Court Opinion

ID: 9900287
Source: CourtListenerOpinion
Date Created: 2023-11-18 22:08:37.436596+00
Date Added: 2024-06-11T09:21:03.574351
License: Public Domain

NOT FOR PUBLICATION WITHOUT APPROVAL OF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

------------------------------------------------------x
SENIOR CITIZENS UNITED                                :
COMMUNITY SERVICES, INC.,                             : DOCKET NO: 008789-2019
                                                      :                005999-20201
               Plaintiff,                             :
                                                      :
               v.                                     :      Approved for Publication
                                                      :         In the New Jersey
DIRECTOR, DIVISION OF TAXATION, :                              Tax Court Reports
                                                      :
               Defendant.                             :
                                                      :
------------------------------------------------------x

             Decided: July 1, 2021

             Dale W. Keith for plaintiff (Keith & Keith, LLC, attorneys).

             Jamie M. Zug for defendant (Gurbir S. Grewal, Attorney General of
             New Jersey, attorney).

CIMINO, J.T.C.

      Plaintiff, Senior Citizens United Community Services, Inc. (SCUCS) is a New

Jersey non-profit corporation providing special and rural transportation services

through contracts with New Jersey Transit and county governments. SCUCS seeks

a refund of the Motor Fuel Tax and the Petroleum Products Gross Receipt Tax paid

on fuel purchased to provide the transportation services. Defendant, Director of the

1
  A jurisdictional question has been raised for the refund period of January 2019
through July 2019. This decision does not address any refund for this period of time.
Division of Taxation (Director) denied the refund applications and the within action

ensued. For the reasons set forth in greater detail below, SCUCS is entitled to a

refund of the Motor Fuel Tax and Petroleum Products Gross Receipts Tax while

providing certain special or rural bus services.

                                          I.

                                          A.

      SCUCS, through contracts with New Jersey Transit and two counties,

provides special and rural transportation for senior citizens and the disabled.

Transportation is provided for employment, mall shopping, non-emergency medical,

nutrition site, personal business, sheltered workshop, shopping and special events.

      In some counties in New Jersey, the services are provided directly by the

counties. However, Burlington and Camden counties have opted for SCUCS to

provide these services. Funding for SCUCS’ services is provided through the state

Senior Citizen and Disabled Resident Transportation Assistance Act, L. 1983, c.

578, (codified as N.J.S.A. 27:25-25 to -34), federal formula grants for the enhanced

mobility of seniors and individuals with disabilities, 49 U.S.C. §5310, and federal

formula grants for rural area transportation, 49 U.S.C. § 5311.

      SCUCS entered one-year contracts with two local gas stations to purchase fuel

at retail with payments remitted monthly. In addition, SCUCS obtained a credit card

account with a third retail vendor. SCUCS sought refund of both the Motor Fuel

                                         -2-
Tax as well as the Petroleum Products Gross Receipts Tax. The Director denied the

refunds and SCUCS filed the instant appeals.

      SCUCS moves for summary judgment as to eligibility for the refunds. The

Director cross-moves for summary judgment. Our Supreme Court has indicated that

summary judgment provides a prompt, business-like and appropriate method of

disposing of litigation in which material facts are not in dispute. Brill v. Guardian

Life Ins. Co. of Am., 142 N.J. 520, 530 (1995). Since there are not any material

facts in dispute, the matter is ripe for summary judgment.

                                           B.

      “The judicial goal [when interpreting a statute] is to carry out fairly the

legislative purpose and plan, and history and contemporaneous construction may

well furnish important light as to that purpose and plan.” Bernhardt v. Alden Café,

374 N.J. Super. 271, 279 (App. Div. 2005). “Statutes cannot be read in a vacuum

void of relevant historical and policy considerations and related legislation.”

Borough of Matawan v. Monmouth Cnty. Bd. of Tax’n, 51 N.J. 291, 299 (1968).

Helfrich v. Township of Hamilton, 182 N.J. Super. 365, 370 (App. Div. 1981).

“Regardless of whether the language is plain or whether ambiguities cause us to seek

guidance from sources other than the words the Legislature has chosen, our primary

task is to effectuate the legislative intent in light of the language used and the objects

sought to be achieved.” Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 554 (2009).

                                           -3-
      The issue in this case is whether the transportation services provided by

SCUCS satisfy the statutory requirements for the exemption from taxes on the fuel

purchased. Both the Motor Fuel Tax and the Petroleum Products Gross Receipts

Tax provide that certain types of bus service are exempt from taxes. Both statutes

use the word “autobus.” The parties disagree over whether a definition of the word

“autobus” as found in Title 48 (Public Utilities) is incorporated into Title 54

(Taxation).

      The Director argues that to obtain the exemption, SCUCS must operate an

“autobus” as that term is defined in N.J.S.A. 48:4-1 of Title 48 (Public Utilities).

The Director further argues that the term “autobus” was amended in 1992 to

explicitly exclude “special paratransit vehicles” which are defined to include

vehicles used by a county special or rural bus service transporting senior citizens and

the disabled. ---
              See N.J.S.A. 48:4-1. The Director goes on to reason that since SCUCS

is providing paratransit services, it is not operating an autobus and thereby not

eligible for the exemption. The Director also argues that SCUCS is not providing

regular route service and is thereby not eligible.

      SCUCS argues that the definition of autobus found in N.J.S.A. 48:4-1 of Title

48 is not incorporated into Title 54. The purpose of the paratransit amendment is to

free organizations such as SCUCS from the costs associated with implementing

certain regulatory obligations sought to be imposed by the New Jersey Department

                                          -4-
of Transportation. The paratransit amendment is not intended to increase the costs

of providing special and rural bus service which would result from denial of the

exemption. Further, SCUCS is not required to operate regular route service to obtain

the exemption.

      The pertinent part of the current version of the exemption statute provides as

follows:

            Fuel used for the following purposes is exempt from the
            tax imposed by the “Motor Fuel Tax Act” . . . :

            [] Autobuses while being operated over the highways of
            this State in those municipalities to which the operator has
            paid a monthly franchise tax for the use of the streets
            therein under the provisions of R.S. 48:16-25 and
            autobuses while being operated over the highways of this
            State in a regular route bus operation as defined in R.S.
            48:4-1 and under operating authority conferred pursuant to
            R.S. 48:4-3, or while providing bus service under a
            contract with the New Jersey Transit Corporation or under
            a contract with a county for special or rural transportation
            bus service subject to the jurisdiction of the New Jersey
            Transit Corporation pursuant to P.L. 1979, c. 150 (C.
            27:25-1 et seq.), and autobuses providing commuter bus
            service which receive or discharge passengers in New
            Jersey. For the purpose of this paragraph “commuter bus
            service” means regularly scheduled passenger service
            provided by motor vehicles whether within or across the
            geographical boundaries of New Jersey and utilized by
            passengers using reduced fare, multiple ride or
            commutation tickets and shall not include charter bus
            operations for the transportation of enrolled children and
            adults referred to in subsection c. of R.S. 48:4-1 and
            “regular route service” does not mean a regular route in
            the nature of special bus operation or a casino bus
            operation,
                                        -5-
              [N.J.S.A. 54:39-112(a)(1).]

       On its face and without the valuable context provided by the legislative

history, the statute is confusing and not a model of clarity. The one sentence which

is central to the dispute is 112 words long and contains ten conjunctions including

three “ands,” four “ors” and three “whiles.” The parties have spent much time

arguing over the function of each conjunction in defining the exemptions. The

legislative history of this provision reveals that it did not start out this way, but rather

was the product of multiple amendments over more than a half-century. While the

task is tedious, only by walking through the legislative history starting with the

original motor fuel tax enactment in 1927, can the court fully appreciate the intent

of the Legislature.

                                            II.

                                            A.

       With growing use of motor vehicles and the need to improve the roads

traveled upon, New Jersey instituted a tax on motor fuels in 1927.2 L. 1927, c. 334,

§ 4 (tax), § 8 (revenues appropriated for construction and maintenance of state

2
  Initially the tax imposed was two cents on every gallon sold. Id. at § 4. Over the
years the tax has increased from two cents a gallon in 1927 to the current rate of 10.5
cents per gallon for gasoline. Compare L. 1927, c. 334, § 4, with L. 2010, c. 22, § 3
(codified as N.J.S.A. 54:39-103(a)(1)(a)).

                                            -6-
highways). Bus transportation was exempt so long as a municipal franchise tax of

five percent on gross receipts was paid. Id. at § 1. The franchise tax was established

some eleven years earlier in 1916 when the Legislature enacted the Kates’ Act which

allowed municipalities to regulate the rapidly growing popularity of bus

transportation. L. 1916, c. 136. Public Service Railway Co. v. General Omnibus

Co., 93 N.J.L. 344, 345 (Sup. Ct. 1919). See generally Ross D. Eckert and George

W. Hilton, The Jitneys, 15 J. of L. & Econ. 293 (1972).

      The Motor Fuel Tax underwent a comprehensive revision and was reenacted

in 1935. L. 1935, c. 319. The listing of exemptions was arranged in the form which

patterns the current statute. Id. at 1202. Shortly after the 1935 adoption, all of New

Jersey’s statutes were codified into the Revised Statutes (R.S.). L. 1937, c. 188. The

bus service exemption then specified:

             Any person who shall use any fuels . . . for any of the following
             purposes: . . .

             [] Autobuses while being operated over the highways of
             this state in those municipalities to which the operator has
             paid a monthly franchise tax for the use of the streets
             therein under the provisions of sections 48:4-14, 48:4-15
             and 48:4-16 or 48:16-25 of the title Public Utilities,

             [R.S. 54:39-66(b).]

      With the codification, the Legislature refined the general exemption for bus

transportation into two specific exemptions.       One exemption was for service

                                         -7-
primarily regulated by the State under Chapter 4 of Title 48; the other exemption

was for jitney bus service primarily regulated by municipalities under Chapter 16 of

Title 48. R.S. 54:39-66(b) (1937). Both exemptions required payment of the

municipal franchise tax to qualify for the exemption. The bus service exemptions

remained unchanged until 1972. Compare R.S. 54:39-66(b) (1937) with N.J.S.A.

54:39-66(1)(b) (1971) (repealed and replaced with N.J.S.A. 54:39-112(a)(1)).3

      By 1972, the Legislature was facing a different challenge. With the rise of

private automobile transportation, bus service in New Jersey was in dire straits.

Continental Trailways, Inc. v. Dir., Div. of Tax’n, 102 N.J. 526, 533 (1986). To

encourage public bus transportation, the Legislature eliminated the municipal

franchise tax for certain regular route bus service. Ibid. L. 1972, c. 211, § 5. See

also Trailways, Inc. v. City of Atlantic City, 179 N.J. Super. 258, 270 (Law Div.

1980) (discussing legislative history). The statute, as amended, then read as follows:

             Any person . . . who shall use any fuels . . . for any of the
             following purposes: . . .

             autobuses while being operated over the highways of this
             State in those municipalities to which the operator has paid
             a monthly franchise tax for the use of the streets therein
             under the provisions of R.S. 48:16-25 of the Title Public

3
  A rewrite of the motor fuel tax provisions in 2010 sought to increase compliance
by streamlining collection of the tax. A. Budget Comm. Statement to A. 3014 (Jan.
24, 2010). The laundry list of exemptions originally provided in N.J.S.A. 54:39-66
was re-codified as N.J.S.A. 54:39-112. L. 2010, c. 22, §12 (N.J.S.A. 54:39-112), §
56 (repeal of N.J.S.A. 54:39-66) (Technical corrections L. 2010, c. 79, §§ 11, 57).

                                          -8-
             Utilities, and autobuses while being operated over the
             highways of this State to provide regular route passenger
             service under operating authority conferred pursuant to
             R.S. 48:4-3.
             [L. 1972, c. 211, § 3.]
        This was the established form of the bus service exemptions until an

amendment in 1985 which added the exemption for special or rural bus services.4

                                          B.

      Concurrent with the efforts of the Legislature to increase bus transportation,

there was also a legislative push by Congress in the 1970s to ensure the greater

availability of bus service for certain individuals. Congress authorized funds to

provide grants to support special transportation for senior citizens and the disabled,

as well as grants to enhance rural transportation.5 6

4
  There were slight changes in 1975 and 1983. L. 1975, c. 314, § 2. L. 1983, c.
264, § 5. Neither of these changes is material.
5
  Congress enacted the Federal-Aid Highway Act of 1973, Pub. L. No. 93-87, 87
Stat. 250, amending section 16(b) of the Urban Mass Transportation Act of 1964 “to
make grants and loans . . . providing transportation services meeting the special
needs of elderly and handicapped persons . . .” Federal-Aid Highway Act, § 301(g),
87 Stat. at 295-96 (codified as 49 U.S.C. § 1612(b) (repealed 1994)) (emphasis
added). The section was later revised and recodified and now reads “[t]he Secretary
may make grants . . . for . . . public transportation projects . . . to meet the special
needs of seniors and individuals with disabilities . . . .” 49 U.S.C. § 5310(b)(1)(A)
(emphasis added).
6
   Congress added section 18 to the Urban Mass Transportation Act in 1978 to
provide “grants for the initiation, improvement, or continuation of intercity bus
service for residents of rural areas . . .” Federal Public Transportation Act of 1978,
Pub. L. No. 95-599, § 323, 92 Stat. 2689, 2754-55 (codified as 49 U.S.C. § 1618
                                          -9-
      In 1979, the Governor’s Task Force on Transportation Services for Elderly

and Handicapped Persons issued a report recommending that the State take a lead

role in coordinating social service and paratransit operations, and that each county

have a transportation coordination office. Governor’s Task Force on Transportation

Services for Elderly and Handicapped Persons, Coordinating Specialized

Transportation Services in New Jersey 3 (1979). This role included coordinating the

funding received from the federal government for both special and rural

transportation services. Id. at 8. The people of New Jersey approved an amendment

to the Constitution in 1980 to expand the use of Atlantic City gambling tax revenues

to provide “additional or expanded health services or benefits or transportation

services or benefits to eligible senior citizens and disabled residents . . . .” N.J.

Const. art. IV, § 7, ¶ 2D.

      Having both federal and state funding, the Legislature enacted the Senior

Citizen and Disabled Resident Transportation Assistance Act. L. 1983, c. 578. The

Legislature required New Jersey Transit establish and administer the Senior Citizen

and Disabled Resident Transportation Assistance Program. N.J.S.A. 27:25-28(a).

New Jersey Transit Corporation had been established in 1979 as a statewide public

(repealed 1994)) (emphasis added). The section was later revised and recodified and
now reads “the Secretary may award grants . . . in rural areas for” various types of
public transportation projects. 49 U.S.C. § 5311(b)(1) (emphasis added). To
summarize, with the 1973 and 1978 enactments, the federal government took an
active role in providing assistance for special and rural transportation.
                                        -10-
transit system, owning, operating and funding various modes of transportation. L.

1979, c. 150, N.J.S.A. 27:25-1 to 27:25-24.

      The policies of the program include “assist[ing] counties to develop and

provide accessible feeder transportation service to accessible fixed-route

transportation services . . . and accessible local transit service to senior citizens and

the disabled, [including] door-to-door service, fixed route service, local fare subsidy

and user-side subsidy . . . .” N.J.S.A. 27:25-28(a). To receive funding for the

program, a county must develop a county plan for assistance in accordance with

program guidelines. N.J.S.A. 27:25-30. Funds from the Casino Revenue Fund are

appropriated to support the program. N.J.S.A. 27:25-28(b). The law did not specify

if, and how, the counties could have third party providers operate the programs.

                                           C.

      If there was any doubt whether the Legislature intended to have third parties

operate county senior and disabled transportation programs, that was cleared up by

S. 131 (1984) which became L. 1985, c. 207 (Chapter 207). S. 131 provided that

third party operators would be exempt from the Motor Fuel Tax while providing

service “under a contract with the New Jersey Transit Corporation or under a

contract with a county for special or rural transportation bus service subject to the

jurisdiction of the New Jersey Transit Corporation . . . .” See L. 1985, c. 207, § 2.

S. 131 was pre-filed in early January 1984, for consideration in the next Legislative

                                          -11-
session which began January 10, 1984. Shortly after S. 131 was pre-filed, the Senior

Citizens and Disabled Resident Transportation Assistance Act was signed into law

on January 17, 1984. L. 1983, c. 578.

      If there was no intent to have third party operators of the program, S. 131

would not have been necessary since the counties as governmental entities were

already exempt from the motor fuel tax. N.J.S.A. 54:39-65 (repealed and replaced

with N.J.S.A. 54:39-112(b)(3)). S. 131 became Chapter 207 when it was signed into

law by the Governor on June 27, 1985.7 L. 1985, c. 207. Overall, Chapter 207 works

in tandem with the Senior Citizens and Disabled Resident Transportation Assistance

Act to enable a county to utilize a third-party provider and still realize the economy

of providing the service without the additional expense of the Motor Fuel Tax.

                                         D.

      Chapter 207 not only added an exemption for special and rural transportation,

but also added an exemption for commuter bus service. With the doubling of

exemptions from two to four, the sentence defining the bus fuel tax exemptions also

doubled from 57 to 112 words, and the number of conjunctions increased as well.

7
  While S. 131 was still pending, regulations proposing procedures to implement
the already approved Senior Citizens and Disabled Resident Transportation
Assistance Act, including third party operation by entities such as SCUCS, were
proposed by New Jersey Transit on June 17, 1985. 17 N.J.R. 1532 (Jun. 17, 1985).
The regulations were effective October 7, 1985. 17 N.J.R. 2445 (Oct. 7, 1985).
                                        -12-
However, parsing this sentence into the four component exemptions plainly reveals

the intent of the Legislature.

        The first original exemption provides:

              Autobuses while being operated over the highways of this
              State in those municipalities to which the operator has paid
              a monthly franchise tax for the use of the streets therein
              under the provisions of R.S. 48:16-25

              [N.J.S.A. 54:39-66(1)(b) (repealed and replaced with
              N.J.S.A. 54:39-112(a)(1).]

This exemption covers what is known as jitney service which is limited to a single

municipality serving 13 or fewer passengers or four municipalities in certain

counties serving 20 or fewer passengers.         N.J.S.A. 48:16-23.     Jitney service

providers are required to pay a franchise tax of five percent of gross revenues to the

municipalities in which they operate, and the service is primarily regulated by the

municipality. N.J.S.A. 48:16-25.

        The second original exemption is for regular route bus service and was

specified at the time of adoption of Chapter 207 8 as:

              and autobuses while being operated over the highways of
              this State to provide regular route passenger service under
              operating authority pursuant to R.S. 48:4-3

              [L. 1985, c. 207, § 2.]

8
    This language of this exemption changed in 1987. See infra p. 22.

                                         -13-
Regular route service is generally defined as bus service on a regular route between

fixed termini. See N.J.S.A. 48:4-1. In addition, operating authority is required from

the State in the form of a certificate of public convenience and necessity. 9 10 11

N.J.S.A. 48:4-3.

9
  Initially the certificate was issued by the Board of Public Utilities. Regulation of
bus transportation was transferred from the Board of Public Utilities to the
Department of Transportation effective in 1979. Reorganization Plan for the Board
of Public Utilities and the Department of Transportation. Acts of the 1st Ann. Sess.
of the 198th Legis. 995 (1978). In 2007, the regulation of bus transportation was
transferred to the Motor Vehicle Commission. L. 2007, c. 13, § 1 (codified as
N.J.S.A. 48:4-3). New Jersey Transit does not require a certificate of public
convenience and necessity to operate a bus route. N.J.S.A. 27:25-8(b).
10
   Prior to 1973, both State and municipal consent for operation was required for
pick-up and drop-off in a municipality. In an apparent attempt to increase bus
service, the Legislature eliminated municipal consent. L. 1973, c. 158 § 11. N.J.S.A.
48:4-10 (repealed).
11
   Regulation of interstate bus service by the states is limited. Applying the dormant
Commerce Clause, the United State Supreme Court initially limited the reach of state
regulation to health and safety concerns under the dormant commerce clause. Buck
v. Kuykendall, 267 U.S. 307 (1925). Later, Congress, using its affirmative powers
to regulate interstate commerce, promulgated the Motor Carrier Act of 1935 placing
the jurisdiction of interstate bus transportation with the Interstate Commerce
Commission. Motor Carrier Act of 1935, 74 Pub. L. 498, 49 State. 543. Congress
later deregulated interstate bus transportation in 1982. Bus Regul. Reform Act of
1982, Pub. L. No. 97-261, 96 Stat. 1102. Besides significantly deregulating
interstate transportation, the act allowed the Interstate Commerce Commission (ICC)
to approve intrastate bus service in certain instances. 49 U.S.C. § 10922(c)
(repealed). See Funbus Systems, Inc. v. Cal. Pub. Util. Comm., 801 F.2d 1120,
1126-29 (9th Cir. 1986). However, a specific provision of the act allowed New Jersey
to regulate buses to Atlantic City casinos. See Hudson Transit Lines, Inc. v.
Interstate Commerce Comm’n, 765 F.2d 329, 342-43 (2d Cir. 1985) (citing 49
U.S.C. § 10922(c)(2)(H)) (repealed). There were complaints that this carve-out was
ignored by the ICC. Oversight of the Bus Regul. Reform Act of 1982, Hearing
                                        -14-
      With the expanding policy goals of the Legislature to support bus

transportation, the 1985 enactment of Chapter 207 replaced the period at the end of

the aforesaid section with a comma, and then added two more exemptions. One

exemption is for special and rural transportation and the other is for commuter bus

service. The third exemption provided by Chapter 207, and addressing special or

rural transportation specifies:

             or while providing bus service under a contract with the
             New Jersey Transit Corporation or under a contract with a
             county for special or rural transportation bus service
             subject to the jurisdiction of the New Jersey Transit
             Corporation pursuant to P.L. 1979, Ch. 150, (C. 27:25-1
             et. seq.)

             [L. 1985, c. 207, § 2.]

      A discussion of how county special or rural transportation services subject to

the jurisdiction of New Jersey Transit Corporation came to be under the Senior

Before the S. Subcomm. on Surface Transp. of the Comm. on Com., Sci., & Transp.,
S. Hrg. 98-518, 98th Cong. 102 (1983). This carve-out was further clarified in 1987.
Federal Mass Transportation Act of 1987, Pub. L. No. 100-17, 101 Stat. 132, § 340
(amending 49 U.S.C. § 10922(c)(2)). Congress abolished the Interstate Commerce
Commission in 1995 and transferred most of its responsibilities to the Secretary of
Transportation. ICC Termination Act of 1995, Pub. L. No. 104-88, 109 Stat. 803.
However, the Federal Motor Carrier Safety Administration was later established to
oversee safety regulation. Motor Carrier Safety Improvement Act of 1999, Pub. L.
No. 106-159, 113 Stat. 1748.
Needless to say, there was much activity involving the regulation of bus
transportation during the 1980s into the 1990s.
                                       -15-
Citizen and Disabled Transportation Assistance Act is addressed earlier in this

opinion.

      Chapter 207 then continues with a fourth exemption for commuter bus service

by indicating:

             and autobuses providing commuter bus service which
             receive or discharge passengers in New Jersey. For
             purposes of this paragraph “commuter bus service” means
             regular scheduled passenger bus service provided by
             motor vehicles whether within or across the geographical
             boundaries of New Jersey and utilized by passengers using
             reduced fare, multiple ride or commutation tickets and
             shall not include charter bus operations or special bus
             operations as defined in R.S. 48:4-1 or buses operated for
             the transportation of enrolled children and adults referred
             to in subsection c. of R.S 48:4-1,

             [L. 1985, c. 207, § 2.]

      Previously, only intrastate regular route service regulated by the State was

exempt per the second exemption set forth above. With Chapter 207, the exemption

is expanded to commuter bus service, regardless of whether intrastate or interstate

service. At the time of enactment, the Legislature was exploring ways to enhance

commuter bus service. Pub. Hearing Before the S. Transp. & Commc’ns Comm. on

Bus Transp. in N. J. 12, 37 (Mar. 19, 1984).

      To summarize, with the amendments provided by Chapter 207 in 1985, the

Legislature expanded the categories of motor fuel tax exemption for bus

transportation from two categories to four. The first category is the local jitney bus

                                        -16-
service. The second category is regular route intrastate bus service operating under

a certificate of public convenience and necessity issued by the State per N.J.S.A.

48:4-3. The third category is service under contract with New Jersey Transit or

service under contract with the county to provide special or rural transportation

subject to New Jersey Transit jurisdiction.12 The fourth category is commuter bus

service whether interstate or intrastate.13

                                              E.

       The Director asserts that the word “autobus” as taken from the second

category of exemption for regular route service is part of the third category defining

special or rural transportation services. Specifically, the Director argues that the

exemption for special or rural service applies to “autobuses . . . while providing bus

service . . . .”

       For starters, it is unclear whether the word “autobus” mentioned at the

beginning of the second exemption covering regular route service is incorporated

12
   The court is not determining and need not determine whether the provision is
actually two provisions, the first being for any type of service under contract with
New Jersey Transit, and the second being under contract with a county if providing
special or rural bus service under the jurisdiction of New Jersey Transit. Whether
treated as one exemption or two, the outcome under the facts of this case is the same.
13
   For completeness, there is a fifth category of exemption for bus transportation
provided by a governmental entity which is covered by a different provision.
N.J.S.A. 54:39-65 (repealed and replaced with N.J.S.A. 54:39-112(b)(3)). This
would encompass New Jersey Transit as a governmental agency. N.J.S.A. 27:25-
4(a). See also N.J.S.A. 27:25-16 (New Jersey Transit exempt from state taxes).
                                          -17-
into the third category exempting special and rural transportation services. If the

first two categories were excised from the statute, as well as the connecting “or” that

starts off the third category provided by Chapter 207, the third category would

simply indicate “while providing bus service under a contract with . . .” While

beginning an exemption with the word “while” can be construed as awkward, the

description of the special and rural transportation exemption is nevertheless

complete and makes sense. This construction would mark the swift end of the

Director’s argument.

      However, the ultimate goal is for the court to ensure that it is fulfilling the will

of the Legislature. To be assured, the third exemption must also be considered with

the incorporation of the word “autobus.” As more fully set forth below, even with

the incorporation of the word “autobus” into the third exemption, no definition of

“autobus” from Title 48 is incorporated.

      With the word “autobus” as part of the third exemption, the exemption goes

on to plainly describe with particularity the type of exemption-qualifying “bus

service” provided by an autobus. L. 1985, c. 207, § 2. N.J.S.A. 54:39-66(1)(b)

(repealed and replaced with N.J.S.A. 54:39-112(a)(1)). Pointedly, the exemption is

for bus service provided “under a contract with the New Jersey Transit Corporation

or under a contract with a county for special or rural transportation bus service

subject to the jurisdiction of the New Jersey Transit Corporation . . . .” Ibid. This

                                          -18-
third exemption focuses on the service provided, not the type of bus. The second

original exemption also focuses on the service provided, namely, regular route

service. This is also true for the first exemption, jitney service, as well as the fourth

exemption, commuter bus service. 14 Looking broadly at the current exemption

statute, it begins with “[f]uel used for the following purposes is exempt . . . .”

N.J.S.A. 54:39-112. The emphasis of the statute is on the service, not the vehicle.

      The legislative focus on the type of service is longstanding. Upon initial

codification in 1937, the Legislature declared the exemption applicable to autobuses

which paid the franchise tax per Title 48. It did not classify the type of bus, but

rather the bus service provided and whether the bus paid the franchise tax. R.S.

54:39-66 (1937). Even the 1935 version of the exemption statute, upon which the

1937 codification was based, does not define autobus, but rather defines the

exemption as those autobuses which pay the franchise tax. L. 1935, c. 319, § 1202.

Later, with the 1972 amendment limiting the application of the franchise tax, the

exemption still applied if the service was regular route. L. 1972, c. 211, § 3.

14
   While it certainly true that jitney bus service is limited by the number of
passengers, that is not dispositive for defining jitney service. For example, a smaller
bus with service covering more than four municipalities would not be considered as
providing jitney service, since jitney service is limited to no more than four
municipalities. N.J.S.A. 48:16-23.
                                          -19-
      The Director attempts to divorce the statutory language from the statutory

history to create an interpretation which is contrary to the intent of the Legislature

along with insisting that autobus is part of the definition defining the special and

rural transportation exemption. The Director wants to incorporate a definition of

autobus found in Title 48 into Title 54.         Specifically, the Director seeks to

incorporate the definition in N.J.S.A. 48:4-1. This is one of three definitions of

autobus found in Title 48. See N.J.S.A 48:4-2.20, 4-1, 16-23. The Director does not

explicitly posit a reason for picking this particular definition. It could be that the

definition in Chapter 4 of Title 48 deals with regular route bus service. However,

one of the other definitions of autobus, found at N.J.S.A. 48:4-2.20, also applies to

regular route service. SCUCS counters that the definitions of autobus found in Title

48 are not applicable.

      By its very definition, the term autobus in N.J.S.A. 48:4-1 is confined to

Chapter 4 of Title 48.15 N.J.S.A 48:4-1 (“The term ‘autobus’ as used in this chapter

means . . . .”) In adopting Chapter 207 in 1985, if the Legislature wanted to apply a

definition of autobus found in Title 48 to the third category of exemption, special or

rural transportation services, it could have easily done so. In fact, the Legislature in

15
    Likewise, for jitney service, the definition of autobus is set forth in N.J.S.A.
48:16-23. That definition indicates that it only applies to Article 3 of Chapter 16 of
Title 48 concerning jitneys. N.J.S.A. 48:16-23. The definition of autobus in N.J.S.A.
40:4-2.20 only applies to N.J.S.A. 48:4-2.20 to -2.25. L. 1983, c. 517.

                                         -20-
Chapter 207 did indicate when it wanted to incorporate definitions from N.J.S.A.

48:4-1. For the fourth exemption category, commuter bus service, which was also

adopted as part of Chapter 207, the Legislature specifically excepted charter bus

operations and special bus operations “as defined in R.S. 48:4-1” and school buses

“referred to in . . . R.S. 48:4-1” from the exemption. L. 1985, c. 207, § 2.

      To further clarify the plain words of the enactment, the legislative statements

accompanying Chapter 207 plainly indicate the desire to exempt “any bus carrier

under contract with New Jersey Transit or under contract with a county for special

or rural transportation subject to New Jersey Transit shall . . . be exempt [from the

excise tax]” and “carriers which receive the receive excise tax exemption . . . shall

be reimbursed and repaid the motor fuel tax paid.” 16             S. Revenue, Fin. &

Appropriations Comm. Statement to S. 131 (Feb. 14, 1985). See also A. Transp. &

Commc’ns Comm. Statement to S. 131 (Mar. 25, 1985); A. Revenue, Fin. &

Appropriations Comm. Statement to S. 131 (May 13, 1985). In addition, at the time

of signing, the governor’s office indicated the legislation “provides tax relief for . . .

bus service under contract to New Jersey Transit, by exempting these services from

. . . the Motor Fuels Tax.” Office of the Governor, News Release (June 28, 1985).

16
  Chapter 207 also eliminated the Excise Tax and the Motor Fuel Use Tax for
special and rural service and commuter service. L. 1985, c. 207, §§ 1, 3.
                                          -21-
To now claim the exemption does not apply would be contrary to both the plain

language as well the legislative history of the act.

      A 1987 amendment to the bus fuel tax exemption provision further

demonstrates that when the Legislature sought to include a Title 48 definition in the

fuel tax exemption provision, it did so explicitly. The legislature changed the second

original category of exemption to read:

             and autobuses while being operated over the highways of
             this State in a regular route bus operation as defined by
             R.S. 48:4-1 and under operating authority conferred
             pursuant to R.S. 48:4-3

             [L. 1987, c. 445, § 5]

The purpose of the change is to distinguish regular route service from casino, special

and charter operations.17 Previously, casino buses were regulated as regular route

service. A. Transp., Commc’ns & High Tech. Comm. Statement to S. 64 (Mar. 12,

1987). The committee felt “they are closer in most respects to special buses.” Ibid.

With the change “casino bus operations [would be] on the same basis as charter and

special operations with respect to taxes and fees. Buses in this new category would

no longer be exempt from the motor fuel tax [as regular route buses] . . . .” Ibid.

      The amendment refined the term “regular route passenger service” to now

read “regular route bus operation as defined by R.S. 48:4-1.” L. 1987, c. 445, § 5.

17
   There was an ongoing issue over between the State and Federal governments as
to regulation of Atlantic City casino bus traffic. See fn. 11, supra.
                                          -22-
Concurrently, a definition for “regular route bus operation” was added to N.J.S.A.

48:4-1. L. 1987, c. 445, § 1. Once again, when the Legislature sought to incorporate

a definition from Title 48, it did so explicitly. Moreover, if there is any doubt as to

the statutory language, the legislative history plainly reveals the change is aimed at

removing the fuel tax exemption from casino buses which were considered part of

the second category, not rural and special transportation in the third category.

      A 1992 amendment to the autobus definition of N.J.S.A. 48:4-1 is at the heart

of Director’s argument. The amendment excepts paratransit vehicles from the

definition of autobus found in N.J.S.A. 48:4-1. The origin of the amendment arises

from “[t]he D[epartment] o[f] T[ransportation] . . . notif[ying] county and non-profit

paratransit agencies that since donations are accepted by the agencies for their

services, they will be subject to the laws and regulations concerning autobuses.” 18

A. Transp. & Commc’n Comm. Statement to A. 1764 (Dec. 3, 1992). As regulated

autobuses, the “vehicles would require separate DOT vehicle inspections, omnibus

license plates and retrofitting of equipment not essential to the provision of

paratransit service. In addition, the vehicles would be subject to additional insurance

requirements from which New Jersey Transit buses are already exempted.” Ibid.

18
  It is not clear whether SCUCS was collecting donations at the time, however,
more recent documentation in the record indicates that SCUCS sought token
donations from patrons of its service.
                                         -23-
      At the end of 1992, a bill was sponsored to exclude special paratransit vehicles

from Department of Transportation (DOT) regulation. The bill excluded “special

paratransit vehicles” from the term autobus as defined by N.J.S.A. 48:4-1. A

“special paratransit vehicle” is defined as:

             any motor vehicle which is used exclusively for the
             transportation of persons who are at least 60 years of age
             or who have disabilities or who are the clients of social
             service agencies, provided, that the motor vehicle is used
             in a service provided by a county either directly or by
             contract, or provided by a non-profit organization, and the
             service is included by a county as part of its county plan
             required by section 6 of [the Senior Citizen and Disabled
             Resident Transportation Act], regardless of whether a fare
             is charged or donations accepted.

             [L. 1992, c. 192, § 2 (codified at N.J.S.A. 48:4-1).]

Importantly, the introductory phrase of N.J.S.A 48:4-1 which was reenacted as part

of the bill continued to indicate “[t]he term ‘autobus’ as used in this chapter means .

. .” Moreover, the sub-definition of “special paratransit vehicle” separately indicates

“as used in this chapter.” Thus, the definitions only apply to Chapter 4 of Title 48.

Limited by their own terms to a particular chapter in Title 48 (Public Utilities), it

would be quite a stretch for the definitions of autobus and special paratransit vehicle

to now reach into the motor fuel tax provisions of Title 54 (Taxation).

      Notably, the 1992 enactment also amends Title 17 (Insurance) to specifically

exempt buses providing paratransit services from certain insurance provisions. L.

1992, c. 192, § 1 (codified as N.J.S.A. 17:28-1.5). The definition of special

                                         -24-
paratransit vehicle from Title 48 is specifically incorporated into the relevant section

in Title 17. N.J.S.A. 17:28-1.5 (“Any special paratransit vehicle as defined in R.S.

48:4-1”). By comparison, no definition from Title 48, autobus, special paratransit

vehicle or otherwise, is incorporated into Title 54 as part of the 1992 enactment.

      Neither the express words of the 1992 enactment, nor anything in the

legislative history indicates an intent that this definitional change of autobus in

N.J.S.A. 48:4-1 is intended to apply to the motor fuel tax exemption in Title 54. The

clear legislative purpose of this act is to relieve the counties and third-party providers

of the financial expense that would flow from DOT regulation. There is not any

indication that the Legislature intends to impose the additional financial expense of

the Motor Fuel Tax.

                                           F.

      Over the years, the Legislature incorporated a number of terms from Title 48

into the Motor Fuel Tax exemption statute. These incorporated terms have included:

             franchise tax . . . under the provisions of . . . [N.J.S.A.]
             48:16-25. [L. 1937, c. 188.]

             franchise tax . . . under the provisions of [N.J.S.A.] 48:4-
             14, 48:14-15 and 48:14-16. [L. 1937, c. 188]

             operating authority conferred pursuant to [N.J.S.A.] 48:4-
             3. [L. 1972, c. 211, § 3.]

             charter bus operations or special bus operations as defined
             in [N.J.S.A.] 48:4-1. [L. 1985, c. 207, § 2.]

                                          -25-
             buses operated for the transportation of enrolled children
             and adults referred to in subsection c. of [N.J.S.A.] 48:4-
             1. [L. 1985, c. 207, § 2.]

             regular route bus operation as defined by [N.J.S.A.] 48:4-
             1. [L. 1987, c. 445, § 5.]

      At no time did the Legislature indicate any statutory definition of autobus

found in Title 48 is incorporated into the fuel tax exemptions. Rather, in the first

and second exemptions, jitney service and regular route service, the type of service

“being operated” is defined by statute, not a description of the bus (i.e. autobus)

providing the service. N.J.S.A. 54:39-112(a)(1). To now incorporate any statutory

definition of autobus from Title 48 (Public Utilities) into the fuel tax exemption

provisions of Title 54 (Taxation) is certainly not contemplated by the Legislature.

The Legislature could have simply stated “autobus as defined by N.J.S.A. 48:4-1.”

It did not. To now imply otherwise cuts against the expressed intent of the legislative

amendments over the years.

                                          G.

      The Motor Fuels Use Tax Act was also amended to include the exemptions

added by Chapter 207. L. 1985, c. 207, § 3. The use tax allows the State to capture

taxes on every gallon of fuel purchased outside the State, but used in the State.

N.J.S.A. 54:39A-3. Only users of statutory defined qualified vehicles are subject to

the use tax. N.J.S.A. 54:39A-2(b). New Jersey is a party to the International Fuel

Tax Agreement (IFTA) which includes the 48 contiguous states as well as 10
                                         -26-
Canadian provinces. May Trucking Co. v. Or. DOT, 388 F.3d 1261, 1263 (9th Cir.

2004). A user is required to periodically report to New Jersey the fuel used and

purchased in each participating jurisdiction and pay any outstanding tax due to any

state or province through one filing with New Jersey. N.J.S.A. 54:39A-4, -5, -6,

-24. N.J.A.C. 13:18-3.9. A user is entitled to a credit, if applicable, for fuel

purchased in one state or province and used in another, as well as fuel purchased and

used in the same state or province. N.J.S.A. 54:39A-8. N.J.A.C. 13:18-3.10. New

Jersey distributes the appropriate amounts of tax owed to each IFTA member

jurisdiction. N.J.S.A. 54:39A-29. See generally N.J.A.C. 13:18-3.1. For fuel used

in New Jersey, the Motor Fuel Use Tax is an amount equal to the sum of the Motor

Fuel Tax and the Petroleum Products Gross Receipts Tax. N.J.S.A. 54:39A-29(f).

      As to the Motor Fuels Use Tax Act, the special and rural exemption put in

place by Chapter 207 makes no mention of autobus. Instead, the exemption states:

             Exempt vehicle means . . . (6) [v]ehicles operated by a
             public utility as defined in R.S.48:2-13, or under a contract
             with the New Jersey Transit Corporation or under a
             contract with a county for special or rural transportation
             bus service subject to the jurisdiction of the New Jersey
             Transit Corporation pursuant to P.L.1979, c.150 (C.27:25-
             1 et seq.) whose operations are limited to the State of New
             Jersey, or vehicles providing commuter bus service which
             receive or discharge passengers in New Jersey.

             [N.J.S.A. 54:39A-2(c). L. 1985, c. 207, § 3.]

                                         -27-
      The Motor Fuel Tax exemption refers to “autobus” and the Motor Fuel Use

Tax refers to “vehicle.” It is readily apparent that the Legislature is seeking to

exempt the same type of bus service from fuel taxes. Specific to this case, special

or rural transportation services would be exempt from taxation whether imposed

directly at the pump through the Motor Fuel Tax and refunded, or excepted from the

apportionment reporting scheme required under the Motor Fuel Use Tax. The Motor

Fuel Use Tax is part of an integrated system to ensure that revenues representing the

Motor Fuel Tax and Petroleum Products Gross Receipts Tax are collected directly

at the pump or indirectly through the Motor Fuel Use Tax reporting requirements.

Neither the plain words of the statute, nor the legislative history, reveals that the

Legislature intends that the special and rural transportation fuel tax exemption

applies differently based upon the type of fuel tax at issue.

                                           H.

      Finally, the Director rearranges and reparses the conjunctions for an alternate

reading of the exemption as follows: “autobuses while being operated over the

highways of this state in regular route bus operation . . . while . . . under a contract

with a county for special or rural transportation bus service subject to the jurisdiction

of the New Jersey Transit Corporation . . .” The problem with this argument is that

special transportation service is not regular route service. Regular route service is

generally defined as transportation that occurs between fixed termini at regular

                                          -28-
times. See N.J.S.A. 48:4-1. Special transportation consists of picking up seniors

and taking them to doctor’s appointments and shopping which by its very nature is

not regular. "Legislative language must not, if reasonably avoidable, be found to be

inoperative, superfluous or meaningless." Spade v. Select Comfort Corp., 232 N.J.

504, 522 (2018) (quoting Carter v. Doe (In re N.J. Fireman's Ass'n Obligation), 230

N.J. 258, 274 (2017)). If the words “regular route” were part of the special

transportation services exemption, Chapter 207 would be rendered inoperative, at

least in part. In adopting Chapter 207, the Legislature certainly did not intend a

reading which would render Chapter 207 inoperative.

      The overarching goal is to implement the will of the Legislature. Based upon

the language of the statute as more fully illuminated by the legislative history,

SCUCS qualifies for the exemption from the Motor Fuel Tax while providing special

and rural transportation services.

                                        III.

                                        A.

      The parties also disagree whether SCUCS is entitled to a refund of the

Petroleum Products Gross Receipts Tax (PPGRT). The statute was amended at

various times to include certain exemptions and there is some disagreement as to

how the provisions are to be construed. The Director contends that the statute

requires SCUCS to have one-year fuel contracts and provide certain documentation

                                       -29-
to obtain any exemption and that SCUCS has not satisfied this requirement. SCUCS

disputes the Director’s interpretation of the law and the facts. With a number of

amendments over the years, the PPGRT is also not a model of clarity when read

without considering the impact of each amendment. However, parsing through the

legislative amendments plainly reveals that SCUCS is entitled to a refund of the

PPGRT on the same basis as the Motor Fuel Tax.

      In 1990, the Legislature enacted the PPGRT. N.J.S.A. 54:15B-1 to 54:15B-

8. L. 1990, c. 42. The tax is imposed on each company engaged in the refining or

distribution of petroleum products. L. 1990, c. 42, § 3. N.J.S.A. 54:15B-3. The

initial rate of the tax was 2.75% of gross receipts derived from the first sale of a

petroleum product in the state. Id. A later amendment provided that if the first sale

is motor fuel, the tax is converted to a cents per gallon rate which is adjusted

semiannually by the Director. L. 1991, c. 181, § 2. N.J.S.A. 54:15B-3. While the

tax is paid by the refiner or distributor, the effects of the tax may be certainly passed

on to buyers or others down the distribution chain.

      The law was amended in 1991 to exempt sales to the federal government from

the tax. L. 1991, c. 19, § 1. N.J.S.A. 54:15B-5. However, if the federal government

is not the first in-state purchaser (e.g. motor fuel purchased by the federal

government at the retail level), the federal government can seek reimbursement

equivalent to the amount of tax paid. L. 1991, c. 19, §3(a). N.J.S.A. 54:15B-10.

                                          -30-
The legislation provides the procedure to be followed for the federal government to

obtain the reimbursement. L. 1991, c. 19, 3(b), 3(c), 4. N.J.S.A. 54:15B-10(b),

-10(c), -11.

      The law was amended a second time in 1991 to exempt sales to non-profits

pursuant to a written contract extending one year or longer. L. 1991, c. 181, §1,

N.J.S.A. 54:15B-2. The amendment explicitly provides the seller must provide the

same type of documentation as provided for sales to the federal government. Ibid.

      The parties have gone back-and-forth primarily on the issue of whether

SCUCS has the type of one-year contract contemplated by the statute. SCUCS

asserts it purchased motor fuel from three different retail vendors on an as needed

basis under one-year or credit card contracts. The Director asserts that these are not

actually one-year contracts but merely accounts that are billed monthly and SCUCS

has not provided proof from the sellers as required under the provisions governing

reimbursement.     N.J.S.A. 54:15B-2, -10(b).      The court need not decside the

applicability or parameters of the non-profit exemption since a later amendment

provides a separate basis for relief to the taxpayer.

                                          B.

      In 2016, the PPGRT significantly increased as part of an effort to provide

funding for transportation infrastructure. S. Budget & Appropriations Comm.

Statement to A. 12 3 (July 29, 2016). For highway fuel, the rate went from 2.75%

                                         -31-
to a base rate of 12.85%.19 L. 2016, c. 57, § 14. N.J.S.A. 54:15B-3(a)(1). With this

increase in the tax, the Legislature exempts the same entities which are also exempt

from the Motor Fuel Tax. L. 2016, c. 57, §13, N.J.S.A. 54:15B-2.1(b). The language

for the Motor Fuel Tax exemption categories found at N.J.S.A. 54:39-112 (formerly

N.J.S.A. 54:39-66) is copied verbatim into the PPGRT. Ibid.

      The bus service exemptions, now part of PPGRT, are as follows:

            autobuses while being operated over the highways of this
            State in those municipalities to which the operator has paid
            a monthly franchise tax for the use of the streets therein
            under the provisions of R.S. 48:16-25 and autobuses while
            being operated over the highways of this State in a regular
            route bus operation as defined in R.S. 48:4-1 and under
            operating authority conferred pursuant to R.S. 48:4-3, or
            while providing bus service under a contract with the New
            Jersey Transit Corporation or under a contract with a
            county for special or rural transportation bus service
            subject to the jurisdiction of the New Jersey Transit
            Corporation pursuant to P.L. 1979, c. 150 (C. 27:25-1 et.
            seq.), and autobuses providing commuter bus service
            which receive or discharge passengers in New Jersey. For
            purposes of this paragraph “commuter bus service” means
            regularly scheduled passenger service provided by motor
            vehicles within or across the geographical boundaries of
            New Jersey and utilized by passengers using reduced fare,
            multiple ride, or commutation tickets and shall not include
            charter bus operations for the transportation of enrolled
            children and adults referred to in subsection c. of R.S.
            48:4-1 and “regular route service” does not mean regular
            route in the nature of special bus operation or casino bus
            operation.

19
  The rate is adjusted annually based upon prior revenues. N.J.S.A. 54:15B-3(c).
Other petroleum products increased to 7%. N.J.S.A. 54:15B-3(a)(1).
                                       -32-
             [N.J.S.A. 54:15B-2.1(b)(1)].

      Since this is the exact same language utilized in the Motor Fuel Tax Act, the

taxpayer qualifies for exemption from PPGRT in the same way it is exempt under

the Motor Fuel Tax. Obviously, when the Legislature uses the same exact exemption

language for a different tax on the same product, it is quite apparent that the

interpretation of the exemption language from the prior tax is applicable. See State

v. Fleischman, 189 N.J. 539, 552 (2007).

      The lead-in to the PPGRT exemptions provides that “a refund of the [PPGRT]

may be claimed by the consumer providing proof the tax has been paid and no refund

has been previously issued . . . .” N.J.S.A. 54:15B-2.1(b). This is identical to the

preface of the motor fuel tax exemption that provides “a refund of [the Motor Fuel

Tax] may be claimed by the consumer providing proof the tax has been paid and no

refund has been previously issued . . . .” N.J.S.A. 54:39-112(a). There is hardly any

dispute that the taxpayer here is the consumer of the highway fuel and qualifies under

the bus service exemption provisions. Identical refund language for the identical

commodity signals the legislative intention to implement a refund procedure based

upon the same standard and proofs. See Fleischman, 189 N.J. at 552. To suggest

otherwise would not be in keeping with the intent expressed by the Legislature

through the language it used.

                                        -33-
                                           IV.

      Overall, this case demonstrates the importance of reviewing the legislative

history, regardless of the complexity or the topics. Here, the complex areas of

taxation and public utilities regulation intersect. A full understanding of what the

Legislature sought to accomplish in this matter is impossible to discern without

reviewing the history and context of the legislative enactments in both areas of the

law. Upon a thorough review of both areas of the law and the legislative intent, the

court finds that the special and rural transportation services provided by SCUCS are

eligible for the Motor Fuel Tax and the Petroleum Products Gross Receipts Tax

exemption.

      For the foregoing reasons, SCUCS is eligible for a refund of the Motor Fuel

Tax and the Petroleum Products Gross Receipts Tax paid. An order will follow.

                                       -34-