Volume 11 - Opinions of Counsel SBRPS No. 101
Special ad valorem levies (sewer charges) (fire district)(creation after filing of final assessment roll) - County Law, § 270; Real Property Tax Law, §§ 102(14), 502, 516; Town Law, § 181:
Special ad valorem levies imposed on behalf of a county sewer district or a town fire district may be included in a December 31 tax levy despite the fact that the county sewer district or town fire district was not established until after the filing of the final assessment roll upon which such charges are to be levied. The provisions in the County Law and the Town Law are dispositive of when liability attaches for county sewer district and town fire district special ad valorem levies. [4 Op.Counsel SBEA No. 58 superseded.]
We have been asked whether a special ad valorem levy can be imposed in a December 31 tax levy (Real Property Tax Law, § 900(1)) on behalf of a special district, for instance, a fire district or sewer district, if such district was not created until after the final assessment roll was filed on or before the preceding July 1 (RPTL, § 516(1)). Consequently, the assessing unit town’s taxable status date (RPTL, § 302), tentative assessment roll filing date (§ 506), and final assessment roll filing date (§ 516) all will have passed before the district’s creation. The essential question is whether such a district must exist at the time of the filing of the tentative assessment roll for district special ad valorem levies to be properly levied on that roll. The corollary question is whether such a levy would violate the taxpayer’s rights to due process of law.
In 4 Op.Counsel SBEA No. 58, we stated that neither an assessor nor other local official may impose a special ad valorem levy on a current assessment roll on behalf of a new county sewer district created after the tentative roll is filed, because the plenary jurisdiction of the town assessor ceases after the assessor completes and files that tentative assessment roll, and no other official has jurisdiction to change the assessment roll in such manner. We interpreted the RPTL restrictions narrowly, because there are no express provisions therein authorizing the assessor to change the tentative roll for either special district codes or the determination of which properties are subject to special ad valorem levies.
Upon further examination, we now conclude that, although it is true that the assessor does not have the express authority to unilaterally change an assessed value after the tentative roll is filed, a change in or even an addition of a special district code by the assessor is not precluded. Rather, in our opinion, the County Law and Town Law, which generally govern the establishment of special districts, the adoption of budgets for special districts, and the levy of special district charges, coupled with the RPTL’s assessment review and correction provisions, contain sufficient safeguards and authority to permit special district coding changes. That is, we believe there are three separate procedures that, when combined, ensure that taxpayers are both fully apprised of their tax liability and that their rights are protected. Accordingly, to the extent that 4 Op.Counsel SBEA No. 58 indicates otherwise, it should be deemed superseded.
District creation and procedures
Liability for a special district charge depends initially upon location of the property within the district. State law establishes procedures for the creation of special districts, and those procedures contain safeguards to ensure that property owners have notice of the potential inclusion or exclusion of their property within a proposed district. {1}
For example, for a county sewer district, such as the district discussed in 4 Op.Counsel SBEA No. 58, section 270 of the County Law requires the county legislative body to hold a public hearing (per § 254 of such law) if that body changes either the allocation of the costs of the county sewer district or the boundaries of the district. The county legislative body, in certain circumstances, must also make an application to the State Comptroller pursuant to County Law, section 258, to make a determination as to whether the proposed changes will result in an undue burden being placed upon the property of the proposed district. In our opinion, the County Law provides adequate notice and hearing procedures that afford taxpayers the opportunity to review and contest those charges at the time that the sewer district is formed or otherwise changed. As noted, the law provides additional safeguards and, in certain circumstances, requires approval from the State Comptroller’s Office (see, County Law, § 270(4)). Similar provisions exist under Articles 12 and 12-A of the Town Law, which govern certain town special districts, including town sewer districts (see, Town Law, §§ 194(6) and 209-f(i); see generally, N.Y.S. Dept. of State, Local Government Handbook, at 96-98 [5th ed.]).
Pursuant to Article 11 of the Town Law, which governs the establishment, extension, dissolution, and alteration of fire districts, a fire district may be established by a town board on its motion or upon a petition of the owners of 50 percent of the resident-owned taxable assessed valuation in the area of the proposed district (Town Law, §§ 170, 171). The town board is further required to hold a public hearing to determine that all properties to be included are benefited properties, that all properties which are benefited have been included in the proposed district, and that the district is in the public interest (Town Law, § 171). If the town board decides to finance the establishment of a fire district by district indebtedness, an application must be made to the State Comptroller for approval (Town Law, § 173). We note also that there are no provisions in the Town Law placing time limitations on when fire districts may be established. Additionally, a taxpayer may contest his or her parcel’s inclusion within or exclusion from such a district by commencing a judicial proceeding, pursuant to Article 78 of the Civil Practice Law and Rules, within 30 days from the date of recording of a town board resolution establishing, extending, consolidating, altering the boundaries, or dissolving the district (Town Law, § 173).
Assessment procedures
A county legislative body may impose special ad valorem levies for a county sewer district (County Law, § 270). A board of fire district commissioners similarly may authorize special ad valorem levies for a fire district (Town Law, § 181). {2}
The imposition of special ad valorem levies is integrated into the assessment process. The very definition of “assessment” is, “a determination made by assessors of (1) the valuation of real property, including the valuation of exempt real property and (2) whether or not real property is subject to taxation or special ad valorem levies” (RPTL, § 102(2); emphasis added). The RPTL includes numerous provisions concerning the assessor’s procedures in assessing real property and the property owner’s right to review that assessment (see generally, RPTL, Arts. 3, 5, and 7).
In preparing the tentative assessment roll, the assessor is required to indicate the name or number of the special districts in which each parcel is located and whether the parcel is subject to special ad valorem levies (RPTL, § 502(6); 9 NYCRR 190-1.2(b)(7)). The significance of the tentative roll filing is that it puts a taxpayer on notice of his or her right to review their property’s assessment. The taxpayer’s opportunity to challenge the assessed value assigned to his or her parcel for purposes of taxation and special ad valorem levies is as set forth in Article five (administrative review) and Article seven (judicial review) of the RPTL.
In seeking administrative correction of an assessment, among other grounds, a taxpayer may allege that an “unlawful entry” has occurred. That term is defined in section 550(7)(b) of the RPTL, in part, as “an entry on an assessment roll or a tax roll, or both, of the assessed valuation of real property which is entirely outside the boundaries of the . . . special district in which the real property is designated as being located.” When such an unlawful entry is entered on an assessment roll, the assessor may petition the board of assessment review to correct it (per RPTL, § 552 or 553). {3} When such error appears on a tax roll, an aggrieved property owner has an administrative remedy (per RPTL, § 554 or 556).
In other words, there are two separate procedures: one to object to a municipal governing board’s decision to include a parcel in a particular special district, and a second to challenge the erroneous imposition of a special ad valorem levy upon a parcel not located within the boundaries of a special district. The first situation is subject to judicial review of the municipal governing board’s final order establishing the district (County Law, § 260; Town Law, §§ 173, 195, and 209-g). The second circumstance may be remedied by the RPTL’s correction of errors procedure (RPTL, § 550 et seq.).
Conclusion
Accordingly, we are satisfied that the law adequately protects taxpayers vis-à-vis their property and the inclusion of that property within a fire district. Therefore, in our opinion, special ad valorem levies may be imposed for newly formed fire districts at the same time other taxes and charges are levied, despite the fact that a fire district was created after the preceding July 1. In reaching a conclusion contrary to our former opinion, we now conclude that the provisions in the Town Law pertaining to the formation of fire districts and to the town budget procedures for special districts are dispositive of when liability attaches for fire district charges. In superseding our former opinion, we further conclude that special ad valorem levies may similarly be imposed for county sewer district charges, since the budgetary process for county sewer districts provides similar protections. The answer to the issue of whether special ad valorem levies may be imposed for other types of special districts created after the final assessment roll has been filed will depend on the applicable provisions in the general or special laws which establish when liability attaches for such charges. {4}
October 27, 1994
Revised June 9, 2004
{1} In 11 Op.Counsel SBRPS No. 15, we discussed the impact on real property tax administration of the Court of Appeals’ decision in Garden Homes Co. v. Town of Dover, 95 N.Y.2d 516, 742 N.E.2d 593, 720 N.Y.S.2d 79 (2000), concluding that towns must now give property owners direct notice of hearings to consider objections to special assessment rolls, but that notice by posting and publication is sufficient for purposes of taxation and special ad valorem levies. While Garden Homes may have broader implications for the future, it does not affect our conclusions here concerning the imposition of special ad valorem levies for the district. That is, for purposes of this Opinion, we assume that all statutory, regulatory and constitutional requirements for the creation of the particular district have been satisfied.
{2} A town board does not have the authority to alter or change budgets or special ad valorem levies approved by a fire district board of commissioners (Town Law, § 181).
{3} Similarly, an assessor may correct an “omission” per section 551 or 553 of the RPTL, an omission including “taxable real property for which no . . . special district tax was levied because of a failure to include the property within the appropriate taxing district” (RPTL, § 550(4-a)).
{4} We also note that towns may establish several types of special districts whose costs are raised by the imposition of special ad valorem levies (see, Town Law, § 202(3)).
