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In re Petition of the University Cottage Club of Princeton New Jersey Corp.

June 25, 2010

IN THE MATTER OF THE PETITION OF THE UNIVERSITY COTTAGE CLUB OF PRINCETON NEW JERSEY CORP.
FOR HISTORIC SITE CERTIFICATION PURSUANT TO N.J.S.A. 54:4-3.52, ET. SEQ.



On appeal from the New Jersey Department of Environmental Protection.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 5, 2010

Before Judges Stern, J. N. Harris and Newman.

Petitioner, University Cottage Club of Princeton (Cottage Club), appeals from the Department of Environmental Protection's (DEP) refusal to certify its historic-site tax exemption pursuant to N.J.S.A. 54:4-3.52 to -3.54 and in accordance with the remand of the Supreme Court in University Cottage Club of Princeton N.J. Corp. v. N.J. Dep't of Environmental Protection, 191 N.J. 38 (2007).

We affirm the action of the DEP based on the intervening legislation, L. 2007, c. 157, effective August 4, 2007, and retroactively applied 2004 amendments, defining public accessibility standards to obtain tax-exempt status which Cottage Club did not satisfy. The relevant facts, which are not in dispute, may be summarized as follows.

Cottage Club filed a petition with the DEP for historic site tax-exempt status pursuant to N.J.S.A. 54:4-3.52 to -3.54. After months of correspondence between Cottage Club, the DEP, and the Borough of Princeton, the then-DEP Commissioner (Commissioner) denied the application, finding that Cottage Club did not provide sufficient public access to its property to warrant a tax exemption under the statute. The Commissioner also indicated that until pending legislation to amend the statute was put into effect, he was going to deny all applications due to the public accessibility requirement in the statute. Univ. Cottage Club, supra, 191 N.J. at 47. Cottage Club appealed to this court, which affirmed the Commissioner's actions.

The Supreme Court granted certification and reversed, finding that the more rigorous requirements for tax-exempt status in the 2004 amendments, made via L. 2004, c. 183, were not intended to apply to Cottage Club, which filed its petition for tax-exempt status in 2001. Univ. Cottage Club, supra, 191 N.J. at 49-50.

Cottage Club was accessible to the public for limited hours on twelve days of a year. The 2004 amendments required a tax-exempt status seeker to be open to the public at least ninety-six days out of the year. N.J.S.A. 54:4-3.54b(a)(4); Univ. Cottage Club, supra, 191 N.J. at 58. The Supreme Court found that the DEP's rejection of the petition was arbitrary and unreasonable, pointing out that "Cottage was entitled to an adjudication based on the regulations and standards the DEP had imposed upon it and that it had satisfied, including the twelve days of public access." Univ. Cottage Club, supra, 191 N.J. at 58.

The matter was remanded by the Court to the DEP for action "consistent with the principles to which we have adverted." Ibid. While the DEP commented that it lacked sufficient information regarding Cottage Club's public accessibility, it is reasonably clear that DEP stayed its hand because of legislative activity.

Three weeks after the Court's decision, legislation was introduced in both houses, Assembly Bill No. A-4126 and Senate Bill No. S-2808, to clarify the intent and effect of the 2004 amendments. The 2007 amendments expressly changed the effective date of the 2004 act, indicating that the "2004 act is applicable to properties designated as historic sites after July 1, 1999." N.J.S.A. 54:4-3.54a1(f).

In addition to the change in time requirements, the 2007 amendments transferred jurisdiction over the granting of historic-site tax exemptions from the DEP to the Director of the New Jersey Division of Taxation in the Department of the Treasury. N.J.S.A. 54:4-3.54b. The DEP did retain the right to designate a site as historic, but could no longer grant tax-exempt status.

While this new legislation had been pending, Cottage Club sought certification from the DEP. The DEP eventually explained it was not acting on the Supreme Court's order of remand because the pending legislation would divest its jurisdiction to grant tax-exempt status.

On this appeal, Cottage Club raises the following issues for our consideration.

POINT I

THE SUPREME COURT HAS ALREADY DETERMINED THAT COTTAGE CLUB IS ENTITLED TO A HISTORIC[-]SITE TAX[]EXEMPT CERTIFICATION AND SET FORTH THE STANDARDS APPLICABLE TO SUCH DETERMINATION.

A. On remand, DEP was obligated to certify Cottage Club's tax-exempt status and was not permitted to undertake further review.

POINT II

COTTAGE CLUB IS ENTITLED TO AN ORDER COMPELLING THE COMMISSIONER TO CERTIFY ITS TAX-EXEMPT STATUS UNDER THE HISTORIC[-]SITE TAX EXEMPTION STATUTE IN ACCORDANCE WITH THE SUPREME COURT'S PRIOR RULING.

POINT III RETROACTIVE PROVISIONS OF 2007 AMENDMENTS ARE UNCONSTITUTIONAL AND MANIFESTLY UNJUST.

A. Legislation to "reverse" the Cottage Club decision violates the separation of powers clause.

B. The 2007 amendments constitute special legislation in that they were adopted to prevent exemption for Cottage Club alone and to arbitrarily preserve tax exemptions for entities certified prior to January 1, 1999.

C. Retroactive provisions of 2007 amendments are manifestly unjust.

I.

Cottage Club contends that the Supreme Court's holding in University Cottage Club automatically entitled it to a historic-site tax exempt certification. Cottage Club asserts that the DEP was not obliged to undertake any ...


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