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

• Decision Date: 29 January 1999
• Docket Number: No. S-97-802,S-97-802
• Parties: US ECOLOGY, INC., appellant, v. BOYD COUNTY BOARD OF EQUALIZATION, Boyd County, Nebraska, appellee.
• Court: Nebraska Supreme Court

Page 575

588 N.W.2d 575

256 Neb. 7

US ECOLOGY, INC., appellant, v. BOYD COUNTY BOARD OF EQUALIZATION, Boyd County, Nebraska, appellee.

No. S-97-802.

Supreme Court of Nebraska.

Jan. 29, 1999.

Syllabus by the Court

1. Taxation: Judgments: Appeal and Error. Appellate review of a final decision of the Nebraska Tax Equalization and Review Commission shall be conducted for errors on the record of the commission. 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.

2. Appeal and Error. The Supreme Court will not consider errors which are not properly assigned in a petition for further review and discussed in the supporting memorandum brief, unless plain error exists. In this context, plain error exists where there is an error in an opinion of the Court of Appeals 3. Taxation: Valuation: Appeal and Error. The Tax Equalization and Review Commission shall affirm the action taken by a county board of equalization unless evidence is adduced establishing that the action taken by the board was unreasonable or arbitrary or unless evidence is adduced establishing that the property of the appellant is assessed too low.

concerning which no complaint is made in a petition for further review, but which is encompassed within the errors raised before the Court of Appeals and which, if uncorrected, would result in an erroneous direction for retrial of a cause.

4. Taxation: Valuation: Presumptions: Evidence: Proof: Appeal and Error. There is a presumption that a county board of equalization has faithfully performed its official duties in making an assessment and has acted upon sufficient competent evidence to justify its action. That presumption remains until there is competent evidence to the contrary presented, and the presumption disappears when there is competent evidence adduced on appeal to the contrary. From that point forward, the reasonableness of the valuation fixed by the board of equalization becomes one of fact based upon all the evidence presented. The burden of showing such valuation to be unreasonable rests upon the taxpayer on appeal from the action of the board.

5. Taxation: Valuation: Proof: Appeal and Error. In an appeal from a county board of equalization, the burden of persuasion imposed on the 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 his 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.

6. Property: Valuation: Witnesses. An owner who is familiar with his property and knows its worth is permitted to testify as to its value.

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

8. Taxation: Valuation. The purchase price of a property, standing alone, is not conclusive of the actual value of property for assessment purposes; it is only one factor to be considered in determining actual value.

9. Taxation: Valuation. Pursuant to Neb.Rev.Stat. § 77-112 (Reissue 1996), the statutory measure of actual value is not what an individual buyer may be willing to pay for property, but, rather, its market value in the ordinary course of trade.

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

Carl Schuman, Boyd County Attorney, for appellee.

HENDRY, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, and McCORMACK, JJ.

STEPHAN, J.

This case involves a dispute with regard to the valuation for purposes of taxation of a tract of land in Boyd County which U.S. Ecology, Inc., purchased in July 1990 for $320,000 as a potential site for a low-level radioactive waste disposal facility. From 1990 through 1995, the assessed value of the land was never more than $113,875, but in 1996 the Boyd County Board of Equalization (Board) increased the valuation to $320,000. US Ecology appealed to the Nebraska Tax Equalization and Review Commission (TERC), which affirmed the Board's 1996 valuation based upon a 2-to-1 determination that U.S. Ecology failed to prove that the Board acted arbitrarily or capriciously in increasing the valuation for 1996. US Ecology sought review by the Nebraska Court of Appeals, which reversed, based upon its determination that there was sufficient evidence to establish that the Board had acted arbitrarily and capriciously in establishing the 1996 valuation. The Court of Appeals further determined that the property was agricultural land not being used for agricultural purposes and therefore should be valued

at 100 percent of its actual value. It reversed, and remanded the cause to the TERC for further proceedings consistent with the Court of Appeals' opinion. US Ecology v. Boyd Cty. Bd. of Equal., 6 Neb.App. 956, 578 N.W.2d 877 (1998). We granted the Board's petition for further review and now affirm the judgment of the Court of Appeals.

FACTUAL AND PROCEDURAL BACKGROUND

We summarize the facts and procedural background of this case which are set forth in greater detail in the published opinion of the Court of Appeals. US Ecology is a California corporation engaged in radioactive and hazardous waste handling, processing, and disposal. In July 1990, it purchased the subject property in Boyd County because of its suitability as a site for a low-level radioactive waste disposal facility which U.S. Ecology intends to build and operate if it obtains the necessary license from the State of Nebraska. See Neb.Rev.Stat. § 81-1578 et seq. (Reissue 1994 & Cum.Supp.1998). The license application has been pending since 1990. The subject property consists of approximately 317.99 acres located 3 miles west of Butte, Nebraska. If the license is obtained, approximately 110 acres of the subject property will be used for construction of the actual facility and the remaining acres will be used for site-monitoring and testing. Since 1989, between $82 and $83 million has been spent on the project to develop the waste disposal facility in Boyd County. However, the only improvements on the proposed site include a small structure, several monitoring wells, and other technical improvements used for testing for the anticipated future use of the property.

US Ecology paid approximately $1,000 per acre for the subject property. At the time of purchase, it was aware that similar property was selling for about $400 per acre; however, it was willing to pay a premium price because of the suitability of the property as a potential site for the waste disposal facility. Although it had previously been used as farmland, the subject property has not been used for agricultural purposes since 1990.

From 1990 through 1995, the subject property was assessed as agricultural land, and its highest assessed value during this period was $113,785 in 1995. However, on July 22, 1996, the Board determined that the assessed value should be increased to $320,000. US Ecology perfected a timely appeal to the TERC pursuant to Neb.Rev.Stat. § 77-1510 (Reissue 1996). The TERC held a hearing at which counsel for the Board and U.S. Ecology appeared. The Board did not call any witnesses but offered five exhibits which included the minutes of its July 22 meeting, the option contract pursuant to which U.S. Ecology purchased the subject property, the July 1990 deed transferring title of the subject property to U.S. Ecology, and tax-assessment documents pertaining to a licensed landfill facility in Dakota County and an operational hazardous waste disposal facility in Kimball County.

US Ecology called two witnesses, John DeOld and Wayne Kubert. Since 1988, DeOld has been employed by U.S. Ecology as manager for its Nebraska Central Interstate project. His duties include management of U.S. Ecology's efforts to comply with contracts which it has with the Central Interstate Compact Commission to site, develop, license, operate, and close the low-level radioactive waste disposal facility for which the subject property is the proposed site. He stated that a decision on the pending license application was expected no earlier than the last few months of 1999 and that U.S. Ecology did not know with any degree of certainty whether it would ever receive a license for the proposed facility. DeOld testified that since the cessation of farming operations on the property in 1990, U.S. Ecology has been conducting on-site environmental and monitoring activities, including ground water and atmosphere studies to establish a baseline of information showing the condition of the property with respect to any hazardous or radiological materials that may be found on the site. He stated that the subject property is primarily grassland and that U.S. Ecology pays to have the grass mowed and hauled away once or twice a year. DeOld testified that in his opinion, the property had a fair Wayne Kubert, a real estate appraiser retained by U.S. Ecology, also testified as a witness before the TERC. Kubert stated that because of the uncertainty regarding the acceptance of U.S. Ecology's license application, the highest and best use of the property in 1996 was for agricultural purposes. Kubert performed an appraisal of the property using the market or comparative value approach. He determined that the real property should be valued at $154,710 and improvements at $11,290, for a total of $166,000. Valuing the property at 80 percent, which is the way agricultural land is valued, the property had a value of $123,710 and the improvements a value of $11,290, for a total value of $135,000. Kubert certified that in conducting the appraisal he complied with the "Uniform Standards of Professional Practice ... as...