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Volume 8 - Opinions of Counsel SBEA No. 8

Opinions of Counsel index

Municipal corporations exemption (leased property) (community college) - Real Property Tax Law, § 406:

Real property owned by a village and occupied and used by a local community college is “held for a public use” within the meaning of section 406 of the RPTL.

We have been asked our opinion as to the taxable status of real property owned by a village and leased to the local community college.

Municipally-owned real property located within the corporate limits of the municipality is exempt from taxation and exempt from special ad valorem levies and special assessments, to the extent provided in Real Property Tax Law, section 490, if the property is “held for a public use” (RPTL, §406(1)). Since the ownership of the subject property by the village and its location within the village limits is not in question, the sole issue for determination is whether the property, if it is occupied and used solely by the community college, is “held for a public use”.

While use of land may be in the public interest, such “interest” is not synonymous with “public use” (Matter of Niagara Falls and Whirlpool Railway Company, 108 N.Y. 375, 15 N.E. 429 (1888)). Nor does “public purpose” necessarily mean “public use”. In Town of Harrison v. County of Westchester, 13 N.Y.2d 258, 196 N.E.2d 240, 246 N.Y.S.2d 593 (1963) the Court of Appeals stated:

Although what comprises “a public use” within the meaning of [section 406(1)] “has never been defined with exactitude” and “must necessarily depend upon the peculiar circumstances of each case, [”public use“ for purposes of section 406(1)] means that the property should be 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.” (13 N.Y.2d at 263, 246 N.Y.S.2d at 596). (Citation omitted).

In determining whether the operation of a community college constitutes a “public use” of property, we note at the outset that the community at large, namely the residents of the county, are the beneficiaries of the college’s operations within the meaning of the Town of Harrison case. Article 126 of the Education Law, which relates to community colleges, indicates the primary beneficiaries of the college’s activities: “Community colleges shall provide two-year programs of post high school nature combining general education with technical education relating to the occupational needs of the community or area in which the college is located” (Education Law, §6303(1) (emphasis added)). In Grimm v. County of Rensselaer (4 N.Y.2d 416, 151 N.E.2d 841, 176 N.Y.S.2d 271 (1958)), the Court of Appeals held that:

Education has long been regarded as serving a public and governmental purpose and a proper local municipal function is unquestionably served by higher educational institutions authorized by municipal divisions of the state. The ownership and operation of public facilities serving the welfare of a municipality are not deprived of their municipal character because they may serve a larger interest as well. (4 N.Y.2d at 421, 176 N.Y.S.2d at 274).

Since the operation of a community college is a governmental purpose and benefits the inhabitants of the particular community which owns the property, it would be a “public use” within the meaning of section 406(1) of the Real Property Tax Law (See also, Fallica v. Town of Brookhaven, 52 N.Y.2d 794, 417 N.E.2d 1248, 436 N.Y.S.2d 707 (1980), per the dissenting opinion of Lazer, J., 69 A.D.2d 597, at 598-604, 419 N.Y.S.2d 102 at 111-118 (1979)).

Therefore, it is our opinion that property owned by a village and occupied and used by the local community college would be entitled to an exemption from taxation and to the extent provided by RPTL, section 490 from special ad valorem levies and special assessments, as provided in section 406(1).

June 16, 1983

Updated: