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Appellate court confirms Lewis County can tax Lowville’s water plant property


LOWVILLE — A state appellate court has upheld a lower court’s determination that Lewis County is not bound by a 1998 agreement with Lowville granting a tax exemption for the village’s water treatment plant property.

In a ruling released Friday, the Appellate Division, Fourth Department, affirmed state Supreme Court Judge Hugh A. Gilbert’s August 2012 ruling dismissing the village’s complaint regarding a County Board of Legislators agreement with the village that said the village-owned property located outside of the village “is declared wholly exempt from taxations of the county.”

The 1998 agreement, signed by then-Mayor Danny L. Salmon, now a village trustee, and the late Ralph K. “Pete” Farney, then Legislature chairman, granted the village a tax exemption for its water treatment plant. The exemption agreement provided that the village would receive a tax exemption for as long as the water treatment plant property is used for a “public purpose” that satisfies the tax-exempt requirements of state Real Property Tax law, which governs exemptions for municipalities on properties owned outside the municipality’s boundaries.

The exemption agreement further provided that an amendment to the state tax law, some “other legislative change” or a final court order subjecting the property to taxation could modify the obligations of the parties to comply with terms of the amendment, legislative change or court order. In 2011, after conducting a study of its tax-exemption policies, the Board of Legislators passed a resolution to phase out all tax exemptions for municipal water and sewage treatment facilities, including the village’s. In 2012, the board voted on a resolution that would grant an exemption solely to the village while continuing to phase out the exemptions for all other municipalities, but the resolution did not pass.

The appellate court agreed with Judge Gilbert that the board’s adoption of the 2011 resolution phasing out all tax exemptions for municipal water and sewage treatment facilities constituted a “legislative change” within the meaning of the exemption agreement between the county and the village. The appellate jurists wrote that the county board is a legislative body that exercises the county’s power “through a local law or resolution duly adopted by the board.”

The appellate court ruled that the exemption agreement “specifically” provides that a legislative change “shall modify the obligations of the parties to comply with such legislative change,” meaning the village’s property can be taxed.

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