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Volume 3 - Opinions of Counsel SBEA No. 56

Opinions of Counsel index

School districts exemption (special ad valorem levies) (capital costs of construction) - Real Property Tax Law, §§ 408, 490:

School districts are not exempt from special ad valorem levies to pay the cost of capital improvements of water districts, nor are they exempt from water rents.

We have received an inquiry from a board of education of a city which owns real property located in a town and has been receiving tax bills from the town water district. The question is whether the school district’s property is exempt from taxation and our opinion is requested as to the validity of the water district tax bills.

Section 408 of the Real Property Tax Law provides that real property owned by a school district shall be exempt from taxation and exempt from special ad valorem levies and special assessments to the extent provided in section 490 of the Real Property Tax Law.

Said section 490 provides, inter alia, that real property exempt from taxation pursuant to section 408 shall also be exempt from certain special ad valorem levies and special assessments against real property located in the unincorporated area of a town except those levied to pay the cost of capital improvements.

We have been advised by the State Comptroller’s office that the water district in question was formed in 1948 and the capital cost of such district was to be financed over a period of 40 years on the basis of special ad valorem levies.

It would appear, therefore, that the bills in question are valid since school districts are not exempt from special ad valorem levies to pay the capital cost of water districts.

Another bill referred to in the inquiry constitutes a water rent based on the usage of water as indicted by meter readings and, of course, the school district is not exempt from water rents.

March 20, 1974

NOTE:  But see Opinion 7-88.

Updated: