Gordon v. Town of Esopus

Smith, J. (dissenting).

The majority opinion contains a concise and fair summary of the argument I find dispositive in this case:

“The Town points to this legislative history and argues that the Legislature’s decision to remove the assessment scheme from the 1976 law suggests that the Legislature intended forest land to be assessed not as forest land but as vacant land; that is, land that is unimproved such that it may be assessed for *91tax purposes based on its ‘highest and best’ use. The Town urges that to consider forest land certified as such under RPTL 480-a as land being used as forest land for tax assessment purposes results in an effective ‘double dip’ benefit for taxpayers that the Legislature did not intend, as the 80% tax exemption will apply to a discounted assessment value if the land is assessed as forest land.” (Majority op at 89.)

This argument does not persuade the majority, but it does persuade me.

I acknowledge that if we simply apply general valuation principles to this land—without considering the specific problem to which the Legislature was responding in RPTL 480-a, and the nature of the response it eventually chose—it should be valued as forest land, not vacant land. As a general rule, the purpose of valuation is to determine the fair market value of the property—what a willing buyer would pay a willing seller (see New York State Office of Real Property Services, Uniform Assessment Standards 1.3 [“Value means market value—the price a willing buyer would pay a willing seller in an arm’s-length transaction”]). Here, the fair market value is obviously impaired by the fact that petitioners have committed themselves to use the property as forest land, and could not escape that commitment without a significant tax penalty. Thus, in principle, petitioners’ appraiser was correct in saying that only sales of property subject to a similar impairment should count as “comparable” for valuation purposes.

But the picture changes when we examine the history of the statute. It seems that, in 1974, the Legislature was troubled by the practice of taxing authorities in doing essentially what the Town of Esopus proposes to do here—valuing forest land as if it were vacant land, thus producing a relatively high value. The legislation that enacted the original version of RPTL 480-a contained a section entitled “Legislative findings and declaration of purpose,” which said:

“The legislature hereby finds and declares that lands presently devoted to growth of forest crops are often assessed at a level which renders continued dedication to such use uneconomical . . . [U]se of land for timber production is becoming increasingly economically unfeasible due to assessment practices *92which do not take into account the present use of the property being assessed. Lands devoted to growth of forest products should be assessed at a level which recognizes this use rather than at a level reflecting devotion of the land to another purpose.” (L 1974, ch 814, § 1.)

Thus the Legislature’s purpose in 1974 was to require a valuation approach similar to the one now required by the majority opinion—valuing the land as forest land, not vacant land. The 1974 version of RPTL 480-a goes on for some pages to prescribe a rather complicated valuation procedure for lands certified as forest lands. Perhaps it was too complicated; in any event, as the majority mentions (majority op at 89), the Legislature repeatedly postponed the effective date of the 1974 legislation, and then took a very different approach in 1976: It threw out all the detailed provisions for valuing forest land, and simply gave forest land an 80% tax exemption, reflected in today’s version of RPTL 480-a.

It seems obvious that the 1976 Legislature substituted the 80% exemption for what it had, in 1974, considered a fairer assessment procedure. But that substitution does not make sense unless the Legislature assumed that the valuations, before being reduced by the statutory exemption, would be the higher ones that made the Legislature act in the first place. If the Legislature expected forest land to be valued at the lower levels consistent with a restriction of land to forest use, why not base the tax on the whole of the lower value? Why tax only one fifth of it?

Finding no answer to this question, I conclude that the legislative purpose is best served by allowing the Town to value the land as if it were vacant, and then to divide the resulting valuation by five. To divide the lower value by five is effectively to give the taxpayers twice what the Legislature intended to give them only once.

Judges Ciparick, Graffeo, Read, Pigott and Jones concur with Chief Judge Lippman; Judge Smith dissents in a separate opinion.

Order reversed, etc.