Opinion 91-56


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.


PUBLIC AUTHORITIES -- Termination (requirement that there be no outstanding liabilities)
WORDS AND PHRASES -- "Liabilities" (as including accounts payable and contractual obligations for purposes of termination of a public authority)

PUBLIC AUTHORITIES LAW, §2828: The term "liabilities", as used in Public Authorities Law, §2828, includes bonds, notes and, among other things, accounts payable and contractual obligations.

You ask whether the term "liabilities", as used in section 2828 of the Public Authorities Law relative to termination of public authorities, encompasses only outstanding notes or bonds or whether it also includes accounts payable and contractual obligations. You ask the question in connection with the Western Finger Lakes Solid Waste Management Authority.

The Western Finger Lakes Solid Waste Management Authority (the Authority) is generally governed by title 30 of the Public Authorities Law (§2725 et seq). Public Authorities Law, §2727(4)(b) provides that, with an exception apparently not applicable here, "[t]he authority shall be perpetual in duration and shall continue until terminated by law" (emphasis added). Public Authorities Law, §2749 provides that insofar as the provisions of title 30 are inconsistent with the provisions of, among other things, any general law, the provisions of title 30 shall be controlling.

Section 2828 of the Public Authorities Law provides as follows:

§2828. Termination of public authorities

Every authority or commission hereafter created by this chapter shall terminate at the end of five years from the date of its creation if at the end of such period it has outstanding no liabilities; provided, however, that any appropriation made to such authority or commission by the state of New York or by any political subdivision thereof shall not be deemed a liability for the purposes of this section. (emphasis added)

The Authority was created by the Public Authorities Law after the enactment of section 2828 (see L 1986, ch 627; compare L 1957, ch 976; L 1983 ch 838). Moreover, the phrase "until terminated by law" as used in section 2727(4)(b) appears to contemplate the provisions of section 2828. It also appears that section 2828 is not inconsistent with either section 2727(4)(b) or any other provision of article 8, title 30. Therefore, we believe that section 2828 is applicable to the Authority.

The term "liabilities" is not defined for purposes of section 2828. "Liability", however, is a broad legal term which has been defined, in the absence of contrary legislative intent, to include every kind of legal obligation, responsibility or duty (see, gen., Black's Law Dictionary, 5th Edition, 1979). Thus, an obligation to pay outstanding notes or bonds is but one example of a liability which may also include, inter alia, accounts payable or contract liability, tort liability and wages and salaries payable.

That a broad construction should be accorded the term "liabilities" in §2828 is further suggested by reference to the legislative history of that section. Section 2828 was originally enacted as section 2580 of the Public Authorities Law by chapter 976 of the Laws of 1957 and later renumbered (see chapter 838 of the Laws of 1983). Chapter 976 enacted a recommendation of the Temporary State Commission on Coordination of State Activities as proposed in the Commission's 1956 Staff Report on Public Authorities in New York State (see Legislative Document [1956], No. 46). According to that Report, the section was intended to establish a reasonable period (i.e., five years) for a public authority to become "operative" following its creation and to provide for termination of an inoperative authority at the end of such period unless the Legislature specifically reviews the authority's status and enacts legislation continuing its existence. The Report stated:

If legislation were to require that an authority be operative at the end of such a five-year period, it would be essential to define what is meant by "operative" and to apply a test therefor. Any authority which is truly operative would have outstanding liabilities, such as bonds, notes, leases or other contractual obligations. (emphasis added; Legislative Document [1956], No. 46, p. 104).

We also observe that section 2828, after providing for termination after five years from the date of an authority's creation if it has no outstanding "liabilities", includes a proviso that "any appropriation made to such authority ... shall not be deemed a liability for the purposes of this section". If "liability" was intended to mean only outstanding notes or bonds, this proviso would be unnecessary. A statute must be read so that each word or phrase will have a meaning and serve a purpose (see McKinney's Statutes, §98[a]).

Therefore, we conclude that the term "liabilities", as used in Public Authorities Law, §2828, includes not only bonds and notes, but also, inter alia, accounts payable and contractual obligations.

December 26, 1991
Catherine A. Foerster, Esq., Attorney
Western Finger Lakes Solid Waste Management Authority