§ 3032. Civil damages for failure to release a lien. (a) In general. A
taxpayer may bring a civil action for damages against the state in the
court of claims if any officer or employee of the department knowingly,
or by reason of negligence, fails to release a lien on property of such
taxpayer within forty days after the day on which (1) the commissioner
finds that the liability for the amount assessed or determined, together
with all interest in respect thereof, has been fully satisfied or has
become legally unenforceable, or (2) there is furnished to the
commissioner a surety bond issued by a surety company approved by the
superintendent of financial services as to solvency or responsibility
and authorized to transact business in this state, or other security
acceptable to the commissioner, that is conditioned upon the payment of
the amount assessed or determined, together with all interest in respect
thereof, within the time prescribed by law (including any extension of
such time) and is in accordance with such requirements relating to
terms, conditions, and form of the bond or other acceptable security, as
may be specified by regulation.

(b) Damages. In any action brought under subdivision (a) of this
section, upon a finding of liability on the part of the defendant, the
defendant shall be liable to the plaintiff in an amount equal to the sum
of (1) actual, direct economic damages sustained by the plaintiff which,
but for the actions of the defendant, would not have been sustained,
plus (2) the costs of the action.

(c) Limitations. (1) Exhaustion of administrative remedies. The amount
of damages awarded under subdivision (b) of this section may be reduced
if the court determines that the plaintiff has not exhausted the
administrative remedies available to such plaintiff within the
department which have been established pursuant to the commissioner's
authority to compromise civil liability provided in subdivision
eighteenth-a of section one hundred seventy-one of this chapter. In
establishing administrative review procedures regarding claims for
damages under this section, the commissioner is authorized to enter into
contracts with private dispute resolution entities for the purpose of
providing review of such claims and suggested compromises by independent
third parties.

(2) Mitigation of damages. The amount of damages awarded under
paragraph one of subdivision (b) of this section shall be reduced by the
amount of such damages which could have reasonably been mitigated by the
plaintiff.

(d) Notice of failure to release lien. The commissioner shall by
regulation prescribe reasonable procedures for a taxpayer to notify the
commissioner of the failure to release a lien on the property of the
taxpayer.