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Volume 6 - Opinions of Counsel SBEA No. 67

Opinions of Counsel index

Veterans exemption (generally) (computation - effect of L.1979, c.l34) - Real Property Tax Law, § 458:

Subdivision 5 of section 458 of the Real Property Tax Law, as added by chapter 134 of the Laws of 1979, is applicable only to assessing units which initially file full value assessment rolls on or after the date on which the chapter was signed into law (i.e., May 24, 1979).

Our interpretation of the veterans exemption from real property taxation (Real Property Tax Law, § 458), specifically as to the effect thereon of chapter 134 of the Laws of 1979, has been requested. Chapter 134 adds a new subdivision 5 to section 458 to provide that, under certain circumstances, veterans receiving an exemption pursuant to section 458 are to be held harmless from any impact as a result of an assessing unit’s implementation of the full value standard of assessing (Real Property Tax Law, § 306). The question is whether the new law should be read to apply to a town which voluntarily filed a full value assessment roll in 1974.

It is our conclusion, based on a reading of chapter 134, that with respect to assessing units which voluntarily file full value assessment rolls, the new law is applicable only to those assessing units which initially file full value assessment rolls on or after the date on which the new law was signed (i.e., May 24, 1979).

Chapter 134 became effective on May 24, 1979 and will terminate on December 31, 1980. In construing an exemption statute, such as chapter 134, there are several legal principles which must be kept in mind. Foremost is that exemption 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). Also, statutes must generally be construed as prospective in operation (Kelley v. Yannotti, 4 N.Y.2d 603, 152 N.E.2d 69, 176 N.Y.S.2d 637; McKinney’s Statutes, § 51). This principle of prospective application of statutes is especially relevant as to exemption statutes. It is only where there is a clear legislative intent to give retroactive effect to an exemption statute that such a construction will be given (Kelley v. Yannotti, supra; Matter of Van Kleeck, 121 N.Y. 701, 25 N.E. 50; McKinney’s Statutes, § 57).

Chapter 134 specifically relates to circumstances under which the ratio between the amount of the exemption and the total assessed value of the subject property increases or decreases due only to a change in the manner of assessing. This language is clearly prospective (see, General Construction Law, § 48). In combination with the absence of retroactive language in the law, and considered in light of the principles of statutory construction set forth above, the chapter must be construed as being prospective only.

However, even assuming, arguendo, that the chapter could be construed to be retroactive, it could not apply to the assessment roll prepared by towns with May 1 taxable status dates in 1979, and its application would be limited to the assessment roll prepared during the year 1980. That is, any local law adopted by a town pursuant to this chapter would be subject to a permissive referendum pursuant to Municipal Home Rule Law, section 24(2)(c). Such a local law may not take effect until at least 45 days after its adoption or until approved by the affirmative vote of a majority of the qualified electors of the town voting on a proposition for its approval if, within the above mentioned 45 day period, a petition for a referendum is filed in accordance with subdivision 1 of section 24 of the Municipal Home Rule Law. Certainly, there is no procedure whereby such a local law adopted on or after the effective date of chapter 134 could be effective as to the assessment roll prepared during the year 1979.

In approving chapter 134, which he referred to as “interim legislation,” Governor Carey also indicated his commitment to an equitable system of assessment (1979 Approval Memorandum No. 19). It is clear that the practice of fractional assessing in the past has led to inequitable administration of the veterans exemption, with some veterans receiving wholly exempt status from town and county taxation while others receive significantly less benefit from the exemption. We cannot agree that the veterans exemption was ever intended to grant to veterans a total exemption from general municipal taxation. In that chapter 134 may create such status for some veterans in certain assessing units, the new law certainly does not assist in attaining the equitable system of assessing referred to above.

August 8, 1979