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.