Appeals from the Order of the Court of Common Pleas of Allegheny County, in the case of In Re: Western Pennsylvania Water Company v. Board of Property Assessment, Appeals and Review, County of Allegheny, Commonwealth of Pennsylvania, No. GD 84-2911, dated March 7, 1988.
D. R. Pellegrini, City Solicitor, for appellant, City of Pittsburgh.
Joseph P. Decker, for appellant, Borough of Baldwin.
Edward R. Lawrence, Jr., Alter, Wright & Barron, for appellant, Baldwin-Whitehall School District.
Donald C. Fetzko, for appellant, The Borough of West Mifflin.
Stanley Yorsz, for appellant, Bethel Park School District.
Matthew M. Hoffman, Steele & Hoffman, for appellant, Keystone Oaks School District.
James H. Webster, Springer, Bush & Perry, for appellee, Western Pennsylvania Water Company.
President Judge Crumlish, Jr., Judge Colins and Senior Judge Barbieri, sitting as a panel of three. Opinion by Senior Judge Barbieri. Judge Barry did not participate in the decision in this case.
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Before the Court are the consolidated appeals of the City of Pittsburgh, Borough of Baldwin, The Borough of
[ 124 Pa. Commw. Page 136]
West Mifflin, Baldwin-Whitehall School District, Bethel Park School District and Keystone Oaks School District (collectively Appellants) from the order of the Court of Common Pleas of Allegheny County which struck Appellants' tax liens on the property of the Western Pennsylvania Water Company (Appellee) for the years 1956 and 1970 through 1976. We affirm.
Appellee is a public utility which owns various parcels of real estate used in utility service situated in each of Appellants' municipalities or school districts in Allegheny County. In order to understand how these municipalities and school districts were able to place tax liens on Appellee's property during the years 1970 through 1976 and why these liens must be stricken, it is necessary to review the background of the litigation that came to this Court fifteen years ago in Duquesne Light Co. v. Board of Property Assessment, Appeals and Review of Allegheny County, 10 Pa. Commonwealth Ct. 41, 299 A.2d 660 (1973), which reasoning was subsequently affirmed in AT&T Co. v. Board of Property Assessment, Appeals and Review of Allegheny County, 461 Pa. 716, 337 A.2d 844 (1975).
Historically, realty used in utility service is exempt from direct local real estate taxation. Schuylkill Bridge Co. v. Frailey, 13 S & R 422 (Pa. 1826). In 1968, Article VIII, Section 4 of the Pennsylvania Constitution was enacted which provided that while real property of public utilities was initially subject to local taxation, payment to the Commonwealth of a gross receipt tax and distribution by the Commonwealth to the local taxing authority of its pro rata share shall be in lieu of local taxes imposed upon the utility's real property. Article VIII, ...