Opinion 95 - 25


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

 

CONSTITUTIONAL LAW -- Tax Limit (withholding State aid as penalty for levy in excess of)

MUNICIPAL FUNDS -- State Aid (applicability of provisions of section 54-a of the State Finance Law to payments provided in the aid to localities budget)

WORDS AND PHRASES -- "Notwithstanding Any Other Provision of Law" (meaning of for purposes of the aid to localities budget)

STATE CONSTITUTION, ARTICLE VIII, §10; STATE FINANCE LAW, §§54, 54-a: The provisions of section 54-a of the State Finance Law authorize the State Comptroller to withhold local assistance payable pursuant to chapter 53 of the Laws of 1995 from a county, city or village which levies real property taxes in excess of its State constitutional tax limit.

This is in reply to your inquiry concerning the State Comptroller's authority to withhold local assistance from a county, city or village which levies taxes in excess of its State constitutional tax limit. Specifically, you ask whether the provisions of section 54-a of the State Finance Law authorize the State Comptroller to withhold local assistance paid pursuant to chapter 53 of the Laws of 1995.

Section 54-a of the State Finance Law provides that in the event a county, city or village levies real property taxes in excess of the limitations established by Article VIII, section 10 of the State Constitution, the State Comptroller "shall withhold local assistance by the state as defined in section seventy-one of this chapter to such county, city or village to the extent of such excess."(1) Once the State Comptroller has finally determined the amount to be withheld, that amount "shall be deducted only from the next four quarterly installments due or to become due thereafter to such county, city or village pursuant to the provisions of section fifty-four of this chapter" (emphasis added).

Section 54 of the State Finance Law provides for an annual apportionment and payment of State aid to counties, cities, towns and villages from moneys appropriated by the State for the support of local governments. In general, section 54 requires the moneys appropriated by the State to be apportioned in accordance with a formula which takes account of factors such as population, average full value of real property, and personal income per capita (State Finance Law, §54[2]). Section 54 also generally requires amounts apportioned to localities to be paid on a quarterly basis (State Finance Law, §54[7][d]).

Since 1987, however, local government aid has not been apportioned and paid pursuant to the express terms of section 54 of the State Finance Law. Instead, local government aid has been apportioned and paid pursuant to provisions set forth in each year's "aid to localities budget".

Chapter 53 of the Laws of 1995, the current "aid to localities budget", appropriates moneys to the general fund - local assistance account and sets the amounts to be paid to cities, counties, towns, and villages by reference to specific dollar amounts or to percentages of amounts paid in prior years "notwithstanding any other provision of law" . In addition, the aid to localities budget specifies, "notwithstanding any other provision of law," the dates upon which or by which the amounts set by the budget are to be paid . Finally, chapter 53 of the Laws of 1995 states that: "Notwithstanding any other provision of law, the amounts paid from this appropriation to any city, county, town or village for the support of local government shall constitute the complete liquidation of the state's obligation for such purposes pursuant to section 54 of the state finance law" (emphasis added).

As noted, section 54-a requires deductions only from installments due or to become due "pursuant to the provisions of section fifty-four" of the State Finance Law. Thus, if this provision were to be read literally, deductions could not be made from aid to localities payable during this State fiscal year because the aid is not payable pursuant to the express provisions of section 54. Chapter 53, however, specifically states that the amounts paid from the local assistance account are in satisfaction of any amounts that would otherwise be payable under section 54 of the State Finance Law for the support of local government. Given this reference in chapter 53 to the State's obligation pursuant to section 54, it seems clear that the amounts paid pursuant to chapter 53 are in substitution for, and the functional equivalent of, the aid previously paid pursuant to the express terms of section 54. Therefore, in our view, the withholding provisions of section 54-a are applicable to aid payable pursuant to chapter 53 to the same extent as aid previously paid pursuant to the express provisions of section 54.

Further, we do not believe that the language in chapter 53 requiring localities to receive State aid in the amount and at the time specified therein "notwithstanding any other provision of law" overcomes the withholding requirement of section 54-a. In this regard, we note that there is no one, accepted meaning of the phrase "notwithstanding any other provision of law". Depending on the context, the phrase has been interpreted both as evidencing a legislative intent to preempt entire areas of law and as having only a narrow effect on a particular provision of law (see, e.g., United States of America v Dixie Carriers, Inc., 627 F 2d 736).

Based on a comparison of the provisions of section 54 and chapter 53, we believe that the phrases "notwithstanding any other provision of law" as used in chapter 53 are intended to apply primarily to the manner in which the amounts of the payments are to be calculated and the timing of those payments. Although these phrases can be read more broadly as rendering section 54-a inoperative, there is no evidence that the Legislature intended such a result. In the absence of such evidence, we believe that chapter 53 should be construed as preserving the deterrent effect of section 54-a.

Accordingly, it is our opinion that the provisions of section 54-a of the State Finance Law authorize the State Comptroller to withhold local assistance payable pursuant to chapter 53 of the Laws of 1995 from a county, city or village which has levied real property taxes in excess of its State constitutional tax limit.

September 20, 1995
Patricia Lamb McCarthy
Deputy Comptroller

1. Section 71 referred to in section 54-a has been repealed and its substance transferred to section 72 of the State Finance Law (see L 1981, ch 405). The former section 71 defined "local assistance" as "all payments and contributions by the state to and in aid of local governmental units or agencies, in the manner and to the extent provided by law including..." a list of specific payments to local governments. The provisions of the new section 72(2)(a) established "within the general fund a separate account which shall be designated and known as the local assistance account and shall reflect all expenditures made for local assistance." The same legislation which repealed the former section 71 and enacted the new section 72 also added a new section 2 to the State Finance Law defining certain terms used in that chapter. For purposes of the State Finance Law, "local assistance" was defined as "[a]ll payments and contributions by the state to and in aid of local government units or agencies in the manner and to the extent provided by law" (State Finance Law, §2[13]). In light of the similarity between the definition found in the former section 71 and that found in the new section 2, and the fact that the repeal of section 71 and the addition of the definition in section 2 were simultaneous, it is our opinion that the Legislature's failure to correct the reference to the definition of "local assistance" in section 54-a was inadvertent and that it is appropriate to apply the definition found in section 2 (13) of the State Finance Law.