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Volume 7 - Opinions of Counsel SBEA No. 54

Opinions of Counsel index

Municipal corporations exemption (agreement to exempt - method of) (scope - school taxes) – Real Property Tax Law, § 406(2), (3):

A school district may grant an exemption to another municipality’s real property which is located within the school district’s boundaries and otherwise meets the requirements of subdivision 2 or subdivision 3 of section 406.

A town board may grant an exemption under subdivision 2 or subdivision 3 of section 406 by adoption of a resolution. It need not act by local law.

We have been asked whether subdivisions two and three of section 406 of the Real Property Tax Law may be applicable to taxes levied by school districts, and whether a town may grant exemptions pursuant to these provisions by adoption of a resolution, rather than by local law. These subdivisions provide that real property owned by a municipal corporation, located outside its boundaries and used for certain specific purposes (e.g., a public park under subdivision 2; a sewage disposal plant under subdivision 3) shall be exempt from taxation “by any municipal corporation in which located, provided the governing board thereof shall so agree in writing”.

Since the term “taxation” includes taxes levied by or on behalf of school districts (Real Property Tax Law, § 102(20)) and the term “municipal corporation” includes school districts (§ 102(10)), under subdivisions two and three of section 406, real property owned by a municipal corporation but located outside its boundaries may be exempt from taxation by the school district in which the property is located, but only if the governing body of the school district so agrees in writing (see, 2 Op.Counsel SBEA No. 84).

The second question is whether a town may act by resolution to grant an exemption pursuant to either subdivision 2 or 3.

A resolution is “a ministerial act declarative of the will of the corporation” (City of Troy Unit of Rensselaer Co. Charter of the C.S.E.A. v. City of Troy, 36 A.D.2d 145, 319 N.Y.S.2d 106, at 108 (3d Dept., 1971), aff’d, 30 N.Y.2d 549, 281 N.E.2d 555, 330 N.Y.S.2d 611 (1972)). Subdivisions 2 and 3 of section 406 require only that the governing bodies express their agreement to exemptions in writing; they do not prescribe any particular manner by which the body must act. “If the mode of the exercise of the power by a municipal corporation is not prescribed by statute the power may be exercised by resolution as well as by ordinance or order” (Collins v. City of Schenectady, 256 App.Div. 389, 10 N.Y.S.2d 303, at 308 (3d Dept., 1939)).

The Court of Appeals has stated that “[w]here general legislation enacted . . . in the form of a statute . . . is in effect, then a municipal corporation may act in particular instances by resolution” (Jewett v. Luau-Nyack Corp., 31 N.Y.2d 298, at 306, 291 N.E.2d 137, 338 N.Y.S.2d 874, at 881 (1972)). By way of illustration, the Court stated in dictum that “[a] municipal corporation may by resolution exempt a housing project from taxes . . .” (id.).

Therefore, provided that the resolution is in writing, it is our opinion that the requirement of subdivision 2 or subdivision 3 of section 406 that the governing body “agree” to an exemption would be satisfied by adoption of a resolution.

October 14, 1980