On certification to the Superior Court, Appellate Division, whose opinion is reported at 284 N.J. Super. 521 (1995).
The opinion of the Court was delivered by Garibaldi, J. Chief Justice Poritz and Justices Handler, Pollock, O'hern, Stein and Coleman join in Justice GARIBALDI's opinion.
The opinion of the court was delivered by: Garibaldi
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
New Jersey Carpenters Apprentice Training and Education Fund v. Borough of Kenilworth, 147 N.J. 171, 685 A.2d 1309 (1996)
Garibaldi, J., writing for a unanimous Court.
The issue in this case is whether a training center owned by the New Jersey Carpenters Apprentice Training and Education Fund is exempt from real property taxation pursuant to N.J.S.A. 54:4-3.6.
N.J.S.A. 54:4-3.6 (section 3.6) exempts from real property taxation any building that is actually used as a "school" and is not conducted for profit. The New Jersey Carpenters Apprentice Training and Education Fund (Fund) owns a building in which it operates a training center for apprentices. The Fund was established "for Apprentice Training and educational purposes" under an Agreement and Declaration of Trust (the Trust). Trustees, representatives of both the United Brotherhood of Carpenters and Joiners of America (Union) and employers in the construction industry, oversee the Fund's activities and investments. The Fund is exempt from federal income taxes under 26 U.S.C.A. § 501 (c). The Trust provides that no part of the corpus or income of the Fund may be used for purposes other than apprentice training and educational purposes, even on termination of the Trust.
To provide a training center for apprentices, the Fund purchased property in Kenilworth for $2.8 million in 1990. The Fund recruits apprentices from union locals, by advertising at high-school career days, from vocational schools, and through advertising at unemployment offices. There is no charge for tuition, books, or supplies, as the program is funded through contributions of Union members. Apprentices are required to work full-time in carpentry and to attend the facility four weeks per year. Apprentices who attend the training center are taken into local unions. No academic programs are offered and students do not receive grades or degrees. The program is not accredited by the New Jersey Department of Education or any similar agency.
In 1991, the Fund applied to the Borough of Kenilworth for an exemption from real-estate taxes for the training center pursuant to section 3.6, claiming that it was operating a school that was not conducted for profit. Kenilworth denied the exemption. The County Board of Taxation affirmed the assessment. The Fund filed a complaint with the Tax Court of New Jersey, which found that the property was neither a school nor nonprofit and entered a judgment affirming the assessment. The Appellate Division reversed the Tax Court's decision. The Supreme Court granted Kenilworth's petition for certification.
HELD: The training facility owned by the Fund does not qualify as a "school" under N.J.S.A. 54:4-3.6 and is operated primarily to benefit a particular profit-making sector of the economy. It is, therefore, not exempt from the payment of real property taxes.
1. Tax-exemption statutes are strictly construed against those claiming exemption because of the compelling public policy that all property bear its fair share of the burden of taxation. (pp. 8-9)
2. A statute should be interpreted in accordance with its plain meaning if it is clear and unambiguous on its face and allows for only one interpretation. Statutory construction that will render any part of a statute inoperative, superfluous, or meaningless is to be avoided. To read the term "school" broadly to cover all institutions of learning would render superfluous the other terms of the statute. (pp. 9-11)
3. While the term "college" has been given a broad definition, an institution of education cannot be considered a "college" under the statute if it is primarily for the benefit of a specific for-profit sector of the economy. Because the Fund is controlled by and operated primarily for the benefit of the construction industry, it cannot be considered a college for purposes of tax exemption under the statute. (pp.13-20)
4. Although some states have exempted from taxation nontraditional schools on a case-by-case basis, such an approach does not provide a standard for courts to follow and ensures that every nontraditional school will litigate its exemption status. (pp. 20-23)
5. A property owner's exemption from federal income taxation does not determine whether the owner's property is tax-exempt under state real-estate law. (p. 24)
Judgment of the Appellate Division is REVERSED.
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN, STEIN and COLEMAN join in JUSTICE GARIBALDI's opinion.
The opinion of the Court was delivered by
N.J.S.A. 54:4-3.6 exempts from real property taxation any building that (1) is actually used as a "school" and (2) is "not conducted for profit." Plaintiff, the New Jersey Carpenters Apprentice Training and Education Fund (Fund), owns a building in which it operates a training center for apprentices. The question to be resolved in this case is whether that building is exempt under N.J.S.A. 54:4-3.6.
The Fund is a Taft-Hartley trust fund created under an Agreement and Declaration of Trust (Trust) in 1969. The Fund was established "for Apprentice Training and educational purposes." Four parties signed the trust agreement: (1) the New Jersey State Council of Carpenters, an unincorporated association of local trade unions and district councils affiliated with the United Brotherhood of Carpenters and Joiners of America (Union); (2) the Building Contractors Association of New Jersey, an association of employers in the building construction industry; (3) additional employers in the construction industry who are under an obligation to make contributions to the Fund by virtue of their respective collective bargaining agreements with the Union; and (4) the trustees, representatives of both the Union and the employers.
The trustees oversee the Fund's activities and investments. Originally composed of fourteen members, the board has been expanded to twenty-four members. Under the Trust, half of the trustees are appointed by the Union and half by the employers. The Union trustees serve at the will of the Union and the employer trustees serve at the will of the employers.
The Fund's purpose is described in the Trust:
The Fund is established for Apprentice Training and educational purposes and no part of the earnings or assets of the Fund shall inure to the benefit of any private ...