For affirmance -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For reversal -- None. The opinion of the court was delivered by Schettino, J.
Plaintiff Borough appealed to the Appellate Division from certain summary judgments of the Division of Tax Appeals based upon the determination that the Freeze Act (N.J.S.A. 54:2-43) precluded plaintiff from reassessing for the years 1961 and 1962 the corporate respondents' real property following final judgment by the Division determining the 1960 taxes on the same properties. Before argument in the Appellate Division, we certified the cause on our own motion.
The properties here involved are three multi-family apartment buildings. The taxpayers appealed from the 1960 assessments to the Bergen County Board of Taxation which reduced the assessments. The Borough appealed to the Division of Tax Appeals which heard testimony from both sides. The Borough's witness, an accountant, testified, over objection, not as a real estate expert, but as a member of the Borough's board of assessors. His opinions were accorded very little weight because of his lack of competence in this area and because he admittedly did not know the true value of the property. The Division noted that the taxpayers' real estate expert gave "clear and lucid" testimony of the true value of the property, found that the testimony preponderated in favor of the taxpayers and dismissed the appeal. The Borough appealed to the Appellate Division which affirmed the judgments, stating in part that "The Borough's proof before the
Division of Tax Appeals in support of its appeals failed to satisfy its procedural burden of overcoming the presumption in favor of the correctness of the county board judgments by adducing 'sufficient competent evidence to the contrary.' City of Passaic v. Botany Mills, 72 N.J. Super. 449, 454 (App. Div. 1962)." We denied the Borough's petition for certification on September 17, 1962, 38 N.J. 315 (1962).
By that date the Borough had assessed the properties in the same amounts for the tax years 1961 and 1962 as it had for 1960. On the taxpayers' appeal to the Bergen County Board of Taxation, the 1961 and 1962 assessments were reduced to the 1960 amounts. On appeal to the Division of Tax Appeals, the Borough contended that the reduced assessments were "less than the true value of such property" and "below the percentage of full value of assessment of comparable property in the Borough." In opposition to the taxpayers' motions for summary judgments, the Borough filed affidavits showing that on October 19, 1962 it had engaged experts who had reappraised all the property in the Borough and whose appraisals indicated that defendants' properties should have been assessed at still different figures in between those of the county board and of the Borough's assessor. The Division of Tax Appeals granted taxpayers a summary judgment on the grounds that, under the Freeze Act, the 1960 proceedings and determinations precluded higher assessments for 1961 or 1962.
The issues are as follows: (a) Does the Freeze Act (N.J.S.A. 54:2-43), apply to the present proceedings? (b) Does the application of the Freeze Act violate (1) Article VIII, § 1, pars. 1, 2 of the New Jersey Constitution which provide that real property must be assessed and tax exemptions granted only by general laws, and (2) Article VIII, § 3, pars. 2, 3 of the New Jersey Constitution which forbid donations of public funds to private corporations?
At oral argument, the Borough contended for the first time that the Freeze Act violated the fourteenth amendment of the United States Constitution.
"Where a judgment final has been rendered by the Division of Tax Appeals in the State Department of Taxation and Finance involving real property such judgment shall be conclusive and binding upon the municipal assessor and the taxing district, parties to such appeal, for the assessment year and for the 2 assessments years succeeding the assessment year covered by the final judgment, except as to changes in the value of the property occurring after the assessment date. Where such changes are alleged, the petition of appeal shall specifically set forth the nature of the changes relied upon as the basis for such appeal. However, the conclusive and binding effect of such judgment shall terminate with the tax year immediately preceding the year in which a program for a complete revaluation of all real property within the district has been put into effect."
Chapter 36, § 2 of the Laws of 1957, at page 67, added the last sentence to this section. The Statement attached to the bill (Senate Committee Substitute for Assembly No. 369, adopted March 25, 1957) states: "The purpose of the amendments * * * is to nullify the 'freeze' for the year in which a program for the complete revaluation of all real property within the district has been put into effect, * * *." Obviously, the Borough's reappraisal was not in existence when the 1961 and 1962 assessments were made.
The Freeze Act provision pertaining to judgments of the State Division of Tax Appeals was enacted under Chapter 161, Laws of 1946, as section 14. An almost identical provision, section 18 of the same act, freezes judgments of the county boards of taxation in those cases in which no ...