This case concerns the trial of consolidated causes of action seeking to invalidate the Hackensack Meadowlands Reclamation and Development Act, L. 1968, C. 404, hereinafter "the act," on constitutional and other grounds. The matters consolidated are:
1. Meadowlands Regional Development Agency, et als. v. State of New Jersey, et als. (Superior Court of New Jersey, Chancery Division -- Bergen County, Docket No. C-1620-68)
2. Guy G. Galiardo, et als. v. Hackensack Development Commission, et als. (Superior Court of New Jersey, Chancery Division -- Bergen County, Docket No. C-1620-68)
3. In the Matter of the Application of the Meadowland Regional Development Agency, et als. , Louis Montenegro and Phillip Mellillo, Jr., et als. and Town of Secaucus, et als. (Superior Court of New Jersey, Appellate Division, Docket No. A-771-68, 979-68 and 791-68 (Consol.))
4. Counts 3 and 4, mounting constitutional attacks upon the act, of seven causes of action in lieu of prerogative writs (mandamus seeking to otherwise compel riparian grants filed in the Superior Court, Law Division (two in Hudson County, five in Bergen) consolidated under the caption --
Cheval Bros. v. State of New Jersey, et als. (Superior Court of New Jersey, Law Division -- Bergen County. Docket No. L-28712-68 P.W.)
The proceeding brought originally in the Appellate Division under N.J.S.A. 1:7-4 seeking to void the act on the narrow ground that the legislation was a special or local law lacking compliance with the procedural requirements of N.J. Const. (1947), Art. IV, § VII, par. 8, and N.J.S.A. 1:6-1 et seq. has been held in abeyance after oral argument on cross-motions. The Appellate Division found in an unreported per curiam opinion that while defendants
admissions obviated the need for taking proofs on the mechanics of enactment, i.e. , the procedural conditions precedent to the passage of special or local law, with defendant contending that the act was general and plaintiff alleging that it was special, observed that evidence expected to be introduced in the remaining actions pending in the Chancery Division would be of help in their determining whether the act was general or special. It therefore withheld further action until the Chancery Division actions attacking the act on other grounds were decided by the trial court. However, it granted permission to the parties to introduce evidence bearing upon the issues over which it had original jurisdiction for transmittal to it, even though not needed for the determination of issues within the jurisdiction of the Chancery Division. In such event, however, the Chancery Division was directed not to make findings of fact upon the issues exclusively within the Appellate Division jurisdiction under N.J.S.A. 1:7-4, except as such findings were a necessary incident to the resolution of other issues within the trial court's jurisdiction. Lastly, the Chancery Division was given control over the reception of evidence to be transmitted to the Appellate Division, its competency, quality and quantity, to the same extent as if the issues to be decided by the Appellate Division were within the jurisdiction of the Chancery Division.
L. 1968, C. 404, is a general statute. As will be demonstrated hereinafter this conclusion of law is a necessary incident to the resolution of several issues raised in the proceedings within the original jurisdiction of the trial court. Thus it has been necessary to make findings from proofs submitted, even though these very proofs are to be transmitted to the Appellate Division for independent findings and conclusions related to issues within its original jurisdiction, i.e. , is the act special or general, as such finding
relates to N.J.S.A. 1:7-4? Defendant has conceded that it has not conformed to the requirements of N.J.S.A. 1:6-1 et seq. , which outlines the procedures peculiar to the passage of special or local legislation. Thus, if the Appellate Division finds, from the proofs transmitted, that the act is special or local, it must fall despite any findings or conclusions the trial court makes upholding its validity. If the Appellate Division concludes that the act is general, then the interdiction of R.S. 1:6-1 et seq. has no application.
Plaintiffs contended during the trial that the act was a special or local law, irregularly passed without public notice of the intention to apply therefor and without the general object thereof expressed as required by N.J. Const. (1947), Art. IV, § VII, par. 8, and that the act was further invalid because it was not enacted in response to a petition from the local governments subject thereto, as provided in Art. IV, § VII, par. 10 of the Constitution and coordinate statutes.*fn1
In order to place the issue of general versus special or local law in proper perspective, a brief summary of the act's provisions is necessary. Art. 1 declares that there are approximately 21,000 acres of salt water swamps, meadows and marshes, commonly known as meadowlands, in the lower Hackensack River basin, and lists among the objectives of the act: the orderly, comprehensive development of the Hackensack Meadowlands in order to provide more space for industrial, commercial, residential, public, recreational [112 NJSuper Page 98] and other uses; the development of the state-owned lands as an asset for the support of the free public school system; the fulfillment of the obligation of the State to assert its interest, and the provision of special protection from air and water pollution and special provision for solid waste disposal and the preservation of the delicate balance of nature. Art. 2 defines the boundaries of the district. It encompasses some 18,000 acres in 14 communities lying in Hudson and Bergen Counties. Art. 3 establishes the Hackensack Meadowlands Development Commission as a public corporate body with succession and sets forth the broad ambit of its powers toward the attainment of the objectives set forth in Art. 1. Art. 4 establishes the Hackensack Meadowlands Municipal Committee, consisting of the chief executive of each constituent municipality within the district or his alternate. The Committee is empowered to review, prior to final action, all codes and standards, master plans, or amendments, development and redevelopment or improvement plans or other major decisions of the Hackensack Meadowlands Commission. Should the Committee formally reject the matters submitted by the Commission, the Commission may not take any final action on the matter except by a five-sevenths vote of its full membership. Art. 5 requires the Commission to develop, adopt and promulgate a master plan for the physical development of all lands lying within the district. It includes comprehensive provisions relating to the development of the district. Among them are provisions dealing with land use, sewerage, utilities, water transportation and residential standards. Others include clearance, redevelopment and like matters, schools, libraries, parks, playgrounds and other public facilities. Additionally, the plan may provide for the distribution and density of population, the appearance of the community within the district, water pollution, waste disposal and other matters related to the planned development of a model community. To implement the Commission's broad planning powers, Art. 5 further provides that no
constituent municipality shall take any action respecting land use or building construction within the district which is inconsistent with the master plan's provisions. Moreover, the Commission must review and approve any municipal project within the district which contemplates the use of public funds. The Commission is also empowered to review and regulate all subdivisions, site plans, buildings and other uses within the district, to insure that they conform with its master plan. Furthermore, the Commission is empowered to act as a regional redevelopment agency under the Redevelopment Agencies Law, L. 1945, C. 306 (N.J.S.A. 40:55C-1 et seq.), thus rendering it eligible to receive federal renewal grants.
Art. 6 empowers the Commission to issue bonds and notes. Art. 7 authorizes it to condemn land within or without the district when necessary, notwithstanding that the land in question may already be in the hands or under the control of a municipality or other public agency. However, § 37 of the act provides for payments to municipalities in lieu of taxes. Art. 8 provides for special assessments against real estate located in improved districts which the Commission is empowered to establish. Assessments against public lands can be paid from State funds. Art. 9 contains the inter-municipal tax-sharing feature by which the constituent municipalities share the tax benefits and burdens resulting from the Commission's development and redevelopment activities.
Art. 10 contains the act's general provisions. Among them is one empowering any public body to cooperate with the Commission. Additionally, the article provides that the Commission may enter into contracts with one or more municipalities, counties or other public agencies for the operation of public works and improvements. The remainder of the act establishes the procedure for the determination of title to the meadowlands, both within and without the district, by amending and supplementing the Department of Conservation and Economic Development Act of 1948
(L. 1948, c. 448) It directs the Resource Development Council to undertake title studies and surveys of the meadowlands to determine which are state-owned and establishes a Hackensack Meadowlands Negotiations Board to set fair prices for leases or conveyances of state-owned land where such leases or conveyances are found to be in the public interest.
Plaintiffs contend that the act, by definition, is private, special or local because its application is restricted to some 18,000 acres in Hudson and Bergen Counties affecting some 14 constituent communities. They reason that this constitutes a designation and not a classification, thus rendering the act invalid on its face.
[Based on expert testimony developed in the case, the court found that the areas excluded from the district represented a reasonable and proper exercise of legislative judgment. The court concluded:]
The Hackensack meadowlands in the 14 constituent municipalities thereof are distinguished by characteristics sufficiently marked in importance to constitute them a separate class among other areas and municipalities in New Jersey. None of the Legislature's exclusions of other areas and municipalities from the regulated class is arbitrary. Each is supported by the application of recognized planning principles thereto.
Our Courts have dealt with other legislation regulating specific areas of the State. The decisions in State v. Corson , 67 N.J.L. 178 (Sup. Ct. 1901); Van Cleve v. Passaic Valley Sewerage Com'rs , 71 N.J.L. 183 (Sup. Ct. 1904), rev'd on other grounds, 71 N.J.L. 574 (E. & A. 1905), and Sherwood v. Bergen-Hackensack Sanitary Sewer Authority , 24 N.J. Misc. 48 (Sup. Ct. 1946), aff'd 135 N.J.L. 304, 309 (E. & A. 1947), all address themselves to legislation which regulated specific areas of the State. See also cases cited in In re Freygang , 46 N.J. Super. 14, at 24 (App. Div. 1957), aff'd 25 N.J. 357 (1957). In all these cases
the court wrestled with the issue which the act presents herein: is the legislation a legitimate product of the Legislature's power to classify, in that the regulated class is distinguished by characteristics sufficiently marked and important to make it a class by itself, and, related thereto, does it arbitrarily exclude subjects the characteristics of which warrant their inclusion within the class? Roe v. Kervick , 42 N.J. 191, 233 (1964).
Thus, the issue in this aspect of the case is reasonable classification viewed against the purpose which the act exists to serve. Bayonne v. Palmer , 90 N.J. Super. 245, 284 (Ch. Div. 1966), aff'd 47 N.J. 520 (1966). A threshold question is the manner in which this issue is to be resolved. Plaintiffs seem to suggest at the trial that the burden was upon the State not only to prove the reasonableness of its classification, but to establish that the meadowland district, if not divinely ordained, was at least divinely inspired. They are in error. The act is presumptively valid and the onus of establishing that it is not rests on them. Jamouneau v. Harner , 16 N.J. 500, 515 (1954); In re Freygang, supra , 46 N.J. Super. at 28. Moreover, the State does not have the burden of proving that the meadowland district is susceptible to any other dimensions than those it now has. The act must be viewed in the light of the Legislature's power to classify for purposes of regulation. The N.J. Constitution (1947) does not require mathematical perfection in its exercise of that power. Two Guys from Harrison, Inc. v. Furman , 32 N.J. 199, 229 (1960). Defendant's position is best expressed by the standards articulated in Wilson v. Long Branch , 27 N.J. 360, 377 (1958), which there appear in the context of equal protection of the laws but are equally applicable to Art. IV, § VII, par. 9 of our Constitution:
In brief, the Legislature is accorded a broad discretion in the area of permissible classification, Passaic v. Consolidated Police, etc., Pension Fund Comm'n , 18 N.J. 137, 146 (1955), and it is only when the purported basis for classification is illusory that the courts will condemn the product thereof, Van Riper v. Parsons , 40 N.J.L. 1, 9 (Sup. Ct. 1878).
Whether the act is a general one or not depends upon the factual basis for the Legislature's classification. Van Cleve v. Passaic Valley Sewerage Com'rs, supra , 71 N.J.L. at 201. At the trial defendant's evidence sought to establish the unique nature of the Hackensack meadowlands, defined in § 3 of the act (N.J.S.A. 13:17-3(j)) as all those meadowlands lying within the 14 constituent municipalities. If the meadowlands are unique, then so, by definition, are the municipalities which contain them.
It was established that the line on the map defining the meadowlands district was the product of a series of decisions, each based upon planning criteria, made between competing alternatives. It was not claimed that reasonable persons could not draw the boundary differently. It was recognized that the district could have other dimensions and still suit the act's purposes. Doubtless there are some areas which could arguably be included within the district, just as there are areas which arguably could be excluded.
Months before the act became law, Commissioner Ylvisaker, testifying before a legislative committee in support of the bill which became the act, recognized that there is no such thing as a line on a map that all will accept. Hearings on Senate Bill 477 before Joint Commissions on Agriculture, Conservation and Natural Resources , at 87, 88.
Mankind's bloody history provides a basis for his observation. Unlike other lines, which often are the product
of force or circumstances, each turn and convolution of the district line was formed by a decision based upon the application of recognized planning criteria to the observable characteristics of the terrain under consideration. No claim was made that each decision was ultimately correct and so beyond argument; it is claimed that each decision was, in the circumstances in which it was made, reasonable, and that the district line, which is the sum of these decisions, is itself reasonable, and by reasonable is meant the antonym of arbitrary, which should not be defined to mean arguable.
Before concluding on the issue of general versus local law, plaintiffs' argument that there are other regions in the State equally susceptible to regional planning and thus the Legislature should have provided for these areas as well in the act, should not be overlooked. However, the failure to include them in the act does not render the act invalid.
Plaintiffs' premise is incorrect. The Hackensack meadowlands are unique, if only for the reason that they constitute a vast reservoir of vacant lands situated in the midst of the New York-Northeastern New Jersey metropolitan area. No other area -- not even the Raritan meadows -- is similarly located. Population pressures on other regions of the State may some day warrant their receiving the same legislative treatment currently afforded the Hackensack meadows. This does not mean, however, that the Legislature must defer dealing with the exigent problems of the Hackensack meadowlands until such time as conditions in other regions of the State justify similar legislative treatment.
The argument that in other parts of the state there now exist similar conditions that ought to be dealt with in like manner, even if it were based on a correct statement of the fact, which it is not, should be addressed to the lawmaking power, and not to the courts. It is for the Legislature to decide whether certain territory should be subjected to sanitary and police regulations of the character now
under consideration. In their wisdom, they have declared that public exigencies require the creation of a sewerage district in the Passaic Valley, and its regulation by law. We cannot by judicial construction postpone their lawmaking upon the subject until the public needs require the creation of other sewerage districts sufficient to form a "class," in the sense of a group of subjects that may be legislated upon collectively. Classification is essential only for the purpose of differentiating among many individuals, in order that fewer than the whole number may be generalized for the purpose of being treated in groups. But where there is only a single individual -- as here, a single established sewerage district -- grouping, classification, generalization, are alike impossible.
Nor are they necessary in order to avoid conflict with the Constitution. The purpose of the prohibition against "special or local" laws is not to prevent legislation where there is but one individual to be dealt with. The purpose is to prevent unfounded discrimination where there are two or more individuals to be dealt with. [ Van Cleve, supra , 71 N.J.L. at 206, 207. See also, Robson v. Rodriquez , 26 N.J. 517, 524 (1958); New Jersey Restaurant Ass'n, Inc. v. Holderman , 24 N.J. 295, 300 (1957)]
Plaintiffs have particularly focused their attention on the formula provided in Art. 9 of the act, commonly characterized as the inter-municipal tax-sharing account, and its alleged invalidity.
The provisions concerning the inter-municipal tax-sharing account appear in §§ 59 to 74 of the act, N.J.S.A. 13:17-60 to 76. Section 59(a) (N.J.S.A. 13:17-60) sets forth the Article's purpose, which is to insure that all constituent municipalities share equitably in new benefits and costs resulting from meadowland development.
Under the Commission's master plan powers (Art. 5 of the act, N.J.S.A. 13:17-9 to 22, and particularly N.J.S.A. 13:17-11), it will plan the district to provide for mixed uses which will include residential as well as industrial areas, open spaces, parks, schools, libraries and the like.
Obviously, some uses, such as industries, result in valuable ratables which do not bring with them a proportional
demand for municipal services. Others, such as parks and single-famliy residences, cause maximal demands for municipal services without providing sufficient ratables to meet the cost thereof.
Art. 9 is the legislative answer to the unfairness which would otherwise be the product of the Commission's land use power. It equitably apportions the benefits of the Commission's activities among the constituent municipalities, thus avoiding the bickering for ratables which, according to the Meyner Commission Report , at 17 (June 1965), has characterized meadowland "development" as it has occurred to date.
The concept behind the inter-municipal account begins with each municipality incurring a gross obligation based upon the new aggregate true value of real property in that part of the meadowland district which lies within the municipal limits, computed with reference to the base year 1969.*fn2 The aggregate true value of all such real property as of October 1, 1969, is compared against the aggregate true value thereof as of October 1 of each year commencing with 1970, to determine the increase or decrease in aggregate true value which will be used in the inter-municipal account calculations for the succeeding adjustment year commencing with 1971. (§ 65(a)(1) of the act, N.J.S.A. 13:17-67).
Aggregate true value is, in all instances, computed on the basis of well-established practices. In the first instance, the municipal assessor annually values the meadowland district real property within his jurisdiction, at which time he is to determine the full and fair value thereof. Thereafter -- since local assessments rarely reflect true value, but only a percentage thereof, Switz v. Kingsley , 37 N.J. 566 (1962); N.J.S.A. 54:4-2.25 -- true value is discerned
through the application of the average assessment ratio promulgated annually by the Director of the Division of Taxation for state school aid purposes to the assessor's aggregates (N.J.S.A. 18A:58-4; see also Bayonne v. Division of Tax Appeals , 49 N.J. Super. 230 (App. Div. 1958) (§ 65(a)(2) of the act, N.J.S.A. 13:17-67).
The municipality's gross as distinguished from net obligation is determined by multiplying the increase in aggregate true value of its real property for the year in question by the apportionment rate, which boils down to the average tax rate of the 14 constituent municipalities (§§ 65(a)(3) and (b); N.J.S.A. 13:17-67).
The act provides for credits against each municipality's gross obligation to the fund. There is a credit related to the cost of new municipal services, police, firemen, sanitation, schools and the like, which each municipality provides to the district (§§ 67 and 68, N.J.S.A. 13:17-69 and 70). There is another credit for the cost of those municipal projects which, in the Commission's judgment, serve also to benefit the district as a whole and are consistent with its master plan. (§ 69, N.J.S.A. 13:17-71). Each municipality is guaranteed, in effect, the value of its meadowlands tax ratables as of 1969, the base year (§ 66 of the act, N.J.S.A. 13:17-68). The surplus, if any, remaining in the inter-municipal account is distributed to the constituent municipalities on an aliquot basis related to the area of unimproved and redeveloped lands each has within the district as against the total area of such lands therein -- the apportionment payment -- (§ 70(a), N.J.S.A. 13:17-72).
The contribution of each municipality to the intermunicipal account, or its receipt of funds therefrom -- in either case called the meadowland adjustment payment -- is simply the net amount derived by subtracting the amount of the service project guarantee and apportionment payments from the gross sum due the inter-municipal account. If the payments exceed the amount due, the municipality
receives money from the fund. If they do not, it makes a contribution thereto (§ 72, N.J.S.A. 13:17-74).
The premise behind Art. 9 is that, as a result of the Commission's activities, particularly in development and planning, the value of real property within the meadowland district will be enhanced far beyond what would be the case were the municipalities therein to be left to their own devices. It envisions that all municipalities will reap the benefits from this new value in the form of ratables and revenue therefrom which would otherwise be lost. The effect on the tax rate of each municipality, from these otherwise unavailable ratables, must be beneficial. Art. 9 simply exists to equitably apportion the benefits so derived.
The result of Art. 9 will be to call upon some of the constituent municipalities (the number and identity thereof will probably change from year to year) to remit a part of the new revenues they receive from new meadowland value to those municipalities in which are located the schools, parks and residences which do not provide valuable tax ratables. Plaintiffs urge this to be constitutionally objectionable.
Their attack on the inter-municipal tax-sharing account appears to rest upon several constitutional provisions. The first is that the act is a private, special or local law relating to taxation or exemption therefrom, and so treats with a subject prohibited to the Legislature by N.J. Const. (1947), Art. IV, § VII, par. 9(6), which provides: "The Legislature shall not pass any private, special or local laws: * * * (6) relating to taxation or exemption therefrom, * * *." I have found the act to be general. See I, supra. The second is that the act violates Art. IV, § I, par. 1 of the State Constitution, in that it is an improper delegation of the Legislature's taxing power and, related thereto, it delegates the taxing power to an agency, the Commission, which does not exercise the power of local self-government, and it delegates the taxing power to an area which is not coterminate with one which exercises powers of local self-government.
The third is that the act violates Art. VIII, § I, par. 1(a) of the Constitution.
Art. 9 and the inter-municipal account are sui generis. Research has found nothing comparable thereto, either in New Jersey or anywhere else. It does not appear that the act directly imposes a state tax on the citizens and taxpayers of those municipalities as will be, from time to time, required to make a payment into the inter-municipal account.*fn3 In legal contemplation, such payments are obligations related to a public purpose which the State can properly require its subordinate political subdivisions to incur. In any event, Art. 9 and its operation have an effect on municipal taxes. Nevertheless, since the act is a general law, such effect is constitutionally permissible under the express provisions of Art. IV, § VII, par. 9 of our Constitution.
A. The State is empowered to require its subordinate political subdivisions to incur expenses related to a public purpose. The payments that some of the constituent municipalities will from time to time make to the inter-municipal account are such expenses. Art. 9 of the act, which imposes such requirements, is therefor valid.
The act imposes the meadowland adjustment payment directly on the constituent municipalities, and only indirectly on the taxpayers thereof. Section 72(c) of the act (N.J.S.A. 13:17-74(c)) provides that a municipality obliged to make such a payment treat it as a line-item appropriation in its annual budget. It is handled as any
other cost of municipal government and will be included in the amount to be raised by taxes to support municipal government (N.J.S.A. 40A:4-30). Thus, while the taxpayers of some municipalities will ultimately bear the cost of the meadowland adjustment payment, that cost as to them is a part of the cost of municipal government which their municipal taxes pay.
It is clear that the State is empowered to impose costs and expenses on its units of local government to fulfill a public purpose, even when the municipalities subject to the State's charge must raise money by taxation to pay the obligation so imposed, Easton and Amboy R.R. Co. v. Central R.R. Co. , 52 N.J.L. 267, 275-276 (Sup. Ct. 1890). See also, 2 McQuillin, Municipal Corporations , §§ 4.159, 4.162; 16 Ibid. , § 44.33; 37 Am. Jur., Municipal Corporations , § 91.*fn4
This conclusion rests on two well recognized principles. "Municipal corporations are merely political subdivisions of the State and the legislative control over them is almost unlimited," Becker v. Adams , 37 N.J. 337, 340 (1962); Jersey City v. Martin , 126 N.J.L. 353, 361 (E. & A. 1941), and "* * * All taxes, whether levied for state, county, or municipal purposes, are state taxes; they can be imposed by no other authority than that of the state. The state appropriates the proceeds to what purposes it sees fit; but, however the proceeds may be appropriated, every tax is a state tax." State Board of ...