Court Opinion

ID: 9649736
Source: CourtListenerOpinion
Date Created: 2023-08-23 15:07:23.046813+00
Date Added: 2024-06-11T12:22:17.347466
License: Public Domain

*100Justice WALLACE, JR.,
concurring in part and dissenting in part.
Except for the portion that rejects a prospective tax exemption, I concur with the majority opinion. I agree with the New Jersey Turnpike Authority’s (Authority) position that the New Jersey Turnpike Authority Act (Merger Legislation or Act) created a new, prospective tax exemption that applies for all years after 2003.
As the majority notes, “[t]he Merger Legislation was prompted by Governor McGreevey’s concern that New Jersey was facing a ‘fiscal crisis.’ ” Ante at 95, 918 A.2d at 615. As a result, the Legislature amended the Highway Authority Act to include the PNC Bank Arts Center (Arts Center) in the definition of “[h]ighway project,” which is defined as “the acquisition, operation, improvement, management, repair, construction, ... and maintenance of the New Jersey Turnpike and of the Garden State Parkway, ... and of the Garden State Arts Center, as transferred to the authority.” L. 2003, c. 79, § 8 (codified as amended at N.J.S.A 27:23 — Í). The Legislature also amended the Act to include “highway projects” as a subset of tax-exempt “[transportation project[s].” L. 2003, c. 79, §§ 8, 23 (codified as amended at N.J.S.A. 27:23-4, -12). Further, the Act authorized the Authority “to contract with any person ... desiring the use of any part [of a highway project] ... for placing thereon ... stores, hotels, and restaurants, offices, entertainment facilities, or for any other purpose,” L. 2003, c. 79, § 22 (codified as amended at-N.J.S.A. 27:23-9), and to decide whether “[t]o transfer, sell, dispose of, or otherwise relinquish all right, title, or interest in the Garden State Arts Center,” L. 2003, c. 79, § 9 (codified as amended at N.J.S.A 27:23-5(u)).
The Legislature expressly declared that:
The exercise of the powers granted by this act will be in all respects for the benefit of the people of the State, for the increase of their commerce and prosperity, and for the improvement of their health and living conditions, and as the operation and maintenance of transportation projects and other property by the Authority wül constitute the performance of essential governmental functions, *101the Authority shall not he required, to pay any taxes or assessments upon any transportation project or any property acquired or used by the Authority under the provisions of this act or upon the income therefrom, and any transporiation project and any property acquired or used by the Authority under the provisions of this act and the income therefrom, and the bonds issued under the provisions of this act, their transfer and the income therefrom (including any profit made on the sale thereof) shall he exempt from taxation. The Legislature reaffirms that all existing facilities and property, and their operations, and management, of the authority and of the New Jersey Highway Authority, as transferred to the authority, are deemed public and essential governmental functions and are exempt from local taxes or assessments.
[L. 2003, c. 79, § 23 (codified as amended at N.J.S.A. 27:23-12) (emphasis added).]
The Legislature in clear, plain language “reaffirmfed] that ail existing facilities and property ... of the ... Authority, as transferred to the authority, are deemed public and essential governmental functions and are exempt from local taxes or assessments.” Ibid. Despite that clear language, the majority reads the phrase “as transferred to the authority” to mean that “the Legislature intended to transfer the Arts Center to the Turnpike Authority without creating a new tax immunity or enlarging the Art Center’s statutory purpose.” Ante at 98, 918 A.2d at 617. I cannot agree.
At the time the Legislature passed the Merger Legislation, the Authority was continuing to challenge any attempt by Holmdel Township (Holmdel) to impose taxes on the Arts Center. The Appellate Division had also remanded to the Tax Court to determine “whether the use of the reception center under the Bott agreement is too far removed from the Legislature’s initially-contemplated use to warrant tax immunity.” Ante at 85, 918 A.2d at 609 (citation omitted). Thus, the tax issue was before the Tax Court when the Legislature passed the Merger Legislation.
In my view, the Legislature intended to clarify the tax issue that was pending before the Tax Court and did so by passing the Merger Legislation. The Legislature declared that the Arts Center was a highway project and that any property used by the Authority under the provisions of the Merger Legislation “shall be exempt from taxation.” L. 2008, c. 79, § 23 (codified as amended at N.J.S.A 27:23-12). After making that declaration, the Legislature then reinforced its intention by stating that it “reaffirms that *102all existing facilities and property ... of the ... Authority ... are deemed public and essential governmental functions and are exempt from local taxes or assessments.” Ibid. The Legislature could not have been clearer in the Merger Legislation in declaring its intention that the Arts Center was exempt from taxes.
The majority takes a different view and states that “it is incongruous to conclude that the Legislature intended to create an entirely new tax exemption but chose to use the word ‘reaffirm,’ which implies confirmation of a past condition, to create that exemption.” Ante at 97, 918 A.2d at 616. As noted above, at the time the Legislature passed the Merger Legislation, the Authority had never paid taxes to Holmdel for the Arts Center and had challenged Holmdel’s attempt to impose taxes. Under those circumstances, the Legislature’s use of the word “reaffirm” was intended to maintain the then existing, but disputed, tax exemption.
Finally, in disagreeing with my position, the majority notes that “the Merger Legislation’s exclusive purpose was to. mitigate the State’s fiscal crisis by reducing administrative inefficiencies.” Ante at 99, 918 A.2d at 617 (citation omitted). It seems obvious that the majority’s rejection of a tax exemption for the Arts Center will have the opposite effect. Clearly, by imposing taxes for the first time on thp Authority, it will' raise the Authority’s expenses and create new financial obligations.
I conclude that, once the Merger Legislation becarne effective in 2003, the Arts Center, including the reception center and the amphitheater, was tax exempt.
Justice RIVERA-SOTO joins in this opinion insofar as Justice WALLACE would confer tax-exempt status on the reception center.