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Volume 7 - Opinions of Counsel SBEA No. 121

Opinions of Counsel index

Special franchise assessment (apportionment) - Real Property Tax Law, §§ 202, 616:

No single method/or apportioning special franchise assessments among school districts and special districts has been prescribed by the Legislature, the courts or the State Board. The assessor must choose a method, and should ensure that the results are kept current.

We are asked if there is one “proper” method of apportioning special franchise assessments among school districts and special districts. Objections have been raised to the fact that different methods are being used throughout the State and even within some counties.

The State Board must annually assess special franchises (RPTL, §202(l)(a)) and file a certificate of such assessment for each special franchise in each assessing unit (§ 616(1)). The State Board is not directed to apportion that assessment among the school districts or special districts within the assessing unit (see, People ex rel. Troy Gas Co. v. Hall, 203 N.Y. 312, 96 N.E. 933 (1911)). Rather, subdivision 2 of section 616 provides: “In towns the assessment of each special franchise located in more than one school district or in one or more special districts shall be apportioned by the assessors among each such school district and special district. . . . Upon the request of any special franchise owner, the assessor shall furnish certified statements of the amounts apportioned to the respective districts.”

The State Legislature first directed assessors to apportion the assessed valuation of railroad real property among school districts “according to the proportion that the value of said property in each of such districts bears to the value of the whole thereof in said town” (L.1867, c.694). By Chapter 414 of the Laws of 1884, this requirement was extended to the assessment of property of “telephone, telegraph and pipe-line companies.”

When the Tax Law was codified in 1896 (L.1896, c.908), these provisions were amended so that the assessors were simply directed to “apportion the assessed valuation of each such corporation among such school districts” (§39). This is essentially the same language found today in subdivision 2 of section 616 of the RPTL. Thus, the Legislature has never prescribed a specific methodology which the assessor must use in making this apportionment. As a result, the matter is left to the discretion of the assessor and it is suggested that the following are among the more common methods of apportionment being employed by assessors:

(1) The total special franchise assessment is apportioned 254 among the school and special districts according to each district’s portion of the town-wide total assessed value (i.e., the assessed value of all real property whether taxable or exempt, in whole or in part);

(2) The total special franchise assessment is apportioned among the school and special districts according to each district’s portion of the town-wide taxable assessed value;

(3) The total special franchise assessment is apportioned among the school and special districts according to each district’s portion of the town-wide total assessed value of taxable real property.

It is our understanding that other methods are also in use (e.g., by means of a comparison of the number of rate-payers in the school district and the total number of rate-payers in the town; the percentage of miles of cables, wires, etc., within each school district within the town). We understand the concern about the disparate methods, but at least to date neither the courts, the State Legislature, nor the State Board (by rule) has prescribed a method to be applied uniformly.

Concern has also been expressed about the frequency with which these apportionments are updated, the indication being that some assessors apply the same percentages from year to year, without any consideration of changes that may be occurring. If this is the case, of course, the assessors should be urged to update their apportionments on an annual basis. Whatever the method of apportionment chosen, the assessors should make every effort to keep the results of that methodology current.

December 23, 1982

Updated: