Appeal from the Order of the Court of Common Pleas of Berks County, in case of In Re: Assessment of Schuylkill Valley School District of Leesport, Berks County, Pennsylvania, Regarding the Assessment and Exempt Status Determination of Property owned by the Reading Municipal Airport Authority Located in Bern Township, Berks County, Pennsylvania, as made and determined by the County Board of Assessment Appeals, No. 117 December Term, 1970.
Raymond C. Schlegel, with him Scott L. Huyett and Balmer, Mogel, Speidel & Roland, for appellant.
Arthur Ed. Saylor, with him Edelman, Schaeffer, Saylor, Readinger and Poore, for appellee.
President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer and Rogers. Opinion by Judge Rogers.
The Reading Municipal Airport Authority, a municipal authority created by the City of Reading to manage the City's airport, borrowed from a bank money with which it purchased two steel buildings containing a total of 16 T-hangars.*fn1 It leased the buildings to Reading Aviation Service, a business corporation of the State of Delaware. Reading Aviation Service in turn leases the 16 T-hangars to owners of aircraft based at the airport.
The issue is whether the two buildings are entitled to exemption from local taxation. The Board of Assessment and Revision of Taxes and the Common Pleas Court of Berks County held that they were not. We agree.
Article 8, Section 2 of the Constitution of Pennsylvania provides pertinently that "the General Assembly may by law exempt from taxation . . . (iii) that portion of public property which is actively and regularly used for public purposes." Section 204 of The General County Assessment Law, Act of May 22, 1933, P.L. 853, 72 P.S. § 5020-204, exempts from local taxation "[a]ll . . . public property used for public purposes, with the ground thereto annexed and necessary for the occupancy
and enjoyment of the same . . . ." The courts have garnished this constitutional and statutory authority with supplementary principles. Those here helpful are: (I) A real property tax may be levied upon land owned by a public body not used for a public purpose but leased to a private individual for a commercial purpose, Pittsburgh School District v. Allegheny County, 347 Pa. 80, 31 A.2d 725 (1943);*fn2 Pittsburgh v. Allegheny County, 351 Pa. 345, 41 A.2d 639 (1945);*fn3 (II) public property used for a public purpose is entitled to be exempted although persons using the facility are required to pay reasonable charges for refreshment or special entertainment, and this is so whether the public body furnishes those benefits directly or through licensees, New Castle v. Lawrence County, 353 Pa. 175, 44 A.2d 589 (1945);*fn4 (III) indeed, the fact that properties of a public body are leased to private parties deriving profit therefrom instead of being operated by the body will not defeat the exemption if the properties are being used for the specifically authorized public purpose for which they were acquired, Pittsburgh Public Parking Authority v. Board of Property Assessment, 377 Pa. 274, 105 A.2d 165 (1954);*fn5 (IV) it is the use
of the property and not the use of the proceeds from the property that determines whether tax exemption may constitutionally be granted, West View Borough Municipal Authority Appeal, 381 Pa. 416, 113 A.2d 307 (1955);*fn6 Freeport School District v. Armstrong County, 162 Pa. Superior Ct. 237, 57 A.2d 692 (1948);*fn7 (V) that property used commercially serves the convenience of public users will not justify an exemption nor will the fact that the use is not indispensable or essential thereto defeat exemption; the test is whether the property's use is reasonably necessary for the efficient operation of the facility, Moon Township Appeal, 387 Pa. 144, 127 A.2d 694 (1956); (VI) it is a judicial question for the ultimate determination of the courts as to whether the use is public and hence entitled to exemption, Dornan v. Philadelphia Housing Authority, 331 Pa. 209, 200 A. 834 (1938); McSorley v. Fitzgerald, 359 Pa. 264, 59 A.2d 142 (1948).
Three cases have dealt specifically with the exemption of properties of a municipal airport. Moon Township Appeal, supra, upheld a lower court decision that certain shops, bars, stores, offices and a hotel at the Pittsburgh airport were not reasonably necessary to the operation of that public airport and hence not public uses entitled to exemption. In Moon Township Appeal, 425 Pa. 578, 229 A.2d 890 (1967), our Supreme Court affirmed the same lower court's holding that the hotel and a restaurant, newsstand and a portion of ...