PENNSYLVANIA STATE SYSTEM OF HIGHER EDUCATION v. INDIANA AREA SCHOOL DISTRICT
The Pennsylvania State System of Higher Education; and Indiana University of Pennsylvania, Petitioners,
v.
Indiana Area School District; County of Indiana; and Indiana County Board of Assessment Appeals, Respondents.
No. 184 M.D. 2011.
Commonwealth Court of Pennsylvania.
Argued: December 12, 2011.
Filed: April 5, 2012.
Before: LEADBETTER, President Judge;1 McGINLEY, Judge; FRIEDMAN, Senior Judge.
OPINION NOT REPORTEDMEMORANDUM OPINION BY JUDGE McGINLEY.
The underlying action was commenced by petition for review, in the nature of a declaratory judgment, to determine whether real property owned by the Commonwealth of Pennsylvania State System of Higher Education (PASSHE) for use by the Indiana University of Pennsylvania (IUP) (collectively "Petitioners"), is subject to local real estate taxation by the Indiana Area School District (School District), and the County of Indiana (County). (The School District, and the County, together with the Indiana County Board of Assessment Appeals (Board), are hereinafter referred to as "Respondents").
There are two Applications for Summary Relief before this Court: (1) Petitioners' "Second Application for Summary Relief;" and (2) Respondents' "Joint Application for Summary Relief."
PASSHEPASSHE is the owner of 22.93 acres of real property, which includes the "Robertshaw Building" located at Rose Street, White Township, Indiana County (Property). The Deed for the Property reflects titled ownership in "the Commonwealth of Pennsylvania State System of Higher Education, for the use of Indiana University of Pennsylvania." Deed, December 17, 1984, at 1; attached to Respondents' Brief as Exhibit "A."
Procedural History
1. This case was assigned to the opinion writer before Judge Pellegrini succeeded Judge Leadbetter as President Judge.
2. In a declaratory judgment action, just as in civil actions generally, summary judgment may be granted only in those cases in which the record clearly shows that there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Hydropress Environmental Services, Inc. v. Township of Upper Mount Bethel, County of Northampton, 575 Pa. 479, 836 A.2d 912 (2003); Public Utility Commission Bar Association v. Thornburgh, 434 A.2d 1327 (Pa. Cmwlth. 1981).
3. Act of May 21, 1943, P.L. 571, as amended. Section 6(1)(ii) of the Act of October 27, 2010, P.L. 895, repealed The Fourth to Eighth Class County Assessment Law, effective January 1, 2011. The Fourth to Eighth County Assessment Law was replaced by the Consolidated County Assessment Law, 53 Pa.C.S. §§ 8801-8868, effective January 1, 2011. Because this matter arose prior to January 1, 2011, it is governed by the repealed Fourth to Eighth Class County Assessment Law.
4. Under an "exemption" analysis a property is exempt when the legislature acts affirmatively to remove property otherwise subject to taxation, while immunity exists because no specific power to tax this class of property has ever been delegated by the legislature to the particular taxing body. Bucks County Community College v. Bucks County Board of Assessment Appeals, 608 A.2d 622, 623 n. 2 (Pa. Cmwlth. 1992). Because the legislature has not specifically delegated the power to tax a Commonwealth agency or instrumentality to Respondents, an "immunity," as opposed to an "exemption," analysis is appropriate. That is, the Property is entitled to immunity, unless PASSHE has acted outside the scope of its government authority in acquiring and holding the property.
5. To the contrary, to qualify for tax "exemption" it must be established that the property is being used for a "public purpose." Article 8, Section 2 of the Pennsylvania Constitution.
6. For example, the Pennsylvania State Capitol Complex in Harrisburg, Pennsylvania.
7. PASSHE should not be confused with The Pennsylvania State University or Pennsylvania's Commonwealth System of Higher Education. The Commonwealth System of Higher Education is the organizing body of Pennsylvania's "state-related" schools, which allows the independent control of the universities while supplying them with the public funds needed for operations at each institution. Universities in the Commonwealth System of Higher Education are considered public universities, but are under independent control rather than that of the state.
8. Sections 20-2002-A, 20-2003-A, and 20-2004-A, of the Public School Code of 1949 (Public School Code), Act of March 10, 1949, P.L. 30, were added by the Act of November 12, 1982, P.L. 660, as amended, 24 P.S. § 20-2002-A, 24 P.S. § 20-2003-A, 24 P.S. § 20-2004-A.
9. Petitioners argue that PASSHE is the Commonwealth because it enjoys sovereign immunity under 42 Pa.C.S. §8521; Poliskiewicz v. E. Stroudsburg Univ., 536 A.2d 472 (Pa. Cmwlth. 1988). However, an entity's status as an agency or instrumentality of the Commonwealth varies, depending on the issue for which the determination is being made. Pennsylvania State University v. Derry Township School District, 557 Pa. 91, 731 A.2d 1272 (1999). Therefore, PASSHE's entitlement to sovereign immunity for purposes of tort liability is not necessarily determinative of its status in a tax immunity matter.
10. Petitioners suggest that SEPTA was wrongly decided and blurred the distinction between immunity versus exemption. They contend that "use" of the property is only germane in an "exemption" analysis and that the Supreme Court, in holding that the "use" of the property was relevant in its "immunity" analysis effectively eliminates the distinction between immunity and exemption. This Court must disagree. As explained, the law applied by the Supreme Court in SEPTA was entirely consistent with prior case law. The Supreme Court accurately pointed out that the "use" of the property in an "exemption" analysis is relevant to determine if the property is being used for a "public purpose." In an "immunity" analysis, "use" of the property is necessary to determine if the agency or instrumentality is being used within the agency's "governmental powers and purposes." The only time "use" is not relevant is when it is the Commonwealth itself which owns the property. In such a case, there is tax immunity. As discussed, that is not the case here.
11. Contrary to Petitioners' argument, the Supreme Court did not determine that SEPTA is the Commonwealth. It determined that SEPTA was part of the sovereignty of the Commonwealth as opposed to a "local" agency.
12. Section 20-2003-A of the Public School Code, 24 P.S. §20-2003-(A).