On appeal from regulations adopted by Department of Community Affairs.
Deighan, R. S. Cohen and Landau. The opinion of the court was delivered by Landau, J.A.D.
Appellant N.J. Builders Association (NJBA) challenges regulations adopted by the Commissioner of the Department of Community Affairs (DCA) which amend the state energy subcode (N.J.A.C. 5:23-3.18) by replacing its thermal efficiency standards with standards required by the U.S. Farmers Home Administration (FmHA). See 19 N.J.R. 1793, effective October 5, 1987. NJBA argues that DCA's authority under the State Uniform Construction Code Act (UCCA), N.J.S.A. 52:27D-119 et seq., is limited to adopting as a subcode the entire model code of nationally recognized organizations and that it lacks authority to substantively amend the subcodes.
Respondent State of New Jersey, Department of Community Affairs (DCA) does not deny that it might lack authority under the UCCA to directly amend a subcode once adopted. Rather, DCA claims that it obtained the authority it needed to modify
the energy subcode by powers transferred from the Department of Energy (DOE) who between July 11, 1977 and August 29, 1986 was responsible for adopting and amending the energy subcode. L. 1977, c. 146; N.J.S.A. 52:27F-1 et seq. DCA further argues that the regulations at issue here are not materially different from regulations promulgated by DOE when it had administrative responsibility for the energy subcode and that under the Agency Transfer Act, regulations made prior to a state agency transfer remain in effect until amended or repealed. N.J.S.A. 52:14D-6.
Administrative agencies have limited jurisdiction and actions beyond an agency's jurisdiction are ultra vires. D.S. v. East Brunswick Tp. Bd. of Ed., 188 N.J. Super. 592, 597 (App.Div.1983) certif. den. 94 N.J. 529 (1983). We recognize that a finding of ultra vires is disfavored, see e.g., N.J. Guild of Hearing Aid Dispensers v. Long, 75 N.J. 544, 561 (1978); In re N.J. Board of Public Utilities, 200 N.J. Super. 544, 557 (App.Div.1985). Notwithstanding this, after carefully considering the arguments and briefs of counsel, we hold that the DCA Commissioner exceeded his authority under N.J.S.A. 52:27D-123 by substantively amending the State's energy subcode.*fn1
N.J.S.A. 52:27D-123 empowers the DCA Commissioner to adopt a State Uniform Construction Code consisting of subcodes which "may be adopted individually by the commissioner as he may from time to time consider appropriate." N.J.S.A. 52:27D-123(b). It further provides that:
UCCA's legislative history reflects a clear intent to limit the DCA Commissioner's authority to adopting a model code in its entirety while relying on a national process for amendments to that subcode. When the UCCA was under consideration by the Legislature, Sydney L. Willis, representing DCA and the Governor's office, testified at a public hearing that "our bill*fn2 . . . allows . . . for no local adaptations and no state adaptations of the standard code or the subcode once they are adopted. . . ." He went on to say:
We will rely on a national process, a national code which has the procedure for continuous updating. We will be members of the process for updating. There will be representation there, as well as from other states in the discussions of what amendment should be provided each year. We will be a part of that discussion and we will rely on the outcome of that essentially democratic process.
At a subsequent point in his statement, Willis was asked, "What if New Jersey then objected to a feature of the BOCA code, . . . can we [New Jersey] make any modifications then?" Willis responded: "No. The options provided under the bill would be simply to reject the entire subcode and adopt a new subcode under the same procedure provided here-with good reason promulgated by the department."
In September 1977 the Legislature amended UCCA to include a mechanism for recommending changes or amendments to those national model codes that had been adopted as subcodes by the DCA Commissioner. Significantly, Senate Bill S-1345 as originally proposed authorized the Commissioner to ...