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Volume 11 - Opinions of Counsel SBRPS No. 54

Opinions of Counsel index

Equalization rates (State rates) (change in level of assessment factor - effect on exemptions); Correction of errors (clerical error) (partial exemption - failure to apply change in level of assessment factor) - Real Property Tax Law, §§ 550, 1224:

Where the State Board issues a change in level of assessment factor, an assessor is obliged to adjust partial exemptions subject to such factors. An assessor’s failure to do so is a clerical error subject to timely correction.

We have received an inquiry concerning the effect of this agency’s issuance of a change in level of assessment factor on certain exemptions. {1}  In July, 2003, that is, after the final 2003 assessment roll had been filed, an assessor received notice of a certified change in level factor of 1.0856 to be applied to several exemptions including the forestry exemption and the eligible funds veterans exemption (RPTL, § 458(5)(a)). The question is whether and how this factor should be applied to the exemptions. (Apparently, they were not.)

It appears that a misunderstanding regarding the procedure for the computation of the change in level factor may have occurred. An assessor who anticipates a material change in level on the assessment roll is required to so notify the State Board in writing not later than 30 days prior to the last date for filing of the final assessment roll (9 NYCRR § 186-3.3). In this particular situation, the assessor failed to do so.

Regardless of whether an assessor notifies the State Board of an anticipated change in level, the Board is obliged to compute a change in level of assessment once it receives the assessor’s annual report (RPTL, § 575), if that report indicates that such a change is warranted (id., § 1221). Section 1228 of the RPTL provides that where the State Board is authorized or directed by law to certify a change in level “for adjustment by the assessor of . . . partially exempt real property,” it must do so in the manner provided in section 1224 of that law.

Section 1224(1) provides, in part, that where the State Board is authorized or directed to determine a change in level of assessment factor for an “assessment ceiling or other assessment limitation” [which phrase is deemed to include exemptions], the assessor is to recompute the ceiling or assessments affected thereby. Pursuant to section 1224(2), if a ceiling or assessment limitation as determined prior to applying the change in level of assessment factor is less than the local assessed valuation after recomputing the ceiling or assessment limitation, the assessor is obliged to amend the assessment roll to enter as the taxable assessed value the lesser of the new ceiling/limitation or the local assessed valuation.

Section 480(3) provides that the assessment of a tract eligible for a forest exemption shall not exceed the valuation fixed at the time the application for classification under that section was filed, except that “such assessment may be increased or decreased . . . to reflect a change in level of assessment. . . .” Section 458(5)(a) is even more explicit. Where the change in level option of section 458(5) has been locally adopted:

[I]f the total assessed value of the real property for which such exemption has been granted increases or decreases as the result of a revaluation or update of assessments, and a material change in level of assessment . . . is certified for the assessment roll pursuant to the rules of the state board, the assessor shall increase or decrease the amount of such exemption by multiplying the amount of such exemption by the change in level of assessment factor. If the assessor receives the certification after the completion, verification and filing of the final assessment roll, the assessor shall certify the amount of exemption as recomputed pursuant to this paragraph to the local officers having custody and control of the roll, and such local officers are hereby directed and authorized to enter the recomputed exemption certified by the assessor on the roll.

If exemptions subject to adjustment because of the issuance of a material change in level factor were not in fact adjusted, and the exemptions were therefore miscalculated, this would constitute a “clerical error” as defined in section 550(2)(b) of the RPTL. Affected taxpayers may seek corrected tax bills (per RPTL, § 554) or refunds or credits (per RPTL, § 556) by filing the appropriate forms with the county director of real property tax services.

January 28, 2004

{1}  The term “change in level of assessment factor” as well as the related terms “change in level of assessment,” “material change in level of assessment,” and “physical or quantity change” are all defined in section 1220 of the Real Property Tax Law.