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Volume 10 - Opinions of Counsel SBRPS No. 116

Opinions of Counsel index

Public authorities exemption (Power Authority of the State of New York) (special ad valorem levies) - Public Authorities Law, § 1012; Real Property Tax Law, § 102(14):

The New York Power Authority is exempt from special ad valorem levies.

We have been asked if two parcels owned by the Power Authority of the State of New York are exempt from charges for two fire protection districts and a county water district.

Town Law, section 184(6), provides that the expenses of fire protection districts are to be raised by special ad valorem levies (Real Property Tax Law, §102(14)) levied against the taxable property in the district (Op.State Compt. 81-201). It appears that the county water district in question also raises its expenses by special ad valorem levy pursuant to section 270 of the County Law (see, Young Men’s Christian Association v. Rochester Pure Waters District, 44 A.D.2d 219, 354 N.Y.S.2d 201 (4th Dept., 1974), aff’d, 37 N.Y.2d 371, 334 N.E.2d 586, 372 N.Y.S.2d 633 (1975)).

The New York Power Authority is one of the public authorities authorized by the Public Authorities Law. Accordingly, its real property is entitled to the exemption provided in the Authority’s enabling legislation, that is, section 1012 of the Public Authorities Law (RPTL, §412).

Public Authorities Law, section 1012, provides in relevant part that the Power Authority “shall be required to pay no taxes or assessments upon any of the property acquired by it” in order to carry out its statutory purposes. The section does not, however, mention special ad valorem levies or special assessments.

The Court of Appeals analyzed an exemption statute similar to section 1012 in New York State Dormitory Authority v. Board of Trustees of Hyde Park Fire and Water District, 86 N.Y.2d 72, 653 N.E.2d 1159, 629 N.Y.S.2d 989 (1995), holding that the Dormitory Authority was not liable for a “special assessment” for a town improvement district. {1}  Like section 1012, Public Authorities Law, section 1685, provides that the Dormitory Authority “shall be required to pay no taxes or assessments” on its property. The opinion of the Court noted that the exemption provisions of Public Authorities Law, §1685, were last amended in 1949 (L.1949, c.786), nearly a decade before the codification of the Real Property Tax Law (L.1958, c.959) “where the terms ‘special assessment’ and ‘assessment’ were first defined as corresponding to separate and distinct concepts” (86 N.Y.2d at 77-78, 653 N.E.2d at 1160-61, 629 N.Y.S.2d at 990-91). The Court therefore concluded that the exemption from “assessments” stated in Public Authorities Law, section 1685, could not be determined by relying on the definitions of “assessment” and “special assessment” set forth in RPTL, section 102(2) and (15), respectively.

Public Authorities Law, section 1012, from its original enactment (L.1939, c.870), has provided that the Power Authority is exempt from “taxes” and “assessments.” {2}  None of the three amendments to section 1012 (i.e., L.1951, c.146, L.1972, c.908 and L.1974, c.369) has changed the scope of the exemption. Like “special assessment,” the term “special ad valorem levy” was first defined in the RPTL (as §102(14)). The Dormitory Authority decision, therefore, supports the conclusion that the definitions of special assessment and special ad valorem levy set forth in Real Property Tax Law, section 102, do not control when construing the meaning of the exemption from taxes and assessments granted to the Power Authority by section 1012 of the Public Authorities Law.

The Court in Dormitory Authority devoted a considerable part of its analysis to Town of Cheektowaga v. Niagara Frontier Transportation Authority, 82 A.D.2d 175, 442 N.Y.S.2d 322 (4th Dept., 1981), which determined whether Public Authorities Law, section 1299-o, exempted the Niagara Frontier Transportation Authority from paying a special assessment for a sewer district. At the time of the Cheektowaga decision, Public Authorities Law, section 1299-o, contained language which both supported and undermined the idea that the Legislature intended to exempt the Niagara Frontier Transportation Authority from special assessments. One portion of section 1299-o provided that the Authority was required to pay no fees, taxes or assessments, but a second portion stated that the Authority was exempt from taxation and special ad valorem levies and that those terms had the same meanings as in section 102 of the RPTL. The Court of Appeals in Dormitory Authority accepted the interpretation of the Fourth Department in Town of Cheektowaga that the references to taxation and special ad valorem levies in Public Authorities Law, §1299-o, were insufficient to show that the Legislature intended a restrictive interpretation of “assessment.”

Subsequent to the Town of Cheektowaga decision, Public Authorities Law, section 1299-o, was amended (L.1982, c.836) to provide that the Niagara Frontier Transportation Authority was not exempt from benefit assessments. Given the view of the Court of Appeals as expressed in Dormitory Authority, it is our opinion that an explicit statutory provision like that set forth in chapter 836 of the Laws of 1982 would be required in order to show that the Legislature intended a restrictive interpretation of a statute granting an exemption from “assessments” to a public authority.

As noted above, the Legislature has not by explicit provision in Public Authority Law, section 1012, stated that the exemption of the New York Power Authority from “assessments” excludes special ad valorem levies. Accordingly, based on the reasoning in the Dormitory Authority case, we must conclude that the Power Authority is exempt from special ad valorem levies.

October 30, 2000


{1}  The significance of the New York State Dormitory Authority decision is discussed in 10 Op.Counsel SBRPS No. 16.

{2}  The section was originally designated Public Authorities Law, section 1013, but was later renumbered section 1012 (L.1949, c.612).

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