On appeal from the New Jersey Department of Education.
The opinion of the court was delivered by: Grall, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Skillman, Grall and Espinosa.
The Commissioner of the Department of Education has adopted regulations entitled "Fiscal Accountability, Efficiency and Budgeting Procedures," N.J.A.C. Title 6A, Chapter 23A, to implement laws enacted to revise the school funding formula and reduce property taxes, in part, through oversight and limitation of government spending by school districts. See L. 2007, c. 53, 63, 92 and 260. Asserting the interests of its members, the New Jersey Association of School Business Officials (Association) appeals and challenges the validity of regulations that set standards for payments in lieu of unused sick and vacation leave to school district business administrators, N.J.A.C. 6A:23A-3.1(e)(6)-(8),*fn1 and condition a school district's receipt of state aid on its adoption of a nepotism policy, N.J.A.C. 6A:23A-6.2.
The Association contends that the Commissioner has exceeded the authority delegated by the Legislature and adopted regulations that are inconsistent with the enabling acts and in conflict with other statutes addressing compensation and nepotism. We uphold the challenged measures because they are not inconsistent with statutory law and are within the powers "'expressly granted'" to the Commissioner and those "'reasonably necessary or appropriate to effectuate the specific delegation.'" N.J. Guild of Hearing Aid Dispensers v. Long, 75 N.J. 544, 562 (1978) (quoting In re Regulation F-22 of the Office of Milk Indus., 32 N.J. 258, 261 (1960)).
Legislative grants of administrative authority are construed liberally "to enable the agency to accomplish its statutory responsibilities [and] effectuate fully the legislative intent." N.J. Guild, supra, 75 N.J. at 562. In assessing the scope of delegated authority, our courts "look beyond the specific terms of the enabling act to the statutory policy sought to be achieved by examining the entire statute in light of its surroundings and objectives." Ibid. Administrative action that "'can be said to promote or advance the policies and findings that served as a driving force for the enactment of that legislation'" is upheld. In re Certain Amendments to Adopted and Approved Solid Waste Mgmt. Plan of Hudson County Solid Waste Mgmt. Dist., 133 N.J. 206, 216 (1993) (quoting A.A. Mastrangelo, Inc. v. Comm'r of Dep't of Envtl. Prot., 90 N.J. 666, 684 (1982)).
Given the foregoing standards governing judicial review, examination of the pertinent enabling acts informed by the problems the Legislature identified and the goals it sought to achieve is essential. In this case, there is an abundance of relevant material.
The Legislature commenced the effort that led to the adoption of the Commissioner's regulations addressing "Fiscal Accountability, Efficiency and Budgeting Procedures" in July 2006. Recognizing that the "Legislature and the Governor" had the responsibility "to protect the welfare and well-being of" the people of New Jersey by addressing "[t]his State's high property taxes," the Legislature sought to "bring about property tax reform based upon a fairer distribution of tax burdens and the adoption of efficiencies." Assemb. Concurrent Res. 3, 212th Legis. Sess. (2006).*fn2
Through that resolution, the Legislature established four joint legislative committees to review and formulate proposals for "school funding, government consolidation and shared services, public employee benefits" and constitutional reform.
Ibid. Each of the joint committees was directed to prepare a report proposing measures "to bring about property tax reform." Ibid.
Specific directives given to the several joint committees are relevant here. Among the duties assigned to the Joint Legislative Committee on Public School Funding Reform was formulation of proposals to "control school district spending, particularly administrative spending." Ibid. The Joint Legislative Committee on Government Consolidation and Shared Services was directed "to review and formulate proposals that address the sharing of services and regionalization of functions at all levels of government." Ibid. And, the Joint Legislative Committee on Public Employee Benefits Reform was assigned the duty "to review and formulate proposals that address abuses of the system of benefits provided to public employees, including all branches of State government and all local government entities, and to control the costs of the State and its political subdivisions for public employee retirement, health care and other benefits." Ibid. The joint committees issued their final separate reports on December 1, 2006.*fn3
Each of the joint committees conducted public hearings, gathered evidence and received comments from professional organizations and the public. Three committees relied, in part, upon a report issued by the State Commission of Investigation (SCI) in March 2006 and entitled "Taxpayers Beware: What You Don't Know Can Cost You - An Inquiry Into Questionable and Hidden Compensation for Public School Administrators."*fn4 As "part of a broad ongoing effort . . . to identify waste and abuse at all levels of government in New Jersey," id. at 1 (executive summary), the SCI examined "employment contracts and compensation arrangements between public school administrators and boards of education" and identified "questionable and excessive practices that, collectively, cost unsuspecting New Jersey taxpayers millions of dollars," ibid. The excess administrative costs identified included perquisites such as travel expenses, clothing and housing allowances and the award of "inordinate amounts of sick, vacation and other forms of paid leave and the cashing-in of unused leave" in return for payments far greater than those provided to state employees. Id. at 6. The SCI attributed these costly benefit awards to the fact that employment contracts for administrators were negotiated privately and without oversight by county or state officials and not disclosed to the public. Id. at 57-59. The SCI recommended reforms. Id. at 60-71.
Referencing and reiterating the SCI's findings, the joint legislative committees made additional findings and recommended reform. See J. Legis. Comm. on Public School Funding Reform, Final Report, 212th Legis. Sess., at 88-90 (2006) (hereinafter PSFR); J. Legis. Comm. on Government Consolidation and Shared Services, Final Report, 212th Legis. Sess., at 55-57, 61-63 (2006) (hereinafter GCSS); J. Legis. Comm. on Public Employee Benefits Reform, Final Report, 212th Legis. Sess., at 141-45 (2006) (hereinafter PEBR). With respect to school funding, the determination was that "any new school funding formula must include mechanisms to control the taxing and spending behavior of school districts and to promote greater efficiencies." PSFR, supra, at 1. The committee considering consolidation and shared services found oversight of "[s]chool superintendents . . . with respect to administrative spending" lacking and a need to "promote accountability and cost savings." GCSS, supra, at 2. The committee on employee benefits found a "widespread practice of allowing [school district] administrators to cash-in substantial amounts of accumulated sick and vacation leave at retirement or upon departure." PEBR, supra, at 142, 144.
The committees recommended measures to foster accountability through public disclosure of contract benefits provided to administrators, PSFR, supra, at 89-90; GCSS, supra, 61-63, and enhanced oversight of "administrative spending in districts" by the Commissioner and "executive county superintendent[s]" with authority to "[a]pprove or disapprove of the hiring, compensation, and benefit plans of local school superintendents" and "veto excessive non-instructional expenses," GCSS, supra, at 56. There were specific recommendations for expanding the Commissioner's obligations and authority - such as conditioning reappointment of executive county superintendents and superintendents and business administrators of local districts upon performance evaluations and authorizing corrective action by the Commissioner to address non-compliance with standards set by the Commissioner for expenditure of public funds for education on administrative costs. Id. at 56-57; PSFR, supra, at 80-90.
Reasoning that standardization "for public employees serving at different levels of government" would "enable local governments to control public employee benefit costs" and thereby "reduce property tax revenue needs," the Joint Legislative Committee on Public Employee Benefits Reform urged enactment of legislation limiting payments for sick leave and accumulation of vacation leave to "all local government and board of education employees" so as to bring those benefits "in line with the current law and practice for State employees." PEBR, supra, at 143-45. The reference is to N.J.S.A. 11A:6-2, which permits state employees to accrue no more than one-year's vacation leave absent gubernatorial declaration of emergency, and N.J.S.A. 11A:6-16 and N.J.S.A. 11A:6-19, which authorize payment for unused sick leave "at the rate of one-half of the eligible employee's daily rate of pay" and fix the maximum benefit at $15,000.
The Legislature responded. The laws enacted and pertinent here are Chapters 53, 63, 92 and 260 of the Laws of 2007. Because the unifying object of each of the several chapters is broad, each chapter amends and supplements statutes codified in multiple titles of our statutes. Thus, the amendments and additions to the various titles and the scope of the authority delegated to the Commissioner must be understood with reference to that context and the relationship between the various amendments. See Saint Peter's Univ. Hosp. v. Lacy, 185 N.J. 1, 14-15 (2005) (discussing construction of related statutes adopted during the same session).
Through Chapter 53 of the Laws of 2007, the Commissioner must develop "plain language budget summary forms for the use of school districts," require annual submission and make the forms available to the public. N.J.S.A. 18A:22-8a(a) (L. 2007, c. 53, § 2a); see also N.J.S.A. 18A:22-8. With respect to contractual benefits awarded by school districts to business administrators, superintendents and assistant superintendents, the Commissioner must require each district to provide "a detailed statement" of "all forms of compensation provided for under the contract," including benefits to be "conferred after or upon separation from the school district." N.J.S.A. 18A:7F-5.3(a)(1), (3) (L. 2007, c. 53, § 4(a)(1), (3)). The district's business administrator must certify the accuracy of reports of all taxable income paid by the district, N.J.S.A. 18A:17-14.4 (L. 2007, c. 53, § 8).
The Commissioner must act upon receipt of the information. If, based on the information received from the district, the Commissioner "believes . . . the conduct of a superintendent, assistant superintendent or school business administrator warrants the revocation of the certificate held [by one of those officers] the commissioner shall recommend such revocation."
N.J.S.A. 18A:6-38.1(a) (L. 2007, c. 53, § 10(a)). And, when "any condition exists within a school district that would authorize the appointment of a State monitor pursuant to the provisions of [N.J.S.A. 18A:7A-55], the State Board of Examiners shall review the certification of the superintendent and the business administrator." N.J.S.A. 18A:6-38.2 (L. 2007, c. 53, § 11).
The board of education of every district must adopt a "travel policy" that requires a board member to "recuse himself from voting on travel" if a member "of his immediate family" has a "personal involvement" and a general rule that a board member "shall not act in his official capacity in any matter in which he or a member of his immediate family has a personal involvement that is or creates some benefit to the school official or member of his immediate family." N.J.S.A. 18A:11-12(k)-(l).
Through Chapter 63 of the Laws of 2007, the Legislature provided for additional oversight of school district spending by the Commissioner through "executive county superintendents." L. 2007, c. 63, §§ 42-58; N.J.S.A. 18A:7-1 to -16. Pursuant to N.J.S.A. 18A:7-1, executive county superintendents are appointed by the Governor upon the Commissioner's recommendation and with the advice and consent of the Senate. Executive county superintendents must "[p]romote administrative and operational efficiencies and cost savings within the school districts in the county while ensuring that the districts provide a thorough and efficient system of education." N.J.S.A. 18A:7-8(d). The Commissioner is responsible for assessment of their performance in "facilitating administrative efficiencies" based on "standards" set by the Commissioner including factors such as "per-pupil administrative expenditures." N.J.S.A. 18A:7-1(a)-(b).
Executive county superintendents must "[r]review and approve, according to standards adopted by the commissioner, all employment contracts for superintendents of schools, assistant superintendents of schools, and school business administrators in school districts within the county, prior ...