Volume 5 - Opinions of Counsel SBEA No. 93
Municipal corporations exemption (county nursing home) - Real Property Tax Law, § 406:
The establishment and operation of a county nursing home within the county’s boundaries is a public purpose within the meaning of section 406 of the Real Property Tax Law and therefore, pursuant to this section, such a nursing home is exempt from taxation.
We have received an inquiry concerning the taxable status of a licensed public nursing home owned and operated by a county and located within its boundaries. The question is whether the facility in question is exempt from real property taxation under the provisions of section 406 of the New York Real Property Tax Law.
Under New York law, all real property is subject to taxation, unless specifically exempted therefrom by an express statutory provision (Real Property Tax Law, §300). A tax exemption for property owned by municipal corporations, including counties, is provided for in section 406 of the Real Property Tax Law. Subdivision 1 of such section provides, in relevant part:
§406. Municipal corporations
1. Real property owned by a municipal corporation within its corporate limits held for a public use. . .shall be exempt from taxation and exempt from special ad valorem levies and special assessments to the extent provided in section four hundred ninety of this chapter, (emphasis supplied)
In deciding whether a section 406 exemption applies, the determining factor is the use of the property for a public purpose. Pursuant to the above-quoted section, real property owned by a municipal corporation within its corporate limits, which is being used for a public purpose is exempt from taxation. It has been held that real property is being “held for a public use” when it is “occupied, employed or availed of, by and for the benefit of the community at large, and implies a possession, occupation and enjoyment by the public, or by public agencies” (Herkimer County v. Village of Herkimer, 251 App.Div. 126, 295 N.Y.S. 629, aff’d, 279 N.Y. 560, 18 N.E.2d 854).
The operation of a county public nursing home would seem to fall clearly within the ambit of the above-quoted judicial standard. Such a facility no doubt benefits the community at large, and is occupied and enjoyed by the public. Nevertheless, there is a dearth of judicial decisions or administrative opinions as to whether a public nursing home is specifically eligible for exemption under Real Property Tax Law, section 406.
We assume for purposes of this inquiry that the facility in question was established and maintained pursuant to the provisions of title 5 of article 5 of the Social Services Law (§§193 et seq.) relating to the establishment and maintenance of public homes and infirmaries. Article 5 of the County Law which sets out the general powers of county boards of supervisors provides in section 233-a(l)(aa) that “[s]upport of a public home maintained by a county public welfare district. . .where such home is maintained pursuant to section one hundred ninety three of the social welfare law. . .” is a county purpose. It would seem that the clear implication of the above-quoted section is that the establishment and maintenance of a public nursing facility was conceived as a necessary purpose of county government by the Legislature.
In a formal opinion (10 Op.State Compt. 55) the State Comptroller has characterized the erection and operation of a county home, under the provisions of section 193 of the Social Services Law, as a governmental function. The specific inquiry concerned the applicability of a town zoning ordinance to the construction of a new county nursing home. After making a primary distinction between municipally owned property used for governmental or public purposes and municipally owned property used for private purposes, the Comptroller went on to state that properties devoted to a governmental purpose have been held to be:
exempt from the operation of zoning laws, but as to property held in a proprietary capacity, it is subject to the same restraints as private persons (cases cited).
The issue to be resolved, therefore, is whether the county is performing a governmental function in erecting and operating a county home and infirmary.
Generally, governmental functions are those performed by a municipality in the exercise of sovereign power delegated to it by the state for the public good and the welfare of the citizens of the state at large, as distinguished from functions performed for the benefit of a private or local interest or group (2 McQuillan, Municipal Corporations, 3d Ed, §10.05). While we know of no decision in this State passing directly on the above question, in other jurisdictions it has been held that the care of destitute and indigent persons is a governmental function (see In re Condemnation of Land of Pennsylvania Turnpike Commission, 347 Pa. 643, 32 A.2d 910; . . .).
It would seem that in view of Article XVII, section 1 of the New York State Constitution and section 193 of the Social Welfare Law [now §193 of the Social Services Law], the courts in this State would hold that the erection and operation of a county home and infirmary is a governmental function, and, therefore, that such a project is not subject to a town zoning ordinance. (emphasis supplied)
Based upon the provisions of the relevant statutes, as well as the Comptroller’s opinion quoted above, it is reasonable to conclude that the estab5lishment and operation of a county public nursing home within the county’s boundaries is a public purpose within the meaning of section 406 of the Real Property Tax Law and is, therefore, exempt from taxation, special ad valorem levies and special assessments to the extent provided in section 490 of the Real Property Tax Law.
August 3, 1976