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Volume 7 - Opinions of Counsel SBEA No. 17

Opinions of Counsel index

Taxes (enforcement) (city school districts - limitations of time) -  Civil Practice Law and Rules, §§ 217, 7803; Real Property Tax Law, § 1332:

In order to compel a county treasurer or city tax enforcement officer to remit uncollected city school district taxes, the city school district must commence a proceeding in the nature of mandamus under Article 78 of the Civil Practice Law and Rules, within four months after the treasurer or tax enforcement officer refuses a timely demand for payment.

We have been asked whether a city school district is subject to any statutory limitations of time in seeking to compel county or city officials to remit payment for uncollected city school taxes as required by subdivision 5 of section 1332 of the Real Property Tax Law.

Section 1332 sets forth the manner in which the payment of uncollected city school district taxes is to be enforced. In general, upon the expiration of the warrant for the collection of those taxes, the collecting officer of the city school district must deliver a statement of unpaid taxes to the school authorities (§ 1332(2)). After review of the statement to ensure its accuracy, the school authorities are required to transmit the statement (and their certification) to the county treasurer, city tax enforcement officer or both (§ 1332(3)). (The city official is responsible for collection and enforcement of those school taxes due and owing on property within the city, and the county treasurer for the remaining school taxes).

The city or county officer must then proceed to “enforce the collection of such unpaid taxes . . . in the same manner and at the same time” as though they were city or county taxes (§ 1332(5)). Moneys collected on behalf of the city school district must be paid over on a monthly basis (id.). If the city or county acquires a tax lien against any of the tax delinquent properties on account of unpaid city school taxes, the city or county must remit the amount of those unpaid taxes with interest (id.).

By amendment in 1963 (L.1963, c.191), the city and county liability for payment of uncollected city school district taxes was extended to instances in which “within two years after the return of the statement of unpaid taxes no tax sale on account of any such unpaid taxes was held.” In other words, whether the city or county receives payment or acquires a lien on account of unpaid city school taxes, the city school district must be “made whole” no later than two years after the return of the statement of unpaid taxes (see, § 1332(5)). Effectively, the city or county thus becomes a guarantor of unpaid city school taxes.

As a general rule, a proceeding lies under Article 78 of the Civil Practice Law and Rules (CPLR) to compel action when a body or officer has “failed to perform a duty enjoined upon it by law” (CPLR, § 7803(1)). A statute of limitations of four months attaches to such a proceeding “unless a shorter time is provided in the law authorizing the proceeding” (id., § 217).

If the nature of the proceeding is one of mandamus, this four month period does not begin to run until “after the respondent’s refusal, upon the demand of the petitioner . . . to perform its duty” (id.). In construing this time limitation, the courts have stressed that “. . . the question is whether the relief sought is the review and the annulment or modification of a determination involving judgment or discretion, as distinguished from a demand for ministerial action in accordance with law” (Foy v. Brennan, 285 App.Div. 669, 140 N.Y.S.2d 132, at 135 (1st Dept., 1955)). A “ministerial act” has been defined as “one which a person performs in a given state of facts, in a prescribed manner, in obedience to the mandate of legal authority, without regard to the exercise of his own judgment upon the propriety of the act being done” (47 N.Y. Jur., Public Officers and Employees, § 25 (1966)).

City and county officials responsible for payment over to city school authorities of unpaid taxes are given no discretion or right to exercise judgment with respect to that responsibility. Subdivision 5 of section 1332 imposes a ministerial duty on those officials to remit the full amount of unpaid taxes no later than two years after the return of the statement of unpaid taxes. Therefore, a proceeding to compel payment of these unpaid taxes would be one in the nature of mandamus.

Assuming this to be the case, the four month statute of limitations previously cited would not begin to run until after refusal by the county or city official of a demand by school authorities for payment. While this means that the “petitioner controls the time of institution of the proceeding” (Colder v. Teachers Retirement Board, 4 Misc.2d 166, 156 N.Y.S.2d 494, at 497 (S.Ct., N.Y. Co., 1956)), it is well settled that “the demand must be made within a reasonable time after [becoming] aware of the facts which give rise to his right of relief [citations omitted]” (Devans v. Gokey, 12 A.D.2d 138, 209 N.Y.S.2d 94, at 96 (4th Dept. 1961), aff’d, 10 N.Y.2d 898, 179 N.E.2d 516, 223 N.Y.S.2d 515 (1961)). In the absence of demand within a reasonable time, the claim may be barred by laches (Austin v. Board a/Higher Education of the City of New York, 5 N.Y.2d 430, 158 N.E.2d 681, 186 N.Y.S.2d 1 (1959)).

Applying these principles to the question presented, we must initially determine when the right first arose for the school district to demand payment.

Certainly, the city school district would have the right to make a demand for payment no earlier than two years after the return of the statement of unpaid taxes. Prior to that date the city or county is liable only for payment of taxes which have been collected or as to which the city or county has acquired a tax lien on account thereof.

Assuming that the city school district could have demanded payment as of the first day after the passage of those two years (i.e., assuming there to be no mitigating circumstances such as misleading conduct by the city or county - see, Devans v. Gokey, supra - or, perhaps, established past practice of payment more than two years after the return of unpaid taxes), the question is what is a reasonable time after that date for the city school district to make such demand?

The generally accepted rule is that the circumstances of the particular case will determine whether the demand is timely made (see, e.g., Estate of Lefrak v. Procaccino, 52 A.D.2d 1016, 383 N.Y.S.2d 709 (3d Dept. 1976); Holz v. Kowal, 27 A.D.2d 128, 276 N.Y.S.2d 398 (4th Dept. 1967); Garguil v. Board of Education of Liverpool Central School District, 54 A.D.2d 1085, 339 N.Y.S.2d 504 (4th Dept. 1976); Berry v. Blair, 49 A.D.2d 309, 374 N.Y.S.2d 850 (4th Dept. 1975); and Application of Kleinman, 20 A.D.2d 594, 245 N.Y.S.2d 268 (3d Dept. 1963)). Therefore, whether a school district’s demand for payment under section 1332(5) was timely made will depend upon the circumstances of the case. Of course, a timely demand must be succeeded by institution of the Article 78 proceeding within four months after the refusal of the city or county officer to accede to the demand for payment.

July 11, 1980