Supreme Court affirms ethanol plant valuation
In a Dec. 6 ruling, the Nebraska Supreme Court affirmed a February 2019 ruling by the Tax Equalization and Review Commission that lowered the property valuation of the Madrid ethanol plant for 2017.
Perkins County initially assessed the property value of the plant at $16,364,768.
Owners of the plant, Wheatland Industries LLC/Mid America Agriproducts, appealed that value to the county board of adjustment, which is comprised of the three county commissioners.
The county board confirmed the $16 million value set by the county assessor.
In June 2017, Wheatland appealed that decision to TERC.
The TERC appeal hearing was not held until June, 2018.
On Feb. 27, 2019, TERC ruled in favor of Wheatland, dropping the valuation to $7,336,042.
Perkins County then filed an appeal with the Nebraska Court of Appeals, saying TERC erred in their ruling.
Instead, the Nebraska Supreme Court took up the case directly.
The high court turned the case around in five weeks, releasing their ruling Dec. 6.
Steve Tucker, chair of the Perkins County commissioners, said this means the county will have to refund around $18,000 in taxes already paid in 2018 by Wheatland.
Perkins County Schools Superintendent Phillip Piquet said they know they will be responsible for repayment of taxes as well. However, he didn’t have the figure right at hand during Monday’s school board meeting.
The plant’s 2018 and 2019 assessed valuation, also at $16,364,768, has already been appealed by Wheatland to TERC.
In the high court’s decision, written by Judge William B. Cassel, they said Wheatland had shown sufficient evidence, based on appraisal practices, to justify TERC’s ruling.
Wheatland’s appraiser, Joseph Calvanico, had appraised the ethanol plant in Furnas County twice, which was almost a mirror copy of the Madrid plant.
The value he arrived for the Furnas County was $8,943,575, which included 200 more acres than the Madrid plant.
During the TERC hearing, Calvanico noted the appraisal method used by Perkins County’s appraiser and Assessor Peggy Burton did not account for any physical or functional depreciation.
He also contended there had been a 40 percent decrease in the number of ethanol plants in Nebraska, which devalued the economic value of the plant by 40%. With those elements applied, he put the assessed valuation of the Madrid plant at $6.8 million.
TERC said Perkins County acknowledged some physical depreciation should be attributed to the plant. However, no evidence was presented to show how much value that represented.
In a spreadsheet presented by Burton at the hearing, she showed the Furnas County plant at half the capacity of the 40-million gallon Madrid plant.
That error was acknowledged during the hearing. When asked, Burton said the correct information would have changed her opinion on the value of the Madrid plant but she didn’t specify how much.
The high court ruled Wheatland showed sufficient evidence to substantiate a lower valuation. In addition, they said Perkins County did not provide sufficient evidence to refute the 40% economic depreciation.
Cassel said Wheatland showed that a plant similar to theirs was valued comparably to the appraisal completed for them.
The omission of the correct information on the Furnas County plan showed Perkins County’s valuation was unreliable and that their valuation was “unreasonable and arbitrary. “
Cassel also wrote TERC’s consideration of economic depreciation was justifiable based on the evidence presented at the hearing.
2018 appeal
Tucker said they will contest the 2018 appeal at TERC and will present evidence to substantiate their reasoning for a higher valuation.
It is unknown when the TERC hearing will be held.