New York Law Review

Tag: State Board of Equalization and Assessment

  • Matter of Town of Mount Kisco v. State Bd. of Equalization and Assessment, 64 N.Y.2d 950 (1985): Procedure for Challenging County Equalization Rates

    Matter of Town of Mount Kisco v. State Bd. of Equalization and Assessment, 64 N.Y.2d 950 (1985)

    A municipality that fails to challenge tentative or final state equalization rates under Article 12 of the Real Property Tax Law is precluded from collaterally attacking those rates in a subsequent proceeding under Section 816 of the Real Property Tax Law.

    Summary

    Several municipalities challenged the 1980 county equalization rates adopted by the Westchester County Tax Commission, arguing errors in the calculation of the 1979 state equalization rate. The State Board of Equalization and Assessment (SBEA) rejected these challenges, citing the municipalities’ failure to challenge the 1979 state rates directly. The New York Court of Appeals affirmed, holding that the municipalities were precluded from collaterally attacking the state rates in this manner. The court emphasized the importance of using the direct statutory procedures for challenging state equalization rates provided in Article 12 of the Real Property Tax Law.

    Facts

    Westchester County adopted equalization rates for apportioning 1981 county taxes, mirroring the state’s 1980 advisory schedule. This schedule incorporated the state’s final 1979 equalization rates, which were based on a 1976 market survey. The petitioner municipalities challenged the 1980 county equalization rates before the SBEA, alleging errors in the calculation of the 1979 state equalization rate, specifically citing overvaluation of properties in the 1976 survey and incorrect appraisal methods for condominiums. The municipalities did not previously challenge the 1979 state rates.

    Procedural History

    The SBEA confirmed the hearing officer’s conclusion that the municipalities waived their right to question the valuations and methodology used in determining the 1979 rates due to their failure to challenge those rates directly. The Appellate Division confirmed the SBEA’s decision. The Court of Appeals affirmed the Appellate Division’s judgment.

    Issue(s)

    Whether municipalities, having failed to challenge state equalization rates under Article 12 of the Real Property Tax Law, can challenge the validity of those rates in a collateral attack under Section 816 of the Real Property Tax Law.

    Holding

    No, because the failure to pursue direct statutory procedures for challenging state equalization rates under Article 12 of the Real Property Tax Law precludes a collateral attack on those rates under Section 816.

    Court’s Reasoning

    The court emphasized the importance of the statutory procedures outlined in Article 12 of the Real Property Tax Law for challenging state equalization rates. These procedures provide municipalities with a mechanism to challenge tentative rates, participate in hearings, and seek judicial review. The court cited previous cases, including Central Buffalo Project Corp. v. City of Buffalo, which emphasized the need to invoke these direct statutory procedures. The court reasoned that allowing collateral attacks on state rates after failing to use the Article 12 procedures would undermine the statutory scheme. The court acknowledged that Section 816 allows localities to challenge the fairness of the county rate, particularly for counties that set rates independently of the state. However, this right does not extend to challenging the underlying state rates when the municipalities failed to utilize Article 12. As the court stated, “This failure precludes them from questioning the validity of those same rates in this collateral attack under section 816 of the Real Property Tax Law”. The court reasoned that this preclusion doesn’t negate Section 816 because it still allows challenges to other aspects of county rates not subject to Article 12 review. This distinction is crucial for understanding the scope and limitations of both Article 12 and Section 816. The court did not address the underlying fairness of the rates themselves.

  • Town of Shandaken v. State Bd. of Equalization and Assessment, 63 N.Y.2d 442 (1984): Clarifying Authority in State Land Assessment

    63 N.Y.2d 442 (1984)

    The State Board of Equalization and Assessment’s role in assessing state forest lands is limited to ensuring the local assessor’s assessment aligns with the applicable equalization rate; valuation authority rests with local assessors.

    Summary

    The Town of Shandaken, located within a forest preserve, challenged the State Board of Equalization and Assessment’s (SBEA) approved assessment of state-owned forest lands. The town argued that its own assessment should be conclusive. The Court of Appeals affirmed the Appellate Division’s decision, holding that the SBEA’s authority is limited to ensuring assessments align with equalization rates. The power to determine valuation lies with the local assessors, and the SBEA cannot substitute its valuation for that of the local assessors. The court emphasized the clear language of Real Property Tax Law § 542.

    Facts

    The Town of Shandaken contains a significant amount of state-owned forest land. In 1981, the Town’s assessors filed a tentative tax roll, valuing the state lands at $19,874,655. The SBEA, after initially determining a lower valuation of $15,899,720, approved an assessment of $16,516,600. The Town then initiated legal action, contending that the SBEA exceeded its authority and that the Town’s assessment should be approved.

    Procedural History

    The Town commenced an Article 78 proceeding, which Supreme Court converted to a declaratory judgment action, ruling in favor of the SBEA. The Appellate Division modified, declaring the SBEA’s procedures violated Real Property Tax Law § 542 and that the Town’s assessment was conclusive. The SBEA appealed to the Court of Appeals.

    Issue(s)

    Whether the State Board of Equalization and Assessment has the authority to determine the valuation of state lands for assessment purposes, or whether its authority is limited to approving assessments based on the applicable equalization rate.

    Holding

    No, because the authority of the State Board of Equalization and Assessment (SBEA) is limited to ensuring that assessments of state lands conform to the applicable equalization rate, while the authority to determine the initial valuation of such lands rests with the local assessors.

    Court’s Reasoning

    The court based its decision on the plain language of Real Property Tax Law § 542. The statute mandates that state lands be valued as if privately owned and assessed at the same percentage of full valuation as other taxable real property in the assessing unit. The court emphasized that the assessors must notify the State Board of their assessment amount, and that the State Board must then approve the assessment. The approval must be “in such an amount as will place it at the same percentage of full valuation as other taxable real property in the assessing unit.” The Court stated, “Nothing in the statutory prescriptions grants initial or final valuation authority to the State Board; its authority is only to assure that the final assessment conforms to the applicable equalization rate.” The court rejected the SBEA’s argument that past practice justified its actions, stating, “That, as the State Board asserts, past practice has varied from the pattern of the statute does not warrant our disregard, when we are called on to consider the issue, of the explicit language of the statute”. The court also noted that when the Legislature intends to grant the SBEA original authority to determine valuation, it explicitly does so in the statute (citing Real Property Tax Law, § 600). The Court further elucidated that the local assessors are responsible for the initial valuation, with procedures for judicial review under Article 7 of the Real Property Tax Law, while the State Board is responsible for ensuring conformity with the equalization rate, a rate that the State Board itself determines. The court underscored that if the Legislature intended for the SBEA to have valuation authority, it could amend the statute to reflect that intention.