State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: October 30, 2014 517815
________________________________
In the Matter of BOARD OF
EDUCATION OF THE CENTRAL
ISLIP UNION FREE SCHOOL
DISTRICT et al.,
Appellants,
v MEMORANDUM AND ORDER
DAVID M. STEINER, as
Commissioner of Education,
et al.,
Respondents.
________________________________
Calendar Date: September 11, 2014
Before: Peters, P.J., Lahtinen, Stein, Garry and Devine, JJ.
__________
Hamburger, Maxson, Yaffe & McNally, LLP, Melville (David N.
Yaffe of counsel), for appellants.
Eric T. Schneiderman, Attorney General, Albany (Robert
Goldfarb of counsel), for respondents.
__________
Garry, J.
Appeal from a judgment of the Supreme Court (Melkonian,
J.), entered January 30, 2013 in Albany County, which, in a
combined proceeding pursuant to CPLR article 78 and action for
declaratory judgment, among other things, dismissed the
petition/complaint.
At a special meeting of petitioner Central Islip Union Free
School District (hereinafter the District) in June 2000, voters
authorized petitioner Board of Education of the Central Islip
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Union Free School District to undertake renovation projects in
several of the District's buildings and to levy taxes and issue
bonds to finance the total construction cost of approximately $54
million. The undertaking was planned to take advantage of a
statutory 10% enhancement in state aid that was available at
that time for certain school building projects. Respondent
Department of Education (hereinafter DOE) thereafter approved
plans and specifications submitted by the Board and issued
building permits for the projects. The Board then executed
construction contracts and filed "request for building project
data" (hereinafter SA-139) forms with DOE that, among other
things, provided estimated costs for each project. Under
Education Law former § 3602, DOE was authorized to begin paying
amortized building aid upon receiving these SA-139 forms or 18
months after issuing building permits, whichever was later (see
Education Law § 3602 [6] [e] [3] [former (b)]). DOE began making
such payments during the 2002-2003 school year. Construction
proceeded, and the projects reached substantial completion
between September 2003 and May 2004. The District was required
by regulation to file final cost reports for the projects by the
later of June 30 of the school year in which the certificates of
substantial completion were issued or six months after the
certificates were issued – that is, by the end of 2004 at the
latest (see 8 NYCRR 155.2 [e] [1]). For reasons not clearly
revealed in the record, no such final cost reports were filed
until June 2008. DOE excused the late filing as to one project
but, as to the others, discontinued the apportioned payments and
sought to recoup the aid apportionments that had already been
paid.1
In 2011, petitioners commenced the present combined CPLR
article 78 proceeding and action for declaratory judgment against
DOE and respondent Commissioner of Education seeking, among other
1
DOE is authorized to grant extensions when a school
district establishes that timely submission of a final cost
report was prevented by circumstances beyond its control, but
determined here that the District had failed to establish such
circumstances for all but one of the projects (see 8 NYCRR 155.2
[e] [2]).
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things, to annul DOE's determination. While this matter was
pending, the Legislature enacted amnesty legislation that, in
effect, directed DOE to restore most of the aid that had
originally been awarded (see L 2012, ch 57, part A, § 31 [a]).
Supreme Court thereafter dismissed the combined proceeding and
action as moot. Petitioners appeal.
The underlying dispute distills to what is deemed to
constitute a "claim" as required for the Commissioner to certify
payments of apportionments of state education aid within the
applicable limitation periods (see Education Law § 3604 [5] [a];
8 NYCRR 175.10 [a] [2], [3]; [b]; see also 8 NYCRR 155.2 [e]
[1]). DOE contends that the District's final cost reports
constituted claims for payment within the meaning of these
provisions, that the limitations period for all of the reports
expired, at the latest, in June 2006 – depending on the dates of
the respective certificates of substantial completion – and that
the District's failure to file the final cost reports within the
limitations period precluded the Commissioner from certifying the
projects or paying any aid. Petitioners contend that the SA-139
forms that they timely filed at the inception of the project were
the "claims" referred to in these provisions, and that the
statutory and regulatory requirements were thus fulfilled when
DOE accepted and approved the SA-139 forms, issued building
permits thereon and began making apportioned aid payments.
We agree with Supreme Court that, as a consequence of the
subsequent enactment of the 2012 amnesty legislation, we cannot
now reach the merits of these competing arguments. Judicial
power is limited to active controversies, such that a court is
effectively deprived of jurisdiction when a matter is rendered
moot by changed circumstances (see Saratoga County Chamber of
Commerce v Pataki, 100 NY2d 801, 810-811 [2003], cert denied 540
US 1017 [2003]; Matter of Cerniglia v Ambach, 145 AD2d 893, 894
[1988]), lv denied 74 NY2d 603 [1989]). Here, the amnesty
legislation "ratified and validated" the actions and omissions of
any school district that failed to file timely final cost reports
for otherwise-eligible school construction projects, so long as
the reports were filed – as they were here – by December 31, 2012
(L 2012, ch 57, part A, § 31 [a]). Upon such filing, DOE is
directed to pay apportioned aid to the affected district in full,
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except for a penalty for the late filing that is calculated as a
percentage reduction based on the lateness of the filing in
relation to the useful life of the project (see L 2012, ch 57,
part A, § 31 [c]).
Petitioners fall squarely within the ambit of this
legislation, as their aid had been withheld because of the
failure to file timely final cost reports, and the reports were
later filed before the qualifying date of December 31, 2012.
Accordingly, DOE must pay the apportioned aid to petitioners,
less the penalty, without regard to whether it was previously
correct in withholding the aid; petitioners' aid must be reduced
by the amount of the penalty – approximately $5.46 million –
without regard to whether they were previously correct that the
aid should not have been withheld. Further, contrary to
petitioners' contention, the reduction in aid resulting from the
penalty does not directly affect their rights as a consequence of
the determination of this matter, and thus does not preclude a
determination that the matter is moot. The express language of
the amnesty legislation bases the penalty not upon the alleged
failure to submit timely claims that previously formed the ground
for DOE's refusal to pay, but instead upon petitioners'
undisputed delay in filing the final cost reports. Petitioners
now contend that they should be relieved from the penalty on
grounds of fairness because DOE's previous position was
incorrect, but this Court cannot address that contention and
cannot disregard the express direction contained in the amnesty
legislation (see Matter of Cerniglia v Ambach, 145 AD2d at 894).2
Accordingly, an adjudication of the parties' dispute would have
no effect on their rights and obligations, and Supreme Court
properly determined that the matter is moot (see Matter of
Association for Community Living, Inc. v New York State Off. of
Mental Health, 92 AD3d 1066, 1067-1068 [2012], lv dismissed 19
2
Notably, petitioners did not seek leave to amend the
petition/complaint to request a judgment declaring the penalty
provision unconstitutional or invalid, nor did they raise any
other direct challenge to the penalty's validity (see CPLR 3025
[b]; compare Matter of New York State School Bds. Assn. v New
York State Bd. of Regents, 210 AD2d 654, 655 [1994]).
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NY3d 874 [2012]; Ryan, Inc. v New York State Dept. of Taxation &
Fin., 83 AD3d 482, 483 [2011], lv denied 17 NY3d 707 [2011]; New
York Pub. Interest Research Group v Regan, 91 AD2d 774, 774-775
[1982], lv denied 58 NY2d 610 [1983]; see also Matter of NRG
Energy, Inc. v Crotty, 18 AD3d 916, 918-919 [2005]; Matter of
Spano v Wing, 285 AD2d 809, 811 [2001]).
Petitioners do not contend that the exception to the
mootness doctrine is applicable (see generally Matter of Hearst
Corp. v Clyne, 50 NY2d 707, 714 [1980]). Nonetheless, it bears
noting that the issues presented here will not recur, as the
Education Law has been amended to provide that DOE may not pay
apportioned aid for building projects approved after July 1, 2011
until either 18 months after such approval or receipt by DOE of
the certificate of substantial completion and final cost report,
whichever is later (see Education Law § 3602 [6] [e] [3] [b], as
amended by L 2011, ch 97, part C, subpart F, § 4).
Peters, P.J., Lahtinen, Stein and Devine, JJ., concur.
ORDERED that the judgment is affirmed, without costs.
ENTER:
Robert D. Mayberger
Clerk of the Court