MATTER OF NEW YORK TELEPHONE COMPANY v. Nassau County
| Decision Date | 09 December 1999 |
| Citation | 699 N.Y.S.2d 616,267 A.D.2d 629 |
| Court | New York Supreme Court — Appellate Division |
| Parties | In the Matter of NEW YORK TELEPHONE COMPANY, Appellant-Respondent,<BR>v.<BR>NASSAU COUNTY et al., Respondents-Appellants. (And Three Other Related Proceedings.) |
Mikoll, J. P.
These appeals stem from the Nassau County respondents' alleged miscalculation of the share of 1995-1996 real property taxes to be borne by petitioners New York Telephone Company, Long Island Light Company and New York Water Services Corporation (hereinafter collectively referred to as the utility company petitioners or petitioners). In three separate CPLR article 78 proceedings (Nos. 1, 2 and 4) filed against the Nassau County respondents (hereinafter the County), the utility company petitioners sought refunds or adjustment of tax levies for subsequent years based on their claim that the County improperly calculated their tax rates and collected excessive taxes from them for the 1995-1996 tax year. In proceeding No. 3, the County commenced a declaratory judgment action against the State respondents (hereinafter the State) seeking a declaration that the County properly calculated petitioners' 1995-1996 tax rates and that the State had improperly required the County to correct same. Proceeding No. 3 was subsequently converted to a CPLR article 78 proceeding and joined with the other three proceedings in Supreme Court, Albany County. That court held, inter alia, that petitioners' taxes had been calculated incorrectly resulting in substantial overpayments to the County, that one quarter of the amounts overpaid by petitioners should be refunded in the form of tax credits over the next five years, and that the State was responsible for reimbursing the County one half of the amount of the tax credits to be given to petitioners. These cross appeals by all parties ensued.
Essential to understanding and resolving the questions presented is a brief description of Nassau County's real property taxation system. Nassau County is a "special assessing unit" whose real property taxation is governed by RPTL article 18. As such, its real property is divided into four classes: classes one and two include all residential real property, class three includes utility property and class four includes commercial property. Property taxes imposed on each class of real property are a function of two components: the assessed value of the property and the tax rate applied to it. A special assessing unit may apply a different tax rate to each class of property, based on each class's "tax share". Class tax shares are determined by the ratio of the total assessed value of each class to the total assessed value of all property within the special assessing unit. Class tax shares are adjusted annually to reflect market changes and changes in the quantity of property within each class. The term "current base proportion" (hereinafter CBP) denotes the tax share of each class adjusted to take into account relative changes in market value. The term "adjusted base proportion" (hereinafter ABP) represents CBPs adjusted to reflect the addition of or removal of property from the assessment roll, or the addition or improvement to existing property, or physical or quantitative changes within a class. It is critical to note at this juncture that ABPs, by definition, measure only changes from year to year based on the same level of assessment in each year. It is equally important to note that petitioners do not challenge the amount of their real property tax assessments; the dispute focuses solely upon the tax rate applied to those assessments for the year in question.
As a "special assessing unit", Nassau County was responsible for determining the full and assessed value of all property in classes one, two and four. Until a change in law effective August 2, 1994 (RPTL 616), however, class three property was treated differently. Class three property consists of two types: (1) utility property located on privately owned property, and (2) utility property located on public property, denominated "special franchise property". Prior to the change in law, Nassau County was only responsible for determining the full and assessed value of the first type of utility property. As to the second type, "special franchise property", the State Office of Real Property Services (hereinafter the State Board) determined the final assessed value of such property and Nassau County entered this final value on its assessment roll.
Accordingly, in June 1994 (before the change effected by the new legislation), the State Board provided Nassau County with the final assessed value of all special franchise property in the County, the County entered these assessments on its rolls and utilized these assessments in preparing its 1994-1995 tax bills.
However, on August 2, 1994, the new legislation required that the special assessing unit (Nassau County), not the State Board, determine the final assessed value of special franchise property. The legislation required the special assessing unit to determine such final assessed value by applying to the full value of special franchise property, as certified by the State Board, "the uniform percentage at which all property in class three is assessed".
The State Board thereafter advised Nassau County that because of the change in law, the June 1994 assessed values prepared by the State Board and provided to Nassau County were not valid.[*] The State Board reminded the County of its new responsibility to determine assessed values of special franchise property on the basis of the full values thereof provided by the State Board. In December 1994, the State Board provided Nassau County with a set of "final special franchise full values for assessment rolls completed in 1994", and again reminded the County of its obligation to multiply these full values by the same percentage at which other class three property was assessed, and enter these products, or final assessed values, on its 1994 assessment rolls. Apparently, Nassau County did not do so, with the result that its 1994 assessment rolls, insofar as special franchise property was concerned, reflected final assessed values computed by the State Board.
In 1995, the State Board provided Nassau County with a list of special franchise full values for the 1995 assessment roll. The County used these figures to calculate the ABPs which, as previously noted, measure only the assessed value of physical or quantity changes from year to year within a given property class. Essential to an accurate calculation of the change which the ABPs are designed to measure is the comparison of "like to like" data.
Against this backdrop, we first take up the question of whether Supreme Court properly determined that the County had, in fact, miscalculated the ABPs attributable to utility company real property for the year 1995-1996 and that such error affected its computation of the tax...
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