Volume 6 - Opinions of Counsel SBEA No. 8
Agricultural societies exemption (meeting halls and Grange property) (effective date of L.1978, c.616) - Real Property Tax Law, § 450:
Agricultural society meeting halls and Grange property satisfying the requirements of section 450 of the Real Property Tax Law, as amended by chapter 616 of the Laws of 1978, may receive real property tax exemptions on assessment rolls prepared on the basis of taxable status dates occurring on or after July 24, 1978, the date on which chapter 616 was signed into law.
As a result of the effective date of chapter 616 of the Laws of 1978, a question has arisen as to which assessment roll will first be affected by the amendment.
Section 450 of the Real Property Tax Law previously provided an exemption to real property owned by an agricultural society and permanently used by it as exhibition grounds. Chapter 616 (approved by the Governor on July 24, 1978) increases the scope of this exemption so as to also exempt real property owned by an agricultural society permanently used by it for a meeting hall. In addition, for purposes of section 450, the Grange Order of the Patrons of Husbandry (i.e., the Grange) is specifically defined as being an agricultural society. Substantively then, it is clear that section 450 must now be read to exempt real property owned by an agricultural society (including the Grange) and permanently used by it for a meeting hall or an exhibition ground.
The difficulty with chapter 616 is in section 2 of the chapter, which provides: “§ 2. This act shall take effect immediately and shall apply to all taxable years commencing after December thirty-first, nineteen hundred seventy-seven.” Recognizing and understanding the difficulties with this language necessitates a somewhat detailed discussion of the provisions of the Real Property Tax Law and the rules of statutory construction.
To begin, section 302 of the Real Property Tax Law provides that all real property shall be assessed according to its condition and ownership as of taxable status date. Whether a particular parcel satisfies an exemption statute is also also determined as of this date (Semple School for Girls v. Boyland, 308 N.Y. 382, 126 N.E.2d 294; Young Israel of Far Rockaway, Inc. v. City of New York, 33 A.D.2d 561, 305 N.Y.S.2d 432). In most towns, taxable status date is May I although in towns in the Counties of Erie, Suffolk and Westchester, taxable status date is June 1. The taxable status dates in cities are determined by city charter provisions; most villages have a January 1 taxable status date (Real Property Tax Law, § 1400).
Assuming a town has a May 1 taxable status day as provided in section 302 of the Real Property Tax Law, it files its tentative assessment roll on or before June 1 (§ 506). The board of assessment review meets on the third Tuesday in June to hear complaints (§ 506). The town’s final assessment roll is filed on or before August 1 (§ 516). This completes the basic assessment calendar, and the final rolls are then made available to tax jurisdictions for use in the levy and collection of their taxes.
Towns and counties have fiscal years beginning on January 1 and ending on December 31 (Town Law, § 101, County Law, § 352, respectively). Taxes for an upcoming fiscal year must be levied not later than December 31 of the previous year (Real Property Tax Law, § 900) and become a lien as of January 1, the first day of the fiscal year (§ 902). Thus, taxes levied for the January 1 through December 31, 1978 town and county fiscal years were based on assessment rolls having a May 1, 1977 taxable status date. Similarly, taxes which will be levied for the 1979 town and county fiscal years will be based on an assessment roll with a May 1, 1978 taxable status date.
School districts utilize the latest city, town, or county assessment roll for purposes of the levy and collection of school taxes (§ 1302). Most school districts have a July 1 through June 30 fiscal year (Education Law, § 2(15)) and levy their taxes on or before September 1 (Real Property Tax Law, § 1306). Where school districts use the town assessment roll, which, as previously noted, is finally filed on or before August 1, for purposes of their September 1 levy, the 1978-1979 school taxes will be based on an assessment roll having a May 1, 1978 taxable status date.
As previously noted, chapter 616 was signed into law on July 24, 1978, effective immediately and applicable to all taxable years commencing after December 31, 1977. However, because it was not enacted until July 24, 1978, the law was not in effect during the periods of time when the assessors were preparing the 1977 and 1978 assessment rolls. Therefore, the assessors had no authority to exempt agricultural society meeting halls (or Grange property) on assessment rolls based on either of those dates. The question is whether the assessor may or must now change either of those assessment rolls given the enactment of chapter 616.
Section 450 of the Real Property Tax Law is an exemption statute, and such statutes must be strictly construed (Herkimer County v. Village of Herkimer, 251 App. Div. 126, 295 N.Y.S.629, aff’d, 279 N.Y. 560, 18 N.E.2d 854; City of Lackawanna v. State Board of Equalization and Assessment, 16 N.Y.2d 222, 212 N.E.2d 42, 264 N.Y.S.2d 528). As a general rule, statutes are to be construed as prospective in operation only (Kelley v. Yannotti, 4 N.Y.2d 603, 152 N.E.2d 69, 176 N.Y.S.2d 637; McKinney’s Statutes, § 51). The rule of prospective application is especially relevant as to exemption laws; statutes allowing exemptions from taxation are not, as a general rule, retroactive (Matter of Van Kleeck, 121 N.Y. 701, 25 N.E. 50; McKinney’s Statutes, § 57). Only where there is a clear legislative intent to give retroactive effect to a statute, will such a construction be given (Kelley v. Yannotti, supra; Matter of Van Kleeck, supra).
In this case, as previously noted, the statute provides that the act shall take effect immediately and shall apply to all taxable years beginning after December 31, 1977. Although the phrase “taxable year” is not defined in the Real Property Tax Law, it is defined for personal income tax purposes in section 350(4) of the Tax Law as meaning “the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the net income and net capital gain are computed under this article.” We assume, therefore, that the Legislature is referring to fiscal years. Thus, from the language in the statute, it would appear at first glance that the Legislature intends for the exemption to apply to all fiscal years beginning on or after January 1, 1978.
However, this intent is not absolutely clear. For example, section 2 of chapter 616 first states that the “act shall take effect immediately.” It has long been held that where a law “declares that ‘it shall take effect immediately.’ that is, at the date of its passage, [it] thereby exclud[es] the idea that it should have any retrospective operation or effect . . .” (Matter of Miller, 110 N.Y. 216, 223-24, 18 N.E. 139). Additionally, the sponsors’ memorandum in support of A. 10902 (which has the same bill section 2 as A.10902-A signed into law) does not in any way express retroactive Legislative intent. Rather, the memorandum states, “Effective Date: Immediately.” Also, A. 10902 (and its companion S. 8320) were introduced March 7, 1978. Since the Legislature can be presumed to be familiar with the State’s laws, including those establishing municipal fiscal dates, the failure by the bill’s sponsors to discuss retroactive effect in their memorandum to a bill, which was introduced by them after the 1978 town and county fiscal years had begun, casts further doubt as to the Legislature’s intent to make this law retroactive in effect.
However, assuming arguendo, that the Legislature did intend a retroactive effect, in our opinion, assessors are powerless to change either the 1977 or 1978 assessment roll at this time so as to exempt agricultural society meeting halls or Grange property. There is no administrative procedure in the law which presently allows assessors to make such a change. The correction procedures set forth in Title 3 of Article 5 of the Real Property Tax Law are not relevant because, as of both taxable status date 1977 and taxable status date 1978, the property was not entitled to exemption. Therefore, assessors made no correctable error in failing to grant such exemption.
The Legislature’s failure to provide a machinery whereby the assessor could change the assessment roll so as to take cognizance of chapter 616 on the 1977 and 1978 assessment rolls is yet another indication against the Legislature’s intent to make that chapter retroactive. For example, in increasing the maximum income for purposes of the aged exemption (Real Property Tax Law, § 467) last year (L.1977, c.187-approved after taxable status date), the Legislature provided a machinery whereby the assessor could change the 1977 assessment roll to grant exemptions to those individuals previously excluded by reason of income in excess of the former statutory maximum. Chapter 187 as amended by chapter 457 provided a detailed procedure involving an application for exemption, the entry of the exemption on the assessment roll by the assessor, and the administrative review of a denial of the exemption by the assessor. Chapter 616 of the Laws of 1978 provides no such machinery.
Accordingly, it is our opinion that without Legislative amendment providing such machinery or judicial decree so providing, (and we note that generally omissions in a statute cannot be supplied by construction (see, McKinney’s Statutes, § 363 and cases cited therein)), assessors should exempt agricultural society meetings halls and Grange property satisfying the requirements of section 450 on assessment rolls prepared on the basis of taxable status dates occurring on or after July 24, 1978. the date chapter 616 was signed into law.
September 6, 1978