| November 18, 1991
Barry Skokowski, Sr.
Deputy Commissioner
Department of Community Affairs
101 South Broad Street
Trenton, New Jersey 08625
Re: 91-0141:
Whether Commissioners of
County Boards of Taxation are subject
to Local Government Ethics Law
Dear Deputy Commissioner
Skokowski:
The question
has arisen as to whether the Commissioners
of County Boards of Taxation are required to file financial
disclosure statements pursuant to the Local Government Ethics Law
(P.L. 1991, c. 29; N.J.S.A. 40A:9-22.1 et seq.). Please he advised
that the Commissioners of County Boards of Taxation are not "local
government officers" pursuant to N.J.S.A. 40A:9-22-3(g) and
accordingly they are not required to file financial disclosure
statements. Rather, the Commissioners are State officers or
employees subject to the requirements of the State's Conflicts of
Interest Law, N.J.S.A. 52:13D-12 et seq.
N.J.S.A. 40A:9-22.6
provides that "[l]ocal government
officers shall annually file a financial disclosure statement."
N.J.S.A. 40A:9-22.3(g) in turn, defines a local government officer
as follows:
"Local
government officer" means any person
whether compensated or not, whether part-time
or full-time: (1) elected to any office of a
local government agency; (2) serving on a
local government agency which has the
authority to enact ordinances, approve
development applications or grant zoning
variances; (3) who is a member of an
independent municipal, county or regional
authority; or (4) who is a managerial
executive or confidential employee of a local
government agency, as defined in section 3 of
the "New Jersey Employer-Employee Relations
Act," P.L. 1942, c. 100 (C. 34:13A-3), but
shall not mean any employee of a school
district or member or a school board;
Initially the
determination is whether the Commissioners
of County Board of Taxation serve a "local government agency."
A
"local Government agency" includes
any agency,
board, governing body, including
the chief executive officer, bureau, division,
office, commission, or other instrumentality
within a county or municipality, and any
independent local authority, including any
entity created by more than one county or
municipality which performs functions other
than of a purely advisory nature, but shall
not include a school board. [N.J.S.A. 40A:9-22.3(e)].
However, County
Boards of Taxation established pursuant to N.J.S.A.
54:3-2 are State rather than local government agencies. Warren v.
Hudson County, 135 N.J.L. 178, 180 (E. & A. 1947); Defeo v.
Smith,
31 N.J. Super. 474 (1954), rev'd. on other grounds, 17 N.J. 183
(1955). Further, the Executive Commission on Ethical Standards in
its implementation of the State Conflicts of Interest Law has
determined that the Commissioners of County Boards of Taxation are
State officers and employees. See Executive Commission on Ethical
Standards Advisory Opinion No. 33, (September 17,1975).
(Attached). Accordingly, the County Boards of Taxation are not
"local government agencies" within the meaning of the
Local
Government Ethics Law. It follows that the Commissioners are not
subject to Local Government Ethics Law as they do not serve a
"local government agency."
In conclusion,
you are advised that Commissioners of
County Boards of Taxation are not "local government officers,"
and
accordingly the Commissioners are not required to file financial
disclosure statements pursuant to the Local Government Ethics Law.
However, the Commissioners are State officers or employees subject
to the requirements of the State's Conflicts of Interest Law,
N.J.S.A. 52:13D-12 et seq.
Very
truly yours,
ROBERT
J. DEL TUF0
ATTORNEY GENERAL OF NEW JERSEY
By:___________________________________
John J. Chernoski
Senior Deputy Attorney General
JJC:rb
c: Stephen M. Sylvester, Assistant Director,
Division of Taxation
Executive Commission on
Ethical Standards
Advisory Opinion
No. 33
The Executive Commission on Ethical Standards has been
asked for advice on whether it would be a conflict of interest for
a member of a County Board of Taxation, who is the President and
primary stockholder of a real estate and insurance firm, to
participate in hearing tax appeals when:
(1) the petitioning
taxpayer or the assessor
for the responding municipality is a
client of his firm;
(2) the attorney
for the taxpayer or for the
municipality is a client of his firm; or
(3) the assessor
of the responding city is
his relative.
In responding
to those questions, it must initially be
determined whether members of the County Boards of Taxation are
"State officers or employees" or "special State officers
and
employees" as those terms are used in the Conflicts of Interest
Law. State officer or employee" is defined in N.J.S.A. 52:13D-13
to mean
"(b)
... any person, other than & member
of the Legislature, holding an office or
employment in a State agency, ..." (Emphasis
added).
"State agency"
is defined in the same section to mean
"(a)
... any of the principal departments
in the Executive Branch of the State
Government, and any division, board, bureau,
office, commission or other instrumentality
within or created by such department, the
Legislature of the State and any office,
board, bureau or commission within or created
by the Legislative Branch, and any independent
State authority, commission, instrumentality
or agency. A county or municipality shall not
be deemed an agency or instrumentality of the
State."
A review of the
statutes pertaining to County Boards at
Taxation reveal that they "are creatures of the Legislature"
created by N.J.S.A. 54:3-1. Baldwin Construction Co. v. Essex
County Board of Taxation, 28 N.J. Super. 110, 116 (App. Div. 1953);
Board of Taxation of Essex County v. Bellville, 92 N.J. Super. 338,
342 (Law Div. 1966). The members of the county boards of taxation
are appointed by the Governor with the advice and consent of the
Senate. N.J.S.A. 54:3-2. Their salaries are paid by the State
Treasurer upon warrants drawn by the Director of the Division of
Budget and Accounting and are specifically fixed by statute.
N.J.S.A. 54:3-6.
In 1946, the
Court of Errors and Appeals commented on
the nature of these Boards in Warren v. Hudson County,
135 N.J.L. 178 (E. & A. 1946), where it stated:
"The
county boards of taxation are an
integral part of the State tax system and as
such their status is necessarily that of State
agencies having specified functions in the
administration of a system for the assessment
and collection of taxes." Id. at
A similar statement
is fold in the Appellate Division decision in
DeFeo v Smith, 31 N.J. Super. 474 (App. Div. 1954), rev'd on other
grounds, 17 N.J. 183 (1955) where the court said:
"The
county board of taxation is not
subordinate to the board of chosen
freeholders. While the county board of
taxation exercises a jurisdiction that is
confined with definite territorial limits, its
duties concern the State at large in a
government field of major importance .... Its
status is necessarily of a State agency having
specific functions in the administration of a
system for the assessment and collections of
taxes." Id at
After reviewing
the statutes and judicial decisions pertaining to
County Board of Taxation and the legal advice requested by this
Commission from the Attorney General, it is our conclusion that
County Boards of Taxation are State agencies and that the members
and employees of these boards are subject to the N. J. Conflicts
of
Interest Law.
In addition to
the standards of conduct contained in the
Conflicts of Interest Law itself, that law also requires the head
of each State agency to adopt a code of ethics to govern and guide
the conduct of those State officers and employees within the
agency. N.J.S.A. 52:13D-23. For those instrumentalities within
and under the control of a principal department in the Executive
Branch of State Government the duty to adopt a code of ethics is
on
the department head unless he assigns the performance of this duty
to the principal officers of specified instrumentalities within
his
department. For those independent State instrumentalities who are
within a principal department for administrative purposes only,
the
duty is on the head of that instrumentality to prepare the required
code of ethics. In such cases, the instrumentality may either
adopt its own code of ethics or, if suitable, the one promulgated
by the department in which the instrumentality is situated.
Each code of
ethics must both conform to the general
standards set forth in N.J.S.A. 52:13D-23(e) and contain pro-visions
formulated with respect to the particular needs and
problems of the agency to which said code is applicable. N.J.S.A.
52:13D-23(a). Each code must be reviewed by the Attorney General
to determine its compliance with the provisions of the Conflicts
Law and any other applicable provisions of law. To assure its
suitability and adequacy, it also must be approved by this
Commission, N.J.S.A. 52:13D-23(a), which has the continuing
responsibility of reviewing and recommending changes in the codes
adopted throughout the Executive Branch of State Government.
N.J.S.A. 52:13D-21(d).
In the case of
the County Boards of Taxation, the
Executive Commission has not received any codes of ethics from
these Boards. Presumably this is due to the fact that they either
consider themselves to be governed by the code of ethics of the
Department of Treasury or were unaware of the requirement of the
Conflicts Law. In either case, this Commission must now determine
whether a code of ethics exists governing the conduct of Boards
of
Taxation and their employees.
The County Boards
of Taxation are located in the
Department of Treasury which has adopted a code of ethics governing
"all officers and employees of the Department." Although
this would
seem to include the members and employees of the County Boards of
Taxation, a review of the Department's code demonstrates that it
was not intended to cover the conduct of these individuals nor was
it formulated with respect to the particular needs and problems
of
______ ______ Boards. This is evidenced by the various provisions
that _______ persons to make specified disclosures to, and obtain
approval from their Division Director. Since the County Boards of
Taxation are not situated within any division in the Department
of
Treasury, it is apparent that these provisions are inappropriate
when applied to them. The inapplicability of the Department code
to these Boards is also demonstrated by the fact that this
Commission is aware of no attempt by the Department to apply these
provisions to the County Boards. But more importantly, the
departmental code contains a noticeable absence of any provisions
that take cognizance of the peculiar needs and problems of these
Boards. For these reasons, this Commission has concluded that the
code of ethics of the Department of Treasury is not applicable to
the County Boards of Taxation in that Department. The State
Treasurer, therefore, must adopt a code of ethics covering the
members and employees of the County Boards or each Board must adopt
it's own code of ethics. Because all of the County Boards face
similar conflict of interest problems, this Commission recommends
that the Boards consult with one another and recommend one code
of
ethics that can be promulgated by the State Treasurer as a uniform
code for all Boards.
The future promulgation of a code of ethics for the
County Boards of Taxation, however, does not resolve the present
problem. The mandate of the Conflicts Law is that a code of ethics
be adopted within six months of the date on which the law was
enacted. N.J.S.A. 57:13D-23. Although the Legislature did not
specifically provide a means to enforce this mandate or state what
would occur if a code were not adopted within the six month period,
it should not be presumed chat the Legislature intended to perform
an idle gesture in requiring the adoption of a code of ethics and
specifying the time period in which it was to be adopted. The
Legislative intent is clear. It directed that a code of ethics be
adopted within six months of the enactment of the law and specified
the standards to be placed in each code. Since an appropriate code
of ethics has not been adopted within the prescribed time period,
it now becomes the duty of this Commission to effectuate the
Legislative will by declaring the standards contained in N.J.S.A.
52:13D-23(e), which the Legislature required to be placed in each
code, to be the code of ethics for each County Board of Taxation
until an appropriate code or codes is duly adopted and approved.
This course of action is the most suitable method for implementing
the apparent legislative intent since it carries out the
requirement that a code be adopted while still affording the agency
the opportunity of formulating and adopting a code better geared
to
its peculiar needs and problems.
Having decided
these preliminary questions, attention may
now be directed at the specific questions posed by the requester.
These questions ask whether a member of a county board of taxation
may participate in the hearing of tax appeals in the situations
outlined above. N.J.S.A. 52:13D-23(e) provides that a code of
ethics would conform to the following general standards:
"(1)
No State officer or employee should
have any interest, financial or otherwise,
direct or indirect, or engage in any business
or transaction or professional activity, which
is in substantial conflict with the proper
discharge of his duties in the public interest
....
(4) No State
officer or employee should
act in his official capacity in any matter
wherein he has a direct or indirect personal
financial interest that might reasonably be
expected to impair his objectivity or
independence of judgment....
(7) No State
officer or employee should
knowingly act in any way that might reasonably
be expected to create an impression or
suspicion among the public having knowledge of
his acts that he may be engaged in conduct
violative of his trust as a State officer or
employee."
The question of what is a direct or indirect personal
financial interest that would require disqualification (as it would
impair the official's objectivity) is factual, depending upon the
circumstances of the particular case. Van Itallie v. Franklin
Lakes, 28 N.J. 258, 268 (1958); Township Committee of Township of
Nazlet v. Morales, 119 N.J. Super. 29 (Law Div. 1972); Aldom v.
Roseland, 42 N.J. Super. 495, 503 (App. Div. 1956). The issue is
whether the circumstances could reasonably be interpreted to show
that they had the likely capacity to tempt the official to depart
from his sworn public duty. Griggs v. Princeton Borough, 33 N.J.
207, 219 (1960); Van Itallie v. Franklin Lakes, supra 28 N.J. at
268; Township Committee of Township of Hazlet v. Morales, supra,
119 N.J. Super. at 33. Actual proof of dishonesty need not be
shown. LaRue v. East Brunswick, 68 N.J. Super. 435, 447 (App. Div.
1961); S. & L. Associates, Inc. v. Washington Tp., 61 N.J. Super.
312, 329 (App. Div. 1960), aff'd in part, rev'd in part, 35 N.J.
224; Aldom v. Roseland, supra, 42 N.J. Super. at 503.
In the situation
involving the petitioning taxpayer who
is a client of a County Board of Taxation member's real estate and
insurance firm, a clear violation of the above quoted statute is
presented. A determination of the assessed valuation in such a
case would probably have an effect on the petitioner's insurance
coverage and thus directly involve the member's business
relationship with the taxpayer. Therefore, the member of the
County Board of Taxation would disqualify himself as he would have
an indirect personal financial interest which could reasonably be
expected to impair _____ objectivity or independence of judgment.
For the member
of the County Board of Taxation to have a
direct or indirect personal financial interest that would give rise
to a conflict of interest in situations when the assessor or the
attorney for the responding municipality, or the attorney for the
taxpayer is a client of the member's firm, it is not necessary to
show a direct or indirect personal financial interest flowing
immediately to the board member. See Aldom v. Borough of Roseland,
supra. In the three aforementioned situations, there is a strong
possibility that the board member's financial interest would be
affected by his decision in tax appeals involving these clients
of
his firm. For example, if the member determined a low assess
valuation in an appeal involving one of his clients, the client
would be inclined to increase his business dealings with the board
member's firm. Thus it can be said that when the board member
hears a tax appeal and the attorney or the assessor for the
municipality, or the attorney for the taxpayer, is a client of his
real estate and insurance firm, the member should not act in his
official capacity as he has an indirect personal financial interest
that would reasonably be expected to impair his objectivity.
Since the board
member may advance his private interests
by his own official decisions, he would be unlikely to consistently
advance the best interests of the public even if his intentions
were of the highest nature. The hearing of tax appeals in the
three aforementioned instances would therefore be in substantial
conflict with the proper discharge of his duties in the public
interest and might reasonably be expected to create an impression
or suspicion among members of the public having knowledge of his
acts that he may be engaged in conduct violative of his trust as
a
State officer. For these additional reasons, he should disqualify
himself from hearing such tax appeals.
While there is
no ease, statute or rule precisely on
point as to whether a County Board of Taxation member may
participate in hearing tax appeals when the assessor of the
responding city in his relation, the Commission is not without
authoritative guidance. Sufficient direction is furnished by State
v. Deutsch, 34 N.J. 190 (1961); N.J.S.A. 2A:15-49(a);
Rule 1:12-1(a) and (b); and Canon 13 of the Canons of Judicial Ethics.
In State v Deutsch,
the New Jersey Supreme Court held
that the judge in a criminal case should have disqualified himself
because he was a brother of the prosecutor.
N.J.S.A. 2A:15-49(a)
provides:
"No
judge of any court shall sit on the trial
of or argument of any matter in controversy
pending in his court, when he: Is related in
the third degree to any of the expertise to
the action, which degree shall be computed as
at common law."
Rule 1:12-1 is
even broader. It provides in pertinent
part:
"The
judge of any court shall disqualify
himself on his own motion and shall not sit in
any matter if he
(a) is by
blood or marriage the second cousin
of or is more closely related to any party to
the action;
(b) is by blood or marriage the first cousin
of or is more closely related to any attorney
in the action. This proscription shall extend
to the partners, employers, employees or
office associates or any such attorney except
where the Chief Justice for good cause
otherwise permits,"
Canon 13 reads:
"A judge
should not act in a controversy where
a near relative is a party; he should not
suffer his conduct to justify the impression
that any person can improperly influence him
or unduly enjoy his favor, or that he is
affected by the kinship, rank, position or
influence of any party or other person."
Rule 1:12-1 makes
the Canons of Judicial Ethics applicable to
judges of this State. See Kremer v. City of Plainfield, 101 N.J.
Super. 346 (Law Div. 1968). In discussing the applicability of the
foregoing case, statute and rules, Judge Wood in Kremer v. City
of
Plainfield, supra, said:
"While
the authorities I have cited apply
specifically only to judges, there is no sound
reason why a lesser standard should govern the
conduct of those acting in a judicial
capacity. The need for unquestionable
integrity, objectivity and impartiality is
just as great for quasi-judicial personnel as
for judges." 101 N.J. Super. at 352-353.
Therefore, a member
of a County Board of Taxation, acting in a
quasi-judicial capacity when hearing a tax appeal, (see Del. L.
&
in. R.R. v. City of Hoboken, 10 N.J. 418 (1952)) must disqualify
himself when the assessor of the responding city is a second cousin
for related in the third degree at common law) or is more closely
related to the board member.
"It
[is] argued that establishment of the
principle we are announcing would deserve the
public interest because it might operate to
influence substantial and civic-minded
citizens, who have outside business
connections, against membership in elective or
appointive public agencies. That result is
extremely doubtful. The rule disqualifies
only where personal and public loyalties come
into conflict. In those rare instances such
high-minded persons undoubtedly, will welcome
the disqualification." Aldom v. Borough of
Roseland, supra at 508.
In summary, it
is the conclusion of this Commission that
a member of a County Board of Taxation is subject to the
Conflicts of Interest Law and the standards contained in
N.J.S.A. 52:13D-23(e). He must therefore disqualify himself
from hearing tax appeals when
(1) the petitioning
taxpayer or the assessor
for the responding municipality is a
client of his firm;
(2) the attorney
for the taxpayer or for the
municipality is a client of his firm; or
(3) the assessor
of the responding city is
his second cousin (or related in the
third degree at common law) or is more
closely related to the board member.
_________________________________
JOHN A. WADDINGTON
Chairman - Executive Commission
on Ethical Standards
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