§ 556. Refunds and credits of taxes. 1. (a) Pursuant to the provisions
of this section, an appropriate tax levying body may refund to any
person the amount of any tax paid by him or her, or portion thereof, as
the case may be, or may provide a credit against an outstanding tax (i)
where such tax was attributable to a clerical error or an unlawful entry
and application for refund or credit is made within three years from the
annexation of the warrant for such tax, or (ii) where such tax was
attributable to an error in essential fact, other than an error in
essential fact as defined in paragraph (d) of subdivision three of
section five hundred fifty of this title, and such application for
refund or credit is made within three years from the annexation of the
warrant for such tax.

(b) For each year for which a refund or credit is granted pursuant to
the provisions of this section by reason of the existence of an unlawful
entry as defined by paragraph (b) of subdivision seven of section five
hundred fifty of this title, the assessor of the assessing unit in which
the subject real property is actually located, but has been omitted from
the assessment and tax rolls of such assessing unit, or a school
district or special districts located therein, shall have the authority
to enter such real property on the current assessment roll in accordance
with the provisions of section five hundred fifty-one of this title,
notwithstanding any time limitation contained in such section.

2. (a) Whenever it appears to a person who has paid a tax that such
tax, or a portion thereof, was attributable to an unlawful entry, a
clerical error, or an error in essential fact, as described in
subdivision one of this section, such person may file an application in
duplicate, including any available proof of the error, with the
appropriate county director of real property tax services for a refund
of such tax, or portion thereof, as the case may be.

(b) Whenever it appears to a person who is an owner of a parcel which
is subject to an outstanding tax, that such tax, or a portion thereof,
was attributable to an unlawful entry, a clerical error, or an error in
essential fact, as described in subdivision one of this section, such
person may file an application in duplicate, including any available
proof of the error, with the appropriate county director of real
property tax services for a credit of such tax, or portion thereof.

(c) For an error in essential fact, the application for correction
shall include a copy of the property record card, field book, or other
final work product upon which the incorrect assessment was based and a
copy of any existing municipal record which substantiates the occurrence
of the error. For an unlawful entry as defined in paragraph (a) of
subdivision seven of section five hundred fifty of this title, the
application for correction shall include a statement by the assessor or
by a majority of a board of assessors substantiating that the assessor
or assessors have obtained proof that the parcel which is the subject of
the application should have been granted tax exempt status; the failure
to include such statement shall render the application null and void and
shall bar the tax levying body from directing a refund or credit of
taxes pursuant to this section.

3. The application for a refund or credit pursuant to this section
shall be on a form and shall contain such information as prescribed by
the commissioner and shall be available in the offices of all collecting
officers and in the office of the county director.

4. (a) The county director, within ten days of the receipt of an
application filed pursuant to this section, shall investigate the
circumstances of the claimed unlawful entry, clerical error or error in
essential fact to determine whether the error exists, and on such
investigation he may require and shall receive from any officer,
employee, department, board, bureau, office or other instrumentality of
the appropriate municipal corporation such facilities, assistance and
data as will enable him to properly consummate his studies and
investigations hereunder.

(b) Upon completion of such investigation the county director shall
immediately transmit a written report of such investigation and his or
her recommendation for action thereon, together with both copies of the
application, to the tax levying body. If the same alleged error also
appears on a current assessment roll, the county director shall also
file a copy of such report and recommendation with appropriate assessor
and board of assessment review who shall consider the same to be the
equivalent of a petition for correction filed with such board pursuant
to section five hundred fifty-three of this title.

5. The tax levying body, at a regular or special meeting, upon the
presentation of an application filed pursuant to this section and the
written report described in subdivision four of this section, shall:

(a) examine the application and report to determine whether the
claimed unlawful entry, clerical error or error in essential fact
exists;

(b) reject an application where it is determined that the claimed
unlawful entry, clerical error or error in essential fact does not exist
by making a notation on the application and the duplicate copy thereof
that the application is rejected and the reasons for the rejection;

(c) approve an application where it is determined that the claimed
unlawful entry, clerical error or error in essential fact does exist by
making a notation on the application and the duplicate copy thereof that
the application is approved and by entering thereon the amount of the
refund to be paid or outstanding tax to be credited;

(d) mail an application that has been rejected to the applicant;

(e) mail an application that has been approved to the applicant.

6. (a) The amount of any tax refunded or credited pursuant to this
section shall be a charge upon each municipal corporation or special
district to the extent of any such municipal corporation or special
district taxes that were so refunded. Amounts so charged to cities,
towns and special districts shall be included in the next ensuing tax
levy.

(b) In raising the amount of a refund or credit pursuant to this
section of a relevied school tax the appropriate tax levying body shall
charge back against the school district which levied such tax the amount
of the refund or credit which shall not exceed the amount paid by the
county treasurer to such school district upon the return of such tax.
The amount so charged against such school district shall be deducted by
the county treasurer and withheld from any moneys which shall become
payable by him to such school district by reason of taxes which shall
thereafter be returned to him by such school district. No such charge
shall be made by the county legislative body against a school district
unless ten days' notice thereof by mail has been given to the school
authorities thereof. Notice that such deduction will be made shall
thereafter be given by the county treasurer in writing to such school
authorities on or before the first day of May prior to the making of
such deduction.

7. The powers and duties imposed by this section upon the county
director of real property tax services shall be performed by such
officer for taxes levied for county, city, town, special district and
school district purposes except that (a) in the case of counties having
the power to assess real property for tax purposes such powers and
duties shall be performed by the chief assessing officer or the chairman
of the county board of assessors and, (b) in the case of villages, for
village tax purposes, such powers and duties shall be performed by the
village assessor or the chairman of the village board of assessors;
provided, however, that if the village has enacted a local law as
provided in subdivision three of section fourteen hundred two of this
chapter, the county director shall perform the powers and duties imposed
upon such officer by this section on behalf of such village.

8. (a) A tax levying body may, by resolution, delegate to an official
who is empowered to authorize payment of bills without prior audit by
such body or, in the event there is no official so empowered, to an
official responsible for the payment of bills upon audit of the
appropriate municipal corporation so designated by it, the authority to
perform the duties of such tax levying body, as provided in this
section. Such resolution shall only be in effect during the calendar
year in which it is adopted and shall designate that such delegation of
authority is applicable only where the recommended refund or credit is
twenty-five hundred dollars or less, or such other sum not to exceed
twenty-five hundred dollars.

(b) Where such resolution is adopted and the recommended refund or
credit does not exceed the amount specified in the designating
resolution, the county director shall transmit the written report of the
investigation and recommendation, together with both copies of the
application, to the official designated by the tax levying body. Upon
receipt of the written report, the designated official shall follow the
procedure which the tax levying body would follow in making refunds,
provided, however, where the designated official denies the refund or
credit, in whole or in part, such official shall transmit to the tax
levying body for its review and disposition pursuant to subdivision five
of this section the written report of the investigation and
recommendation of the county director, together with both copies of the
application and the reasons that the designated official denied the
refund or credit. Where the recommendation of the county director is to
deny the application or the refund or credit requested is in an amount
in excess of the amount authorized in the enabling resolution, the
county director shall transmit the written report of the investigation
and recommendation, together with both copies of the application, to the
tax levying body.

(c) On or before the fifteenth day of each month, the designated
official shall submit a report to the tax levying body of the refunds or
credits processed by such official during the preceding month. Such
report shall indicate the name of each recipient, the location of the
property and the amount of the refund or credit.

(d) In no case shall the total sum of such refunds or credits approved
by the designated official exceed the amount appropriated therefor by
the tax levying body.

9. In the event that an appropriation for a refund authorized pursuant
to this section is included in the annual budget next adopted after
approval of such refund, interest shall be added to such refund computed
from the date that the application is approved pursuant to subdivision
five or eight of this section.

10. When a portion of an outstanding tax has been credited pursuant to
this section, any interest and penalties that have been imposed thereon
shall be reduced to the extent that such interest and penalties were
attributable to the credited portion of the tax, and no additional
interest and penalties shall be imposed if the corrected amount of the
tax is paid within eight days of the date on which the notice of
approval is mailed pursuant to paragraph (e) of subdivision five of this
section.