Opinion 88-57

This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

WATER RENTS -- Rates (schedule of rates may include a classification under which low income senior citizens are charged at a reduced rate)

CONSTITUTIONAL LAW -- Equal Protection (classification of users based on age and income)

TOWN LAW, §198(3)(d); State Constitution, Article 1, §11: A town board, on behalf of a water district, may establish a schedule of water rates including a classification under which senior citizens meeting certain income criteria are charged at a reduced rate.

You ask whether a town, on behalf of a water district, may establish a schedule of water rates under which senior citizens who meet certain income criteria are charged at a reduced rate.

Section 198(3)(d) of the Town Law provides that the town board shall have the power, with respect to a water district, to establish the water rates to be paid by consumers. In establishing such rates, a town board may fix different classifications of consumers and apply a different rate schedule to each classification, provided the classifications and the rates applicable comply with constitutional equal protection guarantees (24 Opns St Comp, 1968, p 728; 8 Opns St Comp, 1952, p 281; NY Const, Art I, §11; US Const, 14th Amendment). Classifications granting preferential treatment to a particular class of persons have been found to be permissible where the classification has a rational basis and is not arbitrary, where there is uniformity within the class, and where the classification bears some substantial and rational relationship to the accomplishment of a legitimate governmental purpose (see, e.g., Maresca v Cuomo, 64 NY2d 242, 485 NYS2d 724; People v Ditniak, 28 NY2d 74, 320 NYS2d 25; Town Board of the Town of Poughkeepsie v City of Poughkeepsie, 22 AD2d 270, 255 NYS2d 549).

Generally, this Office will not attempt to evaluate the constitutional validity of particular classifications proposed by a municipality in connection with local legislation (see 1981 Opns St Comp No. 81-8, p 8; 1979 Opns St Comp No. 70-649, p 125). Typically, each classification is unique, involving legislative determinations which must be made in light of all facts and circumstances relating to the justification for the legislative enactment and upon consideration of concepts of equal protection and freedom from discrimination as guaranteed by the State and Federal Constitutions. However, with respect to the instant proposed classification, we note that there is judicial precedent upholding a local law granting preferential treatment to senior citizens meeting certain income qualifications.

In Parrino v Lindsay, 29 NY2d 30, 323 NYS2d 687, the Court of Appeals upheld the validity of a local law which exempted designated senior citizens from rent increases in rent controlled apartments in New York City, stating that:

"...'the standards of equal protection are met if a classification, or distinction among classes has some rational basis.' (citations omitted). Certainly, the classification effected by the local law under consideration has such rational basis; it has a substantial relation to a legitimate public purpose, namely, the prevention of severe hardship to aging senior citizens resulting from the shortage of low and moderately priced housing accommodations. As bearing on the reasonableness of a classification based on age or income, we but note the many laws which provide for public assistance, social security payments, reduction in real estate taxes for elderly home owners and double exemption on the computation of Federal, State and city income taxes and other protective legislation based wholly on age or economic need of the recipient." (29 NY2d at 35; 323 NYS2d at 692)

Based on the decision in Parrino, supra, this Office previously concluded that a city local law granting a partial exemption from water rents to senior citizens who earned no more than a certain amount per year prescribed a permissible classification (Opn No. 81-8, supra). It should also be particularly noted in this regard that the State Legislature, as mentioned in Parrino, supra, has authorized municipal corporations to provide real property tax exemptions to senior citizens who meet certain income criteria (Real Property Tax Law, §467). This statute, like all legislative enactments, carries a strong presumption of constitutionality (see, e.g., Cook v City of Binghamton, 48 NY2d 323, 422 NYS2d 919) and, therefore, is a further indication that granting preferential treatment to senior citizens based on income criteria in this case is a permissible classification. Thus, we conclude in this instance, based on Parrino, supra and the treatment afforded senior citizens under analogous provisions of state law, that granting preferential treatment with respect to water district water rents to senior citizens who meet certain income criteria is a permissible classification.

Accordingly, it is our opinion that the town may, by adopting an appropriate ordinance or resolution, establish a schedule of water rates which charges senior citizens meeting certain income criteria at a reduced rate. However, while we conclude that a town may grant preferential treatment to the senior citizens, whether any particular proposed rent schedule meets constitutional equal protection requirements is a question of fact to be determined by town officials in light of the general principles discussed above.

December 7, 1988
Kenneth I. Davies, Supervisor
Town of Saranac