Empire State Chapter of Associated Builders and Contractors, Inc., et al., Appellants,v.M. Patricia Smith,, et al., Respondents.

Brief

N.Y.April 24, 2013

To be argued by: Andrea Oser Time requested: 20 minutes App. Div. Fourth Dept. No. CA 11-01813 Court of Appeals of the State of New York EMPIRE STATE CHAPTER OF ASSOCIATED BUILDERS AND CONTRACTORS, INC., COUNTY OF ERIE, CHRIS COLLINS, BUFFALO NIAGARA PARTNERSHIP INC., INNOVATIVE MECHANICAL SYSTEMS, INC., M.G.M. INSULATION, INC. ALLEGHANY INDUSTRIAL INSULATION, DANIEL J. BRINSKY, AND DOUG BYERLY, Plaintiffs-Appellants, -AGAINST- M. PATRICIA SMITH, IN HER OFFICIAL CAPACITY, AS COMMISSIONER, NEW YORK STATE DEPARTMENT OF LABOR, AND THOMAS P. DINAPOLI, IN HIS OFFICIAL CAPACITY, AS COMPTROLLER, STATE OF NEW YORK, OFFICE OF THE COMPTROLLER, Respondents-Respondents. BRIEF FOR RESPONDENTS BARBARA D. UNDERWOOD Solicitor General ANDREA OSER Deputy Solicitor General ALLYSON B. LEVINE Assistant Solicitor General of Counsel ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney for Respondents The Capitol Albany, New York 12224-0341 Telephone No. (518) 473-6948 Facsimile No. (518) 473-8963 Dated: March 7, 2013 Reproduced on Recycled Paper i TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES ......................................................................................... iii PRELIMINARY STATEMENT..................................................................................... 1 QUESTIONS PRESENTED.......................................................................................... 4 STATEMENT OF THE CASE....................................................................................... 5 A. The Wicks Law .............................................................................. 5 B. The 2008 Amendments At Issue Here.......................................... 7 C. Course of Proceedings.................................................................. 16 D. Supreme Court’s Decision ........................................................... 19 E. The Appellate Division’s Order................................................... 20 ARGUMENT POINT I THE APPELLATE DIVISION PROPERLY REJECTED PLAINTIFFS’ HOME RULE CHALLENGE TO THE THREE-TIERED MONETARY THRESHOLDS ............... 24 A. PLAINTIFFS’ HOME RULE CHALLENGE FAILS BECAUSE THE INCREASED THREE-TIERED THRESHOLD IS REASONABLY RELATED TO A SUBSTANTIAL STATE CONCERN........ 25 1. The 2008 amendments implicate a substantial state concern documented by the legislative history.................... 28 2. The three-tiered monetary threshold is reasonably related to those substantial state concerns ......................... 33 B. PLAINTIFFS LACK BOTH CAPACITY AND STANDING TO BRING THEIR HOME RULE CHALLENGE ................................... 39 POINT II THE APPELLATE DIVISION PROPERLY REJECTED PLAINTIFFS’ EQUAL PROTECTION CHALLENGE TO THE TIERED MONETARY THRESHOLD........................................................................... 44 POINT III THE APPELLATE DIVISION PROPERLY REJECTED PLAINTIFFS’ CONSTITUTIONAL CHALLENGES TO LABOR LAW § 222 ............................. 46 ii Table of Contents (cont’d) PAGE ARGUMENT, Point III (cont’d) A. PLAINTIFFS’ CHALLENGES TO THE APPRENTICE-TRAINING PROVISIONS TURN ON AN ERRONEOUS INTERPRETATION ............. 47 B. PLAINTIFFS’ EQUAL PROTECTION CHALLENGE TO THE PROJECT LABOR AGREEMENT PROVISION IS MISGUIDED ............................. 53 POINT IV PLAINTIFFS’ LACK STANDING TO BRING A CITIZEN-TAXPAYER CLAIM, AND ANY SUCH CLAIM LACKS MERIT....................................................... 56 CONCLUSION ...................................................................................................... 58 iii TABLE OF AUTHORITIES CASES PAGE Adler v. Deegan, 251 N.Y. 467 (1929)........................................................................................... 35 Affronti v. Crosson 95 N.Y.2d 713 (2001)......................................................................................... 45 Alliance of Am. Insurers v. Chu, 77 N.Y.2d 573 (1991).................................................................................... 48,53 Baldwin v. City of Buffalo, 6 N.Y.2d 168 (1959)........................................................................................... 27 Building Contrs. Ass’n v. State of New York, 218 A.D.2d 722 (2d Dep’t 1995) ................................................................... 28-29 Burlington Northern Railroad v. Ford, 504 U.S. 648 (1992) ........................................................................................... 38 Campaign for Fiscal Equity, Inc. v. State of New York, 86 N.Y.2d 307 (1995).................................................................................... 45,55 City of New York v. Patrolmen’s Benevolent Ass’n of City of N.Y., 89 N.Y.2d 380 (1996).......................................................................... 26-27,34,41 City of New York v. State of New York, 86 N.Y.2d 286 (1995)..................................................................................passim City of New York v. Village of Lawrence, 250 N.Y. 429 (1929)........................................................................................... 27 Cleburne v. Cleburne Living Ctr., Inc., 473 U.S. 432 (1985) ...................................................................................... 53,54 Cohen v. State of New York, 94 N.Y.2d 1 (1999)............................................................................................. 48 Colella, Matter of v. Board of Assessors, 95 N.Y.2d 401 (2000)......................................................................................... 42 iv Table of Authorities (cont’d) CASES (cont’d) PAGE Dandridge v. Williams, 397 U.S. 471 (1970) ........................................................................................... 34 Empire State Ch. Associated Bldrs. & Contrs., Inc. v. Smith, 98 A.D.3d 335 (4th Dep’t 2012) ........................................................................ 21 Farrington v. Pinckney, 1 N.Y.2d 74 (1956)........................................................................................ 27,36 General Bldg. Contractors of N.Y.S., Matter of v. Board of Trustees, Vill. of Cayuga Heights, 42 A.D.2d 660 (3d Dept’ 1973) ............................................................................ 6 General Bldg. Contrs. of N.Y.S., Matter of v. City of Syracuse, 40 A.D.2d 584 (4th Dep’t 1972), aff’d as modified, 32 N.Y.2d 780 (1973)........................................................................................... 8 General Bldg. Contrs. of N.Y.S., Matter of v. County of Oneida, 54 Misc.2d 260 (Sup.Ct., Oneida County 1967) ................................................. 8 Godfrey v. Spano, 13 N.Y.2d 358 (2009)......................................................................................... 57 Hotel Dorset Co. v. Trust for Cultural Resources of City of N.Y., 46 N.Y.2d 358 (1978).................................................................................... 27,36 Kelley, Matter of v. McGee, 57 N.Y.2d 522 (1982).......................................................................... 26,27,36,37 Maresca v. Cuomo, 64 N.Y.2d 242 (1984)......................................................................................... 45 McGowan v. Burstein, 71 N.Y.2d 729 (1988)......................................................................................... 48 Moran Towing Corp., Matter of v. Urbach, 99 N.Y.2d 443 (2003).................................................................................... 47,48 New York Blue Line Council, Inc., Matter of v. Adirondack Park Agency, 86 A.D.3d 756 (3d Dep’t 2011) ........................................................................ 40n v Table of Authorities (cont’d) CASES (cont’d) PAGE N.Y.S. Ass’n of Plumbing-Heating-Cooling Contrs., Matter of v. Egan, 86 A.D.2d 100 ( 3d Dep’t 1982) ......................................................................... 22 N.Y.S. Chapter, Inc., Matter of v. N.Y.S. Thruway Authority, 88 N.Y.2d 56 (1996).............................................................................. 6,28,54,55 Patrolmen’s Benevolent Ass’n of City of N.Y. v. City of New York, 97 N.Y.2d 378 (2001)............................................................................. 26,34n,35 Port Jeffereson Health Care Facility v. Wing, 94 N.Y.2d 284 (1999)......................................................................................... 46 Rudder v. Pataki, 93 N.Y.2d 273 (1999)......................................................................................... 56 Saratoga Cnty. Chamber of Commerce v. Pataki, 100 N.Y.2d 801 (2003)....................................................................................... 56 Schneider v. Sobol, 76 N.Y.2d 309 (1990)......................................................................................... 46 Society of Plastics Indus. v. County of Suffolk, 77 N.Y.2d 761 (1991)......................................................................................... 42 Town of Black Brook v. State of New York, 41 N.Y.2d 486 (1977)..................................................................................passim Town of Islip, Matter of v. Cuomo, 64 N.Y.2d 50 (1984)........................................................................................... 26 Transactive Corp., Matter of v. N.Y.S. Dep’t of Social Servs., 92 N.Y.2d 579 (1998)......................................................................................... 57 Uniformed Firefighters Ass’n, 50 N.Y.2d 85 (1980)........................................................................................... 35 United States v. Salerno, 481 U.S. 739 (1987) ........................................................................................... 48 vi Table of Authorities (cont’d) CASES (cont’d) PAGE Wambat Realty Corp. v. State of New York, 41 N.Y.2d 490 (1977).................................................................................... 26,41 Washington v. Davis, 426 U.S. 229 (1976) ........................................................................................... 55 Wood, Matter of v. Irving, 85 N.Y.2d 238 (1995)......................................................................................... 27 STATE CONSTITUTION art. IX ...................................................................................................... 39 § 2 ...................................................................................................... 25 § 2(b)(2) ................................................................................................. 25,26 § 3(d)(1) ...................................................................................................... 26 § 3(d)(4) ...................................................................................................... 26 STATE STATUTES CPLR 3211(3) ...................................................................................................... 19 3211(7) ...................................................................................................... 19 5601(a) ...................................................................................................... 24 General Municipal Law § 100-a .............................................................................................. 6,21,28 Labor Law § 222 ...............................................................................................passim § 222(1) ................................................................................................. 13,48 § 222(2) .......................................................................................................... § 222(2)(a) ................................................................................................. 13,56 § 222(2)(b) ...................................................................................................... 12 § 222(2)(d) ...................................................................................................... 51 § 222(2)(e) ...............................................................................................passim § 222(2)(ii) .......................................................................................................... § 224 ...................................................................................................... 15 § 224(1) ...................................................................................................... 15 vii Table of Authorities (cont’d) STATE STATUTES (cont’d) PAGE Public Authorities Law § 1735 ...................................................................................................... 7n § 3603 ................................................................................................. 7n,40 § 3628 ................................................................................................. 7n,40 State Finance Law § 123-b .............................................................................................. 5,24,56 § 123-b(1) ...................................................................................................... 56 L. 1912, ch. 514 ..................................................................................................... 6,7 L. 1921, ch. 469 ...................................................................................................... 33 L. 1961, ch. 292 ................................................................................................... 7,33 L. 1964, ch. 572 ................................................................................................... 7,33 L. 1972, ch. 40, § 1 ...................................................................................................... 7n L. 1985, ch. 375, § 6 ..................................................................................................... 7n L. 1999, ch. 507, § 1 ..................................................................................................... 7n L. 2003, ch. 143, § 1 ..................................................................................................... 7n L. 2008, ch. 57, Part MM ............................................................................................. 32 § 1 ........................................................................................................ 9 MISCELLANEOUS Assembly Record of Proceedings (June 22, 2007).................................................. 31,33 Bill Jacket Supp., L. 2008, ch. 57.........................................................................passim Bloomberg Press Release (6-14-07) ............................................................................. 31 Deal is Struck to Cut Public Building Cost, New York Sun, June 15, 2007, ........................................................................ 11 viii Table of Authorities (cont’d) MISCELLANEOUS (cont’d) PAGE Deal Updates Contracting Law, but No Progess on Campaign Finance, New York Times, June 15, 2007....................................................................... 31 Fiscal Implications of the Wicks Law Mandate, New York State Division of Budget, May 1987 ................................................. 8 Jeffrey P. Rosenstein & Kenneth D. O’Reilly, Wicks Law Revisited, New York Law Journal, Nov. 13, 2007 ....................................................passim Leaders Agree on Reform, Legistlative Gazette, B.J.S.......................................... 30,31 McKinney’s Cons. Law of N.Y., Book 1, Statutes § 123(b)......................................... 51 N.Y.S. Assembly Memorandum in Support, Bill No. A9807C, Part MM............... 9,29 Paterson Press Release (4-9-08) .................................................................................. 31 Silver Press Release (6-21-07).................................................................................. 8,31 Spitzer Press Release (6-14-07) ...............................................................................................passim (10-12-07) ...............................................................................................passim State of the State Address Fact Sheet, B.J.S. ............................................................ 30 PRELIMINARY STATEMENT The Wicks Law has long required governmental entities to prepare separate bid specifications for three components of public construction projects − plumbing, heating/ventilating/air conditioning, and electric wiring and standard illuminating fixtures. It applies only when the total cost of a project will exceed a specified monetary threshold, in order to avoid imposing an undue administrative burden on smaller projects. The law was intended to ensure the procurement of high quality goods and services at the lowest possible cost by eliminating the mark-up costs incurred when all aspects of a project are awarded to a general contractor who in turn hires subcontractors for the project’s various components. The monetary threshold was fixed at $50,000 in the 1960s and remained at that level for four decades. In 2008, the Legislature amended the law in two ways. First, it increased the monetary threshold, replacing the $50,000 threshold with a three-tiered threshold that in most counties in the State makes the separate specification requirement applicable when the cost of the project exceeds $500,000; in Westchester, Nassau and Suffolk counties when the cost exceeds $1.5 million; and in the counties in New York City when the cost exceeds $3 million. Second, the Legislature authorized governmental entities to opt out of compliance with the separate specification requirement if they require their contractors to enter into “project labor agreements” that satisfy the 2 provisions of a newly enacted Labor Law § 222. A project labor agreement is a pre-hire collective bargaining agreement that establishes one or more labor organizations as the collective bargaining representative for all persons who will work on the project. The agreement must comply with a number of specific statutory requirements; among other things, it must require the contractor to “participate” in approved apprentice-training programs. Plaintiffs include the County of Erie and its supervisor, an association of building contractors, and three individual building contractors − one from outside the State, one that is minority-owned, and one that is women-owned. In this declaratory judgment action, plaintiffs challenge both features of the 2008 amendments. First, they challenge the exclusion of Erie County and other upstate counties from the higher thresholds applicable to projects in the eight identified downstate counties, arguing that the law constitutes a “special law” enacted without any home rule message in violation of the Home Rule Provision of the New York State Constitution, and imposes differential treatment in violation of the federal and state Equal Protection Clause. Second, plaintiffs challenge the provisions in Labor Law § 222 governing project labor agreements and approved apprentice-training programs. For this purpose, plaintiffs argue that the Labor Law provisions must be interpreted to preclude out-of-state contractors and to disadvantage minority-owned, women-owned and non-union contractors from working on governmental projects in excess of the applicable 3 Wicks Law thresholds. Plaintiffs argue that, so interpreted, the provisions violate a myriad of constitutional provisions, including the Privileges and Immunities Clause, the Dormant Commerce Clause, the Due Process Clause, and the Equal Protection Clause. Plaintiffs also argue that, taken together, the provisions impose additional costs on governmental entities and therefore violate the State Finance Law. Both courts below rejected these claims. Supreme Court, Erie County (Glownia, J.), dismissed the complaint for failure to state a cause of action, and the Appellate Division, Fourth Department, reinstated the complaint and granted judgment for defendants by declaring the 2008 amendments to be valid and constitutional. Two Appellate Division justices dissented. Both courts properly rejected the home rule challenge to the three-tiered monetary threshold, because the amended threshold was intended to serve the State’s substantial interest in regulating public works contracts to ensure the procurement of high quality goods and services at the lowest possible cost while relieving localities from the administrative burden of the Wicks Law’s separate specification requirements for lower cost projects, the amended threshold reasonably serves that interest, and courts should not second guess the Legislature’s judgment about how to tailor the threshold to differences in project costs in different counties. The rulings below recognize the highly technical nature of plaintiffs’ challenge. The Wicks Law’s separate specification 4 requirement has been in place for a century. The Legislature’s 2008 amendments were intended to provide localities with some relief from what had by then become a burdensome requirement. Plaintiffs are dissatisfied with the extent of relief provided, but this is not an issue that can be addressed in a home rule challenge. And plaintiffs also cannot use a home rule challenge as an indirect means to challenge the 2008 amendments on equal protection grounds. Both courts also properly rejected the challenges to Labor Law § 222 on the basis that plaintiffs misinterpreted the statute, and that the statute when properly interpreted has none of the flaws they identify. Finally, both courts properly held that plaintiffs lacked standing to bring a citizen-taxpayer challenge to the 2008 amendments under the State Finance Law. For all the reasons set forth below, the judgment should be affirmed. QUESTIONS PRESENTED 1. Whether plaintiffs’ home rule challenge to the Legislature’s amendment of the Wicks Law establishing a three-tiered monetary threshold fails because the amendment is reasonably related to the substantial state concern it was designed to address, as both lower courts held, or alternatively whether that home rule challenge fails for lack of capacity and/or common-law standing, as only the Supreme Court held. 5 2. Whether plaintiffs’ equal protection challenge to the Legislature’s amendment to the Wicks Law to establish a three-tiered monetary threshold fails either for lack of standing or because the amendment satisfies rational basis review. 3. Whether plaintiffs’ facial constitutional challenges to the apprentice- training provisions codified in Labor Law § 222(2)(e) fail because they turn on erroneous interpretations of those provisions. 4. Whether plaintiffs fail to establish that the project labor provisions codified in Labor Law § 222 violate the equal protection rights of non-union contractors because the statute does not classify contractors on the basis of whether or not they employ a union workforce. 5. Whether plaintiffs lack standing to state a citizen-taxpayer cause of action under State Finance Law § 123-b. STATEMENT OF THE CASE A. The Wicks Law The Wicks Law is a series of provisions codified principally in the General Municipal Law, Public Housing Law, and State Finance Law. The law requires governmental entities undertaking publicly funded construction projects that will exceed a specified monetary threshold to prepare separate bid specifications for three categories of work: (i) plumbing and gas fitting (“plumbing”); (ii) steam 6 heating, hot water heating, ventilating, and air conditioning (“HVAC”); and (iii) electrical wiring and standard illuminating fixtures (“electrical”). See generally Jeffrey P. Rosenstein & Kenneth D. O’Reilly, Wicks Law Revisited, New York Law Journal, Nov. 13, 2007, at S1, S11 (hereinafter “Wicks Law Revisited”) (reproduced at R. 160-161). Originally enacted in 1912, L. 1912, ch. 514, the Wicks Law was intended, among other things, “to assure the prudent and economical use of public moneys for the benefit of all the inhabitants of the state and to facilitate the acquisition of facilities and commodities of maximum quality at the lowest possible cost.” General Municipal Law § 100-a; see also Matter of N.Y.S. Chapter, Inc., Associated Gen. Contrs. of Am. v. N.Y.S. Thruway Auth., 88 N.Y.2d 56, 67 (1996) (“New York has a multitude of procurement statutes applicable to public entities, but the underlying purpose is uniform: to assure prudent use of public moneys and to facilitate the acquisition of high quality goods and services at the lowest possible cost.”); Matter of General Bldg. Contrs. of N.Y.S. v. Board of Trustees, Vill. of Cayuga Hgts., 42 A.D.2d 660, 661 (3d Dep’t 1973) (statutes governing general competitive bidding and subdivided bidding “are intended for the protection of the municipalities and the taxpayers therein”). The Legislature determined that requiring governmental entities to prepare separate bid specifications for the plumbing, HVAC, and electrical components of large public construction projects would save money by eliminating the mark- 7 up costs incurred when all aspects of a project are awarded to a general contractor who in turn hires subcontractors for the project’s various components. See Wicks Law Revisited, at S1 (reproduced at R. 160). The Wicks Law was amended periodically over the years to increase the applicable monetary threshold from the original amount of $1,000 in 1912, L. 1912, ch. 514, to $50,000 for most public contracts in the 1960s. See, e.g., L. 1961, ch. 292 (raising threshold for state government contracts); L. 1964, ch. 572 (raising threshold for local government contracts).1 The threshold thereafter remained unchanged without even adjustments for inflation until the Legislature amended the law in 2008. B. The 2008 Amendments At Issue Here By 2008, the Legislature determined that, although the Wicks Law was intended to save taxpayer money, its modest monetary threshold was undermining that very purpose by imposing an undue financial and administrative burden on governmental entities. Several courts had concluded that the Wicks Law effectively required governmental entities to assume 1 Even before the 2008 Amendments, the Wicks Law utilized varying thresholds for the projects of specified public entities. For example, Public Authorities Law §§ 3603 and 3628 fixed the monetary thresholds for the Clifton-Fine Health Care Corporation and the Erie County Medical Center Corporation contracts at $75,000. See L. 1999, ch. 507, § 1; L. 2003, ch. 143, § 1. Under Public Authorities Law § 1735, the New York City School District is exempt from the separate specification requirement. And the Legislature also has periodically relieved specified projects from aspects of the Wicks Law. See, e.g., L. 1972, ch. 40, § 1 (Ralph Wilson Stadium in Erie County); L. 1985, ch. 375, § 6 (Times Union Center in Albany County). 8 responsibility for the supervision and coordination of the separate specification contractors as well as liability for the completion of the public construction project. See, e.g., Matter of General Bldg. Contrs. of N.Y.S. v. City of Syracuse, 40 A.D.2d 584, 584 (1972), aff’d as modified 32 N.Y.2d 780 (1973); Matter of General Bldg. Contrs. of N.Y.S. v. County of Oneida, 54 Misc. 2d 260, 262-64 (Sup. Ct., Oneida County 1967). A 1987 study performed by the State Division of the Budget had explained that a governmental entity was required not only to solicit separate bid specifications for the components of a project, which drove up administrative costs associated with preparing and soliciting bids, but also to serve as its own general contractor with all the duties that would entail, such as “management of the separate prime contracts, oversight of the actual construction, coordination of the construction schedule, and resolution of any contract disputes.” Fiscal Implications of the Wicks Law Mandate, New York State Division of the Budget, May 1987, at 2, 14-15 (reproduced in full at R. 64- 125). Many local governments felt ill-equipped to manage numerous public construction projects, wished to avoid the additional costs that would be incurred by hiring separate contractors to manage their public construction projects, and cried for reform. See Wicks Law Revisited, at S1, S11 (reproduced at R. 160-161); Spitzer Press Release (10-12-07), Bill Jacket Supp., L. 2008, ch. 57 (hereinafter “B.J.S.”) (reproduced at R. 331); Silver Press Release (6-21-07), B.J.S. (reproduced at R. 337-338). 9 The Legislature responded by amending the Wicks Law in 2008 (the “2008 Amendments”) to exempt additional projects from the separate specification requirement in two ways relevant here. 1. The three-tiered increase in the monetary threshold. First, the 2008 Amendments increased the monetary threshold that triggers the separate specification requirement in a way that, for the first time, created different monetary thresholds for different geographic regions of the State.2 The amendments increased the threshold from $50,000 to $3,000,000 for projects in New York City (i.e., “the counties of the Bronx, Kings, New York, Queens, and Richmond”), $1.5 million for projects in the counties of Nassau, Suffolk and Westchester, and $500,000 for projects “in all other counties within the state.” L. 2008, ch. 57, Part MM, § 1 (reproduced in full at R. 126-152). The Assembly Memorandum in Support noted that the change was intended to “help reduce property taxes by lowering local construction costs.” N.Y.S. Assembly Memorandum in Support, Bill No. A9807C, Part MM (reproduced at R. 296). This same increase in the monetary threshold had been proposed in 2007, but had not progressed beyond the Assembly that year. Then-Governor Spitzer proposed the three-tiered increase in the monetary threshold for the stated 2 As previously noted, see, supra, at n.1, the Legislature had previously relieved specified public entities from the separate specification requirement to varying degrees, but the law had never utilized a tiered threshold that varied in different regions of the State. 10 purpose of “eas[ing] the burden this mandate imposes on local governments.” Governor’s Program Bill Memorandum, B.J.S. (reproduced at R. 328). The Governor explained that, since the last change to the monetary threshold, real estate, labor, and material costs had increased dramatically, subjecting a greater number of public construction projects to the separate specification requirements. The Governor’s goal was thus to “recalibrate” the thresholds, and thereby “allow[ ] smaller projects to proceed without separate specifications.” Id. (reproduced at R. 330). Governor Spitzer estimated that increasing the thresholds as proposed would save localities millions of dollars each year. See Spitzer Press Release (10-12-07), B.J.S. (reproduced at R. 331). Moreover, the reforms were touted for their potential impact on the upstate economy. Governor Spitzer described the reforms as “a priority outlined in the Governor’s Renew New York Agenda for improving the Upstate economy.” Spitzer Press Release (10-12-07), B.J.S. (reproduced at R. 332); Spitzer Press Release (6-14-07), B.J.S. (reproduced at R. 335). And then-Lieutenant Governor Paterson opined that the reforms would “help make a difference for the Upstate economy.” Spitzer Press Release (6-14- 07), B.J.S. (reproduced at R. 335). Governor Spitzer further explained that the tiered threshold was needed “to take into consideration the geographic differences in the cost of construction.” State of State Address Fact Sheet, B.J.S. (reproduced at R. 336). The three- 11 tiered thresholds mirrored regional differences in construction costs and were intended to exempt more than 70 percent of public projects throughout the state from the Wicks Law subdivided bidding requirements. See Spitzer Press Release (10-12-07), B.J.S. (reproduced at R. 332); Spitzer Press Release (6-14-07) (reproduced at R. 335); see also Excerpts from B.J.S. (reproduced at R. 334, 350- 351, 367, 370-371, 375-376); Deal is Struck to Cut Public Building Costs, New York Sun, June 15, 2007, B.J.S. (reproduced at R. 366) (reporting that the reforms “would exempt more than half of public projects from the mandate”). When the 2007 bill was debated in the New York State Assembly, the bill’s sponsor in that chamber, then-Monroe County Assemblywoman and Labor Committee Chair Susan John, advocated strongly for the three-tiered threshold, explaining that the $500,000 threshold applicable to 54 of the State’s 62 counties was equitable. Assembly Record of Proceedings (June 22, 2007) (reproduced at R. 390). She noted that the $500,000 threshold was “a ten-fold increase over the existing threshold” applicable to these counties and that “if one were to adjust the [$50,000] threshold” using consumer price index adjustments, the result would be “a threshold significantly lower than $500,000.” Id. She explained that the amendments reflected a “fair compromise” between competing local interests, namely “the interests of those individuals who seek a higher threshold and those individuals who seek to make sure that mechanical contractors are not put out of business through the efforts to assure a higher threshold.” Id. 12 Indeed, although Assemblywoman John represented a county that would be governed by the lowest tier of the new tiered threshold, she “would have preferred a lower threshold” to avoid harming local, small subcontractors, mostly used by governmental entities, but overlooked by large general contractors. Id. (reproduced at 391-392). While the provision was not enacted in 2007, it was included in a 2008 budget bill and passed by the Legislature in that form. 2. The Opt-Out Provision. The 2008 Amendments also enacted a second aspect of Governor Spitzer’s 2007 Program Bill amendments to the Wicks Law. This provision permitted governmental entities to opt out of the Wicks Law’s separate specification requirement for those projects in which they require their contractors to enter into project labor agreements that satisfy the provisions of the newly enacted Labor Law § 222. That section, entitled “project labor agreements,” provides: Any contract, subcontract, lease, grant, bond, covenant or other agreement for projects undertaken pursuant to this section shall not be subject to the requirements of separate specifications (referred to as the Wicks Law) when the agency, board, department, commission or officer of the state of New York, or political subdivision thereof, municipal corporation, public benefit corporation or local or state authority having jurisdiction over the public work has chosen to require a project labor agreement, pursuant to paragraph (a) of this subdivision. Labor Law § 222(2)(b). 13 Labor Law § 222 also more generally authorizes governmental entities to require their contractors to enter into project labor agreements for any public projects when they determine that doing so will best serve their interests. A “project labor agreement” is a pre-hire collective bargaining agreement that establishes one or more labor organizations as the collective bargaining representative for all persons who will perform work on the project, that is: a pre-hire collective bargaining agreement between a contractor and a bona fide building and construction trade labor organization establishing the labor organization as the collective bargaining representative for all persons who will perform work on a public work project, and which provides that only contractors and subcontractors who sign a pre-negotiated agreement with the labor organization can perform project work. Labor Law § 222(1). Under Labor Law § 222, a governmental entity must satisfy at least two requirements before it may use a project labor agreement. First, it must decide that “its interest in obtaining the best work at the lowest possible price, preventing favoritism, fraud and corruption, and other considerations such as the impact of delay, the possibility of cost savings advantages, and any local history of labor unrest, are best met by requiring a project labor agreement.” Labor Law § 222(2)(a). Second, it must consider a contractor’s capacity to perform the work as well as the contractor’s track record of performance: Any contract . . . or other agreement for construction, reconstruction, demolition, excavation, rehabilitation, 14 repair, renovation, alteration, or improvement with respect to each project undertaken pursuant to this section, the [governmental] entity shall consider the financial and organizational capacity of contractors and subcontractors in relation to the magnitude of work they may perform, the record of performance of contractors and subcontractors on previous work, the record of contractors and subcontractors in complying with existing labor standards and maintaining harmonious labor relations, and the commitment of contractors to work with minority and women-owned business enterprises. Labor Law § 222(2)(e) (emphasis added). For projects that exceed the monetary thresholds fixed by the Wicks Law (the only projects for which an opt-out would be necessary or useful), governmental entities choosing to opt out must satisfy a third requirement. For such projects, the governmental entity must require each contractor and subcontractor to “participate in apprentice training programs in the trades of work it employs” that have been approved by the Department of Labor: With respect to any contract for construction, reconstruction, demolition, excavation, rehabilitation, repair, renovation, alteration, or improvement in excess of three million dollars in the counties of the Bronx, Kings, New York, Queens, and Richmond; one million five hundred thousand dollars in the counties of Nassau, Suffolk and Westchester; and five hundred thousand dollars in all other counties within the state; the entity shall further require that each contractor and subcontractor shall participate in apprentice training programs in the trades of work it employs that have been approved by the [D]epartment [of Labor] for not less than three years and shall have graduated at least one apprentice in the last three years and shall have at 15 least one apprentice currently enrolled in such apprenticeship training program. In addition, it must be demonstrated that the program has made significant efforts to attract and retain minority apprentices, as determined by affirmative action goals established for such program by the department. Labor Law § 222(2)(e) (emphasis added). The 2008 Amendments also gave the Department of Labor new enforcement authority. Labor Law § 224 specifically grants the Commissioner of Labor the power to enforce any provision of the Wicks Law by giving the Commissioner authority to issue a stop-bid order. A stop-bid order remains in effect until the Commissioner renders a determination that the governmental entity has complied with the Wicks Law. See Labor Law § 224(1). Shortly after the enactment of 2008 Amendments, the Department of Labor received an inquiry from an attorney asking whether the participation requirement in Labor Law § 222 required contractors to have an approved apprentice training program in place “with respect to any contract for construction” with a government entity, as opposed to just those contracts for which they had entered into a project labor agreement. The Department responded by letter dated July 9, 2008, that it interpreted the statute to mean that “the apprenticeship requirements included in Section 222 of the Labor Law are limited to projects that take place under project labor agreements” (R. 179). It noted that Labor Law § 222(2)(e) expressly references only contracts and other 16 agreements “undertaken pursuant to this section,” namely Labor Law § 222, and that Labor Law § 222 is titled “Project Labor Agreements” (R. 179). Then, by letter dated August 25, 2008, in response to a further inquiry, the Department clarified its position still further, explaining that contractors and subcontractors with project labor agreements in place need not establish their own Department- approved apprentice training programs in order to “participate” in such programs. They could satisfy the participation requirement by entering into project labor agreements with labor organizations that had their own qualifying programs (R. 181-182). C. Course of Proceedings Plaintiffs include the County of Erie and its former County Executive Chris Collins, in his official capacity and as a taxpayer, two professional corporations whose members are contractors subject to the Wicks Law (plaintiffs Empire State Chapter of Associated Builders and Contractors, Inc., and the Buffalo Niagara Partnership, Inc.), and three building contractors: Alleghany Industrial Insulation Co., a Pennsylvania construction corporation; M.G.M. Insulation, Inc., a certified minority-owned business; and Mechanical Systems, Inc., a certified women-owned business. (R. 26-29). Plaintiffs commenced this declaratory judgment action on March 31, 2009, to challenge the 2008 Amendments (R. 13-63). Their complaint names as defendants then- Commissioner of Labor Patricia Smith and New York State Comptroller Thomas 17 P. DiNapoli and asserts twenty-one causes of action that fall generally into two categories: (1) causes of action challenging the adoption of a three-tiered monetary threshold, and (2) causes of action challenging Labor Law § 222. Plaintiffs claim that the three-tiered monetary threshold constitutes a special law for which no home rule message “was received by the Legislature,” in violation of the Home Rule Provision of the State Constitution, although they do not specify the county or counties from whom such a message should have been received. They also claim that the Amendments discriminate against upstate counties in violation of the federal and state Equal Protection Clauses (R. 21, at ¶¶ 16-21; R. 25, at ¶ 39; R. 30, at ¶¶ 53-60; R. 50-55, at ¶¶ 181-183, 188-198). Plaintiffs mount a facial challenge to the apprentice-training provisions of Labor Law § 222 under the Privileges and Immunities, Dormant Commerce, Due Process, and Equal Protection Clauses. For this purpose, plaintiffs make two assumptions about the meaning of the statute, both of which contradict the interpretation rendered by the Department of Labor. Plaintiffs assume that Labor Law § 222(2)(e) requires all contractors on public construction contracts that exceed the Wicks Law’s monetary thresholds to participate in approved apprentice-training programs, regardless of whether the project is proceeding under a project labor agreement (see, e.g., R. 32, at ¶ 66). And plaintiffs assume that the phrase in Labor Law § 222(2)(e) requiring each contractor to “participate” in approved apprentice-training programs requires the contractor 18 to maintain its own approved program (see, e.g., R. 23, at ¶ 27; R. 24-25, at ¶¶ 32-36). Based on these assumptions, plaintiffs argue that the apprentice- training provisions necessarily discriminate against out-of-state contractors, because such contractors lack the New York address required to establish and maintain approved training programs of their own (R. 22-23, at ¶ 26; R. 32, at ¶ 67). Plaintiffs argue that the apprentice-training provisions have a discriminatory impact on minority-owned and women-owned contractors, because statistics show that, as compared to other contractors, such contractors establish and maintain relatively fewer apprentice-training programs of their own (R. 24-25, at ¶¶ 32-38; R. 38-45, at ¶¶ 104-148). Plaintiffs also seek to challenge the provisions of Labor Law § 222 governing project labor agreements more generally, arguing that the provisions effectively favor union contractors over non-union contractors in violation of the Equal Protection Clause by giving governmental entities an incentive to use project labor agreements (R. 51-53, at ¶¶ 184-198). Finally, plaintiffs argue that, in light of all of its alleged discriminatory features, the 2008 Amendments impose added costs on governmental entities, in violation of the State Finance Law (R. 36, at ¶¶ 92-103). The complaint seeks a judgment declaring the 2008 Amendments unconstitutional, an order permanently enjoining defendants from enforcing the 2008 Amendments and attorneys’ fees (R. 56-63). Defendants answered the 19 complaint, asserting lack of standing, lack of capacity and failure to state a cause of action (R. 158, at ¶ 10-14, R. 153-182). Thereafter, defendants moved to dismiss pursuant to CPLR 3211(3) and (7), for lack of “standing” and failure to state a claim; they did not include a separate argument based on “capacity” (R. 183-265). D. Supreme Court’s Decision By memorandum decision and order (one paper), Supreme Court granted defendants’ motion and dismissed the complaint (R. 9-12). The court rejected plaintiffs’ home rule challenge for both lack of standing and failure to state a cause of action. On standing, the court explained that no plaintiff was a county that had been singled out for the allegedly improper special treatment; thus no plaintiff had been denied any right to avoid the imposition of a special law upon it that had not been authorized by submitting a home rule message. To the contrary, Erie County, the only county named as a plaintiff, and for that matter all of the other plaintiffs as well, “are subject to the standard $500,000 Wicks Law monetary threshold which applies in 54 New York State counties, not the higher thresholds which apply in the eight other counties [in and near New York City]” (R. 11). The court did not separately address Erie County’s capacity to maintain the challenge. On the merits of plaintiffs’ home rule challenge, the court explained that “the 2008 Amendments were enacted in furtherance of and bear a reasonable 20 relationship to a substantial State-wide concern which concern falls within the State Legislature’s purview,” because “the Legislature reasonably, and in a way related to the State’s purpose, took into account that large construction projects are significantly more common and labor costs for contractors are significantly higher in those counties than elsewhere in New York State” (R. 11). The court went on to dismiss plaintiffs’ remaining twenty causes of action on the basis that they all turned on two erroneous assumptions about the meaning of the 2008 Amendments codified in Labor Law § 222, namely that (i) contractors must satisfy that participation requirement in every public construction contract, regardless of whether a project labor agreement is used or not and (ii) contractors had to operate their own approved apprentice-training programs in order to satisfy the participation requirement of Labor Law § 222(2)(e). The court rejected plaintiffs’ interpretation as contrary to the plain language of the statute, and noted as well that it contradicted the reasonable interpretation proffered by the agency responsible for enforcing the Amendments. Plaintiffs appealed. E. The Appellate Division’s Order In a 3-2 decision, the Appellate Division, Fourth Department, also rejected plaintiffs’ challenge to the statute. The Appellate Division held that the complaint should not have been dismissed, and reinstated the complaint for declaratory relief; it then declared both challenged aspects of the 2008 21 Amendments to the Wicks Law as valid and constitutional. Empire State Ch. of Associated Bldrs. & Contrs., Inc. v. Smith, 98 A.D.3d 335, 348 (4th Dep’t 2012) (reproduced at R. 414-427). The Appellate Division disagreed with Supreme Court on standing, holding that Erie County had “standing” to bring a home rule challenge, relying on this Court’s decision in Town of Black Brook v. State of New York, 41 N.Y.2d 486 (1977). That case held that local governments − which ordinarily lack capacity to challenge the constitutionality of an act of the Legislature, have such capacity where needed to protect their home rule interests. But the Appellate Division did not address Supreme Court’s determination that Erie County nonetheless lacked standing because it was not subject to any special rule, but rather was governed by the generally applicable $500,000 monetary threshold, and therefore incurred no injury to its home rule interest. On the merits, the Appellate Division majority agreed with Supreme Court that plaintiffs’ home rule challenge failed, concluding that the provision creating an elevated three-tiered threshold for application of the Wicks Law “bears a direct and reasonable relationship to a substantial State concern” (R. 417), namely, “assur[ing] the prudent and economical use of public moneys for the benefit of all the inhabitants of the state and . . . facilitat[ing] the acquisition of facilities and commodities of maximum qualify at the lowest possible cost” (R. 417 [quoting General Municipal Law § 100-a]); “fostering 22 honest competition in order to obtain the best work or supplies at the lowest possible price” (R. 417-418); and “guard[ing] against favoritism, improvidence, extravagance, fraud and corruption” (R. 418 [quoting Matter of N.Y.S. Ass’n of Plumbing-Heating-Cooling Contrs. v. Egan, 86 A.D.2d 100 (3d Dep’t 1982)]). The majority explained that the substantial state concern was not merely a hypothetical one, but was in fact the concern that the law was designed to serve. As to the reasonableness of the particular three-tiered threshold established, the majority noted the general rule that the Legislature has no obligation to produce evidence to sustain the rationality of a statutory classification, and that the court was “guided by the presumption that the Legislature acted within constitutional limits and investigated and found facts supporting that classification” (R. 418). The majority further noted that documents in the legislative record reflected a reasoned legislative judgment: that the monetary threshold in place since the 1960s had become out-of-date, [ ] that raising that threshold would ease the burden that the Wicks Law imposes on local governments . . . . [and] that the three-tiered monetary threshold was devised to take into consideration geographically-based differences in the costs of construction (R. 418-419). And having rejected plaintiffs’ home rule challenge under the heightened standard of review applicable to that challenge, the majority explained that plaintiffs’ equal protection challenge to the three-tiered threshold, subject only to rational basis review, necessarily failed. 23 The dissenters agreed that the decision to raise the Wicks Law threshold implicated a matter of substantial state concern sufficient to satisfy the heightened standard of review applicable to home rule challenges, but they concluded that there was an inadequate relationship between that concern and the use of the three-tiered threshold. The dissenters noted a variety of documents from the record supporting the adoption of a tiered threshold generally, and indeed conceded that a tiered threshold would be reasonable in light of common knowledge that construction costs are greater downstate than upstate. The dissenters nonetheless opined without citing any precedent that the specific tiered threshold adopted “must be tied to some economic or other objective indicator” and lacked factual or evidentiary support in the record (R. 425). Turning to the provisions of Labor Law § 222 governing project labor agreements and approved apprentice-training programs, the Appellate Division rejected plaintiffs’ challenges unanimously. It explained that the majority of those challenges “rest upon plaintiffs’ erroneous interpretation of Labor Law § 222(2)(e)”(R. 422), which was flawed. Contrary to plaintiffs’ assumption, the apprentice-program provisions were properly read to apply only to projects undertaken pursuant to project labor agreements. And contrary to plaintiffs’ assumption, the subject provisions did not require contractors to establish and maintain their own apprentice-training programs; rather, contractors could 24 satisfy the participation requirement by entering into project labor agreements with labor organizations with their own qualifying programs. Finally, the Appellate Division rejected plaintiffs’ challenge to the 2008 Amendments on the basis that they allegedly waste taxpayer funds in violation of State Finance Law § 123-b, concluding that plaintiffs lacked standing to assert a citizen-taxpayer claim based on their failure to allege a specific threat of an imminent state expenditure (R. 422). Plaintiffs now appeal as of right from the Appellate Division’s opinion and order, asserting jurisdiction pursuant to CPLR 5601(a) based on the two-justice dissent on an issue of law. ARGUMENT POINT I THE APPELLATE DIVISION PROPERLY REJECTED PLAINTIFFS’ HOME RULE CHALLENGE TO THE THREE-TIERED MONETARY THRESHOLDS Plaintiffs’ challenge to the three-tiered monetary threshold under the Home Rule Provision of the State Constitution fails on the merits, as the Appellate Division held, and it also fails for lack of capacity and common-law standing, notwithstanding the Appellate Division’s contrary view. 25 A. Plaintiffs’ Home Rule Challenge Fails Because The Increased Three-Tiered Threshold Is Reasonably Related To A Substantial State Concern. The increased three-tiered threshold adopted by the Legislature in 2008 was reasonably related to a substantial state concern, as both courts below correctly held. Indeed, the Appellate Division’s dissenters agreed that the adoption of a tiered threshold generally was reasonably related to a substantial state concern supported by the history of the Wicks Law and the 2008 Amendments, but the dissenters mistakenly credited plaintiffs’ argument that the reasonableness of the specific thresholds chosen had to be similarly documented by that history. This Court has never imposed such a requirement. Doing so now would fail to afford proper deference to the legislative judgment made here and impose an undue burden of documentation on the Legislature. Article IX, section 2, of the New York State Constitution, known as the Home Rule Provision, confers broad powers upon local governments to enact local legislation. The Constitution, therefore, limits the power of the Legislature by providing that it has “the power to act in relation to the property, affairs or government of any local government only by general law, or by special law only” upon a home-rule message from the local government or governments affected by the law. N.Y. Const., art. IX, § 2(b)(2). A home rule message is a “request of two-thirds of the total membership of its legislative body or [a] request of its chief executive officer concurred in by a majority of such membership.” Id. 26 Thus where the Legislature enacts a general law, or “[a] law which in terms and in effect applies alike to all counties, all counties other than those wholly included within a city, all cities, all towns or all villages,” no home rule message is required. Id. at §§ 2(b)(2), 3(d)(1). In contrast, where the Legislature seeks to enact a special law, defined as “[a] law which in terms and in effect applies to one or more, but not all, counties, counties other than those wholly included within a city, cities, towns or villages,” it generally cannot do so without a home rule message from the localities affected. Id. at §§ 2(b)(2), 3(d)(4). This Court has explained, however, that the Legislature may enact a special law without a home rule message from the locality affected if the law is reasonably related to a matter of substantial state concern. Patrolmen’s Benevolent Ass’n of City of N.Y. v. City of New York (“PBA II”), 97 N.Y.2d 378, 386 (2001); see also Wambat Realty Corp. v. State of New York, 41 N.Y.2d 490, 495-98 (1977) (discussing this standard). For this purpose, “‘the subject matter of the statute [must be] of sufficient importance to the State generally to render it a proper subject of State legislation . . . notwithstanding the fact that the concern of the State may also touch upon local matters.’” Matter of Town of Islip v. Cuomo, 64 N.Y.2d 50, 56 (1984) (quoting Matter of Kelley v. McGee, 57 N.Y.2d 522, 538(1982)). Moreover, the substantial state concern must have “support in the language, structure or legislative history of the statute” at issue. City of 27 New York v. Patrolmen’s Benevolent Ass’n of City of N.Y. (“PBA I”), 89 N.Y.2d 380, 391 (1996). “[S]peculative assertions on possible State-wide implications of the subject matter” do not suffice. Id. The purpose of the Home Rule Provision is “to provide some measure of protection to a city from possible danger of ill-considered interference by the Legislature in its local affairs.” City of New York v. Village of Lawrence, 250 N.Y. 429, 439 (1929). The provision “evince[s] a recognition that essentially local problems should be dealt with locally and that effective local self- government is the desired objective.” Matter of Kelley, 57 N.Y.2d at 535; see also Baldwin v. City of Buffalo, 6 N.Y.2d 168, 172 (1959) (“The theory behind home rule is very simple: it is the thought that local problems, in which the State has no concern, can best be handled locally.”) Legislative enactments generally enjoy a strong presumption of constitutionality that may be rebutted only by proof persuasive beyond a reasonable doubt. Hotel Dorset Co. v. Trust for Cultural Resources of City of N.Y., 46 N.Y.2d 358, 370 (1978); Farrington v. Pinckney, 1 N.Y.2d 74, 88 (1956). Moreover, and contrary to plaintiffs’ suggestion otherwise (Br. at 20-21), it is the party attacking the constitutionality of the statute that bears the heavy burden of demonstrating that the statute is invalid. See Matter of Wood v. Irving, 85 N.Y.2d 238, 244-45 (1995). 28 Applying these principles, the increased three-tiered monetary threshold implemented by the 2008 Amendments did not require a home rule message because it bears a reasonable relationship to substantial state concerns that are identified and articulated in the legislative history. 1. The 2008 amendments implicate a substantial state concern documented by the legislative history. The Legislature’s decision to increase the monetary threshold applicable to the Wicks Law for the first time since the 1960s and to do so with a tiered threshold implicates substantial state concerns. Most fundamentally, the State has a substantial interest in regulating public works contracts to ensure the procurement of high quality goods and services at the lowest possible cost, the very interest that the Wicks Law and indeed the competitive bidding laws more generally have long been designed to serve. See General Municipal Law § 100-a (declaring policy of competitive bidding laws); see also Matter of N.Y.S. Chapter, Inc., 88 N.Y.2d at 67 (explaining this policy). The Legislature long ago determined that requiring governmental entities to prepare separate bid specifications for the plumbing, HVAC, and electrical components of large public construction projects would save money by eliminating the mark-up costs incurred when all aspects of a project are awarded to a general contractor who in turn hires subcontractors for the project’s various components. See generally Wicks Law Revisited, at S1 (reproduced at R. 160). And in Building Contrs. 29 Ass’n v. State of New York, 218 A.D.2d 722, 722-23 (2d Dep’t 1995), the Second Department correctly held that “the State has a valid and substantial interest in regulating public works contracts to the extent of requiring separate specifications and bidding for the types of work enumerated in General Municipal Law § 101,” a holding that plaintiffs do not challenge here. At the same time, the Legislature has a substantial interest in exempting from the separate specifications and bidding requirement those public construction contracts that place undue administrative burdens on local governments, sufficient to outweigh or even undermine the cost-saving purposes of those requirements. The history of the 2008 Amendments documents that the amendments were intended to serve these fundamental state interests. By 2008, the Legislature had evidence before it that the monetary threshold in place since the 1960s was no longer effective to serve the statute’s stated purpose; instead, the threshold was placing an increasing financial and administrative strain on local governments that varied with regional differences in construction costs. Indeed, the Assembly Memorandum in Support touted the legislation establishing the new three-tiered increased threshold as a measure that would “lower[ ] local construction costs.” N.Y.S. Assembly Memorandum in Support, Bill No. A9807C, Part MM (reproduced at R. 296). 30 The enactment of this statute in 2008 was the culmination of an effort that began in 2007, when then-Governor Spitzer introduced substantially similar legislation. He explained that “[i]n the four decades since [the monetary] threshold was last adjusted, the costs of real estate, labor and materials for public works projects have risen dramatically, subjecting an ever-increasing number of public works contracts to the separate specifications requirements.” Governor’s Program Bill Memorandum, B.J.S. (reproduced at R. 330). Governor Spitzer stated that the bill was meant to “recalibrate” the threshold to allow smaller projects to proceed without the undue burdens created by the former threshold thereby “provid[ing] fiscal relief and increased flexibility for local governments.” Id. In a State of the State Address Fact Sheet, he explained that the $50,000 threshold was “too low” and had been “driv[ing] up the cost of construction for localities.” See State of the State Address Fact Sheet, B.J.S. (reproduced at R. 336). He also stated that the increased monetary thresholds would exempt some 70 percent of public construction projects from the mandate of the Wicks Law, see Spitzer Press Release (10-12-07), B.J.S. (reproduced at R. 331-332), and described his proposal as “[a] three-tiered threshold system to take into consideration the geographic differences in the cost of construction.” State of the State Address Fact Sheet, B.J.S. (reproduced at R. 336); see also Leaders Agree on Reform, Legislative Gazette, B.J.S. (reproduced at R. 370-371) 31 (explaining that the different thresholds “reflect the geographic differences in construction costs”). Other leaders called for similar reform for the same reasons, including then-Lieutenant Governor Paterson, see Paterson Press Release (4-9-08), B.J.S. (reproduced at R. 334), Assembly Speaker Silver, see Silver Press Release (6-21- 07), B.J.S. (reproduced at R. 337-338), and New York City Mayor Bloomberg, see Bloomberg Press Release (6-14-07), B.J.S. (reproduced at R. 351). See also Deal Updates Contracting Law, but No Progress on Campaign Finance, New York Times, June 15, 2007, B.J.S. (reproduced at 367); Leaders Agree on Reform, Legislative Gazette, B.J.S. (reproduced at R. 370-371). At the same time, other voices expressed concerns over competing local interests. Then-Assemblywoman Susan John, the 2007 bill’s sponsor in her chamber, stated during debates that the bill was intended to strike “a fair balance for the contractors and the public’s interest with regard to the building of public works construction projects.” Assembly Record of Proceedings (June 22, 2007) (reproduced at R. 393). Indeed, she “would have preferred a lower threshold” to avoid harming local, small subcontractors, mostly used by governmental entities, but overlooked by large general contractors. Id. (reproduced at R. 391-392). Other legislators argued in opposition that the tiered threshold failed to give sufficient relief to upstate counties. See, e.g., Assembly Record of Proceedings (June 22, 2007) (reproduced at R. 391, 397-400). 32 The 2007 program bill passed the Assembly, but proceeded no further; see also Spitzer Press Release (10-12-07), B.J.S. (reproduced at R. 331); Wicks Law Revisited, at S11 (reproduced at R. 161). The very next year, similar legislation was introduced and enacted as part of a 2008 budget bill. See Sponsor’s Memorandum in Support, Bill No. A4204. See L. 2008, ch. 57, Part MM. The debates surrounding the 2007 program bill therefore form a critical part of the legislative history of the 2008 Amendments, and document the Legislature’s intent to provide badly needed relief to the very local governments that the Wicks Law was intended to protect. Plaintiffs contend that documentation generated in connection with the 2007 program bill is irrelevant here (Br. at 25-26), but they are mistaken. The introduction and debates on the proposal in 2007 are a vital part of the legislative history of the provision enacted the following year. Indeed, plaintiffs effectively admitted as much when they submitted the Supplemental Bill Jacket containing this material with their motion papers in order to “provide[ ] the [c]ourt with relevant legislative materials/history” (R. 266 ¶ 5; see also R. 268 ¶ 10 [plaintiffs describe the Supplemental Bill Jacket along with other materials as the “available legislative history”]). And contrary to plaintiffs’ further claim (Br. at 25-26), evidence of the Governor’s intent underlying a program bill ultimately introduced and passed by the Legislature provides strong evidence of legislative intent. 33 2. The three-tiered monetary threshold is reasonably related to those substantial state concerns. The increased and tiered monetary threshold implemented by the 2008 Amendments bears a reasonable relationship to the articulated substantial state concerns of regulating public works contracts to ensure the procurement of high quality goods and services at the lowest possible cost and guarding the public fisc without imposing undue financial and administrative burdens on local governmental entities. The Legislature has periodically increased the triggering thresholds to serve these interests, increasing the threshold from $1,000 to $25,000 in 1921, L. 1921, ch. 469, and then to $50,000 in 1961 and 1964, for state governmental entities and local governmental entities, respectively. L. 1961, ch. 292; L. 1964, ch. 572. After a long period of no further change, the 2008 Amendments finally increased the triggering threshold again to a minimum of $500,000. Contrary to plaintiffs’ argument (Br. at 32-33), that increase alone was substantial. In 2007, when the Assembly was debating a prior version of the Amendments, its sponsor in that chamber explained that merely adjusting the $50,000 threshold then in place based on the consumer price index would have resulted in “a threshold significantly lower than $500,000.” Assembly Record of Proceedings (June 22, 2007) (reproduced at R. 390). The Legislature thus 34 reasonably concluded that an increase to at least $500,000 would provide significant relief to all counties from what had by then become burdensome subdivided bidding requirements. The Legislature also reasonably concluded that in order to provide comparable relief throughout the State, it should establish a tiered threshold to account for regional differences in overall public construction costs. The Legislature thus raised the threshold higher still for the high-cost counties in the greater New York metropolitan region in order to account for the high costs of public construction projects in those counties. This determination was also reasonable. Under the Court’s home rule precedents, as long as the statute is intended to serve a substantial state interest articulated in the language, structure and legislative history, it need only bear a reasonable relationship to that substantial state concern. PBA I, 89 N.Y.2d at 391. Mathematical precision is therefore not required. Cf. Dandridge v. Williams, 397 U.S. 471, 485 (1970).3 And it is reasonable to assume that the counties of the greater New York metropolitan region face considerably higher 3 As previously noted, see, supra, at 26-27, this Court requires a heightened showing that the statute at issue was intended to serve a substantial state interest articulated in the language, structure and legislative history of that statute, as opposed to a purely conjectural interest. PBA I, 89 N.Y.2d at 389-92. But this Court has never suggested that home rule analysis demands a closer fit between the measure adopted and the substantial interest than that demanded by rational basis review. To the contrary, it has affirmatively stated that a statute need only be found to reasonably serve the substantial state interest identified. PBA II, 97 N.Y.2d at 386. 35 public construction costs. Indeed, “it has long been recognized that New York City and other large municipal centers might reasonably receive different treatment.” Uniformed Firefighters Ass’n, 50 N.Y.2d 85, 91 (1980); see also PBA II, 97 N.Y.2d 378; Adler v. Deegan, 251 N.Y. 467 (1929). Higher costs of the New York metropolitan region may well be attributable not only to higher labor costs (see Plaintiffs’ Br. at 33-35), but also to higher costs of materials, added costs as a result of environmental factors and to factors requiring a greater volume of public construction, such as density of population and the age and condition of significant public improvements. There is no reason to expect, as plaintiffs suggest (Br. at 33-36) that a three-fold increase in labor costs should result in a three-fold increase in the threshold for application of the Wicks Law separate specification requirement. First, labor costs are not the only factor contributing to higher construction costs in the metropolitan area. Second, there is no reason to assume that the threshold should be a fixed multiple of relevant costs. Selecting the threshold for exemption from the Wicks Law requires balancing the potential benefits of the requirement against the administrative burdens it imposes. While the balance is affected by the size and cost of a project, it is not necessarily achieved by a formula purporting to define a mathematical relationship between costs and thresholds. Such a balance is precisely the kind of judgment best committed to the Legislature. 36 For this reason, the Legislature’s judgment as to the specific tiers selected and the counties to which those tiers apply is presumed to be constitutional absent proof persuasive beyond a reasonable doubt. Hotel Dorset Co., 46 N.Y.2d at 370. There is also a “presumption, long recognized by this [C]ourt, that the Legislature has investigated and found facts necessary to support the legislation.” Id. The Appellate Division properly applied these presumptions in concluding that the wisdom of the Legislature’s specific determination to raise the threshold to $500,000 for most counties of the State, but to raise it still further for the counties of the greater New York metropolitan region is not an appropriate subject of judicial fact-finding (R. 420). This Court’s cases analyzing generally applicable laws that classify localities by certain characteristics are especially instructive here. In that context, the Court has explained that legislation that “effects a classification among the local governments it regulates does not render the enactment invalid, so long as that classification is reasonable and related to the State’s purpose.” Kelley, 57 N.Y.2d at 540; see also Farrington, 1 N.Y.2d at 89. Kelley involved a statute that classified New York’s counties according to four ranges in population and imposed requirements on the salaries of district attorneys that varied according to the population range of the respective 37 counties served.4 After this Court concluded that the subject matter of the statute involved a substantial state concern ― maintaining salaries of district attorneys at an acceptable level ― it weighed the reasonableness of the classification. Id. at 539-40. For this purpose, the Court accepted as reasonable the notion that counties with greater populations warranted different treatment, and it deferred to the legislative judgment as to the specific population ranges selected to further that purpose. It did not insist on mathematical precision, it did not require that the salary specified for a particular county bear some mathematical relationship to the population of the county, and it did not second- guess the legislative judgment as to where to draw the lines: [t]he Legislature’s choice to impose minimum salary requirements for District Attorneys upon counties depending upon their size comports with logic and common sense. It is entirely reasonable to assume that the greater the population in a county, the greater will be its need for a full-time District Attorney as well as its ability to pay that officer an adequate salary. Id. at 540. 4 The statute provided that (1) counties with a population greater than 500,000, had to pay their District Attorneys an annual salary equivalent to that received by State Supreme Court Justices; (2) counties with a population greater than 100,000 but less than 500,000 had to pay their District Attorneys at the same level as County Court Judges in their counties; (3) counties with a population greater than 40,000 but less than 100,000 that had opted to designate their District Attorney as a full- time officer had to pay their District Attorneys at the salary level of County Court Judges; and (4) the remaining counties, i.e., those with a population less than 40,000, were unaffected by the statute. Kelley, 57 N.Y.2d at 537. 38 The same reasoning applies here. In the 2008 Amendments, the Legislature effectively classified the counties of the State into three tiers, identifying a small group of counties for different treatment on the basis of higher public construction costs. Because it was reasonable for the Legislature to vary the Wicks Law threshold to account for differences in costs and other burdens, it was also reasonable for the Legislature to make the necessary judgments about where to draw the lines, and precisely what threshold to apply to the various counties. The Court should therefore defer to its judgment here. Plaintiffs’ proper remedy is through the legislative process. Plaintiffs argue (Br. at 33-35) that the three-tiered threshold is irrational because a handful of counties outside the greater metropolitan region − particularly Dutchess County − generally face higher labor costs similar to those faced by the eight metropolitan counties that are given thresholds above the lowest tier. But this point is not sufficient to establish irrationality. As the courts have explained in the equal protection context, a plaintiff relying on under- or over-inclusiveness to establish irrationality must show that any under- or over-inclusiveness “is so great that the [statute] can no longer be said rationally to implement” an identified purpose. Burlington Northern Railroad v. Ford, 504 U.S. 648, 653 (1992). Plaintiffs make no such showing here − nor do they explain how the exclusion of Dutchess County from the higher-tiered threshold has any harmful effect upon them. 39 B. Plaintiffs Lack Both Capacity and Standing To Bring Their Home Rule Challenge. By relying exclusively on the participation of Erie County as a plaintiff in this case to establish capacity and common-law standing (Br. at 19 & n.2), plaintiffs effectively concede that none of the other plaintiffs can maintain a home rule challenge to the 2008 Amendments. But contrary to the Appellate Division’s conclusions (R. 416), Erie County lacks both “capacity,” in the sense of authority to sue the State, and common-law standing to challenge the tiered threshold as violative of the Home Rule Provision. Political subdivisions as a general rule lack capacity, or power, to challenge the constitutionality of an act of the State Legislature restricting its governmental powers. The general rule follows from the fact that political subdivisions are created by the sovereign State, and therefore exercise their powers subject to the State’s discretion and control. Town of Black Brook v. State of New York, 41 N.Y.2d at 488; see also City of New York, 86 N.Y.2d 286, 290 (1995) (explaining this principle). As the Court explained in Town of Black Brook v. State, 41 N.Y.2d 486, however, the general rule does not apply when a local government’s claim is based on one of the constitutional protections provided in Article IX; in that context, “the otherwise general rule prohibiting [a local government] from questioning legislative action . . . is no longer applicable.” Id. at 489. 40 The Town of Black Brook was situated within the Adirondack Park region. Black Brook sought to challenge the enactment of the Adirondack Park Agency Act, which established a comprehensive land use and development plan for the Adirondack Park region, on the ground that it interfered with the exercise of its local zoning and land planning powers. Because Black Brook had “a direct political interest in ensuring the preservation of its home rule power,” this Court concluded that the general rule should not impede its ability to assert its home rule rights, and thus that it had “standing,” i.e., capacity, to bring such a challenge.5 41 N.Y.2d at 488-89. In contrast, Erie County’s home rule rights are not implicated because the State has not attempted to interfere in Erie County’s local affairs. Just as the Legislature has in the past adopted special thresholds applicable to the projects of identified public entities, but left the projects of the remaining governmental entities subject to the generally applicable threshold without home rule messages from all of those remaining entities, see, e.g., Public Authorities Law §§ 3628 (Erie County Medical Center Corporation); and 3603 (Clifton-Fine Health Care Corporation), the Legislature here adopted a special rule for the 5 The Black Brook Court used the term “standing,” but it was clearly addressing capacity, a term that is sometimes used interchangeably with standing. See, e.g., City of New York, 86 N.Y.2d at 291-92 (describing Black Brook as a capacity case); Matter of New York Blue Line Council, Inc. v. Adirondack Park Agency, 86 A.D.3d 756, 759 & n.3 (3d Dep’t 2011) (same); see also City of New York, 86 N.Y.2d at 297, 299 (Ciparick, J., dissenting) (noting tendency of the courts to use the term standing, even when “clearly addressing the capacity issue”). 41 projects of eight identified counties, and left the projects of the remaining counties subject to a generally applicable threshold. Under Black Brook, the eight identified counties have capacity to object, if they wish to do so. But Erie County lacks capacity to object to the 2008 Amendments on the ground that none of the eight counties issued a home rule message. And to the extent Erie County argues that the 2008 Amendments are invalid absent its own home rule message, it is mistaken. Extending the exception recognized by Black Brook to the circumstances presented here would impose an infeasible and unnecessary burden on the Legislature by requiring it to obtain home rule messages from all of the remaining fifty-four counties in the State. Not surprisingly, all of the home rule challenges this Court has previously considered were brought by plaintiffs allegedly aggrieved by provisions that singled them out, rather than parties who were dissatisfied by the widely applicable treatment from which others were excepted. See, e.g., PBA I, 89 N.Y.2d 380 (challenge to law barring New York City recourse to a mini-public employment relations board for arbitration brought by New York City); Wambat Realty Corp., 41 N.Y.2d 490 (challenge to requirement of park agency approval for land use brought by town within agency’s region and landowner required to obtain approval). 42 The Court should therefore find that Erie County lacks capacity to challenge the 2008 Amendments under the Home Rule Provision.6 Even if Erie County has capacity under Black Brook, the Court should find it nonetheless lacks common-law standing to challenge the tiered threshold at issue here, because it fails to establish a cognizable injury in fact. As the Court has explained, common-law standing is a threshold requirement for any plaintiff seeking to challenge governmental action. It requires a plaintiff to satisfy a two- part test, requiring it to show (1) “injury in fact,” meaning actual rather than conjectural harm, and (2) an injury that falls within the zone of interests or concerns sought to be promoted by the law pursuant to which the Legislature has acted. See Matter of Colella v. Board of Assessors, 95 N.Y.2d 401, 409-10 (2000). See generally Society of Plastics Indus. v. County of Suffolk, 77 N.Y.2d 761, 773 (1991). Erie County does not assert, let alone establish, an injury that falls within the zone of interests protected by the Home Rule Provision. Erie County alleges that the increase from $50,000 to $500,000 was inadequate to relieve it of the burden imposed by the separate specification requirement of the Wicks 6 Defendants adequately preserved the defense of capacity by raising it their answer in Supreme Court, and moving to dismiss the complaint on the basis of “standing,” a defense that is often understood to include or to refer to the defense of capacity. See, supra, at 40. In the Appellate Division, defendants’ briefing focused on common-law standing, but the Appellate Division relied on a capacity case to reject the defense. 43 Law. Br. at 32. But even assuming that the alleged inadequacy of the increase constitutes an injury in fact,7 that would not constitute an injury to Erie County’s home rule interests. The fact that Erie County seeks no relief here to address its asserted injury demonstrates as much. Erie County affirmatively seeks the invalidation of the 2008 Amendments. It is unclear whether the Court could grant that relief by effectively reinstating the $50,000 threshold previously applicable, or rather by striking so much of the 2008 Amendments as included higher tiers for the eight specifically identified counties, and thereby making the $500,000 threshold uniformly applicable. Either way, Erie County would obtain no relief at all for the injury it asserts, and might even be worse off. Erie County also asserts that the adoption of the three-tiered threshold is inequitable. That claim does not assert interference with Erie County’s home rule powers either; it asserts disparate treatment. And it is well settled that political subdivisions lack capacity to challenge a state statute on equal protection grounds. City of New York, 86 N.Y.2d at 289. Erie County should not 7 It is unclear whether being excluded from the higher monetary thresholds actually constitutes such an injury, however, for two reasons. First, even if governmental entities in Erie County did not obtain as much relief as they would have wished, the 2008 Amendments nonetheless provided some relief, and thus did not injure those entities. Second, the thresholds adopted represented a compromise among competing interests within the counties. To the extent that governmental entities in Erie County were disadvantaged, competing local interests were advantaged. 44 be permitted to bring a disparate treatment challenge indirectly under the guise of a home rule challenge. POINT II THE APPELLATE DIVISION PROPERLY REJECTED PLAINTIFFS’ EQUAL PROTECTION CHALLENGE TO THE TIERED MONETARY THRESHOLD The true thrust of plaintiffs’ argument is that the tiered threshold imposed by the 2008 Amendments disparately burdens upstate counties compared to their downstate counterparts. Plaintiffs thus assert as an alternative cause of action that the 2008 Amendments violate the equal protection rights of upstate counties by adopting higher monetary thresholds for certain downstate counties, and thus, should be struck down as unconstitutional (Br. at 69, 74; see also R. 49-53). But plaintiffs’ equal protection challenge fails for two reasons. First, none of the plaintiffs have standing to assert this equal protection challenge. As previously noted, Erie County lacks capacity to sue its creator, the State, to bring an equal protection challenge. See City of New York, 86 N.Y.2d at 291. Plaintiffs do not assert, nor could they, that any other plaintiff can bring an equal protection claim on Erie County’s behalf because no other plaintiffs’ equal protection rights are implicated by the classification created by the 2008 Amendments. For example, the contractor plaintiffs cannot assert that the 2008 Amendments violate their equal protection rights because the Amendments distinguish between counties, not contractors, and an allegation that the 45 Amendments have a disparate impact on contractors who seek work from upstate counties is insufficient since they have never demonstrated, much less alleged, intentional discrimination. Campaign for Fiscal Equity, Inc. v. State of New York, 86 N.Y.2d 307, 321 (1995) (“an equal protection cause of action based upon a disproportionate impact upon a suspect class requires establishment of intentional discrimination”). Erie County Executive Chris Collins also cannot bring such a challenge. To the extent he seeks to do so in his official capacity, he cannot do so for the same reasons that the county lacks capacity. “Municipal officials . . . suffer the same lack of capacity to sue the State with the municipal corporate bodies they represent.” City of New York, 86 N.Y.2d at 291. To the extent he seeks to pursue this claim in his individual capacity as a citizen taxpayer, he cannot do so because, as noted, infra at Point IV, he lacks standing to bring a citizen-taxpayer action. Second, plaintiffs’ equal protection claim fails on the merits. Contrary to plaintiffs’ contentions (Br. at 68-69), and as the Appellate Division reasonably concluded, the 2008 Amendments neither involve a fundamental right nor an inherently suspect classification, and are thus subject to rational basis review. See Affronti v. Crosson, 95 N.Y.2d 713, 718-19 (2001). Under rational basis review “a legislative enactment will pass constitutional muster if the governmental classification is based upon some conceivable and legitimate State interest.” Maresca v. Cuomo, 64 N.Y.2d 242, 250 (1984). The Legislature need 46 not have articulated the purpose behind the classification or even have been actually motivated by that purpose. Port Jefferson Health Care Facility v. Wing, 94 N.Y.2d 284, 290-91 (1999). A statute does not offend the Constitution simply because the distinctions it draws are mathematically imperfect or “result in some inequality.” Schneider v. Sobol, 76 N.Y.2d 309, 314 (1990). The 2008 Amendments easily satisfy this standard. As the Appellate Division noted, because “the three-tiered monetary threshold meets the more exacting standard of the [H]ome [R]ule article,” plaintiffs cannot show it fails to meet the lesser burden imposed by the rational basis test (R. 422). POINT III THE APPELLATE DIVISION PROPERLY REJECTED PLAINTIFFS’ CONSTITUTIONAL CHALLENGES TO LABOR LAW § 222 The Appellate Division properly rejected plaintiffs’ constitutional challenges to the provisions of the 2008 Amendments that are codified in the newly enacted Labor Law § 222. Plaintiffs’ challenges to the apprentice-training provisions of the statute turn on erroneous interpretations, and plaintiffs’ argument that the statute disparately impacts non-union contractors fails to state a constitutional claim. 47 A. Plaintiffs’ Challenges to the Apprentice-Training Provisions Turn On An Erroneous Interpretation. Most of plaintiffs’ challenges to Labor Law § 222 involve the apprentice- training provisions codified in Labor Law § 222(2)(e). Those provisions require governmental entities, in circumstances governed by the statute, to require their contractors and subcontractors to “participate in apprentice training programs in the trades of work it employs” that have been approved by the Department of Labor. Plaintiffs argue that these provisions apply to all public construction contracts, and that so understood, they violate the Privileges and Immunities Clause, the Dormant Commerce Clause, the Equal Protection Clause, and the Due Process Clause, not as applied in any particular context, but on their face, because they effectively discriminate against out-of-state, minority-owned, women-owned and non-union contractors (Br. at 42-74). But plaintiffs are mistaken. Plaintiffs’ facial challenges fail because they turn on an interpretation that is inconsistent with the statutory text, the Department of Labor's reasonable interpretation of that text, and the purpose of the provision. In seeking facial nullification of the 2008 Amendments, plaintiffs must “surmount the presumption of constitutionality accorded to legislative enactments by proof beyond a reasonable doubt.” Matter of Moran Towing Corp. v. Urbach, 99 N.Y.2d 443, 448 (2003) (internal quotation marks omitted). Further, “plaintiffs bear the burden to demonstrate that ‘in any degree and in 48 every conceivable application,’ the law suffers wholesale constitutional impairment.” Cohen v. State of New York, 94 N.Y.2d 1, 8 (1999) (quoting McGowan v. Burstein, 71 N.Y.2d 729, 733 [1988]). Thus plaintiffs “‘must establish that no set of circumstances exists under which the [legislation at issue] would be valid.’” Moran Towing Corp., 99 N.Y.2d at 448 (2003) (quoting United States v. Salerno, 481 U.S. 739, 745 [1987]). Moreover, this Court is required to “avoid interpreting [the] statute in a way that would render it unconstitutional if such a construction can be avoided and to uphold the legislation if any uncertainty about its validity exists.” Alliance of Am. Insurers v. Chu, 77 N.Y.2d 573, 585 (1991). Labor Law § 222 is titled “Project labor agreements.” Labor Law § 222(1) defines the term “project labor agreement,” and Labor Law § 222(2) sets forth requirements for the use of such agreements by governmental entities in connection with public construction contracts. Labor Law § 222(2)(e) states in the first sentence that, for “[a]ny contract, subcontract, lease, grant, bond, covenant, or other agreement for construction, reconstruction, demolition, excavation, rehabilitation, repair, renovation, alteration, or improvement with respect to each project undertaken pursuant to this section, the entity shall consider” various factors, including a contractor’s financial and organizational capacity and record of performance. Labor Law § 222(2)(e) (emphasis added). The second sentence states that for “any contract for construction” above the 49 otherwise applicable Wicks Law monetary thresholds, “the [governmental] entity shall further require that each contractor and subcontractor shall participate in apprentice training programs.” Id. (emphasis added). Read in context, therefore, the second sentence about apprentice-training programs does not apply to all public construction contracts over the applicable monetary threshold of the Wicks Law, but rather imposes a “further” requirement on the contracts that are subjected to requirements in the first sentence, i.e., projects that are proceeding under project labor agreements as defined in the statute. This interpretation is not only consistent with the text and the interpretation of that text by the Department of Labor (R. 179), but it is also the interpretation that makes sense of the statutory scheme. Labor Law § 222(2)(e) appears in a statute entitled “Project labor agreements.” The first sentence imposes certain requirements on “[a]ny contract [or other agreement] with respect to each project undertaken pursuant to this section,” i.e., Labor Law § 222, and thus applies only to contracts for projects subject to a project labor agreement. And the second sentence imposes a “further” requirement on those same contracts when they are for amounts that exceed the statutory threshold amounts. Thus, although the second sentence begins with the phrase “With respect to any contract for construction” in excess of the threshold amounts, in context that sentence applies only to a contract that meets two requirements: (a) it is for a project subject to a project labor 50 agreement, and (b) it is for an amount that exceeds the relevant threshold amount. That is, the second sentence requires compliance with the apprentice- training provisions as an additional requirement for certain projects that are already subject to the requirements of first sentence because they are proceeding under project labor agreements. In arguing to the contrary, plaintiffs attribute unwarranted significance to the fact that the Legislature did not repeat in the second sentence the phrase “[w]ith respect to each project undertaken pursuant to this section” contained in the first sentence of the section. (Br. at 45-46, 48-50). But such repetition was unnecessary, because the second sentence plainly states that it is adding something to the requirement of the first sentence; it provides that government entities “shall further require” the contractors referenced in the first sentence to participate in apprentice training programs when the contracts exceed the threshold amounts. Thus, no separate restriction was necessary to establish that the second sentence applies only to contracts for projects governed by project labor agreements, such as where governments use such agreements to opt out of the separate specification requirements of the Wicks Law. Plaintiffs argue that their contrary interpretation is compelled by the statutory text, and therefore the Appellate Division erroneously relied on the section heading to create ambiguity between the two sentences in section 222(2)(e), where there is none (Br. at 46-50), but they are mistaken. As 51 demonstrated above, the statutory text, read as a whole, points to the interpretation reached by the courts below and by the Labor Department, rather than by the plaintiff. But as the Appellate Division reasonably noted, to the extent that the words “any contract” create ambiguity as to whether the apprentice-training provision applies to all public construction projects or only those proceeding under a project labor agreement, the section heading “Project labor agreements” clarifies the imprecise language used. Although a heading may not alter “the effect of unambiguous language in the body of the statute,” it can “clarify or point the meaning of an imprecise or dubious provision.” McKinney’s Cons. Law of N.Y., Book 1, Statutes § 123(b). Finally, plaintiffs claim that the section heading of Labor Law § 222 provides no guidance because subsection (d) ― not at issue here ― appears under the same section heading, and can arguably be read to apply to all public construction contracts (Br. at 50). Plaintiffs’ argument is not persuasive, because the coverage of subsection (d) itself is not yet clear. It may well be that, like subsection (e), subsection (d) is also properly read to apply only when governmental entities require their contractors to enter into project labor agreements. Neither the courts nor the Department of Labor has yet provided any interpretive guidance on the issue. Thus, when Labor Law § 222(2)(e) refers in its second sentence to “any contract” above the otherwise applicable Wicks Law monetary threshold, it is 52 not extending its reach to all public works projects above the otherwise applicable Wicks Law threshold, as plaintiffs suggest, but only to those public works projects that are referenced in the first sentence and also in excess of the Wicks Law threshold. This is in fact how the Department of Labor, which enforces the provision, reads the statute. Thus the provision requires participation in apprentice-training programs only for public construction projects proceeding under project labor agreements and in excess of the Wicks Law threshold amounts. Moreover, because the provision requires such participation only for projects proceeding under project labor agreements, the provision need not, and therefore should not, be read to mean that contractors must establish and maintain approved apprentice-training programs of their own in order to “participate” in such programs, within the meaning of the statute. The Department of Labor has explained that a contractor can satisfy the statute’s participation requirement by entering into a project labor agreement with a “labor organization [that] has an apprenticeship training program that meets the statutory requirements” (R. 181-182). Read this way, the provision would not preclude governmental entities from using contractors that either do not or cannot maintain qualifying programs of their own. Indeed, the Department’s reading in this regard is more reasonable than the one plaintiffs offer for three reasons. First, the Department’s reading 53 applies a more natural meaning of the term “participate,” since “participate” does not usually mean “maintain” or “establish.” Second, the Department’s reading is more consistent with the express legislative intent to create opportunities for minority-owned and women-owned businesses and for minority apprentices. Labor Law § 222(2)(e) expressly requires entities choosing contractors for public construction contracts to consider, among other factors, “the commitment of the contractors to work with minority and women-owned business enterprises” and to assure that the qualifying apprentice-training program “has made significant efforts to attract and retain minority apprentices.” And third, the Department’s reading avoids the constitutional issues that plaintiffs press and thus adheres to the rule of constitutional avoidance. See Alliance of Am. Insurers, 77 N.Y.2d at 585. B. Plaintiffs’ Equal Protection Challenge to the Project Labor Agreement Provision is Misguided. The Court should reject plaintiffs’ equal protection challenge to the project labor provisions of the 2008 Amendments. The Equal Protection Clause is “essentially a direction that all persons similarly situated should be treated alike.” Cleburne v. Cleburne Living Ctr., Inc., 473 U.S. 432, 439 (1985). Moreover, a statutory classification on a basis other than race, alienage, national origin, gender or illegitimacy is subject to rational basis review, and thus will be sustained if rationally related to a legitimate governmental interest. 54 See id. at 440. Plaintiffs claim the project labor provisions violate the Equal Protection Clause by necessarily favoring union contractors over non-union contractors (Br. at 65, 69-70, 73-74). That claim fails for two independent reasons. First, the project labor provisions do not classify contractors on the basis of whether or not they employ a union workforce. On their face, they do not at all address the manner in which contractors conduct their businesses. Regardless of whether a contractor has previously chosen to hire organized labor, nothing in Labor Law § 222 will preclude it from bidding on a project requiring a project labor agreement as long as it is willing to enter into a project labor agreement with a labor union for purposes of the project. In Matter of N.Y.S. Chapter, Inc. v. N.Y.S. Thruway Authority, 88 N.Y.2d 56 (1996), the Court examined the nature of project labor agreements for purposes of deciding whether, before the enactment of Labor Law § 222, public authorities governed by New York’s competitive bidding laws could lawfully adopt project labor agreements. The Court explained that a project labor agreement “generally requires all bidders on the project to hire workers through the union hiring halls; follow specified dispute resolution procedures; comply with union wage, benefit, seniority, apprenticeship and other rules; and contribute to the union benefit funds.” Id. at 65. While the terms of individual project labor agreements can vary, such agreements would normally apply 55 regardless of the identity of the bidder, and thus without regard to whether the bidder had previously hired union workers. This was the very nature of the agreements before the Court in Matter of N.Y.S. Chapter.8 Plaintiffs do not suggest otherwise. Rather, plaintiffs argue that the project labor provisions of Labor Law § 222 impose a disparate impact on contractors who would not otherwise choose to utilize organized labor (Br. at 73- 74). Plaintiffs’ disparate impact claim necessarily fails. It is well settled that a claim that a facially-neutral statute has a disparate impact on a class − even a suspect class − is insufficient to establish an equal protection violation, absent a showing of invidious discriminatory intent. See Campaign for Fiscal Equity, 86 N.Y.2d at 321. See generally Washington v. Davis, 426 U.S. 229, 240 (1976) (“the invidious quality of a law claimed to be . . . discriminatory must ultimately be traced to a . . . discriminatory purpose”). And plaintiffs nowhere suggest such discriminatory animus. Second, either union and non-union contractors are not similarly situated, or the Legislature’s decision to distinguish between them is reasonably related to a legitimate governmental interest. Labor Law § 222 authorizes a 8 In that case, this Court approved the use of project labor agreements by public authorities so long as the record supporting the determination to implement one established that the project labor agreement was justified by the interests underlying the competitive bidding laws. Matter of N.Y.S. Chapter, 88 N.Y.2d at 65. In doing so, the Court noted that the successful bidder on a project labor agreement need not be a union contractor and expressly rejected the notion that project labor agreements “generally represent a social policy favoring organized labor.” Id. at 76. 56 governmental entity to use a project labor agreement only upon a finding that “its interest in obtaining the best work at the lowest possible price, preventing favoritism, fraud and corruption, and other considerations such as the impact of delay, the possibility of cost savings advantages, and any local history of labor unrest, are best met by requiring a project labor agreement.” Labor Law § 222(2)(a). Authorizing the use of project labor agreements where such a determination can be made necessarily passes rational basis review. POINT IV PLAINTIFFS LACK STANDING TO BRING A CITIZEN-TAXPAYER CLAIM, AND ANY SUCH CLAIM LACKS MERIT Under State Finance Law § 123-b(1), a “citizen taxpayer” has standing to challenge “a wrongful expenditure, misappropriation, misapplication, or any other illegal or unconstitutional disbursement of state funds or state property,” whether or not the taxpayer is “affected or specially aggrieved” by the expenditure. As this Court has explained, however, a plaintiff’s claims must have a “sufficient nexus to fiscal activities of the State” to confer standing under § 123-b. Rudder v. Pataki, 93 N.Y.2d 273, 281 (1999). “A claim that state funds are not being spent wisely is patently insufficient to satisfy the minimum threshold for standing.” Saratoga Cnty. Chamber of Commerce v. Pataki, 100 N.Y.2d 801, 813 (2003). 57 Apparently relying solely upon former Erie County Executive Chris Collins’ status as a citizen taxpayer to establish standing, plaintiffs argue that the 2008 Amendments increase costs to taxpayers and waste state funds (R. 21- 22; Br. at 70-71). They essentially challenge the Legislature’s nonfiscal activity of amending a statute that dates back to 1912. Consequently, plaintiffs’ “claims are not of the kind for which State Finance Law § 123–b confers standing.” Matter of Transactive Corp. v. N.Y.S. Dep’t of Social Servs., 92 N.Y.2d 579, 589 (1998). The former County Executive therefore lacks standing to maintain a claim under the State Finance Law. In any event, plaintiffs’ vague allegations that the 2008 Amendments will drive up construction costs and use funds “marked for use to pay for Wicks Law projects under the 2008 Amendments” fail to state a cause of action (Br. at 71). Here, “plaintiffs make conclusory allegations” that defendants will waste state funds “without claiming specific expenditures that would not otherwise have been incurred.” Godfrey v. Spano, 13 N.Y.3d 358, 374 (2009). Further, the 2008 Amendments were enacted to prevent an increase in expenditures. And, as this Court has noted, while a taxpayer need not demonstrate that he or she is specially aggrieved, “there must be some specific threat of an imminent expenditure.” Id. at 374. Because plaintiffs have identified no such imminent expenditure, they failed to state a claim under the statute. 58 CONCLUSION For the reasons stated above, the Appellate Division’s opinion and order should be affirmed. Dated: Albany, New York March 7, 2013 BARBARA D. UNDERWOOD Solicitor General ANDREA OSER Deputy Solicitor General ALLYSON B. LEVINE Assistant Solicitor General of Counsel Respectfully submitted, ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney for Respondents By: _____________________________ ALLYSON B. LEVINE Assistant Solicitor General Office of the Attorney General The Capitol Albany, New York 12224 Telephone (518) 473-6948 Reproduced on Recycled Paper