional use; (2) earning capacity of the real property; and (3) reproduction cost less depreciation. Taxable value of agricultural land and horticultural land for purposes of taxation shall mean the value determined pursuant to Neb.Rev.Stat. §§ 77-1359 to 77-1365 (Reissue 1996).

Steven G. Seglin, of Crosby, Guenzel, Davis, Kessner & Kuester, Lincoln, for appellant.

Carl Schuman, Boyd County Attorney, for appellee.

INTRODUCTION

INBODY, Judge.

US Ecology, Inc., appeals the July 8, 1997, decision of the Nebraska Tax Equalization and Review Commission (Commission) affirming the increase in the valuation of real property owned by US Ecology by the Boyd County Board of Equalization (Board) from $113,785 to $320,000. For the reasons set forth herein, we reverse, and remand for further proceedings.

STATEMENT OF FACTS

US Ecology is a California corporation engaged in radioactive and hazardous waste handling, processing, and disposal. An investigation was conducted by US Ecology and its subcontractors throughout Nebraska to locate an appropriate site for a low-level radioactive waste facility pursuant to US Ecology's exclusive contract with the Central Interstate Compact Commission. This investigation disclosed approximately 80 sections of land suitable for such a venture, including the approximately 320 acres of land legally described as "The East One-Half of Section Thirteen (13), Township Thirty-four (34) North, Range Fourteen (14) West of the 6th Principal Meridian [in Boyd County, Nebraska,] [e]xcept a tract of land located in the South One-Half of the Southeast Quarter (S 1/2SE 1/4)...." This property will hereinafter be referred to as the "subject property."

In July 1990, US Ecology purchased the subject property. Because of the suitability of this particular property as a location for a low-level radioactive waste facility, US Ecology paid a premium for the land, slightly more than $1,000 per acre, for a total purchase price of $320,000, when similar land was selling for approximately $400 per acre.

From 1990 through 1995, the subject property had been assessed as agricultural land, with a 1995 assessed value of $113,785. However, in 1996, the Board determined that the land should no longer be assessed as agricultural land and increased its assessed value to $320,000. US Ecology timely appealed this determination to the Commission.

On July 2, 1997, a hearing was held before the Commission. The Board introduced into evidence five exhibits: the July 1990 deed transferring title of the subject property to US Ecology; the option contract between US Ecology and the seller; the minutes from the Board's July 22, 1996, meeting; and tax assessments of a licensed landfill facility in Dakota County and an up-and-running hazardous waste facility in Kimball County.

US Ecology called two witnesses at the hearing: John DeOld, project manager since the summer of 1988 for US Ecology's central interstate project, and Wayne Kubert, a real estate appraiser. DeOld testified that in July 1990, US Ecology submitted its application for the required operating license from the State of Nebraska, which set forth that only about 110 acres will be used for the actual waste disposal operation, with the remaining acres probably to be used for site-monitoring and similar purposes. The application had not been approved as of the date of the hearing, and the earliest that US Ecology could get license approval, if it was to be successful, would be the last few months of 1999. Furthermore, US Ecology DeOld testified that for the first year after US Ecology purchased the subject property, a tenant farmer already using the site continued farming the property. Since that time, US Ecology has been conducting on-site environmental monitoring activities, including ground water and atmospheric studies and measurements of soil and vegetation quality, to establish a baseline of information showing the condition of the property with respect to any hazardous or radiological material that might be found on the site. Finally, DeOld testified that in his opinion, the reasonable market value of the property on January 1, 1996, and continuing up to the date of the hearing was approximately $450 per acre.

does not know with any degree of certainty that it will receive a license for the proposed Boyd County facility.

US Ecology's second and final witness was Kubert, a real estate appraiser. Kubert testified that because of the uncertainty regarding the acceptance of US Ecology's license application, the highest and best use of the subject property is for agricultural purposes. He performed an appraisal of the property using the market or comparative value approach. In doing so, he considered the value of a 150-square-foot concrete building which US Ecology had built on the land. Additionally, there was evidence presented that US Ecology has installed approximately 50 wells on the property for the purpose of measuring ground water flow and monitoring water quality, moved two leased mobile-home-type trailers onto the property, and built or maintained a rudimentary road system.

Kubert valued the property at $154,710 and the improvements at $11,290, for a total of $166,000. Valuing the subject property at 80 percent, which is the way agricultural land is valued, the subject property has a value of $123,710 and the improvements are valued at $11,290, with the total value at $135,000. Kubert then testified that he also analyzed the value of the subject property based upon the Boyd County Assessor's value for each type of soil type and land use to get an...