# Petition for Writ of Certiorari — City of Newark v. Port of New York Authority > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385604_1152%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1969 - **Citation:** 396 U.S. 987 ## Text EME COURT, 0. a % FILED: ee ee ~ | SEP 23 1969 | IN THE = JOHN F. BAVIS, CLERK | Otfice Supreme Court, U.S. mei’ Court of the United States Octoser Term, 1969 = 636 a ‘THE CITY OF NEWARK, a municipal corporation of N ew J ersey, Petitioner, Us. THE PORT OF NEW YORK AUTHORITY, a body corporate and politic, created by Compact between the States of New Jersey and New York, - Respondent. PETITION FOR WRIT OF CERTIORARI TO THE SUPREME COURT OF NEW JERSEY ae al oe Purip E. Gorpon, * Corporation Counsel of and Attorney for Petitioner, City Hall, Newark, New J ersey, 07102. . Sam WEIss, Assistant Corporation Counsel, Of Counsel. Adams Press Corp., 11 Commerce Street, Newark, N. J.—Market 3-8611-12 ° ¥ é PEED Ped MITE EH Ne TORE HEI TE. SOLEIL MARIE A ONE AD PENTEL ST a 4. ; 4 , a od cial cate 8 TERR RR eRe IPED eA ae oe TABLE OF CONTENTS Oprntons BELow JURISDICTION QUESTION PRESENTED STATUTES -INVOLVED,...: : = STATEMENT OF THE CASE ’ SraGEs IN THT Fnoceepmcs AND MANNER IN WHICH THE FEDERAL [Questios Sovecst To Be ReviEwep was RalsED.......... 6 REASON -FOR seg ee THE Writ 9 Supportive P ECEDENTS thon os Conciusion | \ cocmmeenons ee —— 12 APPENDIX: | 4 a . A—Opinion of the Supreme Court of New Jer= | sey ...1. la B—Opinion of the Superior Court of New Jer- sey, Law Division ; Sila C—Judgmént and Mandate on Modification of Supreme Court of New Jersey 53a D—Relevant Statutes 54a E—Relevant Statutes - 68a F—Relevant_ Statutes... 68a, G—Relevant Statutes 70a H—Rele ant Statutes prt os ii . TABLE OF ‘CONTENTS Cases Cited | City of Cleveland v. Perk, 2 Ohio St. 2 173, 207 ( _N. E. 2d 556 (1965) , aa City of Newark v. Essex County Board of aot, ' 103 .N. J.- ‘Super. 41 (L. D. 1968), modified 54 N. J. 171 (1969) PAGE a Pe City of: Newark. v. Essex Deans Board of! Taxation, 54:-N. J. 171, 254 A. 2d 513 (1969) Gloucester Ice and Cold Storage Co. v. Assessors of ‘Gloucester, 337 Mass. 23, 147 N. E. 2d 820 (1958).. Port of N. Y. Auth. v. Essex Co. Bd. of Tax., 46:.N. J. 51 (1965). 3 | Town of Harrison v. County of Westchester, 13 N. Y. 2d 258, 196 N. E. 2d 240 (1963) Township of Moon, In re, 387 Pa. 144, 127 A. 2d 361 ~ (1956) . Statutes Cited NSA. 32: 14, et seq. N.J.S.A. 3226-25, et seq. N.J.S.A. 32 :1-35.28, et seq. N.J.S.A. 32:1-144, et seq. NJSSiA. 54:433 11 5 10 | z In co oe : Se Supreme Court of the United States. - OCTOBER TerM, 1969 © a>. > a THe City oF NEWARK,” a municipal corporation of. New-Jersey, - | Petitioner, Us. Tue Port or New-York Avuruority, a body coporate and | politic, created by Compact between 1 the States. of New | Jersey and New York, ° , "Respondent. - 4 > > Petition for Writ of Certiorari to the Supreme Court - \ ; of New Jersey Petitioner respectfully prays that a writ of centowtsl issue to review the judgment of the Supreme Court of. New Jersey entéred on June 25, 1969, b \ \ \ Opinions Below a aon a ag a Ss The\action was initiated by the Port Authority in the Superior Coun of New Jersey, Law Division, for a de- \ \ \ \ \ , 4 ‘ claratory’ judgment that certain lands and buildings leased by Newark to the Port Authority in the Port Newark area are exempt from local taxation. Newark did not ally it- . self with the position of the Port Authority, but joined as a party plaintiff for the purpose of achieving a determina: tive ‘resolution of. the issue by jidicial declaration. ‘The - Law Division held that with respect to properties leased by the Port Authority from Newark pursuant to statutory authority for the operation of a marine terminal, those properties used for transit functions, temporary storage and supporting services are exempt from taxation while ‘properties: used -for general warehousing, sales. and -deliv- eries and for processing and manufacturing are taxable. The opinion so holding, a copy of which is attached’ here- to as Appendix B, is reported at 103 N. J. Super. 41. On appeal to the Appellate Division, and certification by the Supreme Court, the latter court held that uses of properties at Port ‘Newark operated by the Port Author- ity under its lease with Newark, for transit functions, warehousing, processing and distribution activities ‘and service buildings were all statutorily authorized purposes _ and were tax exempt as publicly -owned property devoted to “public purposes.” The opinion so holding, a copy of _ which is attached hereto | as Appendix A, is pene af. 54 N.J. 171. * Jurisdiction - The jurisdiction of this Court:i is conferred by 2% U. S. C. 1257(3), to test the immunity from taxation specially ~ set up or claimed by the Port Authority under compacts ~ between the States of New Jersey and New York. The judgment sought to be reviewed was entered on June 25, 1969. ~ ‘ - ° PA / ‘ ; & ° é de A __ NMS. A. 04 4-3. 3. See Appadie H hereto. “Question Presented ° Se ¥ Are theme of properties at Port Newark Roe Aa ee the ort Authority ‘under its lease with Newark, for gen- ral warehousing, sales and deliveries ‘of merchandise and for processing and manufacturing exempt from taxation. under interstate compacts, represented, by N.J.S.A. 32:1-1 et seq., 32:1- % et seq., 32:1-144 et seq. and: 32:1- 3528 et seq. ? Sal mfr “Stages Involved — Pertinent portions of each of the. just-noted: statutes have been copied and attached hereto as Appendices D, E, F and G, respectively. Another statute here involved is Statement of the Case ; Idns. for the, development lof a marine terminal on ewark Bay date back to the beginning of this century, ith study commission reports and legislation leading: to / public ownership and operation of marjne terminals. ; Pursuant to the. authority of the foregoing enialathont' : the City of Newark dev eloped. the marine terminal com- . plex in the Port Newark area, eovering approximately. .700 ‘acres, including the leasing of docks, Jands and _— ings to private conéerns. - , In the interim, New Jersey and New York coe into / / a / an interstate compact pursuant to Congressional. author/ ‘ vity, establishing the Port of New York District and ating the Port of: New York Authority as the. bi, agency for the purpose of dev eloping the port N.J.S.A. pesca itis Bi . , ity to ungertake a study of all matters ‘r ating to Port 2s : /- r . ‘ . ‘ ? Newark and Newark Airport for the purpose of consid- ering the possibility of the port authority undertaking the management and administration. As a result of such a study legislation was adopted in 1947 authorizing the co- ‘ operation between the port authority and municipalitie in the development of marine terminals. N.J.S.A. 32:1- 35.28 et seq. Parallel legislation was adopted in the State of New York. Under this legislation, municipalities were empowered “to consent to the use by the port authority of any marine terminal owned by such municipality * * * ~ [and] to grant, convey, lease or otherwise transfer to the port authority any such marine terminal-or real or per- sonal property upon such terms as may be determined by the port authority and ‘such municipality.” N.J.S.A. 32:1- 35.31. In addition, every municipality was also authorized “to vest in the Port Authority the control, operation, - maintenance * * * of any marine terminal now owned by such municipality.” Id. Instead of conveying the marine terminal properties to te the port authority. or retaining the port authority as a managing agent of the marine terminal within the ambit of the foregoing legislative authéfization, the city entered into a lease agreement with the port authority on October 22, 1947 demising certain prémises for a term of 50 years for marine and air terminal purposes. Under this lease, which carried a basic rental of $128,000 per year, the port authority assumed all the existing leases theretofore made by the city, and was authorized to sublet parts of the demised premises for the stated marine and air termi- nal purposes. Since entering into possession, the port au- thority has sublet most of the properties involved in the leasehold to private concerns, and that is the factual pat- tern which existed. on October 1, 1966, the key assessment date for the tax year of 1967. = In 1960, the citv"Goncluded that certain of the demised premises were not being used for air and marine terminal purposes and should be subject to ordinary taxation. It ’ therefore applied to the, Mssex County Board of Taxation to list these properties the tax rolls as omitted assess- ments. The same approa¢h applied to the tax years of 1961, 1962, 1963, 1964 and ‘1965. The Essex County Board determined that the property should be assessed with the port authority listed’as “Owner”. This determination inspired appeals to the appellate di- vision gand suits in the law and chancery divisions of the Superior Court. The Supreme Court finally took juris- diction of all aspects of the.complex litigation and re- manded the matter to the law division to hear de novo all the issues involved in the entire controversy. Port of New. York Authority v. Essex County Board of Taxation, 46 N. J. 51 (1965). | Subsequent to the remand and pending the trial in the law division, the city and the port authority effected a settlement of their differences involving the tax years from 1960 to 1965 inclusive by entering into the “Ninth Supplemental Agreement with Respect to the Newark Ma- rine and Air Terminals,” dated December 14, 1966. s part of the settlement agreement, the annual rental was increased from $128,000 to $1,000,000, with a provisi for additional rental using a formula based upon a com putation of the net revenue of the port authority. Among other provisions relating to advance payments and retroactive rent for 1966, the agreement provided: “In the event the City or the Port Authority, er both, under any law that may hereafter be enacted or applied, shall be. or become subject to and liable for payment th the county in which the demised ff premises are located of any taxes, assessments or ot 6S 4 my «“y ig a 6 governmental levies or imposts upon or against the _ demised premises or upon any part or parts there- of then, as between the City and the Port Author- ity, the Port Authority shall pay the same and such payment by the Port Authority shall be included in the operation and maintenance expense.” a ‘tween the parties wwoyld be dismissed with prejudice and that the city would designate on its tax records that all the properties. involved in the leasehold are tax exempt. It was also = wo that all litigation pending be- The agreement went into effect, the prior litigation was dismissed, and the City marked the properties exempt on its tax roles. On a review of the assessments of the city ‘for the taxable year 1967, the Essex County Board of Taxation set aside the exemption and directed that the city restore the demised properties to its tax rolls. The city complied with this directive and thereafter the pres- ent suit was @eught for declaratory judgment relating to the taxability of the affected properties for the year of ~ 1967. The major areas of dispute arise with properties which are utilized by private companies under sublease from the Port Authority for the conduct of ordinary business ¥ activities involving the sale and delivery of goods to cus- tomers, warehousing of goods, and the processing and manufacturing of products. 4 Stages in the Proceedings and Manner in Which the Federal alt 23 Sought to be Reviewed was Raised. Paragraph.8 of the Port: Authority’s eémplaint in the Law Division reads (Tr. 3a): ~ “*** each of the properties listed on Schedule ‘A’. attached to the Resolution of defendant, Board [Tr. 8a, 9a], is publicly owned and devoted to Marine. Terminal purposes, pursuant to and in accordance with R.S. 32:1-35.28 et seq. [see Appendix G] and is, under the law of the State of ‘New Jersey, ex- empt from taxation. yy See, ites paragraph 7(6) ofthe Pretrial Order (Tr. iba), which reads: \ “(6) Construction of the statutory ter / marine ter- minal purposes, under N.J.S.A. 32:1-36.28.” Furthermore, the opinion of the Law Division (see Ap- ' pendix B), at page 49 of 103 my J. Super., says: “The port authority howe er points to the provisions of N.J.S.A. 32:1-144 as a basis for tax exemption:” That statute will be found in Appendix F, attached hereto. And, at page 54 of 193 N. “*** The port authority contends that the proper- ties in question are b¢ing used for a public purpose since they are being jised as a marine terminal pur- suant to N.J.S.A. 32:1-35.28 et seq. The other par- ties concede that a marine terminal is a public use . Super. : and that the ultimate issue presented by this litiga- ’ tion is whether the properties are used for marine terminal purposes.” s As we have seen, the Law Division held that properties used for general warehousing, sales and deliveries of mer- chandise and for processing and manufacturing. are tax- able. / In the opinion of the Supreme Court of New Jersey, 54 N. J. 171, see Appendix A hereto, the following ap pears, at page 520 of 254 A.2d (as unofficially reported): “Although the history and contemporaneous con- struction of the marine terminal act (L. 1947, ¢. 44; R.S. 32:1-35.28 et seq., N.J.S.A.) strongly support the conclusion that the Legislature contemplated tax exemption of the Port Newark properties de- voted to marine terminal purposes, reference must be made to R.S. 54:4-3.3, N.J.S.A. [see Appendix H hereto], for express authority for the exemption. That long standing statute provides that publicly- owned properties ‘used for public purposes’ shall be tax exempt.” And, same page: | : “***Tn their briefs before us, the Authority, the County Board and the City of Newark have all ex- pressed their full agreement with this determina- tion although they have pursued their differences as to what properties were being used for marine terminal purposes.” The same opinion further stated, " page 529 of 254 A. 2d: : —___“* * * All in all we find that the properties at ta terminal were-without exception used for statutor- ily authorized purposes, were tax exempt as public- ly-owned property devoted to public purposes, and that the Law Division’s judgment must be modified accordingly.” <2 Reasons for Granting the Writ | The writ should be granted becausé the court below has decided an important question of federal law which has _not been, but should be, settled by this court. | Supporting Precedents In Town of Harrison v. County of Westchester, 13 N. Y. 2d 258, 196 N. E. 2d 240 (1963), the court held that hang- ars located on county-owned airport property and land on which they stood were not exempt from town taxation _ as property held for public use where the hangars were - occupied by private corporations, either as lessees or sub- lessees ginder. long-term leases insuring to them complete dominion over the premises. The court says, at pages -242 and 243 of 196. N. E. 2d: “Aithough such exempt property would normally in- clude not only the land which is used for runways, ticket offices, waiting rooms~4nd the like but’ also the land upon which are erected hangars to house and maintain the aircraft serving the public * * *, there can be no doubt that the courts below were correct in denying such tax exempt status to Hang- ars ‘D’ and ‘E’ for the reason that they are not being emploved for a public use. As the (248) trial court in this case aptly noted, both hangars are oc- cupied by private corporations, either as lessees or sublessees, ‘tinder long-term leases which insure to . them complete dominion over the premises demised to them.’ The hangars were not leased, nor are they utilized, for the purpose of providing storage or maintenance area for aircraft serving the gen- eral public or for any other purpose redounding to the benefit or advantage of the general community. 10 On the contrary, they are being devoted to servic- ing the private aircraft of their corporate occu- pants and, indeed, the occupancy of Hangar-‘E”’ is expressly limited by the operative leases to such a purpose. These two factors—the exclusive, long- term control of the premises by private corpora- tions and the use of the premises by them solely for the storage and maintenance of aircraft serving only their own-gersonnel and guests—warrant the conclusion that the hangars, and the land upon which they are located, are not ‘held for a public ‘use. 999 In re Township of Moon, 387 Pa. 144, 127 A. 2d 361 (1956), cited by the Court of Appeals in the foregoing case, the court says, at page 364 of 127 A. 2d: “The legal- ‘Srineiples applicable to. the situation are entirely clear. Article IX, §1, of the Constitu- tion, P.S., permits ‘the General Assembly to exempt from; taxation public property used for public pur- poses. Undoubtedly the portions of the Airport em- | ployed in its actual. operation—-the landing fields, runways, ramps, hangars, ticket offices, waiting room for passengers, management offices, control tower, repair shops and the like—represent a pub- lie use which. properly exempts them from taxa- tion; this is conceded by all the parties. There is likewise no question but that property the use of — which is reasonably necessary for the efficient op- eration of the Airport, even though not indispen- « gable or essential thereto, is also entitled to exemp- tion. Nor can such property be denied exemption merely because it is rented out by the Airport and | thereby yields a return which serves to reduce ex- penses, becgaise, where the primary and principal S &- use to which property is put is public, the mere . fact that an.income is incidentally derived from it | does not affect its character as property devoted to a public use. * * * On the other hand, however, there is equally no,doubt but that property, even though owned by a body ordinarily tax exempt, is taxable if used by it for commercial. purposes, or if rented to a lessee for a purely business enterprise and not a public use; this is true even though the | rentals or other proceeds from the property are _ ; devoted to the tax exempt .activities of the lessee.” In Gloucester Ice & Cold Storage Co. v. Assessors of Gloucester, 337 Mass. 23, 147 N. E. 2d 820, a (1998), the court says: «* * * The property subleased to Cold Storage is” land of the Commonwealth used for other than pub- lic purposes. The character of the use is not ‘de- termined by the activities of the holder of the prin- . Ee. cipal lease,’ namely Association * * *.) As was | (823) said in Cabot v. Assessors of Boston, 335 | lass. 53, 65, 138 N. E. 2d 2d 618, ‘(a)lthough the . maintenance of the pier as a facility was a proper _ public purpose to assist the important fishing in- dustry, the use of the pier by the sublessees in — ; their own businesses was held * * * not to be fora _ public purpose.’ It-is for the Legislature to decide y to what extent it will assist the execution of a pub- lic purpose. Here the Legislature has made no ex- press provision; for tax exemption of the pier in the hands of tenants operating for private profit, . ... comparable to the specific tax exemption considered in the Cabot case (355 Mass. at pages 63-65, 138 . N. E. 2d at pages 625-626), but has contented itself with assisting the fishing industry by the con- ¢ Sf ee _eeen a 12 struction of basic facilities, leaving them ‘taxable ~ under sec. 3A to private business occupants, even - though such occupants directly and indirectly con- - eeabete to the accomplishment of the public aa poses.” ~ And in City of Cleveland v. Park, 2 Ohio St. 2d 173, 207. N. E. 2d 556 (1965), where portions of a municipally owned airport were leased to-a private corporation for profit, engaged in the business of providing fixed base . operations at airports, the court held that the property lost its identity as public property used exclusively for a public. purpose and was not entitled to exemption from taxation. CONCLUSION It is respectfully urged that this petition for cer- tiorari should be granted. a Respectfully Submitted, Pump E. Goupos, Corporation Counsel of and Attorney for Petitioner. Sam WEIss, | [ans Assistant Corporation Counsel: _ Of Counsel. i APPENDIX A Opinion of the Supreme Court of aw Jersey 64. N. J. 171. ’ Tue Crry or Newark, ; | | Plaintiff-Respondent, Tur Port or New York AvTHOoRITY, Plaintiff-Appellant and . Cross-Respondent, v. ‘Pur Essex County Boarp or TAXATION, | Defendant-Respondent al and Cross-Appellant. Town OF BELLEVILLE, Pe ee Intervening Defendants- Respondents. x sca . “f Supreme Court oF New JERSEY Argued May 5, 6, 1969. Decided June 25, 1969. . [1a] Na ; ; 2a Aussi A Action by Port of New York Authority for declaratory judgmént that certain lands and buildings leased to it by city of Newark i in Port Newark area are exempt from lo- eal taxation. From judgment entered by the Superior ° Court, Law Division, 103 -N. J. Super. 41, 246 A. 2d 509, the Port of New, York Authority appealed to the Appel- - late Division, and the Essex County Board of. Taxation cross-appealed. The Supreme Court certified the matter before it was argued in the Appellate Division. The Su- preme Court; Jacobs, J., held that uses of properties at Port Newark operated by Port of New York Authority under its lease ‘with City of Newark, for transit functions, warehousing, processing and distribution activities and sérvice buildings were all.statutorily authorized purposes and were tax exempt as public-owned property devoted to “public purposes”. Peis otter modified. : z * ; *® ¢ Norpan N. Schiff, Newark, for City of Newark (Philip K. Gordon, Corp. Counsel, attorney). ~~ Charles H. Landesman, Deputy Atty. Ger, for The Essex County Bd. of Taxation (Arthur J. Sills, Atty. Gen., at- | torney, Elias Abelson, Trenton, of counsel). : Saul A: ‘ Wolfe,- Newark, for intervening defendants- re- spondents ' (Skoloff &. Wolfe, Newark, attorneys). ’ The opinion of the court was deliyered by JACOBS, J. v ¢ The Law Division held that a goodly portion of the _ ‘real property at the.Port Newark terminal owned by the e es . « 8a: Baca 4 Appendix, A City ‘of Newark and leased'to The Port of New York Au- thority was subject to local property taxation. City of Newark, et al. v. Essex Cty. Bd. of Taxation, 103 N. J. Super. 41, 246 A. 2d 509. (1968). The Port of New York Authority appealed to the Appellate Division from that part of the Law Division’s judgnient which designated - much of its leased property as not exempt and the Essex County Board of Taxation cross-appealed from that” part which designated som the leased’ property as exempt. ~ We cértified the matter before it -was argued in the Ap- - pellate Division.’ RR. 1:10-1. ‘The lower court recognized, as do we, that the pertinent | history should be ‘examined and evaluated for the light it. _may properly shed on the legislative contemplation. 103 N. J. Super. at 45-48, 246 A. 2d 509; Lloyd v. Bermeulen, 22 N. J. 200, 206, 125 A. 2d 383 (1956); Hudson County News Co. v. Sills, 41 N. J. 200, 226, 195 A. 2d 626 (1963), appeal dismissed, 378 U. 8. 583, 84 S. Ct. 1914, 12 L. Ed. 2d 1036 (1964). As early as 1911 the Legislature ‘adopted a resolution wtich referred to the fact that our communi- ties were exercising local control over their waterfront facilities without any coordination with other communi- ties, and which requested the Governor to appoint. com- missioners to act with others in formulating . proposals for the development and management of the Port of New York: Jt. Res. No. 3, Laws of 1911, p. 840. The Gover- nor did appoint such: gommissioners and in February,. , 1914 they submitted a preliminary report which recom- mended the creation of a-permanent State agency with * well defined powers over “the waterfront and waterways ~ md in, the State”.- New Jersey Harbor Commission; Fourth _ Preliminary Report 8 (1914). In the course of. their re- . © port, the commissioners referred to the trend -towards —« sd 2 ° . a wy 2 ; we 4a > - Appendia y oe public control of waterfront facilities in the United, States, well as in foreign countries, and noted that consider- 7 Fable legislation had been “passed by States and cities, cre- ating public bodies to control and develop the waterfront, not only with respect to docks and piers, but also to belt- line railroads, storage and’ warehousing accommodations * and the other things which go to make up a terminal,” Fourth Preliminary Report, supra at 37-38. In April, .1914 an act was passed formally creating the New Jersey Harbor Commission and defining its power and duties. See L. 1914, ce. 123; New Jersey Harbor Commission, An- nual Report (1915). "In-1916 the Legislature adopted a jutbiaililiis act which authorized cities fronting on tidewater “to establish mu- nicipal docks, warehouses and shipping and industrial fa- cilities, and to operate or lease the same in whole or in. o ” L,. 1916, ¢.. 162 (R.S. 40:179-58 et seq., N.J.S.A.). ring the following year the’ Governor strongly sup- ported the development of marine terminals through, pub- lic ownership and the Legislature again adopted a referen- — dum act authorizing any city fronting upon navigable waters “to establish docks, warehouses, ferries, terminals “<~and shipping and industrial facilities” and to operate such _ facilities or lease them for terms of years. L. 1917, e. 127 (R.S. 40:179-46 et.seq., N.J.S.A.).. This legislation ex- pressly. provided that every terminal erected pursuant to its provisions “and every interest or estate therein, shall, during the term of any lease thereof made as herein pro- vided, be exempt from all taxes. and assessments ‘within this State”. L. 1917, ¢. 127, § 10 (R.S., 40:179-55, N.J. S.A.). . 5a Appendia A “ey In 1920 the Legislature adopted the so-called industrial terminal act’ whieh substantially reenacted the 1917 act including its provision for tax exemption but omitting its” referendum requirement. L. 1920, ¢. 176 (RS. 40:179=34° et seq., N.AS.A.). See RS. 40:179-42, N.J.S.A. Under the authority of the foregoing legislation, Newark devel- oped a marine terminal complex in the Port Newark area. See Shea v. Ellerstein, 118 N. J. L. 438, 193 A. 551 (Sup. Ct. 1937); American Agricultural Chemical Co. v. Mur- phy, 136 N. J. L. 193, 54 A. 2d 719 (E. & A. 1947). The terminal ‘covered approximately 700 acres of land and in- cluded wharves, warehouses and other buildings, along with open spaces, which were leased to private tenants en- ' gaged in receiving, storing, processing and distributing products of varying nature. Admittedly all of the leased real property thus used at the terminal was exempt from local taxation under R.S. 40:179-42 and R.S. 40:179-55, N.J.S.A. In the meantime there were significant developments concerning the creation and activities of the Port of New York Authority. In 1917 the Legislatwre provided (L. 1917, c. 130) that the Governor shall, appoint commis- sioners to meet with New York commissioners and recom- mend the policy to be pursued in developing the Port of New York. Three years later the commissioners submit- ted the results of their extensive studies. See New York, New Jersey Port and Harbor Development Commission, Joint Report with Comprehensive Plan and Recommenda- tions (1920). They pointed to the serious economic penal- ties which result from inadequate and incomplete terminal facilities and recommended the adoption of a compact be- tween New Jeksey and New York establishing a port dis- trict and creating a permanent interstate agency for de- 6a~ Appendia -A velopment of the port. In 1921 the Legislatures of New Jersey and New York authorized the execution of the port” compact (consented to by Congress 42 Stat. 174 (1921) establishing the port of New York district and creating the Port of seg Authority as their joint agency. L. 1921, c. 151; Laws of N. Y. 1921, c. 154. See RS. 32: 1-1 et seq. The 1921 compact vested the agency with full power to construct, lease and operate any terminal fa- eility within the port of New York district and defined “terminal facility” to include wharves, piers, docks, ware- houses, cold storage, etc., “and every kind of terminal or e facility now in use or hereafter designed for use handling, storage, loading or unloading of freight ship, railroad or freight terminals”. R.S. 32:1-23, In 1922 New Jersey and New York adopted a compre- ° hensive plan for the development of the port district. L. 1922, c. 9; Laws of N. Y. 1922, c. 48. See R.S. 32:1-25 et seq., N.J.S.A. -Bard, The Port of New York Author- - ity 35-62 (1942). The plan provided, inter alia, that ter- minal operations within the port district should be uni- fied insofar as economically practicable; that there should be consolidation of shipments so as to eliminate duplica- tion of effort and inefficient loading of equipment; and that there should be the most direct routing of all com- modities so as to avoid centers of congestion, conflicting eurrents and long truck hauls. R.S. 32:1-26, N.J.S.A. Though the 1921 and 1922 legislation contained no express provision for tax exemption there is little reason to doubt that such was the legislative purpose. .In any event, in 1931 the New Jersey Legislature provided (L. 1931, c. 69; R.S. 32:14 et seq., N'J.S.A.), as did the New York Leg- islature py complementary enactment (Laws of N. Y.’ Ta Appendia A 1931, ce. 553; Unconsol. Laws §§ 6971-6973 (McKinney 1961)), that in order to relieve municipaliffes of undue ’ Tess of taxation because of Port of New York Authority acquisitions, the Authority shall have power “in connec- tion with any marine or inland terminal property owned by it” to make voluntary payments to municipalities in reasonable amounts not exceeding the sums last paid as taxes on the property prior to its acquisition by the Au- thority. In Port of N. Y. Authority v. City of Newark, *. 20 N. J. 386, 120 A. 2d 18 (1956), this Court, citing Bush Terminal Co. v. City of New York, 282 N. Y. 306, 26 N. E. 2d 269 (1940), pointed out that the Legislatures of both New Jersey and New York must have considered the Au- thority’s marine and inland terminal property to be tax exempt; otherwise there would have been no need for re- lief to the local municipalities by way of L. 1931, ¢. 69, described as the “in- lieu-of” tax statute. 20 N. J. at 393, 120 A. 2d 18. Throughout the years, Newark’s efforts to develop its seaport had proven very costly to its taxpayers and at the close of the second world war, during which period the _ seaport had been used_by the Government for military purposes, it was in critical need-of rehabilitation and. re- construction. At the request of Newark’s-Central Plan- ning Board, a study of Newark’s marine and air terminals was made by the Harland Bartholomew firm which sub- mitted its preliminary report in 1945. In that report it was pointed out that “to date, Port Newark has cost the taxpayers approximately $9,600,000” and continued city operation would not avoid “long periods of substantial | annual deficits”. The possibility of having the seaport, along with Newark’s airport, operated by private par- ties, in which event, they would be subject “to full taxa- 8a Appendia A: "7° tion”, was.mentioned but the report recommended instead that they, be placed in the hands of.an independent pub- lie agency such as the Port of New York Authority which appeared “to possess ‘the best possibilities for .Newark.” In 1945 Newark requested the Port of New York: ‘Author- ity to undertake “a thorough study of all matters with relation to Port Newark,and Newark Airport, to the end that the said Port of New York Authority may make to the City of Newark a proposal concerning the possibility of its undertaking the management and administration of the said Port Newark and Newark Airport.” Pursuant to Newark’s request, the Port of New York ‘Authority conducted a survey and presented a report. - See Development of -Newark Seaport and Airport ( 1946). It proposed: extensive rehabilitation of the marine: ter- minal area including the redredging of the channel, the rehabilitation of the existing wharves, buildings, pavé- ments and- trackage and the providing of new. tran&i sheds, bulkheads, wharves, warehouses, industrial space and “other appropriate and needed facilities”. At one ° point in the report the tenants who would use the fa- att were described as “handlers, storers’” and “process- ors” of commodities. At another point, the report indi- _ eated that “shipping lines, lumber companies and distribu- - tors of a wide variety of commodities” were awaiting the availability of space at the marine terminal, and in de- tailing the benefits to be received from the port develop- ment the report referred to the fact that “persenal prop- erty taxes” from-tenants in thé terminal area would in- crease. See R.S. 54:4-9 et seq., N.J.S.A. There was no suggestion whatever of real property taxes except in the proposed .agreement stibmitted by the Authority under 9a ? ¥ ri Appendia A which the city would transfer to the httanity “the exist- ing marine and air terminal facilities” for five million dol- lars, the Authority to provide up to seventy-one million dollars for improvements and to pay the city one hun- dred thousand dollars annually “in lieu of taxes”. The Authorit#s proposal was supported by the loca] Chamber of Commerce which anticipated benefits in the form of expanded ‘business, increased employment and “personalty assessments and taxes”. Similarly the local Merchants Association referred to increased personal property yields from the proposed development. The newspapers in substantial measure supported the Author- ity’s tender and stressed, the advantage to Newark’s tax- payers in_having the city unburden itself of its deficit op- ° eration. However, the city officials were. apparently dis- - pleased with the terms of the Authority’s ‘proposed agree- ment, of purchase and in September, 1946 the Authority submitted a revised offer of purchase which also fell by the wayside. In December, 1946 the Authority offered ayurg the Newark ports on terms comparable to its leasehold offer to New York City for its airports which contemplated a ninety-nine year term lease with the city to receive half the net revenues. While the Authority’s, lease offers were pending and in negotiation, bills were introduced in New Jersey, as well as New York, to fa- cilitate the Authority’s development of marine and air terminals. A «public hearing on the bills was held on March 17, 1947 in the New Jersey Senate Chamber and during the course thereof an Authority representative in- _ dicated that payment to Newark would be made as a mat- ~ ter of rental rates “in lieu of taxation” railroad rep- resentative appeared at the hearing, apparently to sug- gest that the broad tax exemption being afforded to the $ 40a _ Appendia A Authority might operate ‘unfairly as against railroad transportation facilities. The bills were passed and the one which related par- ticularly to marine terminals became L. 1947, c. 44; RS. 32 :1-35.28 et seq., N.J.S.A. See also Unconsol. Laws §§ 6671-6678. (McKinney 1961). The statement attached to it referred to Newark’s negotiations with the Authority with respect to its marine terminal and set forth that its purpose was to implement the power of the Authority and municipalities within the-port district “to go forward with the plans now in process of preparation if the’ municipali- ties or any of them sq desire”. The bill as enacted em- powered any municipalif\ within the port district to con- sent to the Authority’s use\of any marine terminal owned by the municipality or of any real or personal property owned by the municipality and “necessary, convenient or desirable in the opinion of the Port Authority for ma- rine terminal purposes” and empowered the municipality to “grant, convey, lease or otherwise transfer to tfe Port Authority any such marine terminal or real or personal property”. R.S. 32:1-35.31, N.J.S.A. A marine terminal was defined as a development consisting of piers, wharves, docks, bulkheads, slips, basins, vehicular roadways, rail- road connections, side tracks, sidings “or other buildings, structures, facilities or improvements, necessary or. con- _ venient to the accommodation of | eens or. other ves- sels and their cargoes or passengers”, R.S. 32:1-35.30, N.J.S.A. Marine terminal purposes were defined to mean “the effectuation, establishment, acquisition, construction, . rehabilitation, improvement, maintenance or operation of - marine terminals.” The Legislature in section five of the bill explicitly directed that that section and its preceding & » lla A ppendia, A sections shall be supplementary tol the 1921 compact be- tween New Jersey and New York “and shall be liberally construed to effectuate the purposes of said compact and of the comprehensive plan heretofore adopted by the two States pursuant thereto”. R.S.,32:1-35.32, N.J.S.A. Shortly after the adoption of I. 1947, c. 44 (RS. 32:1-- 35.28 et seq., N.J.S.A.) Newark and the Authority en- tered into their basic agreement with respect to the New- ark marine and air terminals. It was dated October 22, 1947, effective March 22, 1948, and set forth a leasing ar- rangement under which Newatk leased its ports to the Authority for a term up to fifty years “for marine- and air terminal purposes and incidental purposes”. The rent- al was fixed substantially at $128,000 per annum or a di- vision of net revenues, 75% to the city, 25% to the Au- thority, whichever was greater. The lease obligated the Authority to assume the city’s long term real property leases and also provided that the Authority would “re- habilitate, improve and develop the Newark Marine Ter- - ‘minal” by, inter alia, “rehabilitating the existing wharves, - buildings, pavements, and trackage” and by providing new transit sheds, bulkheads and wharves and “new public warehouse spaces, and other appropriate and needed fa- cilities”. ‘The lease did not mention taxes but there is no question that both the city and the. Authority con-. templated. that the historic tax exemption of the real prop-— erty would continue so long as it was part of the marine terminal operation; nor is there any doubt that they con- templated a modern, efficient marine terminal which would include not only adequate water berths, transit sheds and transportation facilities, but also adequate areas dedi- cated to the storage, processing, servicing and distribu- tion of waterborne cargo. : 3 12a Appendia A - After taking over the Spbration of the Newark marine terminal, the Authority proceeded with its rehabilitation plans and admittedly converted it into a vibrant, modern seaport which has brought economic benefits not only to the immediate area but also to the State as a whole. The Authority’s Director of marine terminals, Mr. Albert Lyle King, testified before the Law Division that in his con- . cept a marine terminal may be viewed as. “a complex of wharves, warehouses, open land and miscellaneous build- ings for the purpose of generating and transferring cargo between land- and water earriers and providing facilities for servicing, processing, and distributing cargo”. Act- ing on this concept, the Authority geared its policy towards terminating those. city. lease with tenants whose _ business did not serve to generate waterborne cargo and. towards entering: into new leases with proper tenants. In Mr. King’s language, the tenant “must have substan- tial: amounts of cargo moving in and out by water”. At the time of the hearing i in the Law Division it appeared. that, apart from an isolated instance, all of the buildings and lands at the terminal which were being used for the — storage, processing and distribution.of metchandise were concerned principally with waterborne products. For over a decade the Authority continued its develop- ment of the marine terminal without interruption and without any legal attack on the tax.exempt status of the real property at the terminal which it held under lease from the city. See Lidyd v. Vermeulen, swpra, 22 N. J. at 210, 125 A. 2d 393; State Department of Civil Service v. Clark, 15 N. f. 384, 341, 104-A. 2d @85 (1954). In 1960 the city took the position ‘that certain portions of the leased property were not being used for marine terminal | purposes and should therefore be subject to taxation. It a 13a Appendia A. applied to the ‘Bisek County Board of Taxation to list the properties in question on the tax rolls as omitted as- sessments. The Board determined: that the properties should be assessed, with the Port of New York Authority... listed as “owner”, This produced appeals and further _ litigation which beeame snarled procedurally and “which — resulted in an order of this Court remanding: all phases — of the controversy to the Law Division for a de novo hearing and determination. Port of N. Y. Auth. v. Es- sex Co. Bd. of Taxation, 46 N. J. 51, 214 A. 2d 705 (1965). After the remand, the city and the Authority made a_ settlement under which the annual rental payable by the ~ © Authority to the city was increased from $128,000 to | $1,000,000, with a. provision for additional rental upon a_ formula based on net revenue. The settlement agreement provided that if the city or the Authority should become liable for payment of taxes to the county, the Authority would make the payment and include it in its operation @and maintenance expense. Finally, it was stipulated that all litigation between the parties would be dismissed with | prejudice, and that the city would designate all of the leased properties on its tax records as-tax exempt. In due course this was done. See pitas jess at 48, 246 A. 2d 509. | ; oot In reviewing the city’s assessment lists of taxable prop- -erty for 1967, the Essex County Board of Taxation con- eluded that certain of the properties leased to the Au- thority were not used for “marine terminal .purposes” but ~ were subleased “to private business concerns for the pur- pose of producing revenue.” It directed that they be placed in nonexempt status and that Newark change its lists accordingly. The city complied and thereafter the a ida eh \ : Appendia A Authority filed \its complaint seeking a declaration as to whether the properties were being used for marine ter- minal purposes and were tax exempt. Newark joined as a party plaintiff and other Essex County municipalities were permitted to intervene. A full trial was held in the Law Division which found that the properties leased by the city to the Authority were tax exempt to the extent . that they were being used for marine terminal purposes » within the contemplation of L. 1947, e. 44—R.8. 32:1-35.28 a, et seq., NJS.A. See 103 N? J, ‘Super. at 52-55, 246-A. 2d '~ 506. However, in determining: what were such marine terminal purposes it took a much narrower view than that expressed by Mr. King on the Authority’ S behalf. The° Law Division ‘classified . ‘the properties Ander the following headings: (a) transit’ ‘functions, temporary stor- age and supporting services; (b) warehousing ; (c) sales and delivery of merchandise; (a) processing and manu- facturing; (e) miscellaneous:: “Within (a) were various "activities very intimately corinected with the loading and unloading of vessels including temporary storage in trans- it sheds ‘and elsewhere, ship and cargo container repairs, ete. Included within (b) were warehouses where lumber, plastics, coffee and numerous other products, largely wa- _terborne; were stored for indefinite periods of/ time pend- ing delivery to consignees and customers. Included with- in (c) were lands and buildings used by éarriers, im- porters, ete. for storing largely waterborne inventories for sale and delivery. Included within (d)- were lands and buildings where products, largely waterborne, such as lumber, steel, wine, etc.,-were/ processed for ultimate dis- -tribution. The miscellaneous grouping (e) ingluded,a few vacant properties and service, buildings such) Xs banks, a | ee es f * eee i » els 2 id 15a, Appendix ,A restaurant and premises of the Port of New- York Au- thority; The United States Department of Customs and the: Waterfront Commission. Though the: Law Division determined that all of the properties in category (a) and some in (e) were exempt, ' it held that none of the properties in (b), (c), and (d) was exempt. 103 N. J. Super. at 61, 246 A. 2d 509. In main effect it concluded that only those properties which were devoted to short-term incidental storage or to es- sential ship-related services were proper marine terminal © purposes within the statutory contemplation. Thus. the important facilities for warehousing, processing and dis-_ tributing which were fostered by the Authority to reduce ‘the high terminal costs involved in the transshipment of waterborne cargo were the very ones determined by the ' Law Division to -be outside the scope of the statutory “marine terminal purposes.” In holding that warehous- ing was not one of the marine terminal purposes, the Law Division expressed the thought that the “only jus- tification for the location of the. warehouse at:the Port _ is the fact that the stored goods are in the main water- ~ borne, and the existence of these buildings near the piers serves as ah economic advantage to the company.” But that economic advantage represents the difference be- tween that waterborne cargo.coming to the Newark ter- | mjnal rather than some other terminal, and, .as Mr. King pointed out, if a modern marine terminal is to bé. oper- ated efficiently and successfully it must afford some such economic inducements. | ‘ Throughout its opinion the Law Division expressed: strangely restrictive notions as to what weré proper ma- rine terminal purposes within the statute. Thus, in re- 16a Appendia A sponding to the Authority’s snggestion that a wholesale lumber "yard is appropriate in a marine terminal because it involves a-waterborne commodity of such size and bulk as to make it impractical to locate outside thé port anga, the Law Division expressed the thought that “the con- duct of, a lumber yard * * * has no necessary or con- venient nexus with the accommodation. of cargoes or ves- . sels”.. Similarly it expressed the view that warehouses, though they may be concerned only with waterborne goods “are not necessary or convenient to the accommodation of vessels or their cargoes”. Foreign importers and ex- porters were found by it to be “not engaged in any ac- tivity. which aids the flow or movement of cargo” and ’ therefore “net within the statutory purposes of a ma- rine terminal”. A company, receiving wine in bulk di- — rectly from ships which pumped the wine into the. com- pany’s own storage tanks for later bottling, was found by it to be- ‘in a business “not associated with a marine terminal. involving the movement of. waterborne cargo”. And.a restaurant within the area, frequented mainly by the local employees, was said by the’ Law Division to be not “reasonably necessary for the operation of a marine terminal”, Although the history and contemporaneous cgnstruction of the marine terminal act (L. 1947, c. 44; R.S.°32:1-35.28 et seq., N.J.S.A.) strongly support the conclusion that the Legislature contemplated tax exemption of the Port New- ark properties devoted to marine terminal purposes, ref- erence must be made to R.S. 54:4-3.3, N.J.S. A., for ex- press authority for the exemption. That long standing statuté provides that publicly-owned properties “used for public purposes” shall be tax exempt. In Towgship of _ lla 7 Appendia A A. 2d 187 (App. Div. 1949) the court was called upon to determine whether an airport belonging to the Town of Morristown but operated with- some leases and con- cessions was tax exempt under R.S. 54:4-3.3, N.J.S.A. In the course of his opinion favoring the exemption, Judge Bigelow said: _ While an exemption from taxation granted to a private institution is strictly construed, the con- trary is true of the exemption held by political bodies, since the latter are not taxed in a doubtful ease. So the phrase “used for public purposes” should be liberally construed; it probably includes any municipal enterprise which the gay has _ authorized. An airport is clearly a public pitirpose. R.S. 40:8-1, ete., N.J.S.A. The circumstance that Morristown leases hangar space and the right to service airplanes at the airport, and the fact that the Town has conducted the enterprise at a small © profit, do not detract from the public character of - the airport. 4 N. J. Super. at 24, 66 A. 2d at 188. See Walter Reade, Inc. v. Dennis Tp., 36 N. J. 435, 439- 441, 177 A. 2d 752 (1962). ‘In the case at hand, the Law Division determined that R.S. 54:4-3.3, N.J.S.A. was applicable and that the Port Newark properties, to the extent that they were used for marine terminal purposes, were exempt from taxation as publicly owned properties devoted to public use. 103 N. J. Super. at 52, 246 Ac 2d 509. In their briefs hefore us, the Authority, the County Board and the City of Newark Hanover v,Town of Morristown, 4 N. J. Super. 22, 66 ~~ 18a Appendix A have all*expressed their full agreement with this deter- mination although they have pursued their differences as to what properties were being used for marine terminal purposes. Indeed the only dissent as to the applicability of R.S. 54.4-3.3, N.J.S.A. comes from the intervening mu- nicipalities which have advanced the contention that “with the exception of the properties occupgd by the Port Au- thority, U. S. Customs, the Waterfront Commission, and perhaps the transit-sheds * * *, none of the property is devoted to use for public purposes”. They apparently rely, though mistakenly, on cases suclf’ as Jamouneau v. * Division of Tax Appeals, 2 N. J. 325, 66 A. 2d 534 (1949) ; Borough of Moonachie v. Port of N.-Y. Autlfority, 38 N. J. 414, 185 A. 2d 207 (1962) and Todd Shipyards Corp. v. Weehawken Tp., 45 N. J. 336, 212 A. 2d 364 (1965). In Jamouneau the City of Newark leased premises to. a private concern which built\a factory for its own op- eration. Insofar as the city was concerned there was no public purpose other than receipt of the rental. In re- jecting the contention that the property was tax exempt under R.S. 54:4-3.3, N.J.S.A., the Court pointed out that “the use was exclusively private and commercial; there -was neither vestige of a present public use nor prospect of a future public use within the terms of the lease.” 2 N. J. at 330, 66 A. 2d at 537., This is in clear contract _ to’the Port Authority’s position here that its publie pur- pose is to operate the Port Newark marine terminal and that its leases, though they incidentally bring in revenue, are primarily and firmly designed to further the continu- ing development ‘of the marine terminal as such. In Moonachie the Port of New York Authority built a plant on its land at Teterboro Airport and leased it to 19a Appendia A a Yi a screen and storm window factory for twenty years. The purpose of the lease was revenue rather than the develop- ment of the airport.’ In rejecting a claimed tax exemption ‘for the factory building, this Court noted that “a ‘tax ex- emption based upon a statute specifying a particular pub- lic use is clearly lost when the use to which the prop- erty is put is foreign to the prescribed use and tha rev- enue motive in adopting the use is the primary or exclu- _ sive one.” 38 N. J. at 427, 185 A. 2d at 214. In Todd Shipyards property leased by the Government “for private purposes, and not to further a public purpose of the fed- eral government” (45 N. J. at 346, 212 A. 2d at 369) was held taxable.. Commenting on R.S. 54:4-2.12, N.J.S.A., which deals with the taxation of leaseholds but specifical- ly exempts property leaséd to interstate agencies such as the Port of New York Authority, this Court described - the holding in Moonachie.in terms which pointedly ,dif- ferentiate it from the case now before us: Subsection (1) of. section 10 deals with interstate agencies.” As to such agencies, we have held that a lease for privaté use as distinguished from a lease to private operators in furtherance of the public puryse for which the exemption was granted e oF a lease incidental to achieving that public pur- pose, will result in taxation. -Moonachie, Borough of, v. Port of New York Authority, 38 N. J. 414, 185 A. 2d 207 (1962). This holding was- in keep- ing with an earlier decision that the exemption was not lost where the lease was made to serve essen- tially the public purpose the agency was authorized to further. Port of New York. Authority v. City of Newark, 20 N. J. 386, 120 A. 2d 18 (1956). 45 N. J. at 344, 212 A. 2d at 368. 20a Appendia A [1] We agree entirely with the Law Division that there is no longer any basis for doubting that a legislatively au- . thorized marine terminal is a “public purpose” within per- tinent constitutional and statutory provisions. 103 N. J. Super. at 55, 246 A. 2d 509. See Port of N. Y. Authority v, City of Newark, supra, 20 N. J. 386, 120 A. 2d 18;. Port of New York Auth. v. Hackensack Water Co., 41 N. J. 90, 195 A. 2d 1 (1963). In the former case this Court held that a truck terminal, built by the Port. of New York Authority and leased to the Air Force,.was being used for public purposes and was tax exempt (20 — N. J. at 396-397, 120 A. 2d 18), and in the latter case it described, in’ passing, the terminal facilities in Port Newark as being “in the public use”. 41.N. J. at 95, 195 A. 2d 1. See Roe v. Ker'vick, 42 N. J. 191, 199 A. 2d 834 (1964) : | The concept of public purpose is a broad one. Gen- erally speaking, it connotes an activity which serves as a benefit to the community as a whole, and which, at the same time is directly related to the functions of government. Moreover, it cannot be static in its implications. To be serviceable.it must expand when necessary tyeffompas thanging public needs of a modernynamie society. Thus it is incapable of exact or perduring definition. In each instance where the test is to be applied the decision must be reached with reference to the object sought to be accomplished and to the degree and manner in which the object affects the public welfare. Hog- lund v. City of Summit, supra (28 N. J. 540, at p. 549, 147 A. 2d 521); DeArmond v. Alaska State Development Corporation, 376 P. 2d 717 (Alaska \ ao” alee -” Appendia A Sup. Ct. 1962); City of Frostburg v. Sains O15 Md. 9, 136 A. 2d 852, 855 (Ct. App. 1957); Opinion to the Governor, 76 R. I. 249, 69 A. 2d 531 (Sup. Ct. 1949); Rhyne, Municipal Law, § 15-4, p. 341 (1957). 42 N. J. at 207, 199 A. 2d at 842. See also City of Trenton v. Lenzner, 16 N. J. 465, 469- 470, 109 A. 2d 409 (1954), cert. denied, 348 U. S. 972, . 75 S. Ct. 534, 99 L. Ed. 757 (1955). In Courtesy Sandwich Shop v. Port of N. Y. Au., 12 5 N. Y. 2d 379, 240 N. Y. S. 2d 1, 190 N. E. 2d 402, ap- peal dismissed, 375 U. S. 78, 84 S. Ct. 194, 11 L. Ed. 2d 141 (1963), the New York Court of Appeals upheld the law which -authorized the Port of New York Authority to condemn land for the’ development of the World Trade Center in lower Manhattan. In rejecting a contention that the Center did not satisfy the requirement of pub- lie purpose, the court said: The Appellate Division has stated that the con- cept of the World Trade Center is a public pur- pose. We understand this to mean that any use + of ‘the property sought to be condemned that is functionally related to the centraHzing of all port business is unobjectionable even though private per- sons are to be the immediate lessees. The “con- cept” referred to by the Appellate Division can mean only that. It is the gathering together of all business relating to world trade that is supposed to be the great convenience held out to /those who use American ports and which is supposed to at- tract trade with a resultant stimulus to the eco- nomic well-being of the Port of New York. This PTY ae 22a ° Appendix A benefit is not too remote or speculative as to ren- der the means chosen to achive it’ patently unrea- sonable; nor is the benefit sought itself an improp- er concern of government. ‘The history of western civilization demonstrates the cause and effect re- lationship between a great port and a great city. (See Pirenne, Economic and Social History of Me- dieval Europe, {Harcourt, Brace & Co., N. Y.].) Fostering harbor facilities has.long been recog- nized by this court as the legitimate concern of government. (Matter of Mayor of City of N. Y., 135 N. Y. 253, 3t N. E. 1043.) 240 N. Y. S. ad at 5; 190 N. E. 2d at 405. . See Lerch v. Maryland Port Authority, 240 Md. 438, 214 A. 2d 761 (1965). [2] Town of Harrison. v. County. of Westchester, 13 N. Y. 2d 258, 246 N. Y. S. 2d 593, 196 N. E. 2d 240 (1963) is relied upon by the Essex County Board of Taxation but if does not at all impair the Authority’s position be- f us. There the County of Westchester leased prem- , a private company to operate it as a public air- The company leased two of its hangars for long periods of time to private companies for their exclusive _private uses. The Court of Appeals held that, although the airport was tax exempt to the extent that it was used for service to the public, the two hangars leased to the private companies were not tax exempt. The ¢ourt dis- tinguished the Courtesy Sandwich Shop case supra as in- volving condemnatign rather than taxation and concluded, solely as.a matter of statutory construction, that the New York Legislature did not intend to exempt parties using hangars for their own private purpose and not for “any - ¢ 4 eh don ihn a al - 23a Appendix A ; > the general community.” 13 N. Y. 2d at 263, 246 N. Y. S. other purpose redounding to the benefit. or 4 antage of 2d at 597. 196 N. E. 2d at 243. But, as has al y been pointed out, there is every indication that the New Jer- | ~sey Legislature did intend that the properties at Port Newark should be tax exempt So ‘long _as they were be- ing used, as the Authority-asserts they were here, in fur- therance of the public purposed marine terminal contem- plated by the statute. If they were being so used, then clearly any incidental benefits to the private lessees of the Authority would neither impair the public purposes nor remove the tax exemption. See Walter Reade; Inc. v. Dennis Tp., supra, 36 N. J. at 4389, 177. A. 2d 752; Bloomfield v. Div. of Tax Appeals, 84 N. J. Super. 19, 200 A. 2d 793 (App. Div. 1964); cf. Clayton.v. Kervick, 52 N. J. 138, 155, 244 A. 2d 281 (1968); see also Orbison. v. Welsh, 242 Ind. 385, 179 N. E. 2d 727 (1962); Carney vy. Ohio Turnpike Commission, 167 Ohio St. 273, 147 N. E. 2d 857 (1958) ; Visina v. eo 252 Minn. 177, 89 N. W. 2d 635 ( 1958). [3] We come now to the ultimate question as to wheth- er the properties were actually being used for marine terminal: purposes within the meaning of the statute. Mr. King testified that after the Authority took over the ma- rine terminal complex from Newark it proceeded with ~ efforts to relocate certain lessees and terminate certain leases, all with a view towards generating waterborne ‘traffic and rehabilitating the terminal as contemplated by the statutory authorization for its transfer. Thus lessees "who were preempting valuable wharf space for their own private merchandise were, to the extent possible, relocated ~ to enable the movement of mass volumes of public, car- - goes. And lessees whose businesses -did. not primarily > ‘ pega bt ls li es baa a et r" as I Ya a) Py. : . “ - ® — s canine is ‘ sate ie see ee hc RL. S Lie. Sg TE Slob hs tagline Bt Ai RCA th DN nat St Bs a tein sh RS ey ros + Oda ‘Appendia A ~ involve waterborne traffic had their leases terminated as - soon as possible.. So far as the leasing policy of the. . A | Authority, was concerned, Mr. King testified: that no leases — -would be executed unless the tenant was. substantially con- _ nected with waterborne traffic and had substantial’ amounts of cargo moving in and out by water. So far as the warehousing and industrial activities relating to the water- borne products were concerned, he testified that the Au- -thority’s policy was to require reasonably rapid turn- overs, to permit processing or fabricating as distinguished from complete manufacturing, and to permit ship ‘and container servicing along with other servicings necessary or convenient and incidental~-to the effective operation of the terminal.’ He observed that the activities at Port Newark were normal marine terminal activities: ~through-- out the world;:.and he gave the following illustration of the close relationship between the terminal area’s transit and sterage or industrial functions: Well, take, for example, if you want to use this as an illustration, the frozen meat, which amounts to . 150,000 tons of imported meat through Port New- ark every year.. This has been a. very, very highly “ competitive movement, with the Ports of Norfolk, Baltimore, Philadelphia and Jacksonville all trying to get it, all building warehouses as close to the water as they could get them, and all quoting .the lowest possible rates and all to take those ships out of the Port of New York, and they very nearly did. As a matter of fact, they took a half dozen of them before we could catch up to it fast enough to get a cold storage warehouse built,in Port New- ark and then, having gotten that warehouse, we got - ¢ ? oe 3 e avila sy Lh ax pec upisiens ens m — : a —" ‘ r) Appendia A ‘our ships back where they belonged before we had any further losses. But there was a case where it was abSolutely imperative’ competitively to hold that shipping and all of those ships, which is a lot of shipping a’ year, absolutely imperative that a : « . cold storage plant be in that port area. As to the trucking differential, believe me, we made all kinds of studies of trucking costs. ‘The - trucking differential between handling from a trans- - it shed in Port Newark to the cold storage plant in the industrial. section of Port Newark, compared : to’ trucking it to any cold storage warehouse in ieee Newark or elsewhere in the Port of New York, ‘the aeemamentn’ ARE ‘difference was better than six dollars a ton, and it . : aoe completely wipes us out. We had to put that:ware- » house in there to hold that shipping. Those ships ). represented an awful lot -of jobs a year and an * awful lot of money into the City of Newark and its" : _ business firms each year. : The record firmly establishes the Authority’s high goals. . and the broad effectiveness of its expanding activities. It has invested well: over a hundred million dollars to date and has converted ‘the terminal into one of the na- _tion’s great seaports. Its determinations from time “to time as to what activities should be initiated or continued within the terminal area have involved exereises of) dis- ‘eretion but there is nothing to suggest anything other than con iscientious exercises which fit well within Mr. cial definition and the common tnderstand- “sing of what a Yodern marine terminal should fairly en- compass. By 1 all but two, of the storage and dis-'— tribution facilities inthe terminal area serviced primarily an Appendié ss _ waterborne cargo and since then, one of the two is no ° longer located there. The other has been exeperiencing severe reductions in its waterborne traffic and if, that course is not reversed it may safel¥ be assumed that its lease will not be renewed. - The:properties which are _be- ing used for purposes sueh as. ship and containér repair,’ service accommodations to passengers, employees. and others in the area, ete., have also been fairly, considered by the Authority to be rokvonithe necessary or convenient to the operation of a modern terminal. And while the evidence is rather meagre as to the few vacant proper- tres, Mr. King testified that the only vacant. properties were “those that happen to be in between moves” and they may fairly be viewed as merely incidental to the ordinary operation of the terminal. Cf. Borough of Mdonachie v. Port of N. Y. Authority, supra, 38 N. J. at 428, 185 A. 2d 207. - The Law Division did not question the Authority’s goals or the economic benefits which are being brought to the State and its people by its activities at Port New- ark. It did, however, consider it incumbent ‘upon itself “to control the expansion of port authority activities via ‘the route of tax exemption” by limiting the exemption “to those uses and purposes which are clearly within the legis- lative intendment.” 103 N. J. Super. at 60, 246 A. 2d at 520. It then: proceeded to find that such uses and. purposes included only the transit sheds and the essen- tial ship-related services and not the buildings devoted to the warehousing, processing and distribution of water- borne cargo. It appears clear to us that this highly nar- ° rowing finding as to,’ ‘the legislative intendment ran di- rectly counter to the recorded statutory sre AN = ter- minology and must, now be rejected. \ Ea date om Meee sittin at ee Sh aloe aS ‘ “ 3 See 27a ~ : Appendix A It is’ significant that the Law Division could cite no \ supporting statutory provision which it might fairly say departed from the expansive grant of. delegated legisla- - tive power and tax exemption evidenced by the historical materials and the legislative provisions: outlined earlier in this opinion. As already been pointed out, the 1921. compact sweepingly defined terminal facilities to include “warehouses” and all kinds of terminal or storage facili- ties then used or thereafter designed for the “handling, ~ storage, loading or unloading of freight” at steamship terminals. R.S. 32:1-23, N.J.S.A. The 1947/compact, ex- plicitly executed to enable the rehabilitation and expanded - operation of the. Port Newark terminal complex which ‘ then contained warehousing; processing and distribution. facilities, embodied definitions of “marine terminals” and © “marine terminal purposes” which were broad and flexible rather than narrow and fixed and are to be liberally con-. ’ strued. See R.S. 32:1-35.30, N.J.S.A.; RS. 32:1-35.32, . ; .N.J.S.A.; cf. Application of Waterfront Comm. of N. Y. | - Harbor, 39 ¥. J. Super. 33, 39, 120 A, 2d 504 (Law Div. 1956). Marine terminal purposes were defined to. include the acquisition, rehabilitation, improvement and operation of marine terminals, and, in turn; marine terminals were : defined to include ‘developments consisting of wharves, ' “docks, ete. and other buildings, structures, facilities or im- ' provements “necessary or convenient to the accommoda-_- : tion of steamships or other vessels and their cargoes or E passengers”. /The use of the disjunctive in the. phrase S “necessary or convenient to the accommodation of steam- ships or other vessels and their cargoes\or passengers”. ~The use of the disjunctive in the phrase “necessary or convenient” stresses the breadth of the legislative contem- AIA NRE YL NILE NE Appendia A plation; and the use of comparable phrases throughout the 1921 and supplemental compacts evidences the legis-° lative design to afford comprehensive discretionary pow- ers to the Authority in order that it may successfully car- ry-out its mandates with respect to the operation of the « port district. See, e.g., R.S. 32:1-23, N.J.S.A,; B.S. 32:1- 33, N.J.S.A.; R.S. 32:1-35.3, N.J.S.A.; R.S. 32:1-35.19, N.J.S.A.; B.S. 32:1-35.28, N.J.S.A.; B.S. 32:1-35.33, N.J. S.A.;)R.S. 32:1-35.35, N.J.S.A.; R.S. 32:1-35.52, N.J.S.A.; R.S. 2:1-35.57, N.J.S.A.; RS, 32:1-132, N.J.S.A.; B.S. 32; 1-38, N.J.S.A.; B.S. 32:1-73, N.J.S.A.; B.S. 32:1-96, NJ, S.A. ‘ € We are firmly convinced that the statutory definitions, particularly when read with the impelling history, furnish more than adequate legislative support for the» Author- ity’s entire operation at the Port Newark terminal com- plex. The transit functions, the warehousing, processing and distribution activities, and the service buildings all fit well within the statutory reference to facilities and im- provements necessary or Convenient to the accorimoda- tion of steamships or other vessels and their cargoes or passengers; and such further incidental uses as were re- ferred to in the record before us were not® incompatible with the overall furtherance of the operation of the ma- rine terminal and were within the broad discretionary powers of the Authority. All in all ‘we find that the prop- erties at the terminal were without excéption used for statutorily authorized purposes, were tax exempt as pub- - liely-owned property devoted to public purposes, and that tlie Law Division’s judgment must be modified accord- ingly. . (4, 5) The Law Division expressed concern with the in- creasing removal of real property by public agencies from — _we Appendia A - the tax rolls of local government. It referred to the “se- vere impact of such publie agency encroachment upon the tax structures of our municipalities” and sought to limit the Authority’s tax exemption through a judicial “form of braking action”. 103 N. J. Super. at 54, 246 A. 2d at 516. In response, the Authority stresses that the land on which the physical facilities at Port Newark have been constructed was originally marsh land and was not put to productive use until the Port was developed; that the Authority’s takeover of the Port relieved Newark of a crushing financial burden and now returns to it, under the settlement arrangements between them, a minimum of $1,000,000 per year in rental payments; and that the other communities irl Essex County as well as in the State as a whole have greatly benefitted and are greatly benefit- ing from the Authority’s progressive and expanding com- mercial development of the Port. However, none of the foregoing appears to be properly addressed to this Court for we, as judges, are not concerned with the wisdom or unwisdom of any statutory grant of tax exemption or with” its continuation or termination. Finding, as we have, that the Legislature granted‘a tax exemption for the entire Port Newark terminal operation, our clear duty, absent a showing of constitutional infirmity, is to apply it. Any concern with the breadth of the exemption and any move- ment for its restriction must, under our form govern- ment, he addressed to the Legislature rather than the Judiciary. See Arrow Builders Supply Corp. v. Hudson . Terrace Apts., Ine., 15 N. J. 418, 420-421, 105 A. 2d 387 (1954): Matawan Borough v. Monmouth Cty. Tax Bd., 51 N. J. 291, 298, 240 ‘A. 2d 8 (1968). Modified. ) 80a fi. Appendia A . For modification: Chief Justice Weirraavs, and Jus- tices Jacops, FRAncis, _—— sata, ScHETTINO and. HAneman—7, = - Opposed: None. 3la APPENDIX B “Opinion of the iMeiieiaiiis Court of New. Jersey, Law’ Division 103 N. J. Super. 41 THe City or NEWARK AND THE Port or New York Av- THORITY, PLaintirrs, v. THr Essex County Boarp or Taxation, DEFENDANTS, AND Town oF BELLEVILLE, e¢ all, INTERVENING REEBNDANTS. Superior Court oF New JERSEY Law Divsison ‘ Argued May 10, 1968—Decided June 26, 1968. a ° SyYNOPsIS Aatiigs by Port of New York Authority for, declaratory judgment that certain lands and buildings leased to it by City of Newark in Port Newark area are exempt from local, taxation. The Superior Court, Law Division, Larner, J. 8. C., held that with respect. to properties leased by Port of New York Authority from the City of Newark ursuamt to statutory authority for operation of marire terminal, hose properties used for transit functions, tem- orary storage and supporting services are exempt from _ taxation while properties used for general warehousing, sales and deliveries of. merchandise and for processing and manufaeturing are taxable. ; Judgment accordingly. — * ’ - Mr. Norman N. sis Ain for csi The City of } Newark. — ~*~, SIPS PO WE A RAE hee ~~ + Prey . ae Nee EPR PS MONETTE PRE AC re . aa see tehaniiaieaantndiaiaias al 32a Appendix B Mr. Francis A. Mulhern, Solicitor, for plaintiff, The ° Port of New York Authority (Mr. Sidney Goldstein, Gen- eral Counsel, of the New York bar, of .counsel). Mr. Charles H. Landesman, Deputy Attorney General, for defendant, The Essex County. Board ‘of Taxation (Mr. Arthur J. Sills, Attorney General of New nee attor- ney). —_ Mr. Saft A. Wolfe for Intervening Defendants (Messrs. " . Skolof é Wolfe, attorneys). LaRNER, g. 4..C. This action was instituted by the Port of New York Authority (hereinafter port authority) for a declaratory judgment that certain lands and buildings leased by the City of Newark (hereinafter city) to.the-port authority in the Port Newark area are exempt from local taxation. The city did not ally itself with the position of the port authority, but joined as a party plaintiff for the purpose of achieving a determinative resolution of the issues by judicial declaration. The particular focus of this litigation.is the action:of the Essex County Board of Taxation in the form of a’ resolu- tion-dated January 1967 removing the properties ingues- ? tion from the exempt rolls and directing the city to in- clude them in the tax lists for the tax year of 1967. The Essex County Board of Taxation contends that the properties and their use are not such as to warrant tax exempt. status and that the county’s share of the ety’ S taxes should be increased accordingly. All the other municipalities of the County of Esséx have intervened in the action by Permission: of the court in view of their financial interest in the controversy, con- tending that the properties should be assessable for taxa- ? ~ DS ce aa ON ol 33a, .? , . Appendia B | tion and that the exemption from taxation — increase > their tax burden to the county. | | Recussedve History Although the issues before the court involve only the determination of taxability for the year 1967, it is impor- tant to ndte the histof¥ of the relationship between the city and port authority and their involvement in this tax controversy in past years. Plans for the development of a marine terminal on Newark Bay date back to the beginning of this century, with study commission reports and legislation leading to public ownership and Siti he of marine terminals. L. 1911, ec. 161; New Jersey Preliminary Report (1914) p. 184-188; L: 1916, c. 162; rbor Commission, Fourth. R.S. 40:179-58 et seq.; L.-1917, ¢. 127; R.S. 40:179-46 et | seq.; L, 1920, ¢. 176, R.S. 40:179-34 et seq. Pursuant to the authority of the foregoing legislation, the City of Newark developed the marine terminal com- plex in the Port Newark area, covering approximately 700 acres, including the leasing of ddécks, lands and buildings to private concerns. t In the interim, New Jersey and New York selene into an interstate cofpact pursuant to Congressional attthor- ' ity, establishing the Port of New York District and creat- . ing the Port of New York Authority as the bi-state _agency for the purpose of developing the port: district. NSA. B2:1-2 et seq. ‘In 1945, the City of Newark requested the port author- ity to undertake a study of all matters relating to Port Newark and Newark Airport for the purpose of consider- > rent B4a Appendix B ing the possibility of the port authority undertaking the management and administration. ‘As a result of such a study legislation was adopted in 1947 authorizing the cooperation between the port authority and municipalities qin the development of marine termmals. N.J.S.A. 32:1- 35.28 et seq. Parallel legislation was adopted in the State of New York. N. Y.J/nconsol. Laws, § 6671 et. seq. (Mc-. ' Kinney. 1948). Under this legislation, municipalities were empowered “to consent to the use by the port authority of-any marine terminal owned by such municipality * * * [and] to grant, convey, lease or otherwise transfer to the | ' port authority any such marine terminal or real or per- sonal property upon such terms as may be determined by the porteauthority and such municipality” N.J.S.A. 32:1- 35.31. In addition, every municipality ,was also authorized “to vest in the Port Authority the -eontrol, operation, maintenance * * * of any marine terminal now ownéd by ' such municipality.” Id. : Instead of conveying the marine terminal properties to the port authority or retaining the port authority as a managing agent of the marine terminal within the ambit of the foregoing legislative authorization, the city entered - into-a lease agreement with the port authority on October 22, 1947 demising certain premises for-a term of 50 years for marine and air terminal purposes. Under this lease, which carried a basic rental of $128,000 per year, the port authority assumed all thé existing leases theretofore made by the city, and was authorized to sublet parts of the de- mised premises for the stated marine ard air terminal purposes. Since entering into possession} «the, port _ au- ‘thority has sublet most of the properties involved, in the leasehold to private concerns, and that is the factual pat- - ' tern which existed on October 1, 1966, the key assessment date for the fax year of 1967. ; E ’ 35a Appendix B In 1960, the city concluded that certain of. the _demised purposes and should be stibject to ordinary taxation. ‘Tt therefore applied to the Essex County Board of Taxation to list these properties on the tax rolls as omitted assess- ments. The same approach applied to the tax years of 1961, 1962, 1963, 1964 and 1965. The Essex County Board determined that the property should be assessed with the port authority listed as “Owner”. This Jocraluaton inspired appeals to the appellate di- « vision and suits in the law and chancery divisions of the - Superior Court, which became so “snarled procedurally” that the Supreme Court finally took jurisdiction. of all as- pects pf the complex litigation and remanded the matter to the law division to hear de novo all the issues involved in the entire controversy. Port of New York Authority v. Essex County Board of Taxation, 46 N. J. 51 (1965). ~ Subsequent to the remand and pending the trial in the _law division, the city and the port authority effected a ‘sset- _tlement of their differences involving the tax years from \'1960 t#1965 inclusive by entering into the “Ninth Sup- lemental Agreement with Respect to the Newark Marine and Air Terminals,” dated December 14, 1966. As part of\the settlement agreement, the annual rental was in- ereaged from $128,000 to $1,000,000, ‘with a provision for additi tion of the net revenue of the ‘port authority. Among other Sovisiens relating to advance payments and retroactive rent for 1966, the agreement provided: - “In the event the City or the Port Authority, or both, under any ay. that may hereafter be enacted al rental using a formula based upon a computa-.. RL VERA rate bp ee 36a _ Appendix B ee : 3 or applied, shall be or become subject to and lia- ble for payment to the county in which the demised premises are located of any taxes, assessments or . governmental levies or imposts upon or against the demised premises-dT upon any part or parts there- of then, as between the City and the Port Author- ity, the Port Authority shall pay the’same and such payment by the Port Authority shall og inelnded 1 in the: operation and maintenance expense.” Tt was also stipulated that all litigation pending between the parties would be dismissed with prejudice and that the city would designate on its tax records that all the proper- _ ties involved in the leasehold are tax exempt. : The agreement werit into effect, the prior litigation was” dismissed, and the City marked the properties exempt on its tax roles. On a review of the assessments of the city for the taxable year 1967, the Essex County Board of Taxation set aside the exemption and directed that the . city peas the demised properties ‘to its tax rolls. The city. complied with this. directive and thereafter the pres- ent suit was brought for declaratory judgment relating to the taxability of the affected properties for the~vear of 1967. The determination of the taxability of thd\ prop- erty in the context of this litigation is a mixed question — of law and fact, involving the exploration and delineation of the controlling legal guidelines and the application of . those guidelines to the specific properties according to i, « their function and-use. It is therefore advisable to dis- euss first the legal principles which must be applied to the factual patterns revealed by the evidence.’ ~ -v. Port of New York Authorit of N.J.S.A. 3221-14 378 | ‘if Appendia “sy LEGAL | Panrorse OP [1] me the court will dispose of: the conten-. ’ tion made by the defendants that the port authority does ‘not have the standing to bring,this action. It is urged that the authggity is not the owner of the properties in- volved and that the tax assessment ordered by the Essex’ County Board of Taxation is against the ownership in- terest of the city and not the leasehold interest: of the port authority as authorized by N.J.S.A. 54:4-2.3; and that as a consequence the port authority has no right to relief. Although , the Authority is not. the owner of the ' . properties involved, _it has a substantial financial stake in the taxability of the properties through its obligations under the lease with the city; and as a result has the requisite standing to seek declaratory relief. N.J.S. 2A: 16-56. See Port of New York Authority v. Essex County Board of Taxation, 46 N. J. 51, 53 (1965); Bergen County , 82 N. J. 303, 307 (1960). ~ Any discussion of the taxa State of New Jersey must comme lative mandate that “all property, real and personal, with- in the jurisdiction of this state not expressly exempted from taxation * * * shall be subject to taxation.” N.J.S.A. 54:4-1. The fundamental question therefore is whether .or ity of property in the not the properties in question are expressly exempt from taxation. ' Tnitially, it is clear that the legislature has not granted a specific exemption from local property taxation for property owned or used by the port authority as a marine terminal by any of the provisions of*the 1947 enabling legislation. (N.J.S.A. 32:1-35.28 et seq.). _ The port euthorit however points to the provisions -as a basis for-tax exemption: with the basic legis-. |. SSOP MOET TN: FELL IIRT APN PRUNE CPN TET HVE RE PPI A LLL TILL ME DN OTE LET RINE PTET INE EL LST 38a eo. ‘ Appendix B “To the end that * * * cities \* *, in the Port of New York District, may not stiffer, undue loss of taxes and assessments by reason: of the acquisition and ownership of property therein by “the Port of New York Authority * * * the port authority is ~ hereby authorized and empowered, in its, discretion, to enter into a voluntary agreement or agreements with any * * * city * * * in said port district, where- by it will und@rtake to pay a fair and reasonable sum or sums annually in connection with any marine or inland terminal property owned by it, not in ex- cess of the sum last paid as taxes upon such prop- erty prior to the time of its ‘acquisition by the port authority.” The authority cites the cases of Port of New York Author- ity v. City of Newark, 20 N. J. 386, 393 (1956) and Bush Terminal Co. v. City of New York, et al., 282 N. Y. 306, 26 N. E. 2d 269 (1940) as authority for the contention that the section impliedly grants a tax exemption to property owned and used by the port authoriity for marine ter- | minal purposes, since the legislature in passing this sec- ion must: necessarily have assumed that such property was exempt from taxation. It is true that where the facts bring into play the. “in lieu of” tax statute, the courts of last resort of the States of New York and New Jersey have held that their respec- tive legislatures impliedly intended to grant tax exemp- tion to the port authority despite the absence of a specific - exemption in the legislation. Port-of New York Authority ' vy. City of Newark, supra; Bush Terminal Co. v. City of New York, supra. ; ? om we ena aes Ma Daa RES tie CI 39a\ ae 8 Appendia B | | aon Pakage [2] These precedents, however, are distinguishable from the present case in two respects. First, the Essex County Board of Taxation did not direct that the property be as- sessed to the port authority ; and second, the ownership of the property in question is not in the port authority, which is a prerequisite of the application of the “in lieu” statute. - N.J.S.A. 3221-144. Hence, it is the conclusion of this court ‘that the reasoning of the foregoing cases. cannot serve as a basis for exemption of properties owned by the city and - - leased*to the port authority. This avenue of tax exemp- tion by statutory implication from N.J.S.A. 32:1-144 is not available to the city, in the context of. the facts herein. - Another basis of exemption advanced by the port au- _— thority is the-provision of R.S. 40:179-42 which states: = __ P “Every industrial terminal, and also all addi- a tions, extensions and improvements thereof, erected ° : pursuant to the terms of this act, and every in- terest or estate therein, except personal property of any tenant or lessee shall, duriitg: the term of any lease’ thereof made as herein proyided, be ex- empt from all taxes and assessments’ within - this state.” (Emphasis supplied.) _ \ [3] This section of the statute was part of the compre- hensive’ legislation passed in 1920~ authorizing any city fronting upon navigable waters to establish an industrial terminal including ‘docks, warehouses, ferries, terminals and shipping and industrial facilities,‘and°to acquire lands for said purpose. It.is urged that since the properties involved in this litigation were initially operated by the city pursuant to R.S. 40:179-34 prior to the time when port authority. went into possession under its lease and a 40a - Appendia B since the provisions of R.S. 40: 179-35 expressly permit. 4 city to lease the industrial terminal facility for a term not exceeding fifty years, the tax exemption provided by. R.S. 40:179-42 should apply to the port authority. An analysis of this legislation involving industrial ter- minals reveals that it is not.the applicable statute which controls the operation of the marine términal in port Newark since 1947.’ It was the legislation under which the port was operated by the city between 1920 and 1947. However, when the city relinquished possession and con- trol to, the Port Authority by the. lease of 1947, it did so pursuant to the legislation adopted for tke very purpose of authorizing the arrangement between the city and the port authority, namely N.J.S.A. 32:1-35.28 et seq. See Port of New-York Authority v. Hackensack — Co., 41 N. J. 90, 95. = 7 .Any doubt as to the identification of the enabling. legis- lation which controls the operation of the port by the port | authority was resolved by the parties themselves in their original lease arrangement in the following language: Wurneas, by the Treaty of April 30, 1921, cre- ating the Port of New York Authority, the two said states granted to the Port _Aythority full power and | authority ‘purchase, construct, lease and operate marine terminals within the Port of New York Dis- trict, and by Chapters Forty-four [N.J.S.A. 32: 1-35.28, et seq.] and Six Hundred and Thirty-one, © respectively, of ‘the Laws of New Jersey and the Laws of New York of 1947, said two states have authorized and empowered cities and other munici- palities in the Port of New York District to co- operate with the Port Authority in the develop- @ xf , 4a - Appendix B ment of marine terminals and to consent to the use by the Port Authority of marine terminals owned by them and-of any, real and Be sacs property: owned by them, seen ° In Section ) Definitions, thé following: also appears: het: ‘Marine : Terminal’ and ‘New ark Marine Ter- minal’ shall mean a Marine Terminal as defined in Seetion Thrée of Chapter Forty-four of the Laws of New Jersey, of 1947, [N.J.S.A. 32 :1-35.20], * * *.” By the foregoing, the city and the port authority ac- knowledged in 1947 that the operation of the port by the ‘port authority was accomplished pursuant to the author- ity and terms of the recently adopted legislation, namely Chapter 44 of the Laws of 1947 (N.J.S.A. 32:1-35.28 et seq.) and not the pre- -existing legislation adopted in 1920 consisting of Chapter 176 of the Laws of 1920 (B.S. 40: ' 179-34 et seq.). Hence the exemption set forth in RS. 40 :179-42 which by its terms is limited to industrial ter- - minals erected pursuant to the 1920 legislation is not’ap- plicable to the current operation of the port by the port ‘authority, and cannot ‘serve as the basis of ‘statutory @x- emption claimed by the authority. eae [4, 5], The port. authority advances as a final ground of tax exemption the provision of N.J.S.A. 54:4-3.3 which exempts from taxation the property. of taxing districts used for “public purposes.” It.is clear that property owned by a municipality, as is the case here, is exempt from taxation, if and only if that property is used for -.“public purposes.” Jamouneau v. Division of Tax Ap- peals, 2. N. J. 325 (1949); Teaneck Township v. Division 42a Appendix B of Tax Appeals, 10 N. J. Super: 171 (App. Div. 1950). In fact, public use’ is a necessary prerequisite in order to bring publicly owned property within -constitutional standards for tax exemption. New Jersey Turnpike Au- thority v. Washington Township, 16 N. J. 38, 44 (1954); . Const. Art. VIII, Sec. 1, par. 1. Simce the statute re- _ quires both public ownership and public use to qualify the. property for tax exemption, the mere receipt of rentals’ from a private lessee with firiancial benefits to the pub- lic agency does not transform a private use into a public use. Jamouneau v. Division of Tax Appeals, supra, 2 - N. J., at p. 333.. As observed by Justice Francis in Bor:_, ough of Moonachie v. Port of New York oe 38 / N. J. 414 (1962): “fP]roperty owned a publie agency but ¢m-_ ployed primarily to obWfin revenue or profit through : private business uses is not immune from taxation, but property employed primarily for a public use does not lose immunity- because the agency inciden- _ _ tally derives some private business income from oe (at’p. 426) P [6] Aithoagti tax exemptions sought by private owners are strictly construed and will not be extended beyond the ascertainable intention of the Legislature, Deubel v. Ker- vick, 33 N. J..568, 574 (1960), our courts have adopted a more liberal attitude toward tax exemptions sought by governmental agencies. Walter ‘Reade, Inc. v. Dennis -Township, 36 N. J+ 435, 440 (1962); Township of Han- over v. Town of Morristown, 4 N. J. Super. 22, 24 (App. Div. 1949). In cases involving governmental agencies, the requisite of use for public: purpose is accorded a liberal 43a Appendix B NX construction—one — broad to encompass the leg- , islative aims. Id. This so-called liberal construction however must be Seti. pered by a countervailing policy consideration dictated by _the increasing removal of real property by public agencies from the tax rolls of local. governments. In ‘Moonachie, - : supra, the Supreme Court pointed out: “Recent years have witnessed also a steadily in- creasing taking of private property by both state and federal \ governments and various agencies thereof for public purposes, thus removing it from - the tax rolls and casting a proportionately greater share of support of state and local government upon the private property owner. * * * Exemption of in- dustrial property from taxation or its removal from tax rolls causes a particularly severe impact upon local government. Such property is a vital part of the tax base in ‘most communities since the tax rev- -_—-—enue-derived from it, as distinguished from resi- — . dential property, usually greatly exceeds the cost of providing local public services. And. it may be said that.there are no substantial differences, either in the-nature of their activity or in. the economic effects upon local communities, between privately owned industrial plants, and buildings ow a tei Port Authority and leased for =e opera- tions unrelated to air terminal purposes.” (38 N. J., _at p. 423) i , | The severe impact of such public agency encroachment upon the tax structures of our municipalities |requires a form of braking,action by our courts so as to permit ex- 440 Sistas B emptions only for such uses as are clearly within the in- -tenciment by the legislature. Thus, the applicable guideline is whether the uses made of the involved properties as of October 1, 1966 were true public uses within*the intent-of the Legislature when it authorized the City of Newark to lease to the port au- thority the Port Newark complex for the development of a marine terminal. , The intervening municipalities of Essex County urge that the ‘use of the properties for marine terminal pur- poses, even within the legislative authorization, is not equated with “public use” as required by N.J.S.A. 54:4- 3.3. The port authority contends that the properties in question are being used for a public purpose since they are being used as a marine terminal pursuant to N.J.S.A. 32:1-35.28 et seq. The other parties concede that a ma- rine terminal is _a_public use and that the ultimate issue | | presented by this litigation is whether the properties are | used for marine terminal purposes. It is manifest from the legislation authorizing the de- velopment of air terminals (N.J.S.A. 32:1-35.1 to 32:1- 35.19) and marine terminals (N.J.S.A. 32:1-35.28 to 32:1- 35.36) and the’ history leading to this legislation that the legislature of our state mandated that the use of prop- erty by the port authority for the purposes defined there- _in constitutes a public use. See Port of New York Au- thority v. City of Newark; 20 N. J. 386 (1956). More- over, the Supreme Court in Port-.af New York Authority - v. Hackensack Water Co., 41 N. J. 90 (1963) referred to the Port Newark operation as. follows: ; \ — 458 a Appendix B “Two small items here involved relate to the Port Newark Marine Terminal, operated by the Port Au- | thority under a lease froxt its owner, ‘the City of Newark, pursuant to legislation of the States of ° which the New Jersey counterpart is’ N.J.S.A. 32:1- ~ 35.28 et seq. These terminal facilities are. in the. public use.” (Emphasis supplied). (at p. 95) . [7] As a consequence, there is no doubt"that a “ntaxine terminal” purpose is also a “public purpose”; and that properties at Port Newark operated by the port author- ity under its lease with the City which are used for ma- rine terminal purposes are tax exempt. Conversely, such properties which are not used for “marine terminal” pur- poses are subject to ordinary taxation, regardless of puh- lic ownership by the City and public operation by the port authority. ” It is also manifest that these consequences follow re- gardless of the fact that the properties may be sub-let by the port authority to private concerns. It is the use-and—— purpose which contro! within the framework of the pub- lic ownership in this case, and-not.the identity of the par- ticular individual | or corporation carrying out that pur- pose under lease or sublease from the city. Port of New York Authority v. City of Newark, swpra, 20 N.'J., at p. 395; Walter Reade, Inc. v. Dennis Township, supra; Town _of Bloomfield v. Division of Tax depen 84 N. J. Super. 19 (App. Div. 1964). There thus remains for consideration the nature, type and extent of the business. activities which are encom- passed within the designation “marine terminal”, in or- der to test the taxability of the particular or uses refleeted by the evidence. ; af a Q i ae Sete Appendia BL 7 The statutory definition of a marine terminal is that *eontained in the Marine Terminal Act (N.J.S.A. 32:1- 35.28 et seq.) which authorized the agreement between the city and the port authority;~and which was incorporated by reference in the lease .of October 22, 1947. N.J.S.A. 32:1-35.30 provides in pertinent part: “‘Marine terminals’ shall mean_ developments, consisting of one or more piers, wharves, docks, ;: bulkheads, slips, basins, vehicular roadways, rail- - road connections, side tracks, sidingsor other build- ings, structures, facilities or improvements, neces- sary or convenient to the accommodation of steam- ships or other: vessels and their “cargoes or pas- sengers. “Marine terminal purposey shall mean the effec- tuation, establishment, acquisition, construction, re- habilitation, improvement, maintenance -or opera- tion of marine terminals.” A further relevant definition appears in the basic com- pact between Pg of New York and New Jersey - which created the Port of New York Authority. N. J. S.A. (82 :1-23 provides in pertinent part: “Terminal facility’ shall include wharves, piers, slips, ferries, docks, dry docks, bulkheads, dock- walls, basins, carfloats, floatbridges, grain or other. * storage elevators, warehouses, cold storage, tracks, yards, sheds, switches, connections, overhead appli- ances, and every kind of terminal or storage fa- cility now in use or hereinafter designed for use for’ the handling, storage, loading or unloading of freight at steamship * * * terminals:” 47a Appendiz B ec | \ In the “Principles to Govern the Development” of the ~Port of New York, the Legislature = = S.A. 32:1-26) : | “Rirst—That terminal operations within. the Port district, so far as economically practical, should be ’ unified ; “Second—That there should be consolidation of ' ghipments at proper classification points, so. as to eliminate duplication of effort, inefficient loading of equipment, and realize reduction in expenses.” It is evident that the legislative design contemplated that the port authority would develop the port for the substantial benefit of the surrounding communities and their citizens; and that all activities reasonably necessary for the operation of a marine terminal would properly represent public uses. [8} It is also evident that the operations encompassed | by the statutory definition of a marine terminal involve lands, structures and buildings utilized. in the flow and . movement of water-borne cargoes ahd passengers. And - this includes not only the usual land accoutrements for shipping, such as piers, docks, wharves, railroad connec- tions, sidings, etc., but also such “buildings, _Structures, ‘facilities or improvemients, necessary or conv enient to the accommodation of — or other vessels and. their cargoes or passengers.” [9, 10] The permissible uses should be construed broad- ly in order to effectuate the basic purposes of the Bi-Sate Compact.and the creation of the port authority; N.J.S.A. 32:1-35.32. However, such Jiberal construction can_only be - 48a Appendix B exercised within the limits of the statutory definition of the activities and functions of a marine terminal, which have as their common denominator the accommodation to the flow and movement of water-borne cargoes and pas: sengers. Thus, even if the land, building or structure is Py not used for one of the enumerated purposes, it is never- * ‘theless within the authorized uses-if it is reasonably neces- sary. or ¢ nvenient for the efficient operation of a marine terminal. l In re Township of Moon, 387 Pa. 144, 127 A. 2d 361, 364 (1956). However; unless the use is one which_- is convenient or-necessary for the operation of a marine terminal as a public instrumentality, it cannot qualify as ‘a public use for. tax exemption despite its incidental bene- fit to the public and to the public agency. Town of Har- rison v. County of Westchester, 13 N. Y. 2d 253, 246 N. Y. | '. &. 2d 593, 196 N. BE. 2d 240 (1963); Borough of Moonachie v. Port of New York Authority, supra. The evidence reveals that the usés of the involved prop- erties are mainly concerned with water-borne imports -and ° exports, which fall into the following general -funetional- categories: (1). transit functions, temporary storage, and supporting services; (2) warehousing; (3) sales and de- livery: of merchandise; (4) processing and manufacturing. In addition, there’‘are some uses which cannot be cate- . _- gorized and which must be analyzed on- an .individnal . basis. : In any event; the major areas of dispute arise with properties which are utilized by private-companies under | sublease from the port authority for the conduct of or- © dinary business activities involving the sale and delivery of goods to customers, warehousing of goods, and the proc- essing and manufacturing of products. 49° : i Appendix. B The ort authority contends that the uses of the prop-* . erties in October 1966 were Substantially- the » ‘same uses © which existed in October 1947 when the port authority en- tered into the lease with the city; and that as a result - thereof, the court- should declare such uses to be encom- passed within the definition of “marine terminal.” Tt — urges that the legislaturé adopted the enabling legisla- tion (N.J.S.A. 32:1-35.28 et seq.) in, apparent recdgnition of the existing facilities and. uses in the Port Newark gom- | plex ‘operated by the city and that it thereby sanctioned |” the continuation of those uses as part and parcel of a ma- — rine terminal by the port authority under-its contemplated . lease with the city. Such an argameny presupposes that the ‘legislation . in question applies by its terms solely to the port of the city of, Newark and that. the .statute’is a-special one for that city and its .peculiar characteristics and problems. Al- i though the impending lease with the City of Newark-may — have inspired. the passage of the legislation, by itS terms .the statute applies to all municipalities within. the- Port . ‘of. New York District. The: statute docs ‘not ‘purport in — express language to ‘equate. the status quo ‘of property uses in the City-of Newark with the permissible uses of. a marine terminal. It rather defines in explicit ‘terms Tu the meaning ofa marine terminal. [11] It is the duty: of this court to construe the legisla- tive intent within the limitation of the terminology utilized in’ the finalized text of the statute, and not. within conjec-. tural assertions as to the unexpressed intentions of the ¢ legislaters when the statute was adopted. Petrangeli v. Barrett, 33 N. J. Super. 378, 386 (App. Div. 1954); Du- mont Lowden, Inc. v.-Hansen, 38 N. J. 49, 56 (1962). _50a~ : Appendia B [12] Hence the*eourt in passing upon the current prop- ' erty uses on October 1, 1966 is not controlled or persuaded by the nature of the uses in 1947. Neither the legislature by statute nor a court by judicial determination has frozen the definition of marine terminals to the existing uses dur- ing "the period pre-existing the port authority lease. The court must make independent findings based upon the fac- tual pattern of 1966, as controlled by the statutory defini- tion of marine terminals. ‘In a further effort to expand the ambit of functions and uses involved in the operation of a marine terminal, the port authority offered testimony: of two experts, trained y~and experienced in the management and operation’ of ‘ports and marine terminals. One of these @xperts, Albert Lyle King, an employee of the port authority, offered his own definition of a-marine terminal as follows: 7 “A marine terminal, in my concept, is a complex of wharves, warehouses, open land and miscellane- ous-buildings for the purpose of generating and ransferring cargo between land and water carriers and providing facilities for ee ene and wars cargo.” @ By this definition as elaborated ie his other testimony, Mr. King took the. position that one of the important goals “Of the authority in the operation of the Newark Marine Terminal is to generate shipping business by attracting companies to the port area who are engaged:in export and import activities. He asserted that such concerns should. be considered part of a marine terminal and permitted to operate within the leased area of the-port in order to com- pete with ports of other cities such as Philadelphia and dla ae B Baltimore. It was his “conception that these businesses should be located in the Port and therefore properly with- in the operation of a marine terminal so that the port _. may develop into a bustling trade.center which would in turn generate substantial shipping actWity. It is for that reason that he included in his, definition of a marine ter- minal the-use of land and buildings for the punper of generating cargo. . It was also because of this approach that-the expert in- cluded within the definition of a marine terminal, uses in- . volving the processmg of fabricating of goods. It was his opinion that such an industrial activity is properly a ma- rine terminal purpose so long as the goods are placed}in water-borne commerce through importation or exporta- tion. He also concluded that concerns engaged in the ex- port and import. - businggs selling mé@rchandise which is water-borne qualify as appropriate users of port proper- - ties within -the limits of a marine terminal. There is no. doubt that the basic goals and motives of this expert and his employer, the port authority, are laud- ’ able from the viewpoint, of the business development of the Port and the economic welfare of the city. These goals however are, not the controlling test of taxability. They may be efficient and profitable standards for the de- velopment of a marine terminal when unhampered and unlimited by legislative controls. However, the desires and goals of the port authority in its ever-expanding ac- tivities cannot run counter to the legislative mandate. Definitions of the port authority or its experts hased upon. their best business: judgment.are of no legal significance on the issues at. hand, which must be‘ tested by the limi- tations of the statutory definition and not by the business judgment of the r authority exetutives and experts. 52a Appendiz B - [13] It is therefore incumbent upon the court to con- trol the expansion of port authority activities via the route of tax exemption by limiting this extraordinary privilege only to those uses and purposes which are clear- ly within the legislative intendment., Public use is not * synonymous with port authority use; it is synonymous with the uses designated by the legislature for a marine terminal. [14] Based upon this standard of legislative construc- tion, which of the properties itvolved come within the statutory requirement that a marine terminal encompasses ‘ buildings, structures and facilities “necessary or conven- ient to.the accommodation of steamships or other vessels and their cargoes or passengers”? The evidence of the uses and purposes of the particular properties on Octo- ber 1, 1966 is not in substantial dispute. As far as pos- sible, it would be appropriate to consider the specific prop- erties in “the applicable classes of the functional cate- - fories outl{ned above. @» [The court proceeds to consider the taxability of each of the involved properties within the functional categories set forth supra. Generally, the court arrives at the fol- - lowing conclusions: 1. Properties used for transit functions, temporary stor- age and supporting services are exempt from taxation. 2. Properties used for general warehousing are tax- able. 3. Properties used for sales and delivery of merchan- dise are taxable. 4. Properties used for processing. and manufacturing are taxable. 5. Miscellaneous properties—some taxable, some exempt (as set out in filed opinion).] APPENDIX C cen and Mandate on .Modification of Sypreme Court of New Jersey. (Filed—June 25, 1969.) It is hereupon ordered and adjudged that the judgment of the’ Law Division, Superior Court be and the same , hereby is modified; and it is further ordered that the ree- ord be remitted to the Law Division, Superior Court top there proceeded with in accordance with the rules An practice relating to that court, consistent with the “the on ion of this Court. Wirness the Honorable J oseph Weintraub, Chief Jus- tice. Judgment pwenery June 25, 1969. Mandate Issued: July 5, 1969. | Joun H. Gitpea Clerk of the Supreme Court “1 * o4a f APPENDIX D Relevant Statutes ‘@ ARTICLE 1 COMPACT OF APRIL 30, 1921 " Revision Note By L. 1921, e. 151, p. 412 (1924 Suppl. § 161.3 1 to *161-6) - New Jersey authorized J. Spencer Smith, DeWitt Van Buskirk and Frank R. Ford, together with the attorney general, to enter into the compact with the state of New York. The compact as set forth i in this article was adopt- - ed by New York and is eontained in Laws of New York 1921, ce. 154, p: 492, McKinney Unconsol. Laws §§ 6401- 6423. / Section 4 of L.1921, ¢. 151 ot sup § *161-6), au- thorized the commissioners to apply for congressional approval of the compact, which- was granted by Public Pesolution No. 17, 67th icine | S.J.Res. 88, 42 Stat 174. 32:1-1. PREAMBLE Whereas, In the year 1834 the states of New York and New Jersey did enter into an agreement fixing dnd deter- ’ mining the rights and obligations of the two states in and about the waters between the two states, especially in and about the bay of New York and the Hudson river; and Whereas, Since that time the commerce of the port: of . New York has greatly developed and increased. and the territory in and around the port has. become commercially one center or district; and — A 55a _. Appendia D 2 pp Whereas, It is confidently believed that a better co-or- dination of the terminal, transportation and other facili- ‘ ties of commerce in, about and through the port of New ‘York, will result in great economies, benefiting the nation, as well as thé'states‘of New York and New Jersey; and Whereas, The future. development of such términal, transportation and other facilities of commerce will re- quire the expenditure of large sums of money, and the _/eordial co-operation of the states of ‘New York and New ‘J ersey in the encouragement of the investment of capital, and in the formulation and execution of the necessary _ physical plans; and ; \. : Whereas, Such result can. best vm sievsiniaitiiln through the cooperation of the two states by and a a joint or common agency; ’ Now, Therefore, The said states of New Jers and New York do supplement, and amend the awe agreément of 1834 in the following respects: | 32 1-2. Co-oPERATION PLEDGED , ARTICLE I. They . agree to and pledge, each to the other, faithful co-operation in the future planning and development of the port of New York, holding in high trust for the bene- fit of the nation the special blessings and natural advan- tages thereof. 32 :1-4. Port AUTHORITY CREATED | ARTICLE III. ~ There is hereby created “The Port of New York Au- thority” “(or paces aniemecieed referred to as the “port 56a Appendia D authority”), which shall be a body corporate and politic, having the powers and jurisdiction hereinafter enume- rated, and such other and additional. powers as shall be- _ conferred upon it by the legislature of either state con- curred in by the legislature of the other, or by act or acts of congress, as hereinafter provided. 32:1.-7. GENERAL POWERS OF PORT*4UTHORITY; STATE AND MUNICIPAL PROPERTY AND BONDED INDEBTEDNESS. PROTECTED ARTICLE VI. The port authority shall constitute a body, both corpo- |‘ Tatg and politic, with full power and authority to pur- chase, construct, lease and/or operate any terminal or transportation facility within said district; and to make charges for the use thereof; and for any of such purposes ' to own, hold, lease and/or operate real or personal prop- ‘erty, to borrow.-money and secure the same by bonds or by mortgages upon any property held or to be held by. it. No property now or hereafter vested in or held by either - state, or by any county, city, borough, village, township or other municipaiity; shall be taken by the port authority, without the authority or consent of such state, county, city, borough, village, township or other municipality, nor shall anything herein impair or invalidate in any way any bonded indebtedness of such state, county, city, borough, village, township or other municipality, nor impair the provisions of law regulating the payment into sinking funds of- revenues derived from municipal property, or dedicating the revenues derived from any municipal prop- erty to a specific purpose. The powers granted in this article shall not be excised by the port authority until the legislatures of both states 'sS 57a Appendix D shall have approved of a comprehensive plan for the de- velopment of the port as hereinafter provided. HistoricaL Note ‘ Revision Note: Rots A comprehensive plan was adopted and approved by both states as contained in $§ 32:1-26 to 32:1-31 of this ‘title. 32:1-9. Laws APPLICABLE TO PUBLIC UTILITIES’ IN EFFECT ARTICLE VIII. Unless and until otherwise provided, all laws now or hereafter vesting jurisdiction or. control in the public service commission, or the public utilities commission, or. like body, within each state respectively, shall apply to railroads and to any transportation,: terminal or other fa- cility owned, operated, leased or constructed by the port . authority, with the same force and effect as if such rail-- road, or transportation, terminal or other facility were owned, leased, operated or constructed by a private cor- poration. 32 :1-10. ) MuNICIPAL POWERS NOT IMPAIRED ARTICLE IX. \Nothing contained in this agreement shall impair the © powers of any municipality to develop or improve port and terminal facilities.. : 32:1-11. PLANS TOBE ADOPTED . ARTICLE X. ' The legislatures of the two states, prior to the signing of this agreement, or thereafter as soon as may be prac-. ticable, will adopt a plan or plans for the comprehensive - development of the port of New York. > . bn * 4 oe ae me —~«668a G5. 7% se Appendix. D ; f a 32 1-12. SupPpLEMENTS AND AMENDMENTS TO COMPREHEN- . SIVE PLAN : a . é ARTICLE XI. -. ee The port authority shall from time to tire make plans: for the development of said district, supplementary to or. amendatory of any plan theretofore adopted, and when such plans are duly approved by the legislatures of the two states, they shall be binding upon both states with the .same force and effect as if incorporated in this agree- ment. 32 :1-13. RECOMMENDATIONS’ TO LEGISLATURES AND CONGRESS i: ARTICLE XII. i The port authority may from time to time make recom- mendations to the legislatures of the two states or to the | congress of the United States, based upon study and an- alysis, for the better conduct of the commerce passing in | and through the port of New York,'the increase and im- provement of transportation and.terminal facilities there- in, and the more economical antl: expeditious handling of such commerce. : 32 31-22. Witaniawis FROM AGREEMENT ‘ ARTICLE XXI. ‘et - wither state may by its legislature withdraw from this agreement in the event that a plan for the comprehen- sive development of the port shall not have been adopted by both states on or prier July 1, 1923; and when such withdrawal shall have been communicated to the governor of the other state by the state so withdrawing, this agree- ment shall be thereby abrogated. a i 59a Appendia D. 32 1.93, DerIniTi0ws EXECUTION OF COMPACT. ARTICLE XXIL Definitions—The following words as herein’ used shall have the following meaning: “Transportation facility” shall include railroads, steam or electric, motor truck or other street or highway vehicles, tunnels, bridges, boats, ferries, carfloats, lighters, tugs, floating elevators, barges, scows or harbor craft of any kind, aircraft suitable for harbor service, and every kind of transportation facility now in use or hereafter designed for use for the transpor- tation or carriage of persons or property. “Terminal fa- cility” shall include wharves, piers, slips, ferries, docks, dry docks, bulkheads, dockwalls; basins, carfloats, float- bridges, grain or other storage elevators, warehouses, cold storage,, tracks, yards, sheds, switches, connections, overhead appliances, and every kind of terminal or stor- age facility now in use or hereafter designed for use. for the handling, storage, loading or unloading of freight at steamship, railroad or freight ‘terminals. “Railroads” | -shall inelude railways, extensions thereof, tunnels, sub-— ways, bridges, elevated structures, tracks, poles, wires, conduits, power houses, substations, lines for the trans- missions of power, car barns, shops, yards, sidings, turn- outs, switches, stations and approaches thereto, cars and motive equipment. “Facility” shall include*all ‘works, buildings, structures, appliances and appurtenances neces- . sary and convenient for the proper construction, equip- ment, maintenance and ‘operation of such facility or facili- ties or any one or more of them. “Real property” shall - include land under water, as well as uplands, and. all property either: now commonly or legally defined as real property or which may hereafter be so defined. “Personal property” shall include. choses in action and‘ all other \ 60a Appendia D property now commonly or legally defined as personal property or which may hereafter be so defined. “To lease” shall-include to -rent or to hire. “Rule or regula- tion”, until and unless otherwise determined by the legis- ‘laturés of both states, shall mean any rule or regulation not inconsistent with' the constitution of thé United States or of .either state, and, subject to the’ exercise of the. power of congress, for the improvément.of the conduct of navigation and commerce within the district, and shall in- clude charges, rates, rentals or tolls fixed or established by the port authority; ‘and untjl otherwise determined as ‘ aforesaid, shall not include matters relating to harbor or river pollution. Wherever action by the legislature of © either state/is herein referred to, it shall: méan’an act of the legislature duly adopted in accordance with the pro- visions of the constitution of the state. Plural or singular.—The singular wherever used herein ‘ shall include the plural. - : Consent, approval or recommendation of municipality. How given.—Wherever herein the consént, approval or recommendation of a “niunicipality” is required, the word “municipality” shall be taken to include any city or incor- - porated village within the port district, and in addition in the state of New Jersey any borough, town, stownship, or . any municipality governed by an improvement commission within the district. Such consent, approval or recommen-. dation whenever required in the:case’of the :city of New York shall be deemed to have.been given or made when- .- ever the board of estimate and apportionment of. said city or any body hereafter succeeding to its duties shall by majority vote pass a resolution expressing such con- sent, approval or recommendation; and in the case of any e 6la Appendia D municipality now or hereafter governed by a commission, ~ whenever the commission thereof shall by a majority vote pass such a resolution; and in all other cases whenever the body. authorized to grant consent to-the use of’ the streets or highways of such municipality shall by a ma- jority vote pass-such 2 a resolution. 32 21-24. ° Kvaairicns In Witness Whereof we-have hereunto set our hands and seals under chapter 154 of the Laws of 1921 of the state of New York and chapter’ 151 of the Laws [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385604_1152%3A1. Public record. Not legal advice.