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South Jersey Port Corp. v. Modern Handling Equipment Co.

Decided: March 4, 1988.

SOUTH JERSEY PORT CORPORATION, PLAINTIFF,
v.
MODERN HANDLING EQUIPMENT CO., DEFENDANT



Greene, J.s.c.

Greene

On February 19, 1988 the court heard argument on the motion and cross-motion for summary judgment in this matter concerning whether the Local Public Contracts Law (L.P.C.L.), N.J.S.A. 40A:11-1 et seq., is binding upon plaintiff, South Jersey Port Corporation (SJPC) N.J.S.A. 12:11A-1 et seq. The action had been instituted by plaintiff SJPC in accordance with the terms of a stipulation entered into and arising out of the dismissal of a case between the parties in the United States District Court at Camden. The Attorney General has declined to appear.

The SJPC was created by an act of the Legislature, N.J.S.A. 12:11A-1, et seq., in 1968 and, in addition to assuming the responsibilities of the former South Jersey Port Commission (Camden Marine Terminals), the Legislature determined: to place responsibility for Delaware River port development in Southern New Jersey (Mercer, Burlington, Camden, Gloucester, Salem, Cumberland and Cape May Counties); that the SJPC was the "sole agency" for the development of said port, and the Legislature provided the SJPC with certain statutory powers to effect the port development, some of which are to acquire and hold personal property, to make and enter into all contracts necessary for the performance of its duties; and further provided that all other general laws inconsistent with that statutory enactment were declared to be inapplicable.

The SJPC was initially established in the State Department of Environmental Protection as a body corporate and politic and now reposes in the Department of Commerce and Economic Development. N.J.S.A. 52:27H-13. Such is pursuant to the constitutional command. N.J. Const. (1947), Art. V, ยง IV, par. 1.

Though the legislation states that the exercise of the powers granted will be in all respects for the benefit of the people of the State, the port facilities are presently primarily, if not only, located within the City and County of Camden.

The SJPC consists of seven members, drawn from the counties in question, and requires appointment by the Governor with the advice and consent of the Senate, and the chairman and vice-chairman are so designated by the Governor. The Governor is expressly given control to nullify any action taken by the SJPC, as evidenced in the minutes submitted to the Governor.

Within its financial structure, the statute mandates the establishment of a SJPC reserve fund and a SJPC tax reserve fund.

The SJPC reserve fund contains monies appropriated therefor by the State, if any, proceeds of bonds, and other monies of the SJPC. The monies in this fund are applied solely to the payment of interest or principal of bonds of the SJPC. The law provides that in order to assure the maintenance of the maximum debt special reserve in the SJPC reserve fund that the State will transfer to the fund such amount annually as may be necessary, if at all, to restore said fund to the maximum debt service reserve. N.J.S.A. 12:11A-13, -14.

The SJPC tax reserve fund holds funds, one source of which is State funds, which are to be used for the payment, in lieu of taxes, to the municipalities in which the SJPC's tax-exempt property is located. N.J.S.A. 12:11A-20. The exercise of the powers of the corporation constitute the proceeds of essential governmental functions in all respects for the benefit of the people of the State of New Jersey, and the purpose of the tax

reserve fund is to prevent suffering by counties and municipalities in which the tax-exempt property is located.

The SJPC functions are not at all functions common to local municipal entities, as counties or lesser municipal corporations, such as cities, townships, etc. The operation of Delaware River marine terminals has local, national and international aspects, in conjunction with, or in competition against, either private terminal operators or other port corporations on the Delaware or along the East Coast and, of course, as close as the Philadelphia Port Corporation.

With the foregoing as background, this matter emerges from the objection of defendant Modern Handling Equipment Co. (Modern), a Pennsylvania corporation, to the award by SJPC of a contract for the purchase of two forklift trucks by the SJPC at an informal price quotation in excess of the bid submitted by Modern. Modern claims that the award of the forklift contract violates the provisions of the Local Public Contracts Law, N.J.S.A. 40A:11-1, and plaintiff claims that the Local Public Contracts Law is not applicable to it.

The Local Public Contracts Law, L. 1971, c. 198, entitled "An Act concerning local public contracts by municipalities and counties and revising parts of the statutory law," was partly new and partly "sourced" upon county and municipal statutory contract bidding law, itself repealed by the L.P.C.L. Under certain circumstances, the law requires public advertisement and bidding relative to public works, materials and supplies.

Rules of Statutory Construction.

As our case law indicates, statutes are to be "read sensibly" and the final inquiry is the "true intention of the law." Suter v. San Angelo, 81 N.J. 150 (1979); Alexander v. N.J. Power & Light, 21 N.J. 373 (1956).

As a general rule of statutory construction the Court should first look to the general language of the disputed statute. If the Court finds that the statute is clear and unambiguous on its face and admits of only one interpretation; the sole function of the Court is to enforce the statute according to its literal terms.

Furthermore, the words and phrases contained in the statute should be given their ordinary and well understood meaning. [ State v. Pleva, 203 N.J. Super. 178, 187-188 (App.Div.1985); citations omitted]

Local Public Contracts Law, N.J.S.A. 40A:11-1 et seq.

The question is whether the SJPC falls within the definition of a "contracting unit" as that expression is defined in the Local Public Contracts Law at N.J.S.A. 40A:11-2. As previously noted, the chapter was stated to be "An Act concerning local public contracts by municipalities and counties and revising parts of the statutory law." The statute has application to "contracting units" meaning:

(a) any county; or

(b) any municipality; or

(c) any board, commission, committee, authority or agency, which is not a State board, commission, committee, authority or agency, and which has administrative jurisdiction over any district other than a school district, project or facility, and included or operating in whole or in part within the territorial boundaries of any county or municipality which exercises functions which are appropriate for the exercise by one or more units of local government, and which has statutory power to make, purchase or enter into contracts or agreements for the performance of any work or the furnishing or ...


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