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Volume 7 - Opinions of Counsel SBEA No. 57

Opinions of Counsel index

Correction of errors (clerical error) (partial exemption - failure to act); Forest and reforested lands, exemption (eligible tract) (decertification) - Real Property Tax Law, §§ 480, 550:

There is no formal procedure for decertifying lands previously considered eligible tracts under the “Fisher Act”. A determination that a previously eligible tract no longer qualifies for a “Fisher Act” forest exemption and an ensuing denial of such exemption does not constitute a “clerical error” as a failure to act on a partial exemption.

A question has been raised concerning the procedures for administrative correction of errors on assessment and tax rolls (Real Property Tax Law, Article 5, title 3), and the denial of an exemption under the provisions of the so-called “Fisher Act” (id., § 480).

In this case, an assessor determined that certain forest lands which had been previously designated “eligible tracts” (§ 480(2)(a)), ceased to qualify as eligible as of taxable status date, 1981. Accordingly, he assessed these lands without regard to the limitations of section 480. The property owner complained to the board of assessment review, which denied his complaint. Thereupon, the property owner submitted an application (EA-556) to the county director for an administrative refund of taxes claiming that a “clerical error” had occurred. The property alleged that the assessor had “failed to act” on a partial exemption within the meaning of section 550(2)(c) of the Real Property Tax Law.

Examining the language of paragraph (c) of subdivision 2 of that section, we note that the definition is that of “an incorrect entry of assessed valuation . . . which, except for a failure on the part of the assessor to act on a partial exemption, would be eligible for such partial exemption”. Thus, this definition has three elements which must be satisfied. First, the assessed valuation (i.e., the taxable assessed valuation) must be incorrect. Second, proof must be offered that the assessor “failed to act” on a partial exemption. Third, it must be shown that had the assessor acted, the parcel would have qualified for exemption. It is our opinion that the assessor’s determination that these lands no longer qualified to be treated as eligible tracts under the Fisher Act was not a “clerical error” within the meaning of section 550. Even if the assessor’s denial of the exemption could be considered a “failure . . . to act”, administrative correction would not lie under the circumstances presented since, in the judgment of the assessor, the property would not have been “eligible for such partial exemption”, as is also required by section 550(2)(c).

It is also our opinion, however, that the denial of a request for an exemption is not equivalent to a “failure to act” within the meaning of paragraph (c) of subdivision 2 of section 550. In denying an exemption, the assessor has acted notwithstanding the property owner’s possible disagreement with that determination. In contrast, a “failure to act” occurs when the property owner submits an application which is required for exemption, which the assessor simply does not process or misplaces and which he thus does not consider at the time of the preparation of the tentative assessment roll.

There is no formal procedure in section 480 for a “decertification” of lands once declared eligible tracts. However, subdivision 3 of section 480, imposing a limitation upon the assessed value of eligible tracts, also provides that “such land shall be so assessed so long as the forest growth shall remain uncut. Upon the removal of the forest growth, it shall be assessed without regard to the provisions of this section”. Clearly, this presumes that the assessor will determine the taxable status of such lands – as he does for all other property – on an annual basis (Real Property Tax Law, § 302). This annual determination is a judgment to be made by the assessor, but which is subject to administrative review before the board of assessment review on grievance day and judicial review as provided in title 1 of Article 7 of the Real Property Tax Law.

Finally, from a policy standpoint, a change in the assessment would not be appropriate. To permit administrative correction in the manner sought by the property owner would effect a transfer of part of the assessment function (see definition of “assessment” in section 102(2)) to a person or both other than the assessor. That is, the tax levying body, upon the recommendation of the county director, would supersede the assessor in one of his primary functions, namely, the determination of taxable status. This was clearly not the intent of title 3 of Article 5.

February 2, 1982