SUNDAR, J.T.C.
This opinion partially decides the parties' respective summary judgment motions. Plaintiff ("Turnpike") contends that defendant's imposition of roll-back taxes on properties the Turnpike acquired for purposes of mitigating certain wetlands it was impacting due to a widening project is improper as a matter of law. It argues that it meets all the three requirements of N.J.S.A. 54:4-23.8 for a roll-back tax exemption because (i) it is a "local government unit," (ii) which acquired property, (iii) for "conservation and recreation" purposes.
Defendant ("Township") contends that the Turnpike does not fall within the language and intent of the statutory exemption from roll-back taxes because it is not a "local government unit" as defined by that statute. It also argues that the exemption should be guided by the purposes of the implementing legislation, the Garden State Preservation Trust Act ("GSPTA"), which does not extend the beneficial provision to lands acquired for mitigation purposes.
The court preliminarily finds that the Turnpike is not a "local government unit." Therefore, as to this issue, both parties' summary judgment motions are denied. However, since the roll-back
The Turnpike is established in the New Jersey Department of Transportation ("NJDOT"), as a "body corporate and politic with corporate succession." N.J.S.A. 27:23-3. It is "an instrumentality, exercising public and essential governmental functions." Its primary purposes is "to provide for the acquisition and construction of modern express highways" and in this regard "to acquire, construct, maintain, improve, manage, repair and operate transportation projects." N.J.S.A. 27:23-1. Those functions are "deemed ... to be an essential governmental function of the State." N.J.S.A. 27:23-3.
The Turnpike is currently involved in a project to widen and reconfigure a portion of the highway from interchange 6 to interchange 9 ("Project"). Because the Project would impact certain freshwater wetlands adjacent to the Turnpike and in the vicinity of the interchanges, the Turnpike obtained a permit from the New Jersey Department of Environmental Protection ("NJDEP") to be allowed to do so. The NJDEP approved a five-year permit in April 2009 pursuant to the Freshwater Wetlands Protection Act allowing the Turnpike to disturb about 119 acres of wetlands, State open waters, ditches, and shading impacts to regulated watercourses.
One of the several conditions of the permit was that the Turnpike mitigate for the permanent and temporary impact to certain wetlands and forested riparian zones. As part of the
Another ten-year permit was issued by the NJDEP in April 2010 for the Project's impact on flood hazard areas. It authorized further temporary and permanent disturbances to additional areas, which were grassed, herbaceous, and forested riparian zones. It also modified the 2009 permit to allow for temporary and permanent impacts to palustrine scrub-shrub, forested, and emergent freshwater wetlands. All conditions of the 2009 permit continued to be effective.
The "Brookland Mitigation Site" identified in the 2009 permit referred to lands owned by Brookland Company, G.P. This company owned contiguous Lots 6, 7, 10, 11 in Block 6, and Lots 1 and 2 in Block 7 ("Subject") measuring approximately 397.47 acres.
In April 2009, the Turnpike's real estate appraiser prepared an appraisal report for purposes of the Turnpike's proposed acquisition of the Subject. The report noted that the Subject was "vacant residential land" a majority of which was located in the Rural Residential-Farmland Preservation District zone which permitted development of single-family homes on six-acre lots. The area along the boundary lines was located in the Flood Hazard/ Conservation District which had restrictive development. Per the report, most of the Subject had "areas of woodlands [and] cleared grassland areas" with "mostly level to slightly varying topography" but was "encumbered with a variety of wetlands and wetland buffers." 115.9 acres of the Subject was uplands but with limited
On June 30, 2009, the Turnpike approved acquisition of the Subject to satisfy a portion of its mitigation obligations. The minutes of the meeting in this regard noted that the Subject comprising of vacant parcels totaling 397.47 acres, as well as two more parcels owned by two other owners (Block 6, Lot 8 and Lot 9 measuring 8.37 acres and 7.85 acres respectively) were identified "as acceptable for mitigation purposes" by the Turnpike's environmental consultant. The minutes also noted that none of these parcels (including the Subject) were "designated as `Preserved Farmland'" under the "Agriculture Development and Retention Act, N.J.S.A. 4:1C-11 et seq." Nor were they "designated or encumbered as Green Acres properties" under "N.J.S.A. 13:1D-52 et seq."
Thereafter, the Turnpike offered to donate the "Brookland Wetland Preservation Site" to the NJDEP as "appropriate compensation" for its wetlands and riparian mitigation obligations. An August 27, 2009 letter from the NJDEP issued to the New Jersey Wetlands Mitigation Council noted that the proposed donation of the Subject and Block 6, Lots 8 and 9 (not owned by Brookland Company), totaling 258 acres of which 146.5 acres were wetlands and 111.5 acres were upland, was "a part of a larger wetland mitigation proposal that includes the purchase of wetland mitigation bank credits and the creation and enhancement of wetlands." The NJDEP approved the proposed donation because the properties met the requirements of the applicable environmental regulations for conservation/preservation of wetlands under N.J.A.C. 7:7A-15.22.
For tax year 2010, the Subject was assessed as farmland qualified pursuant to the Farmland Assessment Act of 1964 (the "Act"). In response to the Township's interrogatories requesting information on the application for farmland assessment and details of agricultural, horticultural, or recreational activities conducted on the Subject, the Turnpike stated that qualification for farmland assessment was "not at issue;" any details of the activities on the Subject prior to its acquisition was within the knowledge of Brookland Company; nothing was done by the Turnpike on the Subject after its acquisition since it was purchased for mitigation purposes; and that "based upon information available in the public domain, it appear[ed]" that the Subject was "unimproved during" 2010 and the prior two tax years. It responded that it did not receive any income from sale of horticultural or agricultural products, or any payments from the soil conservation plan in
Although the parties do not dispute the Subject's prior assessments under the Act, there is no information on why the Subject qualified for the same during 2008 and 2009. The April 2009 appraisal report appears to indicate that for 2009, the Subject was farmland assessed, the assessed values being as follows:
Block Lot 6 6 $66,500 7 $ 700 10 $ 1,400 11 $82,700 7 1 $59,300 2 $20,200 Assessment
Following the Turnpike's purchase of the Subject, the Township's assessor filed a complaint with the Middlesex County Board of Taxation ("County Board") to impose roll-back taxes on the Subject for tax years 2008-2010.
On September 15, 2011, after a hearing, the County Board issued six judgments ordering roll-back assessments as follows:
Block Lot Tax Year 6 6 2010 S2,629,400 2009 S2,464,100 2008 S2,842,600 7 2010 $ 45,600 2009 $ 42,700 2011 $ 49,200 10 2010 $ 100,700 2009 $ 94,700 2008 $ 108,800 11 2010 $3,733,700 2009 $3,499,800 2008 $4,035,600 7 1 2010 $2,046,100 2009 $1,917,100 2008 $2,212,600 2 2010 $ 695,500 2009 $ 651,700 2008 $ 752,100 Assessment
The Turnpike filed a timely complaint with this court appealing the County Board's judgments. The only count being decided in this motion is whether the Subject is exempt from the roll-back pursuant to N.J.S.A. 54:4-23.8.
Summary judgment will be granted "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523, 666 A.2d 146 (1995).
The Turnpike here only maintains that a change in title or ownership does not trigger roll-back if the "new use is exempt." It argues that because it is a "local government unit" which acquired the Subject for conservation purpose, which purpose is the "new use," it is not liable for roll-back taxes because that "new
The imposition of roll-back taxes is authorized by our Constitution. Thus, "when land which has been valued" under the Act "is applied to a use other than for agriculture or horticulture" then it "shall be subject to additional taxes ... in the current year and in such of the tax years immediately preceding, not in excess of 2 such years in which the land was valued" under the Act. N.J. Const. Art. VIII, § I, ¶ 1.
The enabling statute, N.J.S.A. 54:4-23.8, reiterates the above mandate and provides that land "which is in agricultural or horticultural use and is being valued, assessed and taxed under the" Act, will be subject to roll-back taxes if it "is applied to a use other than agricultural or horticultural." Roll-back taxes apply "when a change in use of the land occurs, but not" due to a change in ownership, provided the new owner "continues the land in agricultural or horticultural use" pursuant to the Act. N.J.S.A. 54:4-23.15; N.J.A.C. 18:15-7.2(a).
In 1999, the GSPTA, L. 1999, c. 152, N.J.S.A. 13:8C-1 et seq. enacted detailed legislation intended to promote preservation and conservation of lands. The law was enacted in response to a 1998 constitutional amendment which authorized the dedication of $98 million per year and issuance of bonds of $1 billion, to fund the needs for "open space preservation, farmland preservation, recreation and park development, and historic preservation." Statement to Sen. 9 (May 10, 1999). The law created a Trust to issue
Thus, the GSPTA funds the costs (some or all) of the "projects undertaken" by, among others, the NJDEP, or by "grant or loan recipients." N.J.S.A. 13:8C-5(a). A "project" included "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.
For the GSPTA to apply to lands "acquired or developed by a local government unit ... for recreation and conservation purposes," either with State funds, or previously acquired or developed without State funds, the law requires public hearings and approval process before the unit can sell or change the use of such lands. See generally N.J.S.A. 13:8C-32(a); 8C-33; 8C-35. Such hearing and approval process also applies if the local government unit conveys such of its lands to the State or another local government unit. N.J.S.A. 13:8C-34. The GSPTA requires the NJDEP to maintain and provide a list of projects recommended for funding for acquisition or development of lands for recreation and conservation purposes. N.J.S.A. 13:8C-23(a)(1). Those recommendations are based on applications received from local government units. The Trust must biennially, after consulting the NJDEP, the SADC and the NJHT, report to the Legislature the total acreage for the entire State and for each county and municipality the "lands acquired for recreation and conversation purposes and of farmland preserved for farmland preservation purposes." N.J.S.A. 13:8C-25.
So that the "municipalities may not suffer a loss of taxes" when lands are acquired by the State or a qualifying tax-exempt non-profit entity "in fee simple for recreation and conservation purposes" under the GSPTA, the State or that entity must "make annual payments in lieu of taxes." N.J.S.A. 13:8C-29(a); 13:8C-30(a).
The provision claimed to be applicable here which provides for an exemption from the roll-back taxes is as follows:
In conjunction with and because of the above provision, the same legislation also amended the roll-back statute under the Act. Thus, N.J.S.A. 54:4-23.8 was amended to exempt roll-back taxes upon lands being assessed under the Act if it is "acquired by ... a State [or] local government unit ... for recreation and conservation purposes." See also N.J.A.C. 18:15-7.2(b) (same). Because N.J.S.A. 54:4-23.8 was amended in conjunction with and because of the GSPTA, it adopts and incorporates by reference, the GSPTA's definitions of the terms "acquired," "local government unit," and "recreation and conservation purposes" by noting that these terms "mean the same as [they] are defined" in N.J.S.A. 13:8C-3. See N.J.S.A. 54:4-23.8.
The GSPTA's definitions for "acquired," "local government unit," and "recreation and conservation purposes" are as follows:
The parties do not dispute that the Turnpike acquired the Subject. The parties are at odds as to (i) whether the clause in the definition of "local government unit" applies to the Turnpike; and (ii) whether the Turnpike's acquisition of the Subject for purposes of mitigation under the NJDEP laws qualifies as an acquisition "for recreation and conservation purposes" under the GSPTA. The court here only decides the first of the disputed issues.
The Turnpike claims that it fits within the generic definition of a "local government unit" contained in the first part of N.J.S.A. 13:8C-3, i.e., in the language before the clarifying clause, as an "authority or other entity of" the State. It maintains that the clause in the definition applies to a "separate category" of entities, which are those bodies that both acquire and develop land. The Turnpike notes that it only acquired the Subject, therefore the clause does not apply, which means that an analysis of the "primary purpose" tests in the clause is unnecessary. The Turnpike points out that its construction is reasonable because N.J.S.A. 54:4-23.8, the statute at issue here, requires only an acquisition of the lands to qualify for roll-back exemption.
The Township argues that the definition of a "local government unit" does not include "State agencies, authorities and other similar entities from" the exemption "unless the primary purpose of the agency or authority" is one of the listed activities in the definition. It maintains that the Turnpike is "concededly exclude[d]"
A review of the legislative history indicates that the law "would exempt the State, local government units, and nonprofit organizations from the payment of any farmland assessment roll-back tax in connection with any acquisition of land for open space or farmland preservation purposes." See Statement to S. 9, supra. Further, the clause beginning with "except" was intended to "clarify the definition of `local government unit.'" See Assembly Agricultural and Natural Resources Comm., Statement to Assembly No. 100000 (May 20, 1999). There is no other explanation as to why such a clarification was required.
Both parties are erroneous in their respective interpretations.
The Turnpike is established as a "body corporate and politic with corporate succession." N.J.S.A. 27:23-3. Its implementing statute treats is as an instrumentality of the State. It is recognized as "a duly created governmental agency of the State." Mayor of Elizabeth v. New Jersey Turnpike Auth. 7 N.J.Super. 540, 544, 72 A.2d 399 (Ch. Div.1950).
Thus, the Turnpike is not an agency or authority or other entity of a "county."
The parties moved for summary judgment on the Turnpike's ability to satisfy the three-prong criteria for a roll-back exemption, namely, whether (i) the Turnpike is a "local government unit," (ii) which acquired property, (iii) for "conservation and recreation" purposes. It is undisputed that the Turnpike acquired the Subject. Both parties agreed that the Turnpike as an authority of the State fits within the initial portion of the definition of a "local government unit" however, the court has decided that the Turnpike, an authority of the State, is not a "local government unit" even under the first portion of the definitional section of that term. Therefore, as to this issue, the court denies both parties' summary judgment motions.
However, the GSPTA and the Act provide a roll-back exemption to the State. Therefore, and before deciding the last criterion of the roll-back exemption requirement, namely, that the acquisition be for "conservation and recreation" purposes, the court directs the parties to brief the issue whether the Turnpike qualifies for roll-back exemption as the "State" under the GSPTA, and thus, under the Act.
The Turnpike should file a supplemental brief in this regard no later than March 31, 2014. The Township's reply brief will be due April 18, 2014. The parties need not re-brief the issue of whether Turnpike's acquisition of the Subject qualifies for exemption on grounds of "conservation and recreation" purposes. Oral argument on the supplemental briefs will be granted only if requested by the parties.
Upon consideration of the supplemental briefs, the court will thereafter issue its final decision.
The parties also included information about another Lot owned by Brookland Company identified as Lot 40, in Block 6 totaling about 11.775 acres over which the owner had created a conservation easement in favor of the Township by deed of March 27, 1986. The easement intended to preserve the land in its natural condition so it prohibited removal and destruction of the natural resources/condition and barred construction of any improvements. Though intended for public enjoyment, the easement did not permit public use or access. The conservation easement was binding upon the owner and its successors. This land was not included in the deed involving the purchase of the Subject by the Turnpike. The April 2009 real estate appraisal prepared for the Turnpike did not identify this or any easements when valuing the Subject for its acquisition.
In this connection, the Township claimed that the Turnpike was involved in development of the Subject as evident from a printout of the Turnpike's website of (i) a list of "Awarded Contracts," and (ii) a summary of "Construction Updates" which showed that the Turnpike had awarded a contract to a third-party sometime in August 2012 in connection with the "Brookland Mitigation Site." The Turnpike objected to the use of the document on grounds it was "not part of the motion record" because it was an electronic excerpt, when what is required is a complete certified copy of the actual contract. While the court can take judicial notice of a publicly bid and awarded contract by a public entity, it will not take judicial notice of, or rely upon, the contract description or the "construction updates" to the same since they are not legally cognizable without compliance with evidentiary rules.
