Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
06/16/2017 09:12 AM CDT




                                                         - 751 -
                                  Nebraska Supreme Court A dvance Sheets
                                          296 Nebraska R eports
                      COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                                        Cite as 296 Neb. 751




                                        County of Webster, appellant, v.
                                        Nebraska Tax Equalization and
                                         R eview Commission, appellee.
                                                    ___ N.W.2d ___

                                           Filed May 26, 2017.     No. S-16-583.

                1.	 Taxation: Judgments: Appeal and Error. By statute, an appellate court
                    reviews an order from the Tax Equalization and Review Commission
                    that is defined as a “final decision” under Neb. Rev. Stat. § 77-5019(5)
                    (Cum. Supp. 2016) for error 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: Words and Phrases. An administrative agency’s
                    decision is arbitrary when it is made in disregard of the facts or circum-
                    stances without some basis which would lead a reasonable person to the
                    same conclusion.
                4.	 Administrative Law. Agency action taken in disregard of the agency’s
                    own substantive rules is also arbitrary and capricious.
                5.	 Taxation: Appeal and Error. Questions of law arising during appel-
                    late review of Tax Equalization and Review Commission decisions are
                    reviewed de novo on the record.
                6.	 Administrative Law: Judgments. Whether an agency decision con-
                    forms to the law is by definition a question of law.
                7.	 Statutes. Statutory interpretation presents a question of law.
                8.	 Statutes: Legislature: Intent. A court gives statutory language its
                    plain and ordinary meaning and will not look beyond the statute to
                    determine the legislative intent when the words are plain, direct, and
                    unambiguous.
                9.	 ____: ____: ____. Components of a series or collection of statutes
                    pertaining to a certain subject matter are in pari materia and should
                    be conjunctively considered and construed to determine the intent of
                                     - 752 -
               Nebraska Supreme Court A dvance Sheets
                       296 Nebraska R eports
       COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                         Cite as 296 Neb. 751

       the Legislature, so that different provisions are consistent, harmonious,
       and sensible.
10.	   Taxation. The procedures for a hearing to show cause why an adjust-
       ment should not be made to a county’s valuation of a class or subclass
       of real property are not governed by Neb. Rev. Stat. § 77-5016(4) (Cum.
       Supp. 2016).
11.	   ____. Neb. Rev. Stat. § 77-5027(3) (Cum. Supp. 2016) does not require
       the Property Tax Administrator to set out every property sale that the
       assessment division has included in its statistical analyses.
12.	   Taxation: Evidence. The Property Tax Administrator’s annual narra-
       tive and statistical reports are sufficient competent evidence to support
       the Tax Equalization and Review Commission’s equalization orders
       without including the sales file information for each real property
       transaction.
13.	   ____: ____. If necessary to determine the level of value and quality of
       assessment in a county, the Property Tax Administrator may use sales of
       comparable real property in market areas similar to the county or area in
       question or from another county as indicators of the level of value and
       the quality of assessment in a county.
14.	   Taxation: Words and Phrases. A comparable real property is one that
       is similar to the property being assessed in significant physical, func-
       tional, and location characteristics and in its contribution to value.
15.	   Taxation: Evidence. Because the Property Tax Administrator’s reports
       are sufficient competent evidence to support a change in valuation, Neb.
       Rev. Stat. § 77-5026 (Reissue 2009) requires a county to demonstrate
       that the Tax Equalization and Review Commission should not rely on
       the reports.
16.	   Public Officers and Employees: Presumptions. Absent contrary evi-
       dence, public officers are presumed to faithfully perform their offi-
       cial duties.

  Appeal from the Tax Equalization and Review Commission.
Affirmed.

   Sara J. Bockstadter, Webster County Attorney, for appellant.

  Douglas J. Peterson, Attorney General, and L. Jay Bartel for
appellee.

   Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy,
K elch, and Funke, JJ.
                                    - 753 -
                Nebraska Supreme Court A dvance Sheets
                        296 Nebraska R eports
        COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                          Cite as 296 Neb. 751

      Funke, J.
                     NATURE OF CASE
   Webster County appeals from a May 2016 order adjusting
value issued by the Tax Equalization and Review Commission
(TERC) which increased the “Majority Land Use Grass” sub-
class of the agricultural and horticultural land class of real
property not receiving special value within Webster County
in the amount of 6 percent. Webster County timely appealed.
We affirm.

                      BACKGROUND
   Before discussing TERC’s order, we explain the reporting
requirements and equalization procedures that are relevant to
the parties’ dispute.

                R eporting and Compiling of R eal
                      Property Transactions
   Every person who records a transfer of real property with a
county register of deeds must file a real estate transfer state-
ment prescribed by the Tax Commissioner.1 The record shows
that the transfer statement contains the type of transfer that was
made and the type of property that was transferred. The register
of deeds forwards the transfer statement to the county assessor,
who processes it according to rules promulgated by Nebraska’s
Property Tax Administrator (Administrator) and sends the
statement to the Tax Commissioner.2 The Administrator is the
chief administrative officer of the Department of Revenue’s
property assessment division.3
   The record also shows that county assessors must use the
transfer statements to provide the following information to the
assessment division within 45 days of a recorded transfer: a
nine-digit code that identifies the parcel of property, a sales

 1	
      See Neb. Rev. Stat. § 76-214 (Cum. Supp. 2016).
 2	
      See id.
 3	
      See Neb. Rev. Stat. § 77-701(1) (Cum. Supp. 2016).
                                   - 754 -
               Nebraska Supreme Court A dvance Sheets
                       296 Nebraska R eports
        COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                          Cite as 296 Neb. 751

number that the county assigns to the transaction, and a code
that indicates whether the assessor has qualified the transfer
as an arm’s-length transaction, with or without adjustments to
the sales price. The Administrator uses the transfer statement
information to maintain a “sales file” of all arm’s-length real
property transactions in the state.4
   By statute, to overturn a county assessor’s determination
about a sale’s qualification as an arm’s-length transaction, the
assessment division must review the sale and determine that
the assessor is incorrect.5 By regulation, if an assessor fails
to provide any reason to adjust a sales price or disqualify a
sale, the assessment division can include the sale in the sales
file without adjustment.6 If the assessor provides a reason for
an adjustment or disqualification that complies with accepted
mass appraisal techniques, the property assessment division
cannot include or exclude the property until it verifies the sale
and determines that it does not agree with the assessor.7 When
the assessment division disagrees with the assessor, it must
notify the assessor within 7 days that it will include or exclude
a property sale from the sales file.8 The assessor then has 30
days to file a protest with the Tax Commissioner.9
   The Administrator is required to make the sales file avail-
able to county assessors, as well as the data used to develop
and maintain the sales file.10 Twice a year, the assessment
division provides county assessors with rosters that show real
property transactions by county and by class and subclass

 4	
      See Neb. Rev. Stat. § 77-1327(2) (Cum. Supp. 2016).
 5	
      See id.
 6	
      See 350 Neb. Admin. Code, ch. 12, § 003.04A (2014).
 7	
      See id., § 003.04C.
 8	
      See id., § 003.04D.
 9	
      See id., § 003.04E.
10	
      See, Neb. Rev. Stat. § 77-1377 (Reissue 2009); 350 Neb. Admin. Code,
      ch. 12, § 001.03 (2014).
                                    - 755 -
                Nebraska Supreme Court A dvance Sheets
                        296 Nebraska R eports
        COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                          Cite as 296 Neb. 751

of property.11 An assessor can request additional rosters and
additional information.12 Upon request, the assessment divi-
sion must also provide the sales file database to TERC, county
boards of equalization, and county assessors for use in the
assessment and equalization of property valuations.13
   After an assessor receives a sales file roster, he or she can
protest the assessment division’s inclusion, exclusion, adjust-
ment to a sale, or failure to adjust a property sale.14 An asses-
sor must file the protest within 30 days of receiving the roster
and is entitled to a hearing before the Tax Commissioner.15 The
burden of proving that a sales roster should be altered is on
the assessor.16
                   Tax Assessment R eporting
                         R equirements
   Nebraska’s property tax equalization laws require all county
assessors to annually prepare and file “an abstract of the
property assessment rolls of locally assessed real property”
on forms prescribed by the Tax Commissioner.17 The assessor
must file the abstract with the Administrator,18 and the form
must include the county’s assessed tax valuations for real prop-
erty, by class and subclass.19 Agricultural and horticultural land
is a class that includes several subclasses, including irrigated
cropland, dryland cropland, grassland, and wasteland.20

11	
      See 350 Neb. Admin. Code, ch. 12, § 003.05 (2014).
12	
      See id.
13	
      See, § 77-1377; 350 Neb. Admin. Code, ch. 12, § 003.08 (2014).
14	
      See 350 Neb. Admin. Code, ch. 12, § 004.01 (2014).
15	
      See id., §§ 004.01C and 004.01D.
16	
      See id., § 004.02.
17	
      Neb. Rev. Stat. § 77-1514(1) (Cum. Supp. 2016).
18	
      See id.
19	
      See, id.; 350 Neb. Admin. Code, ch. 60, § 002.02A (2014).
20	
      See Neb. Rev. Stat. §§ 77-1359 and 77-1363 (Cum. Supp. 2016).
                                     - 756 -
                Nebraska Supreme Court A dvance Sheets
                        296 Nebraska R eports
        COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                          Cite as 296 Neb. 751

   The Administrator files annual reports regarding these
abstracts with TERC. The reports contain the assessment divi-
sion’s statistical analyses and the Administrator’s opinion on
the level of value and quality of assessment for each type of
real property, by class and subclass, in each county.21 For agri-
cultural and horticultural land, the study period of each coun-
ty’s sales data is 3 years.22 The assessment division performs
assessment ratio studies, based on the sales file, of a county’s
average level of assessment, the degree of assessment uni­
formity, and the overall compliance with assessment require-
ments for each major class.23 The Administrator can require
tax assessors and other taxing authorities to report an assessed
value and other features of property assessment.24
                     Statutory Equalization
                           Procedures
  After receiving the Administrator’s reports, TERC must
annually equalize the value or special value of assessed real
property as submitted by the county assessors.25 For the pur-
pose of assessing property taxes, nonexempt agricultural and
horticultural land, “as defined in section 77-1359,” is valued at
75 percent of its actual value.26
         Actual value of real property for purposes of taxation
      means the market value of real property in the ordinary
      course of trade. . . . Actual value is the most probable
      price . . . that a property will bring if exposed for sale
      in the open market, or in an arm’s length transaction,
      between a willing buyer and willing seller, both of whom
      are knowledgeable concerning all the uses to which the

21	
      See, § 77-1327(3); Neb. Rev. Stat. § 77-5027(3) (Cum. Supp. 2016).
22	
      See 350 Neb. Admin. Code, ch. 12, § 003.07A(3) (2014).
23	
      § 77-1327(3).
24	
      § 77-1327(5).
25	
      Neb. Rev. Stat. § 77-5022 (Cum. Supp. 2016).
26	
      Neb. Rev. Stat. § 77-201(2) (Cum. Supp. 2016).
                                   - 757 -
               Nebraska Supreme Court A dvance Sheets
                       296 Nebraska R eports
        COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                          Cite as 296 Neb. 751

      real property is adapted and for which the real property is
      capable of being used.27
   But under Neb. Rev. Stat. § 77-5023(1) (Reissue 2009),
TERC can adjust the “value of a class or subclass of real prop-
erty” in any county “so that all classes or subclasses of real
property in all counties fall within an acceptable range.” “An
acceptable range is the percentage of variation from a standard
for valuation as measured by an established indicator of cen-
tral tendency of assessment.”28 TERC’s regulations provide that
“[i]ndicators of central tendency include the mean, median,
and mode.”29
   TERC’s final equalization order states that it uses an
“assessment/sales ratio” to measure and evaluate the level
and uniformity of assessed values and that the level of value
for any class or subclass is indicated by the median ratio.
Under regulations promulgated by TERC and the assessment
division, an assessment/sales ratio is determined by divid-
ing a property’s assessed value by its selling price.30 For
example, a property that has a tax assessment value of $59,500
and sold for $85,000 is assessed at 70 percent of its selling
price. The real property transactions that are analyzed for a
class or subclass are collectively referred to as a “sample.”31
The assessment division’s preferred measure of central tend­
ency in a sample is the median (middle) ratio or average
of the two median ratios, which ratio is also referred to as
the “level of value” for a class or subclass.32 The division
defines “level of value” to mean the “most probable overall
opinion of the relationship of assessed value to actual value

27	
      Neb. Rev. Stat. § 77-112 (Reissue 2009).
28	
      § 77-5023(2) (emphasis supplied).
29	
      442 Neb. Admin. Code, ch. 9, § 002.10 (2011).
30	
      See id., § 002.02. See, also, 350 Neb. Admin. Code, ch. 12, § 002.04
      (2014).
31	
      See 350 Neb. Admin. Code, ch. 17, § 004.01 (2013).
32	
      See, id., § 004.01B; 350 Neb. Admin. Code, ch. 12, § 002.09 (2014).
                                    - 758 -
                Nebraska Supreme Court A dvance Sheets
                        296 Nebraska R eports
        COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                          Cite as 296 Neb. 751

for a political subdivision.”33 But “[i]f the sample of sales is
not representative of the properties in the county or market
area, the Division may expand its analysis to include sales in
adjoining counties that share similar market and geographic
characteristics.”34
   In sum, these regulations show that the “level of value”
for a class or subclass operates as the “established indicator
of central tendency of assessment.”35 The level of value for
agricultural and horticultural land must reflect that the county
valuates such property at 69 to 75 percent of actual value to
fall within the acceptable range of variation.36
   If TERC makes an initial determination that the level of
value for a class or subclass does not fall within the accept-
able range, then it must issue a notice to the county and set
a date for a hearing.37 “At the hearing the county assessor
or other legal representatives of the county may appear and
show cause why the value of a class or subclass of real
property of the county should not be adjusted.”38 Under
§ 77-5023(3), any increase or decrease that TERC makes to a
class or subclass must adjust its level of value to the midpoint
of the acceptable range of variation. Under another subsection
of that statute, any increase or decrease in property values
that TERC makes to a subclass must result in the level of
value for the entire class falling within the acceptable range
of variation.39
   With these simplified statistical methods and procedural
requirements set out, we turn to the facts of this case.

33	
      350 Neb. Admin. Code, ch. 12, § 002.03 (2014).
34	
      350 Neb. Admin. Code, ch. 17, § 004.01B(2) (2013); § 77-5027(5).
35	
      § 77-5023(2).
36	
      Id.
37	
      See Neb. Rev. Stat. § 77-5026 (Reissue 2009).
38	
      Id.
39	
      See § 77-5023(4).
                                - 759 -
                Nebraska Supreme Court A dvance Sheets
                        296 Nebraska R eports
        COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                          Cite as 296 Neb. 751

                    A dministrator’s R eports
                      for Webster County
   After the Webster County assessor filed her assessment
abstracts with the Administrator, the Administrator filed with
TERC the assessment division’s reports and her certified
opinion that the assessed valuations for the subclass of grass-
land should be adjusted upward in Webster County by 9
percent. The report stated that in analyzing Webster County’s
agricultural assessments, the assessment division considered
real property in the surrounding counties of Adams, Clay,
Nuckolls, Kearney, and Franklin to be comparable. The report
stated that because the sales of agricultural property within
Webster County were inadequate to produce a reliable analy-
sis, sales from these surrounding counties were also included
in the sample.40 Additionally, the assessment division included
three Webster County grassland transactions in the sample
that had sold as grassland but were later disqualified by
the assessor.
   The report concluded that “[w]ithin the statistical analysis,
the 80% majority land use for each class contains a sufficient
number of sales.” It noted that grassland values in the region,
like those in most of the state, had increased in recent years.
But it concluded that Webster County’s values for grassland
were not equalized with the surrounding counties and that the
level of value for grassland was below the acceptable range of
variation and did not meet generally accepted mass appraisal
practices. The administrator recommended a 9-percent upward
adjustment to bring the level of value for the grassland sub-
class up to 72 percent and “result in an overall level of value
for agricultural land of 69%.”

                      Show Cause Order
   After receiving the Administrator’s recommendation, TERC
issued an order for Webster County to show cause why the

40	
      See § 77-5027(5).
                             - 760 -
           Nebraska Supreme Court A dvance Sheets
                   296 Nebraska R eports
    COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                      Cite as 296 Neb. 751

proposed upward adjustment should not be made. The order
set out the Administrator’s conclusions that the level of value
for grassland “by the median for the strata Majority Land Use
> 80% Grass . . . is 66.07% of actual or fair market value.”
The order stated that the level of value for grassland was not
within the acceptable range of variation to a reasonable degree
of certainty and scheduled a hearing.

                     Show Cause Hearing
   On April 26, 2016, a hearing was held at which represent­
atives of Webster County appeared to present evidence and
argument as to why the proposed adjustments should not be
made. The county assessor testified that using the State’s data-
base of property sales, she incorporated four grassland sales
from other counties to determine the level of value for grass-
land in Webster County. She “borrowed” two grassland sales
from Franklin County and two from Nuckolls County.
   But the assessor disputed three other sales that the assess-
ment division incorporated to assess the level of value for
grassland in Webster County. She argued that one sale from
Nuckolls County should not have been included, because part
of the parcel contained tree cover. She stated that Webster
County did not separate grassland from timberland; if a parcel
was less than 80 percent grassland, she classified the property
as wasteland.
   Additionally, the assessor argued that the assessment
division had improperly included two grassland sales from
Webster County, sold in the first year of the 3-year study
period, because the owners had substantially changed their
use of the property. She stated that although the properties
were grassland when purchased, within a couple of years, the
owners started using the parcels as dry cropland. When she
originally included these two sales as grassland in her 2016
abstracts, she concluded that the level of value for grassland
in Webster County was 66.07, which is below the acceptable
range of 69 to 75 percent of actual value. But she stated that
                              - 761 -
           Nebraska Supreme Court A dvance Sheets
                   296 Nebraska R eports
    COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                      Cite as 296 Neb. 751

she contacted the owners before preparing her final abstracts
and after concluding that they had purchased the grassland
properties with the intent to use the land as dry cropland, she
disqualified these sales for use in the 3-year study. For the
same reason, she adjusted the sales price for other grassland
property sales.
   In sum, the assessor determined the level of value for
grassland by excluding the two grassland sales from the first
year of the study period, making adjustments to other sales,
and incorporating four grassland sales from other counties
into her study. She concluded that the level of value for 80
percent grassland property in Webster County was 69.93 per-
cent, which was within the acceptable range of variation. She
conceded that she had not increased the value of grassland in
Webster County for 2016 despite increasing it in the previous
2 years. She stated that her goal for 2016 was to “leave the
farmers alone” because “we’ve hit them so hard for so many
years.” She further stated that although her level of value for
grassland was low, she knew she would have to increase those
valuations in 2017 when she could no longer include the oldest
and lowest sales prices in the 3-year study period.
   Sarah Scott, an agricultural land specialist, testified for the
assessment division. The Administrator’s reports showed that
the division used 17 sales of grassland to evaluate the level
of value for that subclass in Webster County. Scott stated
that the division had incorporated four of these sales from
Nuckolls County and Franklin County. She said that the differ-
ence between the assessor’s analysis and the assessment divi-
sion’s analysis was four property transactions that the division
included and the assessor did not. One was an in-kind property
exchange for which the assessor had not provided a reason
to disqualify it. One was the sale of a parcel in Nuckolls
County that contained a wooded portion. The final two were
the grassland sales that the assessor had disqualified because
the owners had substantially changed the property’s use to
dry cropland.
                             - 762 -
           Nebraska Supreme Court A dvance Sheets
                   296 Nebraska R eports
    COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                      Cite as 296 Neb. 751

   Scott explained that even if the assessor had changed the
classification of the two Webster County properties, the assess-
ment division could still use those sales in determining the
value of grassland—because at the time those properties were
sold, their sale price represented the value of grassland. She
stated that this determination was not automatic; it is made
after consulting with the assessor. But she believed that the
assessor had earlier agreed with a field liaison that the two
sales were representative of the value of grassland at the
time of the sales. The assessor admitted that when Scott con-
tacted her about these sales, she did not argue with her about
including them in the analysis. And she admitted that she had
included the in-kind property exchange in her analysis after
discussing the transaction with Scott.
   Most important, she agreed that her dispute with the
Administrator boiled down to three property sales: the two
Webster County sales she had disqualified and the partially
wooded property sale from Nuckolls County that the assess-
ment division had incorporated. She stated that she “didn’t
really have a problem” with incorporating sales from Nuckolls
County but pointed out that a college professor had told
her Nuckolls County was not really comparable, because
Webster County did not get much rain. She admitted, however,
that she had not been able to find any evidence to support
that belief.
   Regarding the Nuckolls County parcel, Scott stated that
under the assessment division’s regulations, timber cover over
grassland is properly classified as grassland. She stated that
the parcel would still be classified as grassland even if it
contained 25 percent timber. And she testified that Nuckolls
County had reported it as an 80-percent grassland sale.
   Finally, Scott testified that in the area of the state where
Webster County is located, grassland prices had increased by
15 to 20 percent—because high commodity prices had encour-
aged buyers to purchase grassland and convert it to dry crop-
land. Because the value of grassland in Webster County did
                             - 763 -
           Nebraska Supreme Court A dvance Sheets
                   296 Nebraska R eports
    COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                      Cite as 296 Neb. 751

not reflect this market trend, she believed the assessed values
should be increased.
   After this testimony, TERC received valuation analyses
that it had requested from the Administrator. These analyses
excluded two agricultural sales, one of which was a grassland
sale. Excluding these two sales resulted in a level of value of
67.82 percent for grassland and an overall level of value of 69
percent for agricultural property. After a recess, the commis-
sioners voted to increase the assessed value of grassland by 6
percent. One of the two commissioners explained that he was
motivated to depart from the Administrator’s recommendation
of a 9-percent increase because of the effect of high commod-
ity prices on the grassland property market.

                    Order A djusting Value
   TERC’s May 2016 order stated that the level of value for
grassland in Webster County was 66.07 percent, which was the
same level of value that the assessment division reached with-
out excluding any property sales from the sample. This state-
ment indicates that TERC chose not to exclude any properties
from the sample, and nothing in its order states otherwise.
But consistent with TERC’s vote at the hearing, it ordered the
assessor to increase Webster County’s assessment valuation
of grassland by 6 percent. This increase caused the level of
value for “Majority Land Use Grass” to be 72 percent of fair
market value and the overall level of value for agricultural and
horticultural land in Webster County to be 69 percent of fair
market value.

                 ASSIGNMENTS OF ERROR
   Webster County assigns, restated, that in adjusting the level
of value for grassland upward by 6 percent, TERC improperly
relied on the Administrator’s statistical reports and opinion,
because they (1) were not supported by competent evidence
and (2) incorporated noncomparable property sales, contrary to
statutory requirements.
                                    - 764 -
                Nebraska Supreme Court A dvance Sheets
                        296 Nebraska R eports
        COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                          Cite as 296 Neb. 751

                   STANDARD OF REVIEW
   [1,2] By statute, we review a TERC order that is defined as
a “final decision” under Neb. Rev. Stat. § 77-5019(5) (Cum.
Supp. 2016) for error on the record.41 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.42
   [3,4] An administrative agency’s decision is arbitrary when
it is made in disregard of the facts or circumstances without
some basis which would lead a reasonable person to the same
conclusion.43 Agency action taken in disregard of the agency’s
own substantive rules is also arbitrary and capricious.44
   [5-7] Questions of law arising during appellate review of
TERC decisions are reviewed de novo on the record.45 Whether
an agency decision conforms to the law is by definition a
question of law.46 Statutory interpretation presents a question
of law.47
                          ANALYSIS
   Webster County contends TERC relied on a statistical analy-
sis that was not supported by competent evidence and incorpo-
rated property sales from other counties that were not compa-
rable to grassland in Webster County. Webster County further
contends that the report did not set out information about

41	
      See JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. of Equal., 285 Neb. 120,
      825 N.W.2d 447 (2013).
42	
      Id.
43	
      Brenner v. Banner Cty. Bd. of Equal., 276 Neb. 275, 753 N.W.2d 802
      (2008).
44	
      Blakely v. Lancaster County, 284 Neb. 659, 825 N.W.2d 149 (2012).
45	
      Brenner, supra note 43.
46	
      Blakely, supra note 44.
47	
      In re Guardianship & Conservatorship of Kaiser, 295 Neb. 532, 891
      N.W.2d 84 (2017).
                             - 765 -
           Nebraska Supreme Court A dvance Sheets
                   296 Nebraska R eports
    COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                      Cite as 296 Neb. 751

each real property transaction that was used for the statisti-
cal analysis.

             Assessment Division’s Statistical and
              Narrative R eports Were Sufficient
                Competent Evidence to Support
                   TERC’s A djustment Order
   Webster County argues that under Neb. Rev. Stat.
§ 77-5016(4) (Cum. Supp. 2016), all records and documents
on which TERC relies, apart from specified evidence, must
be made part of the record, and that this statute precludes
TERC from considering any other factual information or
evidence. It argues that because the inclusion or exclusion
of a property sale can affect the level of value analysis and
require an adjustment, the assessment division must include
the actual sales it relies on in the reports that it presents to
TERC. Webster County further argues that TERC erred in
relying on the Administrator’s reports for Webster County,
because those reports failed to show (1) the actual property
sales that the Administrator relied on to support her opin-
ion, (2) the selling price and assessed value of each property
sale on which the Administrator relied, and (3) the geo-
graphic characteristics for each sold property on which the
Administrator relied.
   TERC counters that § 77-5027(3), which sets out the crite-
ria for the Administrator’s annual reports and opinions, does
not require the level of specificity for which Webster County
argues. TERC contends that such detail would be neither
feasible nor desirable. Instead, it points to § 77-5026, under
which a “county assessor or other legal representatives of the
county may appear and show cause why the value of a class or
subclass of real property . . . should not be adjusted” if TERC
schedules an adjustment hearing.
   We disagree with Webster County’s interpretation of
§ 77-5016(4), and we agree with TERC’s interpretation of
§§ 77-5026 and 77-5027(3).
                                     - 766 -
                Nebraska Supreme Court A dvance Sheets
                        296 Nebraska R eports
        COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                          Cite as 296 Neb. 751

   [8,9] A court gives statutory language its plain and ordinary
meaning and will not look beyond the statute to determine the
legislative intent when the words are plain, direct, and unam-
biguous.48 Components of a series or collection of statutes
pertaining to a certain subject matter are in pari materia and
should be conjunctively considered and construed to deter-
mine the intent of the Legislature, so that different provisions
are consistent, harmonious, and sensible.49
   [10] First, the procedures for a hearing to show cause
why an adjustment should not be made to a county’s valua-
tion of a class or subclass of real property are not governed
by § 77-5016(4). Under Neb. Rev. Stat. § 77-5013 (Cum.
Supp. 2016), TERC has exclusive jurisdiction over appeals
and petitions regarding matters within its jurisdiction.50 Section
77-5016 specifically refers to those types of hearings and sets
out the procedural and evidentiary requirements for them. But
a show cause hearing to determine the validity of an adjust-
ment does not arise from a petition or appeal. Instead, it is part
of TERC’s equalization procedures pursuant to Neb. Rev. Stat.
§ 77-5022 et seq. (Reissue 2009 & Cum. Supp. 2016).
   Under § 77-5022, TERC is required to “annually equalize
the assessed value . . . of all real property as submitted by
the county assessors on the abstracts of assessments.” Section
77-5023(1) grants TERC the power to increase or decrease
the value of a class or subclass of real property in any county
or taxing authority or of real property valued by the state so
that all classes or subclasses of real property in all counties
fall within an acceptable range. Finally, § 77-5026 requires
TERC to provide notice to the counties of any undervalued or
overvalued class or subclass of real property and the right to
request a hearing to contest TERC’s determination. None of
these statutes set forth evidentiary requirements for the proc­
ess of changing valuations.

48	
      In re Interest of Nizigiyimana R., 295 Neb. 324, 889 N.W.2d 362 (2016).
49	
      In re Interest of Tyrone K., 295 Neb. 193, 887 N.W.2d 489 (2016).
50	
      See Neb. Rev. Stat. § 77-5007 (Cum. Supp. 2016).
                              - 767 -
           Nebraska Supreme Court A dvance Sheets
                   296 Nebraska R eports
    COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                      Cite as 296 Neb. 751

   [11] Second, TERC correctly argues that § 77-5027(3)
does not require the Administrator to set out every property
sale that the assessment division has included in its statistical
analyses. It merely requires that the Administrator’s annual
report and opinion contain statistical and narrative reports
sufficient to inform TERC of the level of value and the qual-
ity of assessments for the classes and subclasses of property
within a county. If the Legislature had intended the reports
to include this information, it would have specified that
requirement.
   Equally important, the reporting requirements and equal-
ization procedures that we have set out above illustrate that
including the data for every property sale is not a necessary
requirement for TERC to rely on the Administrator’s reports.
To recap, each county assessor must inform the assessment
division of the real property transfers in the county and clas-
sify those properties by class and subclass. The assessment
division then provides all county assessors with biannual ros-
ters of the individual property transactions in the sales file, by
county and by class and subclass of property. If an assessor
disagrees with the inclusion of a property in the roster, it can
request more information from the assessment division and
file a protest.
   Similarly, the assessment division must notify an assessor
if it disagrees with the assessor’s disqualification or adjust-
ment of a property sale in the assessor’s annual abstracts. The
assessor can then file a protest if he or she disagrees with the
division’s inclusion, exclusion, adjustment, or failure to adjust
a property sale.
   Additionally, upon request, the assessment division must
provide the sales file database to TERC. So if TERC has
concerns about the report, it has access to the same sale
files information that a county assessor does. Another check
against mistakes exists in the show cause hearing itself. That
is, the Legislature has authorized county representatives to
appear before TERC to show why it should not rely on the
Administrator’s reports.
                                   - 768 -
                 Nebraska Supreme Court A dvance Sheets
                         296 Nebraska R eports
        COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                          Cite as 296 Neb. 751

   [12] These procedural requirements ensure that a prop-
erty is not included in the sales file without an opportu-
nity for a county assessor to correct a perceived mistake.51
Additionally, the county assessor appeared to know which
properties that the assessment division had incorporated from
other counties, because she argued that one of the sales was
not comparable to grassland in Webster County. To require
the assessment division to essentially restate the sales rosters
in its annual reports to TERC would be unnecessarily dupli-
cative and costly. Whether the Administrator’s report should
include that information is a decision for the Legislature to
make, and it has chosen not to do so. We conclude that the
Administrator’s annual narrative and statistical reports are
sufficient competent evidence to support TERC’s equalization
orders without including the sales file information for each
real property transaction.
        County Assessor Failed to Demonstrate That
          Property Assessment Division Incorporated
             Property Sales From Other Counties
                  That Were Not Comparable
   Webster County argues that “at least some of the sales”
from other counties used by the assessment division were not
geographically comparable to grassland in Webster County.52
However, the record indicates that it disputed only the one
grassland property in Nuckolls County as not comparable.
   [13] If necessary to determine the level of value and quality
of assessment in a county, the Administrator may use sales of
comparable real property in market areas similar to the county
or area in question or from another county as indicators of the
level of value and the quality of assessment in a county.53
   [14] Webster County correctly argues that a comparable real
property is one that is “similar to the property being assessed

51	
      § 77-1327.
52	
      Brief for appellant at 12.
53	
      § 77-5027(5).
                                    - 769 -
                Nebraska Supreme Court A dvance Sheets
                        296 Nebraska R eports
        COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                          Cite as 296 Neb. 751

in significant physical, functional, and location characteristics
and in [its] contribution to value.”54 But the county assessor
failed to show that any sales the assessment division incorpo-
rated from other counties were not comparable to grassland
property in Webster County.
   [15] As explained, under § 77-5026, a hearing arises from
a TERC order to show cause why an assessment adjustment
should not be made to a class or subclass of property. Because
the Administrator’s reports are sufficient competent evidence
to support a change in valuation,55 § 77-5026 requires a county
to demonstrate that TERC should not rely on the reports. This
burden is consistent with a county assessor’s burden to dem-
onstrate to the Tax Commissioner that a sales roster for the
county should be adjusted.
   The record shows that the Administrator used four bor-
rowed grassland sales: two from Franklin County and two from
Nuckolls County. The Administrator also used two sales within
Webster County which the assessor had previously deemed
not comparable because the use of the land had substantially
changed from grassland to dry cropland.
   The assessor testified that the Franklin County sales were
comparable to Webster County, but that the Nuckolls County
sales were not comparable, because Nuckolls County receives
more rainfall than Webster County. However, Webster County
provided no evidence to support the assessor’s belief that
Nuckolls County received more rainfall. Further, the assessor
also testified that she “didn’t really have a problem” with the
Nuckolls County sales. In fact, she incorporated two property
sales from Nuckolls County for her own analysis.
   At the show cause hearing, the county assessor admitted
that her dispute with the Administrator’s reports involved three
property sales: a parcel that contained tree cover in Nuckolls
County and two parcels of grassland from Webster County that
the assessor had disqualified as being substantially changed.

54	
      Neb. Rev. Stat. § 77-1371 (Cum. Supp. 2016).
55	
      See § 77-5027(3) and (4).
                             - 770 -
           Nebraska Supreme Court A dvance Sheets
                   296 Nebraska R eports
    COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                      Cite as 296 Neb. 751

   The assessor agreed that she had not argued with Scott
about the division’s inclusion of the two sales from Webster
County, and Webster County has not raised these property
sales on appeal. Because the assessor stipulated as to which
property sales she disputed, those were the only disputes prop-
erly before TERC. Further, the only disputed property which
was raised in Webster County’s brief is the one regarding
the Nuckolls County parcel with tree cover. As a result, the
Nuckolls County property is the only disputed parcel before
us on appeal.
   As previously mentioned, the disputed sale from Nuckolls
County was partially covered with timber. The assessor testi-
fied that the parcel was 75-percent grassland and 25-percent
timber. For this reason, Webster County argues that the prop-
erty could not satisfy the 80-percent majority land use standard
for property classifications. Webster County also contends that
Scott, the division’s agricultural land specialist, admitted this
property comprised 75-percent grassland and 25-percent timber
and that as a result it was not comparable.
   The parties have not pointed to a statute or regulation that
shows TERC or the assessment division imposes an 80-percent
majority land use standard for property classifications. However,
because the standard was mentioned in the Administrator’s
report, at the adjustment hearing, and in TERC’s orders, we
assume for this appeal that the standard exists. But Webster
County’s argument that the Nuckolls County parcel did not
satisfy the 80-percent land use standard is refuted by the record
and the assessment division’s regulations.
   The assessment division defines grassland as follows:
      Grassland is the state and condition of the range based
      on what it is naturally capable of producing. Grassland
      includes all types of grasses . . . used for grazing or
      mowed for hay. . . . Areas of wooded grazing land are
      classified as grassland not timberland or wasteland. When
      there are significant areas of trees or timber on a parcel,
      and it can no longer be grazed, consideration needs to be
                                    - 771 -
               Nebraska Supreme Court A dvance Sheets
                       296 Nebraska R eports
        COUNTY OF WEBSTER v. NEBRASKA TAX EQUAL. & REV. COMM.
                          Cite as 296 Neb. 751

      given to placing the affected acres in the forestland and
      timberland category.56
Consistent with its definition of grassland, the assessment
division defines timberland and forestland to be “land which
is wooded by nature or humans and consisting of a dense
growth of trees and underbrush such that it is not suitable
for grazing.”57
   Scott testified that under these regulations, timber cover
over grassland is properly classified as grassland, even if this
characteristic comprised 25 percent of a parcel. Equally impor-
tant, she testified that Nuckolls County had reported the sale of
this property as an 80-percent grassland sale.
   [16] Absent contrary evidence, public officers are presumed
to faithfully perform their official duties.58 So just as we assume
that the land use standard exists, we also assume that the
county assessor for Nuckolls County properly applied it. The
Webster County assessor presented no evidence to show that
tree cover rendered 25 percent of the Nuckolls County parcel
unusable for grazing. We conclude that Webster County failed
to show that the Administrator’s reports included property sales
that were not comparable to grassland in Webster County.
                       CONCLUSION
   We conclude that the Administrator’s required reports under
§ 77-1327 are competent evidence to support a TERC equal-
ization order without including the sales file information for
each real property transaction. We conclude that at a show
cause hearing, a county has the burden to demonstrate that
TERC should not rely on the Administrator’s reports. Finally,
we conclude that Webster County failed to meet that burden.
Accordingly, we affirm.
                                                   A ffirmed.

56	
      350 Neb. Admin. Code, ch. 14, § 002.31 (2014).
57	
      Id., § 002.29.
58	
      Johnson v. Neth, 276 Neb. 886, 758 N.W.2d 395 (2008).
