On appeal from Superior Court of New Jersey, Law Division, Bergen County.
Fritz, Furman and Deighan. Deighan, J.A.D.
This is an appeal from O'Neill v. Washington Tp., 188 N.J. Super. 565 (Law Div.1983). The lower court held that a municipality may not set off a refund of real estate taxes against taxes due for subsequent years on the same property. The question has generated conflicting opinions in our courts. See cases cited O'Neill, supra, 188 N.J. Super. at 570.
In Seatrain Lines v. Edgewater, 4 N.J. Tax 378 (Tax Ct.1982), aff'd 192 N.J. Super. 535 (App.Div.1983), rev'd 94 N.J. 548 (1983), cited in O'Neill, we affirmed the Tax Court in precluding the set off. In the interim period, between the decision in this court and the decision on appeal to the Supreme Court, in response to those decisions which denied the municipalities the right to set off unpaid real estate property taxes against tax refunds for overpayments in prior years, the Legislature enacted L. 1983, c. 137. The summary reversal by the Supreme Court in Seatrain cited L. 1983, c. 137 and was without opposition by the taxpayer.
On this appeal the Township of Washington (Township) urges that the judgment of the trial court be reversed because: (1) plaintiff's action was not brought within time; (2) the Township acted properly in offsetting the refund against taxes due on the same property; (3) plaintiff is equitably estopped from pursuing this action; (4) plaintiff waived the issue of bankruptcy and (5) federal bankruptcy law did not prevent the Township's set off. While not articulated as a separate issue, the Township also relies upon L. 1983, c. 137.
Plaintiff asserts that the statute is either inapplicable to the present case or is unconstitutional (a) if applied retrospectively or (b) if applied to him as a trustee in bankruptcy under the Bankruptcy Code. Therefore our initial concern is the applicability of this statute to the facts of this case.
Essentially, L. 1983, c. 137 amends and supplements N.J.S.A. 54:3-27.2 to authorize any municipal governing body to set off a refund of real estate property taxes, to which a property owner is entitled pursuant to a county tax board determination or a judgment of the Tax Court, against delinquent taxes owed on the same property. The sponsor's statement recognizes that "the courts of this State have generally held that this type of setoff may not be effectuated without specific statutory authority . . . ."
Section 4 of the act provides:
This amendatory and supplementary act shall apply to:
(a) any action initiated on or after the effective date of this amendatory and supplementary act;
(b) any action pending before a county board of taxation or the tax court on or after that date; and
(c) any appeal of a determination of a county tax board or a judgment of the tax court, which appeal is pending before any court of ...