Appeal from the Order of the Court of Common Pleas of Beaver County in the case of In Re: Petition of the Council of the Borough of Aliquippa, Beaver County, Pennsylvania, For the Authority to Fund Unfunded Debt, No. 1713 of 1980.
Philip Baskin, with him Victor R. Delle Donne and Alan C. Jacobson, Baskin and Sears, and Keith R. McMillen, Duplaga, Tocci, Palmieri & McMillen, for appellant.
Daniel L. Haller, with him James P. O'Connell and Lawrence J. Ringer, for appellee.
President Judge Crumlish and Judges Wilkinson, Jr., Rogers, Blatt, Craig, MacPhail and Williams, Jr. Judges Mencer and Palladino did not participate. Opinion by President Judge Crumlish. Judge Wilkinson, Jr., concurs in the result only. Judge Williams, Jr., dissents. The decision in this case was reached prior to the expiration of the term of Judge Wilkinson, Jr.
[ 58 Pa. Commw. Page 216]
The Borough Council of Aliquippa appeals a Beaver County Common Pleas Court decision denying its petition seeking authorization to issue general obligation bonds or notes grounded on the "unfunded debt" provisions of the Local Government Unit Debt Act.*fn1 Specifically, the Borough appeals that part of the court's order which denied unfunded debt status for (1) a judgment, entered April 28, 1980, in favor of Jones & Laughlin Steel Corporation (J & L); the Borough had denied J & L's $1,215,000 tax assessment for the years 1976-80, and (2) the balance due Duquesne Light Company on a judgment entered December 19, 1979, requiring the Borough to pay to Duquesne, from the proceeds of a successful bond issue the balance of delinquent electric bills.*fn2
We affirm in part and reverse in part.
Critical to this Court's determination is an understanding of the term "unfunded debt" as used in the Local Government Unit Debt Act. The court below found that the Borough had assessed and collected excess taxes from J & L in the amount of $769,777 for the years 1976-79, but that this "claimed indebtedness," resulting from the order of the tax assessment appeal cases, did not qualify for "unfunded
[ 58 Pa. Commw. Page 217]
debt" status under the Act. The April 28, 1980 order set the refund amount due J & L, left the details of the Borough's refund plan to the parties without setting a due date and retained jurisdiction over the terms of the plan. The court below concluded that the petition for funding the obligation to J & L via "unfunded debt" must fail because the refund was not a "debt" as defined in Section 102(a)(1) of the Act*fn3 since by exception to the definition of "debt," Section 102(a)(1)(iii), the agreed order plus the lack of any specific refund date made the refund not yet due, thus making it a payment "payable in future years under . . . contracts or other forms of agreement. . . ." The court reasoned that if the judgment could not meet the qualifications of or fell under one of the exceptions to the term "debt" in the definitional section of the Act, then that obligation could not be "unfunded." The court below erred in its definitional application.
[ 58 Pa. Commw. Page 218]
Under the Act, the term "debt" clearly has a number of meanings and references different from those of unfunded debt. The Act's definitional section allows for "debt" and "unfunded debt" to have non-equivalent meanings by the wording at the beginning of Section 102(a):
(a) As used in this act with respect to classifications of debt unless the context clearly otherwise requires :
(1) 'Debt' means. . . . (Emphasis added.)
The definitional section of the term of art "unfunded debt" appears later in the Act (see 53 P.S. § 6780-209). The definitional language of "unfunded debt", Section 509,*fn4 has a unique meaning and textual application. The ...