Appeal of Harrisburg School Dist.

• Decision Date: 30 July 1980
• Citation: 53 Pa.Cmwlth. 299,417 A.2d 848
• Parties: Appeal by the Redevelopment Authority of the City of Harrisburg from the Dauphin County Board of Assessment and Revision of Taxes. Appeal of HARRISBURG SCHOOL DISTRICT, County of Dauphin and City of Harrisburg.
• Court: Pennsylvania Commonwealth Court

Page 848

417 A.2d 848

53 Pa.Cmwlth. 299

Appeal by the Redevelopment Authority of the City of

Harrisburg from the

Dauphin County Board of Assessment and Revision of Taxes.

Appeal of HARRISBURG SCHOOL DISTRICT, County of

Dauphin and City of Harrisburg.

Commonwealth Court of Pennsylvania.

Argued June 6, 1980.

Decided July 30, 1980.

John C. Howett, Jr., Friedman & Friedman, P. C., Harrisburg, for appellants.

Francis B. Haas, Jr., Stuart J. Magdule, William M. Young, Jr., McNees, Wallace & Nurick, Harrisburg, for Red. Auth. of City of Harrisburg.

Before WILKINSON, MacPHAIL and WILLIAMS, JJ.

MacPHAIL, Judge.

The Harrisburg School District, the City of Harrisburg, and the County of Dauphin (Appellants) appeal from a decision of the Court of Common Pleas of Dauphin County, reversing the Dauphin County Board of Assessment and Revision of Taxes (Board) and holding that Appellants have no power to tax certain real estate owned by the Redevelopment Authority of the City of Harrisburg (Authority).

The Authority acquired thirty-six parcels of real estate for future redevelopment, in addition to other parcels already conveyed to developers, pursuant to an urban renewal plan adopted by the City of Harrisburg in accordance with the Urban Redevelopment Law (URL), Act of May 24, 1945, P.L. 991, as amended, 35 P.S. § 1701 et seq. The Chief Assessor of Dauphin County entered the thirty-six properties on the tax rolls as taxable property. That action prompted the Authority to petition the Board to find that the local taxing jurisdictions lacked the power to levy real estate taxes on the property of the Authority, being an agency of the Commonwealth, or in the alternative, that the Authority's real estate was exempt from local property taxes as public property used for a public purpose.

The Authority and Appellants submitted statements and a stipulation of facts to the Board. The Board held that sixteen of the thirty-six properties in question were exempt from local real estate taxes, but that the remaining twenty were not. The Authority appealed the Board's decision to the Court of Common Pleas. Appellants did not cross-appeal from the Board's exemption of the sixteen properties, and thus the only properties involved in this appeal are the twenty found taxable by the Board.

Judge Caldwell, the trial judge, found our decision in Southeastern Pennsylvania Transportation Authority v. Board of Assessment and Revision of Taxes, 13 Pa.Cmwlth. 207, 319 A.2d 10 (1974), referred to as SEPTA case, to be controlling of the disposition of the instant case. In SEPTA, this Court unanimously held that real estate owned by SEPTA, an agency and instrumentality of the Commonwealth, could not be subjected to local taxation because of the absence of a specific delegation of taxing authority by the Pennsylvania General Assembly to the local taxing authorities. No such delegation of taxing power was contained within the provisions of the Metropolitan Transportation Authorities Act of 1963 (MTA), Act of August 14, 1963, P.L. 984, as amended, 66 P.S. § 2001 et seq., the act which created SEPTA, nor in any other relevant statutes.

In the instant case, real estate is owned by the Authority, which is also an agency and instrumentality of the Commonwealth. Herriman v. Carducci, 475 Pa. 359, 380 A.2d 761 (1977). The language of the URL, the Authority's enabling act, providing that a Redevelopment Authority shall not be deemed to be an instrumentality of a city or county, Section 4(a) of the URL, 35 P.S. § 1704(a), but "shall constitute a public body," and exercise "public powers of the Commonwealth as an agency thereof," Section 9 of the URL, 35 P.S. § 1709, is nearly identical to the language of the MTA designating each transportation authority as an agency and instrumentality of the Commonwealth, Section 4(a) of the MTA, 66 P.S. § 2004(a). Like the MTA, the URL also contains no specific delegation of powers to local authorities to tax properties owned by entities created under the URL and no such delegation has been found elsewhere.

On appeal the Appellants argue to us, however, (1) that the SEPTA decision, though controlling, is incorrectly decided and should be overruled, because Appellants, as local taxing authorities, do have the power to tax the Authority's property; and (2) that if Appellants have the power to impose local taxes, the real estate owned by the Authority does not qualify for total exemption from the tax, because several properties do not constitute public property "actually and regularly used for public purposes." Pa.Const. art. VIII, § 2(a)(iii).

After reconsideration of our decision in SEPTA, we must conclude that SEPTA is controlling of this case and that the court's reasoning in SEPTA based on construction of statutes and prior cases law is correct. We thus affirm the holding of the lower court that the Appellants local taxing authorities have no power to tax the Redevelopment Authority of the City of Harrisburg.

Since we affirm on the basis of SEPTA and its supporting cases, we shall limit our discussion herein to the principles of law underlying that decision as they relate to Appellants' arguments. We begin with a restatement of a concept basic to the government of the Commonwealth, that the power of taxation lies solely with the General Assembly of the Commonwealth, and that without a grant or delegation of power to tax by acts of the General Assembly, a municipality has no power to tax. Philadelphia v. Southeastern Pennsylvania Transportation Authority, 8 Pa.Cmwlth. 280, 303 A.2d 247 (1973), citing Mastrangelo v. Buckley, 433 Pa. 352, 250 A.2d 447 (1969). To determine whether a municipality possesses the power to tax in a certain area, one must look to the acts of the General Assembly. The provisions of those acts are to be strictly construed and the grant of such power may not be found by implication. Mastrangelo, supra.

Another basic presumption clearly established over the course of the Commonwealth's history is that property owned by the sovereign, the Commonwealth, is not ordinarily subject to taxation. "The legislators did not intend to upset the orderly processes of government by allowing the sovereign power to be burdened by being subjected to municipal taxes. Legislative enactments presumptively affect only private rights and do not embrace the rights of a sovereign unless the sovereign is explicitly designated or clearly intended." Commonwealth State Employes' Retirement System v. Dauphin County, 335 Pa. 177, 6 A.2d 870 (1939).

From these two principles arises the rule that state-owned property cannot be taxed by a municipality in the absence of a statute clearly authorizing it to do so. However, Appellants contend that the General Assembly does authorize Appellants to tax the Authority's property under The Fourth to Eighth Class County Assessment Law (County Assessment Law), Act of May 21, 1943, P.L. 571, as amended, 72 P.S. § 5453.101 et seq. ¹ Section 201 of the County Assessment Law provides in pertinent part that,

"The following subjects and property shall as hereinafter provided be valued and assessed and subject to taxation for all county, borough, town, township, school (except in cities), poor and county institution district purposes, at the annual rate,

(a) All real estate . . . not exempt by law from taxation. . . . " 72 P.S. § 5453.201.

Within the County Assessment Law, we see no clear authorization given local taxing authorities to tax property of the Commonwealth; for the phrase "(a)ll real estate" does not necessarily imply property of the Commonwealth. In State Employes' Retirement System, supra, our Supreme Court stated that "(i)t is not to be presumed that the general provisions of ...