March 7, 2016
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.
Senate Budget and Appropriations Committee Takes on Estate Tax, Tax on Retirement Income
A bipartisan effort to tackle taxes from retirement income and estate taxes on family assets cleared the Senate Budget and Appropriations Committee last week. S-1728, sponsored by Senators Paul Sarlo and Jeff Van Drew, both Democrats, and Senator Steven Oroho, a Republican, would increase the tax exclusion from the current level of $675,000 to $1 million the first year and completely phase out the estate tax over a five-year period.
Currently, New Jersey’s estate tax is determined by reference to a repealed federal credit against a system of federal estate taxation that no longer exists. So New Jersey estate tax imposes a rate of 37 percent for estates valued at $675,000 and above. The bill would replace this tax threshold with an exclusion beginning at $1 million and increase the exclusion amount incrementally through 2021, at which point no tax would be imposed.
Sarlo pointed out that New Jersey is one of two states with an inheritance tax and an estate tax, noting that this bill would eliminate the duplication.
“We are a big step closer to eliminating the nation’s highest death tax—a reform that would allow parents, grandparents, employers and farmers to stay in New Jersey and pass to future generations the assets that they’ve worked their whole lives to earn,” said Oroho.
S-998, sponsored by Senators Sarlo and Oroho and Senate President Stephen Sweeney, would increase the personal income tax’s pension and retirement income exclusion fivefold over three years. The aim of the bill is to reduce the state’s personal income tax’s capacity to diminish retirement income. Under current law, taxpayers with $100,000 or less of annual income, who are at least 62 years old, may claim a pension and retirement income exclusion of up to $20,000 for joint filers, $15,000 for individuals, and $10,000 for married couples who file separately.
“Too many people in New Jersey face retirement with insecure incomes and too many retirees find it hard to make ends meet on their income,” said Sweeney. “We have to find ways to make retirement more affordable to help ensure that more New Jerseyans have financial security in their retirement so that they can live with dignity and without financial needs.”
The committee passed S-1728 nine-to-zero, with four abstentions, and S-998 12-to-zero, with one abstention.
Governor Nominates Bauman for Supreme Court; Sweeney Questions Christie’s Judicial Independence
Last week, for the second time in four years, Governor Chris Christie nominated Monmouth County Superior Court Judge David Bauman to the Supreme Court. The seat has remained open for the last six years, ever since the governor refused to nominate former justice John Wallace Jr. for tenure in 2010. Judge Mary Catherine Cuff currently sits in as the seventh member.
If confirmed, Bauman, whose mother is Japanese, would be the first Asian American justice to serve on New Jersey’s Supreme Court. Bauman was first nominated to the bench by Governor Jon Corzine in 2008. Christie pointed out that the Senate unanimously approved his appointment to the Monmouth County Superior Court, and he received tenure last year.
Sweeney since announced that Bauman will not have a hearing, and that his nomination fails to preserve judicial independence because he is a Republican. “This nomination would contradict the intent of the framers of the Constitution by leaving only two Democrats on the seven-member court,” said Sweeney.
Sweeney’s reference was to the 1947 Constitutional Convention headed by former Chief Justice Arthur Vanderbilt, who Sweeney pointed out held a “tradition of partisan balance.” Sweeney argued that Bauman’s nomination to the Court would bring the partisan count to five Republicans and two Democrats, counting Justice Jaynee LaVecchia as a Republican.
Arguing that the partisan balance should be in his favor as the sitting governor, Christie noted that LaVecchia has no party affiliation and, therefore, the Supreme Court makeup would be four Republicans, three Democrats and one independent, consistent with the intent of the framers of the constitution. Christie added that Sweeney’s refusal to set a hearing for Bauman is a sign that the Democrats—not the Republicans—are playing partisan politics.
In 2014, Chief Justice Stuart Rabner, a Democrat, was given tenure and Justice Lee Solomon, a Republican, was nominated to fill a vacancy on the Supreme Court.
Supreme Court Seeks Comments on Arbitration Advisory Committee Proposal
A Supreme Court committee has extended the comment period on a report of the Supreme Court Arbitration Advisory Committee until March 14. In the report, the committee proposes a two-year pilot program to test the use of final offer arbitration in non-auto personal injury cases. The proposed pilot program would take place Burlington, Mercer, Middlesex, and Union vicinages.
Final offer arbitration requires the parties to an arbitration to exchange offers and submit their final offers to the arbitrator before the arbitration hearing. The full report is available at njcourts.com. After the hearing, the arbitrator will enter an award limited to one of the final offers submitted by the parties. Comments may be submitted in writing to:
Glenn A. Grant, J.A.D.
Acting Administrative Director of the Courts
Comments: Final Offer Arbitration Pilot Proposal
Hughes Justice Complex; P.O. Box 037
Trenton, New Jersey 08625-0037
Comments may also be submitted electronically to Comments.Mailbox@judiciary.state.nj.us.
Comments are subject to public disclosure upon receipt, and should include a name and address. Anonymous comments will not be considered. Those submitting comments by email should include a name and email address.
Mandatory Online Attorney Annual Registration and Payment
The 2016 deadline for registration payment is March 30. The Judiciary’s web-based application is located at njcourts.com.
Pursuant to the court rules, attorneys licensed to practice law in New Jersey are required annually to file a registration statement in a form prescribed by the administrative director of the courts with approval of the Supreme Court, and to pay an assessment in an amount determined by the Court. The Supreme Court has determined that beginning in 2016 all attorneys admitted to practice in New Jersey with a plenary license (Rule 1:27-1) or a limited, in-house counsel (IHC) license (Rule 1:27-2) must complete their annual attorney registration and pay the required annual fee electronically. Paper registrations will not be accepted from those attorneys, with limited exceptions.
For questions or information related to attorney registration, billing or exceptions to mandatory electronic attorney registration, contact 855-533-FUND (3863) (select option 2) or CPF.Mailbox@judiciary.state.nj.us.