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Volume 8 - Opinions of Counsel SBEA No. 25

Opinions of Counsel index

Special assessing units (portions) (special districts and school districts); School districts (dissolution) (prior indebtedness) - Education Law, § 1504; Real Property Tax Law, §§ 1801, 1803:

Nassau County may not establish base proportions on a town or city level for a County-wide special district or for a school district which crosses town or city lines.

Separate base proportions should not be established for former school districts which have been consolidated into centralized school districts. Those former districts continue to exist in law for the sole purpose of the pro rated distribution of previously incurred indebtedness.

We have been asked to clarify the requirements of Article 18 of the RPTL with respect to “portion - base proportions” in Nassau County. The County’s legislative body is required by section 1803 of the RPTL to establish base proportions (class tax shares) for the County and for each “portion” therein (see generally, 7 Op.Counsel SBEA No. 58).

A “portion” is defined (§1801(d)) as that part of Nassau County “included within the boundaries of”:

(1) a city;

(2) a village;

(3) a town;

(4) the town excluding all villages therein;

(5) a school district; or

(6) A special district which encompasses the entire County, with the exception of one or more cities or villages.

Clearly, the statute neither requires nor authorizes the establishment of special district base proportions on a town or city level. Where a special district encompasses “the entire County” with the exception of one or more cities or villages, only County-wide base proportions should be established for that district. To establish special district base proportions on the municipal (town and city) level would amount to the creation of a new category, which might be termed “portion-portion base proportions” (that is, class tax shares for each portion within another portion).

The same conclusion applies with respect to school districts which cross town or city lines within Nassau County. As is apparent from a reading of the definition in section 1801(d), the State Legislature did not define a portion to include the parts of a school district lying in each town or city. Instead, “portion” is defined as that part of the County included within a school district.

Finally, we are asked whether base proportions (and, ultimately, adjusted base proportions) should be established for former school districts which have been consolidated into centralized school districts. Subdivision one of section 1504 of the Education Law provides that when a new school district is created out of the territory of one or more school districts and there is outstanding bonded indebtedness chargeable against such district(s) out of which the new one is formed,

[The] district superintendent shall apportion said indebtedness between such new district and the remaining portion of the district or districts out of which such new district is organized, according to the assessed valuation thereof, and the portion of the indebtedness so apportioned shall become a charge for principal and interest upon the respective districts as though the same had been incurred by said districts separately. [Emphasis added].

The rationale for this provision is that property owners within each part of a dissolved or consolidated district should pay their respective shares of debt incurred prior to the formation of a new district. However, there is no similar provision in Article 18 of the RPTL applicable to the establishment of base proportions within school districts.

Clearly, even prior to the enactment of Article 18, as a result of the consolidation of all or part of two or more common school districts with outstanding bonded indebtedness, it was possible that a single consolidated school district could have had multiple tax rates (see, Education Law, §1504(1), above). As a result of Article 18, there will be four times as many of these tax rates within consolidated school districts. It does not necessarily follow, however, that there should be a comparable number of base proportions. As we read section 1801(d), the County must establish four base proportions - one for each of the four classes - within each “school district”. There is nothing in Article 18 or its legislative history to suggest that the Legislature intended to establish class tax shares based on boundaries of districts which no longer exist.

The “continuation” of dissolved districts per section 1504 of the Education Law is solely for the purpose of the pro rated distribution of previously incurred indebtedness. Further support for this conclusion is found in section 1518 of the Education Law which provides that a dissolved district “shall continue to exist in law, for the purpose of providing for and paying all its just debts . . .”.

Accordingly, it is our opinion that separate base proportions should not be established for former school districts in Nassau County which have been consolidated into centralized school districts.

September 15, 1983

Updated: