Melvin R. Shuster, Deputy Atty. Gen., Dept. of Justice, Craig R. Burgraff, Deputy Counsel, Dept. of Auditor Gen., Harrisburg, for appellants.
F. E. Conflenti, Cauley, Birsic & Conflenti, Pittsburgh, for appellee.
Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Former Chief Justice Jones did not participate in the decision of this case.
Appellees, Springfield and Wilkins Townships, brought this class action*fn1 in equity to compel appellants, certain Commonwealth officials,*fn2 to distribute to local taxing authorities $30,506,545.00 collected in June 1970 pursuant to the Public Utility Realty Tax Act (PURTA).*fn3 The Commonwealth Court held that the failure to distribute these funds to local taxing authorities violated Pa.Const. Article VIII, section 4, and ordered appellants to make an accounting of these funds and notify each local taxing authority of its right to a share of the distribution.*fn4 This appeal followed.*fn5 We conclude that neither PURTA nor the Pennsylvania Constitution require the Commonwealth to distribute these funds, and reverse.*fn6
Pa.Const. Article VIII, section 4 eliminates the historical exemption of public utility property from local real estate taxes.*fn7 Rather than authorizing local taxation, however, it provides that payment by utilities of gross receipts or other special taxes to the Commonwealth, and distribution of an amount no less than the total sum of real estate taxes which local taxing authorities could otherwise have imposed, will be in lieu of direct local taxation.*fn8 This constitutional provision was approved by the voters in 1968, to take effect July 1, 1970, unless the Legislature provided enabling legislation to make it effective earlier.
The Legislature enacted PURTA, which became effective March 10, 1970, shortly before the constitutional deadline.*fn9 PURTA imposes a public utility realty tax, to be collected by the Commonwealth, and provides for annual distributions, beginning in 1971, of a minimum amount of the revenues to local taxing authorities in accordance with a formula set forth in Article VIII, section 4. Pursuant to PURTA and the constitutional amendment, payment of this tax by utilities is in lieu of direct imposition of local property taxes on public utility realty.*fn10
The first collection under PURTA was made on June 1, 1970, and raised $30,506,545.00 in revenues. These funds were deposited in the Commonwealth's general fund*fn11 and were not distributed to local taxing authorities. In accordance with section 7(b) of PURTA, 72 P.S. 3277(b) (Supp.1976), the first distribution of PURTA revenues was made by October 1, 1971, and was derived from the second PURTA collection of June 1, 1971.
Appellees assert that the passage of PURTA, effective March 10, 1970, constituted "earlier . . . enabling legislation" implementing Pa.Const. Article VIII, section 4 immediately. ...