On appeal from the Tax Court of New Jersey, whose opinion is repeated at 10 N.J. Tax, 309 (1989).
O'Brien, Havey and Stern. The opinion of the court was delivered by Stern, J.A.D.
This appeal involves the construction and constitutionality of N.J.S.A. 54:4-3.52 which provides:
Any building and its pertinent contents and the land whereon it is erected and which may be necessary for the fair enjoyment thereof owned by a nonprofit corporation and which has been certified to be an historic site to the Director of the Division of Taxation by the Commissioner of Conservation and Economic Development as hereinafter provided shall be exempt from taxation.
The Woman's Club of Morristown ("Woman's Club") appeals from a determination of the Tax Court, 10 N.J. Tax 309 (1989), holding that because the subject property is used "for commercial purposes," it did not "qualify for exemption" from local property taxation pursuant to N.J.S.A. 54:4-3.52. The Woman's Club claims that under the plain language of N.J.S.A. 54:4-3.52 the property is tax exempt irrespective of its use. The respondent Town of Morristown ("Morristown") asserts that the statutory exemption must be considered in light of the general constitutional requirement of uniformity of assessment and taxation, see N.J.S.A. Const. (1947), Art. VIII, § 1, para. 1(a), that any exemption must be granted by the general laws, N.J.S.A. Const. Art. VIII, § 1, para. 2, and that N.J.S.A. 54:4-3.52 is unconstitutional because it grants an exemption based upon the status of the property owner, not the use of the property. The Attorney General, as intervenor, pursuant to Rule 4:28-4(d), contends that, properly construed, the statute is constitutional. The Attorney General disagrees with the trial judge, however, to the extent his opinion would prohibit application of the exemption by virtue of any commercial use of the property, as opposed to its predominant use. In other words, the Attorney General agrees that the statute should be construed to save its constitutionality, but contends that the statute can be construed as constitutional if the property is used, to some degree, for a non-profit, non-commercial purpose.
There is no substantial challenge to the Tax Court's finding of standing in this case, and the facts are undisputed. See 10 N.J. Tax at 312-316. It is apparent that the Tax Court construed the statute as it did, in light of the maxim that "[t]he Judiciary is obliged to interpret legislation so that it will be constitutional." 10 N.J. Tax at 320; see also, e.g., N.J. Bd. of Higher Ed. v. Shelton College, 90 N.J. 470, 478, 448 A.2d 988 (1982). The Tax Court perceived that a different construction would run afoul of Art. VIII of the Constitution which provides, in relevant part, that:
1. (a) Property shall be assessed for taxation under general laws and by uniform rules. All real property assessed and taxed locally or by the State for allotment and payment to taxing districts shall be assessed according to the same standard of value, except as otherwise permitted herein, and such real property shall be taxed at the general tax rate of the taxing district in which the property is situated, for the use of such taxing district.
2. Exemption from taxation may be granted only by general laws. Until otherwise provided by law all exemptions from taxation validly granted and now in existence shall be continued. Exemptions from taxation may be altered or repealed, except those exempting real and personal property used exclusively for religious, educational, charitable or cemetery purposes, as defined by law, and owned by any corporation or association organized and conducted exclusively for one or more of such proposes and not operating for profit.
The constitutional problem arises because of the perception that N.J.S.A. 54:4-3.52 provides an exemption based on the status of the property owner and that its constitutionality can be saved only by limiting the use of the exempt property so ...