Opinion 89-17


This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.


SCHOOL DISTRICTS -- Reserve Fund (authority to establish fund to pay tax certiorari claims)
REAL PROPERTY TAXES AND ASSESSMENTS -- Certiorari Proceedings (authority for school district to establish reserve fund to pay certiorari claims)

EDUCATION LAW, §3651: A school district may establish and expend moneys from a reserve fund for the payment of judgments and claims in tax certiorari proceedings without voter approval. 1984 Opns St Comp, No. 84-32 superseded.

You ask whether 1984 Opns St Comp No. 84-32, p 40 is still valid in light of the enactment of chapter 588 of the Laws of 1988.

In Opn No. 84-32, supra, we concluded that, pursuant to Education Law, §3651, a school district may establish a reserve fund to pay tax certiorari claims and that such a fund may be established prior to a court order determining the amount of a judgment or claim. At the time the opinion was rendered, subdivisions (1) and (3) of section 3651 required voter approval to establish and expend moneys from any reserve fund established pursuant to that section.

Chapter 588 of the Laws of 1988, effective on September 1, 1988, adds new subdivisions (1-a) and (3-a) to Education Law, §3651, to authorize school districts to establish a reserve fund for the payment of judgments and claims in tax certiorari proceedings. New subdivision (1-a) provides that notwithstanding the provisions of subdivision (1) of section 3651, any school district may establish a tax certiorari reserve fund without voter approval, provided, however, that the moneys held in the fund do not exceed "that amount which might reasonably be deemed necessary to meet anticipated judgments and claims" arising from tax certiorari proceedings. New subdivision (1-a) also provides that any moneys in the reserve fund which are not expended or which will not reasonably be required for the payment of judgments or claims arising out of certiorari proceedings "for the tax roll in the year such monies are deposited" to the fund must be returned to the general fund by the start of the fourth fiscal year following the deposit of such moneys to the fund. New subdivision (3-a) provides that notwithstanding the provisions of subdivision (3) of section 3651, any school district which establishes a tax certiorari reserve fund may make expenditures from that fund for the purposes specified in new subdivision (1-a) without voter approval.

Because of chapter 588 expressly authorizes school districts to establish reserve funds for tax certiorari judgments and claims, the analysis contained in Opn No. 84-32, supra, is no longer relevant. Further it is apparent that the voter approval requirements of subdivisions (1) and (3) of section 3651 do not apply to a reserve for certiorari judgments and claims because new subdivisions (1-a) and (3-a) expressly allow establishment of, and expenditures from such a fund without voter approval. Finally, since the new law authorizes establishment of the fund for "anticipated judgments and claims", it is our opinion that, consistent with the conclusion in Opn No. 84-32, supra, the fund may be established prior to a court order determining the amount of a judgment or claim.

May 2, 1989
Cornelius F. Healy
Deputy State Comptroller