Opinion 92-28
EDUCATION LAW, §259(1); LOCAL FINANCE LAW, §24.00; REAL
PROPERTY TAX LAW, §§1322, 1324: (1) Interest earned on the
investment of library fund moneys is credited to the library
fund. (2) A school district should pay over to the library
fund or the library treasurer, as the case may be, those taxes
which are specifically earmarked for library purposes as soon
as practicable after their receipt. (3) If a school district
has issued tax anticipation notes in anticipation of taxes
levied for library purposes, the proceeds should be paid to the
library fund or to the library treasurer, as the case may be,
as soon as practicable after receipt. (4) Interest on such tax
anticipation notes is a charge for which the school district,
and not the library, is liable. However, it is permissible for
the library, in its discretion, to reimburse the school
district for interest costs with respect to such notes. (5) If
a school district chooses not to issue tax anticipation notes
but has other moneys available, it should pay a portion of
these funds, if not needed for school district purposes, to the
library to assure the library's ability to operate until tax
revenues are received. 1962 Opns St Comp No. 62-978,
unreported, is superseded to the extent inconsistent. You ask the following questions concerning the relationship between a city school district and a city school district public library in connection with moneys for the support of the library:
Education Law, §259 relates to taxes voted for library purposes and provides in subdivision 1 thereof as follows:
Thus, pursuant to section 259(1), taxes voted for library purposes are considered to be an annual appropriation unless and until changed by further vote and must be levied and collected in the same manner as other general taxes. Further, all moneys received from taxes or other public sources for library purposes must be kept in a separate library fund by the municipality or school district treasurer or, upon written demand of the library trustees, paid over to the treasurer of the library. Since the treasurer of the sponsoring municipality or school district holds library fund money as custodian for the library and invests the moneys, upon authority of the library board, we have concluded that interest earned on such investment must be credited to the library fund and not to the general fund of the sponsor (1986 Opns St Comp No. 86-54, p 86; see also Buffalo Library v Erie County, 171 AD2d 369, 527 NYS2d 993. Section 259(1) does not prescribe a specific date on or before which library tax moneys must be placed in the library fund or paid over to the library treasurer by the sponsoring municipality or school district. In the case of school district public libraries, however, pursuant to Real Property Tax Law, §§1322 and 1324, the amount of the taxes attributable to library purposes must be separately stated on each statement of taxes. Thus, it is clear that tax receipts are expressly earmarked for library purposes. Accordingly, consistent with this statutory scheme, we believe the school district should pay over to the library fund or library treasurer, as the case may be, those taxes which are specifically earmarked for library purposes, as soon as practicable after their receipt. With respect to the time prior to the receipt of taxes, we note initially that public libraries are not authorized to issue indebtedness in anticipation of the receipt of tax revenues (1962 Opns St Comp No. 62-978, unreported; Local Finance Law, §24.00). The sponsoring municipality or school district, however, is authorized, but not required, to issue tax anticipation notes in anticipation of the collection of taxes, including those levied for library purposes (id.; 9 Opns St Comp, 1953, p 52). Since the tax anticipation notes are issued in contemplation of the collection of taxes (see Local Finance Law, §24.00[a][1]), we believe they should be treated, in substance, the same as tax receipts with respect to payments for library purposes. Therefore, if the school district has issued tax anticipation notes in anticipation of taxes including those levied for library purposes, a proportionate share of the proceeds should be paid, as soon as practicable after receipt, into the library fund or, if demand has been made, to the library treasurer. Since tax anticipation notes are obligations of the school district, however, interest thereon is a charge for which the school district, and not the library, is liable (Opn No. 62-978, supra). We are aware of no authority for the school district to charge to the library a portion of the interest expense (id.). However, inasmuch as the proceeds of tax anticipation notes issued in anticipation of taxes levied for the library may only be expensed for library purposes, we believe it would be permissible and in furtherance of a proper library purpose for the library, in its discretion, to reimburse the school district for interest costs incurred with respect to such tax anticipation notes (see Education Law, §§226[6], 255[1], 259[1], 260). If the school district chooses not to issue tax anticipation notes but has other moneys available (see, e.g., Education Law, §2021[21]; Real Property Tax Law, §1318), it should, consistent with the statutory obligation to fund the library appropriation, pay a portion of these funds, if not needed for school district purposes, to the library to assure its ability to operate until tax revenues are received (1977 Opns St Comp No. 77-770, unreported). Opn No. 62-978, supra, is superseded to the extent it concludes that a school district public library may not, in its discretion, reimburse the school district for interest costs on tax anticipation notes issued in anticipation of taxes levied for library purposes. September 30, 1992 Stephen J. Wing, Esq., Attorney for Howland Public Library Howland Public Library
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