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Department of Taxation and Finance

Volume 6 - Opinions of Counsel SBEA No. 49

Opinions of Counsel index

Special assessments and special ad valorem levies (liability of special franchise property); Special franchise assessment (special assessments) (special ad valorem levies) (liability) - Real Property Tax Law, §§ 102(14), 102(15), 550, 622:

Special franchise property is liable for all special ad valorem levies and also those special assessments which benefit the property. Judicial review of benefit may be obtained only as provided by the statute under which the district is established. The issue of whether the property is benefited may not be contested by submission of an application for correction of a tax roll or refund pursuant to Title 3 of Article 5 of the Real Property Tax Law.

Our opinion has been requested as to the right of a special franchise property owner to an administrative refund of taxes attributable to special district charges. The special franchise owner is apparently contending that its property does not benefit from the improvements provided by the district and that it is therefore not liable for charges levied on behalf of that district. The owner contends that the assessment of its property in the district constitutes an “unlawful entry” under section 550(7)(b) or a “clerical error” as defined in section 550(2)(e) of the Real Property Tax Law.

We stated in 5 Op.Counsel SBEA No. 80 that special franchise property, which can be shown to benefit from a special district improvement or service, is liable for a special assessment (Real Property Tax Law, § 102(15)) to defray the cost of the improvement or service.

We also stated that special franchise property is made subject to all special ad valorem levies (Real Property Tax Law, § 102(14)) by statute (Real Property Tax Law, § 622). The case of N. Y. Telephone Co. v. Common Council and Assessors of Rye, 43 Misc.2d 668, 252 N.Y.S.2d 126, aff’d, 25 A.D.2d 682, 269 N.Y.S.2d 692, held special franchise assessments on property located in the City of Rye liable for special ad valorem levies made on behalf of two Westchester County sanitary sewer districts. The court found that where a statute provides that all real property within the district is declared to be benefited, and thereby subject to a special ad valorem levy, the validity of the levy imposed does not depend upon the receipt of any direct or special benefit. A mere general benefit to the community will suffice.

The right and opportunity to contest a determination that property is benefited by a given improvement or service and is therefore liable for special district charges is provided for in statutes such as Town Law, Article 12, and County Law, Article 5-A, as we indicated in 5 Op.Counsel SBEA No. 80 (see, N.Y. Jur. Special Assessments, § 388). Failure to exercise the statutory right to review precludes further administrative or judicial consideration of this question (see, Bentley v. County of Onondaga, 41 Misc.2d 302, 245 N.Y.S.2d 479; Seyfang v. Reister, 154 Misc. 308, 277 N.Y.S. 695).

Therefore, it is our opinion that the question of benefit, in a special district context with respect to special franchise property, must be reviewed as provided by the statute under which the district was established. The issue may not be contested by an application for correction of a tax roll or for a refund of taxes paid pursuant to Title 3 of Article 5 of the Real Property Tax Law.

March 7, 1979