NEW JERSEY TURNPIKE AUTHORITY VS. TOWNSHIP OF MONROE (TAX COURT OF NEW JERSEY) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R.1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4333-14T1
NEW JERSEY TURNPIKE AUTHORITY,
Plaintiff-Appellant,
v.
TOWNSHIP OF MONROE,
Defendant-Respondent.
_____________________________
Argued February 15, 2017 – Decided September 18, 2017
Before Judges Fuentes, Simonelli and Carroll.
On appeal from the Tax Court of New Jersey,
Docket No. 017197-2011, whose opinion is
reported at 28 N.J. Tax 158 (Tax 2014).
John F. Casey argued the cause for appellant
(Chiesa Shahinian & Giantomasi PC, attorneys;
Mr. Casey, on the briefs).
Gregory B. Pasquale argued the cause for
respondent (Shain, Schaffer & Rafanello, PC,
attorneys; Richard A. Rafanello and Mr.
Pasquale, on the brief).
PER CURIAM
Plaintiff, the New Jersey Turnpike Authority, appeals from
the summary judgment decision of the Tax Court that determined it
did not qualify for a roll-back tax exemption reserved for local
and state government units under N.J.S.A. 54:4-23.8. Defendant,
Township of Monroe, sought roll-back taxes from plaintiff's land
purchase. Both plaintiff and defendant moved for summary judgment
on the roll-back tax issue. The Tax Court held plaintiff was not
"the State," denied plaintiff's motion, granted defendant's
motion, and dismissed plaintiff's case with prejudice. The court's
opinion is published in the Tax Court Reports. N.J. Tpk. Auth.
v. Twp. of Monroe, 28 N.J. Tax 143 (Tax Ct. 2014). The Turnpike
Authority argues Judge Mala Sundar erred because the Turnpike
qualifies under the statute as the alter ego of the "the State"
for tax exemption purposes. We affirm.
I
The New Jersey Legislature established the Turnpike Authority
in the New Jersey Department of Transportation. N.J.S.A. 27:23-
3(A). Plaintiff is an "instrumentality, exercising public and
essential governmental functions." Ibid. Its primary purpose is
"to provide for the acquisition and construction of modern express
highways" and "to acquire, construct, maintain, improve, manage,
repair and operate transportation projects." N.J.S.A. 27:23-1.
To assist plaintiff with this purpose, the Legislature exempted
plaintiff from "pay[ing] any taxes or assessments upon any
transportation project or any property acquired or used by
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[plaintiff] under the provisions of this [A]ct[.]" N.J.S.A. 27:23-
12.
The Turnpike Authority is both subordinate to and separate
from the State. The Governor appoints the majority of the Turnpike
Authority's Board of Commissioners and designates the Chairman and
Vice Chairman, who serve at the Governor's pleasure. N.J.S.A.
27:23-3(B)-(C). The Turnpike Authority: (1) must pay its own
debts, N.J.S.A. 27:23-2; (2) can "borrow money and issue negotiable
bonds for any of its corporate purposes," N.J.S.A. 27:23-5(f); (3)
can "sue and be sued in its own name[,]" N.J.S.A. 27:23-5(d), (4)
can contract with private, local, State and federal entities,
N.J.S.A. 27:23-5(l); and (5) "can acquire in the name of
[plaintiff,] by purchase or otherwise . . . any land and other
property, which it may determine is reasonably necessary[,]"
N.J.S.A. 27:23-5(j).
Several years ago, plaintiff began a project to widen and
reconfigure a portion of the highway that ran from interchange six
to interchange nine. Toward that end, it sought permits from the
New Jersey Department of Environmental Protection (DEP) because
its project affected nearby protected freshwater wetlands. In
2009 and 2010, the DEP granted plaintiff a five-year permit that
allowed it to disturb approximately 119 acres, and a ten-year
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permit, authorizing plaintiff to temporarily and permanently
disturb grassed, herbaceous, and forested riparian areas.
In exchange for the permits, the DEP required plaintiff to
mitigate the permanent and temporary harm it would cause to
protected wetlands and forested riparian zones, among others.
Plaintiff fulfilled its duty to mitigate by buying the Brookland
Mitigation Site (hereinafter the "site") for approximately four
million dollars and offering the site as a donation to the DEP.
The purchase deed, which was recorded in the Middlesex County
Clerk's Office on February 23, 2010, noted that the "conveyance"
to plaintiff was made "in lieu of condemnation." Nobody paid a
realty tax transfer for the transaction because plaintiff, an
"instrumentality of the State," initially received the property.
The purchased site comprises approximately 397.47 acres, but
does not include any Preserved Farmland or Green Acres properties.
In April 2009, plaintiff's land appraiser prepared a report,
claiming the site was "vacant residential land" with a market
value of $2.45 million. During tax year 2010, defendant Township
of Monroe assessed the site as farmland that qualified under the
Farmland Assessment Act of 1964 (hereinafter the "FA-Act"),
N.J.S.A. 54:4-23.1 to -34. After plaintiff bought the site,
defendant's assessor filed a complaint with the Middlesex County
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Board of Taxation to impose roll-back taxes on the site for tax
years 2008 through 2010.
Despite their conflict, neither plaintiff nor defendant
claims the site was used for agricultural, horticultural, tree
production, or woodland management purposes once plaintiff
purchased it in 2010. On September 15, 2011, the Middlesex
County Board of Taxation granted defendant's roll-back tax
applications. Plaintiff timely appealed the decision to the Tax
Court, which ultimately ruled in favor of defendant on summary
judgment.
II
This dispute began when the Township of Monroe appealed to
the Middlesex County Tax Board seeking roll-back taxes from the
Turnpike's purchase of land to mitigate the environmental impact
caused by a construction project to widen and reconfigure a portion
of the highway that ran from interchange six to interchange nine.
The DEP authorized the project conditioned upon the Turnpike
acquiring sufficient land to mitigate the permanent and temporary
harm it would cause to protected wetlands and forested riparian
zones, among others.
Both N.J. Const. art. VIII, § 1, ¶ 1, and N.J.S.A. 54:4-23.8,
provide:
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When land which is in agricultural or
horticultural use and is being valued,
assessed and taxed under the provisions of
P.L. 1964, c. 48 (C.54:4-23.1 et seq), is
applied to a use other than agricultural or
horticultural, it shall be subject to
additional taxes, hereinafter referred to as
roll-back taxes, in an amount equal to the
difference, if any, between the taxes paid or
payable on the basis of the valuation and the
assessment authorized hereunder and the taxes
that would have been paid or payable had the
land been valued, assessed and taxed as other
land in the taxing district, in the current
tax year (the year of change in use) and in
such of the two tax years immediately
preceding, in which the land was valued,
assessed and taxed herein provided.
[Emphasis added.]
The FA-Act regulations mirror the Constitution and statute
for the roll-back taxes. The regulations provide: "When land that
is in agricultural or horticultural use and is being assessed
under the Act is applied to a use other than agricultural or
horticultural, . . . it is subject to additional taxes, referred
to as roll-back taxes." N.J.A.C. 18:15-7.1. (Emphasis added).
Further, "[l]and acquired by the State[] [or] a local government
unit . . . for recreation and conservation purposes will not be
subject to roll-back taxes." N.J.A.C. 18:15-7.2(b). The relevant
time period here is 2008-2010.
As framed by Judge Sundar, the Turnpike Authority "argues
that it meets all the three requirements of N.J.S.A. 54:4-23.8 for
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a roll-back tax exemption because (i) it is a 'local government
unit,' (ii) which acquired property, (iii) for 'conservation and
recreation' purposes." New Jersey Turnpike Authority v. Tp. of
Monroe, supra, 28 N.J. Tax at 144. Judge Sundar held the Turnpike
Authority was not a "local government unit" as defined in N.J.S.A.
13:8C-3.
An appellate court accords a highly deferential standard of
review to tax court decisions. Brown v. Borough of Glen Rock, 19
N.J. Tax 366, 375 (App. Div.), certif. denied, 168 N.J. 291 (2001).
An appellate court will not disturb a tax court's findings "unless
they are plainly arbitrary or there is a lack of substantial
evidence to support them" because "[t]he judges presiding in
the Tax Court have special expertise." Glenpointe Assoc. v. Twp.
of Teaneck, 241 N.J. Super. 37, 46 (App. Div.), certif. denied, 122
N.J. 391 (1990). See Ford Motor Co. v. Twp. of Edison, 12 N.J.
Tax 244, 247 (App. Div. 1990) (applying a substantial-evidence
standard of review to a tax court decision), aff'd, 127 N.J. 290(1992).
Although an appellate court defers to a tax court's valuation
decisions, it will review de novo a tax court's legal
decisions. Toll Bros. v. Twp. of W. Windsor, 173 N.J. 502, 549
(2002). See Manalapan Realty v. Twp. Comm. of Manalapan, 140 N.J.
366, 378 (1995) (stating a "trial court's interpretation of the
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law and the legal consequences that flow from established facts
are not entitled to any special deference"). Even on de novo
review, Judge Sundar properly interpreted "the State" under
N.J.S.A. 54:4-23.8 to exclude plaintiff because her holding
accords with: (1) the relevant case law and (2) the roll-back
exemption's history. In this light, we discern no legal basis to
disagree with Judge Sundar's well-reasoned opinion. We add only
the following brief comments.
It is well-settled that courts should consider together
"[s]tatutes which deal with the same subject matter and address
the same legislative purpose[.]" Twp. of S. Brunswick v. State
Agric. Dev. Comm., 352 N.J. Super. 361, 365 (App. Div. 2002)
(citing Brown v. Twp. of Old Bridge, 319 N.J. Super. 476, 498
(App. Div.), certif. denied, 162 N.J. 131 (1999)). This rule of
statutory construction "most obviously applies when the statutes
in question were enacted during the same session or went into
effect at the same time, . . . or where they make specific reference
to one another[.]" Brown, supra, 319 N.J. Super. at 498 (citing
Mimkon v. Ford, 66 N.J. 426, 433 (1975)). It "derives from the
reasonable presumption that legislators are aware of relevant
prior legislation." Id.N.J.S.A. 54:4-23.8 must be analyzed in conjunction with the
Garden State Preservations Trust (GSPTA) because: (1) the
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Legislature both amended N.J.S.A. 54:4-23.8 and passed the GSPTA
pursuant to P.L. 1999, c. 152; (2) N.J.S.A. 54:4-23.8 expressly
incorporates by reference the GSPTA's definitions provision,
N.J.S.A. 13:8C-3; and (3) both statutes deal with roll-back tax
exemptions. N.J.S.A. 54:4-23.8; N.J.S.A. 13:8C-29 (citing
N.J.S.A. 54:4-3.6).
In 1999, the Legislature passed the GSPTA to "acqui[re] and
preserv[e] [] open space, farmland, and historic properties in New
Jersey[.]" N.J.S.A. 13:8C-2. The GSPTA created a Trust, "a public
body corporate and politic" located "in but not of the Department
of the Treasury[,]" to issue bonds that would help fund land
preservation. N.J.S.A. 13:8C-4a; N.J.S.A. 13:8C-7(a). The Trust
partially or fully funds "projects undertaken" by the DEP and
"grant or loan recipients." N.J.S.A. 13:8C-5(a). These projects
include "all things deemed necessary or useful and convenient in
connection with the acquisition or development of lands for
recreation and conservation purposes, the acquisition of
development easements or fee simple titles to farmland, or the
preservation of historic properties, as the case may be."
N.J.S.A. 13:8C-3.
When the State or a qualifying tax-exempt non-profit
organization acquires lands "in fee simple for recreation and
conservation purposes that become certified exempt from property
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taxes" under the GSPTA or other similar laws, the State must pay
the municipalities a fee in lieu of taxes because "municipalities
may not suffer a loss of taxes" from the land acquisition.
N.J.S.A. 13:8C-29a(1)(a). See also N.J.S.A. 13:8C-30a (stating
same for non-constitutionally dedicated money). "[L]ands owned
in fee simple by the State for recreation and conservation
purposes" refer to "State parks and forests . . . State wildlife
management areas, and any other lands owned in fee simple by the
State and administered by the [DEP] for recreation and conservation
purposes." N.J.S.A. 13:8C-29(e); N.J.S.A. 13:8C-30(e).
Here, plaintiff purchased farmland located in the Township
of Monroe to satisfy its mitigation obligations, but failed to pay
roll-back taxes when it gave the land to the DEP. The GSPTA's
compensation provision does not let plaintiff use tax exemptions
reserved for "the State" under the GSPTA or N.J.S.A. 54:4-23.8
because plaintiff cannot force New Jersey to pay a fee in lieu of
taxes, a necessary condition for using the roll-back tax exemption.
The Legislature expressly required that plaintiff pay its own
debts when it prevented plaintiff from "incur[ring] indebtedness
or liability on behalf of or payable by the State or any political
subdivision thereof." N.J.S.A. 27:23-2. If plaintiff cannot
compel the State to pay the fee in lieu of taxes, it is highly
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improbable that it qualifies for a roll-back tax exemption reserved
for "the State."
If the Legislature intended to include plaintiff within the
definition of "the State" under N.J.S.A. 54:4-23.8, it could have
done so when it amended the FA-Act in 1999. The Legislature
constructively knew that this court and our Supreme Court did not
view plaintiff as "the State" for tax exemption or other purposes,
but it did not identify plaintiff as "the State." See Johnson v.
Scaccetti, 192 N.J. 256, 276 (2007) (quoting DiProspero v. Penn,
183 N.J. 477 (2005)) (stating "the Legislature 'is presumed to be
aware of judicial construction of its enactments.'"). Thus, we
may infer that the Legislature did not expand the definition to
include plaintiff when it amended the statute in 1999.
See Quaremba v. Allan, 67 N.J. 1, 14 (1975) (quoting In re Keogh-
Dwyer, 45 N.J. 117, 120 (1965)) (stating that the "'continued use
of the same language or [a] failure to amend the statute[] is
evidence that [a judicial] construction is in accord with the
legislative intent'").
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We thus affirm Judge Sundar's order granting summary judgment
in favor of the Township of Monroe.1
Affirmed.
1
We need not consider if plaintiff meets the definition of a
"local government unit" under N.J.S.A. 54:4-23.8 and qualifies for
a roll-back tax exemption because plaintiff failed to address or
brief these issues on appeal. See N.J. Dep't of Envtl. Prot. v.
Alloway Twp., 438 N.J. Super. 501, 505-06 n.2 (App. Div.), certif.
denied, 222 N.J. 17 (2015).
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