New Life Gospel Church v. State, Dept. of Community Affairs, Div. of Housing Bureau of Fire Safety

• Decision Date: 11 June 1992
• Citation: 257 N.J.Super. 241,608 A.2d 397
• Parties: , 75 Ed. Law Rep. 842 NEW LIFE GOSPEL CHURCH, Appellant, v. STATE of New Jersey, DEPARTMENT OF COMMUNITY AFFAIRS, DIVISION OF HOUSING BUREAU OF FIRE SAFETY, Respondent.
• Court: New Jersey Superior Court — Appellate Division

Page 241

257 N.J.Super. 241

608 A.2d 397, 75 Ed. Law Rep. 842

NEW LIFE GOSPEL CHURCH, Appellant, v. STATE of New Jersey, DEPARTMENT OF COMMUNITY AFFAIRS DIVISION OF HOUSING BUREAU OF FIRE SAFETY, Respondent.

Superior Court of New Jersey Appellate Division.

Argued Nov. 14, 1991.

Decided June 11, 1992.

Susan S. Rankin, Piscataway, for appellant.

John J. Chernoski, Deputy Atty. Gen., for respondent (Robert J. Del Tufo, Atty. Gen., attorney, Joseph L. Yannotti, Deputy Atty. Gen., of counsel, John J. Chernoski, on the brief).

Before Judges KING, GRUCCIO and BROCHIN.

The opinion of the court was delivered by

GRUCCIO, J.A.D.

New Life Gospel Church (the Church), a non-profit religious organization, appeals from a decision of the New Jersey Department of Community Affairs, Division of Housing, Bureau of Fire Safety (the Department) which required the Church to pay a life hazard use registration fee pursuant to the Uniform Fire Safety Act (the Act), N.J.S.A. 52:27D-192 to -213.

The Church owns and operates the New Life Christian School, which is classified as a life hazard use ¹ and is the subject of the registration fee. The Church filed a life hazard registration application for the school, ² which it described as two buildings; a two-story constructed before 1900, and a one-story constructed in 1983. The use was described as a day care center and a grade school.

The Department issued the Church a life hazard use certificate of registration for its school, classifying it a life hazard use AE04. ³ The Church was assessed a $115 annual registration fee to be paid within 30 days.

The Church requested a hearing challenging the registration fee as an unlawful tax against a religious organization, and claimed an exemption. The Department denied the hearing request as untimely. ⁴

The Church claims that the registration fee is revenue raising and therefore a tax, which it, as a religious organization, is not required to pay. A tax is imposed by the government for general revenue purposes. Holmdel Builders Ass'n v. Township of Holmdel, 121 N.J. 550, 582, 583 A.2d 277 (1990). If the primary purpose of a fee is to raise revenue, it is a tax. Id. (citing Daniels v. Borough of Point Pleasant, 23 N.J. 357, 129 A.2d 265 (1957)). The Supreme Court has noted that, in contrast to a tax, a fee is imposed under the government's police power to regulate. Holmdel Builders Ass'n v. Township of Holmdel, supra, 121 N.J. at 582-83, 583 A.2d 277; Parking Auth. of the City of Trenton v. City of Trenton, 40 N.J. 251, 259, 191 A.2d 289 (1963). A fee is not judged a tax so long as the amount of the fee bears a reasonable relationship to the cost incurred by the government to regulate. United States v. Sperry Corp., et al., 493 U.S. 52, 60-61, 110 S.Ct. 387, 393-94, 107 L.Ed.2d 290, 301-02 (1989); Parking Auth. of the City of Trenton v. City of Trenton, supra, 40 N.J. at 259, 191 A.2d 289. If a fee's primary purpose is to reimburse the municipality for services reasonably related to development, it is a permissible regulatory exaction. Daniels v. Borough of Point Pleasant, supra, 23 N.J. at 361, 129 A.2d 265.

We find the life hazard use registration fee a permissible regulatory exaction. The Act clearly states that the purpose of the registration fee is to recover the cost of enforcing the Act. Here, the Church has not sustained its burden of showing that the minimal registration fee imposed does not bear a reasonable relation to the annual cost of inspecting the two buildings comprising the New Life Christian School. Therefore, it is reasonably imposed.

The Church further contends that its religious nature constitutionally mandates exemption from the fee. Our Constitution states that property of religious organizations may be exempted from taxation. N.J.Const. art. VIII, § 1, para. 2. The Legislature has exempted property of religious organizations which is used exclusively for religious or charitable purposes from taxation. N.J.S.A. 54:4-3.6. However, entities exempted from taxes are not exempted from paying government fees. Parking Auth. of City of Trenton v. City of Trenton, supra, 40 N.J. at 257, 191 A.2d 289 (tax exempt municipal parking authority not exempt from payment of building permit fees); Jersey City Sewerage Auth. v. Housing Auth. of the City of Jersey City, 70 N.J.Super. 576, 176 A.2d 44 (Law Div.1961), aff'd, 40 N.J. 145, 190 A.2d 870 (1963) (tax exempt housing authority not exempt from sewerage treatment fees).

Where the Legislature has intended to exempt an entity from payment of a fee imposed pursuant to a regulatory scheme, it has done so in clear and unequivocal terms. See, e.g., N.J.S.A. 52:27D-126c (prohibiting the payment of construction code fees for the erection or alteration of public building owned by a county, municipality, or any agency or instrumentality thereof). The provisions of N.J.S.A. 54:4-3.6, which provide tax exemption for certain property of religious organizations, do not also provide religious organizations an exemption from regulatory fees.

Although the Church's school may be religious in character, it is not constitutionally exempt from the fee. The fee is not a tax and the Legislature did not intend to exempt similar schools from the registration fees. Accordingly, the Church is not exempt.

The Church next contends that the power of an administrative agency to define life hazard use and, by virtue of that definition, to tax property, is an improper delegation of authority. This argument is premised upon the misconception that the registration is a tax. Since the fee is not a tax, the Legislature properly delegated the authority to the Department. The Legislature may properly confer upon an administrative agency the power to provide regulations to promote the spirit of the legislation. Cammarata v. Essex Cty. Park Comm'n, 46 N.J.Super. 262, 269, 134 A.2d 604 (App.Div.1957), aff'd, 26 N.J. 404, 140 A.2d 397 (1958). Further, the Legislature may delegate to an administrative agency the authority to implement broad legislative policy. Id. at 410, 140 A.2d 397.

Administrative regulations are presumed valid and the party attacking the regulations has the burden of showing their invalidity. Bergen Pines Cty. Hosp. v. New Jersey Dept. of Human Services, 96 N.J. 456, 477, 476 A.2d 784 (1984); Public Serv. Elec. & Gas Co. v. New Jersey. Dept. of Envtl. Protection, 193 N.J.Super. 676, 684, 475 A.2d 665 (App.Div.1984), aff'd, 101 N.J. 95, 501 A.2d 125 (1985). The purpose of delegating the authority to promulgate regulations is to utilize the agencies' staff, resources, and expertise for understanding and solving specialized problems.

There is no evidence that the Legislature improperly delegated authority to the Department. Further, the grant of this authority is to be liberally construed to enable administrative agencies to accomplish the legislative purpose. In re Request for Solid Waste Util. Customer Lists, 106 N.J. 508, 516, 524 A.2d 386 (1987). The court will not substitute its judgment for the expertise of an agency. Dougherty v. Department of Human Servs., Div. of Medical Assistance and Health Servs., 91 N.J. 1, 6, 449 A.2d 1235 (1982).

We recently stated, in In re Adoption of N.J.A.C. 7:26B, 250 N.J.Super. 189, 593 A.2d 1193 (App.Div.), certif. granted, 126 N.J. 385, 599 A.2d 162 (1991), that review of an agency action questions whether the action violates the enabling act's express or implied legislative policies; whether there is a substantial basis in the record to support findings upon which the agency based application of legislative policies; and whether in applying legislative policies to facts, the agency clearly erred by reaching a conclusion that could not have been reasonably made upon a showing of relevant factors. Id. at 207, 593 A.2d 1193. We have reviewed the Department's system for imposing the fees and find no violation of the Act.

The Department classified the Church's buildings as a life hazard use, to be inspected annually, and imposed a minimal registration fee of $115. While the Church claims that the facts demonstrate improper Department action, a reading of the record indicates otherwise. The Department was confronted with the State's first recent budget crisis which resulted in a 15% increase in registration fees. The Department also adopted regulations classifying schools as life hazard uses and imposed registration fees for these uses.

Previously, schools were not classified as life hazard uses. However, the Department limited the registration fee to $115 for public or private K-12 educational buildings registered as life hazard uses, even if the building had other life hazard uses which would normally result in a higher fee. Thus, the Church was one of the direct beneficiaries of the Department's intent to limit fees for educational facilities. Further, this type of life hazard use does not require any permit to conduct other activities in the buildings, which is required of other life hazard uses.

The Department has properly implemented the legislative mandate and determined an appropriate level of fees. The Department reduced the level of fees for life hazard uses, such as the Church's, which are educational facilities for New Jersey's students. Further, the inclusion of certain educational facilities as life hazard uses affords occupants the protection of the Act by ensuring that the use is registered and annually inspected for compliance with the Fire Code. Therefore, there is nothing to indicate that the Legislature or the Department acted improperly.

The Church next contends that the title of the Act failed to state that one of its purposes was to generate revenue or to tax certain properties. It claims that this violates the New Jersey constitutional requirement that the purpose of every law be expressed in the Act's title. N.J. Const. art. IV, § 7, para. 4. The purpose of this constitutional requirement is to prevent the use of...