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Volume 11 - Opinions of Counsel SBRPS No. 15

Opinions of Counsel index

Special assessments (generally) (notice of filing); Assessment roll (notice of filing) (publication); Special ad valorem levies (generally) (notice of filing) - Real Property Tax Law, §§ 102(14), 102(15), 506; Town Law, § 239:

Towns must give property owners direct notice of hearings to consider objections to special assessment rolls. Notice by posting and publication is sufficient for purposes of the general assessment roll used for purposes of taxation and special ad valorem levies.

Our opinion has been requested concerning the impact of the Court of Appeals decision in Garden Homes Woodlands Company v. Town of Dover, 95 N.Y.2d 516, 742 N.E.2d 593, 720 N.Y.S.2d 79 (2000), on real property tax administration. We have also been asked which types of special districts will have to change their assessment procedures as a result of this decision.

The Court of Appeals in Garden Homes considered a constitutional challenge to special assessments (as defined in Real Property Tax Law, § 102(15)) levied by the Town of Dover for a joint street improvement area (authorized by L.1999, c.210), which also included the adjacent Town of Beekman. The Court found that Dover complied with the statute (i.e., Town Law, § 239) by conducting the required hearing on the tentative special assessment roll after publishing notice of the hearing. The petitioner, however, an out-of-state limited partnership, was unaware of the published notice and did not appear at the hearing.

The Court granted judgment for the petitioner and declared the special assessment levied by Dover to be invalid, finding that, because Town Law, section 239, required only constructive notice of hearing by publication, it did not satisfy due process of law guarantees as required by the Fourteenth Amendment to the United States Constitution. In reaching this conclusion, the Court of Appeals quoted but rejected the holding of the Appellate Division, Second Department, that “mere adoption of an assessment roll” is not the type of proceeding that “will substantially affect an individual owner's property so as to require actual notice prior to [its] adoption” (266 A.D.2d at 187, 697 N.Y.S.2d at 347).

The Court cited its decision in Matter of McCann v. Scaduto, 71 N.Y.2d 164, 519 N.E.2d 309, 524 N.Y.S.2d 398 (1987), for the principle that “where the interest of a property owner will be substantially affected by an act of government, and where the owner’s name and address are known, due process requires that actual notice be given” (95 N.Y.2d at 519, 742 N.E.2d at 594, 720 N.Y.S.2d at 80). The Court acknowledged that McCann and the other precedents, which were cited for the above principle, {1} involved tax sale or condemnation, but saw no reason why the principle should not be applied to special assessments.

Special assessments

As a practical consequence of Garden Homes, all towns must now give property owners direct notice of hearings to consider objections to special assessments (Town Law, § 239), {2} unless “compelling or persuasive reasons, economic or otherwise” can be shown why direct notice cannot be given. The Court did not define what would constitute these reasons for not giving a property owner direct notice of the right to object to a proposed special assessment, but did cite Walker v. Hutchinson, 352 U.S. 112, 77 S.Ct. 200, 1 L.Ed.2d 178 (1956), for guidance. This was an apparent reference to the holding in Walker “that in some cases it might not be reasonably possible to give personal notice, for example where people are missing or unknown” (352 U.S. at 116, 77 S.Ct. at 202, 1 L.Ed.2d at 182). The Court in Garden Homes found no such showing because “the names and addresses of the affected landowners were indisputably known to the Town because they appear on the special assessment roll” (95 N.Y.2d at 520, 742 N.E.2d at 595, 720 N.Y.S.2d at 81). {3}

General taxation

Importantly, the Garden Homes court clearly stated that its holding did not affect the preparation of assessment rolls used for general taxation. The Court explicitly rejected the argument of the Town of Dover that “requiring actual notice in this case will open the floodgates and require actual notice in the imposition of other taxes” (95 N.Y.2d at 521, 742 N.E.2d at 596, 720 N.Y.S.2d at 82). Londoner v. City and County of Denver, 210 U.S. 373, 28 S.Ct. 708, 52 L.Ed. 1103 (1908), and Browning v. Hooper, 269 U.S. 396, 46 S.Ct. 141, 70 L.Ed. 330 (1926), were cited for the principle that the United States Supreme Court “has long distinguished -- in terms of due process -- between other taxes and special assessments imposed by localities” (95 N.Y.2d at 521, 742 N.E.2d at 596, 720 N.Y.S.2d at 82). Accordingly, and based on current law, in our opinion, notice of the filing of the tentative (general) assessment roll may continue to be given by posting and publication (see, RPTL, § 506). {4}

Special ad valorem levies

The costs of certain county and town special districts may be raised by special ad valorem levies (as defined in RPTL, § 102(15)). County Law, section 270(1), provides in pertinent part that the expenses of such a county district “shall be assessed, levied and collected from the several lots and parcels of land within the district in the same manner and at the same time as county charges . . .” (emphasis added). Town Law, section 202(3), states in relevant part that the expenses of such a town district “shall be assessed, levied and collected from the several lots and parcels within the district for each purpose in the same manner and at the same time as other town charges...” (emphasis added). In our opinion, these emphasized clauses are references to the general assessment roll, so neither statutory provision is affected by Garden Homes, the holding of which, as noted by the Court itself, applies only to special assessments.

August 24, 2001

{1}  The other precedents cited by the Court were Mennonite Board of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983); Matter of ISCA Enterprises v. City of New York, 77 N.Y.2d 688, 572 N.E.2d 610, 569 N.Y.S.2d 927 (1991); and Congregation Yetev Lev D'Satmar v. County of Sullivan, 59 N.Y.2d 418, 452 N.E.2d 1207, 465 N.Y.S.2d 879 (1983).

{2}  The notice must advise that the special assessment roll has been completed, and specify the time and place where the town board will meet to hear any objections to the roll. Section 239 does not require that the taxpayer be given notice of his or her individual special assessment, nor did the Garden Homes court impose such requirement.

{3}  Garden Homes does not in fact represent a fundamental change in the Court of Appeals’ interpretation of due process. That is, the Court favorably cited Smith v. City of New York, 30 A.D.2d 122, 290 N.Y.S.2d 306 (1st Dept., 1968), aff'd, 24 N.Y.2d 782, 248 N.E.2d 432, 300 N.Y.S.2d 572 (1969), which held that a property owner (a railroad) was denied due process when it was not given direct notice of its right to object to a tentative special assessment for a street improvement authorized by chapter 12 of the 1938 New York City Charter. As was the case in Garden Homes, the notice provided in Smith was timely published and its contents complied with the applicable statutory provision. Both statutes were held to be constitutionally insufficient because they did not require direct notice by personal service or by mail.

The due process analysis followed in Garden Homes also resembles the interpretation of United States Supreme Court cases made in Smith where the court relied upon the holding of the Wisconsin Supreme Court in Wisconsin Electric Power Company v. City of Milwaukee, 275 Wis. 121, 81 N.W.2d 298 (1957), that “the constructive notice given by the defendant city by publication of the proposed special assessments against the plaintiff’s lands did not meet the requirements of due process” (275 Wis. at 123, 81 N.W.2d at 299).

{4}  We caution, however, that the Court of Appeals seemed to leave the door slightly ajar to reconsideration of this issue, when, after citing the two U.S. Supreme Court decisions, it chose to add the sentence, “Moreover, plaintiff brings its constitutional challenge only as applied to the 1996 special assessment” (95 N.Y.2d at 521, 742 N.E.2d at 596, 720 N.Y.S.2d at 82).