Opinion 94 - 26


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.


BUSINESS IMPROVEMENT DISTRICTS -- Assessments (computation of limit on) -- Establishment (by town within village)

REAL PROPERTY TAXES AND ASSESSMENTS -- Assessments (limitation on in BID)

TOWNS -- Powers and Duties (establishment of BID within village)

GENERAL MUNICIPAL LAW, 980-b, 980-k: A town may establish a business improvement district, the boundaries of which include area within one or more villages within the town. When a town establishes a business improvement district which includes area within one or more villages, the limitation on district assessments in section 980-k is computed with reference to general town taxes within the district.

You ask whether a town may establish a business improvement district, the boundaries of which include area within a village located within the town. If so, you also ask whether the computation of the maximum amount of the district charge pursuant to General Municipal Law, 980-k is made by reference to the levy of town taxes or village taxes within the area of the town within the village.

Article 19-A of the General Municipal Law (980 et seq.; L 1989, ch 282 as amended) governs the establishment, operation and financing of business improvement districts. Pursuant to General Municipal Law, 980-b, every "municipality" is authorized to adopt a local law, subject to permissive referendum, to provide for the provisions of article 19-A to be applicable to the establishment or extension of business improvement districts in the municipality. For purposes of article 19-A, the term municipality is defined to mean a city, town or village within New York State (General Municipal Law, 980[g]). Prior to the enactment of article 19-A, only cities were authorized to establish business improvement districts (see former General City Law, 24-a et seq., repealed by L 1989, ch 282).

It is a general rule that, unless otherwise provided by State statute, a town's authority to perform its functions extends over the entire area of the town, including the area of villages within the town (see, e.g., 1994 Opns St Comp No. 94-10, p ___; 1989 Opns St Comp No. 89-61, p 135; 1980 Opns St Comp No. 80-334, p 98; Village of Ardsley v Town of Greenburgh, 79 AD2d 628, 433 NYS2d 626 mod 55 NY2d 915, 449 NYS2d 27). This general principle applies even when a village also is authorized to perform the same or similar functions (see, e.g., Opn No. 94-10, supra; 1988 Opns St Comp No. 88-69, p 137). Article 19-A does not limit the authority of a town to establish a business improvement district to within only the area of the town outside of villages (cf. Town Law, 190, which authorizes towns to establish improvement districts under article 12 of the Town Law only outside of villages unless the village, by local enactment subject to permissive referendum, consents to be wholly or partly included within the district). Accordingly, it is our opinion that a town may establish a business improvement district, the boundaries of which include area within one or more villages within the town.

General Municipal Law, 980-k prescribes "tax and debt limitations" with respect to business improvement districts. Subparagraph b of section 980-k provides that the charge upon benefited properties to finance the expense of the business improvement district, exclusive of debt service, levied in a given year may not exceed twenty percent of the total "general municipal taxes" levied in that year against the taxable real property in the district. It further provides that the district charge so levied shall be included in the total amount that the "municipality" is permitted by law to raise in that year by real property tax. It is evident that the terms "municipal taxes" and "municipality" as used in General Municipal Law, 980-k refer back to the municipality which has established the district (see former General City Law, 24-m[b], the predecessor statute to General Municipal Law, 980-k[b], which provided a "tax limit" of 20% of the total "general city taxes" levied against the taxable real property within the district). Accordingly, when a town establishes a business improvement district which includes area within one or more villages, the limitation on district assessments in section 980-k is computed with reference to general town taxes within the district.

December 27, 1994
Patricia Lamb McCarthy Deputy Comptroller