Lasser, P.J.T.C. (temporarily assigned).
This is an action in lieu of prerogative writ by Ewing Township seeking to compel the Mercer County Executive, the Mercer County Board of Chosen Freeholders and Mercer County to pay to Ewing a rebate of 45% of the 1982 county tax paid by Ewing to Mercer County. This rebate is sought pursuant to L. 1982, c. 36, which repealed N.J.S.A. 54:4-5, the county tax rebate statute, and substituted a statute phasing out the county tax rebate. Defendants have moved to dismiss the complaint on the ground that it fails to state a claim upon which relief can be granted or, in the alternative, that Ewing failed to exhaust its administrative remedies.
Defendants urge dismissal of the complaint because Mercer County Airport is not a "county institution" within the meaning and intent of chapter 36 of the Laws of 1982.
N.J.S.A. 54:4-5 was originally enacted in 1922. At the time of its repeal it provided that a taxing district in a county of the
first class having a population in excess of 800,000, and in which there is located a state or county institution other than a park commission, occupying more than 200 but less than 400 acres, is entitled to a rebate of 50% of the county taxes paid by it. The rebate increases to 75% of the county taxes if the institution occupies more than 400 acres. The statement attached to the 1922 bill stated:
This bill is proposed to correct an injustice to the township of Cedar Grove, wherein the Overbrook Hospital is situated. The township is compelled to furnish tuition to the children of the various officials and attendants employed there, and is also compelled to record the vital statistics and to furnish protection to the inhabitants of said hospital, without receiving a dollar in return.
When changed circumstances and the passage of time permitted taxing districts other than Cedar Grove to qualify under the act, limiting amendments were enacted. Limiting amendments were enacted in 1932 (chapter 128), in 1952 (chapter 295), in 1968 (chapter 467), in 1972 (chapter 154) and in 1980 (chapter 118). Cedar Grove has received a rebate of one-half its county taxes since 1923. During the 1960s the town of Secaucus also received a rebate of county taxes. The 1968 amendment added the 800,000 population limitation, which disqualified Secaucus because Hudson County did not meet this population requirement. The efforts of Bergen County taxing districts to obtain a rebate resulted in the 1980 supplement (N.J.S.A. 54:4-5.2) which limited the county tax rebate to those taxing districts which had received a rebate prior to 1980. Paramus v. Bergen Cty., 2 N.J. Tax. 515, 520-521 (Tax Ct.1981).
When Bergen County's population exceeded 800,000, Paramus and Mahwah instituted actions seeking rebates of county taxes because Bergen County College and Ramapo College were within their respective borders. On November 20, 1981, in Mahwah Tp. v. Bergen Cty., 3 N.J. Tax. 513 (Tax Ct.1981), the court held the rebate statute to be special legislation violative of Art. IV, § 7, par. 9 of the New Jersey Constitution, on the ground that there was no rational basis for limiting the classification to taxing districts located in counties of the first class with a population exceeding 800,000.
On June 10, 1982 chapter 36 of the Laws of 1982 was enacted retroactive to January 1, 1982, repealing N.J.S.A. 54:4-5 and substituting a statute phasing out the county tax rebate. Under chapter 36 a qualified taxing district is entitled to a rebate of 45% of its county taxes for 1982, with the rebate declining to 40% in 1983, 30% in 1984 and 15% in 1985 and 1986. After 1986 there is to be no rebate. The act deleted the offending reference to counties of the first class having a population exceeding 800,000, but limited the rebate to a taxing district having within its borders a county institution occupying more than 200 acres and constituting at least 5% of the total land area of the taxing district. The enactment of chapter 36 further limited the county tax rebate by providing that a taxing district in which a state institution or a county educational institution is located is not entitled to a county tax rebate.
The Senate County and Municipal Government Committee Statement attached to Senate Bill 1064, which became chapter 36, states: "This legislation would not be confined to counties of any particular population size or class. However, the land area restrictions in the bill are such that only Cedar Grove in Essex County would qualify. Cedar Grove has been receiving a rebate of county taxes since 1923."
On July 19, 1982 Ewing Township, by letter to the business administrator of Mercer County, requested a county tax rebate for the 1,200 acres occupied by Mercer County Airport. On July 21, 1982 the business administrator replied, stating that Mercer County Airport did not come within the purview of the statute. He offered to discuss the county's position with the township administrator. On July 22, 1982 Senate Bill 1636 was introduced. This bill supplemented chapter 36 of the Laws of 1982 by defining "county institution" as any institution defined in N.J.S.A. 30:4-23 or N.J.S.A. 30:7B-2. This definition limits county tax rebate qualification to a taxing district with a ...