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| STATE OF NEW YORK APPELLATE DIVISION - THIRD DEPARTMENT _____________________________________________ ROBERT L. SCHULZ, CATHERINE M.J. WAJDA, ELMER F. BERTSCH and BURR V. DEITZ Appellants, ORDER TO SHOW CAUSE - against - THE NEW YORK STATE LEGISLATURE, and ________________________________________________ UPON the annexed Affidavit by Robert L. Schulz, Catherine M.J. Wajda and Burr V. Deitz, LET, the respondents, THE NEW YORK STATE LEGISLATURE, SHELDON SILVER, SPEAKER OF THE ASSEMBLY AND JOSEPH BRUNO, SENATE MAJORITY LEADER; and THE NEW YORK STATE EXECUTIVE, GEORGE PATAKI, GOVERNOR, H. CARL MC CALL, STATE COMPTROLLER, and the intervenor-respondent DORMITORY AUTHORITY OF THE STATE OF NEW YORK (DASNY), show cause by way of a submission at a term of the New York State Supreme Court, Appellate Division, Third Department, to be held at the Justice Building at the Empire State Plaza in Albany, New York, at 10:00o’clock in the forenoon, on the 2nd day of December, 1998, or as soon thereafter as counsel and or parties may be heard, why an order should not be made pursuant to CPLR 5518: a) preliminarily enjoining and prohibiting DASNY from issuing any bonds under, and the State Comptroller from making any payments pursuant to, Chapters 5 and 124 of the Laws of 1998, pending the hearing and determination of this appeal from the Order by the Hon. Bernard J. Malone, Jr., entered in the office of the Albany County Clerk on November 20, 1998, and b) for such other relief as to the Court may seem just and proper. ORDERED, that there will be no appearances or oral arguments, and it is further, ORDERED, that service of a conformed copy of this order and the papers upon which it is granted be served upon said defendants and intervenor personally or by overnight mail on or before 5 o’clock in the afternoon on the 23rd day of November, 1998, be deemed good and sufficient service. DATED: Troy, New York _____________________________
STATE OF NEW YORK ROBERT L. SCHULZ, CATHERINE M.J. WAJDA, AFFIDAVIT IN SUPPORT OF THE NEW YORK STATE LEGISLATURE, and DORMITORY AUTHORITY OF THE STATE OF NEW YORK, ________________________________________________ Robert L. Schulz, Catherine M.J. Wajda and Burr V. Deitz, being duly sworn, depose and say, 1. We are appellants in the matter captioned above and we make this Affidavit in support of the Order to Show Cause.
PRELIMINARY STATEMENT 2. Plaintiffs have appealed from an Order of Supreme Court (Hon. Bernard J. Malone, Jr.) issued November 20, 1998, which denied plaintiffs' motion for a preliminary injunction. 3. This affidavit is in support of appellants' motion for a preliminary injunction pending appeal and for a temporary restraining order.
BACKGROUND 4. Chapter 5 of the New York Laws of 1998 (attached as Exhibit B hereto) authorizes the Dormitory Authority of the State of New York ("DASNY") to issue tax-supported, long-term bonds to finance the construction of two new office buildings and a parking garage in Albany, which will be State owned and occupied (the "Albany Plan"). Chapter 5 directs the New York State Office of General Services ("OGS") and the State Comptroller to make annual payments to the holders of the DASNY bonds in amounts sufficient to cover the principal and interest on those bonds. Chapter 5 L98 amends Section 1680 of the Public Authorities Law by adding Sections 35 and 36, which contractually commits the Legislature to make the annual appropriations of the money required to service the DASNY bonds. On October 28, 1998, DASNY and the New York State Office of General Services (OGS) entered into a financing agreement, to implement the Albany Plan (Exhibit C-3). Section 5.5 of the Financing Agreement reads, "Covenant as to appropriations. In order to assure that sufficient moneys for payment by OGS, on behalf of the State, of the Annual Payments, the Commissioner covenants to include in the estimate furnished to the Governor in accordance with Article VII, Section 1 of the State Constitution for the preparation of the State budget, the amount of Annual Payments payable during the State's next succeeding fiscal year, which amount is required by Section 1680(36)(c) of the Act to be appropriated and paid by the State." (Plaintiffs' emphasis). See Exhibit C-3, page 11). The first series of bonds ($45 million) is in the process of being issued by DASNY. The bonds are scheduled to be priced on Monday, November 23, 1998 and issued approximately seven to fourteen days later. The current motion for injunctive relief is aimed at preventing the issuance of the DASNY bonds until there has been a final determination of the underlying claims. 5. Chapter 124 of the New York Laws of 1998 (attached as Exhibit A hereto) authorizes the Schenectady Metroplex Development Authority ("Metro Authority") to issue tax-supported bonds to finance construction of public facilities in Schenectady County (the "Schenectady Plan"). Chapter 124 directs the State Comptroller to annually pay enough money to the Metroplex Development Fund to cover the principal of and the interest on the bonds of the Metro Authority. Chapter 124 directs the Comptroller to make those annual payments out of sales tax revenue funds under his care and management, but to do so without an appropriation by law, in violation of Article VII, Section 7 of the NY Constitution. The first payment by the Comptroller will be made in the near future. The current motion for injunctive relief is aimed at preventing the disbursement of those funds until there has been a final determination of the underlying claims. 6. In regard to Chapters 5 and 124 of the New York Laws of 1998, plaintiffs, as citizens, seek a declaration of their constitutional rights under the New York Constitution, Article VII (sections 11, 7 and 8), Article VIII (sections 1, 2 and 12), Article X (section 5) and by, extension, under Article IV, Section 4 of the Constitution of the United States and the 14th Amendment thereto. Table 3 (attached) provides a summary glimpse of plaintiffs' claims as they apply to Chapter 5 L98 and Chapter 124 L98. 7. In the Court below, plaintiffs moved for a preliminary injunction and defendants moved to dismiss plaintiffs' challenge to Chapters 5 and 124. Plaintiffs opposed the motions. In sum, defendants' arguments are threefold: 1) regarding plaintiffs' Article VII, section 11 (voter referendum) claim, defendants argue, relying on Schulz v State, 84 NY2d 231, that the bonds of DASNY and the Metro Authority would not be legally enforceable and, therefore, would not be debt within the meaning of Article VII, section 11; 2) regarding plaintiffs' Article, section 7 claim (no payment by State comptroller without appropriations by law), defendants argue that Saratoga Harness Racing Assn., 22 NY2d 119 is dispositive; and 3) regarding the rest of plaintiffs' claims, including but not limited to plaintiffs' Article X, section 5 claim (no state or local tax revenues can be used to pay any part of any obligations of any public corporation such as DASNY and the Metro Authority), defendants, relying on Wein v Comptroller, 46 NY2d 394, argue that plaintiffs are prevented by SFL 123-b(1) from suing. 8. In sum, plaintiffs' response to these categorical defenses are as follows: 1) the bonds of DASNY and the Metro Authority would be legally enforceable given a) the mandate of Article VII, Section 16 of the NY Constitution, an issue not considered in Schulz v State, 84 NY2d 231, and b) the plain and unambiguous language of Chapters 5 and 124 of the Laws of 1998, the plain and unambiguous language of DASNY's October 28, 1998 bond resolutions (Exhibits C-1, C-2), the plain and unambiguous language of the October 28, 1998 financing agreement between DASNY and OGS, and the plain and unambiguous language of DASNY's Official Statement (Exhibit D), all of which are being used to induce investors to buy the DASNY bonds. Collectively and individually all the language represents contractual and legislative commitments on the part of the State to service the DASNY bonds, i.e., the language clearly provides for, holds out the promise of, and mandates payment of the principal and interest on the DASNY bonds by the Comptroller from tax funds; 2) Plaintiffs' Article VII, Section 7 claim in this case is clearly distinguishable from Saratoga Harness Racing Assn. where fees, not taxes, were the issue and where payment did not involve the State Comptroller or funds under the care and management of the State Comptroller; and 3) Wein v Comptroller prohibits mere taxpayers, but not citizens, from challenging public borrowing. Otherwise, SFL 123-b(1) would be unconstitutional, as a violation of the citizens' fundamental right to petition the government for a redress of grievances, i.e., a citizen's right to seek a declaration of his individual rights. 9. Table 4 (attached) provides a summary glimpse of defendants' arguments and plaintiffs' responses as argued in the Court below. 10. In regard to SFL 123-b(1), plaintiffs seek a declaration of their constitutional rights under SFL 123-b(1) and under the right to petition clauses of the N.Y. and U.S. Constitutions. Table 5 (attached) provides a summary glimpse of plaintiffs' claims as they apply to SFL 123-b(1). 11. In the Court below, defendants moved to dismiss plaintiffs' challenge to SFL 123-b(1). Plaintiffs opposed the motions. In sum, defendants argued, incredibly, that SFL 123-b(1) "does not deprive citizens of generalized standing with respect to certain bonding issues or deprive them of anything...Nothing in this record that [sic] indicates that Section 123-b(1) of the State Finance Law in any way prohibits plaintiffs from suing...challenges to the constitutionality of Section 123-b(1) have been repeatedly rebuffed." 12. In sum, plaintiffs' response is that SFL 123-b(1), a part of the Taxpayer Act of 1975, was written to prevent mere taxpayers from challenging the issuance of bonds, but (and this is the problem), it has been used to dismiss claims by citizens who were seeking a declaration of their individual rights in constitutional challenges to bond issues. It is on that basis that plaintiffs attack the constitutionality of SFL 123-b(1). 13. Table 6 (attached) provides a summary glimpse of defendants' arguments and plaintiffs' responses as argued in the Court below.
THE COURT BELOW ABUSED ITS DISCRETION 14. The Court below abused its discretion in denying plaintiffs' motion for injunctive relief. Plaintiffs showed that they were likely to suffer immediate and irreparable injury if their motion for a stay was not granted and either a likelihood of success on the merits of their case or sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in their favor. Reuters Limited versus United Press International, 903 Fed 2d 904 at 907. 15. Where the moving party seeks to stay governmental action taken in the public interest pursuant to a statutory scheme, the court should not apply the less rigorous fair-ground-for litigation standard and should not grant the injunction unless the moving party establishes, along with irreparable injury, a likelihood that he will succeed on the merits of his claim. Plaza Health Labs, Inc. v Perales, 878 Fed 2d 577, 580. 16. Plaintiffs met the standards that should have been applied by the Court below to their motion for an injunction. The Court below abused its discretion in denying the motion. 17. "If plaintiffs assert that the violation of their natural (constitutional) rights, even for a short time, is the irreparable injury, the two prongs of the threshold showing required for injunctive relief merge into one, and in order to show irreparable harm, plaintiffs need only show likelihood of success on the merits or fair-ground-for-litigation, together with likelihood of success." The Good News Club v Milford Central School, __ F. Supp. __ (August 8, 1998, 97-CV-302 motion decision by Chief Judge Thomas J. McAvoy, U.S. District Court, Northern District of New York). 18. Implying that plaintiffs may, in fact, have met their burden for a showing of sufficiently serious questions going to the merits to make them fair ground for litigation, together with a likelihood of success on the merits, Justice Malone, from the bench and on the record, said that he would be deciding the case on its merits as soon as possible, but could not do so before the closing on the DASNY bonds, an event expected to occur within 7-10 days. He directed all parties to let him know on Monday, November 23, 1998, how much time they felt they needed to submit any final arguments on the merits. He also said he would immediately issue an appealable order to allow plaintiffs to have the matter of injunctive relief decided by a "higher court." 19. Plaintiffs not only asserted that the violation of natural (constitutional) rights resulting from the adoption of Chapter 5 of the Laws of 1998 and the incurrence of tax-supported debt is the irreparable harm that they would suffer if the motion for a stay was not granted, they also argued the irreparable harm they would suffer if $42 million in tax-supported, long-term (30 year) bonds were issued on behalf of the State, under Chapter 5, with millions of dollars of the proceeds of the bond sale immediately disbursed to attorneys, underwriters and others as "fees", all part of the "cost of issuance," and millions more immediately disbursed as part of the "construction costs" including planning, engineering and administrative costs. These costs would not be recoverable. Nor would the enormous cost of the adverse effect of a final ruling of unconstitutionality on the issued bonds be recoverable. 20. Also, plaintiffs asserted that the violation of natural (constitutional) rights resulting from the adoption of Chapter 124 of the Laws of 1998 and the incurrence of tax-supported expenses and debt is irreparable harm that they would suffer if the motion for a stay was not granted. They also argued the irreparable harm they would suffer if the Comptroller made the million dollar payment he is about to make to the Schenectady Metroplex Development Fund, from the revenues received by the State from the imposition of the State authorized sales tax in Schenectady County. The disbursement of those funds would be immediate. Those tax funds, once disbursed, would not be recoverable. 21. In order to show irreparable injury in a case where plaintiffs are seeking the protection of their constitutional rights, plaintiffs need only show a fair ground for litigation together with likelihood of success on the merits. Good News v Milford Central School, id, citing Bery v City of New York, 906 F.Supp. 163, 166. 22. Plaintiffs made the required showing of fair grounds for litigation together with likelihood of success and that the balance of the hardships, tips in plaintiffs' favor. Plaintiffs now repeat the arguments made below.
FAIR GROUNDS FOR LITIGATION WERE PRESENTED TO A. PLAINTIFFS' ARTICLE VII, SECTION 16 ARGUMENT 23. The Bonds issued under Chapters 5 and 124 L98 would, in fact and in law, be legally enforceable obligations of the State, making Chapters 5 and 124 L98 subject to and violative of the debt-limiting restrictions and prohibitions of the New York Constitution. 24. One need go no further than the plain language and intent of Article VII, Section 16 of the NY Constitution, which directs that the Legislature shall annually provide by appropriation for the payment of the principal and interest on all debts created on behalf of the State and if at any time the Legislature shall fail to make any such appropriations, the Comptroller shall set apart from the first general fund revenues thereafter received a sum sufficient to pay such principal and interest and shall so apply the moneys thus set aside, and a bondholder may go to court for a writ of mandamus to compel the Comptroller to do so. 25. The N.Y. Constitution reads in part: "The Legislature shall annually provide by appropriation for the payment of the interest upon and installments of principal of all debts or refunding debts created on behalf of the state...as the same shall fall due, and for the contribution to all of the sinking funds created by law...If at any time the legislative shall fail to make any such appropriation, the comptroller shall set apart from the first revenues thereafter received, applicable to the general fund of the state, a sum sufficient to pay such interest, installments of principal, or contributions to such sinking fund, as the case may be, and shall so apply the moneys thus set apart. The comptroller may be required to set aside and apply such revenues as aforesaid, at the suit of any holder of such bonds." (Plaintiffs' emphasis). Article VII, Section 16 New York Constitution 26. The provisions now enshrined in Article VII, Section 16 (and a portion of Section 15), requires (a) appropriation by the Legislature of money enough in each year (i) to pay the principal of any state debt coming due that year, (ii) to pay interest on all state debt and (iii) to make deposits to build up sinking funds for maturing state debt as specified in Section 15, and (b) the making of such payments and deposits by the Comptroller without appropriation if necessary. 27. Conclusive evidence that the authors of the amendment recognized that state debt was otherwise subject to repudiation by legislative refusal to appropriate is provided by the existence of the amendment itself. It is nonetheless of historical interest to recall it's authors' own statements. The 1920 amendment was first proposed at the 1915 constitutional convention. The 1915 proposed constitution was turned down by the voters but several of its proposed changes, including the text of what became the 1920 amendment, were later adopted as individual amendments to the constitution then existing, without alteration. The 1938 Constitutional Convention proposed, and the voters approved, a reorganization and readoption of all of Article VII. Its general Committee described the effect of the 1920 enhancement as follows: "The [new provision] made the annual appropriations of interest and retirement of the debt absolutely mandatory on the legislature, and in fact established a priority of these appropriations over any others. [The amendment] provided a powerful safeguard against any possible default. [It] was a unique provision. It was tantamount to a surrender by the state of its sovereign right of repudiation of its debts" (1938 New York State Constitutional Convention Committee, Report, Vol. 10, "Problems Relating to Taxation and Finance," p. 132). 28. The grant of freedom from appropriation risk was given in 1920, 74 years after the 1846 adoption of the referendum requirement for state debt. 29. Ballentine's Law Dictionary, Third Edition, defines "behalf" as, "in the name of; on account of; for the benefit, advantage, interest, profit or vindication of." Ballentine's Law Dictionary, Third Edition, defines "on his behalf" as "For him and as authorized by him." 30. What Chapter 5 L98 attempts, by making the bonds issued under it "appropriation risk," is a forbidden waiver of Article VII, Section 16. 31. Defendants argue that bonds issued by DASNY and the Metro Authority under Chapters 5 and 124 would not be legally enforceable debt within the meaning of the N.Y. Constitution, because of the "Subject to annual appropriations of the Legislature" disclaimer found in Chapter 5 and the "Not State debt, no full faith and credit" disclaimer found in both Chapter 5 and Chapter 124. 32. The legislature has no power to interpret the constitution. Disclaimers in chapters 5 and 124 as to debt and obligations are nullities in light of Article VII, Section 16 of the NY Constitution and in light of the contractual and legislative provisions found in Chapter 5 and 124, the Bond Resolution (Exhibit C-1, C-2), the Financing Agreement (Exhibit C-3), and the Preliminary Official Statement (Exhibit D). See especially the provisions which plaintiffs have underlined. 33. Not only in this state, but nationally, and in most if not all other states, the constitutional system provides for a strict separation of powers. The legislature does not stand beside the judiciary as a co-interpreter of the fundamental law, particularly when it comes to consideration of restraints on legislative power. "It is, emphatically, the province of the judicial department, to say what the law is." Marbury v Madison, 1 Cranch [5US] 137, 176 (1803) (Marshall, Ch.J). 34. It is in this light that the Court must view the "not state debt" and "not legally enforceable obligations" and "obligations on the part of the state to pay moneys are executory only to the extent of appropriations available for such payments" declarations within Chapters 5 and 124 and within the DASNY Bond Resolutions (Exhibits C-1, C-2) and within the Financing Agreement between DASNY and OGS (Exhibit C-3), and within the Preliminary Official Statement (Exhibit D). "The Court can't close its eyes to the Constitution and see only the acts of the Legislature." Marbury. 35. The Legislature has no power to legislate constitutional interpretations. 36. DASNY and the Metro Authority as public corporations, are "the State" for purposes of the debt limiting clauses of the Constitution. These corporations are not independent of the State. The State is deeply entwined in the corporations and the corporations' bonds and notes. The corporations are established by Acts of the State Legislature. The corporations are not using toll revenues, rent revenues or service revenues to pay all the bonds and notes issued under Chapter 5 and 124. They simply issue long-term "Special" obligation bonds payable by annual taxes and fees imposed by the State. Under the Act, the public corporations are merely devices by which the State can borrow money while saying that the corporations, not it, were borrowing money. 37. Ignoring Article VII, Section 16 in their argument that the bonds of DASNY and the Metro Authority are not legally enforceable, defendants relied heavily on Schulz v State, 84 NY2d 231 (Schulz I), which, in turn, relied on Wein v City of N.Y., 36 NY2d 610 (Wein I). 38. Attached is a copy of the video tape provided by the Albany Law School of the oral arguments on June 7, 1994, before the New York State Court of Appeals in Schulz v State of New York, 84 NY2d 231 (Schulz I). 39. The video reveals that the Court was focused almost entirely on trying to get Schulz to tell the Court what a purchaser of bonds (issued under Chapter 56 of the Laws of 1993) would be able to do to get a court to order the State to service those bonds if the Legislature decided not to do so at any time that those bonds were outstanding. In other words, the Court was asking Schulz to support his claim that due to "investor expectations" and "contractual obligations" the State could be made to pay back money borrowed by or on behalf of the State, i.e., that a bondholder would be successful in court if the State didn't appropriate money to service the bonds. 40. The video, and the Court's decision, issued on June 30, 1994, (in Schulz I), clearly demonstrate that not only did Schulz fail, at oral argument, before the Court of Appeals, to support his claim with an argument based on the mandates of Article VII, Section 16 of the NY Constitution, he didn't even raise the issue and the Court's decision failed to address, much less "fully encompass," the mandate of Article VII, Section 16. It cannot be fairly argued that the decision in Schulz I is decisive of the Article VII, Section 16 issue, which plaintiffs in the instant case raised and argued in the Court below, in response to defendants' motions to dismiss and for summary judgment. 41. DASNY and the Metro Authority are agencies which, as public corporations of the State, created and controlled by the State through the State's Public Authorities Control Board, are clearly instrumentalities of the State contracting debt on behalf of the State, and promising to appropriate the money to pay that money back with interest. Thus, any investor in the bonds issued under Chapters 5 and 124 of the Laws of 1998 would be able to go to court, under Article VII, Section 16 of the NY Constitution, for a writ of mandamus to compel the State, either directly or through its instrumentalies, to comply with all of the provisions of Chapters 5 and 124 of the Laws of 1998, notwithstanding the "subject to annual appropriation of the Legislature" disclaimer found in Chapter 5 and notwithstanding the "no full faith and credit" disclaimer found in both Chapter 5 and Chapter 124. 42. With respect to the video tape attached, the Court is asked to note the question from the bench of Mr. Schulz, to the effect, "Is it your argument that in order to find for you in this case (Schulz I), we would have to overrule our decision in Wein v City of New York, (Wein I)?" Schulz answered "no". Obviously, in answering "no", Mr. Schulz was thinking of the distinguishing differences in contractual language in the legislation. He was not thinking of the mandates in Article VII, Section 16, which, in fact, does make the decision in Wein I suspect. And, since the decision in Schulz I relied so heavily on the decision in Wein I, and was not made in the light of Article VII, Section 16 of the NY Constitution, the decision in Schulz I is also quite suspect. 43. The Court below had sufficient legal grounds to find for plaintiffs on the merits, without violating any controlling principles of law, by relying on the mandates of Article VII, Section 16 of the NY Constitution, together with its (the Court's) reading of the contractual and legislative commitments to annually service the bonds of DASNY and the Metro Authority -- all clearly provided in Chapters 5 and 124 of the Laws of 1998, DASNY's October 28, 1998 bond resolutions, (Exhibit C-1, C-2), the October 28, 1998 Financing Agreement between DASNY and OGS (Exhibit C-3), and DASNY's Official Statement used to induce investors to purchase the DASNY bonds (Exhibit D).
B. CONTRACTUAL AND LEGISLATIVE PROVISIONS GUARANTEE 44. Given the plain and unambiguous language of Chapter 5 L98 and the plain and unambiguous contractual language found in DASNY's October 28, 1998 bond resolutions (see Exhibit C1, C-2), and the plain and unambiguous language found in the October 28, 1998 Financing Agreement between DASNY and OGS (see Exhibit C-3), and the plain and unambiguous language found in DASNY's Preliminary Official Statement (see Exhibit D), all used to induce investors to purchase DASNY's bonds, the bondholders would have no difficulty, under Article VII, Section 16, obtaining a Writ of Mandamus from a co-equal, independent Judiciary, to compel the State Comptroller to impound the next moneys to arrive in the State's General Fund, and to use those funds to pay the principal and interest due on the DASNY bonds if the Legislature failed to appropriate the moneys required to service those bonds -- bonds clearly issued on behalf of the State. 45. For instance, Chapter 5 of the Laws of 1998, which amends the Public Authorities Law by adding Section 1680.35 and Section 1680.36 reads as follows: "(a)The dormitory authority is empowered and authorized to enter into a lease, sublease, lease purchase, or other agreement with the office of general services of the state of New York on behalf of the department of audit and control of the state of New York pursuant to which one or more facilities are to be designed, acquired, constructed, reconstructed, rehabilitated, improved or otherwise provided for the department of audit and control of the state of New York, the New York state and local employees' retirement system and the New York state and local police and fire retirement system and pursuant to which such facilities are to be furnished or equipped provided, however, that any contract or lease for construction, reconstruction or rehabilitation authorized by this subdivision shall be governed by article eight of the labor law. Such lease, sublease, lease purchase, or other agreement may provide for the payment of annual rentals and other payments by the department of audit and control of the state of New York to the dormitory authority from appropriations as provided in paragraph (c) of this subdivision or from payments made pursuant to any lease, sublease, lease purchase, or other agreement authorized pursuant to paragraph (f) of this subdivision and contain such other terms and conditions as may be agreed upon by the parties thereto, including but not limited to, provisions relating to the maintenance and operation of the facilities, the establishment of reserve funds, indemnities and the disposition of a facility or the interest of the dormitory authority therein, if any, prior to or upon termination or expiration of such lease, sublease or other agreement. Such lease, sublease, lease purchase, or other agreement shall be subject to the approval of the director of the budget." (b) Any such lease, sublease, lease purchase, or other agreement entered into pursuant to this subdivision may provide that the provisions thereof shall remain in full force and effect until the issue of the bonds of the dormitory authority to which it relates, together with interest thereon, interest on any unpaid installments of interest and the fees and expenses of the dormitory authority, are fully met and discharged, and any payments to be made by the state, the New York state and local employees' retirement system and the New York state and local policy and fire retirement system pursuant to any lease, sublease, lease purchase, or other agreement authorized pursuant to paragraph (f) of this subdivision may be pledged by the dormitory authority to secure such bonds. (c) Any agreement entered into pursuant to this subdivision by and between the dormitory authority and the office of general services on behalf of the department of audit and control shall provide for state commitments to provide annually to the department of audit and control an amount equal to the aggregate amount of all annual rentals due to the dormitory authority from the department of audit and control on account of such facilities for the department of audit and control, the New York state and local employees' retirement system and the New York state and local police and fire retirement system pursuant to any such lease, sublease, lease purchase, or other agreement. Any such lease, sublease, lease purchase or other agreement shall further provide that the obligation of the state to appropriate amounts to the department of audit and control to pay annual rentals due to the dormitory authority from the department of audit and control on account of facilities for the department of audit and control, the New York state and local employees' retirement system and the New York state and local police and fire retirement system pursuant to any such lease, sublease, lease purchase or other agreement shall not constitute a debt of the state within the meaning of any constitutional and/or statutory provisions and shall be deemed executory only to the extent state moneys are appropriated and that no liability shall be incurred by the state beyond the moneys appropriated for that purpose and that such obligation is subject to annual appropriations by the legislature. (d) On or before November fifteenth of each year, the dormitory authority shall submit and thereafter may resubmit to the commissioner of general services, the director of the budget, the comptroller, the chairperson of the senate finance committee and the chairperson of the assembly ways and means committee, a report setting forth the amounts, if any, of all annual rentals and other payments estimated to be due in the succeeding state fiscal year to the dormitory authority from the department of audit and control pursuant to any lease, sublease, lease purchase, or other agreement between the dormitory authority and the office of general services on behalf of the department of audit and control entered into on or after July first, nineteen hundred ninety-seven to provide facilities for the department of audit and control, the New York state and local employees' retirement system and the New York state and local police and fire retirement system. (e) Notwithstanding any provision of law to the contrary, any lease, sublease, lease purchase or other agreement, including any contract for construction, reconstruction, rehabilitation or improvement entered into pursuant to this subdivision shall not be subject to public auction or bidding or any restriction as to the term of such lease, sublease, lease purchase or other agreement; provided however, that, with respect to any lease, sublease, lease purchase, or other agreement for facilities for the department of audit and control, the New York state and local employees' retirement system and the New York state and local police and fire retirement system, the dormitory authority shall determine that there has been a competitive process sufficient to comply with the authority's procurement contract guidelines as required pursuant to section twenty-eight hundred seventy-nine of this chapter. (f) Nothing herein shall be construed to diminish the authority of the comptroller, in his capacity as trustee of the New York state and local employees' retirement system and the New York state and local police and fire retirement system, to be a party to any agreement authorized pursuant to paragraph (a) of this subdivision or, in accordance with the provisions of this title to enter into separate leases, subleases, lease purchases or other agreements with the dormitory authority pursuant to which one or more facilities are to be designed, acquired, constructed, reconstructed, rehabilitated, improved or otherwise provided for the New York state and local employee's retirement system and the New York state and local police and fire retirement system. " (Plaintiffs' emphasis). Section 1680.35 NYS Public Authorities Law " (a) The dormitory authority is empowered and authorized to enter into a lease, sublease, lease purchase, or other agreement with the office of general services of the state of New York pursuant to which one or more facilities are to be acquired, designed, constructed, reconstructed, rehabilitated, improved or otherwise made available for the provision of parking facilities for the state of New York in the city of Albany, New York and pursuant to which such facilities are to be furnished or equipped an in furtherance of such authorization, the commissioner of general services is hereby empowered to grant or convey to the dormitory authority, such lands as may be necessary for such purposes upon such terms and conditions as the commissioner of general services may fix and determine provided, however, that any contract or lease for construction, reconstruction or rehabilitation authorized by this subdivision shall be governed by article eight of the labor law. Such lease, sublease, lease purchase, or other agreement may provide for the payment of annual rentals and other payments by the state of New York on behalf of the departments or agencies having occupancy of use thereof to the dormitory authority from appropriations as provided in paragraph (c) of this subdivision and may contain such other terms and conditions as may be agreed upon by the parties thereto, including but not limited to, provisions relating to the maintenance and operation of the facilities, the establishment of reserve funds, indemnities and the disposition of a facility or the interest of the dormitory authority therein, if any, prior to or upon termination or expiration of such lease, sublease, lease purchase or other agreement. Such lease, sublease, lease purchase, or other agreement shall be subject to the approval of the director of the budget. (b) Any such lease, sublease, lease purchase, or other agreement entered into pursuant to this subdivision may provide that the provisions thereof shall remain in full force and effect until the issue of the bonds of the dormitory authority to which it relates, together with interest thereon, interest on any unpaid installments of interest and the fees and expenses of the dormitory authority, are fully met and discharged, and any payments to be made by the state, pursuant to any lease, sublease, lease purchase, or other agreement authorized pursuant to this subdivision may be pledged by the dormitory authority to secure such bonds. (c) Any lease, sublease, lease purchase, or other agreement entered into pursuant to this subdivision by and between the dormitory authority and the state of New York by the office of general services with respect to such parking facilities shall provide for state commitments to provide annually an amount equal to the aggregate amount of all annual rental due to the dormitory authority from the state on behalf of the state departments and agencies having occupancy or use of such facilities. Any such lease, sublease, lease purchase, or other agreement shall further provide that the obligation of the state to appropriate amounts to pay annual rentals due to the dormitory authority pursuant to any such lease, sublease, lease purchase, or other agreement shall not constitute a debt of the state within the meaning of any constitutional and/or statutory provisions and shall be deemed executory only to the extent state moneys are appropriated and that no liability shall be incurred by the state beyond the moneys appropriated for that purpose and that such obligation is subject to annual appropriations by the legislature. (d) On or before November fifteenth of each year, the dormitory authority shall submit to the commissioner of general services, the director of the budget, the comptroller, the chairperson of the senate finance committee and the chairperson of the assembly ways and means committee, a report setting forth the amounts, if any, of all annual rentals and other payments estimated to be due in the succeeding state fiscal year to the dormitory authority pursuant to any lease, sublease, lease purchase, or other agreement between the dormitory authority and the office of general services on behalf of the state entered into hereafter to provide for parking facilities for the state of New York in the city of Albany." (Plaintiffs' emphasis). Section 1680.36 NYS Public Authorities Law
C. A METRO AUTHORITY BOND HOLDER UNDER CHAPTER 124 L98 46. Given the plain and unambiguous language of Article VII, Section 16 of the NY Constitution and the plain and unambiguous language of Chapter 124 L98, language undoubtedly to be relied upon by investors to purchase Metro Authority bonds, the bondholders would have no difficulty obtaining a Writ of Mandamus from a co-equal, independent Judiciary, to compel the State Comptroller to impound the next moneys to arrive in the State's General Fund, and to use those funds to pay the principal and interest due on the Metro Authority bonds if the Comptroller failed to make the payment of the moneys required to service those bonds -- bonds clearly issued on behalf of "the State," including one of its political subdivisions, Schenectady County. 47. For instance, Chapter 124 reads in part (see Exhibit A for full text): "Pursuant to subdivision (c) of section twelve hundred ten-c of the tax law, the county of Schenectady shall dedicate one-half of one percent county sales and compensating use tax on all sales and compensating uses taxable pursuant to article twenty-nine of the tax law, and shall annually deposit such net collections received therefrom in, the Schenectady metroplex development authority support fund. On January first, nineteen hundred ninety-nine, and then on January first annually thereafter, the director of finance of Schenectady county shall transfer seventy percent of all net collections received from the one-half of one percent sales and compensating use tax and deposited in the Schenectady metroplex development authority support fund to the authority for deposit in the authority's general fund. The authority may use such dedicated sales tax revenue received for any lawful purpose or power of the authority. On January first, nineteen hundred ninety-nine, and then on January first annually thereafter, the director of finance of Schenectady county, after transferring seventy percent of all net collections received from the one-half of one percent sales and compensating use tax in the Schenectady metroplex development authority support fund to the authority for deposit in the authority's general fund, shall transfer all remaining monies in the Schenectady metroplex development authority support fund to the Schenectady county real property tax abatement and economic development fund." Section 2661.9 "Tax revenues received by the authority pursuant to section twelve hundred ten-C of the tax law, shall be applied in the following order of priority: first pursuant to the authority's contracts with bondholders, then to pay the authority's operating expense not otherwise provided for, and then the balance of such taxes not required to meet contractual or other obligations of the authority shall be deposited in the general fund of the authority." (Plaintiffs' emphasis). Section 2663.2 "The authority shall have the power and is hereby authorized from time to time to issue bonds, notes or other obligations in conformity with applicable provisions of the uniform commercial code to pay the cost of any project, the establishment of reserves to secure the bonds, the payment of principal of, premium, if any, and interest on the bonds and the payment of incidental expenses in connection therewith. The aggregate principal amount of such bonds, notes or other obligations shall not exceed fifty million dollars ($50,000,000), excluding bonds, notes or other obligations issued to refund or repay bonds, notes or other obligations therefore issued for such purposes." Section 2665.1 "Any resolution or resolutions authorizing bonds or any issue of bonds by the authority may contain provisions which may be a part of the contract with the holders of the bonds thereby authorized as to: (a) Pledging all or part of the revenues, together with any other monies or property of the authority to secure the payment of the bonds, or any costs of issuance thereof, including but not limited to, any contracts, earnings or proceeds of any grant to the authority received from any private or public source subject to such agreements with bondholders as may then exist." Section 2665.5(a) "In addition to the powers herein conferred upon the authority to secure its bonds, the authority shall have the power in connection with the issuance of bonds to adopt resolutions and enter into such trust indentures, agreements or other instruments as the authority may deem necessary, convenient or desirable concerning the use or disposition of its revenues or other monies or property, including the mortgaging of any property and the entrusting, pledging or creation of any other security interest in any such revenues, monies or property and the doing of any act, including refraining from doing any act which the authority would have the right to do in the absence of such resolutions, trust indentures, agreements or other instruments. The authority shall have power to enter into amendments of any such resolutions, trust indentures, agreements or other instruments within the powers granted to the authority by this title and to perform such resolutions, trust indentures, agreements or other instruments. The provisions of any such resolutions, trust indentures, agreements or other instruments may be made a part of the contract with the holders of bones of the authority." Section 2665.6 "Such trustee may, and upon written request of the holders of twenty-five per centum in principal amount of such bonds outstanding shall, in its own name: (a) By action or proceeding in accordance with the civil practice law and rules, enforce all rights of the bondholders, including the right to require the authority to collect rents, rates, fees and charges adequate to carry out any agreement as to, or pledge of, such rents, rates, fees and charges and to require the authority to carry out any other agreements with the holders of such bonds to perform its duties under this title." Section 2668.2(a) "Neither the state, the county nor any municipality therein shall be liable on the bonds or notes of the authority and such bonds or notes shall not be a debt of the state, the county or of any municipality therein and such bonds and notes shall contain on the face thereof a statement to such effect." Section 2669 "Agreement with state. The state does hereby pledge to and agree with the holders of any bonds issued by the authority pursuant to this title and with those persons or public authorities who may enter into contracts with the authority pursuant to the provisions of this title that the state will not alter, limit or impair the rights hereby vested in the authority to purchase, construct, own and operate, maintain, repair, improve, reconstruct, renovate, rehabilitate, enlarge, increase and extend, or dispose of any project, or any part or parts thereof for which bonds of the authority shall have been issued, to establish and collect rates, rents, fees and other charges referred to in this title, to fulfill the terms of any contracts or agreements made with or for the benefit of the holders of bonds or with any person or public authority with reference to such project or part thereof, or in any way to impair the rights and remedies of the holders of bonds, until the bonds, together with interest thereon, including interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of the holders of bonds, are fully met and discharged and such contracts are fully performed on the part of the authority. The authority is authorized to include this pledge and agreement of the state in any agreement with the holders of bonds. Nothing contained in the section shall be deemed to restrict the right of the state to amend, modify, repeal or otherwise alter statutes imposing or relating to the taxes payable to the authority. Nothing in this section shall be deemed to obligate the state to make additional payments or impose any taxes to satisfy the debt service obligations of the authority." (Plaintiffs' emphasis). Section 2669-a "Agreement with county. The county is authorized to pledge to and agree with the holders of any bonds issued by the authority pursuant to this title and with those persons or public authorities who may enter into contracts with the authority pursuant to the provisions of this title that the county will not alter, limit or impair the rights hereby vested in the authority to purchase, construct, own and operate, maintain, repair, improve, reconstruct, renovate, rehabilitate, enlarge, increase and extend, or dispose of any project, or any part or parts thereof, for which bonds of the authority shall have been issued, to establish, collect and adjust rates, rents, fees and other charges referred to in this title, to fulfill the terms of any agreements made with the holders of the bonds or with any public authority or person with reference to such project or part thereof, or in any way impair the rights and remedies of the holders of bonds, until the bonds, together with interest thereon, including interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of the holders of bonds, are fully met and discharged and such contracts are fully performed on the part of the authority. Nothing in this section shall be deemed to obligate the county to make additional payments or impose any taxes to satisfy the debt service obligations of the authority." (Plaintiffs' emphasis). Section 2669-b "Dedication of taxes authorized for cities and counties. (a) Notwithstanding any other provision of law to the contrary, any authorization for a city or county to impose a tax pursuant to this article, may condition such authorization upon the dedication of such revenue derived from such tax imposed, to a public benefit corporation established as an industrial development agency or an area revitalization agency pursuant to article eighteen-A of the general municipal law or to a public authority established for economic development or transportation purposes pursuant to the public authorities law. (b) In the event that a city or a county imposes a tax pursuant to this article, in accordance with a conditional authorization as described in subdivision (a) of this section, such city or county shall dedicate the revenue from such tax so imposed to the designated public benefit corporation established as an industrial development agency or an area revitalization agency pursuant to article eighteen-A of the general municipal law or public authority established for economic development or transportation purposes pursuant to the public authorities law." ("Plaintiffs' emphasis). Section 1201-d(a),(b) "Sales and compensating use tax for purposes of the Schenectady county metroplex development authority. (a) In addition to the taxes imposed by section twelve hundred ten of this article or any other provision of this article, the county of Schenectady is hereby authorized and empowered to adopt and amend a local law, ordinance or resolution imposing within the territorial limits of said county an additional sales and compensating use tax at the rate of one-half of one percent for the period beginning on or after September first, nineteen hundred ninety-eight and ending August thirty-first, two thousand twenty-eight, which tax shall be identical to the tax imposed by said county pursuant to section twelve hundred ten of this article. Except as hereinafter provided, all provisions of this article, including the definition and exemption provisions and the provisions relating to the administration, collection and distribution by the commissioner, shall apply for purposes of the tax imposed by this section in the same manner and with the same force and effect as if the language of this article had been incorporated in full in this section and had expressly referred to the tax imposed by this section; provided, however, that any provision of this article relating to a maximum rate shall be calculated without reference to the additional sales and compensating use tax herein authorized. For purposes of part IV of article twenty-nine of this chapter, relating to the disposition of revenues resulting from taxes collected and administered by the commissioner, the additional sales and compensating use tax herein provided shall be deemed to be imposed under the authority of section twelve hundred ten of this article and all provisions relating to the deposit, administration and disposition of taxes, penalties and interest relating to a tax imposed by a county under the authority of section twelve hundred ten of this article shall, except as otherwise specifically provided in this section, apply to the additional sales and compensating use tax imposed pursuant to this section." (Plaintiffs' emphasis). Section 1210-C (a) "(b) Notwithstanding any other provision of this article to the contrary, the net collections from the tax imposed pursuant to subdivision (a) of this section for the period beginning on or after September first, nineteen hundred ninety-eight and ending August thirty-first, two thousand twenty-eight shall, upon payment to the county of Schenectady, be deposited in the Schenectady metroplex development authority support fund, pursuant to subdivision nine of section twenty-six hundred sixty-one of the public authorities law, with such fund to be designated as a special dedicated support fund, to be created by said county therefor separate and apart from any other funds and accounts of the county. Pending deposit from such Schenectady metroplex development authority support fund into the general fund of the Schenectady metroplex development authority, all moneys therein may be invested in the manner provided in section eleven of the general municipal law. Any interest earned or capital gain realized on the moneys so deposited or invested shall accrue to and become part of such Schenectady metroplex development authority support fund." (Plaintiffs' emphasis). Section 1210-C (b) "(c) The county of Schenectady shall dedicate one-half of one percent county sales and compensating use tax on all sales and compensating uses taxable pursuant to this article, and shall annually deposit such net collections received therefrom in, the Schenectady metroplex development authority support fund. On January first, nineteen hundred ninety-nine, and then on January first annually thereafter, the director of finance of Schenectady county shall transfer seventy percent of all net collections received from the one-half of one percent sales and compensating use tax and deposited in the Schenectady metroplex development authority support fund to the authority for deposit in the authority's general fund. The authority may use such dedicated sales tax revenue received for any lawful purpose or power of the authority [including Public Authorities Law 2663.2]. On January first, nineteen hundred ninety-nine, and then on January first annually thereafter, the director of finance of Schenectady county, after transferring seventy percent of all net collections received from the one-half of one percent sales and compensating use tax in the Schenectady metroplex development authority support fund to the authority for deposit in the authority's general fund, shall transfer all remaining monies in the Schenectady metroplex development authority support fund to the Schenectady county real property tax abatement and economic development fund." Section 1210-C (c)
D. SCHULZ V STATE OF NEW YORK, 84 NY2D 231 (SCHULZ I) 48. In Schulz I the Court of Appeals declared the debt of the N.Y.S. Thruway Authority and the Metropolitan Transit Authority, issued pursuant to Chapter 56 of the Laws of 1993, to be constitutional for two reasons: 1) the disclaimer that was in the Act, itself, which declared that payments by the Comptroller to these two public corporations, from State funds, would be "subject to appropriation by the Legislature;" and 2) repayment of the debt was "not legally enforceable." 49. In the instant case, the disclaimer is not included in Chapter 124 of the Laws of 1998 and, as argued above, the debt to be incurred under Chapters 5 and 124 is legally enforceable, extinguishing any stare decisis defense. Debt incurred under the authority of Chapters 5 and 124 would, in fact, be legally enforceable in light of Article VII, Section 16 of the NY Constitution, and the contractual and legislative provisions.
E. SFL 123-b(1) CANNOT PROHIBIT THE JUDICIARY FROM ARTICLE 7-A, WHICH INCLUDES SFL 123-B(1), WAS NAMED 50. Plaintiffs offered the following argument in response to defendants' attempt in the Court below to have the Court dismiss most of the claims against Chapters 5 and 124 for lack of standing under SFL 123-b(1). The following argument is based on a close analysis of Wein v Comptroller, 46 NY2d 394. This argument was not presented or raised in any case which followed Wein v Comptroller, 46 NY2d 394, including any of the Schulz cases, cases in which numerous causes of action were dismissed for "lack of standing under SFL 123-b(1)." 51. In Wein, the Court of Appeals held, "Under prior law it was held that the courts lacked the power to 'interfere' with the 'acts of another department of government' except to determine 'the individual rights of the parties' and that a taxpayer's interest in the expenditure of State moneys was not sufficiently direct or immediate for him to be considered an aggrieved party." (Plaintiffs' emphasis). Wein v Comptroller, 46 NY2d 394, 397, quoting Schieffelin v Komfort, 212 NY 520, 530. NOTE: Plaintiffs in the instant case are clearly identified as citizens, quite apart from their status as taxpayers and quite apart from their status as voters. Plaintiffs are clearly suing as citizens, seeking a declaration of their individual rights under the fundamental law. 52. In Wein, the Court of Appeals went on to say, "In the Boryszewski case we held that a citizen and a taxpayer can maintain an action 'to test the constitutionality of a State statute authorizing the expenditure of State moneys...Thus, the recognition in Boryszewski of the taxpayer's legitimate and significant interest in State expenditures did not call for the recognition of a new constitutional right of standing but rather the abandonment of an old constitutional impediment to standing in these cases...Boryszewski v Brydges, supra at 364." (Plaintiffs' emphasis). Wein v Comptroller, 46 NY2d 394, 397. NOTE: To the extent Chapters 5 and 124 of the Laws of 1998 authorize the State comptroller to make payments to DASNY and to the Metro Authority, plaintiffs, as citizens, and, separately, as taxpayers, are challenging the expenditure of funds of the state. 53. In Wein, the Court of Appeals went on to say, "Within two months of the Boryszewski decision, the Legislature added Article 7-A to the State Finance Law which permits a citizen taxpayer to 'maintain an action for equitable or declaratory relief, or both, against an officer or employee of the State who in the course of his or her duties has caused, is now causing, or is about to cause a wrongful expenditure, misappropriation, misapplication, or any other illegal, or unconstitutional disbursement of state funds or state property, except that the provisions of this subdivision shall not apply to the authorization, sale, execution or delivery of a bond issue, or notes issued in anticipation thereof by the State or any agency, instrumentality or subdivision thereof or by any public corporation, or public benefit corporation'...Subsequent to the effective date of Article 7-A...Boryszewski was extended to permit a taxpayer to challenge the constitutionality of a revenue raising, as distinguished from an expenditure, measure. In Wein v Carey (41 NY2d 498, 500, 501, supra) it was held that a taxpayer had standing to contest the issuance of tax and revenue anticipation notes issued by the State. This was viewed as a logical consequence of Wein v State of New York, 39 NY2d 136, supra), an earlier taxpayer's suit, which involved a claimed unconstitutional lending of the State's credit in connection with the issuance of tax and revenue anticipation notes. In no case however have we held that a taxpayer has standing to challenge the issuance of State bonds or bond anticipation notes." (Plaintiffs' emphasis). Wein v Comptroller, 46 NY2d at 398. NOTE: The complaint in the instant case (para. 3, 4, 5 and 6) has clearly identified plaintiffs: a) as citizens, rather than taxpayers, seeking a declaration of their individual constitutional rights, under the fundamental law, in a challenge to the issuance of bonds by public corporations/instrumentalities of the State; and b) as citizens and also as taxpayers seeking a declaration of their rights in relation to the payment (expenditure) from State funds, by the State comptroller, to DASNY and to the Metro Authority; and c) as voters denied their right to vote on State debt. 54. In Wein, the Court concluded that SFL 123-b(1) "does 'not apply' to taxpayer suits involving revenue raising through State bonds and bond anticipation notes...the statutory 'exception' does indicate a reasonably clear legislative intent to prevent taxpayer challenges with respect to a State 'bond issue or notes issued in anticipation thereof.' (State Finance Law, Section 123-b, subd 1)...Thus we have concluded that whether the taxpayer relies on the statute or the case law, he lacks standing to challenge the issuance of State bonds or bond anticipation notes." NOTE: To repeat, plaintiffs are suing, inter alia, as citizens rather than taxpayers. Plaintiffs, as citizens, have a right to seek a declaration of their individual, constitutional rights under the fundamental law, in a challenge to actions alleged to have violated Article VII, Article VIII and Article X of the N.Y. Constitution. Otherwise, what would be the purpose of the Constitution? Of the Judiciary? 55. A construction of SFL 123-b(1) which would allow the Judiciary to dismiss such a constitutional challenge by citizens to the "authorization, sale, execution or delivery of a bond issue or notes issued in anticipation thereof by the State or any agency, instrumentality or subdivision thereof, or by any public corporation" would mean SFL 123-b(1) would be abrogated. It would be unconstitutional, null and void because it would be violative of fundamental republican principles and of the citizens right to petition the government for a redress of grievances. See for instance, NY Constitution Article I, Section 14. 56. Under Point I in its Memo of Law, submitted to the Court below, the State argued, "the exception in subdivision (1) of section 123-b of the State Finance Law does not deprive citizens of generalized standing with respect to certain bonding issues or deprive them of anything – it simply does not of itself confer taxpayer standing with respect to bonding. Thus all plaintiffs must do with respect to a challenge to the authorization, sale, execution or delivery of bond issues or notes issued in anticipation thereof by the State or any State agency is point to a justiciable basis for standing independent of Section 123-b with respect to same, like the right to vote upon State bonding under section 11 of article VII of the State Constitution." 57. The State knows that standing rises to a constitutional right on matters of constitutionality and that the courthouse door cannot be closed to citizens seeking judicial review of legislative acts on constitutional grounds, as in the case at bar, without violating numerous controlling principles of law. 58. Under Point I in its Memo of Law, the State went on to argue, "Nothing in this record that indicates that section 123-b of the State Finance Law in any way prohibits plaintiffs from suing, speaking, assembling, grieving, voting, and enjoying all the privileges, immunities and constitutional protections they otherwise have. Plaintiffs retain the right to assert any other statutory or constitutional right they may have to challenge bond-related enactments, provided only that they present a justiciable controversy in doing so. For these reasons, challenges to the constitutionality of section 123-b(1) of the State Finance Law have been repeatedly rebuffed." 59. The grammar of the first sentence in paragraph 58 is not correct, so the meaning is a bit blurred. However, the State seems to be saying that SFL 123-b(1) has not been used by the judiciary to prevent plaintiffs from seeking the protections of any constitution in any of the Wein or Schulz cases, so, therefore, SFL 123-b(1) is not unconstitutional. This is utter nonsense. Plaintiffs Schulz, Wein and others have had numerous constitutional claims, against numerous acts of the Legislature authorizing the incurrence of public debt, brought in numerous lawsuits, dismissed for lack of standing, citing SFL 123-b(1). See, for instance, Wein v Comptroller, 46 NY2d 394; Coalition v Coughlin, 64 NY2d 660 (the UDC prison construction case); Schulz v State, 185 AD2d 596, 81 NY2d 336 (the UDC Attica case); Schulz v State, 193 AD2d 171, 84 NY2d 231 (the Thruway Authority $6 billion case); Schulz v NYS Executive, 233 AD2d 43, __ NY2d __ (the Clean Water/Clean Air Bond Act case); and Schulz v NYS Legislature, __ AD2d __ (July 30, 1998), app dismissed __ NY2d __ (October 22, 1998), lv to appeal pending (the NYC Transition Finance Authority case). 60. The final sentence in the quote in paragraph 58 above is a non-sequitur and avoids plaintiffs' primary argument against SFL 123-b(1) -- that it cannot be used to dismiss constitutional claims without violating the petition clause of the 1st Amendment, the guarantee clause of Article IV and the privileges and immunities clause of the 14th Amendment, all of the US Constitution. 61. SFL 123-b(1) is unconstitutional. Unfortunately, SFL 123-b(1) has never been compared with the fundamental law, including the petition clause of the 1st Amendment to the US Constitution. Defendants were not able to show otherwise in the Court below. 62. Defendants pointed the Court's attention to page 4 of the Opinion and Order of the Appellate Division in Schulz v NYS Legislature, __ AD2d __ (July 30, 1998). "We have no quarrel with the proposition, that plaintiffs indeed possess standing as voters to assert that the public referendum requirement of N.Y. Constitution, Article VII, Section 11 (See, e.g., Matter of Schulz v New York State Executive, 233 AD2d 43, 48, aff'd __ NY2d __ [June 9, 1998] [finding that the Court of Appeals' decision in Matter of Schulz v State of New York (81 NY2d 336) evidenced 'an intent to permit voter standing in an action or proceeding predicated upon an alleged violation of any of the fundamental requirements of N.Y. Constitution, Article VII, Section 11'])...Such standing does not, however, extend to plaintiffs' claims that the Act violates N.Y. Constitution, Article VII, Section 8 (gift or loan of State money or credit), N.Y. Constitution, Article VIII, Section 12 (limits upon local indebtedness) or N.Y. Constitution, Article X, Section 5 (restriction on assumption of obligations of a public corporation), as such provisions are not linked to any voting rights (see, e.g., Matter of Schulz v State of New York, 193 AD2d 171, affd 84 NY2d 231, cert denied 513 AD2d 1127)." 63. Implied in this opinion is the belief that State Finance Law Section 123-b(1) was, itself, compared with the fundamental law and found to be constitutional, in one or more of the constitutional law cases brought by Robert L. Schulz against the incurrence of public debt, between 1990 and 1998, or in one or more of the constitutional law cases brought by Professor Wein between 1975 and 1982 against the incurrence of public debt. 64. In fact, no court has ever compared State Finance Law Section 123-b(1) with the fundamental law, including the right to petition clause of the U.S. Constitution (1st Amendment) and the N.Y. Constitution (Article I, Section 9.1), or the right to a government republican in form and substance clause (Article IV, Section 4) of the U.S. Constitution, or the freedom from State laws which abridge our privileges and immunities (Section 1, cl 2, 14th Amendment). Plaintiff Schulz challenged the constitutionality of SFL 123-b(1) in the so-called "Attica case" (Schulz v State of N.Y., 185 AD2d 596, 81 NY2d 336, and in numerous cases since then. In 185 AD2d 596 the appellate Division said that based on Wein v Comptroller 46 NY2d 394, SFL 123-b(1) was not unconstitutional. However, the constitutionality of SFL 123-b(1) was not addressed or determined in Wein v Comptroller. The Unified Court System has continued to misapprehend this material fact.
CONCLUSION 65. Based on the above and on the complaint (attached), plaintiffs respectfully request an order granting a preliminary injunction pending the appeal from the order of Supreme Court, issued November 20, 1998. ROBERT L. SCHULZ, Pro Se, 2458 Ridge Road, Queensbury, NY 12804 BURR V. DEITZ, Pro Se, 444 Whitehall Road ,Albany, NY 12208 CATHERINE M.J. WAJDA, Pro Se, 2165 The Plaza, Schenectady, NY 12309-5831 STATE OF NEW YORK _____________________________________________ ROBERT L. SCHULZ, CATHERINE M.J. WAJDA, AFFIDAVIT - against - THE NEW YORK STATE LEGISLATURE, SHELDON SILVER, Robert L. Schulz, Catherine M.J. Wajda, Elmer F. Bertsch and Burr V. Deitz, being duly sworn, depose and say: 1. We are plaintiffs in the matter captioned above and we make this affidavit in opposition to the motion to dismiss by defendants, in support of the motion to intervene and in opposition to the motion to dismiss by the Dormitory Authority of the State of New York and in support of plaintiffs’ motion for injunctive relief and for a final order. 2. Initially, plaintiffs informed counsel to the N.Y.S. Dormitory Authority ("DASNY") that plaintiffs would oppose any motion to intervene on the ground a) that there was no evidence that DASNY would soon be issuing any bonds under the authority of Chapter 5 of the Laws of 1998 (the "Albany Act"); b) that this action attacks the power of the legislative and executive branches to adopt the Albany Act; and c) that DASNY would not be prejudiced in any way if they were not a party to the case because the interests of DASNY would be well represented by the N.Y.S. Department of Law which is representing the Legislature and the Executive defendants. 3. Now, however, there is evidence that DASNY’s Board of Directors passed a Bond Resolution on October 28, 1998, and may be close to issuing bonds. Plaintiffs are moving to restrain the issuance of bonds. Any court order directing defendants to refrain from issuing tax-supported bonds through DASNY under the Albany Act would in all likelihood, be appealed by defendants on the incredible ground that DASNY is not a part of the legislative or executive branches of the government of the State of New York. A statutory stay of the order on appeal would apply. Plaintiffs would then have to seek an order vacating the stay, and so on. 4. Under the circumstances of this case, and in the interest of plaintiffs’ resources and the economy of the Court, and without prejudicing our right to challenge any notion that DASNY is not part of the government of the State of New York and limited by the Constitution of the State of New York, plaintiffs do not oppose DASNY’s motion to intervene. 5. Attached is a copy of the video tape provided by the Albany Law School of the oral arguments on June 7, 1994, before the New York State Court of Appeals in Schulz v State of New York, 84 NY2d 231.
PLAINTIFFS ARE ENTITLED TO INJUNCTIVE RELIEF 6. By Order to Show Cause, plaintiffs request an order: a) preliminarily enjoining and prohibiting DASNY from issuing any bonds or incurring any expense under, and the State Comptroller from making any payments pursuant to, Chapters 5 and 124 of the Laws of 1998, until the Court makes a determination of the underlying claims in this matter, and b) temporarily enjoining and prohibiting DASNY from issuing any bonds or incurring any expense under, and the State Comptroller from making any payments pursuant to, Chapters 5 and 124 of the Laws of 1998, until the return date of the motion for a preliminary injunction or any adjournment or extension thereof. 7. Plaintiffs are entitled to such injunctive relief. They have a strong likelihood of succeeding on the merits. See plaintiffs’ Memorandum of Law (attached). Without the injunctive relief, plaintiffs will suffer the injury and harm they are seeking by this action, to prevent. Without the injunctive relief, that harm will be immediate and irreparable. The State will have contracted for tax-supported debt in spite of the debt-limiting restrictions of the Constitution, and the Comptroller will be making dedicated payments from tax revenues under his care and management to the Schenectady Metroplex Development Fund. On the other hand, if the injunctive relief is granted, neither defendants nor intervenors will not be unduly harmed or prejudiced. A balancing of the equities argues in favor of plaintiffs. ROBERT L. SCHULZ Pro Se
MEMORANDUM OF LAW IN OPPOSITION TO Index No. 5545-98 (all Tables have been omitted from this website) DATED: November 16, 1998
PRELIMINARY STATEMENT This Memorandum of Law accompanies plaintiffs’ affidavit of even date and is in opposition to defendants’ motions to dismiss and in support of plaintiffs’ motion for injunctive relief. Plaintiffs will establish that the defendants would have the Court misapply controlling principles of law and misapprehend material facts. In the interest of justice and jurisprudence, this Court should grant plaintiffs’ request for relief. Chapter 5 of the New York Laws of 1998 authorizes the Dormitory Authority of the State of New York ("DASNY") to issue tax-supported, long-term bonds to finance the construction of new buildings in Albany which will be State owned and occupied (the "Albany Plan"). Chapter 124 of the New York Laws of 1998 authorizes the Schenectady Metroplex Development Authority ("Metro Authority") to issue tax-supported bonds to finance construction of public facilities in Schenectady County (the "Schenectady Plan"). In regard to Chapters 5 and 124 of the New York Laws of 1998, plaintiffs seek a declaration of their constitutional rights under the New York Constitution, Article VII (sections 11, 7 and 8), Article VIII (sections 1, 2 and 12), Article X (section 5) and by, extension, under Article IV, Section 4 of the Constitution of the United States and the 14th Amendment thereto. Table 3, which follows this page, provides a summary glimpse of plaintiffs’ claims as they apply to Chapter 5 L98 and Chapter 124 L98. Defendants move to dismiss plaintiffs’ challenge to Chapters 5 and 124. Plaintiffs oppose the motions. In sum, defendants’ arguments are threefold: 1) regarding plaintiffs’ Article VII, section 11 (voter referendum) claim, defendants argue, relying on Schulz v State, 84 NY2d 231, that the bonds of DASNY and the Metro Authority would not be legally enforceable and, therefore, would not be debt within the meaning of Article VII, section 11; 2) regarding plaintiffs’ Article, section 7 claim (no payment by State comptroller without appropriations by law), defendants argue that Saratoga Harness Racing Assn., 22 NY2d 119 is dispositive; and 3) regarding the rest of plaintiffs’ claims, including but not limited to plaintiffs’ Article X, section 5 claim (no state or local tax revenues can be used to pay any part of any obligations of any public corporation such as DASNY and the Metro Authority), defendants, relying on Wein v Comptroller, 46 NY2d 394, argue that plaintiffs are prevented by SFL 123-b(1) from suing. In sum, plaintiffs’ response to these categorical defenses are as follows: 1) the bonds of DASNY and the Metro Authority would be legally enforceable given a) the mandates of Article VII, Section 16 of the NY Constitution, an issue not considered in Schulz v State, 84 NY2d 231, and b) the provisions of Chapters 5 and 124 themselves which provide for, hold out the promise of, and mandate payment of principal and interest by the comptroller from tax funds; 2) this case is clearly distinguishable from Saratoga Harness Racing Assn. where fees, not taxes, were the issue and where payment did not involve the State Comptroller or funds under the care and management of the State Comptroller; and 3) Wein v Comptroller prohibits mere taxpayers, but not citizens, from challenging public borrowing. Otherwise, SFL 123-b(1) would be unconstitutional, as a violation of the citizens’ fundamental right to petition the government for a redress of grievances, i.e., a citizen’s right to seek a declaration of his individual rights. Table 4, which follows this page, provides a summary glimpse of defendants’ arguments and plaintiffs’ responses which are argued more fully in the points below. In regard to SFL 123-b(1), plaintiffs seek a declaration of their constitutional rights under SFL 123-b(1) and under the right to petition clauses of the N.Y. and U.S. Constitutions. Table 5 provides a summary glimpse of plaintiffs’ claims as they apply to SFL 123-b(1). Defendants move to dismiss plaintiffs’ challenge to SFL 123-b(1). Plaintiffs oppose the motions. In sum, defendants argue, incredibly, that SFL 123-b(1) "does not deprive citizens of generalized standing with respect to certain bonding issues or deprive them of anything...Nothing in this record that indicates that Section 123-b(1) of the State Finance Law in any way prohibits plaintiffs from suing...challenges to the constitutionality of Section 123-b(1) have been repeatedly rebuffed." (Defendants’ Memorandum of Law, page 4). In sum, plaintiffs’ response is that while it is true that SFL 123-b(1), a part of the Taxpayer Act of 1975, is written to prevent mere taxpayers from challenging the issuance of bonds, it has been used to dismiss claims by citizens who were seeking a declaration of their individual rights in constitutional challenges to bond issues. It is on that basis that plaintiffs’ attack the constitutionality of SFL 123-b(1). Table 6 provides a summary glimpse of defendants’ arguments and plaintiffs’ responses which are argued more fully in the points below. The issues are of great public importance. At stake is the right of the majority of people to control the incurrence of public debt and the overburdensome level of taxation that results when a law is enacted which closes the door to judicial review of other laws which authorize the unconstitutional incurrence of public debt. Fundamental rights are invaded, weakened, limited or destroyed by the legislative acts under challenge. They are evidently of the kind which has been frequent of late, a kind which has been so frequent of late, a kind which is meant to protect some class in the community against the fair, free and full competition of some other class (the ordinary, non-aligned citizens who happen also to be voters and who happen also to be taxpayers), the members of the former class thinking it impossible to hold their own against such competition, and therefore flying to the Legislature to secure some enactment which shall operate favorably to them or unfavorably to their competitors in the socio-political and socio-economic fields. The acts under challenge restrain the ordinary, non-aligned citizen in the free enjoyment of his faculties, which he ought to have and use in the pursuit of his happiness. These laws interfere with plaintiffs’ right not to have the fruits of their labor taken from them except by constitutional due process. If these laws and others like it are valid, the fact of their existence is a complete answer to the complaints of the citizens as plaintiffs, that their liberty and freedom from oppressive debt and taxation are greatly impaired. The legislative acts under challenge here are as opposed to a safe state policy as to the very letter of the Constitution. SFL 123-b(1), if left undisturbed by the court, would mean laws can be enacted which can restrict the judicial authority to hear constitutional challenges to the acts of the other branches and to fashion remedies; a patently unconstitutional infringement on the power of the judiciary. Chapters 5 and 124, if left undisturbed by the court would mean the executive and legislative can merely refer to "economic development" or a "need for more government office space" as their justification for circumventing the inconvenient but intentionally protective constitutional debt limiting provisions. Chapters 5 and 124, if left undisturbed by the court would mean the legislative and executive branches will henceforth be able to : 1) use public authorities to incur debt on behalf of the state and its municipalities; 2) have the Authority contract with the State and/or one of its municipalities to apply tax revenues to the Authority for the priority purpose of servicing that debt; 3) assign (by contract) the debt service contract to a trustee of the bondholders, thereby transferring the State’s pledge of tax revenues to the bondholders; 4) contract directly with the bondholders, pledging to never pass any laws which would weaken the State’s contractual commitments to assign tax revenues to the Authority; and 5) paper over the whole misdeed with a legislative disclaimer of "subject to annual appropriation of the legislature," and a disclaimer of "not public debt." However, in spite of the above, if push ever came to shove whereby the State attempted to get away with not servicing the debt timely, the State would be forced to pay the bondholders based not only on the strength of the promise of the provisions of the Chapter laws themselves, but upon the mandates of Article VII, Section 16 of the NY Constitution -- the clear language, and intent of the framers being "New York will service its debts above all else."
QUESTIONS PRESENTED 1. Whether payment of the principal of and the interest on the bonds of DASNY and the Metroplex Authority would be legally enforceable. 2. Whether SFL 123-b(1) can deny plaintiffs, as citizens, standing to challenge Chapters 5 and 124 and to seek a declaration of their constitutional rights. 3. Whether Saratoga Harness Racing Association v Agriculture and Horse Breeding Dev. Fund, 22 NY2d 119 is dispositive of plaintiffs’ Article VII, Section 7 claim against the Metro Authority Act. 4. Whether plaintiffs’ fundamental rights under the U.S. Constitution to petition the government for a redress of constitutional grievances (First Amendment), to a guarantee against State laws which abridge fundamental privileges and immunities (Section 1, Clause 2 of the Fourteenth Amendment), to have state judges bound by the provisions of the U.S. Constitution (Article VI, cl 2), and to a government republican in form and substance (Article IV, Section 4) have been violated by the New York State Legislative and Executive when they enacted State Finance Law Section 123-b(1) which, in the case of matters involving the incurrence of public debt, is preventing plaintiffs as citizens from petitioning State courts for a redress of State constitutional grievances. 5. Whether the will and intent of the people to prohibit any and all payments out of funds under the management of the State without appropriations by law, as expressed in Article VII, Section 7 of the NY Constitution has been violated by Chapter 124 of the Laws of 1998, thereby abrogating the Act. 6. Whether the will and intent of the people to prohibit the use of State and local funds to pay any part of any debt obligation of any public corporation, as expressed in Article X, Section 5 of the NY Constitution has been violated by Chapters 5 and 124 of the Laws of 1998, thereby abrogating the Acts. 7. Whether the will and the intent of the people to prohibit the State and the County of Schenectady from lending their credit to a public corporation as expressed in Article VII, Section 8 and Article VIII, Section 1 of the NY Constitution has been violated by Chapters 5 and 124 of the Laws of 1998, thereby abrogating the Acts. 8. Whether the will and intent of the people to prohibit the State from contracting indebtedness without the approval of the voters, as expressed in Article VII, Section 11 of the NY Constitution has been violated by Chapters 5 and 124 of the Laws of 1998 thereby abrogating the Acts. 9. Whether the will and intent of the people to prohibit the County of Schenectady from contracting indebtedness without pledging the full faith and credit of the County for the payment of the principal thereof and the interest thereon, as expressed in Article VIII, Section 2 of the NY Constitution has been violated by Chapter 124 of the Laws of 1998, thereby abrogating the Act. 10. Whether the will and intent of the people to restrict abusive borrowing and credit lending, as expressed in Article VIII, Section 12 of the NY Constitution has been violated by Chapter 124 of the Laws of 1998, thereby abrogating the Act. 11. Whether Chapters 5 and 124 of the Laws of 1998 violate the US Const. (Art. IV, 1st and 14th Amendments).
FEDERAL CONSTITUTIONAL PROVISIONS INVOLVED 1. The preamble to the Constitution of the United States provides: "We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquillity, provide for the common Defence, promote the general Welfare and secure the Blessing of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America." 2. Article VI of the Constitution of the United States provides in relevant part: "The Judges in every state shall be bound by this Constitution." 3. The First Amendment to the United States Constitution reads, in relevant part: "Congress shall make no law...abridging...the right of the people…to petition the Government for a redress of grievances." 4. The Fourteenth Amendment (Clause 2) to the United States Constitution provides, in relevant part: "No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States...." 5. An implicit constitutional (structural) safeguard is "separated powers" among the legislative, executive and judicial branches. 6. Article IV, Section 4 of the United States Constitution reads in relevant part: "The United States shall guarantee to every citizen in this Union a republican form of government."
NEW YORK CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED 7. New York State Finance Law Section 123-b(1) reads: "notwithstanding any inconsistent provision of law, any person, who is a citizen taxpayer, whether or not such person is or may be affected or specially aggrieved by the activity herein referred to, may maintain an action for equitable or declaratory relief, or both against an officer or employee of the state who in the course of his or her duties has caused, is now causing, or is about to cause a wrongful expenditure, misappropriation, misapplication, or any other illegal or unconstitutional disbursement of state funds or state property, except that the provisions of this subdivision shall not apply to the authorization, sale, execution, or delivery of a bond issue or notes issued in anticipation thereof by the state or any agency, instrumentality or subdivision thereof or by any public corporation or public benefit corporation." (Petitioners’ emphasis) 8. Article I, Section 9.1 of the New York Constitution provides in relevant part: "No law shall be passed abridging the rights of the people peaceably to assemble and to petition the government or any department thereof...." 9. Article VII, Section 7 of the New York Constitution reads: "No money shall ever be paid out of the state treasury or any of its funds, or any of the funds under its management; except in pursuance of an appropriation by law...." Article VII, Section 7, NY Constitution 10. Article VII, Section 8 of the New York Constitution reads: "...nor shall the credit of the state be given or loaned to or in aid of any individual, or public or private corporation or association, or private undertaking...." Article VII, Section 8, New York Constitution 11. Article VII, Section 11 of the New York Constitution reads: "no debt shall be hereinafter contracted by or in behalf of the state, unless such debt shall be authorized by law, for some single work or purpose, to be distinctly specified therein. No such law shall take effect until it shall, at a general election, have been submitted to the people, and have received a majority of all the votes cast for and against it at such election...." Article VII, Section 11, New York Constitution 12. Article VII, Section 16 of the New York Constitution reads: "The Legislature shall annually provide by appropriation for the payment of the
interest upon and installments of principal of all debts or refunding debts created on
behalf of the state...as the same shall fall due, and for the contribution to all of the
sinking funds created by law...If at any time the legislative shall fail to make any such
appropriation, the comptroller shall set apart from the first revenues thereafter
received, applicable to the general fund of the state, a sum sufficient to pay such
interest, installments of principal, or contributions to such sinking fund, as the case
may be, and shall so apply the moneys thus set apart. The comptroller may be required to
set aside and apply such revenues as aforesaid, at the suit of any holder of such
bonds." (Plaintiffs’ emphasis). 13. Article VIII, Section 1 of the New York Constitution reads: "...nor shall any county, city, town, village or school district give or loan its credit to or in aid of any individual, or public or private corporation or association, or private undertaking...." Article VIII, Section 1, New York Constitution 14. Article VIII, Section 2 of the New York Constitution reads: "No indebtedness shall be contracted by any county, city, town, village or school district unless such county, city, town, village or school district shall have pledged its faith and credit for the payment of the principal thereof and the interest thereon...Provision shall be made annually by appropriation by every county, city, town, village and school district for the payment of interest on all indebtedness and for the amounts required for (a) the amortization and redemption of term bonds, sinking fund bonds and serial bonds...." Article VIII, Section 2, New York Constitution 15. Article VIII, Section 12 of the New York Constitution reads: "It shall be the duty of the legislature, subject to the provisions of this constitution, to restrict the power of taxation, assessment, borrowing money, contracting indebtedness, and loaning the credit of counties, cities, towns and villages, so as to prevent abuses in taxation and assessments and in contracting of indebtedness by them...." Article VIII, Section 12, New York Constitution 16. Article X, Section 5 of the New York Constitution reads: "Neither the state nor any political subdivision thereof shall at any time be liable for the payment of any obligations issued by such a public corporation heretofore or hereafter created, nor may the legislature accept, authorize acceptance of or impose such liability upon the state or any political subdivision thereof...." Article X, Section 5, New York Constitution 17. Chapter 124 of the Laws of 1998 reads in relevant part: "Pursuant to subdivision (c) of section twelve hundred ten-c of the tax law, the county of Schenectady shall dedicate one-half of one percent county sales and compensating use tax on all sales and compensating uses taxable pursuant to article twenty-nine of the tax law, and shall annually deposit such net collections received therefrom in, the Schenectady metroplex development authority support fund. On January first, nineteen hundred ninety-nine, and then on January first annually thereafter, the director of finance of Schenectady county shall transfer seventy percent of all net collections received from the one-half of one percent sales and compensating use tax and deposited in the Schenectady metroplex development authority support fund to the authority for deposit in the authority’s general fund. The authority may use such dedicated sales tax revenue received for any lawful purpose or power of the authority. On January first, nineteen hundred ninety-nine, and then on January first annually thereafter, the director of finance of Schenectady county, after transferring seventy percent of all net collections received from the one-half of one percent sales and compensating use tax in the Schenectady metroplex development authority support fund to the authority for deposit in the authority’s general fund, shall transfer all remaining monies in the Schenectady metroplex development authority support fund to the Schenectady county real property tax abatement and economic development fund." Section 2661.9 "Tax revenues received by the authority pursuant to section twelve hundred ten-C of the tax law, shall be applied in the following order of priority: first pursuant to the authority’s contracts with bondholders, then to pay the authority’s operating expense not otherwise provided for, and then the balance of such taxes not required to meet contractual or other obligations of the authority shall be deposited in the general fund of the authority." (Plaintiffs’ emphasis). Section 2663.2 "The authority shall have the power and is hereby authorized from time to time to issue bonds, notes or other obligations in conformity with applicable provisions of the uniform commercial code to pay the cost of any project, the establishment of reserves to secure the bonds, the payment of principal of, premium, if any, and interest on the bonds and the payment of incidental expenses in connection therewith. The aggregate principal amount of such bonds, notes or other obligations shall not exceed fifty million dollars ($50,000,000), excluding bonds, notes or other obligations issued to refund or repay bonds, notes or other obligations therefore issued for such purposes." Section 2665.1 "Any resolution or resolutions authorizing bonds or any issue of bonds by the authority may contain provisions which may be a part of the contract with the holders of the bonds thereby authorized as to: (a) Pledging all or part of the revenues, together with any other monies or property of the authority to secure the payment of the bonds, or any costs of issuance thereof, including but not limited to, any contracts, earnings or proceeds of any grant to the authority received from any private or public source subject to such agreements with bondholders as may then exist." Section 2665.5(a) "In addition to the powers herein conferred upon the authority to secure its bonds, the authority shall have the power in connection with the issuance of bonds to adopt resolutions and enter into such trust indentures, agreements or other instruments as the authority may deem necessary, convenient or desirable concerning the use or disposition of its revenues or other monies or property, including the mortgaging of any property and the entrusting, pledging or creation of any other security interest in any such revenues, monies or property and the doing of any act, including refraining from doing any act which the authority would have the right to do in the absence of such resolutions, trust indentures, agreements or other instruments. The authority shall have power to enter into amendments of any such resolutions, trust indentures, agreements or other instruments within the powers granted to the authority by this title and to perform such resolutions, trust indentures, agreements or other instruments. The provisions of any such resolutions, trust indentures, agreements or other instruments may be made a part of the contract with the holders of bones of the authority." Section 2665.6 "Such trustee may, and upon written request of the holders of twenty-five per centum in principal amount of such bonds outstanding shall, in its own name: (a) By action or proceeding in accordance with the civil practice law and rules, enforce all rights of the bondholders, including the right to require the authority to collect rents, rates, fees and charges adequate to carry out any agreement as to, or pledge of, such rents, rates, fees and charges and to require the authority to carry out any other agreements with the holders of such bonds to perform its duties under this title." Section 2668.2(a) "Neither the state, the county nor any municipality therein shall be liable on the bonds or notes of the authority and such bonds or notes shall not be a debt of the state, the county or of any municipality therein and such bonds and notes shall contain on the face thereof a statement to such effect." Section 2669 "Agreement with state. The state does hereby pledge to and agree with the holders of any bonds issued by the authority pursuant to this title and with those persons or public authorities who may enter into contracts with the authority pursuant to the provisions of this title that the state will not alter, limit or impair the rights hereby vested in the authority to purchase, construct, own and operate, maintain, repair, improve, reconstruct, renovate, rehabilitate, enlarge, increase and extend, or dispose of any project, or any part or parts thereof for which bonds of the authority shall have been issued, to establish and collect rates, rents, fees and other charges referred to in this title, to fulfill the terms of any contracts or agreements made with or for the benefit of the holders of bonds or with any person or public authority with reference to such project or part thereof, or in any way to impair the rights and remedies of the holders of bonds, until the bonds, together with interest thereon, including interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of the holders of bonds, are fully met and discharged and such contracts are fully performed on the part of the authority. The authority is authorized to include this pledge and agreement of the state in any agreement with the holders of bonds. Nothing contained in the section shall be deemed to restrict the right of the state to amend, modify, repeal or otherwise alter statutes imposing or relating to the taxes payable to the authority. Nothing in this section shall be deemed to obligate the state to make additional payments or impose any taxes to satisfy the debt service obligations of the authority." (Plaintiffs’ emphasis). Section 2669-a "Agreement with county. The county is authorized to pledge to and agree with the holders of any bonds issued by the authority pursuant to this title and with those persons or public authorities who may enter into contracts with the authority pursuant to the provisions of this title that the county will not alter, limit or impair the rights hereby vested in the authority to purchase, construct, own and operate, maintain, repair, improve, reconstruct, renovate, rehabilitate, enlarge, increase and extend, or dispose of any project, or any part or parts thereof, for which bonds of the authority shall have been issued, to establish, collect and adjust rates, rents, fees and other charges referred to in this title, to fulfill the terms of any agreements made with the holders of the bonds or with any public authority or person with reference to such project or part thereof, or in any way impair the rights and remedies of the holders of bonds, until the bonds, together with interest thereon, including interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of the holders of bonds, are fully met and discharged and such contracts are fully performed on the part of the authority. Nothing in this section shall be deemed to obligate the county to make additional payments or impose any taxes to satisfy the debt service obligations of the authority." (Plaintiffs’ emphasis). Section 2669-b "Dedication of taxes authorized for cities and counties. (a) Notwithstanding any other provision of law to the contrary, any authorization for a city or county to impose a tax pursuant to this article, may condition such authorization upon the dedication of such revenue derived from such tax imposed, to a public benefit corporation established as an industrial development agency or an area revitalization agency pursuant to article eighteen-A of the general municipal law or to a public authority established for economic development or transportation purposes pursuant to the public authorities law. (b) In the event that a city or a county imposes a tax pursuant to this article, in accordance with a conditional authorization as described in subdivision (a) of this section, such city or county shall dedicate the revenue from such tax so imposed to the designated public benefit corporation established as an industrial development agency or an area revitalization agency pursuant to article eighteen-A of the general municipal law or public authority established for economic development or transportation purposes pursuant to the public authorities law." ("Plaintiffs’ emphasis). Section 1201-d(a),(b) "Sales and compensating use tax for purposes of the Schenectady county metroplex development authority. (a) In addition to the taxes imposed by section twelve hundred ten of this article or any other provision of this article, the county of Schenectady is hereby authorized and empowered to adopt and amend a local law, ordinance or resolution imposing within the territorial limits of said county an additional sales and compensating use tax at the rate of one-half of one percent for the period beginning on or after September first, nineteen hundred ninety-eight and ending August thirty-first, two thousand twenty-eight, which tax shall be identical to the tax imposed by said county pursuant to section twelve hundred ten of this article. Except as hereinafter provided, all provisions of this article, including the definition and exemption provisions and the provisions relating to the administration, collection and distribution by the commissioner, shall apply for purposes of the tax imposed by this section in the same manner and with the same force and effect as if the language of this article had been incorporated in full in this section and had expressly referred to the tax imposed by this section; provided, however, that any provision of this article relating to a maximum rate shall be calculated without reference to the additional sales and compensating use tax herein authorized. For purposes of part IV of article twenty-nine of this chapter, relating to the disposition of revenues resulting from taxes collected and administered by the commissioner, the additional sales and compensating use tax herein provided shall be deemed to be imposed under the authority of section twelve hundred ten of this article and all provisions relating to the deposit, administration and disposition of taxes, penalties and interest relating to a tax imposed by a county under the authority of section twelve hundred ten of this article shall, except as otherwise specifically provided in this section, apply to the additional sales and compensating use tax imposed pursuant to this section." (Plaintiffs’ emphasis). Section 1210-C (a) "(b) Notwithstanding any other provision of this article to the contrary, the net collections from the tax imposed pursuant to subdivision (a) of this section for the period beginning on or after September first, nineteen hundred ninety-eight and ending August thirty-first, two thousand twenty-eight shall, upon payment to the county of Schenectady, be deposited in the Schenectady metroplex development authority support fund, pursuant to subdivision nine of section twenty-six hundred sixty-one of the public authorities law, with such fund to be designated as a special dedicated support fund, to be created by said county therefor separate and apart from any other funds and accounts of the county. Pending deposit from such Schenectady metroplex development authority support fund into the general fund of the Schenectady metroplex development authority, all moneys therein may be invested in the manner provided in section eleven of the general municipal law. Any interest earned or capital gain realized on the moneys so deposited or invested shall accrue to and become part of such Schenectady metroplex development authority support fund." (Plaintiffs’ emphasis). Section 1210-C (b) "(c) The county of Schenectady shall dedicate one-half of one percent county sales and compensating use tax on all sales and compensating uses taxable pursuant to this article, and shall annually deposit such net collections received therefrom in, the Schenectady metroplex development authority support fund. On January first, nineteen hundred ninety-nine, and then on January first annually thereafter, the director of finance of Schenectady county shall transfer seventy percent of all net collections received from the one-half of one percent sales and compensating use tax and deposited in the Schenectady metroplex development authority support fund to the authority for deposit in the authority’s general fund. The authority may use such dedicated sales tax revenue received for any lawful purpose or power of the authority [including Public Authorities Law 2663.2]. On January first, nineteen hundred ninety-nine, and then on January first annually thereafter, the director of finance of Schenectady county, after transferring seventy percent of all net collections received from the one-half of one percent sales and compensating use tax in the Schenectady metroplex development authority support fund to the authority for deposit in the authority’s general fund, shall transfer all remaining monies in the Schenectady metroplex development authority support fund to the Schenectady county real property tax abatement and economic development fund." Section 1210-C (c) 18. Chapter 5 of the Laws of 1998 reads in relevant part: "35 (a) The dormitory authority is empowered and authorized to enter into a lease, sublease, lease purchase, or other agreement with the office of general services of the state of New York on behalf of the department of audit and control of the state of New York pursuant to which one or more facilities are to be designed, acquired, constructed, reconstructed, rehabilitated, improved or otherwise provided for the department of audit and control of the state of New York, the New York state and local employees’ retirement system and the New York state and local police and fire retirement system and pursuant to which such facilities are to be furnished or equipped provided, however, that any contract or lease for construction, reconstruction or rehabilitation authorized by this subdivision shall be governed by article eight of the labor law. Such lease, sublease, lease purchase, or other agreement may provide for the payment of annual rentals and other payments by the department of audit and control of the state of New York to the dormitory authority from appropriations as provided in paragraph (c) of this subdivision or from payments made pursuant to any lease, sublease, lease purchase, or other agreement authorized pursuant to paragraph (f) of this subdivision and contain such other terms and conditions as may be agreed upon by the parties thereto, including but not limited to, provisions relating to the maintenance and operation of the facilities, the establishment of reserve funds, indemnities and the disposition of a facility or the interest of the dormitory authority therein, if any, prior to or upon termination or expiration of such lease, sublease or other agreement. Such lease, sublease, lease purchase, or other agreement shall be subject to the approval of the director of the budget. (b) Any such lease, sublease, lease purchase, or other agreement entered into pursuant to this subdivision may provide that the provisions thereof shall remain in full force and effect until the issue of the bonds of the dormitory authority to which it relates, together with interest thereon, interest on any unpaid installments of interest and the fees and expenses of the dormitory authority, are fully met and discharged, and any payments to be made by the state, the New York state and local employees’ retirement system and the New York state and local policy and fire retirement system pursuant to any lease, sublease, lease purchase, or other agreement authorized pursuant to paragraph (f) of this subdivision may be pledged by the dormitory authority to secure such bonds. (c) Any agreement entered into pursuant to this subdivision by and between the dormitory authority and the office of general services on behalf of the department of audit and control shall provide for state commitments to provide annually to the department of audit and control an amount equal to the aggregate amount of all annual rentals due to the dormitory authority from the department of audit and control on account of such facilities for the department of audit and control, the New York state and local employees’ retirement system and the New York state and local police and fire retirement system pursuant to any such lease, sublease, lease purchase, or other agreement. Any such lease, sublease, lease purchase or other agreement shall further provide that the obligation of the state to appropriate amounts to the department of audit and control to pay annual rentals due to the dormitory authority from the department of audit and control on account of facilities for the department of audit and control, the New York state and local employees’ retirement system and the New York state and local police and fire retirement system pursuant to any such lease, sublease, lease purchase or other agreement shall not constitute a debt of the state within the meaning of any constitutional and/or statutory provisions and shall be deemed executory only to the extent state moneys are appropriated and that no liability shall be incurred by the state beyond the moneys appropriated for that purpose and that such obligation is subject to annual appropriations by the legislature. (d) On or before November fifteenth of each year, the dormitory authority shall submit and thereafter may resubmit to the commissioner of general services, the director of the budget, the comptroller, the chairperson of the senate finance committee and the chairperson of the assembly ways and means committee, a report setting forth the amounts, if any, of all annual rentals and other payments estimated to be due in the succeeding state fiscal year to the dormitory authority from the department of audit and control pursuant to any lease, sublease, lease purchase, or other agreement between the dormitory authority and the office of general services on behalf of the department of audit and control entered into on or after July first, nineteen hundred ninety-seven to provide facilities for the department of audit and control, the New York state and local employees’ retirement system and the New York state and local police and fire retirement system. (e) Notwithstanding any provision of law to the contrary, any lease, sublease, lease purchase or other agreement, including any contract for construction, reconstruction, rehabilitation or improvement entered into pursuant to this subdivision shall not be subject to public auction or bidding or any restriction as to the term of such lease, sublease, lease purchase or other agreement; provided however, that, with respect to any lease, sublease, lease purchase, or other agreement for facilities for the department of audit and control, the New York state and local employees’ retirement system and the New York state and local police and fire retirement system, the dormitory authority shall determine that there has been a competitive process sufficient to comply with the authority’s procurement contract guidelines as required pursuant to section twenty-eight hundred seventy-nine of this chapter. (f) Nothing herein shall be constr |