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Volume 4 - Opinions of Counsel SBEA No. 79

Opinions of Counsel index

Assessments, generally (authority of local government) (wetlands) (shoreline development) - Environmental Conservation Law, § 25-0302; Real Property Tax Law, § 306:

Before an assessor may give preferential assessment treatment to any type of property, statutory authority is necessary. Pursuant to section 25-0302 of the Environmental Conservation Law, tidal wetlands, the use of which is regulated pursuant to Title 2 of Article 25 of such law, must be assessed according to their present use.

We have received several questions in regard to the power of local governments to use taxation as a tool for controlling the use of the shorelines of major water bodies.

A county regional planning board is currently investigating various techniques to assure that shoreline land use is compatible with physical environment. Of particular concern to the board is the land use of a narrow strip of land (i.e., up to 1,000 feet) of the shoreline.

Real property taxation has always been considered a matter of exclusive state concern and not within the local home rule powers (Counties Securities, Inc. v. Seacord, 278 N.Y. 34, 15 N.E.2d 179). Thus, local governments possess only those powers in regard to taxation as have been expressly delegated to them. In other words, local governments have no residual power to grant exemptions or to establish assessment standards. As one court stated (Troy Union R. Co. v. City of Troy, 132 Misc. 534, 230 N.Y.S. 653, 661):

It is well established in the law that a municipality exercises merely delegated powers from the state to levy and collect taxes. It has no power to grant exemptions from taxation nor to make contracts looking to that result. Brooklyn, Q.C. & S.R. Co. v. City of New York, 229 N.Y. 260, 266, 128 N.E. 231; People ex rel. Sweet, Supervisor, v. Board of Supervisors of St. Lawrence County, 101 App. Div. 327, 91 N.Y.S. 948; Dillon on Municipal Corporations (5th Ed.) § 1610; Chicago, R.I. & P.R. Co. v. Union Pac. Ry. Co. (C.C.) 47 F. 15, 21.

The standard of assessment of real property established by state law (Real Property Tax Law, § 306) is that “all real property shall be assessed at the full value thereof.” Case law has construed the term “full value” to mean fair market value and the concept of economic highest and best use is a part of “fair market value.” Neither case law nor statute authorizes any local government to pass any local laws which would change this concept of full value. Exemption statutes permit the preferential assessment of agricultural and forest lands which satisfy the requirements of the particular statutes (Agriculture and Markets Law, Article 25AA, and Real Property Tax Law, § 480-a, respectively). Too, the assessment of tidal wetlands, whose use is regulated under Title 2 of Article 25 of the Environmental Conservation Law, must be based on present use under the restricting regulation (Environmental Conservation Law, § 25-0302).

Another tool given localities adaptable to maintaining low density on the shoreline is the power to acquire open space easements delegated by section 247 of the General Municipal Law. Where such easements are acquired, the effect of the value of the property must be taken into account when the property is assessed for taxation purposes.

Three specific questions are raised in the inquiry. The first question is: If a hypothetical shoreline district were established similar to agricultural districts, would state authorization be necessary before any form of preferential taxation took place? The answer, as the above general discussion indicates, is that statutory authority would be necessary before an assessor could give preferential treatment to shoreline property.

The second question is: Is there any instance where relief from special assessments can be authorized by a local municipality for a particular land area? Again the answer is that a local government may only give such relief where expressly authorized by statute. We know of no statutory authority delegating this power to a local government.

Lastly, we are asked whether or not local communities are able to transfer a portion of their property taxes emanating from large industrial complexes or similar high intensity land use to neighboring communities who may also benefit by it. At present there is no existing statutory authority for treating so-called “tax islands” differently from the taxes of any assessing unit.

December 18, 1974