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Volume 8 - Opinions of Counsel SBEA No. 75

Opinions of Counsel index

Municipal corporations exemption (public use requirement) (occasional use for private purposes) - Real Property Tax Law, § 406:

Occasional use of a municipally owned landfill by private haulers for a fee would not convert an otherwise public use of the site to a private one for purposes of the municipal corporations exemption of section 406 of the Real Property Tax Law.

We have been asked about the taxable status of a county owned and operated sanitary landfill. In addition to servicing towns and villages located within the county, the county receives a fee from several private haulers and municipalities located outside the county for dumping at the landfill.

Subdivision one of section 406 of the Real Property Tax Law provides that real property owned by a municipal corporation within its corporate limits “held for a public use” is exempt from taxation, and also exempt from special ad valorem levies and special assessments to the extent provided in section 490. Since the county is a municipal corporation (§102(10)) and the landfill is located within and owned by the county, the question of whether all or any portion of the property is subject to taxation depends upon whether the property is “held for a public use”.

The “held for public use” standard has been judicially construed to mean 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 public agencies” (Town of Harrison v. Westchester County, 13 N.Y.2d 258, 263, 196 N.E.2d 240, 246 N.Y.S.2d 593, 596 (1963)). The Court of Appeals has recently expanded the definition of the “public” being served for purposes of this statute to include the public at large and not merely the residents of the particular municipality (Fallica v. Town of Brookhaven, 52 N.Y.2d 794, 417 N.E.2d 1248, 436 N.Y.S.2d 707 (1980), modifying 69 A.D.2d 579, 419 N.Y.S.2d 102 (2d Dept. 1979) per Lazer, J. [dissenting] (419 N.Y.S.2d at 114)). Given this interpretation, it seems clear that the use of the landfill by other municipalities would not affect the “public use” test for exemption purposes.

If the primary or principal use of the landfill is to service local governments and their constituencies, we believe the requirement that the property be “held for a public use” would be satisfied. That the county may be receiving a fee from private haulers would not, in and of itself, change our conclusion. (Section 406 does bar an exemption to “revenue producing property” of a municipality if such property was acquired by tax deed, in rem foreclosure or a similar proceeding for continued non-payment of taxes (RPTL, §406(5)). However, this exception does not apply here.)

In determining taxable status of any other municipally-owned property, the assessor must take into account all the circumstances affecting the use of the property. For example, in the Town of Harrison case, the courts held taxable part of a county owned airport, namely, two hangars leased to private companies and devoted almost exclusively to servicing private aircraft. The Court of Appeals considered as significant two factors: “the exclusive long-term control of the premises by private corporations and the use of the premises by them solely for the storage and maintenance of aircraft serving only their own personnel and guests” (13 N.Y.2d at 263). The Court added that the fact that the revenues derived from those leases might be devoted to public uses did not serve to convert the actual use of that property to a public one (id. at 264). Likewise, we believe that an occasional use of a municipally owned landfill by private haulers for a fee will not convert an otherwise public use of the site into a private one for purposes of section 406.

May 29, 1985

Updated: