Superior Court of New Jersey, Appellate Division, No. A-2391-08T2, June 25, 2010: A 2007 legislative amendment retroactively increasing the number of days of public access required for a certified historic site to get a tax exemption was upheld as applicable to the petitioner Cottage Club despite an earlier NJ Supreme Court order. At issue was whether the 2007 amendment violated constitutional separation of powers because the effect was to reverse a court order, whether it constituted “special legislation” or whether its application to the petitioner was manifestly unjust. The appellate court majority opinion upheld application of the amendment, sidestepping the question of whether the Supreme Court had explicitly ordered that the Club be certified before the amendment took effect. Prior to enactment of the amendment, the Club had challenged the NJ DEP’s refusal, based on 2004 legislation, to approve the Club’s 2001 application for certification for historic-site tax exemption. The NJ Supreme Court found that the 2004 legislation was not intended to apply to the Club and remanded the case to the NJ DEP for further action in University Cottage Club of Princeton N.J. Corp. v. N.J. Dep’t of Environmental Protection, 191 N.J. 38 (2007). The NJ DEP took no action for months and the 2007 then took effect.
On separation of powers, the appellate court found that the Club’s rights to an exemption had not vested as a result of the remand, and therefore “…the public interest in taxation, reposed in the legislative branch, overrides the unvested right of Cottage Club in the grant of its petition.” As to special legislation, the court said, “The determining factor for the courts is ‘what is excluded [from the legislation at issue], not what is included.’” [Case cited.] Even though the 2007 amendment was “enacted specifically in reaction to the Supreme Court’s decision” the amendment “constitutes curative legislation which is permitted as retroactive tax legislation.” As to manifest injustice, the court determined that the Club had not identified “any significant reliance or harm that will be caused based on its reliance of the prior statute for tax-exempt status.” A concurring opinion stated that even with a vested right, legislation can repeal a tax exemption retroactively.
Decision is available at http://lawlibrary.rutgers.edu/courts/appellate/a2391-08.opn.html.