Foss v. City of Rochester

• Court: New York Supreme Court — Appellate Division
• Writing for the Court: Before DOERR; SCHNEPP; DOERR
• Citation: Foss v. City of Rochester, 104 A.D.2d 99, 481 N.Y.S.2d 191 (N.Y. App. Div. 1984)
• Decision Date: 07 November 1984
• Parties: David A. FOSS, Appellant, v. The CITY OF ROCHESTER, Paul H. Jacobs, as Assessor of the City of Rochester, The County of Monroe, Respondents, and Hon. Robert Abrams, Attorney General of the State of New York, Intervenor.

Page 191

481 N.Y.S.2d 191

104 A.D.2d 99

David A. FOSS, Appellant, v. The CITY OF ROCHESTER, Paul H. Jacobs, as Assessor of the City of Rochester, The County of Monroe, Respondents and Hon. Robert Abrams, Attorney General of the State of New York, Intervenor.

Supreme Court, Appellate Division Fourth Department.

Nov. 7, 1984.

Harris, Beach, Wilcox, Rubin & Levey, Rochester (Edward H. Fox, Rochester, of counsel), for appellant.

Louis N. Kash, Corp. Counsel, Rochester (Susan Hauser, Rochester, of counsel), for respondents.

Robert Abrams, Atty. Gen., Albany (William J. Kogan, Albany, of counsel), for intervenor.

Dudley, Cantwell & McCale, Albany (Joseph McCale, Albany, of counsel), for Park-Brunswick Neighborhood Ass'n, amicus curiae.

Before DOERR, J.P., and BOOMER, GREEN, O'DONNELL and SCHNEPP, JJ.

SCHNEPP, Justice.

In this declaratory judgment action plaintiff challenges the constitutionality of section 305 and article 19 of the Real Property Tax Law and appeals from the grant of summary judgment to defendants declaring the legislative enactments valid and constitutional. These statutes were embraced within chapter 1057 of the Laws of 1981 and were designed to eliminate the 1975 Hellerstein (Matter of Hellerstein v. Assessor of Town of Islip, 37 N.Y.2d 1, 371 N.Y.S.2d 388, 332 N.E.2d 279) mandated reassessment of real property at full value and to alleviate the problems it posed to both local governments and taxpayers. The Legislature intended to "provide a high degree of stability in the relative tax burdens of taxpayers, particularly among classes of taxpayers" and to "provide ... assessing units with the ability to avoid or decrease tax burden shifts to homeowners" which otherwise would result from reassessment (N.Y.Legis.Ann., 1981, p. 546).

In Hellerstein the Court of Appeals held that the widespread and long term practice throughout the State of making assessments on a percentage basis (fractional assessment) was directly contrary to the statutory requirement in section 306 of the Real Property Tax Law that all property should be assessed at full value. Municipalities throughout the State became subject to this direction. Although the only issue before the court was fractional assessment, the decision brought to the forefront the related issue of uniformity. In many municipalities real property had not been reassessed for tax purposes in many years and existing assessments were out-of-date. As a result, with the rapid increase in value of residential property in recent years, this class of property was assessed generally at a lesser percentage of its current market value than commercial property. Thus, assessment practices over the years have caused a shifting in the burden of real property taxation from owners of residential properties to owners of commercial properties, causing the de facto classification of property in violation of the statutory standard of uniformity. The deviation became so universal that in 1975 the Temporary State Commission on State and Local Finances concluded: "The existence of de jure uniformity does not prevent the practice of de facto classification, and, in fact, every assessing jurisdiction contains 'classified' property", resulting in "wide variations in the percent of full value at which real property is assessed" (Real Property Tax, 1975 Report of the Temporary State Commission on State and Local Finances, vol. 2, p. 22). Without question if all property were to be reassessed and taxed uniformly, there would be a dramatic shift in the local property tax burden away from the nonresidential class on to the residential class.

The rationale for chapter 1057 is the maintenance of the status quo, or more precisely, the avoidance of this tax shift. To accomplish this goal the Legislature (1) repealed section 306 of the Real Property Tax Law, which provided the statutory predicate for full-value assessment, (2) substituted in its place a new section 305 specifically permitting fractional assessment at a uniform percentage of value and (3) added to the Real Property Tax Law a new article 19 ¹ granting to local assessing units the option to allocate tax levies differently for properties classified as "homestead" and "non-homestead". ² In order for article 19 to be implemented within an "assessing unit" the local legislative body must obtain certification from the State Board of Equalization and Assessment as an approved assessing unit (Real Property Tax Law, § 1902) and specifically adopt it (Real Property Tax Law, § 1903, subd. 1). Such approval is conditioned upon revaluation of property within the unit (Real Property Tax Law, § 1902, subds. 1, 2). The allocation of taxes by class (homestead and non-homestead), which is the crux of article 19 is accomplished by splitting the taxes levied on all final assessment rolls according to the "homestead base proportion" established for the assessing unit. The homestead base proportion means the proportion of the taxable assessed value of property in the homestead class to the total assessed value of all property on the assessment roll completed in the year immediately preceding revaluation (Real Property Tax Law, § 1901, subds. ). Under the statute the homestead base proportion applies not only to taxes levied by the assessing unit but also to county and school district levies (Real Property Tax Law, § 1903, subds. 3, 4).

Plaintiff is the owner of a four-family dwelling in the City of Rochester classified as non-homestead property under the statute (Real Property Tax Law, § 1901, subds. ). On August 9, 1983 the City Council of the City of Rochester enacted Local Law No. 6 of 1983 adopting the provisions of article 19 for use within the city (see Real Property Tax Law, § 1903, subd. 1). It has also obtained contingent certification from the State Board of Equalization and Assessment as an "approved assessing unit," because of the revaluation of all real property within the city (see Real Property Tax Law, § 1902) which was completed in 1983. As a result of the revaluation, the city claims that all property within its boundaries is now assessed at a uniform percentage (100%) of full value. Pursuant to article 19, non-homestead property in the city, which comprises 52.46% of the total assessed value, will be apportioned 65.55% of the taxes levied by the city and by the County of Monroe. Conversely, homestead property which makes up 47.54% of the total assessed value will be allocated 34.45% of the total taxes. ³ In the City of Rochester the tax rate for non-homestead properties will be between 1.75 and 2 times greater than the tax rate for homestead properties and in effect a dual tax rate structure has been established.

Plaintiff has alleged three causes of action challenging the constitutionality of section 305 and article 19. In his first cause of action plaintiff seeks to have the standard of assessment in section 305 which requires assessment of all real property in an assessing unit "at a uniform percentage of value (fractional assessment)" declared unconstitutionally vague for failure to set forth a percentage or to provide for assessment of property at any specific value. In his second cause of action, plaintiff challenges the statutory formula in article 19 for establishing the homestead base proportion as an unconstitutional delegation of legislative power to local assessors because the formula incorporates the assessment roll prepared by the assessor prior to revaluation. In his third and final cause of action, plaintiff opposes the application of article 19 to the county tax, claiming the statute does not require uniformity throughout the county but allows variation from one assessing unit to another and thus perpetuates pre-Hellerstein distinctions based solely upon geographical location which unconstitutionally deny plaintiff equal protection of the law.

On his first cause of action, plaintiff argues that section 305 of the Real Property Tax Law violates the due process clauses of the State and Federal Constitutions because it fails to provide taxpayers with notice of the fraction and of the theory of value to be employed by the assessor in the preparation of assessments. Plaintiff argues that the failure of the Legislature to specify the fraction to be used by local assessors renders the statute unconstitutionally vague by depriving him of a standard against which to compare his assessment and prevents him from discovering whether he has been assessed "unequally" without undertaking a considerable burden.

The statute provides: "All real property in each assessing unit shall be assessed at a uniform percentage of value" (Real Property Tax Law, § 305, subd. 2). Plaintiff claims that the word "value" could be construed to mean something other than market value. His concern is unwarranted. In Stemmer v. Board of Assessors of Town of Pompey, 97 A.D.2d 979, 468 N.Y.S.2d 785 we held that "305 is not unconstitutionally vague because 'value' means market value". Although in Stemmer we did not address the issue raised by plaintiff in this case whether fractional assessment without a specific fraction is unconstitutionally vague on due process grounds, we held that section 305 does not violate the equal protection clause because taxing jurisdictions are not bound to assess property at 100% of market value so long as all property in an assessing unit is assessed at a uniform percentage of value (97 A.D.2d 979, 468 N.Y.S.2d 785, supra, citing Sioux City Bridge v. Dakota County, 260 U.S. 441, 43 S.Ct. 190, 67 L.Ed. 340).

Due process requires of a statute a reasonable degree of definiteness. "When it leaves the legislature, a statute must be complete in all its terms, and it must be definite and certain enough to enable every person, by reading the law, to know * * * how the law will operate when put into execution" (Weissinger v. Boswell, 330 F.Supp. 615, 624; cf. Connally v. General Constr. Co., 269 U.S. 385, 391,...