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Volume 9 - Opinions of Counsel SBEA No. 84

Opinions of Counsel index

Alternative veterans exemption (village)(effect of dissolution) - RPTL, § 458-a; Village Law, § 19-1914:

Eligibility for the alternative veterans exemption ceases when a village dissolves, and the town which assumes the functions of the village has “opted-out” of the exemption.

We have received an inquiry concerning the veterans’ exemptions (RPTL, §§ 458 and 458-a) and the possible dissolution of a village. (That village shall be referred to in this Opinion simply as “the Village”.) We are advised that the town in which the village is located (hereinafter, the “Town”) does not grant the alternative veterans exemption (see RPTL, § 458-a(4)), but that the Village currently does. The question is what options the Town will have in relation to the veterans exemptions if the Village dissolves.

A procedure has been established for the dissolution of villages (Village Law, Art. 19). Upon dissolution, village offices terminate and their functions are performed by the appropriate town officers (Village Law, § 19-1914(1)). For example, where a village is dissolved and becomes part of a town, the town tax collector is authorized to collect village taxes levied prior to the dissolution (Village Law, § 19-1918(3); 34 Op.State Compt. 135 (1978)).

The outstanding debts of a dissolved village are generally assumed by the town and become a charge upon the taxable property within the limits of the dissolved village. Such taxes are levied and collected in the same manner as town taxes (Village Law, § 19-1912).

After the effective date of a village dissolution, all assessments are treated as town assessments (see Village Law, § 19-1918(2)). The village ceases to exist as a municipal corporation (see RPTL, § 102(10)), and it no longer has any authority for real property tax administration; it may no longer levy or collect taxes, nor may it approve exemptions from taxation (compare 8 Op.Counsel SBEA No. 16, concerning non-assessing unit villages). The town assumes the duties and functions of the dissolved village (Village Law, § 19-1914(1)), including assessment and tax roll administration.

Turning to the facts at hand, the Town timely adopted a local law “opting out” of the alternative exemption (RPTL, § 458-a(4)(a)), and it still does not allow that exemption. {1}  The Village’s authority to grant an alternative exemption from Village taxes is only effective during the period that the Village establishes a tax roll and levies taxes; it is terminated after the Village ceases operation. Accordingly, if the Village ceases to exist, those veterans who formerly received the alternative exemption will no longer be eligible for that exemption. The Town’s decision not to offer the alternative exemption will not be affected by the Village’s dissolution.

We have also been asked if the Town may decline to grant both veterans exemptions (RPTL, §§ 458 and 458-a). Municipalities do not have any statutory authority to “opt out” of the eligible funds veterans exemption. {2}  Unless authorized by State statute, a municipality has no power to legislate in regard to tax exemptions (see, 8 Op.Counsel SBEA No. 120). Accordingly, neither the Village nor the Town is authorized, by local law or otherwise, to repeal the eligible funds veterans exemption.

December 23,1991

{1}  If it chooses, a municipality, such as the Town herein, may rescind its local law “opting out” of the alternative exemption. Section 458-a(4)(a) expressly authorizes municipalities, which adopted a local law to “opt out” of the alternative veterans exemption, to repeal such a local law, provided the repeal occurs at least 90 days prior to the taxable status date of the municipality (i.e., March 1 in most towns; RPTL, § 302(1)).

{2}  Where the alternative exemption is offered, no new eligible funds exemptions may be granted (RPTL, § 458(6)(a)(i)). Previously granted eligible funds exemptions continue, unless the recipient opts to switch to the alternative exemption. In order for a veteran to receive the alternative exemption for one municipal purpose, he or she has to give up the eligible funds exemption for all tax purposes (8 Op.Counsel SBEA No. 12). We make an exception for the situation in which one of the municipalities in which the veteran resides has opted not to grant the alternative exemption.