Slewett & Farber v. Board of Assessors

I agree with the majority that subdivisions 3, 4 and 5 of section 307 of the Real Property Tax Law are unconstitutional. I would only like to explain my interpretation of the tortuous language and obscured intent of subdivision 3 of that section. To do so, I must view subdivision 3 in the context of the Legislature’s entire 1978 scheme for pleading and proving a claim of inequality in a proceeding to review a real property assessment.

By chapter 476 of the Laws of 1978, section 307 was *417added to the Real Property Tax Law and section 720 was amended. Subdivision 3 of the former essentially regulated pleadings in assessment review proceedings, while subdivision 3 of the latter regulated evidence.

A literal construction of the statutory language of these two provisions resulted in procedural requirements of a rather confusing nature.

Initially, it must be pointed out that chapter 476 of the Laws of 1978 should be read in conjunction with section 706 of the Real Property Tax Law. That section sets forth the basic contents of a petition in an assessment review proceeding. By its terms, when a proceeding is brought to review an assessment on the ground that it has been made at a higher proportionate valuation than that of other real property on the same roll, the petition shall state that the petitioner is or will be injured by such inequality.

Without disturbing section 706, the Legislature, in 1978, enacted section 307, which, in subdivision 3, requires: “in a tax review proceeding which is based in whole or in part on a claim of inequality * * * the petition required by section seven hundred six of this chapter shall allege, in addition to the contents otherwise required by such section, that the assessment has been made at a higher proportionate valuation than the assessment of other taxable real property of the same major type, as determined by the state board of equalization and assessment pursuant to section twelve hundred of this chapter”. (Emphasis added.) Thus, the 1978 legislation seemingly established pleading requirements that would necessitate a petition alleging inequality based on the subject property’s inclusion in two distinct classes of property, viz., that of all properties on the same assessment roll (Real Property Tax Law, § 706) and that of all properties of the same major type on the same assessment roll (Real Property Tax Law, § 307, subd 3).

Subdivision 3 of section 307 continues, and the confusion is compounded. It reads that “evidence to such effect [a vague phrase] may be introduced together with such evidence otherwise admissible under subdivision three of section seven hundred twenty of this chapter.” (Emphasis added.) Again, literally construed, this language seems to *418indicate that any evidence showing the assessment inequality of the subject property with properties in the same class, as that class is determined by the SBEA, may be introduced in the proceeding. Furthermore, this evidence was to be offered in addition to such evidence otherwise admissible under former subdivision 3 of section 720.*

In turn, former subdivision 3 of section 720 (as amd by L1978, ch 476, § 2) had set forth the three types of evidence admissible on the issue of inequality in any assessment review proceeding. The 1978 version of this provision authorized the very same evidence as had been authorized for such proceedings since 1961 (L 1961, ch 942, § 1), i.e., (1) selected parcels, (2) actual sales, and (3) the State equalization rate. The 1978 amendment failed to effect any change in the statutory language that would require parcels to be selected or actual sales to be reviewed from among class properties. Furthermore, the State equalization rate, which is a universal rate applied to all properties, was maintained as admissible evidence. In other words, the same statutory language that had always authorized inequality evidence based on assessment comparisons with unclassified property remained unchanged. Moreover, a 1977 amendment to subdivision 3 of section 720 of the Real Property Tax Law (L 1977, ch 888, § 2), which had included in the subdivision the only reference to property classification contained therein, was deleted by the 1978 amendment now under review.

*419As a result of the 1978 legislation, therefore, a real procedural and evidentiary disorder was created. A petitioner in an inequality proceeding had to plead inequality with all properties on the roll, as well as inequality with those similarly classified. On his proof, a petitioner could present evidence as to each of these issues, but, of course, if he did, he either proved too much or too little, or both. And, if the last, then he would have proven the elements for two exclusive recoveries, without knowing which one he could rightfully claim.

Such a result is, of course, absurd, and, by the rules of statutory construction, must be avoided (McKinney’s Cons Laws of NY, Book 1, Statutes, § 145; Smith v People, 47 NY 330). Moreover, it must be presumed that such a result was never intended by the Legislature (McKinney’s Cons Laws of NY, Book 1, Statutes, § 145).

By applying the rules of statutory construction and by reviewing the legislative history of chapter 476 of the Laws of 1978, the Legislature’s intent in enacting subdivision 3 of section 307 of the Real Property Tax Law becomes clear. It is this intent which is the primary consideration in ascertaining the meaning and effect of any statute (McKinney’s Cons Laws of NY, Book 1, Statutes, § 92).

The natural and obvious meaning of the language of subdivision 3 of section 307 (see McKinney’s Cons Laws of NY, Book 1, Statutes, § 94) indicates that assessment inequality petitions must allege inequality based on class comparison. If this provision is read in conjunction with section 706, as it must be (see McKinney’s Cons Laws of NY, Book 1, Statutes, § 97), the result is an apparent conflict in pleading requirements, as discussed above. Consequently, a harmonious reading of the Real Property Tax Law becomes impossible. Harmony is achieved (see McKinney’s Cons Laws of NY, Book 1, Statutes, § 98), however, when subdivision 3 of section 307 is interpreted as repealing that portion of section 706 which merely required an allegation of inequality based on a comparison with properties on the same assessment roll, without reference to their classification. If legislative intent controls, as it does (see McKinney’s Cons Laws of NY, Book 1, Statutes, § 392), *420this repeal by implication will be dictated. The whole spirit of subdivision 3 of section 307 is that pleading requirements are being changed and more narrowly defined. This is firmly supported by legislative memoranda urging enactment of this statutory provision. For example, the memorandum in support of the Assembly bill reads, in relevant part: “[The new law p]rovides that in alleging inequality, petitioner must show that his property is assessed at a higher proportionate value than properties of the same major type on the same assessment roll * * * This Bill would Alter [present law.] Presently, a petitioner must show that the property is assessed at a higher proportionate value than all other properties not merely similar properties.” I must conclude, therefore, that subdivision 3 of section 307 was intended to introduce new pleading requirements that superseded those in section 706, and to that extent, contrary provisions of section 706 were repealed.

Similarly, to the extent that subdivision 3 of section 307 changed and more narrowly defined the requisite allegation of assessment inequality in such a proceeding, it necessarily refined the meaning and effect of subdivision 3 of section 720. For in revising pleading requirements in an assessment proceeding, the Legislature must have intended that the nature of the evidence to be presented in proof thereof would concomitantly change. Once again, therefore, in reading the Real Property Tax Law as a whole and in attempting to harmonize all of its parts, I must conclude that the over-all effect of chapter 476 of the Laws of 1978 was to maintain the three types of evidence authorized by former subdivision 3 of section 720, but to restrict their use in assessment inequality proceedings to proving comparison with similarly classified property. Thus, pursuant to the 1978 legislation, a petitioner could only show actual sales and select parcels of property of the same major type as that under review. Furthermore, the State equalization rate, as a universal rate, could no longer be used. Instead, the more appropriate class rate could be proven, even though the SBEA categorically denied the existence of such class rates. (See Memorandum to the Governor from Counsel to the SBEA [6 Opns of Counsel of St Bd of Equal & Assess No 2], disapproving L 1978, ch 476, as quoted by *421Special Term, Matter of Slewett & Farber v Board of Assessors of County of Nassau, 97 Misc 2d 637, 649.) Nevertheless, at Special Term, the county suggested that such class rates for major type property may be extracted from data and information on file with the SBEA. It must be implied, therefore, that the 1978 legislation replaced the State equalization rate as admissible evidence under former subdivision 3 of section 720 with evidence of SBEA’s class data as proof of a class rate. For only the latter would be relevant evidence consistent with the 1978 pleading changes.

The foregoing is an explanation of my understanding of the procedural and evidentiary scheme in assessment inequality proceedings established by and resulting from chapter 476 of the Laws of 1978. Given this understanding, it is patently clear to me that the Legislature in 1978 intended a basic revision in the very nature and purpose of such a proceeding and, consequently, in the claim presented and the recovery sought therein. No longer could a taxpayer claim an unequal assessment as compared to all other taxpayers. No longer could he seek to recover a refund because a tax levy had cast on him an unequal share of the total burden of all taxpayers. By reason of chapter 476 of the Laws of 1978, he could only claim and recover a refund representing his payment of an unfair share of the tax burden of similarly situated property owners. Thus, by a presumption contrary to constitutional, statutory and judicial law, a property tax by property type, class, or category was established, and, by procedural and evidentiary revisions governing assessment inequality proceedings, this new tax structure was imposed.

Convinced that subdivision 3 of section 307, in effect, created a new and different property tax from that previously imposed, I must agree with the majority that subdivisions 4 and 5 of that section authorizing an unlimited retroactive application of subdivision 3 to all pending assessment proceedings renders all three subdivisions (3, 4 and 5) unconstitutional.

I would add that subdivision 3 effects a substantive change in New York’s property tax structure. It does so by *422way of implication in a statute facially concerned with pleading requirements. As a result, there is authorized an inherently vague, indefinite, inconsistent and unpredictable tax, though one of major import, considering its almost universal application. Such a tax by property type or category, absent any specifications of the various types or categories contemplated, and absent procedures (presumably administrative) for their establishment based on clear statutory definitions, necessarily lacks uniformity and equality. Thus, property owners are deprived of substantive due process and equal protection of the laws. For this reason, subdivision 3 of section 307 cannot be constitutionally sustained.

For the foregoing reasons, I agree that subdivisions 3, 4 and 5 of section 307 of the Real Property Tax Law are unconstitutional and vote to affirm.

Cohalan and O’Connor, JJ., concur with Lazer, J. P.; Mangano, J., concurs with the result, in a separate opinion.

Order of the Supreme Court, Nassau County, entered January 31, 1979, affirmed insofar as appealed from, without costs or disbursements.

I should note that even greater confusion may have been created by subsequent amendments to the Real Property Tax Law. By section 2 of chapter 126 of the Laws of 1979, subdivision 3 of section 720 was amended to delete any reference to the State equalization rate as admissible evidence in inequality proceedings. This amendment, however, expired on December 31, 1980 (L 1979, ch 126, § 4). Therefore, since section 2 of chapter 126 of the Laws of 1979 repealed former subdivision 3 of section 720, and since the 1979 repealing statute has now expired, the current version of section 720 is without a subdivision 3, there being nothing to indicate the Legislature’s intent that former subdivision 3 be revived. (See Village of Rome v Knox, 14 How Prac 268, 275; McKinney’s Cons Laws of NY, Book 1, Statutes, § 374.) Thus, when subdivision 3 of section 307 of the Real Property Tax Law which is now due to expire on May 15, 1981 (L 1980, ch 880, § 3), refers to subdivision 3 of section 720, the reference is meaningless. Furthermore, a real gap may have been created in the rules governing the admissibility of evidence in inequality proceedings. If additional legislation is not enacted, this will have to be filled in by courts applying common-law rules of evidence.