In the Matter of Town of North Hempstead, Appellant-Respondent,v.County of Nassau, Respondent-Appellant.BriefN.Y.September 10, 2014To Be Submitted By: GREGORY KALNITSKY, ESQ. {[nurt nf ~pp:eals STATE OF NEW YORK In the Matter of TOWN OF NORTH HEMPSTEAD, v. COUNTY OF NASSAU, Appellant-Respondent, Respondent -Appellant. BRIEF OF AMICUS CURIAE FOR CITY OF LONG BEACH COREY E. KLEIN, Corporation Counsel CITY OF LONG BEACH Attorneys for Amicus Curiae City of Long Beach 1 West Chester Street Long Beach, New York 11561 Phone No. (516) 431-1000 Fax No. (516) 431-1016 By: GREGORY KALNITSKY Assistant Corporation Counsel Brief Completed on: March 31, 2014 Echo Press, Inc. • 30 West Park Avenue· Beach, New York 11561 • 432-3601 Printed on Recycled Paper 20582 CONTENTS Table of Authorities .......................................................................... 1 Interest of the Amicus Curiae .. ............................................................... 3 Procedural History .......................................................................................... 3 Jurisdiction ..................................................................................... 5 Questions Presented ....................................................................................... 5 Factual Background ......................................................................... 6 ARGUMENT THE COUNTY MAY NOT CHARGE BACK MUNICIPALITIES FOR FIT TUITION ....................................................................................... 9 a. The Canons of Statutory Interpretation Dictate that FIT Cannot Be Defined as a Community College for Charge-Back PllfPoses ........................................................................................................................................................................ 9 h. In the Alternative, the Court Should Hold that the Charge-Backs Only Apply to Two-Year Degree Programs Administered at FIT ................................................................................................................................................................................. 13 c. New York Education Law Section 6305(10) Is the Controlling Statute Regarding County Reimbursements for FIT Tuition ..................................................................................... 15 Conclusion .................... .............................................................................................................................................. 18 TABLE OF AUTHORITIES Cases: Amato v. State of New York, 131 Misc. 2d 1049 (N.Y. Ct. Cl. 1986) ................. 12 Amorosi v. S. Colonie Indep. Sch. Dist., 9 N.Y.3d 367 (2007) .............................. 14 City of New York v. Novello, 65 A.D.3d 112 (1st Dep't 2009) ........................ 12 Ferres v. New Rochelle, 68 N.Y.2d 446 (1986) ........................................... 9 Fisher v. Fashion Inst. of Tech. , 491 F. Supp. 879 (S.D.N.Y. 1980) ..................... 12 Jackson v. Bd. of Educ. of City of New York, 30 A.D.3d 59 (1st Dep't 2006) ...... 12 Janssen v. Inc. Vill. of Rockville Centre, 59 A.D.3d 15 (2d Dep't 2008) ............ 10 Matter ofCnty. of Suffolk v. King, 18 A.D.3d 1010 (2005) ............................ 16 Matter of Heron v. City of Binghamton , 307 A.D.2d 524 (3d Dep't 2003) .......... 16 Matter of Torre v. Cnty. of Nassau, 86 N.Y.2d 421 (1995) ............................. 16 Matter of Town ofN Hempstead v. Nassau Cnty., 2011 WL 3794045 (N.Y. Sup. Ct.) ..................................................................... : ........... 4 Matter of Town ofN Hempstead v. Nassau Cnty., 102 A.D.3d 800 (2013) ............................................................................................ 4 Mostaghim v. Fashion Inst. of Tech. , 2001 WL 1537544 (S.D.N.Y. 2001) .............................................................................. 13 New York State Bankers Ass 'no v. Albright, 38 N.Y.2d 430 (1975) .................... 9 Pataki v. New York State Assembly, 4 N.Y.3d 75 (2004) ............................... 16 1 People v. Ryan, 274 N.Y. 149 (1937) ...................................................... 9 Raritan Dev. Corp. v. Silva, 91 N.Y.2d 98 (1997) ....................................... 14 Statutes: Education Law §§ 6301-6305 ..................................................... .. .passim 2 INTEREST OF THE AMICUS CURIAE The City of Long Beach respectfully submits this amicus curiae brief in support of the Appellant-Respondent, Town of North Hempstead (hereinafter "the Town"). The City of Long Beach ("hereinafter "the City") is a municipal corporation within Respondent-Appellant Nassau County (hereinafter "the County") that is also subject to the County's charge-backs for nonresident students attending the Fashion Institute of Technology (hereinafter "FIT"). The City, as well as other municipalities, are equally affected by the County's actions in this case. PROCEDURAL HISTORY This brief is submitted in support of Appellant-Respondent, the Town of North Hempstead, in an action against Respondent-Appellant, Nassau County, regarding charge-backs for nonresidents attending FIT. As a municipal corporation within the County, the City of Long Beach is also subject to the charge-backs for FIT and therefore has the same interest in this matter as the Town of North Hempstead. The Town commenced a proceeding by Verified Petition, dated May 5, 2011, seeking judgment that the County may not pass down charge-backs of nonresidents attendees for FIT tuition of Town residents (Record on Appeal ("R.") at 16-31). 3 In an order dated August 11, 2011, the Supreme Court, Nassau County (Parga, J.) held that Education Law article 126 permitted the County to pass down tuition costs of nonresidents to the Town, but only those costs associated with two- year degree programs. Matter oj N Hempstead v. Nassau County, 2011 WL 3794045 (N.Y. Sup. Ct. Nassau County 2011). Additionally, the Supreme Court also held the County may offset the amount due for the charge-backs against the Town's share of collected sales tax for the fourth quarter of fiscal year 2010 (R. 7- 12). Both parties appealed to the Appellate Division, Second Department. By decision and order dated January 16, 2013, the Second Department modified the Supreme Court order and held that the Education Law authorized the County to charge back for all monies, including those associated with FIT's baccalaureate and graduate degree programs as well as all two-year programs. Matter oj Town oj N Hempstead v County oj Nassau, 102 A.D.3d 800 (App. Div. 2d Dept. 2013). The court also held that the County resolution authorizing the Treasurer to collect the charge-backs for nonresidents was unlawful, absent the County Legislature adopting a formal resolution authorizing the same. Since such a measure was never taken, the Second Department directed the County to pay the Town the sales tax monies that had been withheld. ld. at 802. 4 The Town moved for re-argument in the Appellate Division and for leave to appeal for the part of the ruling which declared that the Education Law authorized the County to charge back for FIT expenses. The County cross-moved for re-argument and for leave to appeal for the part of the ruling which declared that the County's set off of sales monies was unlawful and that the Legislature must pass a formal resolution authorizing charge-backs for FIT expenses. The Appellate Division denied both motions on May 16, 2013, with notice of entry served June 3, 2013. JURISDICTION This Court has jurisdiction of the present cross-motion and of the proposed appeal pursuant to C.P.L.R. Section 5602(a)(1)(i) because the Order of the Appellate Division from which leave to appeal is sought is a final determination of all the issues raised on appeal in the Appellate Division. QUESTIONS PRESENTED FOR REVIEW 1. Should FIT still be funded as a community college in light of Education Law § 6305(10) even though the school has expanded its curriculum beyond its origins as a community college? ANSWER: No. 5 2. Should the Court interpret Education Law § 6305(10) as having been abrogated by appropriation bills which are not correlative legislative acts? ANSWER: No. FACTUAL BACKGROUND In 2003, upon recommendation of the Nassau County Office of Management Budget (hereinafter "OMB"), the County Legislature authorized the County Treasurer to charge back towns and cities for the amounts the County paid for resident enrollment in community colleges outside of the County (R. 41-42). Nonresident students are New York students who do not reside in the county in which the community college is located and yet attend the school. They are the focus of this litigation. Nonresident students, after showing a certificate of residence to the community college, may attend the college for the same tuition rate as the local host county pays. The community college is then permitted to charge back the county of residence (where the nonresident resides) for the allocable portion of the operating costs and capital costs. Education Law § 6305(2). Such charges are deemed by statute to be a "general county charge." Education Law § 6305(5). 6 The county of residence may then elect to obtain reimbursement of the payments to the community college from smaller municipalities, such as towns and cities, within its boundaries. Education Law § 6305(5). The mechanism for county reimbursements was intended to apply to two- year colleges (R. 95-103). FIT originated as a traditional community college but, since 1975, has offered four-year degrees including master's degree programs in 1979. As the degree programs expanded at the school, so did its operating costs and charge- backs to the point where FIT now costs more than triple the amount of the most expensive community college (R. 21). Initially, FIT was part of the charge-back scheme pursuant to Education Law § 6305(5). But, in 1994, the State Legislature amended Education Law § 6305(5) and placed FIT in a category of its own. The Legislature adopted Education Law § 6305(10) which made the state the sole source of county reimbursements for FIT only (R. 22). In passing the amendment, the Legislature eliminated the statutory right for reimbursements from towns and cities for FIT expenses. Since 2001, however, the state has not passed an appropriation that provides for charge-backs pursuant to funding § 6305(10). In 2003, the County Treasurer billed towns and cities for community college costs, but excluded FIT expenses. That changed in 2010 when the County decided 7 to charge back towns and cities for FIT in addition to community college changes. The County did this without any legislative authority from the County Legislature. To force the smaller municipalities to comply with the new policy, the County withheld sales tax revenue from the towns and cities, applying the revenue against the unliquidated FIT debt. The change in policy from the County has placed a large financial burden on its cities and towns, who have no control over what the County does as the charge back scheme was enacted without legislative authority. The City of Long Beach is a beachfront community, located on a barrier island off the southern coast of Long Island. Approximately 35,000 residents populate the city. During the course of the litigation, the City of Long Beach was devastated by Superstorm Sandy on October 29, 2012. Because of its location, the City suffered astronomical damage to its infrastructure, property, and way of life for its residents. Since Sandy, the City has slowly begun to recover. The cost of the recovery is insurmountable and the City will have to pay millions of dollars to repair its infrastructure, including the water purification plant, recreational facilities, water and sewage pipes, and boardwalk. Even to this day, many residents of the City are still displaced and the community continues to rebuild. Due to the 8 unexpected cost of the storm, the charge-backs from the County present yet another unplanned financial burden to the City. ARGUMENT FOR REVIEW THE COUNTY MAY NOT CHARGE BACK MUNICIPALITIES FOR FASHION INSTITUTE OF TECHNOLOGY TUITION The main issue in this appeal is whether the County may charge back municipalities for nonresident attendees of FIT. The Second Department held that "FIT remains a community college under Education Law article 126 and the County is entitled to charge-back from the Town ... for Town residents enrolled at FIT in four-year undergraduate programs and graduate programs" N Hempstead v. Nassau, 102 A.D.3d at 800. Under a strict statutory interpretation of Education Law article 126 and the doctrine of legislative equivalency, the County may not pass down its expenses to municipalities, who have no control over, or input in, the County function. For these reasons, the decision of the Appellate Division should be reversed in part and affirmed in part. a. The Canons of Statutory Interpretation Dictate that FIT Cannot be Defined as a Community College for Charge-back Purposes 9 In determining the meaning of a statute, the court must "carefully examine the language of a statute and its underlying purpose to determine its intended effect." Ferres v. New Rochelle, 68 N.Y.2d 446 (1986). A court may look beyond the original statute to "subsequent amendments." Id., citing New York State Bankers Ass 'n v. Albright, 38 N.Y.2d 430 (1975). "The legislative intent is the great controlling principle" in determining how to apply the statute. People v. Ryan, 274 N.Y. 149, 152 (1937). "The starting point of analysis must be the plain meaning of the statutory language, since it is the statutory text which is the clearest indicator of legislative intent." Janssen v. Inc. Vill. of Rockville Centre, 59 A.D.3d 15, 28 (App. Div. 2d Dept. 2008) (internal citation omitted). In 1948, New York adopted Education Law article 126, entitled "Community Colleges and State-Aided Four Year Colleges." Education Law § 6301, entitled "Definitions," defines a community college as: Colleges established and operated pursuant to the provisions of this article, either individually or jointly, by counties, cities, intermediate school districts, school districts approved by the state university trustees, or individually by community college regions approved by the state university trustees, and providing two-year post secondary programs pursuant to regulations prescribed by the state university trustees and receiving financial assistance from the state therefor. Education Law § 6301(2) (emphasis added). Similarly, Education Law § 6303(1) further states, "community colleges shall provide two-year programs of post high school nature." Applying the Janssen standard, a plain reading of the statutory 10 language clearly indicates that the Legislature intended that community colleges be limited to providing two-year programs. Janssen, 59 A.D.3d at 28. FIT is no longer a community college under the statutory definition· of Education Law article 126. When article 126 was adopted in 1948, FIT was a community college within the definitional parameters. FIT solely offered two-year programs and degrees pursuant to §§ 6301 and 6303. In 1975, FIT began to offer baccalaureate degrees and in 1979 it began to offer master's degrees that were beyond the two-year curriculum definition of community colleges under article 126. Therefore, it is highly unlikely the Legislature intended to include FIT as it exists today under the purviews of article 126 when it passed in 1948. The Legislature's view of FIT became clearer in 1994 when it amended the Education Law and passed § 6305(10), making FIT an exception to the traditional community colleges. The amendment states, "the state shall reimburse each county which has issued a certificate of residence for any non resident in attendance at the fashion institute of technology .... " Education Law § 6305(10) (emphasis added). The amendment to the Education Law, specifically regarding FIT, removes it from the common category of community colleges and places a mandatory financial burden on the state. The amendment serves as an indication that the Legislature no longer regards FIT as a college that conforms to the original definition of community 11 college under § 6301. The Legislature would not have passed the amendment in 1994 if it did not contemplate FIT as categorically different from the statutory definition of community college. Furthermore, Albright allows the court to look to subsequent amendments, such as § 6305(10), when interpreting the legislative intent of the statute. Ferres, 68 N.Y.2d at 451. The use of the word "shall" in Education Law § 6305(10) obligates the State to reimburse counties for FIT tuition through its use of mandatory language. See, City of New York v. Novello, 65 A.D. 3d 112, 118 (App. Div. 1st Dept. 2009) (use of the word "shall" in legislation is generally regarded as mandatory). The State remains responsible for reimbursing counties under Education Law § 6305(10) because the law has never been repealed. The County relies on Amato v. State of New York, 131 Misc. 2d 1049 (N.Y. Ct. Cl. 1986) and Fisher v. Fashion Inst. of Tech., 491 F. Supp. 879 (S.D.N.Y. 1980) to argue that FIT falls within the definition of a community college. In footnote 4 of the Cross-Motion for Leave to Appeal to the Court of Appeals, the County cites specific language to support their proposition. The County has cited both cases as pertinent examples of law regarding the status of FIT as a community college. Neither case, however, holds that FIT is a community college. The County has pulled both quotes out of context. Both citations appear in the facts section of the cases and are nothing more than background information. They should not be 12 relied upon as support for the proposition that FIT is a community college for the purposes of a subsequent charge-back scheme. In Jackson v. Bd. of Educ. of City of New York, the court accurately explained the language of Amato as "mere dicta" because that case was a personal injury action against FIT that addressed proper venue. Jackson v Bd. of Educ. of City of New York, 30 A.D.3d 59, 60 (App. Div. 1st Dept. 2006). The City also points out that both Amato and Fisher were decided in the 1980s, well before the status of FIT changed in 1994 when the Legislature amended the Education Law and added § 6305(10). b. In the Alternative, the Court Should Hold that the Charge-Backs Only Apply to Two-Year Degree Programs Administered at FIT In the alternative, if the court determines that counties have a right to charge back towns and cities, the court should affirm the decision of the Supreme Court that the charge-backs "shall be limited to the amounts paid by the County to FIT for Town-residents students enrolled in the two-year education programs and those seeking two-year Associate Degrees." N Hempstead v. Nassau, 2011 WL 3794045 at *5. The Supreme Court acknowledged that "FIT is anomalous among community colleges in that it offers baccalaureate and Master's degree programs in addition to two-year programs" Id., citing Mostaghim v. Fashion Inst. of Tech., 2001 WL 1537544 (S.D.N.Y. 2001) (emphasis added). Indeed, FIT is different among the field of traditional community colleges because it offers degrees beyond two-year 13 programs. The Supreme Court, recognizing this fact, correctly held that the charge- backs should apply only to two-year degree programs. The Second Department held to the contrary, that the statutory mechanism "does not limit the County's ability to charge back only for the amounts paid to FIT for Town residents enrolled in two-year education programs and those seeking two-year Associate Degrees." In doing so, the court relied on Education Law § 6302(3) to hold that FIT remains a community college. That provision states "FIT shall be financed and administered in a manner provided by community colleges." The Second Department erred, as § 6302(3) plainly states that FIT shall be financed and administered as a community college. It says nothing regarding whether the County may charge back towns and cities for FIT expenses, including baccalaureate and master's degree programs. When the language of a statute is clear "the court should construe it as to give effect to the plain meaning of the words used." Amorosi v. S. Colonie Indep. Sch. Dist., 9 N.Y.3d 367, 372 (2007), quoting Raritan Dev. Corp. v. Silva, 91 N.Y.2d 98, 107 (1997). In its ruling, the court looked past the statute's plain meaning. By construing § 6302(3) beyond its plain meaning, the Second Department read language into the statute that was not there. The Supreme Court, on the other hand, correctly interpreted the statute. The court relied on §§ 6301(2) and 6303(1), which specifically state that community 14 colleges shall provide two-year programs to limit the charge-backs authorized by § 6305(5) to two-year degrees at FIT. Section 6301(2) defines community colleges, limiting the definition to institutions providing "two-year post secondary degree programs." Section 6303(1) entitled, "Programs and curricula of community colleges" provides that "community colleges shall provide two-year programs of a post high school nature .... " Using plain meaning, the Supreme Court appropriately interpreted the statutes to apply the charge-backs to two-year degrees at FIT, as the Second Department should have done. That court should have applied §§ 6301(2) and 6303(1) when interpreting § 6302(3) to define community colleges. c. New York Education Law Section 6305(10) is the Controlling Statute Regarding County Reimbursements for FIT Tuition New York Education Law § 6305(10) states that the "state shall reimburse each county which has issued a certificate of residence for any nonresident student in attendance at the fashion institute of technology" beginning in the 1993-1994 academic year and for "every year thereafter." Notwithstanding the Second Department's decision to the contrary, § 6305(10) is the controlling statute regarding the funding of FIT -related costs. In passing § 6305(10) as an amendment to the section, the New York State legislature demonstrated that it views FIT as distinct from community colleges, and that municipalities are not to be financially responsible for nonresident tuition at FIT. Furthermore, the Education Law statute is not superseded by subsequent budget appropriation bills, because the doctrine of 15 legislative equivalency requires that a position created by a legislative act can only be abolished by a correlative legislative act. Assuming arguendo that FIT remains a community college for statutory purposes, the passage and continuing existence of § 6305(10) indicates that the Legislature intended for FIT to be treated separately from other community colleges. Because the act has not been repealed or superseded, the Court should apply its plain language and deny the County the right to charge back municipalities for nonresident community college tuition. The Second Department held that, because the Legislature has not passed an appropriation bill funding state reimbursement of counties for nonresident community college tuition, the act is, by implication, superseded. Hempstead v. Cnty. of Nassau, 102 A.D.3d. at 801, citing Matter of Cnty. of Suffolk v. King, 18 A.D.3d 1010, 1011 (2005). However, the Court's premise that an appropriation bill may supersede § 6305(10) is misconstrued, because an appropriation bill is not a "correlative legislative act" to the Education Law. Matter of Torre v. Cnty. of Nassau, 86 N.Y.2d 421, 426 (1995); Matter of Heron v. City of Binghamton, 307 A.D.2d 524, 525 (App. Div. 3d Dept. 2003). Although legislative equivalency is typically applied to cases in which a public employee's position has been eliminated, the court may apply the logic of the doctrine to prevent the governor to use an act of executive budgeting to overturn the Education Law. 16 New York's Education Laws and appropriation bills are passed in a procedurally distinct manner. Pataki v. New York State Assembly, 4 N.Y.3d 75, 82- 83 (2004). The Pataki court notes that the intention of creating executive budgeting was to change the roles of the governor and the state Legislature, in an effort to facilitate the passage of budget bills. ld. at 82-83. Appropriation bills are unlike acts enacted through standard legislative procedures, in that the governor has the authority to construct the original bill, as well as to veto any changes made by the Legislature. ld. at 110. The distinction is significant because the Legislature'S role is diminished when the governor has the first look at a bill as well as final review. Notwithstanding the Pataki Court's holding that the system has no effect on the balance of powers and, as a result, is constitutional, the fact remains that executive budgeting alters the fundamental nature of a bill. Therefore, the appropriation bill is not a correlative legislative act to § 6305(10) and cannot supersede it. Moreover, the effect of an appropriation bill is constitutionally limited to two years (ld., at 85), whereas § 6305(10) remains in effect in perpetuity. Use of the word "thereafter" denotes intent on the part of the Legislature to make a permanent change to the way FIT is funded, in recognition of the fact that FIT had irrevocably evolved beyond a traditional community college. Despite not having been funded by recent appropriation bills, § 6305(10) is still a valid statute. While it is true that the purpose of § 6305(10) cannot be carried 17 out as long as it is not funded, nothing prevents the future passage of an appropriation bill funding state reimbursements under the act. Because the state Legislature has not passed a law repealing the act, and no court has struck it down, § 6305(10) is still a valid law, awaiting appropriation. Thus the legislation has made New York State responsible to pay FIT charge-backs even though New York States has declined to do so. CONCLUSION For the preceding reasons the City of Long Beach, as amicus curiae, respectfully requests this court to affirm in part and reverse in part the decision of the Appellate Division, Second Department to the extent it was appealed by Appellant-Respondent Town of North Hempstead. Dated: Long Beach, New York March 31, 2014 18 Respectfully Submitted, ~" Corey . lern 1 "" Corporation Counsel Attorneys for Amicus Curiae City of Long Beach 1 West Chester Street Long Beach, New York 11561 (516) 431-1003 By: Gregory Kalnitsky Assistant Corporation Counsel