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Volume 11 - Opinions of Counsel SBRPS No. 40

Opinions of Counsel index

Industrial waste treatment facilities exemption (applicability to existing improvements) - Real Property Tax Law, § 477:

Improvements that satisfy all of the criteria of section 477 may receive an exemption pursuant to that section even though they were constructed many years ago and they previously received an exemption when they were under the control of an industrial development agency.

An assessor has requested our opinion concerning the industrial waste treatment facilities exemption (Real Property Tax Law, § 477). The facts are that, in 1989, a company built a sewage treatment plant, and the assessor apparently advised its representatives of the availability of the exemption. It is not clear whether the company then actually filed an application (RP-477) with the assessor. Since section 477 provides a partial exemption (equal to the increase in value of the property attributable to the construction or improvement), it may well be that no exemption under section 477 was sought because the company received a full exemption from taxation when it received financing under the local industrial development agency (RPTL, § 412-a; General Municipal Law, § 874). {1}  The company repaid its IDA loans, and, last year, the property became fully taxable. The company has now filed an RP-477 with the assessor who asks whether an exemption under section 477 may now be granted.

Section 477's statutory criteria for exemption are few:

First, the improvements must be constructed after May 12, 1965 (RPTL, § 477(3)). Here, construction occurred in 1989.

Second, the improvements must be certified by the Department of Environmental Conservation [DEC] as being in compliance with the Environmental Conservation Law, the Public Health Law, the State Sanitary Code, and regulations, permits or orders issued by the Commissioner of DEC (RPTL, § 477(2)). The assessor has advised that the company has filed for certification under section 17-0705 of the Environmental Conservation Law.

Lastly, the exemption may only be allowed upon timely filing of an application “on or before the appropriate taxable status date” (RPTL, § 477(4)). The applicant here has done so (for purposes of the 2003 assessment roll).

We note that, unlike some other exemptions, there is no requirement in section 477 that application be made within one year of completion of the improvements for which exemption is sought (compare RPTL, §§ 485-b(3), 483(4)). Likewise, there is no prohibition on the grant of exemption under section 477 to improvements that previously received exemption under another section (compare RPTL, § 485-b(2)(d)). Accordingly, in our opinion, assuming that the improvements satisfy all of the criteria of section 477, the fact that they were constructed in 1989 or that they previously received the IDA exemption does not disqualify them from now receiving an exemption under section 477.

January 31, 2003

{1}  We recognize, however, that while the section 477 exemption is partial, it applies to special ad valorem levies (RPTL, § 477(4)); the IDA exemption does not (General Municipal Law, § 874; Cerro v. Washington County Bd. of Supervisors, 247 A.D.2d 726, 669 N.Y.S.2d 385 (3d Dept., 1998), app. dsmd., 92 N.Y.2d 845, 699 N.E.2d 434, 677 N.Y.S.2d 74 (1998), lv. to app. den., 92 N.Y.2d 811, 703 N.E.2d 269, 680 N.Y.S.2d 457 (1998), and 270 A.D.2d 679, 704 N.Y.S.2d 726 (3d Dept., 2000), app. dsmd., 95 N.Y.2d 887, 738 N.E.2d 782, 715 N.Y.S.2d 378 (2000); 1 Op.Counsel SBEA No. 23).