Volume 7 - Opinions of Counsel SBEA No. 96
Assessments, generally (standard of assessment) (uniform percentage) (authority to choose) - Real Property Tax Law, § 305:
In an assessing unit in which assessments are not at full value, the assessor determines the uniform percentage of value to be applied to the assessment of all real property, in the absence of any affirmative action by the local legislative body. However, where assessments are at full value, the authority to choose a standard of assessment of a uniform percentage of value is vested in the legislative body of the assessing unit, and not in the assessor.
We have been asked whether the change in the standard of assessment effected by Chapter 1057 of the Laws of 1981 authorizes the assessor or the local legislative body of the assessing unit to choose the percentage of value at which all real property is to be assessed. Former section 306 (repealed by L. 1981, c. 1057) of the Real Property Tax Law (RPTL) provided that, “All real property in each assessing unit shall be assessed at the full value thereof.” However, until 1975, it was generally assumed that assessments at a uniform percentage of full value satisfied this standard (e.g., C.H.O.B. Associates Inc. v. Board of Assessors of Nassau County, 45 Misc. 2d 184, 257 N.Y.S.2d 31 (S.Ct., Nassau Co., 1964), aff’d, 22 A.D.2d 1015, 256 N.Y.S.2d 550 (2d Dept., 1964), aff’d, 16 N.Y.2d 779, 209 N.E.2d 820, 262 N.Y.S.2d 501 (1965); Hellerstein v. Assessor, Town of lslip, 44 A.D.2d 689, 354 N.Y.S.2d 602 (2d Dept., 1974)).
This widespread belief was rejected in 1975, when the Court of Appeals held that the full value standard of section 306 did not permit assessors to assess at less than full value (Hellerstein v. Assessor, Town of lslip, 37 N.Y.2d 1, 332 N.E.2d 279, 371 N.Y.S.2d 388 (1975), mod., 39 N.Y.2d 920, 352 N.E.2d 593, 386 N.Y.S.2d 406 (1976)). This decision produced a continuing and increasingly intense public debate in regard to real property tax administration in general and the standard of assessment in particular. During the years 1977 through 1981, the Legislature enacted several delays to the implementation of the full value standard (e.g., L.1977, c.888; L.1978, c.476; L.1981, c.259).
The culmination of the several years of debate concerning the standard of assessment was the Legislature’s enactment of Chapter 1057 of the Laws of 1981. In part, this Chapter repealed former section 306 and replaced it with a new section 305, subdivision 2 of which provides, in part, that “all real property in each assessing unit shall be assessed at a uniform percentage of value (fractional assessment) . . .”. In addition, subdivision 3 of section 305 provides that “Any assessing unit in which assessments are at full value by reason of a revaluation may adopt a level of assessment in accordance with this section.” Neither subdivision specifies who has the authority to determine the level of assessment to be used in an assessing unit.
Under former section 306, which (like § 305(2)) also contained the phrase “all real property in each assessing unit shall be assessed”, there was case law to the effect that the assessor and not the legislative body of the assessing unit had the statutory authority (RPTL, §102(3)) to assess real property “uniformly and equally . . . at full value or fractional value, as in her discretion she may determine” (McAlevey v, Williams, 41 A.D.2d 971, 344 N.Y.S.2d 193, at 194 (2d Dept., 1973); see also, Drelich v. Kahn, 60 Misc.2d 227, 302 N.Y.S.2d 634 (S.Ct., Nassau Co., 1969)). Given the similarity of the language used in the former law and the new law, and the aforementioned judicial precedents determining that it was “the assessor” who had the authority to determine the percentage of full value to be applied, it is our opinion that in the absence of any affirmative action by the local legislative body, it is still the assessor who determines the uniform percentage of value to be applied where subdivision 2 of section 305 applies.
However, subdivision 3 of new section 305 adds a significant new provision to the law. The replacement of full value with the uniformity standard of subdivision 2 is coupled, in subdivision 3, with an authorization to any assessing unit in which assessments are at full value by reason of a revaluation to substitute a level of assessment at a uniform percentage of value. Where this option is to be exercised, the question is which official or officials will make this determination. In new subdivision 3, the language used is that “any assessing unit . . . may adopt a level of assessment . . .” other than full value (emphasis added). An “assessing unit” is defined in subdivision 1 of section 102 of the Real Property Tax Law as “a city, town, village or a county having a county department of assessment with the power to assess real property”. That is, “assessing unit” refers to the local government itself.
There are several provisions of the Real Property Tax Law which refer to the municipal corporation or its officers, rather than to the assessor, in matters of real property tax administration. For example, it has been held that the clerk of the “assessing unit” is the clerk of the municipal corporation, not the assessor’s clerk (VanPatten v. Board of Assessors of Town of Clifton Park, 33 A.D.2d 323, 307 N.Y.S.2d 675 (3d Dept., 1970); Cole-Rome, Inc. v. Board of Assessors of City of Rome, 44 Misc.2d 675, 255 N.Y.S.2d 12 (S.Ct., Oneida Co., 1964)). We have previously expressed the opinion that although the assessor(s) is (are) the named respondent(s) in tax certiorari proceedings, those proceedings are actually actions against the assessing unit, not the assessor(s) individually, and it is the governing body of the assessing unit which is empowered to settle such litigation (3 Op.Counsel SBEA No. 92).
Another example is the statutory provision which directs that notice of tentative State equalization rates must be sent to the chief executive officer of the city, town, or village (RPTL, § 1204). The longstanding practice of the State Board has been to require that complaints with respect to tentative equalization rates be signed by the chief executive officer or the legal counsel of the local government, rather than the assessor (see, SBEA Complaint Form (EA-1)).
Chapter 1057 of the Laws of 1981 gives to governing bodies of assessing units further responsibilities involving the real property tax. For example, it is the governing body which may apply for approved assessing unit status (RPTL, § 1902). Further, where a municipality is certified as an “approved assessing unit”, it is the governing body which is empowered to adopt local laws providing for homestead base proportions (§ 1903(1)(a)), transition assessments (§ 1904(1)), or both.
Finally, the use of the verb “adopt” in subdivision 3 of section 305 lends further support for the conclusion that some type of formal action by the governing body is contemplated. Section 10(l)(d)(l) of the Municipal Home Rule Law provides, in part, that a town’s governing body may adopt a local law relating to “the preparation, making, confirmation and correction of assessments of real property . . .”. Such a local law enacted to change the level of assessment would seemingly be subject to a permissive referendum as required by section 24(2)(c) of the Municipal Home Rule Law, which requires such a referendum where the local law “[c]hanges a provision of law relating to assessments of real property . . .” (emphasis added). In Archer v. Town of North Greenbush, 80 A.D.2d 361, 439 N.Y.S.2d 729 (3d Dept., 1981), the court interpreted “‘changes’ as referring to an amendment which substitutes one form of local procedure for another from [sic] of local procedure” (439 N.Y.S.2d, at 731). A change from full value assessing to fractional value assessing appears to be such a “change”.
Given these provisions of law and judicial precedents, it is our opinion that once a full value revaluation has been implemented, subdivision 3 of section 305 authorizes the governing body of an assessing unit to direct the assessor to assess all real property at a uniform percentage of value.
March 24, 1982