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Volume 3 - Opinions of Counsel SBEA No. 22

Opinions of Counsel index

Nonprofit organizations exemption (religious); Special assessments (liability) - Real Property Tax Law, §§ 102(15), 421, 490:

Church property located in a city and exempt from taxation pursuant to section 421 is subject to “sewerage facility rents” which are “special assessments” as defined in section 102(15).

Our opinion has been requested as to the liability of church property for sewer charges imposed by the City of Newburgh.

          The construction and operating expenses of sewer systems in cities are almost always financed by the imposition of “special assessments” supplemented by “sewer rents”. True rents are based on factors which measure the degree of use. A “special assessment” is defined in the Real Property Tax Law (§ 102(15)) to be “a charge imposed upon benefited real property in proportion to the benefit received by such property to defray the cost, including operation and maintenance, of a special district improvement or service or of a special improvement or service.” (emphasis supplied) It is possible for the benefit received by property to be measured by the assessed value, although usually assessed value constitutes only a part of the formula.

This apparently is the case for the “sewer rents” of the City of Newburgh, which were determined pursuant to Local Law No. 1, 1970.

The formula for determining “sewer facilities rents” is set forth in subdivision a of section 1 of the Local Law. Note that this formula used the “unit” method of assessment. Assessed value plays no part at all in determining the number of units for residences and apartment houses. It becomes a part of the formula only for “other properties”.

Unquestionably the “sewerage facilities rents” are “special assessments” as defined in the Real Property Tax Law. (The use of the word “rents” is a misnomer.) In any event, it certainly is not a tax, for tax is imposed on all property within the city on the basis of value.

Section 300 of the Real Property Tax Law provides that all property within the State is subject to special assessments unless exempt therefrom by law. Under subdivision 8 of section 421, religious property is exempt from special assessments only to the extent provided in section 490. Section 490 does not exempt property from special assessments imposed by a city.

Thus, church property located in a city is not exempt from special assessments imposed by the city, and, therefore, such church property is, in our opinion, liable for sewer charges.

This does not imply that the church cannot complain next year prior to the confirmation of the sewer assessment roll that the particular formula set forth in the law for the church property inflates the benefit received by such property, if this be the case.

May 18, 1973

NOTE:  See also Opinion 7-88.