Dauphin County Gen. Auth. v. DAUPHIN CTY. BD. OF ASSES.
| Decision Date | 17 October 2000 |
| Citation | 768 A.2d 895 |
| Parties | DAUPHIN COUNTY GENERAL AUTHORITY, Appellant v. DAUPHIN COUNTY BOARD OF ASSESSMENTS. Appeal of Dauphin County General Authority, Appellant v. Dauphin County Board of Assessment Appeals. |
| Court | Pennsylvania Commonwealth Court |
James E. McErlane, West Chester, for appellant.
Carl G. Wass, Harrisburg, for appellee.
Before PELLEGRINI, Judge, FRIEDMAN, Judge (P.), McCLOSKEY, Senior Judge.
This case involves the consolidated appeals of the Dauphin County General Authority (the Authority) from the orders of the Court of Common Pleas of Dauphin County (trial court), denying the Authority's appeals from the adjudications of the Dauphin County Board of Assessment Appeals (Board), which held that the premises owned by the Authority at 555 Walnut Street, Harrisburg, Pennsylvania (the Forum Place) and 1101 South Front Street, Harrisburg, Pennsylvania (the Riverfront Office Center) were neither immune nor exempt from the payment of real estate taxes. We now reverse.
The facts of this case are not in dispute. The Authority was created by ordinance adopted by the Board of Commissioners of Dauphin County as a municipal authority under the Municipality Authorities Act of 1945(Act).1 The Authority was incorporated on March 7, 1984, for an initial term of fifty years.2 On June 30, 1998, the Authority purchased the property known as the Riverfront Office Center for a stated consideration of $41,040,000.00. On July 13, 1998, the Authority purchased the property known as the Forum Place for a stated consideration of $65,799,000.00. Both properties had been owned by private developers who had negotiated long-term leases for office space with the Commonwealth and who had paid real estate taxes on the properties.3
Following the two purchases, the Authority filed an application with the Board requesting that both of the properties be removed from the tax assessment rolls on the basis that the same were either immune from taxation or exempt from taxation. The Board, however, denied the Authority's application stating that the same were not entitled to immunity as the Authority had forfeited its right to claim immunity by reason of the fact that it engaged in conduct, i.e., the acquisition of the properties which competed with existing enterprises serving substantially the same purposes.4 The Authority appealed to the trial court and a hearing was held on May 4, 1999. Following the hearing, on December 15, 1999, the trial court issued an opinion and two separate orders denying the Authority's appeals on the same bases as the Board.5 The Authority now appeals to this Court.6
On appeal,7 the Authority argues that the trial court erred as a matter of law in failing to find that it was entitled to immunity from taxation and erred as a matter of law in applying the non-compete clause. We agree.
There is no question in this case that the Authority is a properly incorporated municipal authority under the Act which is permitted to acquire and hold property. As such, the Authority is an independent agency of the Commonwealth. See Delaware County Solid Waste Authority v. Berks County Board of Assessment Appeals, 534 Pa. 81, 626 A.2d 528 (1993). As an agency of the Commonwealth, the Authority is entitled to complete immunity from taxation as long as it acts in accordance with the powers granted to it. Id. It is only where the Authority acts outside of the scope of the powers granted to it that such immunity is lost. Id.
Section 15 of the Act, 53 P.S. § 318, specifically exempts municipal authorities from taxation. This Section provides, in pertinent part, as follows:
The effectuation of the authorized purposes of Authorities created under this act shall and will be in all respects for the benefit of the people of the Commonwealth of Pennsylvania, for the increase of their commerce and prosperity, and for the improvement of their health and living conditions, and since such Authorities will be performing essential government functions in effectuating such purposes, such Authorities shall not be required to pay any taxes or assessments upon any property acquired or used by them for such purposes.
In Delaware County, our Supreme Court emphasized that this Section "evinces a legislative intent to reaffirm the long standing rule that property owned by a municipal authority should not be taxed." Delaware County, 534 Pa. at 87, 626 A.2d at 531; see also In re Appeal of Township of Middletown.
Furthermore, in Wellsboro Area School District v. Tioga County Board for the Assessment and Revision of Taxes, 651 A.2d 592 (Pa.Cmwlth.1994), we indicated that property owned by an authority is presumptively immune from taxation and the burden is on the taxing authority to establish that such immunity does not exist. This lack of immunity can be established by showing that the authority is not properly incorporated or that the authority has somehow acted outside the scope of its authority in acquiring and holding properties.
As stated above, there is no question in this case that the Authority was properly incorporated. Hence, the burden was on the Board to show that the Authority acted outside the scope of its authority. However, the Act grants the Authority the express power to acquire, hold and lease property. Specifically, Section 4A(a)(2) of the Act, 53 P.S. § 306A(a)(2), provides, in pertinent part, as follows:
Additionally, Section 4B(k) of the Act, 53 P.S. § 306B(k), provides as follows:
The trial court found that the Authority acted outside the scope of its authority by violating the non-compete clause under the Act, i.e., by engaging in conduct, i.e., the acquisition of the properties which competed with existing enterprises serving substantially the same purposes. However, the trial court's finding in this regard is in error. As noted above, the non-compete clause is found at Section 4A(b)(2) of the Act. This Section provides as follows:
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