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Volume 8 - Opinions of Counsel SBEA No. 109

Opinions of Counsel index

Agricultural exemption (conversion) (municipal liability); Municipal corporations exemption (scope) (roll-back taxes on converted farmlands) - Agriculture and Markets Law, § 305; Real Property Tax Law, § 406:

Farmland within an agricultural district, which has been receiving an agricultural value assessment, is deemed converted and liable for a roll-back tax when it is used for recreational purposes, including a park. However, if the title has been transferred to a municipal corporation and the property is held for a public use as of the next taxable status date, the land will not be liable for such roll-back taxes.

A farmer is considering selling a parcel of land to a county for use as a park. The parcel is within an agricultural district and has received the benefit of an agricultural value assessment. The farmer wants to know if roll-back taxes will be levied and, if so, who would be responsible for their payment.

Land which is located within an agricultural district which is considered to be “used in agricultural production” within the meaning of section 301(3) of the Agriculture and Markets Law may, upon the owner’s application, receive an agricultural value assessment and possibly a partial exemption from real property taxation (Agriculture and Markets Law, §305(1)(a)). Section 301(3) generally requires that the land be used during the preceding two years for the production for sale of crops, livestock or livestock products of an average gross sales value of $10,000 over that time. {1}  However, if a portion of the land is converted to a use other than for agricultural production, section 305(1 )(d) requires roll-back taxes to be levied against the value of that portion on the first assessment roll prepared subsequent to the conversion. The roll-back taxes essentially equal the amount of taxes saved due to the application of the agricultural value ceiling in the preceding five years. {2}

In 6 Op.Counsel SBEA No. 66, we concluded that conversion to use for purposes other than for agricultural production occurs when there is “. . . some outward act, indicating that the property is in fact or in the process of being converted”. Thus, a conveyance of title, without more, does not constitute a conversion. {3}

Whether a conversion has occurred is a determination to be made by the assessor on a case by case basis. We note that land included as a public park area is used for recreational purposes even though it may not be entirely developed. We have said with respect to the maintenance of a shooting preserve and areas used for campgrounds that recreational use is not “use for agricultural production” (3 Op.Counsel SBEA Nos. 97 and 116). {4}  This position was cited with approval in Briggs v. Jahrling, Index No. 4298/ 78, n.o.r. (Sup. Ct., Orange Co. 1980), in which the court concluded that a shooting preserve was held for a recreational rather than an agricultural use. Therefore, we believe a change from use for production for sale of agricultural products to use for recreational purposes constitutes a conversion, thereby entailing roll-back tax liability.

Rules of construction require that statutes which pertain to the same subject matter are “in pari materia” and “. . . ‘are to be construed together as though forming part of the same statute and should, if possible, be given uniformity of application and construction and applied harmoniously and consistently’ [citation omitted]” (North Eastern Fruit Council v. State Board of Equalization and Assessment, 124 Misc.2d 67, 475 N.Y.S.2d 1010, 1012 (S.Ct. Albany Co. 1984), aff’d, 115 A.D.2d 139, 495 N.Y.S.2d 925 (3d Dept. 1985), mot. for lv. to app. den., 67 N.Y.2d 603 (1986)). Thus, for purposes of determining liability for roll-back taxes, it is proper to construe the provisions of the Agriculture and Markets Law pertaining to the agricultural value assessment program in a manner consistent with the Real Property Tax Law [RPTL], which applies generally to real property taxation.

Section 304 of the RPTL requires assessments to be made against the land itself, which is subject to sale to satisfy unpaid tax liens (see, RPTL, §§1000, 1100). There may be personal liability for unpaid taxes in some cases if one who has an interest in property is a resident of the city or town in which the property is assessed and his or her name is correctly entered on the assessment roll (RPTL, §926). As previously noted, roll-back taxes are levied on the first assessment roll following the conversion. Therefore, assuming that the only area converted is that which is sold, the purchaser, in order to protect his or her investment, will ordinarily be obligated to assume responsibility for payment of roll-back taxes.

However, the fact that the purchaser is a municipality using the area as a public park raises the issue of taxable status. Section 406(1) of the RPTL provides:

Real property owned by a municipal corporation within its corporate limits held for a public use shall be exempt from taxation and exempt from special ad valorem levies and special assessments to the extent provided in section four hundred ninety of this chapter.

Use of municipal lands for a public park is clearly a “public use” within the meaning of this statute.

In regard to that exemption and the conversion of agricultural lands, we note that a roll-back tax imposed on the latter constitutes a “tax” within the meaning of the Real Property Tax Law, since it is a charge imposed by “taxing jurisdictions” which include municipalities and school districts, and used for general purposes (Agriculture and Markets Law, §305(1)(d); RPTL, §102(20)). References to the levy and collection of the roll-back taxes with other taxes in section 305(1)(d) also support our interpretation that roll-back “taxes” fall within the general definition of “tax” (Agriculture and Markets Law, §305(1)(d)).

However, taxes are not imposed against property until “. . .an assessment has ripened into a due payment. . .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” (Moller v. People’s National Bank of Brooklyn, 258 N.Y. 373, 378, 180 N.E. 87, 89 (1932); 6 Op.Counsel SBEA No. 120). This occurs on “lien date” (RPTL, §§902, 1312).

In 6 Op.Counsel SBEA No. 71, we considered the application of roll-back taxes to a purchase of agricultural district land by the Federal government for inclusion in the Appalachian National Scenic Trail. We noted that “[a]bsent a lien at the time of acquisition there is no question that taxes levied against a parcel may not be enforced against the sovereign [citations omitted]” [emphasis added] and that section 400(1) of the RPTL specifically exempts Federal property from taxation. Therefore, we concluded that roll-back taxes could not be imposed upon land owned by the Federal government.

Applying that rationale to the case at hand, it is apparent that although the measure of roll-back taxes relates to the preceding tax years, they would only become a lien against the converted land based upon the tax levy upon the first assessment roll prepared subsequent to the conversion. Since the land in question would be municipally owned as of the taxable status date for that assessment roll, it is entitled to any exemptions available to municipal property.

Therefore, it is our opinion that in the case of municipal acquisition and conversion of land located within an agricultural district to a use for purposes other than agricultural production, no roll-back taxes will be imposed if the property is “held for a public use” and, therefore, exempt from taxation pursuant to section 406(1) of the RPTL.

October 2, 1986

NOTE:  Overruled in part by Opinion 10-36.


{1}  In some instances, all of these requirements need not be satisfied (Agriculture and Markets Law, §§ 301(3)(b), 305(1 )(f)).

{2}  Conversion liability and the land area subject to it differs greatly if land used in agricultural production is located outside of an agricultural district and subject to an eight-year commitment to continued agricultural use (Agriculture and Markets Law, §306(2)).

{3}  Although that Opinion concerns land which is subject to a commitment to continued agricultural production, rather than land within an agricultural district, determination of what constitutes a conversion is the same in either case.

{4}  In the State Board’s Rules (9 NYCRR 194.1(m)), park facilities are listed as land used for nonagricultural purposes.

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