New Jersey State Bar Association - The voluntary Bar Association of New Jersey, serving members since 1899.

Capitol Report

December 16, 2013

 This is a status report provided by the New Jersey State Bar Association on recently passed and pending legislation, regulations, gubernatorial nominations and/or appointments of interest to lawyers, as well as the involvement of the NJSBA as amicus in appellate court matters. To learn more, visit njsba.com

 RECENT NJSBA ACTION IN TRENTON  

 Administrative Law

A-1521 (Burzichelli)/S-2555 (Van Drew) (NJSBA supports) Modifies the process for contested case hearings by the Office of Administrative Law (OAL) with regard to telephone and video conferences, delegation of final decision authority, oral decisions, checklist decisions, electronic filings, and settlements. On Dec. 9, members of the Administrative Law Section, including Chair Paul Josephson, testified before the Senate State Government, Wagering, Tourism and Historic Preservation Committee in opposition to the amendments, which deleted providing administrative law judges with final decision authority, but in support of the bill overall. The bill was released with committee amendments. 

 The New Jersey State Bar Association’s Board of Trustees, Legislative Committee, Elder and Disability Law Section, and Administrative Law Section strongly support empowering administrative law judges with authority to render a final decision, pursuant to the Administrative Procedures Act. The association believes it cannot support a system of justice where a department head, in a contested matter, has the ability to overrule a judge once a decision has been rendered at the conclusion of a hearing. This is currently the situation for attorneys who practice before the OAL, and the NJSBA believes it unfairly limits an attorney’s ability to fully and properly represent and counsel clients.

 Business Law

S-2556 (Sarlo) NJSBA DRAFTED BILL (NJSBA supports) Makes certain technical corrections to the Revised Uniform Limited Liability Company Act (RULLCA). On Dec. 5, the bill was released from the Senate Commerce Committee with amendments and is awaiting Senate vote. 

 The New Jersey State Bar Association’s Executive Committee, Legislative Committee and Real Property, Trust and Estate Law Section support this legislation, believing the changes proposed are essential to ensure the provisions in the existing RULLCA are well understood and implementation is seamless. The association believes further  amendments are necessary, though, to address concerns that the 2012 law permits creditors to liquidate limited liability company (LLC) interests and reduce certain tax benefits afforded under the previous law.

 The amendments would maintain the previous statutory assurance that an LLC interest, gifted to a child, would not be foreclosed upon or liquidated, and would reinstate the previous tax benefits by addressing problems with the current law’s application to estate and gift taxes. The tax law requires the “fair market value” of a transferred interest be utilized for such purposes. Under the previous law, the "non-transferability" of the asset increased the marketability discount of that asset for valuation purposes. Presently, the asset is less transferable because it can be liquidated by a creditor, which diminishes marketability for valuation purposes. Furthermore, the present law prohibits the modification of an LLC’s operating agreement to guard against creditor liquidation. Thus, the high creditor protection once afforded by New Jersey law was inadvertently lost in the RULLCA’s enactment in 2012. 

 Family Law

A-700 (Ramos)/S-315 (Whelan) (NJSBA supports) Authorizes the Office of Public Defender to provide legal representation for a child in proceedings after parental rights have been terminated. On Dec. 9, the bill was heard before the Senate Judiciary Committee and is scheduled to be released. 

 The New Jersey State Bar Association Board of Trustees, Legislative Committee and Family Law Section support this legislation, as a number of children are awaiting permanent placement. Unfortunately, after termination of parental rights, children are legal orphans until adopted. This legislation will allow legal guardians to assist with protecting a child’s interest of formalizing placement even if an appeal is taken or new legal issues arise while pending placement.

 Labor and Employment Law

S-613 (Sweeney) (NJSBA opposes) Concerns certain workers' compensation supplemental benefits. On Dec. 5, former Workers’ Compensation Section Chair Arthur Kravitz testified in opposition to the bill before the Senate Budget and Appropriations Committee. The bill was released with amendments and is awaiting Senate vote.

 The New Jersey State Bar Association’s Board of Trustees, Legislative Committee and Workers’ Compensation Section oppose this legislation in order to preserve the reverse offset provision in the state, in relation to Social Security, which provides for a reduction of the workers' compensation benefit of a worker also receiving disability insurance. The association believes enacting this legislation has the potential of harming the economic integrity of New Jersey’s current cost-effective system by allowing for a double recovery of disability benefits and workers’ compensation benefits, which will in turn increase the cost of doing business in New Jersey. The NJSBA believes a potential alternative that would limit these adverse consequences would be to limit the application of the bill to survivor/death benefits.

 Municipal Court Practice

A-3254 (Coughlin)/S-2309 (Vitale) (NJSBA supports) Permits a municipal court to order certain offenders to perform community service in lieu of payment of penalty. On Dec. 9, the bill was heard before the Senate Judiciary Committee and is scheduled to be released. 

 The New Jersey State Bar Association’s Board of Trustees, Legislative Committee, Criminal Law Section and Municipal Court Practice Section support this legislation, believing the bill will allow defendants the opportunity to give back to their community by receiving restorative justice. The bill further provides an opportunity for judges to avoid putting a defendant in jail if they cannot pay a penalty, based upon hardship or other unanticipated circumstances. The bill will spare defendants their time and money by not having to continually travel back and forth to the courthouse. There is, however, a concern that municipalities will not have the manpower or funding to oversee this program and, thus, the NJSBA believes further consideration to address this concern may be warranted.  

 Real Property, Trust and Estate Law

A-1551 (Wisniewski)/S-2946 (Van Drew) NJSBA DRAFTED BILL (NJSBA supports) Concerns the time frames for establishing or enforcing property rights related to adverse possession. On Dec. 9, former Real Property, Trust and Estate Law Section Chairs Edward Eastman and Lawrence Fineberg testified in support of the bill before the Senate Judiciary Committee. The bill was released. 

 The New Jersey State Bar Association Board of Trustees, Legislative Committee and Real Property, Trust and Estate Law Section support this legislation because New Jersey’s adverse possession law allows an adverse possessor to acquire title to land after 30 years of uninterrupted possession of the property, or 60 years in the case of woodlands or uncultivated land. However, New Jersey has a 20-year statute of limitations applicable to actions concerning real property, such as an action to recover possession of property by a record owner. This conflict between the 20-year statute of limitations and the 30 years of possession required for title to vest through adverse possession has resulted in conflict and confusion. Through case precedent, state courts have allowed title to vest after 20 years of adverse possession.

 This bill was developed to eliminate longstanding confusion in the law by clarifying that title in land vests after 20 years of adverse possession in most cases and 30 years for woodlands and uncultivated land. The NJSBA believes this bill would further encourage the productive and diligent use of land in New Jersey while promoting appropriate title transfer and preventing barren wasteland.