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In Re Plan For the Abolition of the Council On Affordable Housing and

March 8, 2012

IN RE PLAN FOR THE ABOLITION OF THE COUNCIL ON AFFORDABLE HOUSING AND PROVIDING FOR THE TRANSFER OF THE FUNCTIONS, POWERS, AND DUTIES OF THE COUNCIL ON AFFORDABLE HOUSING TO THE DEPARTMENT OF COMMUNITY AFFAIRS, REORGANIZATION PLAN 1-2011


On appeal from the Governor's Reorganization Plan No. 001-2011, issued June 29, 2011.

The opinion of the court was delivered by: Carchman, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued February 15, 2012

Before Judges Carchman, Fisher and Nugent.

The opinion of the court was delivered by CARCHMAN, P.J.A.D.

The issue raised in this appeal is whether, pursuant to the Executive Reorganization Act of 1969, N.J.S.A. 52:14C-1 to -11 (Reorganization Act), a Governor may abolish an independent agency created by the Legislature that is "in but not of" a department of the Executive Branch. As applied here, the narrower issue is whether respondent Governor Chris Christie may, under the terms of the Reorganization Act, "abolish" the Council on Affordable Housing (COAH), an independent agency created by the Fair Housing Act, N.J.S.A. 52:27D-301 to -329 (FHA), and transfer the duties, responsibilities and obligations of that agency to the sole authority of the Commissioner of the Department of Community Affairs (DCA).

Strictly construing the Reorganization Act, we conclude that it does not grant the Governor the power to abolish a legislatively created, representative, independent authority that is "in but not of" the Executive Branch or any department in that branch of the government. Applying this rule here, we determine that the Governor exceeded his authority under the Reorganization Act in abolishing COAH. Accordingly, we reverse.

I.

The relevant facts are not in dispute.

In Southern Burlington County NAACP v. Township of Mount Laurel, 92 N.J. 158 (1983) (Mount Laurel II), and Southern Burlington County NAACP v. Township of Mount Laurel, 67 N.J. 151, cert. denied, 423 U.S. 808, 96 S. Ct. 18, 46 L. Ed. 2d 28 (1975) (Mount Laurel I), the Supreme Court held that New Jersey's municipalities have the constitutional obligation to provide an adequate opportunity for the development of affordable housing, a holding that has become known as the Mount Laurel Doctrine. In 1985, the Legislature codified the Mount Laurel Doctrine by enacting the FHA. Toll Bros., Inc. v. Twp. of W. Windsor, 173 N.J. 502, 513 (2002). The Legislature further established COAH as the entity charged with implementing and administering the legislative mandates of the FHA. Ibid.

COAH reflected the Legislature's intent to create a representative and independent entity to address affordable housing issues. The FHA mandated the membership of COAH, see N.J.S.A. 52:27D-305, and provided detailed specifications regarding its members' qualifications, terms of office, vacancies, compensation, nominations and removals. In its most recent iteration,*fn1 N.J.S.A. 52:27D-305 provides:

a. There is established in, but not of, the Department of Community Affairs a Council on Affordable Housing to consist of 12 members appointed by the Governor with the advice and consent of the Senate, of whom four shall be elected officials representing the interests of local government, at least one of whom shall be representative of an urban municipality having a population in excess of 40,000 persons and a population density in excess of 3,000 persons per square mile, at least one of whom shall be representative of a municipality having a population of 40,000 persons or less and a population density of 3,000 persons per square mile or less, and no more than one of whom may be a representative of the interests of county government; four shall represent the interests of households in need of low and moderate housing, one of whom shall represent the interests of the nonprofit builders of low and moderate income housing, and shall have an expertise in land use practices and housing issues, one of whom shall be the Commissioner of Community Affairs, ex officio, or his or her designee, who shall serve as chairperson, one of whom shall be the executive director of the agency, serving ex officio; and one of whom shall represent the interests of disabled persons and have expertise in construction accessible to disabled persons; one shall represent the interests of the for-profit builders of market rate homes, and shall have an expertise in land use practices and housing issues; and three shall represent the public interest. Not more than six of the 12 shall be members of the same political party. The membership shall be balanced to the greatest extent practicable among the various housing regions of the State.

b. The members shall serve for terms of six years, except that of the members first appointed, two shall serve for terms of four years, three for terms of five years, and three for terms of six years. All members shall serve until their respective successors are appointed and shall have qualified. Notwithstanding the above, a member appointed to represent the interests of local government shall serve only such length of the term for which appointed as the member continues to hold elected local office . . . .

c. The members, excluding the executive director of the agency and the Commissioner of Community Affairs, shall be compensated at the rate of $150.00 for each six-hour day . . . spent in attendance at meetings and consultations . . . .

d. The Governor shall nominate the members within 30 days of the effective date of this act and shall designate a member to serve as chairman throughout the member's term of office and until his successor shall have been appointed and qualified. . . .

e. Any member may be removed from office for misconduct in office, willful neglect of duty, or other conduct evidencing unfitness for the office, or for incompetence. A proceeding for removal may be instituted by the Attorney General in the Superior Court [(Emphasis added).]

The Legislature took extraordinary steps to insulate COAH from the control of a single political party. In addition to requiring representation of certain designated constituent interests, the Legislature ordained that COAH be bipartisan, with no more than six members from one political party; moreover, removal of a member required a proceeding initiated by the Attorney General, to be heard in the Superior Court.

On February 9, 2010, the Governor issued Executive Order No. 12, creating a Housing Opportunity Task Force charged with reviewing the FHA, the State Planning Act (N.J.S.A. 52:18A-196 to -207), COAH's then-present and former regulations and methodologies, and "the continued existence of COAH." 42 N.J.R. 659(a) (March 15, 2010). The task force was to report to the Governor within ninety days; paragraph five of the Order required that, during those ninety days, "COAH [was to] refrain from taking any further action to process applications for substantive certification or to take [sic] any other actions to implement the Third Round regulations," allowing, however, for a "good cause" exception to the provision.

Appellant Fair Share Housing Center challenged Executive Order No. 12 in In re Executive Order on the Council on Affordable Housing, A-2693-09, and we stayed implementation of paragraph five pending appeal. On March 20, 2010, after the Task Force's review was completed, the Governor issued Executive Order No. 20, rescinding Executive Order No. 12, 42 N.J.R. 752(a) (April 19, 2010), thereby rendering that appeal moot.

The Legislature also sought to abolish COAH, and to implement its intent, it enacted Senate Bill No. 1 on January 10, 2011. However, that bill was substantially amended by the time it was passed by the Assembly, and the Governor conditionally vetoed it, expressing a preference for the original Senate version. The bill was withdrawn from legislative consideration following the conditional veto.

On June 29, 2011, the Governor issued the reorganization plan (the plan) in dispute here. 43 N.J.R. 1621(a) (August 1, 2011). The plan's stated purpose was to abolish COAH, "thereby reducing expenditures and promoting economy and efficiency in the operations of the executive branch by eliminating a costly and burdensome regulatory agency." 43 N.J.R. 1621. The plan's general purpose was "to reduce the unnecessary complexity of affordable housing administration in New Jersey, lower the administrative costs associated with the present regulatory process, and streamline the development of new housing projects." Ibid. The plan noted that the DCA, in addition to overseeing and providing assistance to municipalities, "also operates numerous affordable housing programs funded by the Department of Housing and Urban Development and the State of New Jersey." Ibid. According to the plan, "[t]he performance of these obligations [could] be significantly improved and streamlined by consolidating the statutory functions, powers, and duties of [COAH] with those of the [DCA]." Ibid. Accordingly, the plan transferred all of COAH's functions, powers, duties, and personnel to the DCA Commissioner's authority and "abolished" the terms of office of all existing COAH members. Ibid.

The plan asserted that this transfer would result in "significant cost savings to State and local government taxpayers," who would "be freed from the sometimes inconsistent directions provided by COAH and the [DCA], thereby reducing the legal and administrative costs resulting from regulatory uncertainty." Ibid. According to the plan, the DCA could "effectively manage the State's affordable housing obligations without the necessity of the multi-member Council and a separate full-time staff" and without needing to compensate COAH board members for their "time, travel costs, and attendance at meetings." Ibid.

The plan also claimed that it would: address the needs of both the providers and beneficiaries of affordable housing in New Jersey by organizing all programs within a single regulatory body. Consolidating the authority for housing in the [DCA would] reduce bureaucracy and foster predictability and consistency for developers and housing advocates alike, curb procedural inefficiencies and maneuvering, resulting litigation, and unreasonable delays and costs to municipalities and the private sector, while appropriately increasing the availability of affordable housing throughout the state. [Ibid.]

In sum, tracking the language of the Reorganization Act, the Governor asserted that the plan was needed to:

1. Promote the better execution of the laws, the more effective management of the Executive branch and of its agencies and functions, and the expeditious administration of the public business;

2. Reduce expenditures and promote economy consistent with the efficient operation of the Executive;

3. Increase the efficiency of the operations of the Executive;

4. Group, co-ordinate, and consolidate functions of the Executive according to major purposes; and

5. Eliminate overlapping and duplication of effort. [Ibid.]

The plan noted that it was filed with the Secretary of State on June 29, 2011, and that it would become effective sixty days after that date unless the Legislature adopted a concurrent resolution of disapproval. 43 N.J.R. 1622.

According to the legislative schedule, the Legislature canceled its June 30, 2011 session, which had been the only session scheduled between June 29, 2011 and the end of August. In other words, the Legislature was originally scheduled to meet during the sixty-day period only once (the day after the plan was submitted), and ultimately, did not meet at all during the sixty-day period.

Appellant notes various differences between the operating procedures of COAH (before the reorganization) and the Commissioner (following the reorganization) and claims that these differences undermine the legislative underpinning of both COAH and the FHA.*fn2 According to appellant, whereas under COAH, "all decisions were made at public meetings with the opportunity for the public to speak," the DCA Commissioner "has taken the position . . . that because she, unlike COAH, is not a public body subject to the Open Public Meetings Act, N.J.S.A. 10:4-6 et seq.[,] she may decide motions in private on any timetable she wishes."

Appellant cites three sources as evidence of these differences. The first is an opinion letter from the DCA regarding a particular application. Among other things, the opinion letter recites that "since [COAH] no longer exists, there is no requirement that public meetings be held to consider such requests." The second is another opinion letter regarding that same application, in which the Commissioner determines that, "since there no longer is a public body implementing [COAH's] regulations, any regulatory requirements for a public meeting are no longer applicable." The third is a recent decision of the Commissioner "involving the financial feasibility of a proposed development." This decision relied upon a report that, according to appellant, "was never presented in public or made available to the parties." Based on this report, the Commissioner determined that a subdivision approval allowing for fifteen units need only provide two affordable housing units because a third affordable housing unit would not be "economically feasible."

II.

We now address appellant's argument challenging the Governor's reorganization of an "in but not of" agency. Appellant maintains that the Reorganization Act does not apply to such "in but not of" agencies because the Act defines "agency" as entities "of" (as opposed to "in but not of") the Executive Branch. See N.J.S.A. 52:14C-3(a)(1). Appellant bases this contention on a number of factors.

First, appellant contrasts the language of the Reorganization Act with language from other statutes to demonstrate that the Legislature intended to provide the Reorganization Act with different, narrower treatment. For example, appellant cites the Administrative Procedure Act, N.J.S.A. 52:14B-1 to -15 (APA), enacted one year before the Reorganization Act, and an ethics law, N.J.S.A. 52:13D-13, enacted two years later, both of which define agencies as including entities "within" the departments of the Executive Branch. Similarly, appellant contends that the Legislature recognized the distinction between agencies "in" rather than "of" the Executive Branch during its creation of the Office of the Public Defender, the New Jersey Public Broadcasting Authority and other similar independent agencies. Appellant opines that the same Legislature that struggled to protect the independence of those entities did not grant the Governor the power to abolish such independent entities through the expedited process sanctioned by the Reorganization Act.

Second, appellant argues that the purpose and history of the Reorganization Act support the conclusion that "in but not of" agencies are outside of the Reorganization Act's scope, and that such a result is consistent with the approach advanced at the 1947 Constitutional Convention. Appellant also observes that no Governor has ever eliminated an "in but not of" agency under the Reorganization Act and, until creation of this plan, even the present Governor had sought legislative approval to alter such agencies.

Third, appellant claims that courts addressing matters pertaining to "in but not of" agencies have made similar distinctions, and have recognized the Legislature's intent to create a "particular balance of control" regarding those agencies. Appellant argues that COAH's enabling legislation established such a delicate balance of control, as evidenced not only by its use of the phrase "in but not of," but also by its detailed attention to the composition of its Council. Accordingly, the Legislature could not have intended to allow the Governor to unilaterally disrupt that balance.

Finally, appellant contends that to interpret the Reorganization Act in a way that permits the Governor to reorganize an independent agency such as COAH would violate New Jersey's constitutional separation of powers.

The Governor responds that the reorganization plan falls within his authority under the Reorganization Act. The Governor notes that the FHA created COAH "in but not of" the DCA, as opposed to "in but not of" the Executive Branch, and he asserts that this is a distinction with a difference. Because COAH was part of the Executive Branch, the Governor maintains it was "necessarily included in the definition of 'agency' in the Reorganization Act." The Governor notes that the Reorganization Act specified certain types of reorganization that were prohibited, N.J.S.A. 52:14C-6, and the reorganization of independent "in but not of" agencies was not in that list. Therefore, claims the Governor, the Legislature granted the authority to reorganize those independent entities, just as other Governors have done in the past.*fn3

That interpretation, asserts the Governor, is consistent with the 1947 Constitutional Convention's intent to create a strong Governor with authority to control the twenty principal departments. Moreover, the Governor alleges that the FHA will still be effectuated because the plan "simply 'rearranges what already exists' and does not attempt to confer any 'new or different authority' upon the Commissioner."

Amici Curiae Housing and Community Development Network of New Jersey, the Corporation for Supportive Housing, and the Mercer Alliance to End Homelessness assert that the legislatively mandated diverse yet representative membership of COAH reflects the "voices of the competing interests," and "provide[s] balance" to the decisionmaking process, as required by the FHA. Without this balance, they assert, ...


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