ADVISORY OPINION 1987-6
1.) An attorney represents a property owner before the New York City Tax Commission in a tax certiorari protest seeking to reduce the client/property owner's real estate tax assessment set by the Department of Finance. In a tax certiorari protest proceeding, a hearing is held before a tax commissioner or an administrative hearing officer of the Tax Commission. The City is represented by the Finance Department which presents evidence that the taxpayer's real estate tax assessment is correct, while the attorney for the taxpayer presents evidence to show why the assessed value should be reduced.
The City Charter specifies four possible grounds for correction of assessed valuations of real estate: unequal; excessive; unlawful; and misclassified. The Commissioner or hearing officer notes his or her determination on the face of the application either "confirming" the assessment, (no reduction), or offering to reduce it by a specified amount.
2.) A not-for profit organization seeks review, by the Tax Commission, of a denial, by the Department of Finance, of applications requesting exemption from real property tax. The Tax Commission staff examines and develops the factual issues which have resulted in a denial, and a decision to ratify or reverse the denial is rendered. Whenever the Commission needs further information to develop the facts upon which its exemption decision will be based, a hearing, at which the applicant's representative must appear, is scheduled. In doubtful cases or cases of first impression, a hearing is held before the full Commission.
(1) Is the representation of a client in a tax certiorari protest proceeding before the Tax Commission, "lobbying" or "lobbying activity" under N.Y.C. Ad. Code Sec. 3-211?
(2) Is the representation of a client in an application to the Tax Commission, for a review of a denial by the Department of Finance of a tax exemption from real property taxes, "lobbying" or "lobbying activity" under N.Y.C. Ad. Code Sec. 3-211?
Subchapter 2 of Chapter 2 of Title 3 of the New York City Administrative Code Section 3-211(a) defines a lobbyist as "any person or organization retained, employed, or designated by any client to engage in lobbying." "Lobbying" or "lobbying activity" is defined as "any attempt to influence any determination of a board or commission other than a determination in an adjudicatory proceeding." Ad Code Secs. 3-211(c), 3-211(c)(2) (iv). Thus, those persons who attempt to influence the determination of a board or commission are engaged in lobbying with the exception of those whose efforts are confined to adjudicatory proceedings, and who are therefore excluded from the Lobbying Law's requirement of registration and prohibition of contingent fees. Ad. Code Sec. 3-213 et. seq.
Accordingly, to determine whether a tax certiorari proceeding before the Tax Commission, and a review by the Tax Commission of a denial of a tax exemption by the Department of Finance, are adjudicatory proceedings under Local Law 14 of 1985, the following factors are to be applied:
(1) Does the board or commission conducting the proceeding have clearly limited discretion in reaching a determination, in other words, is it limited by law to consideration of certain delineated criteria or a few narrow questions?
(2) Does the proceeding determine the legal rights, duties, or privileges of, at most, a few individuals?
(3) Is participation in the proceeding limited by law to those with a clearly defined interest? This criterion, analogous to standing, constitutes a common-sense distinction between judicial and legislative proceedings. Any citizen, no matter how removed from an issue from a "standing" perspective, may seek legislative action or otherwise participate in the legislative process.
(4) Does the proceeding have any unique characteristics supporting a final determination that it is, or is not, adjudicatory?
In applying the first factor, the Charter carefully defines the questions to be considered by the Tax Commission: "The grounds for review of an assessment shall be that the assessment complained of is excessive, unequal, or unlawful, or that the real property is misclassified". City Charter Section 163 subd. c. (See also Sections 164-b subd. c, 164-b subd. a.).
Second, the Commission's proceedings directly affect only an individual assessment. The Charter permits any "person or corporation claiming to be aggrieved by the assessed valuation of real property" to apply for correction of the assessment. Charter Section 163 subd. b. This language is virtually identical to the "standing" requirement for judicial review of assessment under Article 7 of the Real Property Tax Law. Real Property Tax Law Section 704 subd. 1. See also Ad. Code Section 11-231.
That requirement has been construed by case law as limiting the right to challenge assessments to persons sustaining a direct injury, or otherwise adversely affected. Suburbia Federal Savings and Loan Association v. Mayor of the Incorporated Village of Lynbrook, 76 A.D. 2.d 841 (2nd Dept.1980), motion for leave to appeal denied 52 N.Y. 2.d 702; Mack v. Assessor of the Town of Ramapo, 72 A.D. 2.d 604 (2nd Dept.1979). Therefore, the number of persons who may challenge an assessment is limited, often to just one person, namely, the one who is most affected.
Third, while the Commission may hear from anyone it chooses under Sec. 164, the narrow scope of permissible inquiry in practice limits the number of possible witnesses. No one other than the applicant has a right to be heard at the hearing, since the Charter does not provide for a public hearing, in sharp contrast to the procedure for zoning permits at the Board of Standards and Appeals and the City Planning Commission.
Additionally, there are special considerations relating to court review and procedural rules. While the Tax Commission itself serves as a quasi-appellate body, its decisions are not given the weight usually afforded administrative bodies; review is generally de novo under Article 7 of the Real Property Tax Law (with an apparently growing exception for review of a denial of a claim of tax exempt status under Article 78 of the CPLR). This procedure, while unusual with respect to an administrative finding, was, however, apparently implemented in order to streamline the review process, and does not suggest that the Tax Commission's administrative determinations are in any way unreliable. See Malara v. City of Yonkers, 11 Misc. 2d 488, 489-490 (Sup. Ct.Westchester Co. 1958). In any case, this aspect is counterbalanced by the fact that taxpayers, in order to preserve their right of judicial review, must file an application with the Commission (Charter sections 163 subd. f, 166), and in so doing they are quite obviously responding to the government's initial action of property assessment. More generally, to classify as "lobbying" a right of protest against an annual assessment may well be inappropriate.
In addition, the Commission's powers under Sec.164 of the Charter, including the power to subpoena witnesses and to hear their testimony and that of the applicant under oath, are very similar to those of judicial bodies. This section even specifically authorizes the Commission to promulgate rules of practice, also a characteristic of judicial bodies.
In consideration of the above factors, it is the opinion of the City Clerk that a tax certiorari protest proceeding and a tax exemption determination before the Tax Commission are adjudicatory proceedings, and are not lobbying under Ad. Code Section 3-211(c)(1)(vii). Therefore, those who practice before the Tax Commission are not required to register as lobbyists with this office.
CARLOS CUEVAS City Clerk of the City of New York
KATHERINE E. TIMON Counsel
TIMOTHY MCFARLAND Assistant counsel
*Based upon a Law Department Memorandum dated May 6, 1987 by David Goldenberg, Esq. and Spencer Fisher, Esq., Division of Legal Counsel.