In the Matter of Town of North Hempstead, Appellant-Respondent,v.County of Nassau, Respondent-Appellant.BriefN.Y.September 10, 2014To Be Argued By: Robert F. Van der Waag Time Requested: 30 Minutes COURT OF APPEALS STATE OF NEW YORK APL-2013-00253 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 DEFENDANT-RESPONDENT-RESPONDENT-APPELLANT Of Counsel: Robert F. Van der Waag, Deputy County Attorney Appeals Bureau Chief David A. Tauster, Deputy County Attorney HON. CARNELL T. FOSKEY Acting County Attorney of Nassau County Attorney for Defendant-Respondent- Respondent-Appellant One West Street Mineola, New York 11501 (516) 571-3056 Appellate Division, Second Department, Docket No. 2011-09018 Nassau County Supreme Court Index No. 6734/11 i TABLE OF CONTENTS TABLE OF AUTHORITIES ................................................................................... iii RULE 500.13(A) STATEMENT ............................................................................... 1 JURISDICTION ......................................................................................................... 2 QUESTIONS PRESENTED ...................................................................................... 3 STATEMENT OF THE CASE .................................................................................. 4 Preliminary Statement ................................................................................................ 4 Statement of Facts and Procedural History ................................................................ 6 ARGUMENT ...........................................................................................................12 POINT I A COUNTY MAY PROPERLY CHARGE BACK TO ITS TOWNS AND CITIES THE FULL AMOUNT PAID FOR THEIR RESIDENTS TO ATTEND ANY DEGREE PROGRAM AT A COMMUNITY COLLEGE .....................................12 A. Education Law § 6305(5) is applicable to FIT in all respects ........................12 B. Education Law § 6305(10) did not repeal or alter Education Law § 6305(5) .........................................................................................................17 POINT II THE COUNTY TREASURER WAS EMPOWERED TO CHARGE BACK TO THE TOWNS AND CITIES FOR NONRESIDENT TUITION AT FIT ...............22 A. The County has already adopted a Resolution providing for FIT charge backs ............. ………………………………………………………………22 B. Education Law § 6305(5) does not require enabling legislation ....................26 ii POINT III THE COUNTY IS ENTITLED TO SET OFF THE AMOUNTS CHARGEABLE TO THE TOWN FOR ITS RESIDENTS ATTENDING FIT AGAINST THE TOWN‟S SHARE OF SALES TAX REVENUE ...................................................30 CONCLUSION ........................................................................................................34 iii TABLE OF AUTHORITIES Cases Amato v. State of N.Y., 131 Misc. 2d 1049 (Ct. of Claims 1986)…………………14 Argirion and Finkel v. Marcante Luncheonette II, Inc., 64 Misc. 2d 660 (N.Y. Sup. 1970)………………………………………………………………………..31 Auerbach v Bd. of Educ. of City School Dist. of City of New York, 86 N.Y.2d 198 (1995)………………………………………………………………………25 Buffalo, City Of, v Roadway Tr. Co., 303 N.Y. 453 (1952)………………………23 Canale v. New York State Dept. of Tax. and Fin., 84 Misc.2d 786 (Ct. Claims 1975)……………………………………………………………………….31 Cimino v. State of NY, 306 N.Y. 143 (1953)……………………………………...18 Fahey v. Whalen, 54 A.D.2d 1097 (4th Dept. 1976)……………………………...31 Fisher v. FIT, 491 F.Supp. 879 (S.D.N.Y. 1980)…………………………………14 Fulton Montgomery Community Coll. v County of Saratoga, 80 A.D.3d 217 (3d Dept. 2010)…………………………………………………………………16 Goncalves v Regent Intern. Hotels, Ltd., 58 N.Y.2d 206 (1983)…………………23 Hettrick Mfg. Co. v Barish, 120 Misc. 673 (App. Term 1923) affd, 209 A.D. 807, 204 N.Y.S. 915 (1st Dept. 1924)…………………………………………...32 Matter of County of Suffolk v. King, 18 A.D.3d 1010 (3d Dept. 2005)…………...19 Metropolitan Multi-Housing Laundry Ass’n v. N.Y.C. Dept. of Finance, 184 A.D.2d 759 (2d Dept. 1992)………………………………………………..18 Morash v. State of New York, 268 A.D.2d 510 (2d Dept. 2000)………………….31 Northville Indus. Corp. v State, 14 A.D.3d 817 (3d Dept. 2005)…………………33 iv Pataki v. New York State Assembly, 4 N.Y.3d 75 (2004)…………………19-20, n1 Patrolmen's Benev. Ass'n of City of New York v City of New York, 41 N.Y.2d 205 (1976)…………………………………………………………………..15, 24 United States v Munsey Trust Co. of Washington, D.C., 332 U.S. 234, 67 S.Ct. 1599, 91 L.Ed 2022 (1947)………………………………………………...30 Statutes County Law § 2…………………………………………………………………...28 County Law § 550…………………………………………………………….27, 28 Education Law § 2587…………………………………………………………….13 Education Law § 6301…………………………………………………………….13 Education Law § 6302……………………………………………………..…passim Education Law § 6304…………………………………………………………16-17 Education Law § 6305………………………………………………………..passim Education Law § 6306…………………………………………………………16-17 Nassau County Charter § 183……………………………………………………..26 Nassau County Charter § 203…………………………………………………28, 29 Nassau County Charter § 501……………………………………………………..28 Nassau County Resolution No. 368-2003……………………………………passim Real Property Tax Law § 523-b…………………………………………………..27 Statutes Law § 98…………………………………………………………………18 v Other Authorities Op. State Comp, 1988 No. 88-42………………………………………………….32 1 RULE 500.13(a) STATEMENT There is no other litigation pending between the parties relating to the subject matter of this appeal. 2 JURISDICTION This appeal is presently before the Court upon its grant of leave to both the Town of North Hempstead and the County of Nassau. The Court has jurisdiction to entertain the appeal pursuant to CPLR 562(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 herein are fully preserved (R. 65; 67; 69; 71; 75; 76; County‟s Principal Brief at 9; 10; 12; 14; 16). 3 QUESTIONS PRESENTED 1. Does the Education Law authorize a county to charge back to its towns and cities the entire amounts paid by the county to the Fashion Institute of Technology (“FIT”) for nonresident tuition in all of FIT‟s academic programs, including its baccalaureate and graduate programs? 2. Must a county formally adopt additional local legislation authorizing its chief fiscal officer to charge back to towns and cities the amounts paid by the county for nonresident tuition at FIT where the county has already adopted a local enactment authorizing its treasurer to charge back for nonresident tuition at out-of- county community colleges and where the relevant provision of the Education Law does not require implementing legislation in the first instance? 3. May a county set off the amount owed by a town or city for its residents‟ nonresident tuition at New York community colleges against the town or city share of sales tax distributions when the amount of the tuition owed was readily calculable at the time of the set off? 4 STATEMENT OF THE CASE Preliminary Statement This case involves a straightforward application of the Education Law‟s mechanism for financing attendance at New York community colleges by nonresident students from counties throughout the State. The Appellate Division, Second Department, correctly recognized that counties in New York state may charge back to their subordinate towns and cities the costs associated with residents attending the Fashion Institute of Technology (“FIT”) as nonresident students. The decision below should therefore be affirmed in this respect. The Appellate Division erred, however, in holding that said counties may only engage in such charge backs pursuant to a local enactment which explicitly relates to FIT (rather than community colleges in general). The Appellate Division further erred in holding that a county may not set off the amount of nonresident tuition owed to the county against sales tax revenues owed to a town or city. As such, the decision below should be modified to reflect that the County of Nassau (the “County”) was, in fact, authorized to charge back for nonresident tuition at FIT and, if necessary, set off the debt owed for such nonresident tuition against sales tax distributions to the towns and cities. Education Law § 6305 provides, without limitation, that community colleges may charge back to a county the costs associated with its residents attending said 5 college as nonresident students. That statute further provides that said county may, at its discretion, charge back those costs to its subordinate towns and cities in proportion to the number of residents of said towns and cities who attended the college. The Fashion Institute of Technology is, indisputably, a community college, and as such there is no restriction on a county‟s ability to charge back to a subordinate town or city for nonresident tuition. The Town of North Hempstead (the “Town”) attempts to argue that, notwithstanding the plain and unambiguous language of Education Law § 6305, that it either does not apply to FIT, or that it only applies to FIT‟s two-year associates degree programs. There is nothing in the Education Law which suggests that chargeback authority is limited to particular degree programs at community colleges. Furthermore, while the Town is correct that Education Law § 6305(10) ostensibly provides that the State will reimburse counties for FIT costs, thereby obviating the need to charge back, this provision has been abrogated by the State. As such a county may, in fact, charge back to towns and cities for FIT nonresident tuition in the absence of such state reimbursement, and the decision below should therefore be affirmed in this respect. While the Second Department acknowledged the general framework by which counties may charge back for FIT nonresident tuition, it incorrectly held that such 6 chargebacks may only occur pursuant to a local enactment. There is, however, no language in Education Law § 6305 which suggests that it requires some form of local legislation to authorize a county treasurer to make such chargebacks. Moreover, even if there was such a requirement, Nassau County adopted legislation in 2003 which is broad enough to authorize FIT chargebacks, even if it did not begin charging back for such tuition until 2010. The County Treasurer had the authority to charge back to the Town for FIT nonresident tuition, and as such the decision below should be reversed in this respect. Finally, the decision below also erroneously held that the County could not employ the common law right of set off against the sales tax distributions owed to the Town. It is settled law that municipalities may set off a debt owed against money of a debtor in the municipalities possession, and the State Comptroller has already recognized, in a 1988 opinion, that this right extends to setting off against sales tax revenues. Moreover, as FIT nonresident tuition was readily calculable at the time the County applied the set off, there is no support for a contention that the Town‟s debt was unliquidated. The County was fully authorized to set off the Town‟s nonresident tuition debt against the sales tax distribution, and as such the decision below should be reversed in this respect. Statement of Facts and Procedural History FIT is a community college sponsored by the New York City Board of 7 Education. Education Law § 6302(3). Pursuant to Education Law§ 6302(3), “[a]uthorization to establish community colleges,” FIT “shall be financed and administered in the manner provided for community colleges.” Although almost all community colleges in New York State provide only two-year associates degree programs, a 1975 amendment to Education Law § 6302(3) authorized FIT to offer baccalaureate programs, and a subsequent amendment in 1979 authorized the community college to offer master‟s degree programs. R. 68. Education Law § 6305 provides the framework for financing attendance by nonresident students at community colleges in New York State. Education Law § 6305(4) provides that a community college may chargeback to a county “an allocable portion of the operating costs and a further sum on account of capital costs of such college” attributable to that county‟s residents attending the community college. Education Law § 6305(5), in turn, provides that the counties “may charge back such amounts in whole or in part to the cities and towns in the county in proportion to the number of students who…were attending each such college as non-residents…and who were residents of each such city or town at the beginning of such [academic] terms.” In 1994, the State Legislature enacted Chapter 170 of the Laws of 1994, which added a new subdivision 10 to Education Law § 6305. That new provision 8 provided that “the state shall reimburse each county…the actual amount paid by each…county on behalf of [nonresident] students” attending FIT. R. 74. Chapter 170 of the Laws of 1994 did not contain any provision repealing or modifying Education Law § 6305(5). Between 1995 and 2001, the State Legislature appropriated sufficient funds to meet its obligation pursuant to Education Law § 6305(10), but in 2001 the Legislature eliminated funding for this program from the budget. R. 74. On December 8 2003, the Nassau County Legislature adopted Resolution No. 368-2003, “[a]uthorizing the Treasurer to charge back to cities and towns amounts paid by the County for the cost of educating County residents at community colleges outside of Nassau County.” R. 108. This resolution provided that the Treasurer shall “charge back amounts payable to out-of-county community colleges by Nassau county…to the cities and towns in Nassau County in proportion to the number of students who…were attending such college as non- residents.” R. 109. The second “whereas” clause of this resolution noted that “Nassau County may charge back…amounts paid to out-of-county community colleges to the cities and towns in such county, in proportion to the number of Nassau residents who were attending each such out-of-county college.” Id. The third “whereas” clause of this resolution noted that “Nassau county is currently 9 facing a difficult fiscal situation and is therefore no longer able to voluntarily assume the obligation to pay for town and city residents of Nassau county who attend…out-of-county colleges.” Id. While the resolution spoke only of the County Treasurer having the authority to charge back amounts payable to out-of-county community colleges, without limitations, the charge backs were not applied to FIT, as this course of action was being “reviewed” at this point. R. 43 On June 22, 2010, Steven D. Conkling, then Nassau County Treasurer, sent a letter to Kathleen H. Mitterway, Comptroller for the Town of North Hempstead. The letter referenced the Treasurer‟s authorization, pursuant to Resolution No. 368-2003, to charge back the cost of educating County residents at out-of-county community colleges, and indicated that the Treasurer determined that the Town owed the County $519,830.63 for the period from January 1 through March 31, 2010, for nonresident tuition at new york state community colleges. Id. The letter further noted that FIT is a community college subject to the reimbursement provisions of State law, and that, while the prior County administration did not include FIT payments in its billings, FIT charges would now apply. The letter also indicated that the County would also be charging back and billing for prior years. Id. Subsequently, on July 29, 2010, October 12, 2010, and January 25, 2011, 10 Deputy Treasurer Beaumont Jefferson sent similar letters to Ms. Mitterway detailing the amounts owed to the County by the Town, including sums that were past due. R. 52-54. Specifically, these letters indicated that the Town‟s balance due was $297,833.89 as of July 29, 2010, $397,669.15 as of October 12, 2010, and $2,338,178.98 as of January 25, 2011. Id. As a result of the Town‟s failure to pay its debt to the County for the FIT payments, the County utilized its right of set off against sales tax distributions that were due to the Town for the fourth quarter of fiscal year 2010. R. 94. In response to the set off, on May 5, 2011, the Town commenced a hybrid proceeding for declaratory relief and relief pursuant to Article 78, seeking a declaration that the County could not charge back for non-resident tuition at FIT and that the County did not have the authority to set off against the sales tax revenues. R. 16. As of the commencement of that litigation, the County had set off a total of $1,775,944.87 against the $2,448,625.00 sales tax distribution owed to the Town. R. 94. On August 11, 2011, the Hon. Anthony L. Parga, Supreme Court, Nassau County, effectively dismissed the entirety of the Town‟s claims. Judge Parga‟s order acknowledged the County‟s authority to set off against the sales tax distribution, and the County‟s authority to charge back for nonresident tuition at FIT. R. 11. However, Judge Parga erroneously determined that the County could 11 only charge back for FIT‟s two-year degree programs, rather than for all of the degree programs provided by the community college. The Town appealed from the entirety of the decision, while the County cross appealed from the portion which held that the County could only charge back for two-year degree programs. On January 16, 2013, the Appellate Division, Second Department, modified the decision in a number of essential respects. As relevant to this appeal, the Second Department agreed with the trial court that a county may charge back for FIT tuition, but then further acknowledged that a county may also charge back for the costs associated with all of FIT‟s programs, including the community college‟s baccalaureate and master‟s degree programs. R. 132. However, the Appellate Division reversed the trial court by holding that the County must formally adopt a resolution authorizing the Treasurer to charge back for FIT tuition before it may do so. The Appellate Division also held that the County did not have the right to set off the “disputed” chargebacks against the Town‟s sales tax distributions. Id. Both the County and Town moved for leave to appeal from the adverse portions of this decision, and this Court granted the respective motions by order dated September 3, 2013. 12 ARGUMENT POINT I A COUNTY MAY PROPERLY CHARGE BACK TO ITS TOWNS AND CITIES THE FULL AMOUNT PAID FOR THEIR RESIDENTS TO ATTEND ANY DEGREE PROGRAM AT A COMMUNITY COLLEGE The Town‟s principle argument in this appeal is that Education Law § 6305(5) does not permit the County to charge back to the Town the costs associated with Town residents attending FIT. Failing that, the Town argues that the County should only be permitted to charge back for FIT‟s two year degree programs. Both of these arguments were appropriately rejected by the Appellate Division, and as such the decision below should be affirmed to the extent that it preserves the County‟s authority to charge back to the Town for the FIT payments. A. Education Law § 6305(5) is applicable to FIT in all respects Pursuant to Education Law § 6302(3), FIT is a community college operated by the Board of Education of the City of New York. Moreover, as the Appellate Division correctly noted, FIT is a community college pursuant to the Education Law. R. 132. While the Town appears to acknowledge, at this stage, FIT‟s status as a Community College, it argues that Education Law § 6305 does not apply to FIT because it is somehow not related to the financing or administration of a community college. This position is contrary to both common sense and the purpose of the Education Law, and as such the decision below should be affirmed 13 to the extent that it recognizes that counties may charge back to towns and cities for nonresident tuition at FIT. Education Law § 6301(1) defines “[c]ommunity colleges” as “colleges established and operated pursuant to the provisions of this article…and providing two-year post secondary programs...” Education Law § 6302(3) provides that the New York City Board of Education may serve as the local sponsor for a community college which, in addition to the required two-year programs, may also offer baccalaureate and master‟s degree programs. Even though this community college may offer these additional programs, it still “shall be financed and administered in the manner provided for community colleges.” Id. Pursuant to this authorization, FIT offers baccalaureate and master‟s degree programs in addition to the standard two-year associates degree programs offered by all community colleges in the state. The fact that FIT offers these additional programs does not, however, affect its status as a community college pursuant to the Education Law. Indeed, Education Law § 2587(1)(a), entitled “[t]enure in fashion institute of technology,” explicitly recognizes this reality, by providing that “[c]ommunity college‟ shall mean fashion institute of technology, a community college sponsored by the board of education of the city of New York.” (emphasis added) Similarly, numerous 14 courts within New York, both state and federal, have repeatedly acknowledged that FIT is a community college, including both lower courts in this action. See e.g., Amato v. State of N.Y., 131 Misc. 2d 1049, 1050 (Ct. of Claims 1986) (FIT “is a community college sponsored by the Board of Education of the City of New York” and “it is administered and financed in the manner provided for community colleges.”); Fisher v. FIT, 491 F.Supp. 879, 880 (S.D.N.Y. 1980) (FIT “is a publicly-supported community college sponsored by the Board of Education of the City of New York”). While the Town implicitly acknowledges FIT‟s status as a community college, it engages in a tortured exercise in statutory construction to argue that the college somehow falls outside of the ambit of Education Law § 6305(5). In the Town‟s opinion, because Education Law § 6302(3) provides that FIT “shall be financed and administered in the manner provided for community colleges,” it is somehow only subject to certain sections of the Education Law. There is no basis for this argument, which should be wholly rejected by this Court. As a threshold matter, there is no need to engage in the kind of statutory construction performed by the Town, as the plain language of the Education Law mandates a finding that section 6305 is applicable to FIT. Where a statute‟s language “is clear and unambiguous, the court should construe it so as to give 15 effect to the plain meaning of the words used.” Patrolmen's Benev. Ass'n of City of New York v City of New York, 41 N.Y.2d 205, 208 (1976). In the instant case, the plain language of Education Law § 6302(3) provides that FIT is a “community college,” which “shall be financed and administered in the manner provided for community colleges.” Education Law § 6305 clearly relates to the administration and financing of community colleges, inasmuch as the statute constitutes a clear and harmonious scheme by which the Legislature provided for the financing of non-resident students attending “community colleges,” and the administration of this nonresident attendance program. As such, by any reasonable construction, Education Law § 6305 is applicable to FIT. To the extent that the Town attempts to separate Education Law § 6305(2), which provides the authority for community colleges to chargeback to counties, from Education Law § 6305(5), this argument must be rejected. Education Law § 6305(5) explicitly relates back to the remainder of the statute, including subdivision 2, by referring to the “[a]mounts payable to such colleges pursuant to this section.” The amounts referred to in the two subdivisions are therefore one in the same, and if FIT is authorized to charge back any amount of tuition to a county, this amount may be charged back to a town or city. The above rationale also conclusively defeats the Town‟s alternative 16 argument that, if a county has the authority to charge back to a town or city for non-resident tuition at FIT, the chargeback is only applicable to FIT‟s two-year associate‟s degree programs. It is unclear what authority, if any, the Town is relying on for this proposition. In any event, Education Law § 6305(2) does not distinguish between degree programs, it only refers to “costs…attributable to…nonresident students.” Given that section 6305(5) relates back to amounts payable to community colleges “pursuant to this section,” it is clear that FIT may charge a county for all of its degree programs, and that a county may then charge back to a town or city. C.f. Fulton Montgomery Community Coll. v County of Saratoga, 80 A.D.3d 217, 222 (3d Dept. 2010) (Education Law § 6305 does not require nonresident student to be enrolled in specific degree program, just that the student “is taking a course while „attending‟ a community college”). The strangest argument advanced by the Town in this appeal is its implicit claim that FIT is only subject to the provisions of Education Law 6304, “[f]inancing of community colleges,” and 6306, “[a]dministration of community colleges.” At the outset, an argument that the phrase “financing and administration” refers only to those two sections of the Education Law means that FIT never had the ability to charge back to counties any amounts of tuition pursuant to 6305, and that all of the FIT chargebacks to date were therefore illegal. 17 Regardless, there is no reason to construe the phrase “financed and administered” in the manner suggested by the Town. It is a given that Education Law §§ 6304 and 6306 relate to the financing and administration of community colleges, but these are not the only provisions of law which fit under this rubric. If the Legislature actually intended to limit the statutes relating to the financing and administration of community colleges that are applicable to FIT it would have explicitly done so. Instead, the Legislature simply defined FIT as a “community college” which “shall be financed and administered in the manner provided for community colleges.” As Education Law § 6305 is the only provision of law which provides for the financing of nonresident tuition at a community college and the administration of that program, it is plainly applicable to FIT pursuant to Education Law § 6302(3). B. Education Law § 6305(10) did not repeal or alter Education Law § 6305(5) Contrary to the Town‟s contention, Education Law § 6305(5) was not repealed with respect to FIT by Chapter 700 of the Laws of 1994, which created Education Law § 6305(10). Education Law § 6305(10) provides, in pertinent part, that “the state shall reimburse each county… the actual amount paid by each such county” for nonresident tuition at FIT. This provision does not explicitly (or even implicitly) repeal Education Law § 6305(5), and must therefore be read in harmony 18 with that provision if both subdivisions can be given effect by any fair construction. These two subdivisions of Education Law § 6305 can, in fact, be read harmoniously and in a manner consistent with the purpose of the Education Law. As such, the decision below should be affirmed to the extent it held that Education Law § 6305(10) did not alter counties‟ authority to charge back to towns and cities for FIT nonresident tuition. It is a bedrock principle of statutory construction that “[a]ll parts of a statute must be harmonized with each other as well as with the general intent of the whole statute.” Statutes Law § 98. Moreover, it is the duty of a court to construe even “conflicting provisions of a statute if possible.” Id. Consistent with this principle, repeal of a statute by implication is strongly disfavored, and “will be decreed only where a clear intent appears to effect that purpose.” Cimino v. State of NY, 306 N.Y. 143, 148-9 (1953). “If by any fair construction, both statutes can be given operation, implied repeal will not be declared.” Id. This principle applies “with particular force to statutes relating to the same subject matter, which must be read together an applied harmoniously and consistently.” Metropolitan Multi-Housing Laundry Ass’n v. N.Y.C. Dept. of Finance, 184 A.D.2d 759, 759 (2d Dept. 1992). There is no difficulty in reading all of the provisions of Education Law § 6305, including subdivisions 2 and 5, harmoniously, and there is a “fair 19 construction” by which both of these subdivisions of the same statute can be “given operation.” Education Law § 6305(5) provides the general authority for counties to charge back to a town or city the amounts allocable to that town or city‟s residents attending community colleges in other counties as non-residents. Education Law § 6305(10) provides that the State shall reimburse the counties for the cost of nonresident tuition at FIT. As such, when the state actually complies with its legal duty and reimburses the county, there is simply no amount allocable to town and city residents attending FIT. Section 6305(10) did not, therefore, eliminate the counties‟ authority to charge back for FIT tuition, it simply made such chargebacks a non-issue by placing responsibility for these costs on the State, removing the need for counties to charge back in the first instance. Unfortunately, starting in 2001, the State stopped appropriating money for the reimbursement of counties pursuant to Education Law § 6305(10). This situation lead the Third Department to recognize that the Legislature has “abrogated” Education Law § 6305(10) due to its failure to make an appropriation in the budget for FIT reimbursement. Matter of County of Suffolk v. King, 18 A.D.3d 1010, 1011 (3d Dept. 2005); see also Pataki v. New York State Assembly, 4 N.Y.3d 75, 98 (2004) (appropriations bill may serve to suspend State‟s obligations pursuant to the Education Law). As such, as the Appellate Division correctly 20 determined, Education Law § 6305(10) has effectively been superseded by the subsequent budget ordinances which did not appropriate for the FIT reimbursement. 1 Given that Education Law § 6305 provides not only that counties may charge back for community colleges, but that they “shall” be reimbursed for FIT costs, it is clear that the Legislature never intended for a county to be required to bear any of the cost of nonresident tuition unless it wished to do so. In light of this reality, it is apparent that the State‟s failure to fulfill its obligations under Education Law § 6305(10) necessarily entitles counties to charge back to towns and cities for nonresident FIT tuition. If the Legislature wished to exempt FIT from Education Law § 6305(5), it would have explicitly done so. Instead, the Legislature left Education Law 6305(5) in tact when it adopted section 6305(10), and in doing so preserved the counties‟ charge back authority if the State abrogated its responsibilities under the latter provision. As such, because the State did, in fact, fail to appropriate for FIT reimbursement, counties are again empowered to charge back to towns and cities for FIT costs. 1 To the extent the Town argues that the Appellate Division‟s decision somehow implicates the doctrine of legislative equivalency, it must be stressed that the court never held that Education Law § 6305(10) had been repealed, simply that it had been “superseded” by the Legislature‟s appropriations bills. R. 132. As stated by this Court in Pataki, 4 N.Y.3d at 98, “appropriation bills superseded other legislation long before executive budgeting was adopted and continued to do so since.” 21 It should be stressed that a finding that FIT falls outside of the ambit of Education Law § 6305 also mandates a finding that the community college never had the authority to charge these sums back to the counties in the first instance. Apart from Education Law § 6305(10), the provisions of 6305 make no distinction between FIT and any other community college, and they all relate back to one another. Education Law § 6305 manifests a clear intention that counties should not be responsible for financing the costs of non-resident students attending community colleges unless the actually wish to do so. The only amounts of nonresident tuition that are “payable to such colleges by a county pursuant to” section 6305 are those which may be charged back to towns and cities pursuant to Education Law § 6305(5). As such, if nonresident tuition cannot be charged back to towns and cities pursuant to Education Law § 6305(5), it cannot be construed as an amount payable to a community college pursuant to that section. Such a finding is clearly contrary to the intention of the Education Law, and as such the decision below should be affirmed to the extent it recognizes that counties may generally charge back to towns and cities for nonresident tuition at FIT. 22 POINT II THE COUNTY TREASURER WAS EMPOWERED TO CHARGE BACK TO THE TOWNS AND CITIES FOR NONRESIDENT TUITION AT FIT The County agrees with the decision below to the extent that it acknowledged the general authority for counties to charge back to towns and cities costs allocable to non-resident students attending all degree programs at FIT. However, the Appellate Division incorrectly held that “the County must formally adopt a resolution authorizing the County Treasurer to collect the charge-backs in connection with FIT prior to imposing such costs upon the towns and cities within the County.” R. 132. This holding is flawed because it fails to acknowledge the fact that the County did, in fact, enact a resolution that grants sufficient authority to the County Treasurer to charge back for FIT tuition, as well as the fact that Education Law § 6305 does not actually require enabling legislation. As such, the decision below should be modified to acknowledge this authority. A. The County has already adopted a Resolution providing for FIT charge backs On December 8, 2003, the Nassau County Legislature adopted Resolution No. 368-2003, “[a]uthorizing the Treasurer to charge back to cities and towns amounts paid by the County for the cost of educating County residents at community colleges outside of Nassau County.” There is no dispute between the parties that the County Treasurer is required “to charge back community college 23 costs to the towns and cities within the County.” Town Brief at 45. The only dispute between the parties is whether this resolution was broad enough to include the FIT charge backs. As both Education Law § 6305 and Resolution No. 368- 2003 refer only to “community colleges,” a term which applies to FIT, the County Treasurer is empowered to charge back for FIT costs. There is no basis in law for the Town‟s argument Resolution No. 368-2003 is inapplicable to FIT tuition. At the outset, the Town, strangely, argues that the construction of Resolution No. 368-2003 is not before this Court because the determination that an authorizing resolution was never adopted was a “factual aspect” of the decision below. It is difficult to discern any basis for this claim, but it should go without saying that determining whether a law (or resolution) is applicable to a particular situation is a “legal question.” Moreover, this Court has held that, when confronted with a question of statutory construction, it is not bound by the findings of the lower court. Buffalo, City Of, v Roadway Tr. Co., 303 N.Y. 453, 460 (1952). See also Goncalves v Regent Intern. Hotels, Ltd., 58 N.Y.2d 206, 222 (1983) (“the construction of a statute is a question of law to be resolved by the court”). As such, the interpretation of whether Resolution No. 368-2003 applies to FIT is clearly a question of law which is properly before this Court. An analysis of Resolution No. 368-2003 mandates a conclusion that it 24 applies to all community colleges, including FIT. As discussed in Point I, supra, where the language of a statue “is clear and unambiguous, the court should construe it so as to give effect to the plain meaning of the words used.” Patrolmen's Benev. Ass'n of City of New York v City of New York, 41 N.Y.2d at 208. The plain language of this resolution, which refers only to “amounts payable to out-of-county community colleges,” does not evidence an intent to exclude any community college. Additionally, the third “whereas” clause of the resolution notes that, due to a “difficult fiscal situation,” the County is “no longer able to voluntarily assume the obligation to pay for” nonresident tuition at “such out-of- county colleges.” Certainly the County‟s inability to voluntarily assume responsibility for nonresident tuition extends to FIT, whose programs (as noted by the Town) are more expensive than those at other community colleges. The plain and unambiguous language of Resolution No. 368-2003 allows for no other conclusion than that the County Legislature granted the Treasurer authority to charge back for non-resident tuition at “out-of-county colleges,” and that this term includes FIT. The Town contends that “[t]he resolution was adopted with the specific intent that FIT be excluded from” the charge back authorization. Town Brief at 45. The Town, of course, can point to no “specific” language to this effect, and instead 25 appears to rely on the “staff summary” prepared by the County‟s Office of Management and Budget. However, the “staff summary” is nothing more than an unofficial administrative document which has no effect on the Legislature‟s ultimate approval of the resolution. Additionally, the staff summary merely notes that the chargeback is being “reviewed in relation to FIT tuition,” not that a subsequent resolution will be necessary before such tuition can be charged back. Legislative history such as a staff summary may only be considered “where the [statute‟s] language is ambiguous or where a literal construction would lead to absurd or unreasonable consequences that are contrary to the purpose of the enactment.” Auerbach v Bd. of Educ. of City School Dist. of City of New York, 86 N.Y.2d 198, 204 (1995). The language of Resolution No. 368-2003 refers to “amounts payable to out-of-county community colleges,” a phrase which unambiguously refers to amounts which are payable to FIT, a community college located in New York City to which Nassau County is obligated to make payments for nonresident tuition. Furthermore, the statute itself refers to the County‟s inability to continue voluntarily assuming the “obligation to pay for” nonresident tuition at out-of-county community colleges. As such, a construction of the statute which retains the County‟s obligation to finance nonresident tuition at FIT, but not the other out-of-county community colleges, would be contrary to the clear 26 intention of the statute. The Town also, at least initially, placed considerable reliance on a document issued by the County‟s Office of Legislative Budget review which states that “[t]he County may not charge back for FIT tuition costs,” but it is unclear how this document can actually affect the County‟s chargeback authority. The document cannot be viewed as a part of the Legislative record for the County‟s chargeback resolution, given that it was a review prepared for the County‟s 2010 Fiscal Year budget rather than one prepared simultaneously with the charge back resolution. R. 44. Moreover, the Office of Legislative Budget review is not a policy making arm of County government, and has no control over the County Treasurer. See gen. Nassau County Charter § 183. B. Education Law § 6305(5) does not require enabling legislation Even if this Court determines that Resolution No. 368-2003 is inapplicable to FIT, Education Law § 6305(5) does not require implementing legislation before a County Treasurer may charge back for nonresident tuition. As such the adoption of a resolution by the County Legislature was unnecessary for the County to begin charging back. The County Treasurer was already empowered to charge back for FIT costs, and the decision below should therefore be modified to the extent it held that a county needs enabling legislation to charge back. There is no provision of Education Law § 6305(5) which suggests that it 27 would require some sort of action by a county before it could begin charging back. If the Legislature actually wishes to require implementing legislation by a municipality, it will provide as much explicitly in the statute itself. For instance, Real Property Tax Law § 523-b(1) requires Nassau County to “act[] through its local legislative body” to establish an Assessment Review Commission. There is no similar language in Education Law § 6305, and as such a determination that the County was actually required to adopt legislation before it could begin charging back is erroneous. The Appellate Division appeared to rely on County Law § 550 for the proposition that the County must formally adopt a resolution authorizing the Treasurer to charge back for FIT nonresident tuition. County Law § 550(1) provides, in pertinent part, that a County Treasurer “shall perform the duties prescribed by law as the chief fiscal officer of the county” and “such additional and related duties as may be prescribed by law and directed by the board of supervisors.” This provision does not, implicitly or explicitly, relate to Education Law § 6305(5), and as such it would appear as though the Appellate Division determined that the Treasurer can only charge back if “directed by the board of supervisors” or, in the case of Nassau County, the Legislature. Notwithstanding the language of section 550, County Law § 2(b) limits the 28 applicability of that body of law. County Law § 2(b) provides that the provisions of the County Law shall be inapplicable to the extent that they conflict with an alternative form of County government adopted by a County pursuant to the State Constitution. Nassau County has, in fact, adopted such an alternative form of government, codified as the Nassau County Charter. Pursuant to Nassau County Charter § 501, the County Treasurer “shall have, except as otherwise provided in this act, all the powers and duties of County Treasurers under the laws of this state applicable to the county.” Notably, while County Law § 550 grants the Legislature the power to direct the Treasurer to act, Nassau County Charter § 203 provides that it is “the duty of the County Executive to supervise, direct, and control…the administration of all departments, offices and functions of the county government.” (emphasis added) To the extent that County Law § 550 gives any entity other than the County Executive the power to “direct” the Treasurer to take actions provided for by law, it must give way to the provisions of the County Charter. In the instant proceeding, the Nassau County Executive altered prior practice and directed the Treasurer to begin charging back for FIT nonresident tuition, consistent with his power to direct the administration of county government. The County Treasurer was simply complying with his lawful duties under the County Charter, and therefore could 29 have done so absent any enabling legislation. It should be stressed that this analysis remains applicable even if this Court determines that Education Law § 6305 requires implementing local legislation. Resolution No. 368-2003 was drafted broadly, and refers only to the County‟s desire to charge back amounts payable to out-of-county community colleges without limitation. However, consistent with Nassau County Charter § 203, it is left to the County Executive to direct the Treasurer as to what charge backs to make. In 2010, having reviewed the County‟s continuing “difficult fiscal situation,” the County Executive elected to break with past practice and directed the Treasurer to charge towns and cities back for FIT nonresident tuition. The County‟s decision to charge back for FIT tuition was wholly consistent with all applicable law, and as such decision below should be modified to reflect that the County Treasurer was authorized to make the FIT chargebacks. 30 POINT III THE COUNTY IS ENTITLED TO SET OFF THE AMOUNTS CHARGEABLE TO THE TOWN FOR ITS RESIDENTS ATTENDING FIT AGAINST THE TOWN’S SHARE OF SALES TAX REVENUE The Supreme Court appropriately recognized that the County had the power to set off the amounts of nonresident tuition owed by the Town against the Town‟s share of sales tax distributions, though it erred with respect to the amount that the County could set off. The Appellate Division, however, erroneously reversed Supreme Court and held that “the County did not have the right to set off the disputed charge-backs against the Town‟s share of sales tax revenue.” R. 132. The Appellate Division should be reversed, as the County was entitled to exercise the common law right of setoff against the Town‟s share of sales tax distributions, and this Court should modify Supreme Court‟s judgment to authorize the County to setoff all non-resident tuition applicable to FIT, not just the amounts attributable to the community college‟s two-year associates degree programs. It is settled law that a government, just like any other creditor, may exercise the common law right of set off by financing a debt owed against money in the governments possession owed to the debtor. As the United States Supreme Court held in United States v Munsey Trust Co. of Washington, D.C., 332 U.S. 234, 239, 67 S.Ct. 1599, 1602, 91 L.Ed. 2022 (1947), “[t]he government has the same right 31 „which belongs to every creditor, to apply the unappropriated moneys of his debtor, in his hands, in extinguishment of the debts due to him.‟” (internal citations omitted). This principle has also been recognized by a number of New York State courts. See e.g., Morash v. State of New York, 268 A.D.2d 510, 511 (2d Dept. 2000) (the State Comptroller has the common-law right of setoff in order to collect a debt owed to the State, even where the State‟s claim has not been reduced to judgment or when the setoff is unrelated to the State‟s debt to the claimant”); Fahey v. Whalen, 54 A.D.2d 1097 (4th Dept. 1976) (State Department of Social Services had power to recoup overpayment of Medicaid funds to nursing home by setting off amounts due against reimbursements for subsequent year); Canale v. New York State Dept. of Tax. and Fin., 84 Misc.2d 786 (Ct. Claims 1975) (Comptroller properly exercised right of setoff for taxes owed to State by receiver of liquor license, against claimed refund for overpayment of sales tax by licensee); Argirion and Finkel v. Marcante Luncheonette II, Inc., 64 Misc. 2d 660 (N.Y. Sup. 1970) (City was entitled to exercise right of setoff to apply monies of its debtor in possession in extinguishment of debt due to it when debt became due and payable and final in nature). Beyond these authorities, the State Comptroller has acknowledged that a county is entitled to extinguish a debt owed by a municipality “by withholding a 32 portion of future sales tax payments pursuant to the common law right of setoff.” R. 114; Op. State Comp, 1988 No. 88-42. Notably, the Comptroller indicated that setoff against sales tax revenue is allowable “to effect a distribution required by statute.” Here, the amounts owed for FIT nonresident tuition are required by statute, namely Education Law § 6305(5) and Resolution No. 368-2003. As such, this Court should reverse the Appellate Division‟s holding that the set off was improper, and modify Supreme Court‟s judgment to provide for a set off against all of the FIT nonresident tuition payments owed by the Town. Contrary to the Town‟s contention, and the decision of the Appellate Division, the amount of nonresident tuition owed by the Town for its residents attending FIT is not “unliquidated.” A debt is considered unliquidated “if the amount thereof cannot be ascertained…by mere computation, based either on the terms of the obligation or some other accepted standard, and this regardless of whether the debtor disputes his liability in any or every respect.” Hettrick Mfg. Co. v Barish, 120 Misc. 673, 685 (App. Term 1923) affd, 209 A.D. 807, 204 N.Y.S. 915 (1st Dept. 1924). The amount of nonresident tuition applicable to FIT during the time at issue is not, in fact, unliquidated, ad the precise amount of tuition owed by the Town can readily be calculated by the County. Indeed, the only reason the amount is “disputed” is because the Town‟s contention that only certain types of 33 tuition may be set off, an argument which is simply untenable in light of the plain language of Education Law § 6305. The Town‟s debt in this action is therefore “due and payable [as opposed to] contingent, possible and in futuro,” Northville Indus. Corp. v State, 14 A.D.3d 817, 818 (3d Dept. 2005) (internal quotation omitted). As such, the County may apply the common law right of set off against the sales tax monies owed to the Town, and the decision below should be modified in this respect. 34 CONCLUSION For the foregoing reasons, the decision of the Appellate Division, Second Department, should be 1. Affirmed, to the extent that it held that a county may charge back to towns and cities the full cost of nonresident tuition for all of FIT‟s degree programs; 2. Modified, to reflect that the County Treasurer was empowered to charge back for FIT tuition without needing further Legislative authorization, and; 3. Modified, to reflect that County was entitled to set off the Town‟s debt related to nonresident FIT tuition against the sales tax distribution owed to the Town but possessed by the County. Dated: Mineola, New York December 18, 2013 Respectfully Submitted, HON. CARNELL T. FOSKEY Acting County Attorney of Nassau County Attorney for Defendant-Respondent- Respondent-Appellant. One West Street Mineola, New York 11501 (516) 571-3056 By: ______________________________ Robert F. Van der Waag Appeals Bureau Chief Deputy County Attorney David A. Tauster Deputy County Attorney Of Counsel