IN RE: SUFFOLK COUNTY, respondent, v. LONG ISLAND POWER AUTHORITY, appellant.
In this proceeding, the petitioner, Suffolk County, seeks, inter alia, to bar the Long Island Power Authority (hereinafter LIPA) from enforcing a judgment obtained by its predecessor-in-interest, the Long Island Lighting Company (hereinafter LILCO), for refunds of taxes paid by LILCO based on overassessments of real property taxes on the Shoreham Nuclear Power Plant (hereinafter the Shoreham plant) (see, Matter of Long Is. Light. Co. v. Assessor for Town of Brookhaven, 246 A.D.2d 156, 675 N.Y.S.2d 615). The judgment was rendered in eight consolidated tax certiorari proceedings seeking to review the real property tax assessments levied against the Shoreham plant for the tax years 1984-1985 through 1991-1992 (see, Matter of Long Is. Light. Co. v. Assessor for Town of Brookhaven, supra; see also, Long Is. Light. Co. v. Assessor for Town of Brookhaven, 202 A.D.2d 32, 616 N.Y.S.2d 375). Relying on Public Authorities Law § 1020-q(3), the Supreme Court, Suffolk County, concluded that LIPA is barred from enforcing the entire amount of the judgment obtained by LILCO. We disagree and therefore modify.
In 1986 the State Legislature enacted the Long Island Power Authority Act (Public Authorities Law, article 5, title 1-A) (hereinafter the LIPA Act) in response to the economic crisis resulting from the “imprudent” construction of the Shoreham plant (Public Authorities Law § 1020-a). As the Court of Appeals has observed:
“Enacted in 1986, the LIPA Act created a public power authority having the prerogative to acquire all or part of LILCO's assets through a negotiated settlement, tender offer for LILCO's capital stock or the exercise of eminent domain (PAL § 1020-h). The Act further stipulated, however, that upon acquisition of the Shoreham plant, LIPA was to close and decommission the plant ‘forthwith’ (PAL § 1020-h ).
“The LIPA Act gave LIPA tax-exempt status, as a public authority, respecting any property it acquired from LILCO (PAL § 1020-p). In recognition of the potentially drastic fiscal impact of the loss of local property tax revenues because of the exemption, the LIPA Act provided for LIPA's payment of PILOTs [payments in lieu of taxes] to the municipalities and school districts affected by any such acquisition of LILCO property (PAL § 1020-q ).
“In February 1989, then Governor Cuomo, LIPA and LILCO entered into a ‘Settlement Agreement’ for the acquisition by LIPA of only the Shoreham plant, for $1 (see, Matter of Citizens For an Orderly Energy Policy v. Cuomo, 78 N.Y.2d 398, 408 [576 N.Y.S.2d 185, 582 N.E.2d 568] rearg. denied 79 N.Y.2d 851 [580 N.Y.S.2d 202, 588 N.E.2d 100], [79 N.Y.2d] 852 [580 N.Y.S.2d 203, 588 N.E.2d 101]). The settlement agreement was immediately the subject of a legal challenge in the Matter of Citizens For an Orderly Energy Policy case. Transfer of Shoreham was blocked until the final disposition of that suit by this Court's decision upholding the settlement; therefore, the actual transfer of title to LIPA did not occur until February 29, 1992” (Long Island Power Auth. v. Shoreham-Wading River Centr. School Dist., 88 N.Y.2d 503, 508-510, 647 N.Y.S.2d 135, 670 N.E.2d 419).
Thereafter, in March 1997 LIPA and LILCO entered into an Agreement in Principle whereby LIPA would acquire, through a stock acquisition, LILCO's electric transmission and distribution facilities and retail operations. Additional agreements between LIPA and LILCO resolved various ancillary issues and the final acquisition of LILCO by LIPA was consummated on May 28, 1998.
On March 26, 1997 (prior to LIPA's acquisition of LILCO), a judgment was entered in favor of LILCO in tax litigation involving the real property tax assessment on the Shoreham plant for the tax years 1984-1985 through 1991-1992 for overassessments on the Shoreham plant. The amount of the judgment was over $868,000,000, which included interest through the date of judgment. Interest on this amount continues to accrue at $214,145.48 per day (see, Long Is. Light. Co. v. Assessor for Town of Brookhaven, supra).
Suffolk County, the petitioner in the instant litigation, contends that LIPA is barred from enforcing the entire amount of this judgment. In support of its position, it relies on Public Authorities Law § 1020-q(3), which states as follows:
“1020-q. Payments in lieu of taxes
“3. No municipality or governmental subdivision, including a school district or special district, shall be liable to the authority or any other entity for a refund of property taxes originally assessed against the Shoreham plant. Any judicial determination that the Shoreham plant assessment was excessive, unequal or unlawful for any of the years from nineteen hundred seventy-six to the effective date of this title shall not result in a refund by any taxing jurisdiction of taxes previously paid by LILCO pursuant to such Shoreham plant assessment. The authority shall discontinue and abandon all proceedings, brought by its predecessor in interest, which seek the repayment of all or part of the taxes assessed against the Shoreham plant”.
Initially, we note that in a prior proceeding commenced by Suffolk County, the extent of LIPA's powers under Public Authorities Law § 1020-q was considered by the Supreme Court, Nassau County (see, Matter of Suffolk County v. Long Is. Power Auth., 177 Misc.2d 208, 673 N.Y.S.2d 545). There, the court sustained LIPA's August 21, 1997, determination which ratified agreements between it and LILCO and accepted conditions imposed by the Public Authorities Control Board. These agreements served as the basis for LIPA's ultimate acquisition of LILCO (see, Matter of Suffolk County v. Long Is. Power Auth., supra, at 214, 673 N.Y.S.2d 545). One of the issues considered by the court was whether, in acquiring LILCO, LIPA could compensate LILCO for the value of the tax judgment LILCO had obtained with respect to the Shoreham plant. Suffolk County specifically argued that Public Authorities Law § 1020-q(3) barred LIPA from compensating LILCO for “its as yet unenforced tax certiorari judgment” (Matter of Suffolk County v. Long Is. Power Auth., supra, at 220, 673 N.Y.S.2d 545). In rejecting this argument, the court determined that “a careful examination of section 1020-q(3) does not bar LIPA from compensating LILCO for judgments and only precludes LIPA from obtaining tax refunds from 1976 to 1987” (see, Matter of Suffolk County v. Long Is. Power Auth., supra, at 220, 673 N.Y.S.2d 545 [emphasis supplied] ).
Suffolk County's instant claim is that Public Authorities Law § 1020-q(3) precludes the enforcement, by LIPA, of any tax judgment obtained by LILCO. Since this claim has been specifically rejected by the court in the aforementioned proceeding (see, Matter of Suffolk County v. Long Is. Power Auth., supra), Suffolk County is barred under the doctrine of res judicata from relitigating it herein (see, O'Brien v. City of Syracuse, 54 N.Y.2d 353, 357, 445 N.Y.S.2d 687, 429 N.E.2d 1158; Gramatan Home Investors Corp. v. Lopez, 46 N.Y.2d 481, 485, 414 N.Y.S.2d 308, 386 N.E.2d 1328; Lake Anne Homeowners Assn. v. Lake Anne Realty Corp., 220 A.D.2d 560, 561, 632 N.Y.S.2d 811; Coliseum Towers Assocs. v. County of Nassau, 217 A.D.2d 387, 389-390, 637 N.Y.S.2d 972; see also, Initiative for Competitive Energy v. Long Island Power Authority, 178 Misc.2d 979, 996, 683 N.Y.S.2d 391).
In any event, we conclude that Public Authorities Law § 1020-q(3) only bars LIPA from enforcing that portion of the judgment at issue attributable to real property taxes assessed on the Shoreham plant prior to enactment of the LIPA Act. In Long Is. Power Auth. v. Shoreham-Wading Riv. Cent. School Dist., 88 N.Y.2d 503, 647 N.Y.S.2d 135, 670 N.E.2d 419, supra, the Court of Appeals construed Public Authorities Law § 1020-q(3), in the context of determining LIPA's obligations to make payments in lieu of taxes (hereinafter PILOTs). In that case, the court stated as follows:
“[W]e agree with the courts below that Public Authorities Law § 1020-q(3) should not be read as completely immunizing the various taxing jurisdictions from refund liability for PILOT overpayments based upon the inflated assessed valuations of the Shoreham plant following enactment of the LIPA Act * * * Section 1020-q bespeaks of a legislative intent limited to relieving the local taxing jurisdictions from the drastic impact of substantial refund liability for past taxes and assessments challenged by LILCO, not PILOTs prospectively imposed following LIPA's acquisition of the Shoreham plant. Thus, section 1020-q (3) prevents refund liability for ‘property taxes originally assessed’ against the Shoreham plant, or for ‘refund[s] of taxes' based upon a judicial determination of overassessed evaluation ‘for any of the years from  to the effective date of this title [January 15, 1987]’ * * * While section 1020-q looks backward to taxes previously assessed, defendants' liability for PILOT refunds was, as of the effective date of the Act, wholly prospective. Thus, the plain language of Public Authorities Law § 1020-q(3) limits its application to proceedings to recover taxes overpaid during a specific period of time.
“Our limited reading of section 1020-q(3) is consistent with the legislative history of the LIPA Act. As previously noted, the Assembly sponsoring memorandum expressed conviction that, at the time of passage of the LIPA Act, taxes were already of ‘inordinate and inequitable size’ (Mem of Assembly Sponsor, Bill Jacket, L. 1986, ch. 517, at 13). In the Assembly debates on the proposed LIPA legislation, the then current taxes and assessments on Shoreham were characterized as a ‘windfall’ which ‘no longer should be allowed’ (Member of Assembly Harenberg, Assembly Floor Debates, July 1, 1986, at 369). It would be entirely inconsistent with this view of the inflated status of taxes and assessments on the Shoreham plant at the time of enactment of the LIPA statute to ascribe to the Legislature an intent to permit the local taxing jurisdictions to increase the size of payments in lieu of such taxes and assessments totally insulated from judicial review by a LIPA challenge to assessed valuations and a demand for refunds of PILOT overpayments based thereon. In light of the plain language of the statute and this legislative history, the defendants' position on this issue, which would in effect leave LIPA at the discretion of local assessors in determining the magnitude of PILOTs after a Shoreham takeover, cannot prevail” (Long Island Power Auth. v. Shoreham-Wading Riv. Cent. School Dist., 88 N.Y.2d 503, 517-518, 647 N.Y.S.2d 135, 670 N.E.2d 419, supra [emphasis in the original] ).
Applying this holding to the instant case, we similarly conclude that Public Authorities Law § 1020-q(3) is limited, by its terms, to proceedings to recover real property “taxes overpaid during a specific period of time”, i.e., from 1976 until January 15, 1987, the effective date of the LIPA Act (Long Is. Power Auth. v. Shoreham-Wading Riv. Cent. School Dist., supra, at 517, 647 N.Y.S.2d 135, 670 N.E.2d 419). As the Court of Appeals observed, this “limited reading” of Public Authorities Law § 1020-q(3) conforms to the legislative history of the LIPA Act. As in the case of LIPA's PILOT obligation, to prohibit the enforcement of a judgment for tax refunds attributable to assessments made after the enactment of the LIPA Act, would be inconsistent with the legislative view that taxes on the Shoreham plant were inequitable and inordinately excessive. In addition, it would be inconsistent with the legislative history of the LIPA Act “to ascribe to the Legislature an intent to permit the local taxing jurisdictions to increase the size of * * * assessments, totally insulated from judicial review” (Long Is. Power Auth. v. Shoreham-Wading Riv. Cent. School Dist., supra, at 518, 647 N.Y.S.2d 135, 670 N.E.2d 419).
In a related context, the Court of Appeals has observed that the “sine qua non objective of the LIPA Act was to give LIPA the authority to save ratepayers money by controlling and reducing utility costs * * * Indeed, the Governor, in approving the LIPA Act legislation, emphasized that the core objective of the Act was to produce ratepayer savings” (Matter of Citizens For An Orderly Energy Policy v. Cuomo, 78 N.Y.2d 398, 414, 576 N.Y.S.2d 185, 582 N.E.2d 568; see also, Long Is. Light. Co. v. Assessor of Town of Brookhaven, 154 A.D.2d 188, 552 N.Y.S.2d 336). To accept a statutory construction that would severely restrict LIPA's right to an asset that would, in all likelihood, generate ratepayer savings, would be contrary to the express legislative goal of the LIPA Act (see, Public Authorities Law § 1020-a). It is well settled that all parts of a statute must be harmonized to achieve the legislative purpose (see, Sanders v. Winship, 57 N.Y.2d 391, 396, 456 N.Y.S.2d 720, 442 N.E.2d 1231; see also, McKinney's Cons. Laws of N.Y., Book 1, Statutes §§ 97, 98; Heard v. Cuomo, 80 N.Y.2d 684, 689, 594 N.Y.S.2d 675, 610 N.E.2d 348). Therefore, we conclude that Public Authorities Law § 1020-q(3) does not prohibit LIPA from enforcing any part of a judgment for real property tax refunds attributable to overassessments on the Shoreham plant after the effective date of the LIPA Act. Suffolk County may make such motion in the tax certiorari proceedings involving the Shoreham plant as it deems appropriate to reflect the holding of this court in the instant appeal. Accordingly, the judgment must be modified by deleting the decretal paragraphs thereof which directed LIPA to discontinue and abandon all proceedings to enforce the subject judgments and substituting therefor decretal paragraphs enjoining LIPA from enforcing the subject judgments based on property taxes paid prior to the enactment of the LIPA Act.
ORDERED that the judgment is modified, on the law, by (1) deleting from the first decretal paragraph thereof the words “denied, in its entirety” and substituting therefor the words “granted to the extent that those branches of the petition to compel LIPA to discontinue and abandon all proceedings which seek repayment of taxes assessed against the Shoreham plant for taxes attributable to any period after January 15, 1987, the effective date of the LIPA Act, are denied and that portion of the proceeding is dismissed”, and (2) deleting the second and third decretal paragraphs thereof and substituting therefor the following decretal paragraphs:
“ORDERED, ADJUDGED, and DECREED that the respondent Long Island Power Authority shall discontinue and abandon all proceedings which seek the repayment of all or part of the taxes assessed against the Shoreham plant attributable to any period prior to January 15, 1987; and it is further,
“ORDERED, ADJUDGED, and DECREED that the respondent Long Island Power Authority is enjoined from enforcing any judgment for a refund of taxes paid on the Shoreham plant based on tax assessments for periods prior to January 15, 1987”; as so modified, the judgment is affirmed, with costs to the appellant.