In the Matter of Hague Corporation, Respondent,v.Empire Zone Designation Board, et al., Appellants.

Brief

N.Y.April 23, 2013

Court of Appeals of the State of New York In the Matter of the Application of THE HAGUE CORPORATION, Petitioner-Plaintiff-Respondent, -AGAINST- EMPIRE ZONE DESIGNATION BOARD AND NEW YORK STATE DEPARTMENT OF ECONOMIC DEVELOPMENT, Respondents-Defendants-Appellants. REPLY BRIEF FOR RESPONDENTS-DEFENDANTS-APPELLANTS BARBARA D. UNDERWOOD Solicitor General ANDREW D. BING Deputy Solicitor General OWEN DEMUTH Assistant Solicitor General of Counsel ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney for Respondents- Defendants- Appellants The Capitol Albany, New York 12224 Telephone: (518) 486-4087 Facsimile: (518) 473-8963 Dated: February 12, 2013 Reproduced on Recycled Paper i TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES ................................................................................ ii PRELIMINARY STATEMENT............................................................................1 ARGUMENT POINT I THE LEGISLATURE INTENDED THE APRIL 2009 AMENDMENTS TO THE PROGRAM TO APPLY TO DECERTIFIED BUSINESSES AS OF JANUARY 1, 2008 ............................................................................................................1 POINT II THE LIMITED RETROACTIVE APPLICATION OF THE APRIL 2009 AMENDMENTS DOES NOT VIOLATE THE DUE PROCESS CLAUSE ................................................................6 A. Petitioner’s Reliance On The Pre-April 2009 Version Of General Municipal Law § 959 Was Neither Reasonable Nor Justifiable..............................................................................8 B. The Retroactivity Period Was Not Excessive...........................13 C. The Amendments Serve Valid Public Purposes ......................14 D. Even If The Period Of Retroactivity Were Measured From The August 2010 Amendments, There Would Be No Violation Of Plaintiffs’ Due Process Rights .......................16 CONCLUSION....................................................................................................17 ii TABLE OF AUTHORITIES CASES PAGE Astoria Fed. Savings & Loan Ass'n v. State of New York, 222 A.D.2d 36 (2d Dep't 1996), lv. denied, 89 N.Y.2d 87 (1997), cert. denied, 522 U.S. 808 (1997)................................................................6 Baker v. Arizona Dep't of Revenue, 105 P.3d 1180 (Ct. Ap. Ariz. 2005) ...........................................................15 Becker v. Huss, 43 N.Y.2d 527 (1978)...................................................................................3 Canisius Coll. v. United States of Am., 799 F.2d 18 (2d Cir. 1986), cert. denied, 481 U.S. 1014 (1987)...............16 Chatlos, Matter of v. McGoldrick, 302 N.Y. 380 (1951).....................................................................................5 Chrisley, Matter of v. Morin, 126 A.D.2d 977 (4th Dep't 1987) ............................................................ 10n Dutchess County Dep't of Social Servs. [Day], Matter of v. Day, 96 N.Y.2d 149 (2001)...................................................................................2 Gleason [Michael Vee, Ltd.], Matter of, 96 N.Y.2d 117 (2001)...................................................................................5 Grand Jury Subpoena Duces Tecum [Museum of Modern Art], Matter of, 93 N.Y.2d 729 (1999)...................................................................................4 Hague Corporation, Matter of v. Empire Zone Designation Bd., 96 A.D.2d 144 (3d Dep't 2012)............................................................... 10n Hague Corporation, Respondent-Appellant, Matter of v. Empire Zone Designation Bd., 19 N.Y.3d 1016 (2012)............................................................................ 10n James Square Associates, LP v. Mullin, iii 91 A.D.3d 164 (4th Dep't 2011) .............................................................2,6,9 TABLE OF AUTHORITIES (cont'd) CASES (cont'd) PAGE Lacidem Realty Corp., Matter of v. Graves, 288 N.Y. 354 (1942)...................................................................................13 Majewski v. Broadalbin-Perth Cent. School Dist., 91 N.Y.2d 577 (1998)................................................................................3,5 Milliken v. United States, 283 U.S. 15 (1931) .....................................................................................12 Moran Towing Corp., Matter of v. Urbach, 1 A.D.3d 722 (3d Dep't 2003)....................................................................16 Morris Builders, L.P. v. New York State Empire Zone Designation Board, 95 A.D.3d 1381 (3d Dep't 2012)............................................................. 10n North, Matter of v. Board of Examiners of Sex Offenders of State of N.Y., 8 N.Y.3d 745 (2007).....................................................................................6 Onbank & Trust Co., Matter of, 90 N.Y.2d 725 (1997)...................................................................................3 Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717 (1984) ...................................................................................11 People v. Brooklyn Garden Apts., 283 N.Y. 373 (1940)...................................................................................12 Quarty v. United States of Am., 170 F.3d 961 (9th Cir. 1999) ......................................................................15 Replan Dev., Matter of v. Department of Hous. Preservation & Dev. of City of N.Y., 70 N.Y.2d 451 (1987)......................................................................7,9,10,11 iv TABLE OF AUTHORITIES (cont'd) CASES (cont'd) PAGE Rocanova v. United States of Am., 955 F. Supp. 27 (S.D.N.Y. 1996), aff'd, 109 F.3d 127 (2d Cir.) cert. denied, 522 U.S. 821 (1997)..............................................................14 Roosevelt Raceway, Inc., Matter of v. Monaghan, 9 N.Y.2d 293 (1961)...................................................................................10 United States v. Carlton, 512 U.S. 26 (1994) .............................................................................passim United States v. Darusmont, 449 U.S. 292 (1981) .....................................................................................9 Usery v. Turner Elkhorn Mining Co., 428 U.S. 1 (1976) .......................................................................................11 Varrington Corp, Matter of v. City of New York Dep't of Fin., 85 N.Y.2d 28 (1995).....................................................................................8 WL, LLC, Matter of v. Department of Economic Dev., 97 A.D.3d 24 (3d Dep't 2012)................................................................. 10n NEW YORK CONSTITUTION Article XVI, § 1..................................................................................9,10,12 STATE STATUTES General Municipal Law § 959 ......................................................................................................2,4,8 § 959(a) .................................................................................................11,17 v § 959(w)...................................................................................................2,17 L. 2009, ch. 57, § 1.................................................................................................4 TABLE OF AUTHORITIES (cont'd) MISCELLANEOUS PAGE Press Release, Governor Paterson submits legislation creating an Excelsior Jobs Program (June 18, 2010), available at: http://www.governor.ny.gov/archive/paterson/press/ 061810ExcelsiorJobsProgram.html .........................................................15 II Revised Record of the Constitutional Convention of the State of New York 1127 (1939)...............................................................................12 PRELIMINARY STATEMENT The opening brief of the State officials sued here explains that petitioner's due process rights were not violated by the 15-month period of retroactive application of the April 2009 amendments to the Empire Zones Program. Petitioner argues, and the Third Department agreed, that the period of retroactivity was actually 32 months because the Legislature did not make the April 2009 amendments retroactive until it enacted additional program amendments in August 2010. Petitioner and the Third Department are wrong because the Legislature intended from the outset that the April 2009 amendments would apply as of January 1, 2008. As we explain at Point I, below, petitioner's claim to the contrary is meritless, and the relevant period of retroactivity here is only 15 months. At Point II below, we explain that 15 (or even 32) months of retroactivity would satisfy the Due Process Clause. ARGUMENT POINT I THE LEGISLATURE INTENDED THE APRIL 2009 AMENDMENTS TO THE PROGRAM TO APPLY TO DECERTIFIED BUSINESSES AS OF JANUARY 1, 2008 As we explained in our main brief (State's Main Br. at 24-30), the January 1, 2008 effective date of the corresponding Tax Law amendments, which allow carryover credits only to businesses that have received the retention 2 certificate mandated by the amendments to General Municipal Law § 959, would be nullified or rendered superfluous if the Commissioner could not issue a retention certificate for periods before the amendments’ April 7, 2009 enactment date. Since petitioner's interpretation thus results in a conflict that the Legislature could not have intended, it should be rejected. See James Square Associates, LP v. Mullin, 91 A.D.3d 164, 171-72 (4th Dep’t 2011) (holding, contrary to Third Department’s holding here, that the Legislature intended that revocations pursuant to the 2009 amendments would be effective as of January 1, 2008). There is no merit to petitioner's argument (Br. at 20) that the sections of the April 2009 amendments that expressly amended the Tax Law to include a January 1, 2008 effective date (131-132, 141) are irrelevant to the corresponding amendments to General Municipal Law § 959(w), which were to take effect “immediately.” It does not matter that petitioner is not actually seeking carryover credits here; what is important is that the entire statutory scheme reflects the interdependence between the Tax Law amendments and the amendments to General Municipal Law § 959. See Matter of Dutchess County Dep’t of Social Servs. [Day] v. Day, 96 N.Y.2d 149, 153 (2001) (where the Legislature does not indicate a contrary intent, related statutes must be construed “in a way that renders them internally compatible”) (citation omitted). 3 Notwithstanding the discrepancy in the effective dates between the Tax Law and General Municipal Law amendments, this Court should reconcile them by considering these underlying “policy considerations and the practicalities” behind the April 2009 amendments. Becker v. Huss, 43 N.Y.2d 527, 541 (1978). Only the State's construction adequately considers the “key purposes” of the April 2009 amendments, which were to realize Program reforms and cost savings to the State during the 2009-10 fiscal year (115). Majewski v. Broadalbin-Perth Cent. School Dist., 91 N.Y.2d 577, 584 (1998); see Matter of Onbank & Trust Co., 90 N.Y.2d 725, 730 (1997) (“[T]he reach of the statute ultimately becomes a matter of judgment made upon review of the legislative goal”) (citation omitted). These goals, which petitioner does not seriously dispute, could not be accomplished unless the statute permitted the Commissioner to issue decertifications, where warranted, to take effect as of January 1, 2008. Petitioner's suggestion that the Governor’s proposed budget financial plan is too speculative to demonstrate the importance of the April 2009 amendments to these years (Br. at 21) is belied by the enacted appropriations legislation containing these amendments; the preamble to this legislation indicates “[t]his act enacts into law major components of legislation which are necessary to 4 implement the state fiscal plan for the 2009-2010 state fiscal year.” L. 2009, ch. 57, § 1 (emphasis added). Petitioner additionally refers to an earlier proposed version of the legislation which expressly provided that the amendments to General Municipal Law § 959 were to be effective on January 1, 2008, and which was not contained in the final version (Br. at 10-11, 19-20). In light of the statutory conflict, and frustration of legislative goals that can be avoided only if both the Tax Law and General Municipal Law provisions are read together as effective on January 1, 2008, the difference between the bill as proposed and as enacted is insufficient to establish that the final version of the April 2009 amendments to General Municipal Law § 959 was intended to operate prospectively only. Although “legislative intent may be inferred from the omission of proposed substantive changes in the final legislative enactment,” the deleted language on which petitioner relies falls far short of “demonstrat[ing] a clear mandate from the Legislature” that the decertification of Program participants could not occur as of January 1, 2008. Matter of Grand Jury Subpoena Duces Tecum [Museum of Modern Art], 93 N.Y.2d 729, 738 (1999). Further, as we explained in our main brief on page 29, the fact that the amendments to General Municipal Law § 959 as enacted were to take effect “immediately” (see Pet. Br. at 18-19), does not by itself establish an exclusively prospective operation. It may be supportive of 5 retroactive operation, see Matter of Gleason [Michael Vee, Ltd.], 96 N.Y.2d 117, 122 (2001) and, at worst, is not dispositive. See Majewksi, 91 N.Y.2d at 583-84. Even less persuasive is petitioner's reliance on a draft Senate bill that was introduced in July 2009 but never enacted (Br. at 12, 20). See 2009 N.Y. Senate Bill S05598B. Here, petitioner asks for precisely the opposite inference from the one it would make from the unenacted language discussed above. From the failure to enact an express 2008 effective date, petitioner would infer that the legislature rejected that proposal. By contrast, from the failure to enact a bill purportedly clarifying a 2009 effective date, petitioner would infer that the legislature endorsed that proposal. These contradictory arguments simply demonstrate the unreliability of inferences from the failure to enact a bill. The legislature speaks through its enactments, and not through its omissions. When the Legislature spoke authoritatively to this issue in August 2010, in response to the Third Department's mistaken holding in this case, it promptly clarified what had always been its intention: that the April 2009 amendments were to apply as of January 1, 2008. “It is, of course, true that the Legislature cannot come back a year later and by a new law, control the interpretation of the law it passed a year earlier. However, . . . when the Legislature does tell us what it meant by a previous act, its subsequent statement of earlier intent is entitled to very great weight.” Matter of Chatlos v. McGoldrick, 302 N.Y. 380, 388 (1951); see also 6 Matter of North v. Board of Examiners of Sex Offenders of State of N.Y., 8 N.Y.3d 745, 753-54 (2007) (2002 amendments to New York’s Sex Offender Registration Act were a clarification of existing law, not a substantive change); Astoria Fed. Savings & Loan Ass’n v. State of New York, 222 A.D.2d 36, 46 (2d Dep’t 1996), lv. denied, 89 N.Y.2d 87 (1997), cert. denied, 522 U.S. 808 (1997) (rejecting plaintiff’s argument that 1991 amendment to 1984 statute was impermissibly retroactive). That is what happened here: the Legislature acted swiftly to clarify the effective date of the 2009 amendments in response to Supreme Court's first decision in James Square Associates.1 For all of these reasons and the reasons stated in our main brief, the Third Department's conclusion that the April 2009 amendments were not retroactive to January 1, 2008 was erroneous and should be reversed. POINT II THE LIMITED RETROACTIVE APPLICATION OF THE APRIL 2009 AMENDMENTS DOES NOT VIOLATE THE DUE PROCESS CLAUSE The State officials' main brief explained that retroactive application of the April 2009 amendments did not deprive petitioner of a property interest without 1 Petitioner's brief incorrectly states that the 2010 legislation clarified that the April 2009 amendments would be retroactive to June 1, 2008 (Br. at 22); the correct date is January 1, 2008 (152, 154). 7 due process (State's Main Br. at 31-48). Petitioner's claim, which concerns the retroactive removal of tax credits, is properly analyzed under the standards for retroactive amendment of tax statutes provided by United States v. Carlton, 512 U.S. 26 (1994), Matter of Replan Dev. v. Department of Hous. Preservation & Dev. of City of N.Y., 70 N.Y.2d 451 (1987), and other cases. Both petitioner (Br. at 26) and the Third Department (170) effectively acknowledge that the tax cases govern here by basing their arguments on them. They are correct; it is the standards of those cases that govern here. Under those standards, the limited degree of retroactivity in this case was permissible. Under Carlton and Replan, a tax statute may be amended retroactively if there was no reasonable and justifiable reliance on the unamended statute, if the period of retroactivity is not excessive, and if the retroactive amendment serves a valid public purpose. All three criteria are satisfied here. Petitioner could not reasonably or justifiably rely on its continued Program participation, the period of retroactivity was not excessive, and the amendments serve valid public purposes (State's Main Br. at 36-48). See Matter of Replan Dev., 70 N.Y.2d at 455-57. 8 A. Petitioner's Reliance On The Pre-April 2009 Version Of General Municipal Law § 959 Was Neither Reasonable Nor Justifiable. Petitioner's argument that it "engage[d] in a series of commercial transactions . . . in exchange for receipt of an Empire Zone Business Certification (Br. at 25, 28), does not establish that its reliance on the pre-April 2009 version of General Municipal Law § 959 barred retroactive decertification. As we noted in our main brief (State's Main Br. at 36-42), the United States Supreme Court has held that “reliance alone is insufficient to establish a constitutional violation” because “tax legislation is not a promise, and a taxpayer has no vested right” in whatever credits, deductions, or other benefits may exist at any one time in the tax law. Carlton, 512 U.S. at 33; see Matter of Varrington Corp. v. City of New York Dep’t of Fin., 85 N.Y.2d 28, 33 (1995). The estate taxpayer in Carlton not only lost the more than $2,500,000 in estate tax savings that it claimed under the law that was retroactively amended, but also lost an additional $600,000 in the transaction that it entered into while the law was in effect in reliance on the law; even so, this degree of reliance did not establish a due process violation. See 512 U.S. at 33-34. Petitioner's reliance claim is far weaker than the one argued by the taxpayer in Carlton, because, as we have already explained (State's Main Br. at 41), petitioner presented no proof that it would have "altered [its] behavior to avoid the [loss of tax credits for 2008]," 9 United States v. Darusmont, 449 U.S. 292, 299 (1981), or that it was “induced to conduct [its] business[ ] in a particular way . . . in reliance upon the availability of [Program] tax credits” for 2008. James Square Assoc., 91 A.D.3d 164, 174 (4th Dep't 2011). As we explained in our main brief (State's Main Brief at 36-39), an Empire Zone program certification did not, as petitioner suggests (Br. at 24-26), entitle it to greater protection than that accorded to other taxpayers who made investments or otherwise detrimentally relied on statutory tax incentives that were later retroactively revoked, like the taxpayers whose claim of reliance was rejected in Carlton, 512 U.S. at 33-34, and Replan, 70 N.Y.2d at 457. Here, program certification was simply a prerequisite to the right to claim the tax benefits, and was explicitly subject to termination “by operation of law” (43). Indeed, the New York Constitution required that the certification be terminable by operation of law, and that taxpayers could have no claim for future benefits no matter how great their reliance. It is settled that New York’s constitutional restrictions on tax exemptions preclude taxpayers from claiming any vested right in the continuation of tax credits, exemptions or beneficial rates. Under article XVI, § 1, subject to narrow exceptions not relevant here, “[t]he power of taxation shall never be surrendered, suspended or contracted away” and “[e]xemptions may be altered or repealed.” N.Y. Const., art. XVI, § 1. As this 10 Court held in Matter of Roosevelt Raceway, Inc. v. Monaghan, 9 N.Y.2d 293, 307 (1961), under article XVI, § 1, “the State may not be said to have breached any contract or agreement with Roosevelt to maintain its state tax at the level provided for in 1956 for the reason that no one was empowered to enter into such an agreement on behalf of the State” (emphasis added). The New York Constitution adopted in 1938 made tax exemptions freely repealable, and consequently petitioner has no vested right in the continuation of the Empire Zone tax benefits.2 Thus, petitioner’s certification constituted no more of a “promise” than the statutes involved in Replan, Carlton and other similar tax cases.3 2 Accordingly, petitioner mistakenly relies (Br. at 26) on Matter of Chrisley v. Morin, a Fourth Department case, in support of its claim of a vested right here. See 126 A.D.2d 977 (4th Dep't 1987). Chrisley did not address the constitutionality of retroactive tax legislation or a claim that a taxpayer had a vested right in a tax benefit. Rather, the issue before the Chrisley court was whether the revocation of petitioner's certification as a women's business enterprise comported with procedural due process. In the present case, the Third Department rejected petitioner's procedural due process claims (170), and this Court subsequently dismissed petitioner's appeal as of right from that decision. Matter of Hague Corporation, Respondent-Appellant, v. Empire Zone Designation Bd., 19 N.Y.3d 1016 (2012). 3 In Matter of WL, LLC v. Department of Economic Dev., 97 A.D.3d 24, 32 (3d Dep't 2012), and Morris Builders, L.P. v. New York State Empire Zone Designation Board, 95 A.D.3d 1381, 1383-84 (3d Dep't 2012), the Third Department also mistakenly concluded that the program certificate, rather than the resulting tax benefits, was the critical interest at stake, but then, like petitioner and the Third Department here, those courts analyzed the due process issue based on the standards set forth in the tax cases. 11 All tax credit statutes offer inducements upon which qualified taxpayers naturally rely, but a legislature’s retroactive readjustment of the qualifications necessary for continued tax credits “is not unlawful solely because it upsets otherwise settled expectations.” Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 729 (1984), quoting Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15-16 (1976). Petitioner's situation is no different from that of the taxpayers in Carlton and Replan. Moreover, there was ample indication that the criteria for tax benefits under the Empire Zone Program might be made more stringent. As we explained earlier (State's Main Br. at 20, 40), the Program had been “under increasing scrutiny for several years with respect to its cost-effectiveness, strategic focus and accountability” because many companies had “received more in tax benefits than economic returns they [were] returning in the form of wages paid to workers and capital investments in their facilities” (100) (affidavit of Program Director Randal Coburn). Even before the April 2009 amendments, General Municipal Law § 959(a) had provided notice that a decertification might operate retroactively: the section provided that a decertification would take effect on “the date determined to be the earliest event constituting grounds for revoking certification” (124), which could of course be substantially prior to the actual date of decertification. Thus, petitioner was forewarned that the statute 12 conferring the credits could be further amended and that it could have no vested right in the tax credits. Nor is retroactivity defeated by the fact that petitioner may not have personally received advance notice of the April 2009 amendments. Even where a retroactive tax amendment imposes a new liability on the taxpayer -- which the April 2009 amendments to Program tax credits do not -- a taxpayer “’should be regarded as taking his chances of any increase in the tax burden which might result from carrying out the established policy of taxation.’” Carlton, 512 U.S. at 34, quoting Milliken v. United States, 283 U.S. 15, 23 (1931). Moreover, petitioner is mistaken in relying on this Court’s decision in People v. Brooklyn Garden Apartments, 283 N.Y. 373, 380 (1940). (see Br. at 30). That case involved pre-1938 housing tax benefits, and the decision is at odds with the language and purpose of article XVI, § 1, of the Constitution, adopted in 1938 and described above, which made tax exemptions freely repealable. See N.Y. Const., art. XVI, § 1 (adopted Nov. 8, 1938, effective January 1, 1939); see also II Revised Record of the Constitutional Convention of the State of New York 1127 (1938) (citing housing tax exemptions that under pre-1938 law could not be repealed as an example of the law to be reversed by the new provision). For all these reasons, petitioner has failed to demonstrate, under the precedents of this Court and the United States Supreme Court, that it 13 reasonably and justifiably relied on the Program tax credits for 2008 it would have received but for the enactment of the April 2009 amendments. B. The Retroactivity Period Was Not Excessive. We have explained above and in our main brief that the period of retroactivity should be measured between January 1, 2008 and the April 7, 2009 enactment date, and that this modest period was not excessive. Petitioner complains that the statute's retroactive period is excessive "when considered in conjunction with the other factors, i.e., notice and reliance" (Br. at 28), but that claim ignores the settled rule that even tax legislation that imposes new liabilities -- which the 2009 amendments do not -- may constitutionally be applied to the beginning of the year preceding the legislation’s enactment, as in this case (see State's Br. at 42-44 and cases cited therein). Indeed, in Matter of Lacidem Realty Corp. v. Graves, 288 N.Y. 354 (1942), this Court upheld the retroactive application of the 1941 Tax Law amendment back to January 1, 1940, the beginning of the year before the date of enactment. See id. at 357. Accordingly, the 15-month period of retroactivity at issue here is not excessive under Replan. 14 C. The Amendments Serve Valid Public Purposes. The Program Amendments had two valid public purposes, both mistakenly discounted by petitioner and the Appellate Divisions. First, the amendments were designed to remedy the failing Empire Zones Program by enacting criteria that more accurately gauged a company’s performance and entitlement to the resultant tax benefits. Second, the amendments were designed to ameliorate the State’s fiscal crisis during 2009 and 2010. Both of these purposes find support in the record and case law, as demonstrated in our main brief on pages 44 through 48. Petitioner has not disputed the State's proof that the Program was not meeting its overall goals of increasing job creation and investment opportunities. Nor has petitioner disputed that the 1:1 benefit-cost standard was a reasonable remedy for the Program’s deficiencies. Finally, petitioner has not alleged that it could meet that standard. Moreover, the general cost-savings goals of the Program, which sought to save the State some $90 million during the 2009-2010 fiscal year, provide a separate rational basis for the statute’s retroactive operation. See Carlton, 512 U.S. at 32 (the Legislature may rationally retroactively amend a statute to stem “a significant and unanticipated revenue loss”); see Rocanova v. United States of Am., 955 F. Supp. 27, 29-30 (S.D.N.Y. 1996), aff’d, 109 F.3d 127 (2d Cir.), cert. 15 denied, 522 U.S. 821 (1997) (Congress’s intent in enacting a retroactive amendment to the Internal Revenue Code -- “to raise revenue without raising taxes or imposing a new tax” -- was “rational and reasonable”) Petitioner's attempt to distinguish Carlton (Br. at 23-24) is unpersuasive. Although the Court recognized that the purpose of the amendment in that case was to correct a statutory drafting error and its unanticipated costs, nothing in Carlton purported to limit its holding to drafting errors. Rather, Carlton applies to any rational and reasonable retroactive amendment whose purpose is to stem “significant and unanticipated revenue loss.” Id. at 32. In the present case, the 2009 amendments were in part a response to the fact that the Program was plagued with “skyrocketing costs” and was not generating results. See Main Br. at 8 (citing Press Release, Governor Paterson submits legislation creating the Excelsior Jobs Program (June 18, 2010), available at: http://www.governor.ny.gov/archive/paterson/press/061810ExcelsiorJobsProgram .html). And in addition, at least two courts have rejected similar arguments by taxpayers seeking to limit Carlton. See Quarty v. United States of Am., 170 F.3d 961, 968 (9th Cir. 1999) (“[t]he fact that the Carlton Court noted that the retroactive amendment before it was ‘curative’ of a legislative mistake does not make being ‘curative’ in that sense a requirement for the rationality of retroactive tax changes under the Due Process Clause”); accord Baker v. Arizona 16 Dep’t of Revenue, 105 P.3d 1180, 1187 (Ct. Ap. Ariz. 2005). Thus, the valid public purposes of the April 2009 amendments further support their limited retroactivity. D. Even If The Period Of Retroactivity Were Measured From The August 2010 Amendments, There Would Be No Violation Of Petitioner's Due Process Rights. In light of these authorities, the modest 15-month retroactivity period required by the April 2009 amendments does not offend petitioner's constitutional rights. However, even if this Court agreed with petitioner that the period of retroactivity must be measured from the enactment of the August 2010 amendments, the resulting retroactivity period of two years, eight months and 11 days would still pass constitutional muster, for the reasons stated above and in light of that amendment’s “curative purpose[s]” of correcting, as of January 1, 2008, unanticipated costs incurred by the State in its administration of the Program. Canisius Coll. v. United States of Am., 799 F.2d 18, 27 (2d Cir. 1986), cert. denied, 481 U.S. 1014 (1987); see United States v. Carlton, 512 U.S. at 32 (upholding retroactive application of statute limiting estate tax deductions because the amendment was rationally adopted in order to stem “a significant and unanticipated revenue loss”); Matter of Moran Towing Corp. v. Urbach 1 A.D.3d 722, 724 (3d Dep’t 2003) (“when legislation is curative, retroactivity 17 may be liberally construed”). Accordingly, the 2009 amendments to General Municipal Law § 959(a) and (w) are constitutional whether their period of retroactivity is measured from April 2009 or August 2010. CONCLUSION The Third Department’s opinion and order should be reversed insofar as it held that retroactive application of the April 2009 amendments to General Municipal Law § 959 to January 1, 2008, violated petitioner's due process rights, and petitioner's complaint should be dismissed in its entirety. Dated: Albany, New York February 12, 2013 Respectfully submitted, ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney for Respondents- Defendants-Appellants By: _________________________ OWEN DEMUTH Assistant Solicitor General BARBARA D. UNDERWOOD office of the Attorney General Solicitor General The Capitol ANDREW D. BING Albany, New York 12224 Deputy Solicitor General (518) 486-4087 OWEN DEMUTH Assistant Solicitor General of Counsel Reproduced on Recycled Paper