**-1- NOT FOR PUBLICATION WITHOUT APPROVAL OF**  **THE TAX COURT COMMITTEE ON OPINIONS**

**------------------------------------------------------x FREDA, JOSEPH G. BY ACME AS**  **: TENANT**  **, : TAX COURT OF NEW JERSEY** 

**: DOCKET NO:**  **0 06381** 

**- 2023**  **Plaintiff, :**  **:**

**v. :**  **: CITY OF SEA ISLE CITY**  **, : :** 

**Defendant. :**  **: ------------------------------------------------------x** 

**Decided: March 5**  **, 202 4.**  **Pablo M. Kim for plaintiff**  **( Heinze**  **Law , P**  **A)**

**. Paul J.**  **Baldini for defendant**  **( Paul J. Baldini, P**  **A). CIMINO, J.T.C.**  **An unpaid municipal charge prevents a tax appeal from going forward. Municipal charge is a term of art defined by our Legislature.**  **Since neither the non**

  ** residential development fee nor the planning board escrow fees constitute a** **municipal charge in this case, nonpayment cannot bar this**  **tax appeal. Defendant,**  **City of Sea Isle City (the City), is on a barrier island adjoining the**  **Atlantic Ocean in Cape May County. The plaintiff, Acme, is a tena**  **nt of a property**  **designated as Block 61.03, Lot 20.01 on the City’s tax map. Acme operates**  **a new**  **Approved for Publication In the New Jersey**  **Tax Court Reports -2-** 

**supermarket on the site. Joseph G. Freda owns the parcel. The**  **C ity issue**  **d a**  **temporary certificate of occupancy to Freda in 2019. Freda still owes the**  **C ity a non** 

**** **residential development fee amounting to**  **$117,154.50 and planning**  **board escrow**  **fees amounting to $16,162.64.**  **The non**

**- residential development fee fund**  **s low**  **- and**  **moderate- income housing. N.J.S.A.**  **40:55D**

**- 8.**  **2**
**. The e**  **scrow fees are for professional services incurred by a municipality in reviewing applications for**  **development and for site inspections . N.J.S.A.**  **40:55D**

**- 53.1.**  **T he**  **C ity**  **s eeks**  **dismissal of Acme’s appeal**  **since the fees have not been paid. 1**  **“A taxpayer who shall file an appeal from an assessment against him shall pay to the collector of the taxing district no less than the total of all taxes and municipal charges**  **due . . . .” N.J.S.A. 54:3** 

**- 27**  **; L.**  **1991, c.**  **75, § 30. The City asserts the fees**  **constitute municipal charges.**  **Acme disagrees and asserts**  **the appeal can go forward. The City**  **essentially urges this court to construe**  **“ municipal charge**  **” as a**  **generic term encompass**  **ing a b**  **road array of municipal monetary impositions** 

**. However,**  **“municipal charge” is a term of art used widely in the tax statutes. Chapters 4 and 5 of Title 54, the taxation title,**  **contain a comprehensive scheme for the collection of local property impositions**  **and mention “taxes,**  **assessments and**

**1 Apparently, Acme is responsible for the payment of the property taxes.**  **If paying the taxes, a** 

**t enant**  **can file**  **an ap**  **peal. See**  **Prime Acct. Dep’t v. Township of Carneys**  **Point ,**  **212 N.J. 493, 506**

**- 07 (2013)** 

**. -3-** 

**other municipal cha**  **rges ”**  **more than t**  **hirty times.**  **2 See**  **N.J.S.A. 54:4** 

**- 67,** 

**- 70,** 

**- 99,**  **-1 00,** 

**- 101**  **, -**  **110 ,**  **- 114,** 

**- 117,** 

**- 119**  **, -**  **120 ;**  **N.J.S.A. 54:5**

**- 21,** 

**- 39,** 

**- 45.1,** 

**- 45.4,** 

**- 46,** 

**- 46.1,** 

**- 53.1,** 

**- 54,** 

**- 111.1,** 

**- 122.**  **These ch apters were originally part of a series of**  **laws on municipal finance**  **reform enacted from 1916 through 1918 based upon the work of the**  **Pierson Commission**

**. 3**  **L. 19**  **1 8,**  **c. 236, 237.**  **One of the original**  **enactment s**  **from 1918, which later became**  **C hapter 5**  **, is**  **entitled “[a]n Act**  **concerning unpaid taxes, assessments and other municipal charges . . . .”**  **L. 1918,** 
**c. 237.**  **Th is**  **enactment mentions “municipal charge” seven more times.**  **See L.**  **1918, c.**  **2 37, §§**  **8 , 17,**  **32 , 3**  **3 , 53, 62.**  **T wo**  **later adopted sections define “**  **municipal charge**  **s” as**  **“ taxes**  **, assessment**  **s and**  **other municipal charge**  **s . . . .**  **” N.J.S.A. 54:4** 

**- 110,** 

**- 120**  **; L.**  **1936, c.**  **268, § 4;**  **L. 1937,**  **c. 97, §**  **7. From t**  **he foregoing , t**  **hree types of municipal charges**  **are discerned ,**  **namely, (1) taxes, (2) assessments, and (3) other**  **municipal charges.**

**2 The statutes have slight variations including**  **using “or” instead of “and”**  **; the**  **singular instead of**  **the plural**  **; and “assessment**  **s for benefits” instead of assessment**  **s.**
**3 The Pierson Commission formally known as the Commission for the**  **S urvey of**  **M unicipal**  **F inancing “reduced the incomprehensible clutter of preexisting laws to a**  **few simple yet comprehensive statutes**

**. . . .**  **” E**  **dward L . Suffern**  **, Municipal**  **Accounting in New J ersey**  **, 33 J. Acct. 321, 322 (1922). The laws enacted covered**  **local auditing, budgeting, bonding, accounting, taxation and tax sales. See**  **A rthur**  **N . Pierson, Analysis of the Laws Affecting Municipal and County Finances and**  **Taxation 6-**  **7 (1918). The work of the commi**  **ssion is still relevant.**  **In re Ordinance 2354** 

**- 12 of the Twp.**  **of W**

**. Orange**  **, 223 N.J. 589, 599**

**- 600 (2015) (discussing**  **Pierson bond law). -4-** 

**T he**  **three types of municipal charges give rise to**  **liens that**  **can be satisfied**  **through tax sale. For taxes**  **, the lien is**  **continuous**

**. N.J.S.A.**  **54:5**

**- 6.**  **For assessments, the lien**  **generally arises**  **after authorization**  **of the improvements** 

**. N.J.S.A.**  **54:5 -7.**  **For other**  **municipal charges, the lien attach es**  **as specified by law**

**. N.J.S.A.**  **54:5**

**- 8.**  **Each year, the tax collector prepares a list of “all taxes, assessments and other**  **municipal charges which were a lien at the close of the fiscal year.” N.J.S.A. 54:5**

**- 21.**  **The tax collector then**  **conducts a tax sale to satisfy the lien**  **s . N.J.S.A. 54:5** 

**- 31,** 

**- 32** 
**. Whether**  **a tax, assessment**  **, or other municipal charge**  **, the defining**  **characteristic is a lien**  **arises**

**. M**  **unic i**  **pal charge s constituting**  **“ other**  **municipal charges ”**  **can be found**  **in Titles 40**  **and 40A concerning municipalities.**  **The key to identifying a n**  **“ other**  **municipal charge ”**  **is whether a lien attaches to a governmental fee “on the respective**  **date[] fixed by law**  **.” N.J.S.A. 54:5**  **-8**
**. The Legislature is adept at identifying when**  **a lien attaches**

**. The statutes s**  **pecify over a dozen**  **types of “c**  **harges ”**  **becom ing** 

**“ liens.**  **” See,**  **e.g. ,**  **N.J.S.A. 40:14A** 

**- 21**  **(sewer); N.J.S.A.**  **40:14B**

**- 42**  **(water and sewer);**  **N.J.S.A. 40:48** 

**- 2.**  **1 2f (abatement of**  **nuisance); N.J.S.A. 40:48** 

**- 2.14 (**  **cleanup of lands**  **); N.J.S.A.**  **40:48**

**- 2.27 (cutting brush and hedges); N.J.S.A.**  **40:48**

**- 2.47**  **(snow removal); N.J.S.A. 40:48I**

**- 1 (cannabis establishment taxes)**  **; N.J.S.A. 40:62** 

**- 14**  **(light, heat and power); N.J.S.A.**  **40:64**

**- 8 (tree planting**  **); N.J.S.A.**  **40:65**

**- 12**  **(removal of grass, weeds, snow and ice );**  **N.J.S.A. 40:66**  **A- 18 (incinerator service);** **-5-**

**N.J.S.A. 40A:26A**

**- 12 (sewer)**  **; N.J.S.A. 40A:26B** 

**- 9 (stormwater); N.J.S.A.**  **40A:31**

**- 12 (water**  **); At times**  **the L**  **egislature does not**  **explicitly use the term “**  **charge ,”**  **but still**  **makes clear there is**  **a lien against the property. See**  **, e.g., N.J.S.A.**  **40:48**

**- 1(15)**  **(removal of dangerous building, wall or structure); N.J.S.A. 40:48** 

**- 1.1 (**  **building demolition); N.J.S.A.**  **40:48**

**- 2.5 (repairs to dilapidated building); N.J.S.A.**  **40:48**

**- 2.59 (graffiti removal)**  **; N.J.S.A. 40:62** 

**- 141 (water); N.J.S.A.**  **40:66**

**- 12 (street**  **cleaning and disposal of refuge). Finally, in one instance, a lien i s**  **inferred when unpaid**  **property registration fees**  **are municipal charge s**  **that can lead to a sale** 

**. N.J.S.A.**  **40:48**

**- 2.12s3**  **(d). The**  **imposition of a lien is the common thread**  **which differ**  **e ntiates**  **“ other**  **municipal charges ”**  **from fees. Previously, this court dealt**  **with the i**  **ssue of what constitutes a charge barring**  **a tax appeal in**  **Milltown Indus**

**. Sites v.**  **Borough of Milltown ,**  **12 N.J. Tax 581 (Tax 1992)**  **, aff’d o.b**  **., 15 N.J. Tax 144**  **(App. Div. 1993)**

**. T**  **he Milltown**  **taxpayer owed the**  **municipal ity**  **for electric**  **, water**  **, and sewer**  **service provided to the property** 

**. 12**  **N.J. Tax at 582.**  **This court emphasized the statutes specify**  **when unpaid u**  **tility charge**  **s became a lien**  **subject to tax sale**

**. Id.**  **at 587** 

**- 88.**  **Likewise, the**  **Tax Sale Law (**  **Chapter 5 of Title 54)**  **is read**  **in pari materia**  **with the provision barring an appeal**  **for unpaid municipal charges. Id.**  **at 588**

**- 89** 
**. Based upon the foregoing**  **, the**  **appeal was d**  **ismissed because the utility**  **costs a**  **re municipal**  **charges contemplated by the** **-6-**

**statute**
**. Id. a**  **t 590**
**. Notabl**  **y ,**  **Milltown dealt with**  **statute s**  **explicitly designat**  **ing the**  **unpaid utility costs**  **as an**  **unpaid “**  **charge ”**  **to which a “lien**  **” attached**  **against the property** 
**. T**  **h e statute barring tax appeals uses the term “municipal charge.”**  **N.J.S.A. 54:**  **3- 27.**  **The City cannot escape the well**

**- worn usage of the term.**  **“Judges cannot substitute their own views for terms of art the Legislature has chosen.” In re Plan**  **for Abolition of Council on**  **Affordable Hous**

**. , 214 N.J. 444, 467** 

**- 68 (2013).**  **“Where [the Legislature]**  **employs a term of art ‘**  **obviously transplanted from another legal source, it brings the old soil with it.**  **’ ”**  **George v. McDonough , 596 U.S. 740, 746**  **(2022) (quoting**  **Taggart v. Lorenzen, 587 U.S. ____, 139 S. Ct. 1795, 1801 (2019))**

**. “The point of the old** 

**- soil principle is that**  **‘ when [the Legislature] employs a t**  **erm of art,’**  **that usage itself suffices to ‘**  **adopt the cluster of idea s**  **that were attached to each borrowed word’ in the absence of indication to the contrary**  **.” George**  **, 596 U.S. at**  **753 (quoting FAA v. Cooper**  **, 566 U.S. 284, 292 (2012)). The old soil defining** 

**“ municipal charge**  **” goes back to 1918. Transplanted into the 1991 statute**  **b arring**  **tax appeals is the term “municipal charge” a long with the cluster of ideas attached**  **to it. See**  **N.J.S.A. 54:3**

**- 27** 
**. A municipal charge**  **is not merely a fee or imposition of**  **a municipality. It is part**  **of a statutorily specified class giving rise to a lien and**  **eventual sale of the property. -7-** 

**The mechanics of the non**

**- residential development fee illustrate**  **that f**  **ees are**  **not automatically considered**  **mun ic**  **ipal charges**

**. The non** 

**- residential development**  **fee “is imposed on all construction resulting in non**

**- residential development . . . .”**  **N.J.S.A. 40:55D** 

**- 8.4**  **(a) . Certain properties, such as churches, are exempt from the**  **fee. N.J.S.A.**  **40:55D**

**- 8.4**  **(b) . However, if the property ceases to be used for an**  **exempt purpose within three years of completion**  **, the “unpaid non**

**- residential**  **development fee s**  **. . . may be enforceable by the municipality as a lien against the real property of the ow**  **ner.” Ibid.**  **S o long as the property**  **is use d for**  **an exempt**  **purpose ,**  **it is just a fee . The loss of exempt**  **status gives rise to a lien**  **elevating the**  **fee to the status**  **of a municipal charge enforceable through sale of the property** 

**. Absent statutory authorization**  **c reating a lien**  **, t he City**  **cannot create a municipal**  **charge out of thin air. T**  **he Legislature a**  **llow s**  **municipalities to establish municipal**  **charges for a**  **variety of**  **services including**  **those already set forth above. See**  **infra pp**  **. 4-5. In the case**  **b efore the court, the non** 

**- residential development fee**  **does not constitute a municipal charge giving rise to a lien enforceable by sale of the**  **premises or**  **barring a tax appeal.**  **The City is not the first to invoke**  **e xtra** 
**- legislative steps to**  **enforce collection of monies owed to it. For example, in**  **Ocean Cnty . Bd.**  **of Realtors v. Borough of Beechwood**  **, 248 N.J. Super. 241 (Law Div. 1991),**  **a municipality refused to issue**  **zoning permits, building permits, and resale certificates of occupancy**  **without -8-** 

**payment of all taxes**  **, water and sewer charges . In**  **another case, Builders League of**  **South Jersey, Inc. v. Borough of Pine Hill, 286 N.J. Super. 348 (App. Div. 1996), a**  **municipa lity**  **would not issue a building permit without payment of**  **past**
**- due real**  **estate taxes. See also**  **Home Builders League of South Jersey, Inc. v. Township of Evesham**  **, 174 N.J. Super. 252 (Law Div. 1980) (same issue). T**  **he c**  **ourt s**  **held the**  **municipalities acted beyond their**  **statutory authority. Here, Sea Isle City attempts to**  **force payment of the fee by barring a tax appeal despite the lack of any statutory**  **authorization. The City cannot bar a tax appeal just because the fee ha s**  **not bee n**  **paid. The City is not without remed**  **i es**  **. The**  **Legislature provides an effective remedy to collect the fee** 

**. “The payment of non** 

**- residential development fees . . .**  **shall be made prior to the issuance of a certificate of occupancy for such development.**  **” N.J.S.A.**  **40:55D**

**- 8.4(d). To be sure, the Legislature made clear**  **“[a] final certificate of occupancy shall not be issued for any non** 

**- residential development**  **until such time as the fee imposed pursuant to this section has been paid by the developer.”**  **Ibid. In the**  **normal course, the owner needs the certificate of occupancy to open**  **for business or start collecting rents.**  **The Legislature created an economic**  **dynamic forcing the owner**  **to pay the fee to get the certificate of occupancy. That dynamic**  **topple s**  **when the property owner is able to use the property with**  **out a**  **final -9-** 

**certificate of occupancy. T**  **he incentive of the**  **property owner to pay substantially**  **diminishe s**  **. Acme has been operating for**  **several years under a temporary certificate of**  **occupancy. It is unclear whether this temporary certificate of occupancy is open**

  ** ended or** **repeatedly renewed**

**. While the owner may be taking advantage of the grace**  **of the City for**  **issuing the temporary certificate, it does not open the door to barring a tax appeal, a remedy not contemplated**  **n or permitted by the Legislature.**  **The viability**  **of other remedies ,**  **such as a suit for the fees or**  **revocation of the temporary certificate of occupancy**  **, is beyond the scope of thi**  **s action**

**. As to the planning board**  **escrow fees, the City is in the same predicament. A**  **municipality collects escrow fees**  **to cover**  **the professional fees it incurs**  **for application reviews and inspections. Flama Constr** 

**. Corp. v. Township of Franklin**  **, 201 N.J. Super. 498**  **, 505 (App. Div. 1985);**  **N.J.S.A. 40:55D** 

**- 8(b); N.J.S.A.**  **40:55D**

  ** 53.1. Nowhere does the statute mention escrow fees constitute a lien or** **charge. There is simply no municipal charge enforceable by tax sale**  **, or bar to**  **a tax appeal. Rather, the statute only speaks in terms of the obligations of the developer to satisfy**  **these escrow amounts. As with**  **the non**

**- residential**  **development fee , t**  **he Legislature create**  **d an**  **effective method of ensuring**  **payment of the escrow fees . I**  **n the normal course , the**  **fees are**  **paid “[i]n order for work to continue on the development or the application -10-** 

**. . . .”**  **N.J.S.A. 40:55D** 

**- 53.2(c). The municipality is also able to**  **require escrow fees**  **for insp ections as well. N.J.S.A.**  **40:55D**

**- 53(h).**  **“ [T]**  **he municipal engineer shall not perform any inspection if sufficient funds to pay for those inspections are not on**  **deposit.” Ibid.**  **In other words, if the escrow is not satisfied, the project stops.**  **Incomplete final site work is p art of the reason the City has not issued t**  **he final certificate of occupancy** 

**. It is unclear whether final site work is incomplete**  **because unpaid escrow fees are holding up inspections** 

**. As to the viability of another remedy, such as a suit seeking the fees or**  **recission of the temporary certificate of occupancy, that is beyond the sco pe of the**  **action here. The tenant wants to appeal. Tying the payment of the non** 

**- residential**  **development fee and escrow fee s**  **to a tax appeal is an extra**

**- legislative attempt by**  **the City**  **to recalibrate the dynamic established by the L**  **egislature. The law**  **strictly construe**  **s attempts to block an appeal** 

**. J&J Realty Co. v. Township of**  **Wayne , 22**  **N.J. Tax 157, 163 (Tax 2005) ;**  **See also**  **Great Adventure, Inc. v. Township of**  **Jackson , 10 N.J. Tax 230, 233 (App. Div. 1988);**  **M L Pla**  **insboro Ltd. P ’ship v.**  **Township of Plainsboro , 16 N.J. Tax 250, 257 (App. Div. 1997).**  **Acme wins nothing**  **here except the ability to have the tax assessment**  **adju sted**  **if necessary. With the automatic counterclaim,**  **this could result in an increase.**  **See Campbell Soup Co. v.**  **City of Camden, 16 N.J. Tax 219, 226**

**- 27 (Tax 199**  **6). -11-** 

**The court is not going to upset the balance between the municipality and the taxpayer established by the Legislature.**  **If the L egislature wanted the non** 

**- residential**  **development fee or planning board**  **escrow fees**  **to be municipal charge s**  **blocking a**  **tax appeal ,**  **it would have so specified. It did not. As to collecting the fees , t**  **he Ci**  **ty is left to its remedies**  **provided by law**

**. For the foregoing reasons, the court denies the City’s**  **motion**

**.**