No. 29 W.D. Appeal Docket 1982, Appeal from the Order Entered April 22, 1982 and from the Final Order Entered May 21, 1982 in the Commonwealth Court of Pennsylvania at No. 1339 C.D. 1980, 66 Pa. Commonwealth Ct. 299,
Roberts, C.j., and Nix, Larsen, Flaherty, McDermott, Hutchinson and Zappala, JJ.
West Penn Power Company, Appellant, filed this appeal from the May 21, 1982 order of Commonwealth Court*fn1 denying both appellant's and appellee's (Commonwealth of Pennsylvania, Department of Revenue) motions for summary judgment and denying appellant's request for
mandamus. Having granted appellant's request for declaratory judgment, Commonwealth Court, 66 Pa. Commw. 263, 443 A.2d 1366, declared, as a matter of law, that: Public Utility Realty Tax returns need not be routinely settled under the provisions of the Fiscal Code, Act of April 9, 1929, P.L. 343, No. 176, 72 P.S. §§ 1-1804 (1968 and Supp.1982-83), unless the Department of Revenue intends to use the collection provisions of the Code, in which case the Department must settle the return in question. We now affirm and hold that, in the absence of any explicit directive in the Public Utility Realty Tax Act (PURTA), Act of March 10, 1970, P.L. 168, No. 66 and its replacement, Article XI-A of the Tax Reform Code of 1971, added by the Act of July 4, 1979, P.L. 60, No. 1979-27, 72 P.S. §§ 8101-A -- 8108-A (Supp.1982-83), mandamus will not lie to compel a formal settlement of PURTA taxes by the Department of Revenue. If the Department disagrees with the taxpayer's report and concludes that additional taxes are due the Commonwealth, it is authorized under the provisions of PURTA to enforce the payment by any lawful means. Section 1102-A(c), 72 P.S. § 8102-A(c).*fn2 The use of settlement procedures for the collection of unpaid taxes are thus within the discretion of the Department under Section 801(d) of the Fiscal Code, 72 P.S. § 801(d). The taxpayer's remedy for overpayment of PURTA taxes is a refund petition under Section 503(a)(4) of the Fiscal Code, which applies to situations where a court has subsequently held an interpretation of a tax law to be erroneous.
The facts in this case are as follows. Article VIII of the Constitution of Pennsylvania was amended in 1968 to explicitly subject the real property of public utilities to real estate taxes for the benefit of local taxing jurisdictions. In lieu of the direct imposition of local real estate taxes, however, Article VIII, § 4, authorized the legislature to provide such
revenues by levying gross receipts taxes or other special taxes payable to the Commonwealth. An amount equivalent to the revenues which would have been received from real estate taxes imposed on properly assessed utility realty within a local taxing jurisdiction at its particular rate is then distributed to each local taxing jurisdiction.
To implement the constitutional provision, the General Assembly enacted PURTA in 1970. PURTA levied an annual tax of thirty mills on each dollar of the State taxable value of utility realty. This State taxable value is defined in the Act as "[t]he cost of utility realty, less reserves for depreciation and depletion, as shown by the books of account of a public utility . . . ." Utility Realty is defined in Section 2 of the act as:
all lands, buildings, towers, smoke-stacks and other structures, located within this Commonwealth and owned by a public utility directly or by or through a subsidiary, which are used or are in the course of development or construction for use, in the furnishing, including producing, storing, distributing or transporting, of public utility service; but shall not include (i) easements or similar interests, (ii) railroad rights-of-way and super-structures thereon, (iii) machinery, equipment, pole, transmission tower, pipe, rail or other lines, whether or not attached to such lands, buildings, towers, smokestacks or other structures, and (iv) such realty as is subject to local real estate taxation under any law in effect on April 23, 1968.
Act of March 10, 1970, P.L. 168, No. 66, § 2. In interpreting the act, this Court held in 1977 that dams, dikes and canals used in a utility's pump storage hydroelectric project constitute "machinery and equipment" and are, therefore, excluded from taxation under PURTA. Commonwealth v. Philadelphia Electric Company, 472 Pa. 530, 372 A.2d 815 (1977). This decision was based on the language of Section 5:
Local Assessment of Utility Realty; Initial Assessment; Procedure and Appeals. -- (a) It shall be the duty of the several elected and appointed assessors of real property to assess and value all utility realty in the same manner as is
provided by law for the assessment and valuation of real estate.
Act of March 10, 1970, P.L. 168, No. 66, § 5. See also U.S. Steel Corp. v. Bd. of Assessment and Revision of Taxes of Bucks County, 422 Pa. 463, 223 A.2d 92 (1966); Jones & Laughlin Tax Assessment Case, 405 Pa. 421, 175 A.2d 856 (1961); Gulf Oil Corporation v. Philadelphia, 357 Pa. 101, 53 A.2d 250 (1947).
Appellant Public Utility timely filed its PURTA tax returns for the year 1969 through 1973 with appellee, Department of Revenue. Payments of the tax shown to be due accompanied those returns. No formal settlement was made by appellee on these returns until March 15, 1977 when the appellee was advised by Official Opinion No. 77-5 issued by the Attorney General*fn3 that Section 1001 of the Fiscal Code imposes a duty on the Department of Revenue to settle PURTA taxes subject to the Auditor General's audit and approval, pursuant to the procedure set forth in Section 802.*fn4 Thereafter, appellee began settling all subsequent PURTA tax returns until advised by memorandum of August 6, 1980 that settlements were not required unless "the Department of Revenue is unwilling to accept the PURTA taxpayer's self-assessment."*fn5 Appellee has not settled appellant's PURTA tax returns for the years 1969 through 1973 and currently issues "settlements" only as a prerequisite to collection proceedings. Stipulation of Facts, Reproduced Record at 80a-81a.
Appellant has in the interim filed petitions for refund under Section 503(a)(4) of the Fiscal Code, 72 P.S. § 503(a)(4), for the years 1969 through 1973. Of these petitions, those filed within five years of the date of the tax return have been granted by the Board of Finance and Revenue. Those filed more than five years after the filing of the annual tax return have been denied, apparently pursuant to the five year statute of repose built into Section 503(a)(4).*fn6
Appellant now asks us to reverse the lower court's denial of its request for mandamus and order the Department of Revenue to issue formal settlements on its tax returns for the years 1969 through 1973. Mandamus, however, will lie against the Commonwealth or one of its officials only where such an official has a clearly ministerial duty to perform; it does not lie to compel performance of a discretionary act or to govern the manner of performing a required act. Getz v. Lehighton Borough, 407 Pa. 357, 180 A.2d 230 (1962). Neither the original PURTA nor its 1979 replacement, Article XI-A of the Tax Reform Code, contain any statutory requirement that PURTA tax reports must be settled. Since both the Fiscal Code of 1929 and the Tax Reform Code of 1971 do contain mandatory provisions for the settlement of certain taxes, it is clear that the legislature could and probably would have included such directions ...