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Volume 6 - Opinions of Counsel SBEA No. 1

Opinions of Counsel index

Assessments, generally (standard of assessment) (effect of L.1977, c.888 on municipalities subject to existing court order to assess at full value) - Real Property Tax Law, § 306:

Any municipality which, on the effective date of chapter 888 of the Laws of 1977 (i.e., August 11, 1977), was subject to a judgment directing it to assess at full value by a specific date cannot ignore the court order on the theory that the amendment to section 306 of the Real Property Tax Law supersedes the court’s judgment. Rather, if either party to the litigation has a question as to its rights or liabilities, given the new law, it should seek the direction of the court.

We have received an inquiry in regard to the revaluation program in the Town of Islip and the application of new legislation to that program.

First, our opinion is requested as to the effect, if any, of chapter 888 of the Laws of 1977 on the revaluation program, and, in particular, on the court order issued against the town in the case of Hellerstein v. Assessor of the Town of Islip, 37 N.Y.2d 1, 332 N.E.2d 279, 371 N.Y.S.2d 388.

The Court of Appeals in that case held that the provision in section 306 of the Real Property Tax Law that “[a]ll real property in each assessing unit shall be assessed at the full value thereof” requires the assessment of all property at full value and that the practice of assessing at a fraction of full value, even if uniform, violates the section. As part of its decision, the Court directed the assessor to assess the real property within the town at full value “within a reasonable time,” which it considered to be December 1, 1976. Upon motion made by the town to amend the remittitur, the date for compliance was later extended to July 1, 1978 (Hellerstein v. Assessor of Town of Islip, 39 N.Y.2d 919, 352 N.E.2d 593, 386 N.Y.S.2d 406).

Chapter 888 amends section 306 of the Real Property Tax Law by adding, after the above-quoted provision, the following language:

[P]rovided, however, any assessing unit which in good faith initiates a physical revaluation of all its real property, or where a county initiates such a physical revaluation on behalf of such assessing unit, on or after its taxable status date of nineteen hundred seventy-six, and is actively carrying out such revaluation, shall not be required to complete and file a final assessment roll in compliance with the standard of assessment of this section through December thirty-first, nineteen hundred eighty.

Since the Town of Islip is at the present time actively carrying out a “physical revaluation” of all its real property, the question posed is whether it may delay placing all assessments on the roll at full value until 1981.

It is our opinion that any municipality which, on the effective date of Chapter 888 (August 11, 1977), was subject to a judgment directing it to assess at full value by a specific date cannot ignore that order on the theory that the amendment to section 306 supersedes a court’s judgment. This is particularly the case with the Town of Islip, where all appellate remedies have obviously been exhausted.

As a general rule, a judgment, after it becomes final, may not be affected by subsequent legislation (McKinney’s Statutes, § 58). Furthermore, case law clearly says that this is true if all avenues of review by appeal have been exhausted, for then the judgment becomes a constitutionally protected inviolable property right (Gilman v. Tucker, 128 N.Y 190.28, N.E. 1040). As noted in the cited case:

[After] adjudication the fruits of the judgment become rights of property. These rights became vested by the action of the court and were thereby placed beyond the reach of legislative power to affect (128 N.Y. 190, 204).

Therefore, under the legal principle just discussed, it is apparent that Hellerstein, the petitioner in the litigation, has “inviolable rights” which the Legislature may not alter. The extent of these rights, of course, cannot be determined unilaterally by the respondent municipality. If either or both of the parties has a question as to the extent of the rights of the petitioner or the liabilities of the respondent, then that party must seek the direction of the court.

However, even if no constitutional rights are involved here, we would have reservations about concluding that the amendment affects existing Hellerstein orders. Another canon of statutory construction is that a statute is generally presumed to operate prospectively and not retroactively unless it is procedural in nature (McKinney’s Statutes. §§ 51(c), 55). It is certainly most arguable that the legislation in question is not procedural in nature since it affects neither pleading, evidence, nor practice, the three areas which according to Bouvier’s Law Dictionary 2729 (8th ed. 1914), together comprise “procedure.”

Thus, pursuing this line of reasoning, the amendment to section 306, affective substantive law as we believe it does, would not be construed to apply retroactively without an express provision in regard thereto. As stated in the text of section 53 of McKinney’s Statutes:

[A] pre-existing right or liability, whether or not it is constitutionally protected from change, will not be affected by legislation, unless legislative intent to the contrary is obvious. The doubts, if any, will be resolved in favor of holding the subsequent statute to be prospective only.

It should also be noted that moratorium laws, a category of laws into which the present statute properly belongs, have specifically been held not to apply retroactively (Zajic v. Sikora Realty Corporation, 252 App. Div. 343, 299 N.Y.S. 227).

Caution is also warranted as to the particular fact situation of the Town of Islip. Under the specific wording of chapter 888, only an assessing unit which “in good faith initiates a physical revaluation * * * on or after its taxable status date” of 1976 is covered by the January 1, 1981 date. The town’s taxable status date in 1976 was June 1st; therefore, the statute could be construed, and under its plain wording, would be construed, as not applying to Islip if the town had “initiated” its revaluation prior to June 1, 1976. Our information would indicate the town could be found to have initiated a revaluation program by June 1, 1976. (For example, in an affidavit dated May 27,1976, submitted to the Court of Appeals in support of the town’s Notice of Motion to Amend Remittitur, the assessor described the steps which the town had taken up to that time to comply with the direction of the Court.)

Our opinion is also requested as to whether or not the law and the court order would be complied with if the town reassesses all property on the 1978 assessment roll at a fraction of the 100 percent market values found for each parcel in the revaluation. Our comments in regard to the first question are equally pertinent here. We also note that the general tenor of the Court of Appeal’s decision in the Hellerstein case was to condemn fractional assessing, even if uniform (see, e.g., 37 N.Y.2d at pp. 12-13). Accordingly, it is our opinion. that the town would not be in compliance with the court order if it were to file a 1978 assessment roll at a fraction of full market values.

September 19, 1977