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Volume 7 - Opinions of Counsel SBEA No. 27

Opinions of Counsel index

Assessor (powers and duties) (determination of taxable status); Correction of errors (unlawful entry) (municipal property - taxable portion of tax roll) – Real Property Tax Law, §§ 102(3), 550, 554, 1532:

An assessor’s judgment of the taxable status of municipally owned real property is not a matter for administrative review after the tax roll is prepared.

A County’s chief fiscal officer submitted an application (Form EA-554) to the County Director of Real Property Tax Services for correction of an alleged “unlawful entry” on a school district’s tax roll. The basis for the application was an entry of county-owned property on the section of the assessment roll set aside for taxable real property) 9 NYCRR 190-1.2(a)(2)(i)). The County Director investigated the matter and recommended that the application be approved (Real Property Tax Law, § 554(4)(b)). The tax levying body accepted the report and recommendation of the County Director and approved the application, thereby exempting the parcel from taxation.

The Assessor contends, however, that his entry of the parcel on the taxable portion of the roll was not an error because the property was not “held for a public use” (§ 406(1)), and that the property should be restored to the taxable portion of the roll.

An “unlawful entry” is defined in subdivision 7 of section 550 of the Real Property Tax Law. Paragraph (a) thereof refers to “an entry on the taxable portion of the assessment roll of the assessed valuation of real property which, except for the provisions of [§ 490] . . . is wholly exempt from taxation” (emphasis added). Unlike the other administratively correctible errors defined in section 550, this definition is limited to entries on an “assessment roll”. Thus, once an “assessment roll” becomes a “tax roll” (see, §§ 550(6), 904(1)), an unlawful entry defined in paragraph (a) of section 550(7) is not administratively correctible. Section 554, which sets forth procedures for correction of tax rolls provides in subdivision one as follows: “The appropriate tax levying body may correct a clerical error or an unlawful entry other than an unlawful entry as defined in paragraph (a) of subdivision seven of section five hundred fifty of this chapter in accordance with the provisions of this section” (emphasis added). (To the same effect, see, § 556(1)(a)).

Upon receipt of an application for correction of a tax roll, a county director is required to investigate the matter and prepare a written report and recommendation to the tax levying body (§ 554(4)).

In recommending approval of this application for correction, the County Director ignored both the plain limitations of sections 550(7)(a) and 554(1) and the legend which appears at the top of Form EA-554, to wit “Not applicable to wholly exempt parcels”. Most importantly, however, he recommended “correction” of what the Assessor states was not an error.

The fact that the County Director believed that the Assessor had erred in determining that this property was not held for a “public use” is irrelevant. By processing the application for correction and recommending a change, the County Director substituted his judgment of taxable status for that of the Assessor. It is for this very reason – i.e., to preclude the county director from overruling the judgments of the assessor – that the Legislature excluded this type of error from those correctible on tax rolls.

An “assessor” is defined as an elected or appointed officer charged by law with the duty of assessing real property for the purposes of taxation (§ 102(3)). An “assessment” is defined as a determination made by an assessor of both the valuation of real property and “whether or not real property is subject to taxation or special ad valorem levies” (§ 102(2)). The powers and duties of the county director do not include general review authority of an assessor’s determination of taxable status (§ 1532).

Subdivision 1 of section 406 of the Real Property Tax Law grants an exemption from taxation to real property owned by a municipal corporation within its corporate limits if such property is held “for a public use” (see, e.g., Fallica v. Town of Brookhaven, 69 A.D.2d 579, 419 N.Y.S.2d 102 (2d Dept. 1979), mod., 52 N.Y.2d 794, 417 N.E.2d 1248, 436 N.Y.S.2d 707 (1980); Town of Harrison v. Westchester County, 13 N.Y.2d 258, 196 N.E.2d 240, 246 N.Y.S.2d 593 (1963)). Initially, it is the right and duty of the assessor alone to judge whether a particular use is a “public use” within the meaning of this statute. If the assessor concludes that the property does not qualify for exemption, the owning municipality may, like any other property owner, seek review before the board of assessment review and the courts.

If the Assessor concluded that he had erred in entering his property on the taxable portion of the roll, he could have petitioned the Board of Assessment Review for a correction of the tentative (§ 552(1)) or final (§ 553(1)(c)) assessment roll. This did not occur here because the Assessor determined that the use of the property did not satisfy the requirements for exemption.

Section 551 of the Real Property Tax Law authorizes an assessor to add the assessment for an omitted parcel on the following year’s assessment roll (§ 551(1)). An “omission” is defined (§ 550(4-a)) to include “taxable real property entered on the roll as wholly exempt real property”. The effect of the act of the tax levying body was to make this parcel wholly exempt from taxation. Since the Assessor is of the opinion that this property is taxable, he should treat it as an “omission” and add it to next year’s roll. The County may then pursue its administrative and judicial remedies if it so chooses.

March 17, 1981