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Volume 8 - Opinions of Counsel SBEA No. 21

Opinions of Counsel index

Exemptions, generally (authority to grant) (CATV property) - Executive Law, Article 28; N.Y.S. Constitution, Art. XVI, § 1; RPTL, § 300:

Neither a municipal corporation nor an assessing unit acting on behalf of other municipal corporations may grant a temporary or permanent exemption from taxation to a CATV corporation as part of a franchise agreement.

Our opinion has been requested concerning the taxable status of real property of a cable television corporation. The property has been granted an “exemption” from real property taxation for a period of seven years as part of a franchise agreement with a town.

“All real property within the state shall be subject to real property taxation, special ad valorem levies and special assessments unless exempt therefrom by law” (RPTL, § 300). As to exemptions, section 1 of Article XVI of the State Constitution provides that exemptions “may be granted only by general laws.”

In construing the law from which section 300 of the RPTL was derived, the Court of Appeals stated: “Section 3 of the Tax Law . . . provides that ‘all real property within this state is taxable unless exempt from taxation by law.’ A ‘law’ is a rule of civil conduct prescribed by the law making power of the state” (Board of Education v. Town of Greenburgh, 277 N.Y. 193, 195, 13 N.E.2d 768 (1933) (emphasis added)).

Towns may not act in excess of the powers conferred upon them by the Legislature (Rose v. Eichhorst, 42 N.Y.2d 92, 365 N.E.2d 868, 396 N.Y.S.2d 837 (1977)). As to the taxing power, it has been stated, “All taxing power in this State is vested in the Legislature pursuant to section 1 of Article III and section 1 of Article XVI of the State Constitution [citation omitted]. A county may adopt local laws relating to the levy, collection, and administration of local taxes as long as these local laws are consistent with State laws” (Rab Co. v. Tompkins County Board of Assessment Review, 68 A.D.2d 374, 417 N.Y.S.2d 788, 788 (3d Dept., 1979)).

More particularly as to exemptions, it has been stated, “Unless authorized by state statute the City has no power to legislate in regard to tax exemptions” (London v. Wagner, 22 Misc.2d 360, 195 N.Y.S.2d 550, 554 (Sup.Ct., N.Y. Co., 1959), aff’d, 13 A.D.2d 479, 214 N.Y.S.2d 647 (1st Dept., 1961), aff’d, 11 N.Y.2d 762, 181 N.E.2d 759, 227 N.Y.S.2d 13 (1962)). Similarly, “In matters of taxation, a city exercises merely delegated powers from the state, and has no jurisdiction or authority beyond. And it has no inherent power to grant exemptions from taxation” (Troy Union R. Co. v. City of Troy, 227 App.Div. 351, 238 N.Y.S. 577 (3d Dept., 1929), (emphasis added) aff’d, 253 N.Y. 597, 171 N.E. 798 (1930); see also, L.L.F. Realty Co., v. Fuchs, 273 App.Div. 111, 75 N.Y.S.2d 356 (1st Dept., 1947)).

While some tax exemption statutes do offer options to municipalities (e.g., the income ceiling in RPTL, § 467(3)(a)), the scope me option is limited to the perimeters of the State law. Thus, for example, in the case of the aged exemption, the options are (1) to grant the exemption; and (2) to establish an income maximum within the limits established by the State Legislature.

The options under section 467 are given to each local government and not merely to the assessing unit acting on behalf of local governments which levy taxes on the assessing unit’s roll (e.g., county and school district). In contrast, some local option tax exemption statutes confer on the assessing unit the right to grant an exemption which binds other taxing jurisdictions which levy on its rolls (see, e.g., Private Housing Finance Law, § 125(1)(c); 7 Op.Counsel SBEA No. 120).

In regard to the real property of the CATV corporation, neither this town nor any other town would have had authority to grant an exemption from town taxes, let alone an exemption from county and school levies, as it purports to do in its franchise agreement.

Special franchises are defined as real property (RPTL, § 102(17)). As noted above, in the absence of a statutory grant of an exemption, all real property is taxable (RPTL, § 300). In this regard, there is no exemption, either mandated or optional, applicable to the special franchise of a CATV corporation. There is nothing in Article 28 of the Executive Law, entitled “Commission on Cable Television” inconsistent with this conclusion (see, e.g., §§ 818, 819).

Accordingly, the portion of the franchise agreement with the CATV corporation was ultra vires and has no effect on the taxable status of the corporation’s real property.

January 16, 1984