Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
05/25/2018 09:06 AM CDT




                                                      - 933 -
                                  Nebraska Supreme Court A dvance Sheets
                                          299 Nebraska R eports
                      BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                                          Cite as 299 Neb. 933




                       Betty L. Green Living Trust and R ichard R. Green
                          Living Trust, appellants, v. Morrill County
                                Board of Equalization, appellee.
                                                 ___ N.W.2d ___

                                        Filed May 11, 2018.     No. S-17-873.

                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.	 Taxation: Appeal and Error. Questions of law arising during appellate
                    review of the Tax Equalization and Review Commission’s decisions are
                    reviewed de novo on the record.
                4.	 Administrative Law: Judgments. Whether an agency decision con-
                    forms to the law is by definition a question of law.
                5.	 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.
                6.	 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, 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 evi-
                    dence presented.
                7.	 Taxation: Valuation: Proof: Appeal and Error. The burden of show-
                    ing a valuation to be unreasonable rests upon the taxpayer on appeal
                    from the action of the board of equalization.
                                    - 934 -
             Nebraska Supreme Court A dvance Sheets
                     299 Nebraska R eports
    BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                        Cite as 299 Neb. 933

 8.	 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
     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.
 9.	 Taxation: Valuation: Witnesses. A resident owner who is familiar with
     his or her property and knows its worth is permitted to testify as to its
     value without further foundation. This principle 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.

  Appeal from the Tax Equalization and Review Commission.
Affirmed.
  Timothy L. Moll and Anthony M. Aerts, of Rembolt Ludtke,
L.L.P., for appellants.
   Travis R. Rodak, Morrill County Attorney, for appellee.
   Heavican, C.J., Miller-Lerman, Cassel, Stacy, and Funke,
JJ., and Colborn and Samson, District Judges.
   Miller-Lerman, J.
                     NATURE OF CASE
   This appeal involves the valuations of certain grassland
properties owned by the Betty L. Green Living Trust and the
Richard R. Green Living Trust (the Trusts). The Trusts appeal
from the July 18, 2017, order of the Tax Equalization and
Review Commission (TERC) which affirmed the valuations
which had been established by the Morrill County assessor and
were approved by the Morrill County Board of Equalization
(the Board). We affirm TERC’s order.
                  STATEMENT OF FACTS
  Between them, the Trusts own five grassland parcels of
agricultural and horticultural land located in Morrill County,
Nebraska, the assessed valuations of which for tax year 2016
were the subject of protests. In its order, TERC dismissed
                              - 935 -
           Nebraska Supreme Court A dvance Sheets
                   299 Nebraska R eports
    BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                        Cite as 299 Neb. 933

the case involving a sixth property for lack of jurisdiction.
The Trusts do not challenge that part of the decision, and
therefore, we discuss only the five parcels that are at issue in
this appeal.
   For tax year 2016, the assessor determined the assessed
valuations of the five properties to be $144,025, $106,260,
$166,080, $157,410, and $186,470, for a total of $760,245. The
Trusts protested the assessments to the Board and requested
assessed valuations of $100,249, $41,824, $132,076, $91,627,
and $78,966, respectively, for a total of $444,742. The Board
accepted the assessor’s valuations and denied the protests. The
Trusts appealed to TERC.
   As they argued to the Board and to TERC, the Trusts assert
in this appeal that the assessor used a method of valuation that
was flawed when applied to grassland properties such as the
properties at issue in this case. TERC noted in its order that
valuation of agricultural and horticultural land is governed
by, inter alia, chapter 77, article 13, of the Nebraska Revised
Statutes and the regulations adopted thereunder by the Property
Tax Administrator and the Nebraska Department of Revenue’s
property assessment division (PAD). TERC found Neb. Rev.
Stat. § 77-1363 (Cum. Supp. 2016) to be relevant to this case.
Section 77-1363 provides as follows:
         Agricultural land and horticultural land shall be divided
      into classes and subclasses of real property under sec-
      tion 77-103.01, including, but not limited to, irrigated
      cropland, dryland cropland, grassland, wasteland, nurser-
      ies, feedlots, and orchards, so that the categories reflect
      uses appropriate for the valuation of such land accord-
      ing to law. Classes shall be inventoried by subclasses
      of real property based on soil classification standards
      developed by the Natural Resources Conservation Service
      of the United States Department of Agriculture as con-
      verted into land capability groups by the Property Tax
      Administrator. County assessors shall utilize soil surveys
      from the Natural Resources Conservation Service of the
                             - 936 -
           Nebraska Supreme Court A dvance Sheets
                   299 Nebraska R eports
    BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                        Cite as 299 Neb. 933

      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 [TERC] to achieve more uniform and proportion-
      ate valuations.
   TERC described the law and regulations relevant to valua-
tion in this case as follows:
         In Nebraska agricultural land and horticultural land
      classes shall be inventoried by subclasses of real property
      based on soil classification standards developed by the
      Natural Resources Conservation Service (NRCS) of the
      United States Department of Agriculture as converted
      into land capability groups (LCG) by the Property Tax
      Administrator. County assessors are required to utilize
      these LCGs as directed by the Property Tax Administrator.
      The Property Tax Administrator and the Nebraska
      Department of Revenue’s [PAD] has adopted and prom­
      ulgated Rules and Regulations to carry out their duties
      pertaining to the classification of agricultural and horti-
      cultural land by LCGs. These rules and regulations state
      that the conversion legend for all LCGs is prepared by the
      PAD according to the dryland capability classification of
      each soil that shows, in a general way, the suitability of
      each soil for most kinds of field crops. This conversion
      legend shows the LCGs for each soil in a county whether
      in grassland, dryland or irrigated cropland.
         PAD’s regulations require county assessors to inven-
      tory and categorize each parcel of agricultural land using
      the following classes: (1) irrigated cropland; (2) dryland
      cropland; (3) grassland; and (4) wasteland. The county
      assessor is then required to use a soil conversion legend
      created by PAD to assign agricultural land to an appropri-
      ate LCG.
         For grassland the LGCs 1G1, 1G, 2G1, 2G, 3G1, 3G,
      4G1, and 4G should generally progress from very high
                             - 937 -
           Nebraska Supreme Court A dvance Sheets
                   299 Nebraska R eports
    BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                        Cite as 299 Neb. 933

      yields of forage to very low yields of forage. In addition
      to the soil conversion legend, the regulations provide
      LCG definitions and guidelines for use by county asses-
      sors for purposes of assessing agricultural and horticul-
      tural land. The regulations also permit county assessors to
      develop additional LCG sub-classifications if needed to
      achieve uniform and proportionate valuation.
   Much of the case that the Trusts presented to TERC was
based on testimony and exhibits provided by Gerald W. Green,
who is the trustee of the Trusts. Green testified regarding
his experience and study in the area of agricultural land
valuation. Through Green, the Trusts presented evidence to
TERC which purported to show that the land capability groups
(LCG) assignments determined by the PAD for grassland soil
types present in Morrill County, when compared to Natural
Resources Conservation Service range production ratings, did
not progress from very high yields of forage to very low yields
of forage. In other words, the Trusts argued that grassland
soil types assigned to the 1G1 classification should have the
highest yields of forage while those assigned to the 4G classi-
fication should have the lowest yields of forage. The evidence
presented through Green purported to show that this expecta-
tion was not the case and that instead, a full range of yields
of forage was present in each LCG classification and some
soils classified as 4G had higher yields of forage than some
soils classified as 1G. Green opined that the LCG assign-
ments were random, arbitrary, and virtually meaningless and
that therefore, the LCG’s established by the PAD for grassland
classifications did not meet the requirements of the applicable
regulations and did not result in assessments that were uniform
and proportionate.
   Green proposed an alternate valuation methodology that
did not use the LCG’s determined by the Property Tax
Administrator and instead categorized grassland properties by
the Natural Resources Conservation Service range production
rating. Valuations would be determined by using comparable
                              - 938 -
           Nebraska Supreme Court A dvance Sheets
                   299 Nebraska R eports
    BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                        Cite as 299 Neb. 933

sales in Morrill County and nearby counties and making “a
determination of what buyers are paying for livestock carry-
ing capacity or in other words, $/AUM (Animal Unit Month).”
Such “$/AUM” could then be “applied to all grassland parcels
to come up with a valuation that is based on the current market
conditions and the individual parcel’s productivity.” The Trusts
calculated their requested valuations for the subject properties
by determining a dollar value per animal unit month (AUM)
based on sales of other grassland properties in Morrill County
and then applying that dollar value per AUM to AUM’s for
the subject properties. This process resulted in the requested
assessed valuations noted above.
   In its order of July 18, 2017, TERC acknowledged the
Trusts’ evidence and stated that “[t]he LCG assignments for
each grassland soil type according to the Rules and Regulations
of the Department of Revenue for grassland in Morrill County
appear to be flawed when looking at the [Natural Resources
Conservation Service] production ratings for each soil type
compared to its assigned LCG.” In its order, TERC neverthe-
less found that while the Trusts showed potential flaws in the
LCG assignments for grasslands, they “failed to demonstrate
that this flaw has resulted in assessed value determinations
in Morrill County that are incorrect or grossly excessive and
the result of systematic will or failure of a plain legal duty.”
In reaching this determination, TERC noted the assessor had
testified that she valued the Trusts’ properties “in the same
way that she valued all agricultural and horticultural prop-
erty in Morrill County, and that this valuation followed the
requirements of law imposed upon her.” The assessor “looked
at all sales, not just sales containing only grassland, to deter-
mine the assessed values for agricultural and horticultural land
values in all classes, irrigated, dryland and grassland.” With
respect to the specific properties at issue in this case, the court
described the assessor’s procedure, relating that “there were
no sales of properties with the same soil types as those on the
[Trusts’ properties] so she utilized her training and experience
                             - 939 -
           Nebraska Supreme Court A dvance Sheets
                   299 Nebraska R eports
   BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                       Cite as 299 Neb. 933

along with the sales information pertaining to similar rough
rocky ridge areas to determine the assessed values for” the
Trusts’ properties. The assessor, the court wrote, had noted in
this regard that sales of such “rough rocky ridge areas in and
around Morrill County were influenced by factors other than
productivity alone.”
   As compared to the assessor’s approach, TERC emphasized
that the valuation methodology urged by the Trusts “focused
on a single factor, production of forage, as the basis for [the]
entire analysis, alleging that no other factors apply to grass-
land values in Morrill County.” TERC noted that the asses-
sor “testified that she had no market information to indicate
that a reclassification of grassland soil types from the flawed
LCG’s . . . was warranted when determining assessed values
for Morrill County.” TERC noted that although the asses-
sor acknowledged that production capability was one factor
to be considered when valuing grassland, the assessor also
“testified that the sales she utilized indicated that there were
other factors at work in the market beyond production of
forage alone,” and that she “determined the assessed values
for grassland in Morrill County based on all of the evidence
before her,” which included both the concerns presented by
the Trusts as well as the legal requirements imposed on her in
making assessments.
   Taking all this into consideration, TERC found that
      while the [Trusts have] demonstrated that there are flaws
      in the LCGs classified as grassland determined by the
      PAD, the [Trusts have] failed to demonstrate that this
      flaw has resulted in assessed value determinations in
      Morrill County that are incorrect or grossly excessive
      and the result of systematic will or failure of a plain
      legal duty.
TERC further found that the Trusts did not establish by clear
and convincing evidence that the valuations placed on their
properties, when compared to valuations placed on similar
property, were grossly excessive and the result of ­systematic
                             - 940 -
           Nebraska Supreme Court A dvance Sheets
                   299 Nebraska R eports
    BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                        Cite as 299 Neb. 933

will or failure of a plain legal duty and not mere error
of judgment.
   TERC concluded that there was “not competent evidence to
rebut the presumption that the . . . Board faithfully performed
its duties and had sufficient competent evidence to make its
determination.” TERC further concluded that there was “not
clear and convincing evidence that the . . . Board’s decision
was arbitrary or unreasonable.” TERC therefore denied the
Trusts’ appeals and affirmed the valuations determined by
the Board.
   The Trusts appeal TERC’s order.
                ASSIGNMENTS OF ERROR
   The Trusts claim, restated and renumbered, that TERC
erred when it (1) improperly applied the standard of review,
(2) concluded that they failed to rebut the presumption of
correctness as to the Board’s determinations, and (3) found
that the Board’s valuations were not arbitrary, capricious, and
unreasonable.
                   STANDARDS OF REVIEW
   [1,2] Appellate courts review decisions rendered by TERC
for errors appearing on the record. Platte River Crane Trust
v. Hall Cty. Bd. of Equal., 298 Neb. 970, 906 N.W.2d 646
(2018). When reviewing a judgment for errors appearing on
the record, an appellate court’s inquiry is whether the decision
conforms to the law, is supported by competent evidence, and
is neither arbitrary, capricious, nor unreasonable. Id.
   [3,4] Questions of law arising during appellate review of
TERC’s decisions are reviewed de novo on the record. County
of Webster v. Nebraska Tax Equal. & Rev. Comm., 296 Neb.
751, 896 N.W.2d 887 (2017). Whether an agency decision con-
forms to the law is by definition a question of law. Id.
   [5] Agency action is arbitrary, capricious, and unreason-
able 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. County of Douglas
                              - 941 -
           Nebraska Supreme Court A dvance Sheets
                   299 Nebraska R eports
    BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                        Cite as 299 Neb. 933

v. Nebraska Tax Equal. & Rev. Comm., 296 Neb. 501, 894
N.W.2d 308 (2017).
                           ANALYSIS
    The Trusts generally claim that TERC erred when it affirmed
the Board’s decision accepting the assessor’s valuations of their
properties for the 2016 tax year. The Trusts specifically argue
that TERC misapplied the standard of review, that TERC erred
when it found that the Trusts did not rebut the presumption of
correctness of the Board’s decision, and that TERC erred when
it failed to find the Board’s decision to be arbitrary, capricious,
and unreasonable. We reject these assignments of error and
affirm TERC’s order.
Standards of Review.
   With regard to the standard of review that TERC is to use
when reviewing decisions of county boards of equalization,
Neb. Rev. Stat. § 77-5016(9) (Cum. Supp. 2016) provides
as follows:
      In all appeals, excepting those arising under section
      77-1606, 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.
   [6-8] We have held that the language of § 77-5016(9) cre-
ates a presumption 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.
JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. of Equal., 285 Neb.
120, 825 N.W.2d 447 (2013). That presumption remains until
there is competent evidence to the contrary presented, and
the presumption disappears when there is competent evidence
                              - 942 -
           Nebraska Supreme Court A dvance Sheets
                   299 Nebraska R eports
    BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                        Cite as 299 Neb. 933

adduced on appeal to the contrary. Id. From that point for-
ward, the reasonableness of the valuation fixed by the board
of equalization becomes one of fact based upon all the evi-
dence presented. Id. The burden of showing such valuation to
be unreasonable rests upon the taxpayer on appeal from the
action of the board. Id. We have further stated that 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 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. Id. The burden of persuasion
always remains with the taxpayer. See id.
   The Trusts assert that TERC misapplied the foregoing stan-
dards in this case. They argue that TERC erred when it found
the Trusts failed to rebut the presumption of validity afforded
by § 77-5016(9) to the Board and that it compounded the
error by applying a presumption in favor of the Board when
it found that the Board’s valuation of their property was not
arbitrary, capricious, and unreasonable.
   We believe that although TERC’s order as written lends itself
to confusion, TERC did not err in its application of the correct
standards of review. The confusion appears to result from the
fact that TERC both concluded that there was “not competent
evidence to rebut the presumption that the . . . Board faithfully
performed its duties and had sufficient competent evidence to
make its determination” and also stated that there was “not
clear and convincing evidence that the . . . Board’s decision
was arbitrary or unreasonable.” From these and other state-
ments in the order, the Trusts contend that TERC improperly
applied a presumption of reasonableness to the Board’s valu-
ations. We reject the Trusts’ assignment of error claiming that
TERC applied an incorrect standard of review.
   It is well settled that TERC’s threshold determination should
be whether the taxpayer presented competent evidence to rebut
                              - 943 -
           Nebraska Supreme Court A dvance Sheets
                   299 Nebraska R eports
    BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                        Cite as 299 Neb. 933

the presumption in favor of the Board. Brenner v. Banner Cty.
Bd. of Equal., 276 Neb. 275, 753 N.W.2d 802 (2008); US
Ecology v. Boyd Cty. Bd. of Equal., 256 Neb. 7, 588 N.W.2d
575 (1999). TERC’s determination of that question may often
be informed by considering whether the taxpayer has presented
evidence that would call into question whether the valuation
adopted by the Board is reasonable. That is, evidence tending
to show that the valuation is questionable can serve toward
rebutting the presumption that the Board faithfully performed
its duties. And where a taxpayer overcomes the presumption
of validity for the county’s valuation, the reasonableness of
the valuation fixed by the board of equalization becomes a
question of fact based on all of the evidence presented. JQH
La Vista Conf. Ctr., supra.

The Evidence.
   With the foregoing explanation in mind, and as we discuss
below, we read TERC’s order in this case as having concluded
that the Trusts did not present competent evidence to rebut
the presumption. See § 77-5016(9). Having concluded that the
Trusts did not rebut the presumption, TERC did not need to,
nor did it, make a fact finding regarding the reasonableness
of the Board’s valuations. A fortiori, TERC did not apply an
improper presumption relative to a hypothetical reasonable-
ness determination.
   Reading the order in this manner, we review TERC’s deci-
sion for errors appearing on the record. Our inquiry is whether
TERC’s decision conforms to the law, is supported by compe-
tent evidence, and is neither arbitrary, capricious, nor unreason-
able. See Platte River Crane Trust v. Hall Cty. Bd. of Equal.,
298 Neb. 970, 906 N.W.2d 646 (2018). As discussed below, we
conclude under this standard of review that TERC’s decision
conforms to the law, is supported by competent evidence, and
is neither arbitrary, capricious, nor unreasonable.
   The Trusts rely on JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd.
of Equal., 285 Neb. 120, 825 N.W.2d 447 (2013), in support
                            - 944 -
          Nebraska Supreme Court A dvance Sheets
                  299 Nebraska R eports
   BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                       Cite as 299 Neb. 933

of their argument that TERC erred when it concluded that they
had failed to rebut the presumptions regarding the Board’s
determinations. In JQH La Vista Conf. Ctr., we reviewed
TERC’s decision which had affirmed a board of equalization’s
valuations. We first determined that “TERC was incorrect
when it concluded that the presumption of correctness was
not overcome by competent evidence.” Id. at 126, 825 N.W.2d
at 452. Because we determined that the taxpayer in that case
had rebutted the presumption, we then examined whether the
taxpayer had shown by clear and convincing evidence that the
board’s valuation was unreasonable. Because we determined
that the taxpayer “failed to meet its burden of showing that
the county’s valuation was unreasonable and arbitrary,” we
ultimately affirmed TERC’s decision. Id. at 129, 825 N.W.2d
at 454.
   In reaching the initial conclusion in JQH La Vista Conf.
Ctr. that the taxpayer had overcome the presumption of valid-
ity, we reasoned that the taxpayer had done so by presenting
the appraisals of a certified appraiser who testified that the
appraisals were prepared in conformity with uniform standards
of appraisal practice. We noted that “[t]he appraisals provided
three alternative valuations of the [subject property], using
each of the three methods provided for by” Neb. Rev. Stat.
§ 77-112 (Reissue 2009). JQH La Vista Conf. Ctr., 285 Neb. at
126, 825 N.W.2d at 453.
   We note at this point that under Neb. Rev. Stat. § 77-201(1)
(Cum. Supp. 2016), all real property, unless expressly exempt,
is subject to taxation and is to be valued at its actual value.
Agricultural and horticultural land is valued for taxation
purposes at 75 percent of its value, but the starting point
for determining taxable value is still actual value. Under
§ 77-112, which we cited in JQH La Vista Conf. Ctr., “[a]ctual
value . . . means the market value of real property in the
ordinary course of trade.” Section 77-112 provides, “Actual
value may be determined using professionally accepted mass
appraisal methods, including, but not limited to, the (1) sales
                              - 945 -
           Nebraska Supreme Court A dvance Sheets
                   299 Nebraska R eports
    BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                        Cite as 299 Neb. 933

comparison approach using the guidelines in section 77-1371,
(2) income approach, and (3) cost approach.” Ultimately in
JQH La Vista Conf. Ctr., we concluded that the taxpayer had
rebutted the presumption of correctness of the board’s deci-
sion by presenting appraisals for the subject property, which
appraisals were performed by a certified appraiser using
approved methods.
   In contrast to the evidence presented by taxpayers in JQH
La Vista Conf. Ctr., the Trusts in this case attempted to rebut
the presumption of validity by presenting valuations of their
properties that were determined using a method that was
not shown to be a “professionally accepted mass appraisal
method[].” See § 77-112. The Trusts did not present evidence
of alternate valuations calculated using methods of valuation
that were authorized under the relevant statutes and regula-
tions, and as we discuss below, the method urged by the Trusts
was not appropriate. That is, we believe the Trusts’ evidence
and methodology did not tend to show that the Board and the
assessor failed to faithfully perform their duties or that they did
not have sufficient competent evidence to make their determi-
nation of valuations in accordance with the law and regulations
that govern the assessment process. The evidence in this case
indicates instead that the Board and the assessor followed the
relevant statutes and regulations to arrive at valuations for the
Trusts’ properties.
   TERC acknowledged that the Trusts’ evidence may have
indicated a possible flaw in the methodology developed by the
PAD to classify grassland properties, which methodology the
assessor was required to employ. The assessor generally testi-
fied that she used the classifications required by the PAD and
then valued the properties using a sales comparison approach
based on such classifications. TERC determined that the evi-
dence showed that the assessor and the Board followed the
law imposed on them and valued the properties using a profes-
sionally accepted mass appraisal method. That is, TERC deter-
mined that the evidence did not indicate that the Board in this
                             - 946 -
           Nebraska Supreme Court A dvance Sheets
                   299 Nebraska R eports
    BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                        Cite as 299 Neb. 933

case neither failed to faithfully perform its duties nor made its
determinations based on incompetent evidence.
   The Trusts’ arguments were directed to flaws in the clas-
sifications promulgated by the PAD rather than to failures on
the part of the assessor or the Board in applying the methods
imposed on them by law. The Trusts argued in part that the
assessor should have made additional subclassifications based
on productivity of the soil for grassland purposes. However,
the assessor generally testified that in applying a sales com-
parison approach, she compared the subject properties to sales
of what she determined to be comparable properties based on
various factors, including but not limited to productivity as
grassland. In particular, she noted that the subject properties
were characterized by areas of “rocky, rough ground” and
that she compared the subject properties to other properties
with similar rough, rocky features. TERC determined that the
Trusts did not rebut the presumption of correctness, and in
comparison, it noted that the Trusts’ alternate methodology
had focused on a single factor—productivity—rather than
the multiple factors that the assessor considered in making
sales comparisons.
   The Trusts generally used sales comparisons to calculate
a valuation per AUM, which they asserted to be the best
measure of productivity for grassland purposes. The Trusts
calculated a valuation per AUM for the comparison proper-
ties based on AUM for those properties and then calculated
an alternate valuation for their properties by multiplying that
“$/AUM” by AUM for their properties. The Trusts did not
demonstrate or present evidence to show that this method was
a recognized professionally accepted mass appraisal method in
addition to those identified in § 77-112. The method appeared
to be a modified sales comparison approach in which sales
of other grasslands were considered but were adjusted based
entirely on the single feature of productivity. As noted above,
TERC rejected this approach because it focused on a single
feature, as compared to the assessor’s testimony that she
                            - 947 -
          Nebraska Supreme Court A dvance Sheets
                  299 Nebraska R eports
   BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                       Cite as 299 Neb. 933

considered various features of the properties to determine
comparable sales.
   We recognize that the Trusts’ reliance on AUM as a meas­
ure of productivity for grasslands finds some support in the
law governing property valuation. Under § 77-112, an income
approach is specifically noted as an appropriate professionally
accepted mass appraisal method, and the regulations set forth
an income approach for valuing grasslands based on AUM
in appropriate circumstances. See 350 Neb. Admin. Code,
ch. 11, § 005.03 (rev. 2009). This income approach generally
requires capitalizing net cash rents, and specifically “in the
case of grassland use,” net cash rents are to be determined as
“cash rent per [AUM].” § 005.03A(3). However, in this case,
the Trusts did not present evidence of cash rent per AUM and
did not capitalize net cash rent in accordance with the income
approach as set forth in this regulation. Instead, the Trusts
used the modified sales comparison approach described above
in which they adjusted valuations based on the sole factor of
AUM. Given the law in this area, the valuations that resulted
from the Trusts’ approach were not competent evidence to
rebut the presumption that the Board faithfully performed
its duties and had sufficient competent evidence to make
its determination.
   [9] In connection with competent evidence, we note that the
Trusts argue that TERC erred by rejecting Green’s testimony
which they assert was “competent evidence” to rebut the pre-
sumption of correctness. Brief for appellants at 17. They rely
on cases in which we have said that a resident owner who
is familiar with his or her property and knows its worth is
permitted to testify as to its value without further foundation
and that this principle 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. See Brenner
v. Banner Cty. Bd. of Equal., 276 Neb. 275, 753 N.W.2d 802
(2008). The Trusts argue that because an owner may so tes-
tify, Green’s testimony in this case was competent evidence to
                             - 948 -
           Nebraska Supreme Court A dvance Sheets
                   299 Nebraska R eports
   BETTY L. GREEN LIVING TRUST v. MORRILL CTY. BD. OF EQUAL.
                       Cite as 299 Neb. 933

rebut the presumption in favor of the Board. However, these
principles relate to admissibility and foundation requirements
for a resident owner’s testimony regarding the value of his or
her property. And although this sort of testimony is admissible
evidence, it does not automatically lead to the conclusion that
such evidence constitutes competent evidence contrary to the
presumption. That determination involves considering not only
whether the taxpayer presented admissible evidence but spe-
cifically whether the substance of the evidence presented by
the taxpayer was competent to rebut the presumption that the
Board faithfully performed its duties and had sufficient compe-
tent evidence to make its determinations.
   In this case, TERC did not dismiss Green’s testimony out
of hand. Instead, TERC allowed Green to testify regarding
the value of the property, but after considering his testimony,
TERC concluded that it did not serve to rebut the presumption.
As discussed above, we conclude that TERC did not err when
it determined that Green’s testimony and other evidence pre-
sented by the Trusts did not rebut the presumption of validity
regarding the Board’s determinations.
                         CONCLUSION
   We conclude that TERC’s decision—in which it concluded
that the Trusts did not present competent evidence to rebut the
presumption that the Board faithfully performed its duties and
had sufficient competent evidence to make its determinations—
conforms to the law, is supported by competent evidence, and
is neither arbitrary, capricious, nor unreasonable. We therefore
affirm TERC’s order.
                                                     A ffirmed.
   Wright, J., not participating.
