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Volume 6 - Opinions of Counsel SBEA No. 20

Opinions of Counsel index

Freshwater wetlands (valuation) (open space lands) - Environmental Conservation Law § 24-0905; General Municipal Law, § 247:

Section 24-0905 of the Environmental Conservation Law, in providing a freshwater wetlands tax abatement, does not exempt property from taxation but merely establishes by statute the highest and best use which may be employed by the assessor in the valuation of the subject property for assessment purposes.

We have been asked whether, pursuant to section 24-0905 of the Environmental Conservation Law, freshwater wetland referred to in that section is totally exempt from real property taxation and, if not, in what manner the assessor is required to implement the provisions of that section.

Section 24-0905 provides that freshwater wetland “shall be deemed subject to a limitation on the use of such wetlands for the purposes of property tax evaluation, in the same manner as if an easement or right had been acquired pursuant to the General Municipal Law. Assessed value shall be based, during the duration of such agreement of restriction, on the uses remaining to the owner thereof.”

The reference to the General Municipal Law would appear to relate to section 247, which authorizes municipalities to acquire a wide range of rights or interests in real property for the preservation of open spaces. That statute also provides that where easements, developmental rights or the like are transferred by the owner to the municipality, the assessor shall take into consideration the effect of the burden of such encumbrances on the property by virtue of the transfer. We have held that this section does not authorize a local government to establish an arbitrary percentage exemption (3 Op.Counsel SBEA No. 10), but rather requires that the limitation on the future use of the subject property be taken into consideration in the evaluation thereof for assessment purposes (1 Op.Counsel SBEA No. 80).

In the first instance, the assessor, or such appraisal personnel as he may employ, must use his best professional judgment as to the effect, if any, of the use restriction on the value of the property. After a period of years the assessor would naturally use sales of similarly use-restricted parcels in the valuation process. In general, then, there are no hard and fast guidelines that may be used by the assessor in the first instance, and his judgment must necessarily be subjective.

It should be pointed out, however, that not all parcels subject to the use restriction will necessarily realize a decrease in value for assessment purposes. For example, where the highest and best use is the same both prior and subsequent to the effective date of the use restriction, there would be no diminution in value. Likewise, where the subject parcel has previously been designated as an open area pursuant to a local ordinance concerning new developments, residential or commercial, the use restriction may very well have no effect upon the value of such parcel. Also, if a portion of a parcel is subject to the use restriction and was previously used for landscaping purposes and was assessed as such as part of the entire parcel, it would not necessarily realize a reduction in value solely by reason of the use restriction.

Accordingly, section 24-0905 of the Environmental Conservation Law does not exempt property from taxation, but merely establishes by statute the highest and best use which may be used by the assessor in the valuation of the subject property for assessment purposes. Actual determinations will be required to be made on a case-by-case basis considering all of the facts relevant to each case.

April 27, 1977

Updated: