Volume 6 - Opinions of Counsel SBEA No. 120
Agricultural exemption (scope) (special districts) - Agriculture and Markets Law, § 305:
Land located within an agricultural district and eligible for an agricultural value assessment is exempt from certain benefit assessment and special ad valorem levies unless the charges imposed by the appropriate special district had been levied and become a lien upon the property before all necessary steps had been taken to establish the agricultural district.
Subdivision 5 of section 305 of Article 25AA of the Agriculture and Market Law provides an exemption from certain benefit assessments and special ad valorem levies for agricultural lands (excluding a lot up to one-half acre around the farm residence) located in an agricultural district. We have been asked for an interpretation of when special district charges are “imposed.” Subdivision 5 reads as follows:
Limitation on power to impose benefit assessments or special ad valorem levies in certain improvement districts or benefit areas. Within improvement districts or areas deemed benefited by town improvements for sewer, water, lighting, non-farm drainage, solid waste disposal or other landfill operations, no benefit assessments or special ad valorem levies may be imposed on land used primarily for agricultural production within an agricultural district on the basis of frontage, acreage or value, except a lot not exceeding one-half acre surrounding any dwelling or non-farm structure located on said land unless benefit assessments or ad valorem levies were imposed prior to the formation of the agricultural district.
The apparent rationale for exempting lands receiving agricultural value assessments from the enumerated charges was that these charges are a burden on the owners of agricultural land, while the special district services provided primarily benefit owners of commercial or residential land (see, sponsor’s memorandum for L.1975, c.717 in Governor’s Bill Jacket Collection, which chapter amended section 305(5) to its present form). While terms used in subdivision 5 of section 305, such as “areas deemed benefited by town improvements,” are defined in neither the Agriculture and Markets Law nor the Real Property Tax Law, we believe that the subdivision applies to special assessments and special ad valorem levies imposed by town or county districts organized for one of the listed purposes (2 Op. Counsel SBEA No. 74).
Land eligible for an agricultural value assessment is exempt from these charges, unless the charges were “imposed prior to the formation of the agricultural district.” Section 303, which provides for the formation of an agricultural district, is quite specific as to the date on which a district shall become effective. For purposes of section 305(5), the date a district is formed is its effective date as governed by section 303 (6), which provides for alternative procedures for approval by the county legislative body.
Once the date of formation is established, the question becomes whether charges have been “imposed” upon eligible land within the district. In the case Moller v. People’s National Bank of Brooklyn, 258 N.Y. 373, 180 N.E. 87, the Court of Appeals considered the issue of when particular taxes were “imposed.” The case involved a lease which required a tenant to pay “all such taxes, water rates and assessments as may be imposed or charged.” The Court of Appeals held that the term “imposed” described “an assessment which has ripened into a due payment, and in default of which the law attaches a lien to the land as well as a penalty for failure to discharge within a prescribed duration” (258 N.Y. at 378, 180 N.E. at 89). An earlier case, involving a similar lease provision, defined “imposed” as the moment taxes became “due and payable” (Wall v. Hess, 232 N.Y. 472, 478, 134 N.E. 536, 538).
Applying these cases to the present issue, it would seem that charges for a special district are imposed when they become attached as a charge against the land -that is, lien date (Real Property Tax Law, §902), generally January 1.
Accordingly, land within an agricultural district eligible for an agricultural value assessment is exempt from the enumerated special district charges where the appropriate effective date of the agricultural district, as specified by section 303, predates the first time charges imposed by the special district would otherwise become liens against the agricultural land.
April 7, 1980