In the Matter of Town of North Hempstead, Appellant-Respondent,v.County of Nassau, Respondent-Appellant.BriefN.Y.September 10, 2014APL-2013-00253 Appellate Division – Second Department Docket No. 2011-09018 Nassau County Clerk’s Index No. 6734/11 Court of Appeals STATE OF NEW YORK In the Matter of the Application of the TOWN OF NORTH HEMPSTEAD, Plaintiff-Petitioner-Appellant-Respondent, For a Judgment Pursuant to Section 3001 and Article 78 of the Civil Practice Law and Rules against COUNTY OF NASSAU, Defendant-Respondent-Respondent-Appellant. >> >> BRIEF FOR PLAINTIFF-PETITIONER-APPELLANT-RESPONDENT BOND SCHOENECK & KING PLLC Attorneys for Plaintiff-Petitioner- Appellant-Respondent 1399 Franklin Avenue, Suite 200 Garden City, New York 11530 516-267-6300 Date Completed: November 1, 2013 Of Counsel: Richard S. Finkel To Be Argued By: Richard S. Finkel Time Requested: 30 Minutes i 105519.2 11/1/2013 TABLE OF CONTENTS TABLE OF AUTHORITIES .................................................................................... ii RULE 500.13(a) STATEMENT ................................................................................ 1 JURISDICTION ......................................................................................................... 2 STATEMENT OF THE CASE .................................................................................. 3 QUESTIONS PRESENTED FOR REVIEW ............................................................ 8 PROCEDURAL HISTORY ....................................................................................... 8 STATEMENT OF FACTS ......................................................................................10 ARGUMENT .................................................................................................19 POINT I ......................................................................................................... 19 THE EDUCATION LAW DOES NOT PERMIT COUNTIES TO CHARGE BACK TOWNS AND CITIES FOR FIT COSTS ............ 19 POINT II ........................................................................................................ 37 EDUCATION LAW §6302(3) DOES NOT PERMIT COUNTIES TO RECOVER THE COSTS OF FIT’S ADVANCED DEGREE PROGRAMS FROM TOWNS AND CITIES .................................... 37 POINT III ....................................................................................................... 45 ANY COUNTY CHARGEBACK MUST BE PRECEDED BY AUTHORIZATION FROM THE COUNTY LEGISLATURE ......... 45 POINT IV ...................................................................................................... 50 THE COUNTY’S SET OFF OF SALES TAX REVENUE OWED THE TOWN AGAINST A DISPUTED DEBT IS UNLAWFUL ...... 50 CONCLUSION ........................................................................................................52 ii 105519.2 11/1/2013 TABLE OF AUTHORITIES Page CASES Abate v. Mundt, 25 N.Y.2d 309 (1969) affd. 403 U.S. 182 (1971) ............................................... 34 Anderson v. Regan, 53 N.Y.2d 356, 362 (1981) ................................................................................. 44 Arcara v. Cloud Books, 65 N.Y.2d 324 (1985) rev’d on other grounds 478 U.S. 697 (1986) ........... 43-44 Baker v. Monahan, 42 N.Y.2d 1074 (1977) ....................................................................................... 33 Ball v. State of New York, 41 N.Y.2d 617 (1977) ............................................................................... 5, 24, 25 Ball v. State of New York, 52 A.D.2d 47 (3d Dept. 1976) affd. 41 N.Y.2d 617 (1977) ............. 23-24, 26, 27 Bright Homes v. Wright, 8 N.Y.2d 157 (1960) ..................................................................................... 33, 39 Broderick v. Weinsier, 253 A.D. 213 (1 st Dept. 1938) affd. 278 N.Y. 419 (1938).................................. 43 Castro v. United Container Mach. Group, 96 N.Y.2d 398 (2001) ......................................................................................... 38 Church of the Ascension v. New York State Racing and Wagering Board, 55 A.D.2d 874 (1 st Dept. 1977) affd. 46 N.Y.2d 776 (1978).............................. 24 Church of the Ascension v. New York State Racing and Wagering Board, 46 N.Y.2d 776 (1978) ......................................................................................... 30 Comereski v. City of Elmira, 308 N.Y. 248 (1955) ........................................................................................... 38 Commonwealth v. Canadian Bank, 21 N.Y.3d 55 (2013) ..................................................................................... 27, 37 iii 105519.2 11/1/2013 Department of Welfare of City of New York v. Siebel, 6 N.Y.2d 536 (1959) ........................................................................................... 38 Desiderio v. Ochs, 100 N.Y.2d 159 175 (2003) (J. Rosenblatt concurring opinion) ........................ 38 Dunn v. Uvalde Asphalt Paving Co., 175 NY 214 (1903) ............................................................................................. 51 Fleming v. Graham, 10 N.Y.3d 296 (2008) ................................................................................... 38, 40 Fulton-Montgomery Community College v. County of Saratoga, 80 A.D.3d 217 (3d Dept. 2010) .......................................................................... 19 Gaynor v. Rockefeller, 15 N.Y.2d 120 ..................................................................................................... 26 Grier v. Bowker, 314 F.Supp. 624 (S.D.N.Y. 1970) ...................................................................... 42 Grier v. Bowker, 327 F.Supp. 892 (S.D.N.Y. 1971) ...................................................................... 42 Guiliani v. Hevesi, 90 N.Y.2d 27 (1997) ..................................................................................... 38, 39 Hastings v. H.M. Byllesby & Co., 293 N.Y. 413 (1944) ........................................................................................... 34 Hellerstein v. Assessor of the Town of Islip, 37 N.Y.2d 1 (1975) ............................................................................................. 44 Hoerger v. Spota, 109 A.D.3d 564 (2d Dept. 2013) affd. __ N.Y.3d __ (2013) (2013 NY Slip Op. 05708) .................................................................................. 31 Jewett v. Luau-Nyack Corp., 31 N.Y.2d 298 (1972) ......................................................................................... 31 Jewish Home and Infirmary of Rochester, New York, Inc. v. Commissioner of New York State Dept. of Health, 84 N.Y.2d 252 (1994) ................................ 30 iv 105519.2 11/1/2013 Kittinger v. Buffalo Traction Co., 160 N.Y. 377 ....................................................................................................... 26 Klostermann v. Cuomo, 61 N.Y.2d 525 (1984) ......................................................................................... 33 Leirer v. Caputo, 81 N.Y.2d 455 (1993) ................................................................................... 49, 50 Losurdo v. Asbestos Free, Inc., 1 N.Y.3d 258 (2003) ........................................................................................... 31 Lyons v. Goldstein, 290 N.Y. 19 (1943) ............................................................................................. 32 Majewski v. Broadalbin-Perth Cent. School Dist., 91 N.Y.2d 577 (1998) ......................................................................................... 37 Matter of Board of Education v. Allen, 6 N.Y.2d 127,142 (1959) .................................................................................... 35 Matter of County of Suffolk v. King, 18 A.D.3d 1010 (3d Dept. 2005) .............................................................. 4, 30, 36 Matter of Esiason v. Washington County Bd. of Elections, 220 A.D.2d 878 (3d Dept. 1995) ........................................................................ 33 Matter of Gallagher v. Regan, 42 N.Y.2d 230 (1977) ................................................................................... 23, 28 Matter of Green (Potter), 51 N.Y.2d 627 (1980) ......................................................................................... 31 Matter of Hogan v. Supreme Ct., 281 N.Y. 572 ....................................................................................................... 39 Matter of Malpica-Orsini, 36 N.Y.2d 568 (1975) ................................................................................... 39, 40 Matter of Meng, 227 N.Y. 264 (1919) ........................................................................................... 29 v 105519.2 11/1/2013 Matter of Metropolitan Life Ins. Co. v. Boland, 281 N.Y. 357 ....................................................................................................... 39 Matter of Syquia v. Board of Education of Harpursville Central School District, 80 N.Y.2d 531 (1992) ......................................................................................... 31 Matter of Tormey v. LaGuardia, 278 N.Y. 450 ....................................................................................................... 39 Matter of Washington Post Co. v. New York State Insurance Department, 61 N.Y.2d 557 (1984) ......................................................................................... 38 McCluskey v. Cromwell, 11 N.Y. 593 (1854) ............................................................................................. 38 Meltzer v. Koenigsberg, 302 N.Y. 523 (1951) ........................................................................................... 43 Moran v. Laguardia, 270 N.Y. 450 (1936) ........................................................................................... 22 Natural Resources Defense Council, Inc. v. NYC Dept. of Sanitation, 83 N.Y.2d 215 (1994) ................................................................................... 31, 32 New York Public Interest Research Group v. Dinkins, 83 N.Y.2d 377 (1994) ................................................................................... 22, 28 New York State Bankers Assn., Inc. v. Wetzler, 81 N.Y.2d 98 (1993) ........................................................................................... 23 Pajak v. Pajak, 56 N.Y.2d 394 (1982) ......................................................................................... 33 Pataki v. New York State Assembly, 4 N.Y.3d 75 (2004) .................................................................5, 22, 23, 29, 30, 36 Patrolmens Benevolent Association v. City of New York, 41 N.Y.2d 205 (1976) ................................................................................... 32, 37 People ex rel. Bronx Parkway Commission v. The Common Council, 229 N.Y. 1 (1920) ............................................................................................... 34 vi 105519.2 11/1/2013 People ex rel. Newman v. Foster, 297 N.Y. 27 ......................................................................................................... 39 People v. Boothe, 16 N.Y.3d 195 (2011) ......................................................................................... 33 People v. Elmer, 19 N.Y.3d 501 (2012) ......................................................................................... 43 People v. Mann, 31 N.Y.2d 253 (1972) ................................................................................... 34, 35 People v. Roe, 74 N.Y.2d 20 (1989) ........................................................................................... 46 People v. Tremaine, 281 N.Y. 1 ........................................................................................................... 26 People v. Tychanski, 78 N.Y.2d 909 (1991) ................................................................................... 32-33 Scoglio v. County of Suffolk, 85 N.Y.2d 709 (1995) ................................................................................... 32, 48 Slewett v. Board of Assessors, 78 A.D.2d 403 (2d Dept. 1981) .......................................................................... 35 Spodek v. Park Property Development Associates, 263 A.D.2d 478-479 (2d Dept. 1999) ................................................................. 51 Squadrito v. Griebsch, 1 N.Y.2d 471 (1956) ........................................................................................... 43 Willett v. Lincolnshire Management, Inc., 302 A.D.2d 271 (1st Dept. 2003) ....................................................................... 51 STATUTES County Government Law of Nassau County §102 .................................................. 45 County Law §550 ............................................................................................... 46, 49 CPLR §5602(a)(1)(i) .................................................................................................. 2 vii 105519.2 11/1/2013 Education Law §6302(3) ...................................................................................passim Education Law §6304 .......................................................................................passim Education Law §6305 .......................................................................................passim Education Law §6305(2) ...................................................................................passim Education Law §6305(3) and (4) ............................................................................. 11 Education Law §6305(4) .......................................................................................... 47 Education Law §6305(5) ...................................................................................passim Education Law §6305(10) .................................................................................passim Education Law §6306 ........................................................................................ 42, 43 General Construction Law, §90 ............................................................................... 35 OTHER AUTHORITIES Proposed Senate Bill (S7152-2011) ......................................................................... 27 Proposed Assembly Bill (A10700) .......................................................................... 27 Proposed Assembly Bill (A934-013) ....................................................................... 27 Revised Memorandum of Nancy L. Zimpher, Chancellor, dated September 12, 2012 to Members of the Board of Trustees of the State University of New York ................................................................ 12, 21, 40, 41 1 105519.2 11/1/2013 RULE 500.13(a) STATEMENT There is no other litigation pending between the parties relating to the subject matter of this appeal. 2 105519.2 11/1/2013 JURISDICTION This appeal is presently before the Court upon its grant of leave to the Town of North Hempstead. The Court has jurisdiction to entertain the appeal pursuant to CPLR Section 5602(a)(1)(i), as the Order appealed from is a final order and decides all issues raised in the proceeding. All issues of law raised here are fully preserved (R. 22-23; 28-29; 34; 73; 118-119; 121-122; TPB 1 14-22). 1 Reference is to the Town’s Principal Brief filed in the Appellate Division, Second Department. 3 105519.2 11/1/2013 STATEMENT OF THE CASE This brief is submitted on behalf of the Town of North Hempstead (the “Town”) in support of its appeal from the January 16, 2013 Decision and Order (the “Order”) of the Appellate Division, Second Department. The Town requests that the Order be modified to declare that the Education Law does not permit counties to charge back towns and cities for the monies the counties have paid to the Fashion Institute of Technology (“FIT”). In all other respects, the Order should be affirmed. This appeal presents an issue of great significance to municipalities across the State of New York, and is of particular importance to the towns and cities in the County of Nassau (the “County”), where it is estimated that between 2010 and the end of 2013, the County, under the guise of the Education Law, will have helped itself to approximately $26,000,000.00 in sales tax revenue rightfully belonging to its towns and cities 2 . Other counties have followed suit, in one form or another. Still others have threatened to do so. The Court must put a stop to this unlawful practice. The Education Law directs that a student’s county of residence pay an allocable portion of the operating costs of an out-of-county community college when its resident enrolls in such institution [§6305(2)]. If the mandated county 2 This projection is based upon withholdings of roughly $6.5M in 2010 (R 110). 4 105519.2 11/1/2013 payment is made to a traditional two year community college, the Education Law permits the county of residence, at its discretion, to recover such expenditure by charging back the town or city in which the student resides [§6305(5)]. However, pivotal to the instant appeal, this county chargeback provision does not apply to FIT. Though it originated as a “community college”, FIT also offers baccalaureate and masters degree programs, albeit at significantly greater cost than traditional community colleges. In 1994, in response to its magnified expense, the State Legislature implemented a county reimbursement mechanism exclusive to FIT. It lifted this particularly crippling financial obligation off the backs of towns and cities, and directed that the State shall make such reimbursement to counties [Education Law §6305(10)]. In issuing its mandatory directive to the State, to the exclusion of all others, the Legislature left counties with no alternative remedy. Neither §6305(10), nor any other provision in the Education Law, addresses the contingency that the State would not meet its self-imposed obligation. As fate would have it, the State has not appropriated the monies necessary to reimburse counties for FIT expenses since FY 2001. One court has held that in the absence of such appropriation, counties have no recourse against the State for reimbursement of FIT costs. Matter of County of Suffolk v. King, 18 A.D.3d 1010 (3d Dept. 2005). 5 105519.2 11/1/2013 Thus, the ultimate question on this appeal is which political subdivision(s) has been left to carry the burden of the FIT chargeback? Is it the counties, which sponsor, operate and largely control the community colleges? Or is it the towns and cities (other than New York City), which have no role, input or dominion over such institutions, and which were already relieved of such obligation upon the adoption of §6305(10)? The answer must be the counties. Education Law §6305(10) remains in effect, complete with its mandatory directive to the State. The Town, the City University of New York (“CUNY”), the State University of New York (“SUNY”), and the County of Nassau (the “County”) 3 are all in agreement on this point. Indeed, it is the only conclusion that satisfies the doctrine of legislative equivalency. An appropriation bill adopted pursuant to the distinctive mechanisms contained in Article VII of the State Constitution cannot serve to repeal a provision of the Education Law adopted pursuant to Article III, particularly when it expresses no intent to do so. See, e.g., Ball v. State of New York, 41 N.Y.2d 617 (1977). Thus, Education Law §6305(10) still stands, albeit with the State’s obligation suspended by the lack of an appropriation. See, Pataki v. New York State Assembly, 4 N.Y.3d 75 (2004). 3 Gross Affirmation in Support of Cross-Motion for leave to appeal, at p.9. 6 105519.2 11/1/2013 The lack of State funding invokes the doctrine’s second application. While an appropriation bill can suspend the State’s reimbursement obligation, it cannot restore county chargeback authority that was previously removed by an amendment to the Education Law, particularly where, as here, it expresses no intent to do so. Only a subsequent amendment to the Education Law can accomplish such reinstatement, and no such amendment has ever been adopted. Thus, counties no longer have recourse against towns and cities for the recovery of FIT costs, and when the State does not reimburse them, they are left to bear the obligation alone. Even if the Education Law, as currently constituted, permitted counties to charge back towns and cities for FIT expenses, such chargeback authority must be limited to the expenses arising from student enrollment in FIT’s two year community college programs. This conclusion originates with the premise that community colleges are generally two (2) year institutions, and ends with the distinction between purposes of the two (2) types of chargebacks authorized by the Education Law: (1) the community college chargeback [§6305(2)]; and (2) the county chargeback [§6305(5)]. The community college chargeback is intended to assist the traditional community college with financing the costs of its two (2) year programs. FIT, as 7 105519.2 11/1/2013 stated, is the beneficiary of a statutory provision which permits it to offer baccalaureate and masters degree programs, in addition to its community college curriculum. In its case, the community college chargeback authority is extended to include financing the costs of such advanced programs [§6302(3)]. Conversely, the county chargeback authorized by Education Law §6305(5) serves an entirely different purpose. It is not intended to finance FIT, or any other community college. Instead, the county chargeback serves to offset a “general county charge”. This type of chargeback impacts the charging county’s operating budget, not that of a community college. Contrary to the Second Department’s holding, because it is not a community college financing provision at all, the county chargeback is not implicated by §6302(3). In any event, no county chargeback, to any extent, can be imposed by a County Treasurer without prior authorization from the County Legislature, as the Second Department properly held. Moreover, the County cannot offset a disputed and unliquidated claim against sales tax revenue that it is commanded by statute to pay the Town, again as properly held by the Second Department. Because the Education Law does not provide a county with recourse against a town for the recovery of FIT expenses, the Order should be modified to so reflect 8 105519.2 11/1/2013 and the County should be directed to pay the Town all monies improperly withheld forthwith. In all other respects, the Order should be affirmed. QUESTIONS PRESENTED FOR REVIEW This appeal presents the following questions of law for consideration: 1. Does the Education Law permit counties to charge back towns and cities for the payments that the counties are required to make to FIT? 2. If the law does permit such chargebacks, are counties permitted to pursue towns and cities for the costs of FIT’s baccalaureate and masters degree programs, or are they limited to reimbursement of the costs for FIT’s two year programs? PROCEDURAL HISTORY By Notice of Petition and Petition dated May 5, 2011, the Town sought judgment against the County declaring (i) that the County’s sole source of reimbursement for FIT expenses is the State of New York; (ii) that as such, the County is without authority to charge back the Town for the amounts the County paid to FIT for resident enrollment in that institution; (iii) that even if the County did have such authority, it is limited to recovery of the costs attendant to student enrollment in FIT’s two year programs and degrees; (iv) that if such authority exists, it requires authorization from the County Legislature prior to implementation, which authorization was never given; and finally, (v) that the 9 105519.2 11/1/2013 County’s set off of disputed monies against a liquidated and undisputed debt was unlawful (R. 28-29). Supreme Court, Nassau County (Parga, J.) held that the Education Law did permit the County to charge back the Town for FIT expenses, but limited such authority to the costs attributable to student enrollment in FIT’s two year programs and degrees. Supreme Court also held that the County’s set off of the undisputed sales tax revenue it owed the Town against the disputed FIT chargebacks was proper. It did not address the absence of authorization for the chargeback from the County Legislature (R. 7-12). The Second Department modified the lower court order. It held that county chargebacks to towns and cities for FIT expenses were authorized, and removed the two year limitation that Supreme Court had placed upon them. According to the Second Department, because Education Law §6302(3) directs that “FIT is to be financed and administered in the manner provided for community colleges”, the County is “entitled to a charge-back from the Town for the amounts paid by the County to FIT for Town residents enrolled at FIT in four-year undergraduate programs and graduate programs” (R. 132). However, the Second Department also held that despite its finding, the County could not impose an FIT chargeback in any amount upon the Town as the 10 105519.2 11/1/2013 County Legislature had never adopted a resolution authorizing the County Treasurer to do so. It also properly determined that the County had no right to set off the disputed chargeback amounts against the Town’s statutory share of sales tax revenue withheld by the County. In accordance with these latter holdings, the Second Department modified the third decretal paragraph of the Supreme Court order and directed payment by the County to the Town of the sales tax monies that it has improperly withheld. However, these monies have yet to be paid, the practice has continued, and the amounts withheld continue to multiply dramatically. The Town moved this Court for leave to appeal the adverse portions of the Second Department’s decision, and the County cross-moved for similar relief. By order dated September 3, 2013, the motions were granted. STATEMENT OF FACTS Three (3) categories of students attend community colleges: residents of the county sponsoring the operation of the community college; non-resident students; and out-of-state students. “Non-resident students” are New York State residents who do not reside in the county in which the community college they attend is located. These non- resident students can obtain a certificate of residence from the chief fiscal officer of the county in which they reside, present such certificate to the community 11 105519.2 11/1/2013 college they attend, and pay the same tuition rate that a resident of the local sponsor pays [Education Law §6305(3) and (4)]. The community college accepting a non-resident student is then permitted to charge back an allocable portion of the college’s operating costs, as well as an additional sum for capital costs, to that student’s county of residence. This is the community college chargeback [Education Law §6305(2)]. The county of residence may then elect to obtain reimbursement of the payments it makes to out-of-county community colleges by charging back the towns and cities located within its boundaries. This is the county chargeback, the sole purpose of which is to offset a “general county charge” [Education Law §6305(5)]. FIT originated as a traditional community college offering two-year programs and degrees, and was part of the community college chargeback program described above (R. 96-107). However, since that time, FIT has undergone dramatic change. In 1975, it began offering four-year degrees in multiple disciplines, and in 1979, it further expanded its curriculum to include masters degree programs (R. 21-22). FIT’s advanced curriculum substantially impacts its operating costs and correspondingly, its chargeback rate. As of September 2012, the City University of New York (“CUNY”) and the State University of New York (“SUNY”) 12 105519.2 11/1/2013 estimated that the annual cost to fully fund FIT’s upper division and graduate level chargeback alone was $11.2 M 4 . As of 2010-11, SUNY had approved an FIT operating chargeback of $10,980 per student, more than triple that of the next highest chargeback rate. By comparison, for that same period, the chargeback for Suffolk County Community College was $1,550 per student. Nassau County Community College’s approved chargeback rate was $3,350 per student (R. 21). In the face of these disproportionate costs, the State Legislature amended the Education Law in 1994, segregating FIT from traditional community colleges for county reimbursement purposes. Pursuant to the newly adopted §6305(10), the entire burden of reimbursing counties for the payments they made to FIT was assumed by the State (R. 22). Towns and cities were off the hook. Subsequent to §6305(10)’s adoption, the State funded the obligations raised therein and reimbursed counties for FIT costs. However, in or about FY 2002, that stopped. The State adopted a budget without an appropriation for county reimbursement of FIT expenses (R. at 59). Nassau County’s Actions In 2003, upon recommendation of the Nassau County Office of Management and Budget (“OMB”), the County Legislature, in accordance with Education Law 4 http://www.suny.edu/Board_of_Trustees/webcastdocs/Community% 20College%20Chargeback%20Report.txt, at p. 2. 13 105519.2 11/1/2013 §6305(5), adopted a resolution authorizing the County Treasurer to charge back the County’s towns and cities for the monies that the County had paid for resident enrollment in out-of-county community colleges (R. 41-42). OMB, as the sponsor of the recommendation, made clear that the chargebacks would not include expenses incurred by the County on behalf of students attending FIT. In precise language, OMB stated that “The chargeback is proposed solely in relation to community college tuition and is being reviewed in relation to FIT tuition” (R. 43). Consistent with OMB’s recommendation, and the legislative authorization that followed it, the County Treasurer billed the towns and cities only for expenses attributable to traditional two-year community colleges. The County did not seek reimbursement of FIT costs (R. 71, 86). The 2003 resolution and the County’s subsequent chargeback practices are consistent with the opinion of the County’s Office of Legislative Budget Review, which opined that “[T]he County may not charge back for FIT tuition costs...” (R. 44-45). Nevertheless, things changed in 2010. Without any further legislative authority, the County Treasurer began to charge back the Town for FIT expenses (R. 49). For the 2010 fiscal year, the FIT chargeback to the Town amounted to 14 105519.2 11/1/2013 nearly $1.2 million (R. 64, 72). The total that year, across all five (5) of the County’s towns and cities, was $6,487,043.20 (R. 110). The Town contested the County’s FIT chargeback as having been made without lawful authority. In response, the County simply helped itself to Town funds, informing the Town that the County was keeping its $2,448,625.00 statutory share of Fourth Quarter 2010 sales tax revenue (R. 72) and using it to satisfy the disputed FIT charge back. Specifically, the County advised as follows (R. at 111): The Fourth Quarter FY2010 cash receipt for the Local Government Assistance Program [sales tax] is $14,912,457. Your jurisdiction’s share is $2,448,625. As of the date of this letter, the Town of North Hempstead owes $1,174,462.60 to the County for reimbursement for Fashion Institute of Technology tuition payments and $601,482.27 for other community colleges that the County has paid for the Town of North Hempstead residents. Consequently, these amounts have been deducted from your share of local government assistance. To secure release of the $672,680.13 “balance” of sales tax revenues due the Town, it would be required to execute a claim form acknowledging and agreeing to the County’s position (R. 112). The Town refused, and this proceeding ensued (R. 73). Legislative History This appeal centers upon Article 126 of the Education Law, specifically Sections 6302(3), 6304, 6305(5), and 6305(10) thereof. Article 126 was added to 15 105519.2 11/1/2013 the Education Law in 1948 (L.1948, Ch. 696). In its original form, and insofar as relevant here, Article 126 included the following provisions: §6301(2)- Under the “Definitions” heading, this section defined, and continues to define, community colleges as “colleges providing two-year post secondary programs pursuant to regulations prescribed by the state university trustees and receiving financial assistance from the state therefor”; §6303- Entitled “Programs and curricula of community colleges”, this section directed that “Community colleges shall provide two-year programs of post high school nature combining general education with technical education relating to the occupational needs of the community…”; §6304- Upon original adoption, this section was entitled “Admissions to Community Colleges”. It provided as follows: In addition to admitting students from its own community or communities, each community college shall, within the quota and under the conditions prescribed by the state university trustees, admit students from other communities and from outside the state. §6305- This section was adopted under the heading “Financing of Community Colleges”. It established, inter alia, the ability of counties to charge back their towns and cities for the monies that the counties expend for students attending out-of-county community colleges (the “county chargeback provision”); §6306- This provision addressed the “Administration of Community Colleges”. 16 105519.2 11/1/2013 The 1955 Amendments Article 126 was the subject of several amendments in 1955 (L.1955, ch. 769). Those revisions, as relevant here, were as follows: §6304- The version of §6304 adopted in 1948 was repealed; §6305- The 1948 version of §6305 was re-designated §6304, taking with it the heading “Financing of Community Colleges”. The bulk of former §6305’s provisions were moved into the new §6304, with one notable exception. Left behind, under the new heading “Non-resident and out-of-state students”, was the county chargeback provision, which was simply re-designated §6305(6) 5 . The 1975 Amendment Prior to 1975, Section 6302(3) of the Education Law read as follows: In the City of New York, the board of education, with the approval of the state university trustees, may act as a local sponsor in the establishment and operation, as a community college, of a post secondary technical vocational training institution which is partly supported by such board of education and partly supported by an educational foundation for an industry chartered by the board of regents. In 1975, the provision was amended to allow such institution to offer baccalaureate programs. This was accomplished with the addition of the following language (L.1975, Ch. 356): In addition to the community college programs and curricula authorized by this article, the institution may offer such baccalaureate 5 Later renumbered Section 6305(5). 17 105519.2 11/1/2013 programs and curricula in support of its mission, in accordance with standards and regulations prescribed by the state university trustees, as may be authorized pursuant to the provisions of the master plan. Notwithstanding any other provision of law, the institution shall be financed and administered in the manner provided for community colleges. The 1979 Amendment In 1979, Section 6302(3) was amended yet again to allow masters degree programs. Two words were added, as set forth below: In addition to the community college programs and curricula authorized by this article, the institution may offer such baccalaureate, masters degree programs and curricula in support of its mission, in accordance with standards and regulations prescribed by the state university trustees, as may be authorized pursuant to the provisions of the master plan. Notwithstanding any other provision of law, the institution shall be financed and administered in the manner provided for community colleges (emphasis supplied). The 1994 Amendment In 1994, as part of a statute entitled “Comprehensive Omnibus Revision of Taxes, Fees and Other Requirements Impacting 1994-95 State Fiscal Plan”, Education Law §6305 was amended. As reported by the New York State Legislative Bill Drafting Commission, the amendment became a law June 9, 1994, with the approval of the Governor. It was passed on a message of necessity pursuant to Article III, section 14 of the Constitution, by a majority vote, three-fifths being present. Laws of New York, 217 th Session, 1994, Vol. II, Chpts. 54-172. 18 105519.2 11/1/2013 A new subsection (10) was added to the Education Law, which reads as follows (L.1994, Ch.170, Section 140): On or before March thirty-first, nineteen hundred ninety-five and every year thereafter, the state shall reimburse each county which has issued a certificate of residence for any non-resident student in attendance at the fashion institute of technology during the nineteen hundred ninety-three-ninety-four academic year and every year thereafter in an amount equal to fifty percent of the actual amount paid by such county on behalf of such students and on or before June first, nineteen hundred ninety-five and every year thereafter, the state shall reimburse each county for the remaining fifty percent of the actual amount paid by each county on behalf of such students (emphasis added). The 2012 Amendment In 2012, §6305 was amended to add subsection (11) (L.2012, c.57, pt. Q, §1). The new subsection directed the CUNY and SUNY Boards of Trustees, to examine the laws, regulations and policies regarding community college charges for non-resident students. With this amendment, all other provisions in §6305, including §6305(10), remained intact. 19 105519.2 11/1/2013 ARGUMENT POINT I THE EDUCATION LAW DOES NOT PERMIT COUNTIES TO CHARGE BACK TOWNS AND CITIES FOR FIT COSTS The central question on this appeal is whether the County has statutory authority to charge back the Town for the monies that the County is required to pay FIT pursuant to the Education Law. Respectfully, the answer is no. The Community College Chargeback Community colleges, as a central component of their financing, are authorized to charge back the home counties of non-resident students an allocable portion of the college’s operating costs, as well as an additional sum for capital costs, attributable to the non-resident students’ enrollment in the college [Education Law §6305(2)]. As the County itself argued below, the purpose of such community college chargeback is “clear” (R. 66). It is “…intended to insure that counties of non-resident students share in the cost incurred in operating a community college” (emphasis added). Fulton-Montgomery Community College v. County of Saratoga, 80 A.D.3d 217, 219 (3d Dept. 2010). The County Chargeback Counties, in turn, are then given the discretion to charge back their towns and cities for the monies they’ve paid to the out-of-county community colleges. 20 105519.2 11/1/2013 This county chargeback provision has as its purpose the offset of what the Legislature designated a “general county charge” [Education Law §6305(5)]. The County Reimbursement Mechanism for FIT The county chargeback provision just described does not apply to FIT. That institution’s exclusive ability to offer four-year and masters degree programs, in addition to its community college curriculum, results in chargebacks more than triple those of the next most expensive community college. In 1994, the Education Law was amended to address such disparity. Newly adopted §6305(10) implemented an exclusive mechanism for county reimbursement of FIT expenses. Counties would no longer be reimbursed by towns and cities, as they would for all other traditional community colleges. Instead, the sole source of county reimbursement for FIT expenses would be the State. In that regard, §6305(10) was adopted with a mandatory directive, demanding that the State “shall” reimburse counties. No alternative source of reimbursement was provided or contemplated. A. Education Law §6305(10) Remains in Effect In FY 2002, the State stopped appropriating monies to reimburse counties for FIT costs. Subsequently, the County absorbed such expenses, as it is required to do. That changed in mid-2010 when, without authorization from the County Legislature, the County Treasurer began to charge back the Town for FIT 21 105519.2 11/1/2013 expenses. The chargeback included not only those expenses attributable to two- year programs, but those incurred from student enrollment in FIT’s baccalaureate and masters degree programs as well. Such chargebacks are precluded by Education Law §6305(10). The County suggested below that §6305(10) had been repealed by the lack of a budget appropriation. Indeed, the County referenced §6305(10) in the past tense and argued that it “…was a statute which existed from 1995 through 2001” (emphasis added) (R. 93). Such a position was inconsistent with that advocated by CUNY/SUNY, which in a joint report issued in September 2012, opined that though appropriations to fund §6305(10) ceased in FY 2002, “the law continues to remain in effect.” 6 The County retreated from its former position on appeal to the Second Department, and has indicated here that it “…is not arguing that §6305(10) has been repealed” 7 . On this point then, the parties are now in agreement. Education Law §6305(10) remains in effect. However, the Second Department seemingly found otherwise. For no apparent purpose if not to imply repeal, the court held that the “doctrine of 6 http://www.suny.edu/Board_of_Trustees/webcastdocs/Community%20Coll ege%20Chargeback%20Report.txt, at p. 4. 7 County Cross-Motion for Leave to Appeal, Gross Affirmation at p. 9. 22 105519.2 11/1/2013 legislative equivalency is not implicated [here], as both Education Law §6305(10) and the budgets were enacted by the same means.” This aspect of the holding contradicts the Court’s instruction in Pataki. Further, it is repugnant to the doctrine of legislative equivalency, which demands that repeal of existing legislation can only be accomplished by an affirmative act “of equal dignity and import” to that which resulted in its adoption. Moran v. Laguardia, 270 N.Y. 450, 452 (1936); New York Public Interest Research Group v. Dinkins, 83 N.Y.2d 377 (1994). First, contrary to the Second Department’s conclusion, Education Law §6305(10) and the State’s budgets were not “enacted by the same means.” Instead, they were adopted pursuant to distinct constitutional provisions-- §6305(10) pursuant to Article III of the State Constitution (Laws of New York, 217 th Session, 1994, Vol. II, Chpts. 54-172), and the State budget pursuant to Article VII. The procedural and substantive distinctions between each constitutional article dictate that §6305(10) cannot be repealed by a temporary appropriation bill. As explained by the Court in Pataki, prior to 1927 “all budget legislation, like other legislation, originated with the Legislature. The Governor’s only power over budget legislation was the veto”. Pataki, 4 NY3d at 81. That changed with the addition of Article VII to the State Constitution. While Article III continues to vest the legislative power of the state in the senate and assembly, Article VII, 23 105519.2 11/1/2013 which now governs the budget process, vests “certain legislative powers in the governor.” In the Article VII process, the “classic ‘separation of powers’ between the executive and legislative branches is modified to some degree.” Pataki, 4 N.Y.3d at 83. “[T]he original purpose of the executive budgeting system was to change the roles of the Governor and the Legislature in the process-to make the Governor the ‘constructor’ and the Legislature the ‘critic’”. Pataki, 4 N.Y.3d 82-83. Indeed, pursuant to Article VII §4, the “Legislature may not alter an appropriation bill submitted by the governor except to strike out or reduce items therein….” This “no-alteration provision is ‘a limited grant of authority from the People to the Legislature to alter the budget proposed by the Governor, but only in specific instances.” Pataki, 4 N.Y.3d at 84, quoting New York State Bankers Assn., Inc. v. Wetzler, 81 N.Y.2d 98, 104 (1993). Article VII thus “accord[s] to ‘an appropriation bill submitted by the governor’ a special status; the Legislature may not ‘alter’ it except in the ways specified.” Pataki, 4 N.Y.3d at 84. It follows from this “special status” that the “check and balance…basic to our traditional governmental polity” is modified in the budget process. Matter of Gallagher v. Regan, 42 N.Y.2d 230, 233-34 (1977). Thus, a budget bill cannot serve to repeal a provision of the Education Law, particularly when it expresses no intent to do so. Ball v. State of New York, 52 24 105519.2 11/1/2013 A.D.2d 47, 52 (3d Dept. 1976) affd. 41 N.Y.2d 617 (1977) illustrates this point. The claimant there had served as the Chairman of the New York State Bingo Control Commission since its statutory establishment in 1962. Id. at 49. However, the 1975-76 State budget did not provide funds for the Bingo Commission, shifting that appropriation to the State Racing and Wagering Board. Claimant’s salary was discontinued, and the Commission’s offices were dismantled. Id. at 48. The question thus raised was whether the claimant’s position had been abolished by the State budget bill. Id. at 49. It was not. The court held that “The Legislature must abolish such a statutorily fixed-term position by a legislative act which specifically provides therefor and states in explicit language that such is the intent.” Id. at 50. In a concurring opinion, Judge Herlihy went one step further, stating that the “legislative action in the present case does not establish any clear intent on its part to abolish the Bingo Commission.” Id. at 52. Following the Third Department’s decision in Ball, the First Department considered the same issues in Church of the Ascension v. New York State Racing and Wagering Board, 55 A.D.2d 874 (1 st Dept. 1977) affd. 46 N.Y.2d 776 (1978). That court agreed “with the concurring opinion of Judge Herlihy in Ball…that enactment of the 1976-1976 State budget bill (L.1975, ch 50) did not abolish the 25 105519.2 11/1/2013 Bingo Commission, nor did it transfer to the Wagering Board the powers and functions of said Commission.” Both courts were correct. In reviewing and affirming the Third Department decision, this Court framed the issue before it as follows, Ball v. State of New York, 41 N.Y.2d 617, 621 (1977): It is clear in this case that the Legislature took no express action to abolish the Bingo Control Commission or the office of chairman of that agency. Thus, the issue presented is essentially one of legislative action and intent; may it be inferred from the enactment of the 1975- 1976 budget without explicit appropriation of funds for claimant’s salary that the Legislature expressly or impliedly repealed the office of Chairman of the Bingo Control Commission? Two (2) factors played a prominent role in the Court’s determination that the budget bill abolished neither the office nor the Commission. First, the Court noted with “particular interest” that subsequent to the adoption of the 1975-76 budget, a bill was approved which amended a relevant subdivision of the Executive Law, while leaving the subsection that set the salary for the chairman of the bingo control commission intact. Id. at 620. Second, the Court deemed it “noteworthy” that in connection with the subsequent 1976-77 budget, the Governor submitted “a new budget bill to abolish the Bingo Control Commission”, and the bill “died in committee”. Id. at 620-21. 26 105519.2 11/1/2013 Taking such evidence into account, the Court wrote, Id. at 622: By its failure to pass the legislation explicitly accomplishing the result sought by the Governor, or to specifically provide in the budget as finally enacted for the abolition of the bingo commission, the Legislature may be deemed to have expressed an intent not to eliminate the commission or the office of the chairman. The Governor’s reintroduction of the bill eliminating the Bingo Commission in 1976 quite obviously seems to indicate his own understanding that the Legislature had not, by the mere enactment of the 1975-1976 budget, repealed the applicable sections of the Executive Law. Finally, the Court opined, Id. at 625: We conclude by emphasizing that this case is not resolved by recourse to the truism that ‘[t]he courts do not sit in judgment upon questions of legislative policy’ (Gaynor v. Rockefeller, 15 N.Y.2d 120, 134) and that the province of the courts does not extend to the wisdom, necessity or motivation of legislation (see Kittinger v. Buffalo Traction Co., 160 N.Y. 377, 388, 389). Reliance on these basic jurisprudential principles may not compensate for the absence of required legislative action. The policies of the executive branch in budgetary matters are subject to the approval of the Legislature (NY Const, art VII, §§2, 3, 4) and only the Legislature may repeal a validly enacted statute. Under the circumstances presented here we cannot conclude that the Legislature has manifested a clear intent to repeal the existing statutory authority establishing the Bingo Control Commission. In making this determination we do not abdicate our judicial role in derogation of legislative authority. Rather, we only apply the constitutional dictate that the legislative power of the State is vested in the Senate and Assembly (NY Const, art III, §1). ‘Thus reads the fundamental law binding on us all, Judiciary, Governor, Legislature’ (People v. Tremaine, 281 N.Y. 1, 11). Of critical importance to this appeal, the two (2) factors driving the Court’s decision in Ball are also present here. First, like the relevant provisions of the Executive Law in Ball, Education Law §6305 was amended here in 2012 for the 27 105519.2 11/1/2013 purpose of adding subsection (11) (L.2012, c.57, pt. Q, §1, eff. March 30, 2012). In adopting such amendment, the Legislature was presumed to know the statute’s existing provisions. See, Commonwealth v. Canadian Bank, 21 N.Y.3d 55, 62 (2013). It left §6305(10) intact. Second, like in Ball, proposed legislation has been advanced here which, in exchange for other modifications to the chargeback mechanisms, would have expressly repealed Education Law §6305(10). The initial bill (S7152-2011) 8 , entitled “An act to amend the education law, in relation to payments to community colleges by the state, and to repeal subdivision 10 of section 6305 of the education law relating to state reimbursement to counties for amounts paid on behalf of non- resident students in attendance at the fashion institute of technology” (emphasis added), “died in committee”, just as the proposed legislation did in Ball. A 2012 version (A10700) met the same fate, and the 2013 version has not left committee either (A 934-2013) 9 . 8 The text of the proposed bill is available at http://open.nysenate.gov/legislation/bill/§7152-2011. 9 The text of the proposal is available at http://open.nysenate:gov/legislation/bill/A934-2013. 28 105519.2 11/1/2013 The question as to repeal by lack of appropriation was further addressed in Dinkins. Judge Smith, writing for the Court, framed the issue as follows, 83 N.Y.2d at 381: The primary issue on this appeal is whether a provision in the New York City Charter requiring the funding of the Independent Budget Office (IBO) has been properly amended or repealed by the actions of the Mayor and City Council. Specifically, we consider (1) whether the adoption by the City Council of a modification of the City’s fiscal year 1991 budget that, among other things, eliminated funding for the IBO, as well as the adoption of the fiscal year 1992 budget that contained no appropriation for the IBO, was the legislative equivalent of a local law delaying the establishment of the IBO and (2) whether the 1991 budget modification and 1992 budget implicitly amended the Charter’s IBO provisions. Observing that the law establishing the IBO was adopted by different procedures than the budget, and that the City Council had “not expressed an intent to amend the Charter”, the Court “…concluded that the City Council’s adoption of the fiscal year 1991 budget modification and the fiscal year 1992 budget was not the legislative equivalent of a local law delaying the establishment of the IBO, or an implicit amendment to the Charter’s IBO provisions….” Id. at 385, 386. See also, Gallagher, 42 N.Y.2d at 233-34 [finding that the lack of an appropriation did not serve to effect an amendment to the County Charter after examining the analogous budget process employed by Erie County]. 29 105519.2 11/1/2013 An appropriation bill merely allocates the State’s resources. It cannot be used as “a device for achieving collateral ends under the guise of budgeting.” Pataki, 4 N.Y.2d at 97. Accordingly, §6305(10) remains in effect. B. The County Cannot Revert Back to Education Law §6305(5) To Collect FIT Expenses From the Town On appeal below, the County abandoned its position that §6305(10) no longer existed and argued instead that §§6305(10) and 6305(5) should be read together so as to create “alternate funding” mechanisms 10 . However, such an “alternate funding” argument is without merit. It “is a general principle of construction that where a right is given by statute and a remedy provided in the same act, the right can be pursued in no other mode.” Matter of Meng, 227 N.Y. 264, 277 (1919). Education Law §6305(10) provides an exclusive remedy. No legislative evidence exists to the contrary. Indeed, the State’s obligation to reimburse counties was not made discretionary. Counties were not provided a menu of options to choose from in seeking reimbursement of FIT expenses. Rather, there was but one avenue of relief, a conclusion supported by the statutory language contained in Education Law §6305(10). By utilizing the word “shall”, as discussed in greater detail below, the Legislature rendered the State’s obligation to reimburse counties for FIT expenses mandatory and exclusive. 10 County Brief to Second Department at p.16. 30 105519.2 11/1/2013 The Court should decline to circumvent the legislative process by reading into the Education Law an “alternate funding” scheme that was never contemplated or adopted by the Legislature. See, e.g., Jewish Home and Infirmary of Rochester, New York, Inc. v. Commissioner of New York State Dept. of Health, 84 N.Y.2d 252, 263 (1994). This Court has held that an appropriation bill, limited by the State Constitution to a duration of two (2) years, can serve to suspend a State funding obligation “for that time”. Pataki, 4 NY3d at 98-99. On that point, the holding stopped there. Later, in reliance on Pataki, one court held that the lack of an appropriation for such purpose precluded counties from pursuing the State for reimbursement of FIT expenses. King, 18 AD3d at 1010 (3d Dept. 2005) 11 . However, it does not follow from these holdings, as the County would suggest, that county reimbursement for FIT expenses may again be had from towns and cities. To the contrary, by suspending an exclusive remedy, the Legislature left counties with no remedy. Moreover, the simple lack of an appropriation, standing alone, does not serve to restore or transfer FIT chargeback authority back to counties, particularly as no appropriation bill has ever expressed the intent to do so. See, e.g., Church of the Ascension, 46 N.Y.2d at 777. Nor can such grant of power be made by 11 Contrary to the County’s position below, King does not reject the argument that a county may not charge back a town for FIT costs (R. 65). 31 105519.2 11/1/2013 implication. Matter of Green (Potter), 51 N.Y.2d 627, 629 (1980). Indeed, no mechanism can accomplish such restoration short of a corresponding amendment to the Education Law that expressly states as such. As discussed above, the intent to place the reimbursement obligation exclusively upon the State, and to relieve towns and cities of such burden, was clearly evinced by the Legislature’s command in §6305(10) that “…the state shall reimburse each county” for FIT expenses (emphasis added). “Shall” conveys a mandatory directive. Losurdo v. Asbestos Free, Inc., 1 N.Y.3d 258, 265 (2003); Natural Resources Defense Council, Inc. v. NYC Dept. of Sanitation, 83 N.Y.2d 215, 220-21 (1994); Matter of Syquia v. Board of Education of Harpursville Central School District, 80 N.Y.2d 531, 536 (1992); Jewett v. Luau-Nyack Corp., 31 N.Y.2d 298, 304 (1972). That this mandatory directive was issued to the State, to the exclusion of all others, is beyond legitimate dispute. As reiterated in Hoerger v. Spota, 109 A.D.3d 564, 568 (2d Dept. 2013) affd. __ N.Y.3d __ (2013) (2013 NY Slip Op. 05708): …‘where a law expressly describes a particular act, thing or person to which it shall apply, an ir-refutable inference must be drawn that what is omitted or not included was intended to be omitted or excluded. Applying this maxim (expressio unius est exclusion alterius) here leads to the inescapable conclusion that the Legislature intended that county reimbursement relative to FIT be obtained from the State, to the exclusion of all others. 32 105519.2 11/1/2013 The result would be different had the Legislature written that “…the state may reimburse each county”. Natural Resources, 83 N.Y.2d at 220-21. May, in contrast to shall, is a permissive term. Scoglio v. County of Suffolk, 85 N.Y.2d 709, 712 (1995). A permissive term negates operation of the maxim just referenced. Lyons v. Goldstein, 290 N.Y. 19, 23 (1943). Such discretionary language then, had it been used, could reasonably have suggested an intent to leave §6305(5) available as an option to counties. The Legislature though, did not choose this course, and that prior avenue is now closed. Similarly, the Legislature could have imposed the precise mandatory directive that it did, but provided for the contingency that the State would not appropriate monies to reimburse counties for FIT expenses. If that was the intent, it could have written “that if the State does not appropriate monies for such reimbursement, the county may resort back to §6305(5)”, or some similar alternative language. Certainly, the Legislature was “…free…to draft appropriately worded legislation” to that effect. Patrolmens Benevolent Association v. City of New York, 41 N.Y.2d 205, 209 (1976). Again, it did not. Instead, a budget passed without appropriations for county reimbursement is simply an occurrence that the Legislature chose not to address. Where “[t]he Legislature did not provide for the contingency that is the subject of this appeal”, the Court “…must conclude that its failure in this regard was deliberate” [People v. 33 105519.2 11/1/2013 Tychanski, 78 N.Y.2d 909, 912 (1991)] and “intended.” Pajak v. Pajak, 56 N.Y.2d 394, 397 (1982). The judiciary is not empowered to alter the Legislature’s chosen course. “Courts are not supposed to legislate under the guise of interpretation, and in the long run it is better to adhere closely to this principle and leave it to the Legislature to correct evils if any exist”. Bright Homes v. Wright, 8 N.Y.2d 157, 162 (1960). See also, People v. Boothe, 16 N.Y.3d 195, 198 (2011). Similarly, courts “…must be careful to avoid…the fashioning of orders or judgments that go beyond any mandatory directives of existing statutes and regulations and intrude upon the policy-making and discretionary decisions reserved to the legislative and executive branches.” Klostermann v. Cuomo, 61 N.Y.2d 525, 541 (1984). It follows from §6305(10)’s mandatory directive to the State that it is an exclusive remedy, and that imputation of the “optional” intent urged by the County; i.e., that §6305(10) was merely intended as an “alternate funding” source for county recovery of FIT costs, must be refused. Indeed, given the Legislature’s precise and exclusive directive, “…the judiciary is ‘foreclos[ed]…from fashioning exceptions, however reasonable they might be made to appear’”. Matter of Esiason v. Washington County Bd. of Elections, 220 A.D.2d 878, 879 (3d Dept. 1995) quoting Baker v. Monahan, 42 N.Y.2d 1074, 1075 (1977). 34 105519.2 11/1/2013 In any event, notwithstanding judicial disfavor of the principle, Education Law §6305(5), to the limited extent that it previously included FIT within its coverage, was repealed by implication with the adoption of §6305(10)’s exclusive remedy. “In determining whether one statute impliedly repeals an earlier one, the primary and fundamental question to be resolved is what did the Legislature intend.” People v. Mann, 31 N.Y.2d 253, 257 (1972). “Such intent, of course, must be gathered from the language used and whenever there is a clear repugnancy, so that either one statute or the other must fall, then the latter one must be held to have repealed the former.” People ex rel. Bronx Parkway Commission v. The Common Council, 229 N.Y. 1, 8 (1920). “[S]uch an intent…will be clearly manifested by an inconsistency between the statutes which is such as to preclude giving effect to both.” Mann, 31 N.Y.2d at 258. See also, Abate v. Mundt, 25 N.Y.2d 309, 318 (1969) affd. 403 U.S. 182 (1971). As held by the Court in Hastings v. H.M. Byllesby & Co., 293 N.Y. 413, 419 (1944): Even without an express provision in a statute that inconsistent provisions in earlier statutes are repealed, such inconsistent provisions would be repealed by necessary implication where the provisions in the earlier statutes cover the same field as the later statute and there is no room for reconciliation. 35 105519.2 11/1/2013 Here, the exclusive remedy eventually provided in §6305(10) cannot be read to co-exist with the authority previously granted to counties in §6305(5). Upon issuing a new and mandatory directive to the State, the remedy against towns and cities was necessarily foreclosed. To find otherwise negates clear legislative intent. Thus, within the context of FIT, §§6305(10) and 6305(5), given their carefully selected verbiage, are “in such conflict that both cannot be given effect.” Matter of Board of Education v. Allen, 6 N.Y.2d 127,142 (1959). “…[T]he conflict…must be resolved by holding that the latter impliedly repealed the former insofar as they are inconsistent, with the result that the latter is controlling.” Mann, 31 N.Y.2d at 258 (emphasis added). See also, Slewett v. Board of Assessors, 78 A.D.2d 403, 419-20 (2d Dept. 1981). Even if the lack of an appropriation was treated as having repealed §6305(10), counties still would not have authority to recover FIT expenses under §6305(5). Indeed, the repeal of a provision which had previously supplanted a prior one “does not revive such prior provision.” General Construction Law, §90. The suspension of §6305(10), as opposed to its repeal, does not alter this rule of construction. Under either label, action concerning §6305(10) cannot not serve to revive §6305(5)’s coverage of FIT. 36 105519.2 11/1/2013 Reinstatement of such coverage requires affirmative legislation to that effect. As discussed under the topic of legislative equivalency, restoration of a county’s statutory authority to pursue towns and cities for reimbursement of FIT expenses would require legislation equivalent to that which removed it. To date, no such legislation has been enacted. Accordingly, the County is without recourse against the Town. Neither Pataki nor King say or even imply otherwise. Restoration of a county’s right to charge back towns and cities upon the lack of a State appropriation is not discussed in either, and neither the Education Law nor any appropriation bill since 2001 have evinced the intent to produce such a result. As already stated, by suspending an exclusive remedy, the Legislature left counties without any remedy. Unless and until the Legislature reinstates the authority it removed, the County has no recourse against towns and cities for the recovery of FIT expenses. 37 105519.2 11/1/2013 POINT II EDUCATION LAW §6302(3) DOES NOT PERMIT COUNTIES TO RECOVER THE COSTS OF FIT’S ADVANCED DEGREE PROGRAMS FROM TOWNS AND CITIES After incorrectly holding that Education Law §6305(5) permitted the County to charge back the Town for monies that it had paid FIT, the Second Department further ruled that such authority extended beyond the expenses of FIT’s two year programs to include the costs of its baccalaureate and masters degree programs. Such holding was predicated upon §6302(3) of the Education Law, which, as relevant here, states that FIT is to be “financed and administered in the manner provided for community colleges.” This was also error. The county chargeback authorized by Education Law §6305(5) is not implicated by §6302(3) as it bears no relation to the financing or administration of FIT. The Court’s well-settled rules of statutory interpretation warrant repeating. Courts, with the “language itself” serving as the “starting point”, must give “effect to the plain meaning thereof”. Commonwealth v. Canadian Bank, 21 N.Y.3d 55, 60 (2013) citing Majewski v. Broadalbin-Perth Cent. School Dist., 91 N.Y.2d 577, 583 (1998). See also, Patrolmen’s Benevolent Assn. of City of New York v. City of New York, 41 N.Y.2d 205, 208 (1976). 38 105519.2 11/1/2013 Legislative intent “is to be determined primarily from the language used in the act under consideration.” Department of Welfare of City of New York v. Siebel, 6 N.Y.2d 536, 543 (1959). The words of a statute are to be read “to mean just what they say”. Guiliani v. Hevesi, 90 N.Y.2d 27, 39 (1997) quoting Comereski v. City of Elmira, 308 N.Y. 248, 254 (1955), and should be applied “out of fidelity to the literal legislative language.” Desiderio v. Ochs, 100 N.Y.2d 159 175 (2003) (J. Rosenblatt concurring opinion). “[F]orced or unnatural interpretations” are to be avoided. Fleming v. Graham, 10 N.Y.3d 296, 300 (2008) quoting Castro v. United Container Mach. Group, 96 N.Y.2d 398, 401 (2001). “When the plain language of the statute is precise and unambiguous, it is determinative”. Matter of Washington Post Co. v. New York State Insurance Department, 61 N.Y.2d 557, 565 (1984). As so ably summarized in McCluskey v. Cromwell, 11 N.Y. 593, 601-02 (1854): It is not allowable to interpret what has no need of interpretation, and when the words have a definite and precise meaning, to go elsewhere in search of conjecture in order to restrict or extend the meaning. Statutes and contracts should be read and understood according to the natural and most obvious import of the language, without resorting to subtle and forced construction for the purpose of either limiting or extending their operation. Courts cannot correct supposed errors, omissions or defects in legislation, or vary by construction, the contracts of parties. The office of interpretation is to bring sense out of the words used, and not bring a sense into them. 39 105519.2 11/1/2013 Finally, as reiterated in Matter of Malpica-Orsini, 36 N.Y.2d 568, 571 (1975): Under the doctrine of separation of powers, courts may not legislate (Bright Homes v. Wright, 8 N.Y.2d 157, 162; Matter of Metropolitan Life Ins. Co. v. Boland, 281 N.Y. 357, 361), or rewrite (Matter of Tormey v. LaGuardia, 278 N.Y. 450, 451), or extend legislation (People ex rel. Newman v. Foster, 297 N.Y. 27, 31; Matter of Hogan v. Supreme Ct., 281 N.Y. 572, 576). Implementing these rules, §6302(3) states simply that FIT shall be financed and administered in the manner provided for community colleges. Interpreting these words “to mean just what they say” [Guiliani, 90 N.Y.2d at 39], the statute plainly directs that FIT shall be financed the same way that a community college is financed, and administered the same way that a community college is administered. By its plain language, it means nothing more. Certainly, it does not implicate the county chargeback. This interpretation is supported by the September 2012 CUNY/SUNY report to the Legislature. According to the report, FIT’s ability to expand its offerings was conditioned upon it being “…funded in the same manner as all community colleges, including FIT’s statutory right to bill chargebacks for all applicable non- resident students attending FIT, including upper division and graduate students” 40 105519.2 11/1/2013 (emphasis added) 12 . Community college chargeback authority was thus clearly extended for FIT. However, there is no evidence of a corresponding intent to extend county chargeback authority in the same way. §6302(3) itself makes no mention of counties or county chargeback authority, and the Court is without power to insert such language. Malpica-Orsini, 36 N.Y.2d at 571. Moreover, a “forced” or “unnatural interpretation” which would extend the definition of FIT’s “financing” to include a county budget mechanism is to be avoided. See, Fleming, 10 N.Y.3d at 300. The flaw in the decision below lay in its failure to distinguish between chargebacks. §6305(2) permits community colleges to charge back counties issuing certificates of residence “an allocable portion of the local sponsor’s share” of the operating costs attributable to non-residents attending such community college. This type of chargeback was intended as a central part of financing the community college system. 12 http://www.suny.edu/Board_of_Trustees/webcastdocs/Community%20Coll ege%20Chargeback%20Report.txt, at p.4. 41 105519.2 11/1/2013 The CUNY/SUNY report confirms such intent, describing the community college chargeback/financing dynamic as follows 13 : Chargeback revenues are a critical part of all community college operating budgets, along with student tuition, state aid, and the local sponsor share. Since the establishment of the community colleges in 1948, the operating costs have been shared by the students, the state and the local sponsor(s). The three entities have often been referred to as the ‘Funding Partners’. … The key to understanding the funding partnership is the concept that for each student, there are three funding streams: a state funding share (state aid), student funding share (tuition), and a local funding share based upon the student’s legal residence. For students attending a community college sponsored by the county in which they live, their local share is the sponsor’s contribution. For students living in other counties in New York State, their local share is the chargeback received from their home counties. For students that live outside of New York, the non-resident tuition premium (e.g. the difference between the resident and the non-resident rates of tuition) represents their local share. Sharing the costs of educating every community college student via this three-way funding partnership is the foundation of the community college funding formula (emphasis added). Conversely, there is no evidence to suggest that §6305(5), the county chargeback provision, is intended as a community college financing provision. Indeed, the amounts payable to community colleges by a county pursuant to §6305 were specifically denominated “a general county charge” [Education Law §6305(5)]. With respect to this general county charge, Education Law §6305(5) permits counties, at their discretion, to recoup from towns and cities the payments 13 http://www.suny.edu/Board_of_Trustees/webcastdocs/Community%20Coll ege%20Chargeback%20Report.txt, at p. 5. 42 105519.2 11/1/2013 they have made under §6305(2). The county chargeback, in contrast to the community college chargeback, is merely designed as an offset affecting a county’s operating budget, not that of a community college. This critical distinction was overlooked below. Similar language employed elsewhere in the Education Law provides further support for this conclusion. Education Law §6304 directs the precise manner by which community colleges shall be financed. See, Grier v. Bowker, 314 F.Supp. 624, 629 (S.D.N.Y. 1970); Grier v. Bowker, 327 F.Supp. 892, 894 (S.D.N.Y. 1971). Not coincidentally, the provision bears the heading “Financing of community colleges”. It sets forth a statewide formula for financing the operating and capital costs of community colleges, and assigns contribution percentages for state financial aid [§6304(1)(a)], local sponsor contribution [§6304(1)(c)], and student tuition and fees [§6304(1)(d)]. This formula applies to FIT [§6302(3)]. The Education Law’s financing provision does not include county chargeback authority. In fact, the Legislature removed such county authority from the community college financing provision when it repealed and re-enacted §6304 in 1955, leaving the county chargeback provision behind in the Non-Resident and out-of-state students section of the law (§6305). Similarly, Education Law §6306, entitled “Administration of Community Colleges”, does not provide for county chargeback authority. 43 105519.2 11/1/2013 The Legislature is presumed to know the distinction between the terms it employs in legislation. People v. Elmer, 19 N.Y.3d 501, 507 (2012). Thus, financing, as referenced in Education Law §6302(3), is covered by §6304, consistent with that provision’s title and content. Likewise, administration implicates the provisions of §6306. On the other hand, matters relating to the reduction of a “general county charge”, as provided for in §6305(5), fit within neither term. As such, the language in §6302(3) does not invoke the county chargeback provision. Had that been the intention, the Legislature “could easily have so provided.” Meltzer v. Koenigsberg, 302 N.Y. 523, 525 (1951). It did not. Even if the language in §§6302(3), 6304, or 6306 was in some way construed as ambiguous, and respectfully it is not, then it is instructive that the “financing” and “administration” headings sit atop enactments that do not include the county chargeback provision. In this regard, the statute’s headings should not be disregarded in its interpretation. Broderick v. Weinsier, 253 A.D. 213 (1 st Dept. 1938) affd. 278 N.Y. 419 (1938). Though it may not alter the effect of unambiguous language in the body of the statute itself, “a title or heading may help clarify or point the meaning of an imprecise or dubious provision.” Squadrito v. Griebsch, 1 N.Y.2d 471, 475 (1956). See also, Arcara v. Cloud Books, 65 N.Y.2d 44 105519.2 11/1/2013 324, 329 (1985) rev’d on other grounds 478 U.S. 697 (1986) [the title of a statute might in some cases aid in its interpretation]. In any event, there is nothing ambiguous about the formula-centric financing provisions of §6304, or the straightforward administration provisions of §6306. Nor, respectfully, is there any legitimate question that neither includes county chargeback authority. The Education Law does not provide authority for counties to recover the costs of FIT’s advanced degree programs from towns and cities 14 . That aspect of the Second Department Order holding otherwise must be reversed. 14 There is no evidence in this record with respect to the practices of other counties or the State with respect to their interpretation and implementation of this particular provision. Even if there was, and such interpretations were inconsistent with that advanced by the Town here, it remains that “It has never been the law in this State that the clear and unambiguous wording of a statute or constitutional provision may be overlooked entirely when it is seemingly inconsistent with the practice and usage of those charged with implementing the laws.” Anderson v. Regan, 53 N.Y.2d 356, 362 (1981). Indeed, a prior interpretation may be “nothing more than a violation, which, no matter how persistent, widespread and uncorrected, cannot alter the meaning of the statute.” Hellerstein v. Assessor of the Town of Islip, 37 N.Y.2d 1, 10 (1975). 45 105519.2 11/1/2013 POINT III ANY COUNTY CHARGEBACK MUST BE PRECEDED BY AUTHORIZATION FROM THE COUNTY LEGISLATURE As correctly held by the Second Department, even if the County was allowed to charge back the Town for any or all of the FIT expenses, such chargeback must be preceded by authorization from the County Legislature, which authorization was never granted. By the County’s own admission, the County’s legislative power rests with the Legislature (R. 87). The County Government Law of Nassau County (L. 1936, Chapter 879) (the “Charter”) further provides that the County Legislature “…shall have and exercise all the powers and duties of the county together with all the powers and duties, which now, or may, hereafter be conferred or imposed on the County Legislature by laws applicable to such county not inconsistent with this act” (§102). In 2003, in accordance with these provisions, the County Legislature directed the County Treasurer to charge back community college costs to the towns and cities within the County, and it did so by resolution (R. 42). The resolution was adopted with the specific intent that FIT be excluded from such authorization (R. 43). This intent was irrefutably established below by the OMB staff summary presented to the County Legislature at the time the resolution was considered and passed, as well as by the billing practices of the County Treasurer subsequent to 46 105519.2 11/1/2013 the 2003 resolution’s adoption. Indeed, until the actions giving rise to this proceeding, the County Treasurer never billed towns and cities for FIT tuition, despite assessing charge backs for traditional community college expenses since passage of the 2003 resolution. Consistent with such proof, the Second Department found, at least by implication, that a resolution granting the County Treasurer authority to impose FIT chargebacks was never adopted, and was in fact required. The factual aspect of that conclusion is not subject to this Court’s review, as this Court does “not find facts.” Its “sole authority is to review legal questions.” People v. Roe, 74 N.Y.2d 20, 28 (1989). Accordingly, the only legal question before the Court on this issue is whether the Second Department correctly held that legislative authorization for the FIT chargeback was required before its imposition by the County Treasurer. Respectfully, it did. The Charter establishes that the County Treasurer shall have all the powers and duties of County Treasurer under the laws of this state applicable to the county, and shall be the chief fiscal officer of the County (§502). County Law §550, insofar as relevant here, provides that the “county treasurer shall receive and be the custodian of all money belonging to the county or 47 105519.2 11/1/2013 in which the county has an interest and shall keep a true account of all receipts and the expenditures in books provided by him at the expense of the county.” The Legislature, as already discussed, possesses “all the powers and duties of the County”. Thus, nothing in the Charter or County Law empowers the County Treasurer to impose or collect FIT or community college chargebacks absent prior authorization from the County Legislature. Nor does the County Treasurer derive any such authority from the Education Law, which expressly delineates the duties and responsibilities of a county’s chief fiscal officer within the context of the community college chargeback program. Pursuant to Education Law §6305(3), a county’s chief fiscal officer is restricted to considering applications for and issuing, where appropriate, certificates of residence to any person desiring to enroll in a community college as a non-resident. The only other function of the chief fiscal officer within the framework of the Education Law is to serve as the County’s agent for receipt of billings from out-of-county community colleges attended by the County’s residents pursuant to the certificates of residences that the chief fiscal officer granted [Education Law §6305(4)]. Education Law §6305(5), relied upon by the County here, contains no grant of authority to a county’s chief fiscal officer. To the contrary, it merely provides 48 105519.2 11/1/2013 that the monies paid by a county pursuant to §6305 “shall be a general county charge”, and that “a county may charge back such amounts in whole or in part to the cities and towns in the county…” 15 Two (2) key conclusions are drawn from that statutory language. First, the Legislature, which specifically identified the functions of the county’s chief fiscal officer elsewhere in §6305, made no mention of that office in its delegation of permissive charge back authority to the county. The charge back authority, to the extent that it exists, belongs to the County, not the County Treasurer. Second, by using the word “may”, the Legislature made clear that a county’s charge back authority was permissive. See, Scoglio, 85 N.Y.2d at 712. Imposition of the charge backs, which has policy and budgetary implications for the counties, towns and cities involved, was rendered a local legislative determination. Such discretion, of course, can only be exercised by the County Legislature, not an appointed officer acting alone. Unless and until local legislative authority is given, neither the County Treasurer nor any other official purporting to act on behalf of a 15 The County argued below that the language “in whole or in part” is intended as authorization for county charge back of FIT’s advanced degree program costs. That is not the provision’s intent. Indeed, the “in whole or in part” language existed since the adoption of Article 126 in 1948, long before FIT even began offering advanced degrees. The cited language simply means that a county may charge back its towns and cities for the two year programs dollar for dollar, or may charge back a lesser amount and assume the balance of the obligation itself. 49 105519.2 11/1/2013 county has authority to unilaterally impose a county chargeback upon a town or city. County Law §550, which provides that “the county treasurer shall receive and be the custodian of all money belonging to the county or in which the county has an interest”, provides further support for this conclusion. As §6305(5) is permissive, unless and until the County Legislature decrees its intent to pursue such chargebacks, the monies it might otherwise be entitled to recover are not monies “belonging to the county or in which the county has an interest.” Thus, the County Treasurer has no authority to pursue or “receive” them. The County shared this interpretation. In 2003, the County Legislature adopted a resolution authorizing the community college charge-back, exclusive of FIT. The resolution itself states that its purpose was “to authorize the Treasurer to charge back” (R. 42-43). In an analogous case, this Court rejected an attempt by the Suffolk County Comptroller, the chief fiscal officer of Suffolk County, to unilaterally recoup alleged wage overpayments made to an employee in “…the absence of any judicial action or legislative approval” and where the “Comptroller sought none.” Leirer v. Caputo, 81 N.Y.2d 455, 460-61 (1993). The Court held that in bypassing required procedures and garnishing wages without “an independent adjudicative modality …establishing a debt”, the Comptroller had “…leapfrogged to act alone and 50 105519.2 11/1/2013 circumvented the…Legislature.” Id. at 460, 461-62. Neither the Charter, which granted the Comptroller authority to perform all the duties of the chief fiscal officer of a county under the County Law, nor the County Law, provided authority to the Comptroller to engage in such actions. Id. at 461. This Court, like the Second Department did below, should find that the County Treasurer’s unilateral chargebacks were unauthorized and without effect, and should direct payment by the County to the Town of all monies improperly withheld forthwith. POINT IV THE COUNTY’S SET OFF OF SALES TAX REVENUE OWED THE TOWN AGAINST A DISPUTED DEBT IS UNLAWFUL By the County’s own calculations, the Town’s share of sales tax revenue for the fourth quarter of fiscal year 2010 was $2,448,625.00 (R. 72). That amount is liquidated, undisputed, and well past due. Further, during the course of this litigation, the County has withheld similar sales tax revenue for 2011 and 2012, and likely will do so again in 2013. By contrast, entitlement to the monies that the County has sought from the Town for FIT expenses has been and continues to be disputed. As the extent of such chargebacks is also in dispute, any amounts even arguably due remain unliquidated. 51 105519.2 11/1/2013 On this point, Supreme Court held that the County could collect the two year costs associated with FIT, but no more. The Second Department held that all the costs were lawfully retrievable, but that the County was entitled to nothing because it had never passed a resolution authorizing such a chargeback. It is clear then that the “debt” that the County set off is not only in dispute as to validity and amount, but is not a “debt” at all. As this Court held long ago in Dunn v. Uvalde Asphalt Paving Co., 175 NY 214, 219 (1903): …there can be no such thing as a right to ‘set off’ a possible but unestablished liability unliquidated in amount, against a liquidated legal claim that is due and payable. This is as obviously impracticable in equity as in law. See also, Spodek v. Park Property Development Associates, 263 AD2d 478- 479 (2d Dept. 1999); Willett v. Lincolnshire Management, Inc., 302 AD2d 271 (1st Dept. 2003). The Second Department correctly found that the County could not set off its disputed and unliquidated FIT reimbursement claim against the Town’s undisputed statutory share of sales tax revenue. If municipalities were permitted to withhold monies from each other in satisfaction of disputed and unliquidated claims, without benefit of adjudication or other claim resolution process, the result would be, as it is quickly becoming here, governmental chaos. 52 105519.2 11/1/2013 CONCLUSION The Education Law, as presently constituted, does not provide the County with the right to charge back the Town for any of the costs that the County is required to pay to FIT. The Second Department’s Order should be modified to so reflect, and the County should be directed to pay the Town all monies improperly withheld forthwith. If by some construction it is held that such chargeback authority does exist, it must be limited to the recovery of costs attributable to FIT’s two year programs and degrees. In all other respects, the Second Department’s Order should be affirmed. Respectfully Submitted, BOND, SCHOENECK & KING, PLLC By:___________________________ Richard S. Finkel Attorneys for Appellant-Respondent TOWN OF NORTH HEMPSTEAD 1399 Franklin Avenue, Suite 200 Garden City, New York 11530 (516) 267-6300
