County of Adams v. Nebraska State Bd. of Equalization and Assessment

• Decision Date: 25 July 1997
• Docket Number: No. S-95-1122,S-95-1122
• Citation: County of Adams v. Nebraska State Bd. of Equalization and Assessment, 566 N.W.2d 392, 252 Neb. 847 (Neb. 1997)
• Parties: COUNTY OF ADAMS et al., Appellants, v. NEBRASKA STATE BOARD OF EQUALIZATION AND ASSESSMENT et al., Appellees.
• Court: Nebraska Supreme Court

Page 392

566 N.W.2d 392

252 Neb. 847

COUNTY OF ADAMS et al., Appellants, v.NEBRASKA STATE BOARD OF EQUALIZATION AND ASSESSMENT et al., Appellees.

No. S-95-1122.

Supreme Court of Nebraska.

July 25, 1997.

Syllabus by the Court

1.Demurrer: Pleadings: Appeal and Error.When reviewing an order sustaining a demurrer, an appellate court is required to accept as true all the facts which are well pled, together with the proper and reasonable inferences of law and fact which may be drawn therefrom, but does not accept as true the conclusions of the pleader.

2.Judgments: Appeal and Error.On questions of law, an appellate court has an obligation to reach its own conclusions independent of those reached by the lower courts.

3.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.

4.Judgments: Collateral Attack.When a judgment is attacked in a way other than by proceeding in the original action to have it vacated, reversed, or modified, or by a proceeding in equity to prevent its enforcement, the attack is a "collateral attack."

5.State Equalization Board: Taxation: Valuation: Collateral Attack.The actions of the Nebraska State Board of Equalization and Assessment in equalizing as between different counties are in their nature quasi-judicial and are not subject to collateral attack except upon grounds of fraud, actual or constructive, or for the exercise of a power not conferred upon the board by statute.

Patrick T. O'Brien, of Bauer & Galter Law Firm, Paul L. Douglas, and John M. Boehm, Lincoln, for appellants.

Don Stenberg, Attorney General, and L. Jay Bartel, Lincoln, for appellee Board.

Tim Engler, of Harding, Shultz & Downs, Lincoln, for appelleesMid-America Long Distance Corp. et al.

William R. Johnson and Raymond E. Walden, of Kennedy, Holland, DeLacy & Svoboda, Omaha, for appelleesNatural Gas Pipeline Company of America et al.

William E. Peters, of Peters & Chunka, P.C., Lincoln, for appelleesWilliams Natural Gas Co. et al.

Norman H. Wright, of Fraser, Stryker, Vaughn, Meusey, Olson, Boyer & Bloch, P.C., Omaha, for appelleesAmerican Airlines, Inc., et al.

WHITE, C.J., and CAPORALE, WRIGHT, CONNOLLY, GERRARD, and McCORMACK, JJ.

WRIGHT, Justice.

The appellants are 124 political subdivisions of the State of Nebraska, including 72 counties, 23 cities, and 29 school districts (Subdivisions).The Subdivisions appeal from the order of the Lancaster County District Court, which sustained demurrers to the Subdivisions' petitions.The demurrers were filed by the appellees, the Nebraska State Board of Equalization and Assessment(Board) and numerous taxpayers.

SCOPE OF REVIEW

When reviewing an order sustaining a demurrer, an appellate court is required to accept as true all the facts which are well pled, together with the proper and reasonable inferences of law and fact which may be drawn therefrom, but does not accept as true the conclusions of the pleader.Talbot v. Douglas County, 249 Neb. 620, 544 N.W.2d 839(1996).

On questions of law, an appellate court has an obligation to reach its own conclusions independent of those reached by the lower courts.In re Estate of Ackerman, 250 Neb. 665, 550 N.W.2d 678(1996).

FACTS

On April 12, 1995, the Subdivisions filed petitions alleging that in tax years 1989 and 1990, the Board wrongfully valued certain centrally assessed personal property at zero as a part of the normal equalization process for the respective tax years.The petitions requested that the Board's order of April 12, 1991, which recertified the valuations of numerous centrally assessed taxpayers for tax year 1989 at zero, be declared void.In addition, the 72 counties asked that the Board's order of June 14, 1991, which recertified the valuations of flight equipment owned by various centrally assessed air carriers at zero for tax year 1990, be declared void.

The orders of April 12 and June 14, 1991, were made by the Board pursuant to Northern Natural Gas Co. v. State Bd. of Equalization & Assessment, 232 Neb. 806, 443 N.W.2d 249(1989), cert. denied493 U.S. 1078, 110 S.Ct. 1130, 107 L.Ed.2d 1036(1990), andNatural Gas Pipeline Co. v. State Bd. of Equalization & Assessment, 237 Neb. 357, 466 N.W.2d 461(1991).A review of those cases is helpful in understanding the disposition of the present case.

In Northern Natural Gas Co., we considered the effect of Trailer Train Co. v. Leuenberger, 885 F.2d 415(8th Cir.1988), which construed "s 306(1)(d) of the Railroad Revitalization and Regulatory Reform Act of 1976(the 4-R Act),"232 Neb. at 809, 443 N.W.2d at 252.We concluded that we were required to correct a "constitutional inequity by lowering the complaining taxpayer's valuation to such an extent so as to equalize it with other property in the state."Northern Natural Gas Co., 232 Neb. at 815, 443 N.W.2d at 256.We reversed the decision of the Board, which had refused Northern Natural Gas Company and Enron Liquids Pipeline Company's request that their property be equalized with property of railroads and car companies operating in Nebraska, and remanded the cause to the Board for further proceedings.At the same time, we determined that a companion case involving Natural Gas Pipeline Company of America (NGPL) and Trailblazer Pipeline Company(Trailblazer) was controlled by our holding in Northern Natural Gas Co.Thus, we reversed the Board's order and remanded those causes for further proceedings.SeeTrailblazer Pipeline Co. v. State Bd. of Equalization Assessment, 232 Neb. 823, 442 N.W.2d 386(1989), cert. denied493 U.S. 1078, 110 S.Ct. 1130, 107 L.Ed.2d 1036(1990).

Following the issuance of Northern Natural Gas Co., NGPL and Trailblazer, which owned centrally assessed property in Nebraska and operated natural gas transmission pipelines in Nebraska, sought equalization by the Board of the value of their property for taxation.The Board found that the State of Nebraska was preempted from taxing the personal property of car companies and railroad companies pursuant to the 4-R Act and that as a result of such federal preemption, the personal property of car companies and railroad companies was not subject to tax and therefore could not be the basis for a claim for equalization.The Board explained that, as a practical matter, the claims of NGPL and Trailblazer were claims requesting that their business and personal property and/or real property be exempt from taxation.The Board concluded that it had no statutory or constitutional authority to rule upon such a claim.On appeal, we reversed the Board's decision and remanded the causes to the Board for further proceedings.SeeNatural Gas Pipeline Co. v. State Bd. of Equalization, supra.

Following remand in Natural Gas Pipeline Co., the Board in the instant case equalized the personal property portion of the taxpayers' 1989 valuation to zero and ordered the State Tax Commissioner to recertify the 1989 value of each company to its respective counties in accordance with the order of the Board.The Nebraska Department of Revenue recommended that the Board order that the personal property of the taxpayers be "equalized to zero," and the Board did so.Pursuant to directions from the Board, the State Tax Commissioner notified the counties of the Board's decision and directed that refunds be issued to the taxpayers in accordance with the recertified values.No appeal of the 1991 orders was taken.SeeCounty of Adams v. State Bd. of Equal., 247 Neb. 179, 525 N.W.2d 629(1995)(County of Adams I ).

In July 1991, we issued MAPCO Ammonia Pipeline v. State Bd. of Equal., 238 Neb. 565, 471 N.W.2d 734(1991)(MAPCO I ), cert. denied508 U.S. 960, 113 S.Ct. 2930, 124 L.Ed.2d 681(1993).MAPCO I was a direct appeal from the Board's denial of the taxpayers' request for equalization of the 1990 values of their real and personal property with certain statutorily exempted property.The taxpayers contended that their property should be equalized at zero for 1990 because the State Tax Commissioner did not value, assess, or tax any rolling stock of railroad or carline companies operating in Nebraska in 1990.We concluded in MAPCO I that this proposed remedy was inappropriate:

Equalization is the process of ensuring that all taxable property is placed on the assessment rolls at a uniform percentage of its actual value....As we said in Natural Gas Pipeline Co., [237 Neb.] at 366, 466 N.W.2d at 467, "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."

238 Neb. at 577, 471 N.W.2d at 742.We determined that

[t]he process of equalization, therefore, cannot be applied to property that is not taxed.The appellants' remedy in this case, although based on the uniformity and proportionality requirement of Neb. Const. art. VIII, § 1, does not involve "equalization."Any language in our opinion in Northern Natural Gas Co., supra, which might be read as implying the contrary is hereby disapproved.

MAPCO I, 238 Neb. at 577, 471 N.W.2d at 742.

MAPCO I determined that the taxpayers' remedy was not for their property to be "equalized" at zero percent of actual value, but for the property to be taxed uniformly and proportionately in compliance with Neb. Const. art. VIII, § 1.Therein, we declared unconstitutional a number of statutory exemptions which the federal court in Trailer Train Co. v. Leuenberger, 885 F.2d 415(8th Cir.1988), had cited as the basis for finding discriminatory taxation of railroad rolling stock and for...