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Volume 2 - Opinions of Counsel SBEA No. 87

Opinions of Counsel index

Public Authorities exemption (Erie County Water Authority) (special assessments and special ad valorem levies) - Public Authorities Law, § 1063:

The real property of the Erie County Water Authority is exempt from general taxes only. The property is not exempt from special assessments or special ad valorem levies.

Our opinion has been requested concerning the exemption from taxation of real property acquired by the Erie County Water Authority.

The specific question is in regard to the exemption from taxation for special assessments and special ad valorem levies of real property qualifying for exemption under section 1063 of the Public Authorities Law.

Section 1063, the exemption statute for the Erie County Water Authority, recites that “the authority . . . shall be required to pay no taxes or assessments upon any of the properties acquired by it . . .” (subdivision 1), and that “(a)ny . . . property of the authority shall be exempt from taxation . . .” (Subdivision 2). If the quoted phrase of subdivision 1 were deemed controlling, then the agency would be exempt from general taxes, special assessments and possibly special ad valorem levies (Matter of City of New York, 192 N.Y. 459, 85 N.E. 755; In Re White Plains Presbyterian Church, 112 App. Div. 130, 98 N.Y.S. 63; New York Telephone Company v. Common Council and Assessors of Rye, 43 Misc.2d 668, 252 N.Y.S.2d 126). However, the phrasing in subdivision 2, namely, that the property of the authority “shall be exempt from taxation”, is more limited in its scope since a simple exemption from taxation includes only general taxes and not special assessments and special ad valorem levies (Roosevelt Hospital v. Mayor of New York, 84 N.Y. 108; County of Westchester v. Town of Harrison, 201 Misc. 211, 114 N.Y.S.2d 492; Dinn v. Board of Education of UFSD #4, Town of North Hempstead, 121 Misc. 633, 202 N.Y.S. 62).

Since tax exemption statutes must be strictly construed (Lawrence-Smith School, Inc. v. The City of New York, 280 N.Y. 805, 21 N.E.2d 693), and since the direction of subdivision 2 follows and therefore controls what has preceded it, the phrase “shall be exempt from taxation” is the direction of a statute, and the exemption authorized by section 1063 applies only to general taxes, and not to special assessments and special ad valorem levies.

The conclusion as to the limited scope of section 1063 is further supported by comparing that section to analogous sections in the statutory framework of similar quasi-public bodies. An examination of these laws, all contained in the Public Authorities Law unless otherwise noted, demonstrates that the exemption statutes for the public authorities of the State vary significantly in their scope according to the manner in which they are written.

Several of the authorities provide for exemptions only in regard to interest on the bonds used in financing the Authority (e.g., the Historic Rome Development Authority, § 916; State of New York Mortgage Agency Act, § 2413).

Several other authorities are exempt from general taxes only, in that their particular exemption statutes use the phrase “exempt from taxation” (e.g., New York State Thruway Authority, §§ 371, 372; Central New York Regional Market Authority, § 833). There are many statutes creating authorities which use the same language as is present in section 1063 of the Public Authorities Law (e.g., Onondaga Solid Waste Disposal Authority, §§ 2027 and 2028; Thousand Islands Bridge Authority, § 585).

While the above examples show the conscious differentiation in wording and scope of the exemption statutes for the several authorities examined, an even more significant circumstance exists with several of the more recent authorities. That circumstance is that the tax exemption section in the governing law specifically enumerates the various forms of charges and their liability or lack thereof to which the real property of the authority is subject. For example, the New York State Environmental Facilities Corporation is exempt from taxation according to the direction of section 1296. Subdivision 1 recites that “Real property owned by the Corporation shall be exempt from taxation, special ad valorem levies and special assessments.”

This form of exemption statute is also present in the titles which create the Capitol District Transportation Authority (§ 1316) the Central New York Regional Transportation Authority (§ 1341), the Metropolitan Transportation Authority (§§ 1266 and 1275) and the Rochester-Genesee Regional Transportation Authority § 1299-qq).

In addition to the analogous statutes present in other sections of the Public Authorities Law, there is also evidence in other laws that the precise scope of an exemption is delineated according to distributive words used in the exemption statutes. Thus the Court of Appeals has held that an exemption statute which directs that real property is exempt from “public taxes and assessments” is applicable only to general taxes levied against the entire district, and the real property in question was liable to special assessments levied for local improvements to that property (Buffalo City Cemetery v. The City of Buffalo, 46 N.Y. 503). Finally, section 19 of the Public Lands Law, first enacted in 1894, uses the phrase, “taxes and assessments for local improvements”, thereby specifically including special assessments in addition to general taxes.

Thus, it seems clear that the use of the phrase “exempt from taxation” in section 1063 subdivision 2 is a direction that the property of the authority should be exempt from general taxes only and that it should not be exempt from special assessments and special ad valorem levies. This conclusion that section 1063 of the Public Authorities Law does not exempt the real property of the authority from special assessments or special ad valorem levies, was also reached by the Attorney General. (1966, Op.Atty.Gen. 118).

It has been suggested that if the assessor makes the determination that such property so held by Erie County Water Authority is not entitled to exemption under section 1063 of the Public Authorities Law, the real properties may be returned to the assessment roll pursuant to section 554 of he Real Property Tax Law. It is the opinion of this office that the proper procedure would be to wait until next year and restore this property to the 1972 and 1973 assessment roll pursuant to section 550 of the Real Property Tax Law.

December 13, 1972