Southeastern Pennsylvania Transp. Authority (SEPTA) v. Pennsylvania Public Utility Com'n

• Decision Date: 03 June 1991
• Citation: 592 A.2d 797,140 Pa.Cmwlth. 270
• Parties: SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY (SEPTA), Petitioner, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent. CITY OF PHILADELPHIA, Petitioner, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent.
• Court: Pennsylvania Commonwealth Court

Page 797

592 A.2d 797

140 Pa.Cmwlth. 270

SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY (SEPTA), Petitioner, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent.

CITY OF PHILADELPHIA, Petitioner, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent.

Commonwealth Court of Pennsylvania.

Argued March 6, 1991.

Decided June 3, 1991.

Alexander Kerr and Rick L. Frimmer, for petitioner, SEPTA.

Gerald T. Clark, for petitioner, City of Philadelphia.

David A. Salaga, for respondent.

Before CRAIG, President Judge, and DOYLE, COLINS, PALLADINO, McGINLEY, SMITH and PELLEGRINI, JJ.

PELLEGRINI, Judge.

This is a consolidated appeal from an order of the Pennsylvania Public Utility Commission (PUC), finding that the Southeastern Pennsylvania Transportation Authority (SEPTA) and the City of Philadelphia (City) have certain maintenance responsibilities for the Woodland Avenue Bridge (Bridge), which is part of a separated rail-highway crossing. The Bridge carries Woodland Avenue, a City street, and SEPTA's facilities over and above two sets of SEPTA's electrified railroad tracks which are part of its Media/West Chester commuter rail line.

In 1987, the PUC, prompted by other bridge maintenance investigations ¹ which revealed that no one was maintaining the Bridge, commenced an investigation to determine ownership of the Bridge and to appoint maintenance responsibilities. To address the Bridge's immediate maintenance needs, the PUC issued an interim order directing SEPTA to assume maintenance responsibilities for the substructure and superstructure and the City to assume maintenance responsibilities for the entire bituminous wearing surface of the Bridge.

After hearings to determine final maintenance responsibilities, an Administrative Law Judge (ALJ) determined that SEPTA was the owner of the Bridge. Finalizing the terms set forth in the interim order, the ALJ, in his Recommended Decision, assigned permanent maintenance responsibilities for the Bridge's substructure and superstructure, as well as for the trolley facilities on the Bridge, to SEPTA. He also recommended that the City should be assigned permanent maintenance responsibilities for the entire bituminous wearing surface and curbs, sidewalks and protective railings on the Bridge and its approaches, as well as ice, snow and debris removal. Both SEPTA and the City filed timely exceptions to the ALJ's Recommended Decision.

Rejecting both SEPTA's and the City's claim that the assignment of maintenance responsibilities was incorrect, the PUC adopted the ALJ's Recommended Decision with minor technical modifications. Both SEPTA and the City filed Petitions for Review with this Court, seeking review of the PUC's order. The Commonwealth of Pennsylvania, Department of Transportation (PennDot) intervened in both Petitions, and the Consolidated Rail Corporation (Conrail) and the City intervened in SEPTA's. The two Petitions were consolidated by order of this Court.

Our scope of review in PUC cases is limited to a determination of whether constitutional rights have been violated, an error of law has been committed, or the PUC's findings and conclusions are or are not supported by substantial evidence. Vacation Charters, Ltd. v. Pennsylvania Public Utility Commission, 133 Pa.Commonwealth Ct. 179, 575 A.2d 640 (1990).

The PUC is granted the power to regulate railroad-highway crossings ² pursuant to Sections 2702 and 2704 of the Public Utility Code (Code), 66 Pa.C.S. §§ 2702, 2704. ³ The rationale underlying the Commonwealth's entrustment of broad powers to the PUC to exercise the Commonwealth's police power with respect to railroad-highway crossings is to prevent railroad-highway crossings from becoming unsafe for the public. See, e.g., Pittsburgh Railways Co. v. Pennsylvania Public Utility Commission, 198 Pa.Superior Ct. 415, 424, 182 A.2d 80, 84 (1962); Tarentum Borough v. Pennsylvania Public Utility Commission, 171 Pa.Superior Ct. 156, 160-61, 90 A.2d 853, 855 (1952).

Section 2702 of the Code provides in pertinent part:

(b) Acquisition of property and regulation of crossing.--The [PUC] is hereby vested with exclusive power to appropriate property for any [rail-highway] crossing, ... and to determine and prescribe, by regulation or order, the points at which, and the manner in which, such crossing may be constructed, altered, relocated, suspended or abolished, and the manner and conditions in or under which such crossings shall be maintained, operated, and protected to effectuate the prevention of accidents and the promotion of the safety of the public.

Furthermore, the General Assembly has vested in the PUC the power to allocate the cost of maintaining a railroad-highway crossing in a proper and safe condition among all parties concerned with the crossing. 66 Pa.C.S. § 2704. Section 2704 provides in pertinent part:

(a) General rule.--[T]he cost of construction, relocation, alteration, protection, or abolition of such crossing, and of facilities at or adjacent to such crossing which are used in any kind of public utility service, shall be borne and paid, as provided in this section, by the public utilities or municipal corporations concerned, or by the Commonwealth, in such proper proportions as the [PUC] may, after due notice and hearing, determine, unless such proportions are mutually agreed upon and paid by the interested parties.

I. SEPTA'S APPEAL

Proportioning the maintenance responsibilities as to each of the parties as authorized by the Code, the PUC assigned permanent maintenance responsibilities to SEPTA for the substructure and superstructure of the Bridge because:

** the Bridge is owned by SEPTA;

** it was originally built by SEPTA's predecessor in title for the construction of the rail line beneath the Bridge which now carries SEPTA's commuter rail lines ** SEPTA trolley facilities occupy the Bridge.

SEPTA challenges the PUC's assignment of maintenance responsibilities because it believes that the PUC incorrectly applied the Code to impose those maintenance responsibilities, and even if it correctly applied the Code, SEPTA claims it is exempt from being assigned those maintenance responsibilities under both federal and state law.

A.

Insofar as the assignment by the PUC to SEPTA of certain continuing maintenance responsibilities for the Bridge, both because SEPTA owns the Bridge and the Bridge carries the highway over its commuter rail line, ⁴ SEPTA contends that the PUC is foreclosed from assigning it those responsibilities under 45 U.S.C. § 581(c)(5). That provision exempts certain commuter rail authorities, such as SEPTA, from "taxes and other fees" relating to the operation of commuter rail lines to the same extent as National Rail Passenger Corporation (Amtrak) is exempt. To determine whether SEPTA is exempt from being assigned bridge maintenance responsibilities, we must examine both the congressional purpose and intent behind the enactment of 45 U.S.C. § 581(c)(5), as well as federal decisions interpreting that provision to see if it is intended that the imposition of those responsibilities are precluded as a tax or a fee on commuter rail authorities.

Congress, concerned that local commuter authorities would be unable to operate commuter lines that were to be transferred from Conrail to the local commuter authorities as part of Conrail's reorganization, ⁵ enacted the Northeast Rail Service Act of 1981, Pub.L. 97-35, 95 Stat. 647 (1981), which established the Amtrak Commuter Service Corporation (Amtrak Commuter). Amtrak Commuter, a wholly-owned subsidiary of Amtrak, was intended to facilitate the transfer of commuter rail service from Conrail to local commuter authorities by entering into contracts with local commuter authorities for the operation of commuter rail service in their respective regions. 45 U.S.C. § 581(b)(2).

Congress, which had previously exempted Amtrak from taxes and other fees, ⁶ extended that exemption to Amtrak Commuter. 45 U.S.C. § 581(c)(3). ⁷ In 1988, Congress extended the federal tax exemption to those "commuter authorities" which acquired commuter service property from Conrail and operated commuter services. 45 U.S.C. § 581(c)(5). Section 581(c)(5) provides:

Notwithstanding any other provision of law, any commuter authority that could have contracted with Amtrak Commuter for the provision of commuter service but which elected to operate directly its own commuter service as of January 1, 1983, shall be exempt from the payment of taxes or other fees to the same extent as the Corporation is exempt. Such exemption shall be effective as of October 1, 1981.

SEPTA contends that because it is specifically included in the definition of "commuter authority," the federal tax exemption should apply to SEPTA with regard to maintenance allocations for the Bridge. In support of its contention, SEPTA relies on National Railroad Passenger Corporation v. Commonwealth of Pennsylvania, Public Utility Commission, 665 F.Supp. 402 (E.D.Pa.1987), aff'd., 848 F.2d 436 (3d Cir.1988), cert. denied, 488 U.S. 893, 109 S.Ct. 231, 102 L.Ed.2d 220 (1988) (Amtrak I ) and National Railroad Passenger Corporation v. Commonwealth of Pennsylvania, Public Utility Commission, 1991 WL 998 (No. 86-5357, filed January 3, 1991) (Amtrak II).

In Amtrak I, Amtrak challenged in federal district court a PUC order which required Amtrak to reconstruct and maintain the Cassatt Avenue Bridge, an overhead highway bridge located in the Township of Tredyffrin. Affirming the district court, the Third Circuit found that the maintenance responsibilities imposed on Amtrak were "special assessments" which amounted to a "tax or other fee" under 45 U.S.C. § 546(b). Central to the Third Circuit's decision that the PUC's imposition of maintenance responsibilities on Amtrak should be considered taxes was that:

** "taxation serves to erode the revenue-to-cost ratios which impact on whether states and localities continue to receive the benefit of Amtrak services."...