Volume 5 - Opinions of Counsel SBEA No. 61
Correction of errors (error in essential fact) (parcel partially within assessing unit boundaries) - Real Property Tax Law, §§ 550, 556-a:
Where real property is not located entirely outside the boundaries of an assessing unit, an “unlawful entry” within the meaning of paragraph (b) of subdivision 6 of section 550 of the Real Property Tax Law has not occurred. However, where an erroneous determination of the size of a parcel has affected its assessed value, an “error in essential fact” (Real Property Tax Law, § 550(3)(c)) has been made, and a refund for taxes paid based on such erroneous assessment may be obtained pursuant to section 556-a of such law.
Our opinion has been requested concerning a refund of real property taxes paid to a village for a parcel of property a portion of which is not located within the boundaries of the village. The parcel in question was conveyed by the county to a private association in 1970. A deed recitation declared that the parcel is “situate, lying and being in the Incorporated Village of ‘H’ . . . .” The parcel is actually located only partially within the boundaries.
The sole authority for an administrative correction of assessment errors is Title 3 of Article 5 of the Real Property Tax Law, the so-called “Correction of Errors” provisions. Originally enacted in 1974 (L.1974, c.177) and amended in 1975 (L.1975, c.124), sections 550-559 of the Real Property Tax Law represent the culmination of two years of study to develop strictly defined standards and procedures under which local officials may correct assessment and tax rolls, while maintaining both the integrity of these legal documents and administrative due process. No correction may be made that does not come within the ambit of the definitions of errors set out in section 550 of the Real Property Tax Law.
Real Property Tax Law, section 550, subdivision 6(b), provides as follows:
6. “Unlawful entry” means:
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b) an entry on an assessment roll or a tax roll, or both, of the assessed valuation of real property which is entirely outside the boundaries of the assessing unit, the school district or the special district in which the real property is designated as being located . . .
The word “entirely,” in our opinion, is crucial to an understanding of the thrust of this paragraph. In its memorandum accompanying Chapter 177 of the Laws of 1974 the State Comptroller’s Committee on the Real Property Tax explained the significance of the precise definitions contained in section 550:
the title of this section [section 550] is self-evident, its content is one of the primary aims of the legislation. A passing familiarity or experience with the current provisions of the Real Property Tax Law is sufficient to impress one with the ambiguity of statutory language in light of the complete absence of definitions. While terms such as “illegal” and “manifest” are susceptible to varying interpretations, other terms such as “erroneous” completely defy definition. . . . Of particular note is the fact that definitions of correctable errors are meant to limit the subject matter to errors which go to jurisdiction, transcription or computation . . .
The mistake defined in section 550(6)(b) is one of jurisdiction, which results in an entry on an assessment roll or tax roll which should not have been there at all. The essence of the concept of unlawful entries, therefore, contained in section 550, is that the assessment of the parcel of property in question was void ab initio. The entry should not have been there in the first place, and the assessor has no authority to make the assessment. The property was outside the jurisdiction or boundaries of the municipal corporation.
In the given factual situation, however, at least a portion of the parcel was within the boundaries of the assessing unit. There is no question that the assessor has authority, and, in fact, a duty (see, Real Property Tax Law, § 500) to place an entry on the assessment roll for the parcel in question, albeit part of the parcel being outside the assessing unit. As is indicated above, the definitions contained in section 550 were designed by the sponsors of the “Correction of Errors” legislation to be precise and understandable. The inclusion of the phrase “entirely outside the boundaries of the assessing unit” was both meaningful and deliberate. Since the parcel in question obviously is not entirely outside the boundaries of the village, the use of this definition of unlawful entry to provide a basis for refund would not be appropriate.
However, a partial remedy may be obtained in this situation through the use of a new definition of error which was added in the amendment of the “Correction of Errors” law enacted in 1975 (L.1975, c.124). This definition may be found in section 550, subdivision 3(c).
3. “Error in essential fact” means:
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(c) an incorrect entry of acreage on the taxable portion of the assessment roll, or the tax roll, or both, which acreage was considered by the assessor in the valuation of the parcel and which resulted in an incorrect assessed valuation, where such acreage is shown to be incorrect on a survey submitted by the applicant . . .
There is no question that an erroneous determination of the size of this parcel of real property affected valuation of the property. A refund would be available based on the amount of assessed value attributable to the portion of the property outside the village. The procedure for refund based on such an erroneous determination of the parcel size may be found in section 556-a of the Real Property Tax Law which provides, inter alia, that:
4.(a) If at any time within one year from the annexation of the warrant, it appears to a person who has paid a tax that such tax or portion thereof was attributable to an error in essential fact, such person may file an application in duplicate with the appropriate county director of real property tax services for refund of such tax, or portion thereof, in accordance with the procedures set forth in section five hundred fifty-six of this chapter.
The procedure of section 556 includes filling out a form prescribed by the State Board of Equalization and Assessment (for villages. Form EA:74-7(rev.)). The application for a refund based on an error in essential fact must be made within one year of the annexation of the warrant upon which the real property tax was collected.
March 22, 1976
NOTE: This Opinion cites former sec. 556-a.