On appeal from the Tax Court of New Jersey whose opinion is published at 4 N.J. Tax 294 (Tax Ct. 1982).
Matthews, Antell and Francis. The majority opinion of the court was delivered by Antell, J.A.D. Matthews, P.J.A.D. (concurring).
[190 NJSuper Page 132] These are consolidated appeals challenging (1) a declaratory judgment of the Tax Court determining the extent to which the taxing provisions of the New Jersey Spill Fund and Compensation Act, N.J.S.A. 58:10-23.11h are preempted by section 114(c)*fn1 of the Federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (Superfund), 42 U.S.C.A. § 9601 et seq. and (2) the validity of certain regulations promulgated by the State Treasurer under the Spill Fund Act. We affirm the judgment of the Tax Court substantially for the
reasons stated by Judge Evers in his written opinion published at 4 N.J. Tax. 294 (Tax Ct.1982).
Pursuant to N.J.S.A. 58:10-23.11t the State Treasurer and the spill fund director are authorized to adopt such rules and regulations pursuant to the Administrative Procedure Act as they may deem necessary to accomplish their purposes and responsibilities under the Spill Fund Act. N.J.S.A. 52:14B-4(a)(1) of the Administrative Procedure Act requires the agency to give 30 days public notice prior to the adoption, amendment or repeal of any rule. Subsection (3) requires the agency to
Afford all interested persons reasonable opportunity to submit data, views, or arguments, orally or in writing. The agency shall consider fully all written and oral submissions respecting the proposed rule.
On January 4, 1982 the Department of Treasury published its proposed regulations governing expenditures under the Act in the New Jersey Register, 14 N.J.R. 36, inviting interested parties to submit their comments on or before February 13, 1982. Plaintiffs hand delivered their written comments on February 11, 1982, but the department erroneously determined that they were "untimely and need not be considered," and on March 15, 1982 published a Notice of Adoption of the Regulations in the New Jersey Register, 14 N.J.R. 285. On March 29, 1982 plaintiffs submitted their written request that the department correct its error by rescinding its regulations and re-proposing them with provision for a "meaningful comment period." Their request was denied by letter from the Assistant State Treasurer dated April 7, 1982.
The State's position with respect to this issue is that the omission was only "a technical error which does not justify the invalidation of the regulations." It points out that although plaintiffs' comments were treated as untimely received for purposes of entitlement to consideration before adoption of the regulations the Department had nevertheless "become familiar" with plaintiffs' position before proposing the regulations. Relying upon N.J.S.A. 52:14B-4(d), it maintains that the validity of the regulations should be sustained on the basis of its "substantial
compliance" with the provisions of the Administrative Procedure Act.
The explanations offered by the State fail to justify its non-compliance with the clearly stated requirements of the Administrative Procedure Act. Although its disregard of the Act is not as complete as that considered in Glaser v. Downes, 126 N.J. Super. 10 (App.Div.1973), certif. den. 64 N.J. 573 (1974), the denial of due process of law resulting to plaintiffs is no less. Substantial compliance with the Administrative Procedure Act cannot be found where the prescribed system of notice and written comments, called "the mainstay of modern rulemaking procedure," Davis, Administrative Law of the Seventies, at 169 (1976), has been sidestepped.
We conclude that the regulations under review adopted by notice published March 15, 1982 are invalid ...