Conford, Freund and Sullivan. The opinion of the court was delivered by Conford, S.j.a.d.
This is an appeal by the Township of East Amwell, Hunterdon County, from a judgment of the Division of Tax Appeals cancelling a property tax assessment against so much of the gas transmission pipe line of the Texas Eastern Transmission Corporation as lies within that taxing district. The line is part of a gas transmission pipe system extending from Texas to Linden, N.J. The tax was imposed by the East Amwell assessor on a prorated basis for the last three months of the tax year 1961 under authority of the Added Assessment Act, N.J.S.A. 54:4-63.1 et seq. (L. 1941, c. 397). The assessment was levied on the assumption, denied by the taxpayer, that the line in East Amwell was "completed," within the meaning of the statute, on or before October 1, 1961. In cancelling the assessment the Division of Tax Appeals found that the line was not completed by that date.
The statute in question provides, in part, that:
"[W]hen any parcel of real property contains any building or other structure which has been erected, added to or improved after October 1 and completed between January 1 and October 1 following, the assessor shall, * * * determine the taxable value of such parcel of real property as of the first of the month following the date of * * * such completion, and * * * if such value so determined exceeds the assessment made as of October 1 preceding, the assessor shall enter an assessment" (Emphasis added)
against the property as an added assessment for the current year in an amount determined by estimating the proportion of the excess value represented by the ratio of the number of whole months remaining in the year after such completion to the number 12. N.J.S.A. 54:4-63.2. In other words, a new structure completed by October 1 would be subjected to
an added assessment of one-fourth of its taxable value for the current calendar year. A structure completed after October 1 would escape taxation wholly for the current calendar year.*fn1
The added assessment statute defines the term "completed" as meaning "substantially ready for the use for which it was intended." N.J.S.A. 54:4-63.1. Interpretation of this phrase is thus the key to the determination of the issue before us.
The property here involved is part of a 36-inch pipe line which runs approximately 44 miles in this State from the Delaware River to Linden. The seven-mile portion thereof in East Amwell Township is part of a section running 41 miles between pumping stations in West Amwell Township and Linden, with no intervening pumping stations. In addition to East and West Amwell Townships and Linden, the line traverses five other municipalities. On September 30 and October 1, 1961 the line had been fully laid and backfilled in East Amwell, but not in the State as an entirety. As of the stated dates 79% of the line in the State had been laid and backfilled, and 21%, representing eight miles, remained to be laid and backfilled.
In addition to laying and backfilling, the following procedures had to be performed before the pipe line could actually be used for transporting gas from West Amwell to Linden: (a) hydrostatic testing of the line; (b) removal of the water used in such testing; (c) cleaning and drying of the pipe by running scrapers through it; (d) completion of the drying process by running gas through the pipe. Insofar as the portion of the line in East Amwell was concerned, not only had the entire pipe been laid and backfilled, but the hydrostatic testing thereof had been done. There remained only
the removal of the water and the cleaning and drying of the pipe. It was conceded that these latter steps had not been taken at the East Amwell portion of the pipe line because it was more convenient for the company to do those finishing operations all at one time for the whole 41-mile section between pumping stations. They were, in fact, done within a space of eight days for the entire section, and the whole line was fully ready for operation by November 28, 1961.
Pertinent to the comparison of the work done on the line in East Amwell before and after October 1, 1961 is the consideration that before that date all the following steps had been taken: acquisition of rights from property owners, municipalities and other government agencies; surveying the route and letting of construction contracts; clearing the right-of-way and grading and trenching it, stringing the pipe along the trench, welding it ...