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Home My WebLink AboutTB Minutes 1977-01-19 BUYOUCOS & BARNEY ATTORNEYS AT LAW SAVINGS BANK BUILDING JAMES V . Buyoucos ITHACA, NEW YORK 14850 AREA CODE 607 JOHN C. BARNEY PHONE 273 - 6 $ 41 i January 19 , 1977 New York State Board of Equalization and Assessment 155 Washington Avenue Albany , New York 12225 Attention : Mr . Henry Wyluda Reib Opinion with Respect to Real Property Tax Law , fSection 485 -b . Business Investment Exemption Dear Mr . Wyluda : I am writing this letter to you as attorney for the Town of Ithaca and also -as counsel to the Southern Cavuqa Lake Inter - municipal Water Commission , acting in behalf of several munici - palities which provide water to the Towns of Ithaca , Dryden and Lansi.nq and the Villages -of Cayuga Heights and Lansing , all in Tompkins County , pursuant to an Intermunicipal Water Agreement , The Town of Ithaca is the taxing authority which is now considering the matter of adopting legislation - either to repeal the exemption or to reduce the amount exempted to qualifying. taxpavers pursuant to ' Section 485 -h . I have examined the following Statutory Provisions : 1 ) Real Property Tax Law 102 , Subdivision 13 --A , 148P 151 16 & 20 . 2 ) Section 490 of the Real Property Tax Law , 3 ) Section - 209 -- Q of - the Town Lain , particularly Subdivisions 1 ( a ) and (b ) . ( The reason for this is that the Town of Ithaca several years ago abolished all special improvement districts pursuant to Section 209 -Q of the Toren Law and as defined in Sub - divsion 1 ( a ) and (b ) of Section 209 - 0 . 4 ) I have also read again the opinion of Morris V . County Board of Assessors of Nassau County , 79 Miscellaneous 2d , decided in the Supreme Court , Special Term of Nassau County of June 19 , 1970 . Mr . Henry Wyluda January 19 , 1977 Page 2 The Town of Ithaca now collects the following : A . In January of each _near the Town and County Tax bill is sent to each ' taxpayer tyhich includes the following : 1 . Countv Tax 2 . Town Tax , 3 . Fire Tax . ( The Town of Ithaca does not have its own Fire Department , but contracts for this service with the City of Ithaca and the Village of Cayuga Heights . Each year the Town raises - sufficient funds to pay the two contracting municipalities . for their services . This amount is divided by the applicable total assessed valuation which results in a percentage rate - - sav 2 . 7 % . Thus , if a property is assessed for $ 10 , 00.0 . 00 , the fire tax is $ 27 . 00 . ) . 4 . - water Benefit Assessments . - These charges are levied and assessed against each property in the Town pursuant to Section 209 =Q of the Town Law on the basis of benefits conferred) on each such property . The revenues are used to reduce the bonded indebted- ness incurred for the cost of construction of the water facilities . 5 . Sewer Benefit Assessments . These charges are levied and assessed . against each - property in the Town pursuant to Section 209 -Q of the Town Law on the basis of benefits conferred on each such property . The revenues are used to reduce the bonded indebted- ness incurred for the cost of construction of the sewer distribution facilities . 6 . ' Other charges such as charges for lighting districts . R . In addition to the items in paragraph (a ) above , the Town of Ithaca also levies the following charges : 1 . " [dater Use Charges or Water Rents ; based upon the water consumed By each property . These are used first for operation and maintenance and the balance , if any , to defray the cost of the construction and financing of the municipal water service . 2 . Sewer Use Charges ; these are * used to defrav the cost of operating and maintaining the Sewer Treatment Plant which is used to treat the water discharged from the consuming properties in the Town of Ithaca . The Treatment Plant is owned and operated Mr . Henry Wyluda January 19 , 1977 Page 3 . by the City of Ithaca and the City performs the sewage treatment service under contract with the Town of Ithaca . The sewer use charge is based upon the amount of water used by each consuming property and is paid to the Citv , We request your advice as follows : Jo the Water Benefit Assessment , the Sewer Benefit Assessment , the Water Use Charge , and Sewer Use Charge come within the exemption provided for by Section 485 -b ? In other words , if the exemption provided for by Section 485 -b is not repealed by the Town by Local Law will the industrial activitiy be exempt from the payment of the foregoing assessments and levies ? A . We assume that neither the water benefit assessment charge nor the sewer benefit assessment charge , as described above , is exempt and , therefore , must be paid by the industrial , etc . activity', inasmuch as this appears to fall_ within the definition of a special assessment as defined in Section 102 since it is a charge imposed upon benefited real property in proportion to . the benefits received by such charge to defray the cost ( including the bonded indebtedness to pay such costs ) of the municipal water system and the municipal sewer system respectively . B . We assume , for the same reasons . stated in " A " above , that the water rents as described above which are paid by each consumer based upon the amount . - of water consumed and which are used - for operation* and maintenance ( and any balance also may be used to . defray costs of the municipal water system , includina payment of the bonded indebtedness ) are exempt from the operation of this Statute and therefore must be paid by the industrial activity . . C . Similarly , we assume that the sewer use charge - which is collected from the consumer of water in the Town of Ithaca based upon the amount of water consumed and which is used for the payment of the costs of using the City . of_ Ithaca Sewer Treatment Plant is likewise exempt from the operation of the Statute and thus must be paid by the industrial , etc . activity . However , Section 0 485 -b specifically states that " service charges " shall be exempt from payment by an exempted activity . We are confused by the definition of " service charge " in Subdivision 13 - a of Section 102 of the Real Property Tax Law which seems broad 1 Mr . Henry Wyluda January 19 , 1977 Page 4 enough to cover sewer services under the term " sanitation " and water services under the term " water supply " . One inter - pretation of the Statute would be that service charge means a charge imposed upon real property to defray the cost of services and improvements necessary or convenient and providing services for sanitation and water supply amongst other services , but such charge - must be " other than a special' ad valorem levy or special ' assessment " . We� wlsh to make certain that al1water' benefit assessments and -se'w-er benefit assessments described above come within the exemption other t an special assessments " and are thus not exempt from the operation of the Statute and therefore must be paid by the exempt activity . We wish you specifically to confirm this . We: also request your opinion that water use charges , however they may be defined , based upon the consumption of water , and sewer use charges or sewer rent charges , however they may be defined , based upon the use of water , do not fall within theemeaninq of " service charge " as defined in Section 102 Real Property Tax Law , Subdivision 13 - a . D . Similarly , we would request your opinion that the special ad valorem levy levied for fire protection does not come within the definition of a " service charge " . E-. Similarly , we wish your opinion that any charges for a lighting improvement district would not come within the definition of a " service charge " . F . We are not . - certain whether the Fire Tax described in A , 3 , above is exempt from payment by the industrial , etc . activity . We would assume - .that it . is in the nature of a general tax and therefore , would be exempt , but we would appreciate your advice . We regret the haste in which this letter has been written but the mown may wish to adopt a - local law at its February meeting . Therefore , we will be very grateful for whatever assistance you can • give us . We are ready to discuss any questions you may have with us on the telephone . Please call . me person to person . If you need any additional information , I shall be _glad to supply . it to you . Yours very truly , /J/ • James V . Buyoucos JVB/3kl