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Volume 8 - Opinions of Counsel SBEA No. 76

Opinions of Counsel index

Business investment exemption (local option) (filing with State Board-school district resolution) - Municipal Home Rule Law, § 27; Real Property Tax Law, § 485-b:

The failure of a school district to file with the State Board a copy of a resolution reducing the business investment exemption does not affect the validity of such resolution.

We have been asked whether a resolution of a school board reducing the percentage of the business investment exemption (Real Property Tax Law [RPTL], § 485-b) is effective if it has not been filed with the State Board of Equalization and Assessment.

Subdivision 7 of section 485-b provides:

7. A county, city, town or village may, by local law, and a school district, except a city school district to which article fifty-two of the education law applies, may, by resolution, reduce the per centum of exemption otherwise allowed pursuant to this section; provided, however, that exemptions existing prior in time to passage of any such local law or resolution shall not be subject to any such reduction so effected. A copy of any such local law or resolution shall be filed with the state board. [Emphasis added]

In the case of a local law adopted by a county, city, town or village, the Municipal Home Rule Law, section 27, also requires the local law to be filed with the Secretary of State and expressly provides that “a local law shall not become effective before it is filed in the office of the secretary of state.” In contrast, a school district is not empowered to enact a local law and may act only by resolution. The sole filing requirement applicable to a school district resolution adopted pursuant to RPTL, section 485-b(7) is the requirement set forth in that subdivision, namely, filing with the State Board of Equalization and Assessment.

The answer to this inquiry depends upon whether the statutory filing requirement of section 485-b is “mandatory” or “directory”. Mandatory provisions “go to the jurisdiction or authority of the person acting, and a compliance with them is a condition precedent to the validity of the action or determination under it” (McKinney’s Consolidated Laws of New York Annotated, Volume I, Statutes, § 171). Directory provisions “are mere instructions or directions, inserted for convenience, and relating to some immaterial matter. They are not intended by the Legislature to be disobeyed, but a disregard of them, or an inexact compliance, will constitute only an irregularity, not a fatal defect” (id.) (See generally, Alscot Investing Corp. v. Laibach, 65 N.Y.2d 1042, 484 N.E.2d 658, 494 N.Y.S.2d 295 (1985)). The legislative intent, as evidenced by the contents of the statute and its purposes, determines whether a statute is directory or mandatory (People ex rel. Huffy v. Graves, 277 N.Y. 115, 13 N.E.2d 599 (1938)).

Applying these criteria, we believe that the filing requirement in section 485-b(7) is unrelated to a school board’s authority to reduce or eliminate the 485-b exemption by resolution. The statute does not contain any language (comparable to section 27 of the Municipal Home Rule Law) to the effect that the resolution must be filed with the State Board in order to be effective. Further, the filing requirement appears to be incidental to the purpose of this subdivision. A failure to so file the resolution would not be prejudicial to any party. We conclude that the filing requirement is for informational purposes and is directory, not mandatory.

Therefore, it is our opinion that a school board resolution duly adopted pursuant to subdivision 7 of section 485-b would be effective even if it has not been filed with the State Board.

March 2, 1984

NOTE: Revised December, 1985 to incorporate amendment to subdivision 7 of section 485-b which changed reference to “school districts” from those which levied school taxes to school districts “except a city school district to which article [52] of the education law applies”. See, L.1985, c.512; see also, Walker v. Board of Assessors of Nassau County, 66 N.Y.2d 702, 487 N.E.2d 276, 496 N.Y.S.2d 419 (1985).