Town of Arietta v. State Bd. of Equalization and Assessment

• Citation: 452 N.Y.S.2d 364,56 N.Y.2d 356,437 N.E.2d 1121
• Parties: , 437 N.E.2d 1121 In the Matter of the TOWN OF ARIETTA et al., Respondents, v. STATE BOARD OF EQUALIZATION AND ASSESSMENT et al., Appellants. (And 10 Other Proceedings.)
• Decision Date: 17 June 1982
• Court: New York Court of Appeals

Page 364

452 N.Y.S.2d 364

56 N.Y.2d 356, 437 N.E.2d 1121

In the Matter of the TOWN OF ARIETTA et al., Respondents, v. STATE BOARD OF EQUALIZATION AND ASSESSMENT et al., Appellants (And 10 Other Proceedings.)

Court of Appeals of New York.

June 17, 1982.

Robert Abrams, Atty. Gen. (Vernon Stuart and Shirley Adelson Siegel, Sol. Gen., Albany, of counsel), for appellants

Earle C. Bastow and Francis C. Steates, Utica, for respondents.

OPINION OF THE COURT

JONES, Judge.

A CPLR article 78 proceeding is the appropriate procedure by which affected tax districts may obtain judicial review of the establishment by the State Board of Equalization of transition assessments under section 545 of the Real Property Tax Law. In this proceeding it was not error to grant summary judgment to the petitioning towns directing the State board to establish transition assessments with respect to the 1968 assessment rolls in such amounts as will provide them with total effective assessments of State-owned lands in amounts equaling the corresponding total effective assessments on their respective assessment rolls for the year 1967.

The Towns of Arietta, Benson and Lake Pleasant in Hamilton County and their taxpaying supervisors commenced 11 article 78 proceedings, one for each of the years 1968 through 1978, to review annual determinations made by the New York State Board of Equalization and Assessment as to the amounts of transition assessments of State-owned forest lands. The State board moved under CPLR 7804 (subd. ) in each proceeding to dismiss the petition on the ground that as a matter of law it failed to state facts sufficient to entitle petitioners to the relief sought. The towns and their supervisors cross-moved in the 1968 proceeding for summary judgment.

Special Term denied the cross motion for summary judgment in the 1968 proceeding and granted the State board's motion to dismiss the petitions in each of the 11 proceedings. On appeal the Appellate Division reversed in the 1968 proceeding, reinstated the petition, granted the towns' cross motion for summary judgment, and remitted the matter to Supreme Court for further proceedings not inconsistent with its opinion (80 A.D.2d 956, 438 N.Y.S.2d 13). In each of the other 10 proceedings, the Appellate Division reversed and reinstated the petition; summary judgment was not granted in any of these proceedings inasmuch as no motion had been made for such relief. The State board has now appealed as of right in the 1968 proceeding. ¹ We affirm.

The controversy between the parties relates to the determination by the State board of transition assessments of forest lands owned by the State. Such lands located within the forest preserves, as are those here in question, are subject to local real property taxation under section 532 of the Real Property Tax Law. Assessments with respect to such properties are first made by the local assessors but are then subject to the approval of the State board. In anticipation of the completion and application of a comprehensive reappraisal by the State board, section 545 was added to the Real Property Tax Law in 1960 to provide for "transition assessments", designed to protect affected tax districts against substantial reductions in total assessments of State-owned lands within the district. A transition assessment was required to be established in the first year in which there was a reduction in assessment on taxable State lands which would prevent any loss of taxable assessed valuation on the assessment roll. The addition of the transition assessment to the initial, board-approved regular assessments would result in total effective assessment of State-owned lands equal to the corresponding assessments on the roll of the preceding year. Originally these transition assessments were scheduled to be tapered off at the rate of 2% of the total taxable assessed valuation for each year after the first year beginning with the year 1962. Questions arose, however, with respect to the use by the State board of a new computerized formula, and legislation was enacted in 1962 prohibiting the State board from reducing the transition assessments in 1962 by requiring it to treat 1962 rather than 1961 as the first year of reduction. Thereafter, similar annual enactments deferred the tapering of transition assessments through the year 1972.

There are substantial State-owned lands within the Towns of Arietta, Benson and Lake Pleasant which have been subject to taxation under section 532, the regular local assessments of the individual parcels being subject to approval by the State board. In 1961 the State board did not approve the assessments made by the local assessors as it had in previous years, but instead approved assessments in substantially smaller amounts in most instances, thereby activating the statutory provisions for transition assessments.

In their 1968 proceeding the towns asserted that after adhering to the legislative scheme for several years, the State board approved transition assessments for 1968 in amounts less than those prescribed in section 545, in consequence of which each of the towns suffered a loss of tax revenues and a lowering of tax and debt limits. An order was sought directing the State board to establish transition assessments in accordance with the statutory prescription.

A similar proceeding was thereafter commenced by one or more of four towns in Hamilton County, with their respective taxpaying supervisors, as to each of the years 1969 through 1978, in which relief in the same form was sought. Pursuant to stipulation these proceedings with respect to subsequent years have been held pending the outcome of this 1968 proceeding.

Section 545 as applicable here provides in pertinent part: "1. Whenever the state or an agency of the state acquires real property which becomes exempt as a result of such acquisition and which constitutes two per cent or more of the total taxable assessed valuation of the latest preceding assessment roll or there is a reduction in assessments on taxable state lands, the state board shall establish a 'transition assessment' which will in effect prevent any loss of taxable assessed valuation on the assessment roll for the first year affected by such occurrence or occurrences. For each succeeding year, the state board shall establish a transition assessment which will in effect limit to two per cent of the total taxable assessed valuation on the latest preceding assessment roll the loss in taxable assessed valuation on such roll as a result of such occurrence or occurrences, and (i) further acquisitions by the state or an agency of the state, or (ii) further reductions in assessments on taxable state lands, or (iii) both (i) and (ii)."

Two principal issues are tendered for resolution on the appeal in our court. The first, a procedural question, is whether the towns may maintain a CPLR article 78 proceeding to challenge the method of calculation of transition assessments by the State board under section 545. The second, a substantive question, is whether, assuming the availability of an article 78 proceeding, the transition assessments here were correctly calculated.

We conclude that a proceeding instituted under CPLR article 78 is the appropriate vehicle to obtain judicial review of the performance by the State board of the duties imposed on it by the Legislature under section 545....