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Township of Howell v. Division of Tax Appeals

Decided: January 23, 1968.

TOWNSHIP OF HOWELL, IN THE COUNTY OF MONMOUTH, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
DIVISION OF TAX APPEALS IN THE DEPARTMENT OF THE TREASURY OF THE STATE OF NEW JERSEY, AND WILLIAM KINGSLEY, ACTING DIRECTOR OF THE DIVISION OF TAXATION IN THE DEPARTMENT OF THE TREASURY OF THE STATE OF NEW JERSEY, DEFENDANTS-APPELLANTS



Gaulkin, Lewis and Kolovsky. The opinion of the court was delivered by Kolovsky, J.A.D.

Kolovsky

Upon leave granted, defendants appeal from an order entered in the Superior Court, Law Division, Monmouth County, on January 24, 1967 which denied their motion to dismiss plaintiff's complaint in lieu of prerogative writs and restrained proceedings then pending before the Division of Tax Appeals (Division).

Those proceedings had been instituted under N.J.S.A. 54:1-35.4, a section of the act adopted in 1954 (L. 1954, c. 86; N.J.S.A. 54:1-35.1 et seq.) to implement the State School Aid Act of 1954 (L. 1954, c. 85; N.J.S.A. 18:10-29.30 et seq.). Provision is made by the former act for a determination of the average ratio of assessed to true value

of real estate in the various municipalities of the State and for the promulgation of a table of equalized valuations to be used in the calculation and apportionment of state aid to local school districts pursuant to the State School Aid Act.

The purposes and pattern of operation of the two acts are set forth in detail in City of Bayonne v. Division of Tax Appeals, 49 N.J. Super. 230 (App. Div. 1958), and need not be repeated here except to note that the Director of the Division of Taxation (Director) is directed to promulgate a table of equalized valuations and to certify it to the Commissioner of Education on or before October 1 of each year. N.J.S.A. 54:1-35.1. The equalization table may be reviewed by the Division "on complaint of any taxing district made within 10 days after its promulgation, or on its own motion, but such review shall not suspend the apportionment of school aid moneys." N.J.S.A. 54:1-35.4.

The proceedings enjoined by the interlocutory order under appeal had been instituted by the Division in the exercise of its statutory power to review the October 1, 1966 equalization table "on its own motion." The motion was unanimously adopted by the Division on January 5, 1967 after hearing argument of the Deputy Attorney General, who appeared for the Director and the attorney for the Township of Howell.

The Division's motion was adopted on the basis of information set forth in a petition filed by the Director indicating that Howell's assessor had deliberately delayed submitting required reports giving information with respect to some 214 sales of property in the township and the ratio of the assessed value to the sales price thereof until after August 19, 1966, the cut-off date used by the Director for the 1966 table. The Director, after setting forth an analysis of the delayed reports, expressed his "belief and opinion" that Howell's tax assessor had withheld the reports in an attempt to manipulate the ratio to be assigned Howell Township in order to "wrongfully increase the amount of State School Aid to be paid Howell Township" by an amount in excess of $120,000.

A hearing was held pursuant to the Division's motion on January 9, 1967 and then continued to January 16, 1967. On January 13, 1967 plaintiff Township of Howell instituted this action in lieu of prerogative writs and obtained a restraint against any further hearings before the Division.

The issue presented in this case involves an interpretation of N.J.S.A. 54:1-35.4 which provides as follows:

"An equalization table promulgated hereunder may be reviewed by the Division of Tax Appeals on complaint of any taxing district made within 10 days after its promulgation, or on its own motion, but such review shall not suspend the apportionment of school aid moneys. No change shall be made in the table except after a hearing, of which 5 days' notice shall be given by mail to the governing body of the taxing district. If, after the hearing, the division shall determine that the equalized valuation of any district or districts as fixed by the director was erroneous, it shall revise and correct the equalization table. Such hearings, review and revisions shall be completed by January 10 next following the promulgation of the table. A certified copy of the revised and corrected table shall be transmitted to each official or board to whom the original table was required to be transmitted and also to the State Director of Taxation. In any such proceeding, the director shall be entitled to be heard, and the assessment ratios as promulgated shall be presumed to be correct, and shall not be revised or modified by the Division of Tax Appeals unless the complainant district shall present proof that upon all the evidence available such ratio or ratios could not reasonably be justified."

The trial judge concluded that the Division had no jurisdiction to continue with its hearings beyond January 10, 1967 because he ...


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