Appeal from the Order of the Court of Common Pleas of Allegheny County in the case of Health Group Care Centers, Inc. and Health Group, Inc. v. City of Pittsburgh, a Home Rule Charter Municipality, and The Office of the Treasurer, City of Pittsburgh, No. S.A. 252 of 1985.
Samuel P. Kamin, with him, Howard M. Louik, Goldberg & Kamin, for appellants.
Ronald H. Pferdehirt, Assistant City Solicitor, with him, D. R. Pellegrini, City Solicitor, for appellees.
Judges Barry and Smith, and Senior Judge Barbieri, sitting as a panel of three. Opinion by Judge Barry.
[ 122 Pa. Commw. Page 385]
Appellant, Health Group Care Centers, Inc., is owned by Health Group, Inc., and is licensed by the Commonwealth to operate a long term nursing facility. In 1983 appellant purchased all of the assets of Negley House, Inc., owner of a nursing home in the City of Pittsburgh (City). In 1984 the Treasurer of the City mailed to appellant a notice of deficiency assessment of realty transfer tax for taxes due from the sale of the nursing home. Appellant requested a Treasurer's hearing to challenge the assessment. A hearing was held with the Treasurer represented by the Office of the City Solicitor.
After the hearing the Treasurer issued a decision affirming the assessment with a slight change in appellant's favor. The Treasurer determined that the total consideration passing under the stock purchase agreement was $6,045,267.00, consisting of $3,145,000.00 on the unpaid balance of the mortgage, $280,000.00 in negative working capital, and $2,620,267.00 for purchase of the stock. The Treasurer permitted appellant to take deductions of $670,000.00 for notes receivable and moveable equipment and $1,000,000.00 for good will.
[ 122 Pa. Commw. Page 386]
The value of the real property interest transferred was therefore $4,375,267.00. The transfer tax computed was 1.5 percent of this figure or $65,629.01, plus interest and penalty.
Appeal was filed with the Court of Common Pleas of Allegheny County and a hearing was held. After the hearing appellant filed a motion to supplement the record in order to offer into evidence documents which appellant had failed to offer at the Treasurer's hearing. The motion was denied and the decision was affirmed. Appeal was taken to this Court.
The City enacted four ordinances in 1981 and 1982 which amended the City Code to specify that stock purchases would be taxed as realty transfers when over 50 percent of the corporate assets were in the form of real estate.*fn1 One of the ordinances also added a one-half percent tax to such transfers to bring the total tax to 1.5 percent. Appellant argues that the enactment of these ordinances violated Article III, Section 3 of the Pennsylvania Constitution, which requires that the subjects of bills be clearly expressed in their titles. Appellant also argues that the enactment violated the Local Tax Enabling Act (LTEA)*fn2 and the City's Home Rule Charter in that proper notice was not given to the public before the ordinances were passed. After the trial court hearing appellant attempted to supplement the record with the advertisements the City placed in the local newspapers before the ordinances were passed, and appellant now argues that the trial court erred by denying the motion to supplement the record.
Our response to these arguments is founded upon 42 Pa. C.S. § 5571(c)(5) which reads:
Questions relating to an alleged defect in the process of enactment or ...