Court Opinion

ID: 5847809
Source: CourtListenerOpinion
Date Created: 2022-01-12 23:51:16.790232+00
Date Added: 2024-06-11T08:43:58.644151
License: Public Domain

Titone, J. P. (dissenting).
In my opinion neither my colleagues nor Special Term took sufficient cognizance of a crucial fact in this case, to wit, that Newsday did not comply in timely fashion with an essential statutory prerequisite to the granting of an exemption by the appellant school district. Specifically, section 485-b of the Real Property Tax Law sets forth the following requirements or conditions before an exemption may be secured thereunder:
“2. * * * (b) No such exemption shall be granted unless “(1) such construction, alteration, installation or improvement was commenced subsequent to the first day of January, nineteen hundred seventy six; and
“(2) the cost of such construction, alteration, installation or improvement exceeds the sum of ten thousand dollars * * *
“3. Such exemption shall be granted only upon application by the owner of such real property on a form prescribed by the state board.” (Emphasis supplied.)
It is evident from the record that Newsday did comply with the first two prerequisites under section 485-b (subd 2, par [b]). However, it is likewise undisputed that although it had ample opportunity to do so, Newsday did not apply for an exemption prior to the school district exercising its statutory authority to “reduce the per centum of exemption otherwise allowed” (Real Property Tax Law, § 485-b, subd 7). One entitled to the benefit of an exemption must manifest his acceptance of the grant in order to obtain the benefits and, in particular, must comply with all valid and reasonable conditions imposed by the statute (84 CJS, Taxation, § 224; First Unitarian Church of Los Angeles v County of Los Angeles, 48 Cal 2d 419; see Snapp v Neal, 250 Miss 597). Where a statute granting an exemption conditions its enjoyment on the existence of certain facts, an exemption does not attach until the performance of such conditions. In determining what are the requirements of a conditional grant, the rule of strict construction against the grantee applies (84 CJS, Taxation, § 227).
The majority is correct when it asserts that, as originally *255enacted, a local school district had unrestricted power under subdivision 7 of section 485-b to reduce or eliminate a tax exemption that it had already granted; and that to eliminate such an inequity, the Legislature, in 1977, amended subdivision 7 by adding the words “provided, however, that exemptions existing prior in time to passage of any such local law or resolution [reducing or eliminating the exemption] shall not be subject to any such reduction so effected.” (L 1977, ch 397; emphasis supplied.) However, what the majority does not address or controvert is that the power, inter alia, of a school district to reduce the percentum of exemption under the law was not abrogated by the subject amendment. Simply stated, the amendment only prohibits the exercise of such power where an exemption is extant, or where previously there had been compliance with the statutory prerequisites. It did not proscribe the right of a municipality to “opt out” of the tax incentive program before an exemption under section 485-b vested. Where an amendment leaves portions of the original act unchanged, such portions are continued in effect with the same meaning and effect as they had before the amendment (McKinney’s Cons Laws of NY, Book 1, Statutes, § 193; Robinson v County of Broome, 195 Misc 24, affd 276 App Div 69, affd 301 NY 524; 82 CJS, Statutes, § 384). The existing law is not presumed to be changed further than is necessarily implied from the language used in the amendatory act (McKinney’s Cons Laws of NY, Book 1, Statutes, § 193; Woollcott v Shubert, 217 NY 212; Rawn v l4 East 60th St. Hotel Corp., 126 Misc 247).
Contrary to the position taken by the majority, I attach no significance favorable to Newsday from the fact that in September, 1978 the Tax Assessor for the Town of Huntington, advised Newsday’s representative, in response to the latter’s inquiry, that an application for 9 tax exemption with respect to Newsday’s new plant for the next taxable year had to be filed by June 1, 1979. (See Suffolk County Tax Act, § 5, L 1920, ch 311, as amd by L 1970, ch 107.) Such query and response simply related to the deadline for filing an application under section 485-b in order to qualify for an exemption commencing the next taxable year, as is evidenced by the following language contained in subdivi*256sion 3 of that section: “The original of such application shall be filed with the assessor of the city, town, village, or county having the power to assess property for taxation on or before the appropriate taxable status date of such city, town, village or county.” (Emphasis supplied.)
In alluding to the fact that the appellant school district passed a resolution on November 22,1976 adopting, in principle, the policy enunciated in the subject exemption law, both the majority and Special Term seemingly attach to such action a significance favorable to respondent’s cause. In my opinion such resolution was at most a statement of policy on the part of the membership of the appellant school district at that time. In no way should it be construed as inhibiting members of that body from “opting out” of such program at some future time under rights expressly granted to it pursuant to subdivision 7 of section 485-b. The mere abolition of an opportunity to take measures to become free of a tax pursuant to law, violates no rights (cf. People ex rel. Haim v Chapman, 274 App Div 132). Legislation readjusting rights and burdens is not unlawful because it upsets otherwise settled expectations (Usery v Turner Elkhorn Min. Co., 428 US 1, 16).
Special Term declared that it made no finding on plaintiff’s claim of equitable estoppel. The majority also asserts that the resolution of the issue herein does not depend upon an improper application of the doctrine of equitable estoppel. However, contrary to the position taken both by the majority and Special Term, it is evident that such theory controlled the latter’s determination as reflected by the following excerpts taken from its opinion:
“The settled purpose of 485-b was to encourage business development in this state by providing tax exemptions to those who would build, expand or improve their industrial, business and commercial facilities.
“When this purpose was jeopardized by the local option provision of subd. 7 of the 1976 enactment, the legislature responded by an amendment which prohibited the dilution or elimination by local law or resolution of any existing exemption * * *
“And yet the defendant School Board urges such a hold*257ing upon this court. It would interpret the language of 485-b to mean that even if the construction were completed at considerable cost in excess of $10,000, the exemption could be denied by its unilateral action at any time before June 1 of that year, the taxable status date in the town of Huntington.
“The entrepreneur would enjoy no counter protective options * * *
“A major building project, such as we have here, which proceeds to construction involves considerable effort, expense and commitments which are not, as a practical matter, interruptible and certainly not reversible. An owner who proceeds at his own risk, would be hostage to one or more of the local taxing units who may care to respond to or anticipate political and populist demands for an expansion of the tax base.”
In order to establish a right to equitable estoppel against a municipality, the allegedly aggrieved party must demonstrate (1) lack of knowledge and the means of knowledge of the truth as to the facts in question, (2) reliance upon the conduct of governmental personnel, and (3) action based thereon by the aggrieved of such a character as to change its position prejudicially (Quaglia v Incorporated Vil. of Munsey Park, 54 AD2d 434, 440, affd 44 NY2d 772). Succinctly put, the issue involved, as gleaned from Special Term’s opinion and from the opinion of the majority, is whether it would be inequitable to permit the governmental body herein to repudiate its prior conduct (Reichenbach v Windward at Southampton, 80 Misc 2d 1031, affd 48 AD2d 909, mot for lv to app dsmd 38 NY2d 912).
With respect to the first criterion’ i.e., lack of knowledge and of the means of obtaining the knowledge of the facts in question (Quaglia v Incorporated Vil. of Munsey Park, supra), it is axiomatic that Newsday is charged with the knowledge of the provision under subdivision 7 of section 485-b which permits a municipality and a school district to withdraw from the exemption program, with respect to those whose rights had not vested prior to such withdrawal.
As to the second criterion of equitable estoppel, i.e., reliance upon conduct of municipal officials, Newsday argues *258that it came within its purview in that it relied upon the express invitation, as set forth in the resolution of November 22, 1976, to locate within the boundaries of the appellant school district. In effect, Newsday is asserting that such resolution was an assurance by the school district that the levels of exemption provided in section 485-b of the Real Property Tax Law would be maintained forever. However, the passage of the 1976 resolution did not prohibit the school district, as then composed or as constituted in the future, from exercising the statutory right to reduce partially or totally the percentum of exemption. A municipality as well as a school district, when acting on behalf of the State and the taxpayers affected, is charged with the statutory responsibility to determine the public need for the continuance of its grant of exemptions under the circumstances at any given time. Memberships of school districts and boards of education change constantly, as do the policies of such bodies, especially when additional economic demands are placed on them to provide quality education for those under their jurisdiction. The statutory freedom conferred by statute on the appellant school district to withdraw from the tax exempt program herein cannot be constrained by some prior, nonfinal and conditional determination, on any theory of equitable estoppel (cf. Matter of Hamptons Hosp. & Med. Center v Moore, 52 NY2d 88). Estoppel does not lie against the State, its municipalities or their agencies, where the governmental body was exercising its statutory or regulatory authority, notwithstanding any representation or opinion by any of the body’s officers or employees (Matter of Gavigan v McCoy, 37 NY2d 548, 552). Rates and levels of taxation are the staples of each legislative session. Hence, a prior legislative body is powerless to bind its successors (Matter of Roosevelt Raceway v Monaghan, 9 NY2d 293). A resolution or proposition representing a change in thinking by a governmental entity with respect to a tax abatement or exemption may be the result of a recognized change in conditions or a recognition that the original proposed grant was excessive. In either event correction is permissible (cf. Matter of London v Wagner, 22 Misc 2d 360, 364).
Finally, in connection with the third criterion needed to *259establish equitable estoppel, to wit, action taken by a party in reliance upon the conduct of a municipality, which prejudicially changes the position of such party, nowhere in Newsday’s moving papers for summary judgment is there documentary evidence of an undisputed nature which demonstrates that in deciding to build its plant in the Town of Huntington, it relied on the school district’s participation in the tax exemption program. At most the self-serving statements of Newsday on this issue in its pleadings raise a question of fact which would preclude the granting of summary judgment.
For the reasons set forth above, I believe the order of Special Term granting plaintiff summary judgment should be reversed and summary judgment granted appellants.
Gulotta and Hargett, JJ., concur with Gibbons, J.; Titone, J. R, dissents and votes to reverse the order, deny plaintiff’s motion for summary judgment and grant summary judgment to appellants, with an .opinion.
Order of the Supreme Court, Suffolk County, entered April 8, 1980, affirmed, with $50 costs and disbursements to plaintiff payable by appellants.