Peter J. Nolan, Chester, for appellant.
Melvin R. Shuster, Deputy Atty. Gen., Harrisburg, for appellees.
Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ.
This suit in equity was brought in the Commonwealth Court*fn1 by the appellant, the Southeast Delco School District, on behalf of itself and all other similarly situated local taxing authorities, to compel distribution by the Commonwealth to them of up to eighty million dollars collected in the years 1970 to 1974, inclusively, pursuant to the Public Utility Realty Tax Act, Act of March 10, 1970, P.L. 168, as amended, 72 P.S. § 3271 et seq. [hereinafter "PURTA"]. The defendants, various Commonwealth officials, filed preliminary objections in the nature of a demurrer and asserting that the Commonwealth Court lacked jurisdiction and that appellant's claim was barred by laches. The Commonwealth Court sustained the demurrer and dismissed appellant's complaint. 18 Pa. Commw. 389, 336 A.2d 656 (1975). This appeal followed.*fn2 We shall affirm.
The public utility realty tax -- a tax of thirty mills upon each dollar of the state taxable value*fn3 of public
utility real estate -- was imposed by the General Assembly pursuant to Article VIII, Section 4, of the Constitution of Pennsylvania*fn4 as a special tax in place of local taxation of public utility real estate.*fn5 Appellant's complaint alleges that during the years 1970 through 1974
the Commonwealth collected from public utilities approximately $163,000,000 as a result of imposition of the public utility realty tax, and that, of this amount, approximately $82,300,000 has been distributed to local taxing authorities. The remaining approximately $80,000,000 alleges appellant, has been retained by the Commonwealth and commingled with other funds in the General Fund of the state treasury. The complaint avers that the amounts of money distributed to appellant and to numerous other local taxing authorities for the years in question fall short of the amounts the local bodies could have raised by directly taxing the public utility realty within their boundaries -- amounts to which, appellant contends, it and other local taxing authorities are entitled under Article VIII, Section 4, supra. Thus, the complaint seeks, inter alia, distribution to appellant and all other allegedly aggrieved local taxing authorities of the portions of the public utility realty tax proceeds to which they claim to be entitled but which they have not yet received.
The cause of action which appellant purports to state is based upon the theory that Article VIII, Section 4, requires the Commonwealth to distribute to each local taxing authority "an amount of money, equal to the money that each local taxing authority would have obtained had it taxed the public utility realty directly." (Paragraph 12 of appellant's complaint, R. 7a). We agree with the Commonwealth Court that this theory is erroneous.
The purpose of Article VIII, Section 4, was to provide local taxing authorities with an additional source of revenue. See American Telephone and Telegraph Company v. Board of Property Assessment Appeals and Review of Allegheny County, 461 Pa. 716, 720-23, 337 A.2d 844, 846-47. To this end, the first sentence of the section eliminates the exemption from local real estate taxation which public ...