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Volume 6 - Opinions of Counsel SBEA No. 110

Opinions of Counsel index

Veterans exemption (generally) (computation - local law maintaining percentage of exemption) - Municipal Home Rule Law, § 24; Real Property Tax Law, § 458:

A local law adopted pursuant to subdivision 5(b) of section 458 of the Real Property Tax Law is subject to a permissive referendum, and to be effective for purposes of the 1980 assessment roll, it must be effective on or before the date of tentative completion of the assessment roll.

Numerous assessing units throughout the State intend to implement non-court ordered full value reassessments on their 1980 assessment rolls. Requests have been made for an interpretation of paragraph (b) of subdivision 5 of section 458 of the Real Property Tax Law, the veterans exemption. Subdivision was added by Chapter 134 of the Laws of 1979 and is effective from May 24, 1979 through December 31, 1980 {see, 6 Op.Counsel SBEA No. 67). Paragraph (b) thereof provides as follows:

(b) If the ratio between the exemption granted under this section and the total assessed value of the real property for which such exemption has been granted increases or decreases due only to a change in the manner of assessing, other than a court ordered full value assessment, in the tax district in which such property is located, the amount of the exemption heretofore or hereafter granted may, pursuant to local law, be increased or decreased in such subsequent year in the same proportion as the total assessed value has been increased or decreased. Such adjustment shall be made by the assessors in the manner provided in paragraph three of subdivision one of this section and no application therefor need be filed by or on behalf of any owner of any eligible property.

Specifically, an opinion has been requested as to (1) when must a local law enacted pursuant to subdivision 5(b) be effective in order to authorize the assessor to make the veterans exemption adjustment on the 1980 assessment roll and (2) is the local law subject to a permissive referendum.

As to the first question, section 458 of the Real Property Tax Laws is an exemption statute, and such statutes must be strictly construed (Herkimer County v. Village of Herkimer, 251 App.Div. 126, 295 N.Y.S. 629, aff’d, 279 N.Y. 560, 18 N.E.2d 854; City of Lackawanna v. State Board of Equalization and Assessment, 16 N.Y.2d 222, 212 N.E.2d 42, 264 N.Y.S.2d 528). As a general rule, statutes are to be construed as prospective in operation only (Kelley v. Yannotti, 4 N.Y.2d 603,152 N.E.2d 69, 176 N.Y.S.2d 637; McKinney’s Statutes § 51). The rule of prospective application is especially relevant as to exemption laws; statutes allowing exemptions from taxation are not, as a general rule, retroactive (Matter of Van Kleeck, 121 N.Y. 701, 25 N.E. 50; McKinney’s Statutes, § 57). Only where there is a clear legislative intent to give retroactive effect to a statute, will such. a construction be given (Kelley v. Yannotti; supra; Matter of Van Kleeck, supra).

Absent specific statutory authority, an assessor is without jurisdiction to make changes in assessments after tentative completion of the assessment roll (2 Op.Counsel SBEA No. 62; 6 Op.Counsel SBEA No. 53). Where the Legislature has chosen to give the assessor authority to make changes after the tentative assessment roll has been filed, it has done so explicitly. For example in 1977, and again in 1979, when the Legislature raised the maximum income ceiling for purposes of the aged exemption (Real Property Tax Law, § 467), first to $7,200 (L.1977, c.187), and then to $8,000 (L.1979, c.109), it also authorized: (1) municipalities to act to increase the local ceiling up to sixty. days after taxable status date; (2) filing by applicants up to the date of final filing of the assessment roll; and, most relevant here, (3) assessors to accept the application and enter the exemption on the final assessment roll (see, L.1977, c.457 and L.1979, c.108). No similar administrative procedure has been provided here. Accordingly, an assessor may not make the subdivision 5(b) adjustment unless the local law is in effect on or before the date of tentative completion of the assessment roll (Aetna Insurance Co. v. The Mayor, 1531 N.Y. 331, 47 N.E. 593; People ex rel. American Bible Society v. Tax Commissioners, 142 N.Y. 348, 37 N.E. 116).

As to the second question, subdivision 2 of section 24 of the Municipal Home Rule Law provides, in part, as follows:

2. Except as otherwise provided by or under authority of a state statute, a local law shall be subject to a referendum on petition if it:
* * *
c. changes a provision of law relating to assessments of real property or benefit assessments for local improvements.

The local law referred to in subdivision 5(b) is subject to a permissive referendum (assessment officials throughout the State were advised of this fact in a June 14,1979 memorandum from David Gaskell, Executive Director). That is, subdivision 1(2) of section 458 authorizes a maximum exemption of $5,000 (see, 3 Op.Counsel SBEA No. 43). A local law adopted pursuant to subdivision 5(b) removes that maximum and mandates the increase of a particular veterans exemption to any figure so as to maintain the percentage of exemption received on that veteran’s property on the prior year’s (i.e., fractional value) assessment roll. As such, the local law clearly “changes a provision of law relating to assessments of real property.”

Municipal Home Rule Law, section 24(1) (a), provides that a local law subject to a referendum on petition may not take effect until at least forty-five days after its adoption. This period is extended if within that period a valid petition is filed protesting against the local law. Section 27 provides that a local law is not effective until filed with the Secretary of State.

Thus, the Comptroller, in 10 Op.State Compt. 127, stated that in the absence of a petition protesting against a local law, it follows that the local law will become effective immediately upon the expiration of forty-five days after the date of its adoption. “In any event, [the local law] could not be given effect prior to the effective date of the local law.” (See, Hehl v. Gross, 35 A.D. 2d 510, 313 N.Y.S.2d 422, aff’d, 30 N.Y.2d 828, 286 N.E.2d 285, 334 N.Y.S.2d 914.)

In addition, section 20 of the Municipal Home Rule Law provides that no proposed local law may be passed until it is in its final form and either:

(a) upon the desks or table of the members at least seven calendar days, exclusive of Sunday, prior to its final passage, or

(b) mailed to each of them in postpaid properly addressed and securely closed envelopes or wrappers in a post box or post office of the United States post office department within the local government at least ten calendar days, exclusive of Sunday prior to its final passage.

Thus, except as noted below, in the absence of the filing of a petition protesting against the local law, the shortest possible time from the introduction of the local law to its effective date is a total of 53 days. This time period may be broken down as follows:

Placed upon members desks - 8 days
Hearing notice (3-5 days)
Passage and period for filing of petition - 45 days
Filing (where effective immediately) - 53 days

However, as stated above, if a valid petition is filed protesting against the local law, the “waiting period” is extended. The length of the extended period is governed by the provisions of section 24 of the Municipal Home Rule Law and would have to be computed on a case-by-case basis. Therefore, this opinion is limited to local laws concerning which a petition is not filed. It should also be noted that upon certification of the chief executive officer of the necessity for immediate passage and a two-thirds affirmative vote of the local legislative body, the 53 day period may be reduced to 48 days (Municipal Home Rule Law, § 20(4) and (5)).

Assuming the assessment roll is tentatively completed on June 2, 1980 (June 1, 1980 being a Sunday (see, General Construction Law, §§ 20, 25-a; Public 0fficers Law, § 62)), a local law adopted pursuant to subdivision 5(b) must have been placed on the desks of the members of the town board no later than April 9, 1980; it must have been passed no later than April 17, 1980; and a petition for referendum must not have been filed in order for the assessor to be authorized to make the adjustment on the 1980 assessment roll.

April 25, 1980