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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

FEES -- Exemption from (housing authority)

PUBLIC HOUSING AUTHORITIES -- Fees (exemption from cable television franchise fees)

PUBLIC HOUSING LAW, §52; EXECUTIVE LAW, §§818, 819: The amount billed by a cable television company to a municipal housing authority as a "pass through" to the customer of a franchise fee imposed upon the cable company by a city is not a municipal "fee" falling within the exemption of Public Housing Law, §52.

You ask whether a housing authority is exempt from paying that portion of its cable television bill which is designated as a "franchise fee". You state that the city in which the cable company is located imposes a 5% franchise fee and the cable company has chosen to pass the amount of the fee along to its customers as a separately designated billing item.

Initially, we note that for purposes of this opinion, we have assumed that the company in question has authority to include the fee as a separate item on its customers' bills. Since the State Commission on Cable Television has broad authority in connection with the cable television industry (see Executive Law, §§815, 816), we believe that questions concerning the ability of a cable television company to "pass through" a municipal franchise fee to its customers are more appropriately addressed to that agency.

Public Housing Law, §52(1) sets forth an exemption for municipal housing authorities from certain taxes and fees and provides that a municipal housing authority:

... shall be exempt from the payment of (a) any taxes or fees to the state or any subdivision thereof and (b) any fees to any officer or employee of the state or of any subdivision thereof, except where it is provided by or pursuant to law that such officer or employee is personally entitled to such fees as compensation for services rendered or performed by him in his official capacity.

Thus, the exemption in Public Housing Law, §52 applies only to fees paid by a public housing authority "to the state or any subdivision" or to "any officer or employee of the state or of any subdivision thereof".

Cities are authorized to grant franchises to cable television systems providing service within the municipality and to charge franchise fees to the cable system (General City Law, §§20[10], 23; Executive Law, §§818, 819). Thus, the franchise fee in question is imposed upon the cable company by the municipality, and is paid by the company to the municipality, for the rights obtained under the franchise. It, therefore, is not a fee imposed upon the housing authority by the municipality within the scope of section 52.

The fact that the cable company has chosen to pass the amount of the fee through to its customers as a cost of doing business, by separately listing a portion of the amount of the fee on its customers' bills, does not alter the nature of the fee. The recoupment of the fee by means of this "pass through" does not shift liability for the fee from the company to the housing authority or render the fee payable by the housing authority to the municipality (cf. Burnside Coal v City of New York, 135 AD2d 413, 521, NYS2d 703, lv dsmd 71 NY2d 890, 527 NYS2d 771, discussing the nature of the gross receipts tax pursuant to Tax Law, 300 et seq. as a "pass through" cost of doing business).

Accordingly, the amount billed by the cable television company to the municipal housing authority as a "pass through" to the customer of a franchise fee imposed upon the cable company by a city is not a municipal "fee" falling within the exemption of Public Housing Law, §52.

February 16, 1995
Andrew P. Zweben, Esq., Counsel
Kingston Housing Authority