The opinion of the court was delivered by: Bartle, District Judge.
Plaintiff Southeastern Pennsylvania Transportation Authority
("SEPTA") seeks a declaration that its headquarters and all other
property it owns is exempt from local real estate taxes. It also
requests an injunction to prohibit the assessment and levying of
such taxes. Before the court is the motion of the defendants to
dismiss for lack of subject matter jurisdiction because of the
Tax Injunction Act, 28 U.S.C. § 1341, and for lack of ripeness.
According to the complaint, SEPTA is a metropolitan
transportation authority, a body corporate and politic, created
under the laws of the Commonwealth of Pennsylvania to provide
commuter rail service to the City of Philadelphia ("City") and
neighboring suburban counties. See 74 Pa. Cons.Stat. Ann. §§ 1711
et seq. Its headquarters, which is a subject of the present
dispute, is located at 1234 Market Street in Philadelphia. Since
SEPTA does not presently require the use of the entire building,
it leases a portion to the City and other tenants. In May, 1994,
SEPTA filed an application for a real estate tax exemption with
the Philadelphia Board of Revision of Taxes, which granted SEPTA
an exemption for 85% of the value of the premises. Dissatisfied
with this result, SEPTA has appealed to the Court of Common Pleas
of Philadelphia County.
In the present action, SEPTA contends that it is entitled to be
free of local real estate taxes not only pursuant to state law
but pursuant to federal law as well. SEPTA relies on 49 U.S.C. § 24301(f)
Tax exemption for certain commuter authorities.
— A commuter authority that was eligible to make a
contract with Amtrak Commuter to provide commuter
rail passenger transportation but which decided to
provide its own rail passenger transportation
beginning January 1, 1983, is exempt, effective
1981, from paying a tax or fee to the same extent
Amtrak is exempt.
Defendants do no challenge that SEPTA is a commuter authority
described under § 24301(f).*fn1 Thus, for local tax purposes, §
24301(f) treats SEPTA in the same way as it treats Amtrak. Under
49 U.S.C. § 24301(l)(1), Amtrak is exempt from local real estate
Amtrak, a rail carrier subsidiary of Amtrak, and any
passenger or other customer of Amtrak or such
subsidiary, are exempt from a tax, fee, head charge,
or other charge, imposed or levied by a State,
political subdivision, or local taxing authority on
Amtrak, a rail carrier subsidiary of Amtrak, . . .
after September 30, 1981. In the case of a tax or fee
that Amtrak was required to pay as of September 10,
1982, Amtrak is not exempt from such tax or fee if it
was assessed before April 1, 1997.
Congress enacted this tax exemption as part of comprehensive
legislation to save the nation's dying rail passenger system.
See Nat'l R.R. Passenger Corp. v. Commw. of Pa. Pub. Util.
Comm'n, 848 F.2d 436, 438 (3d Cir. 1988). Through tax
relief, it has sought to help financially strapped rail passenger
commuter authorities and to place part of the burden on the
communities benefiting from their presence. See Southeastern
Pa. Transp. Auth. v. Pa. Pub. Util. Comm'n, 802 F. Supp. 1273,
1278-79 (E.D.Pa. 1992).
Defendants argue, however, that even if SEPTA is exempt from
local taxes, the Tax Injunction Act bars a federal court from
hearing this action. The Act reads:
The district courts shall not enjoin, suspend or
restrain the assessment, levy or collection of any
tax under State law where a plain, speedy and
efficient remedy may be had in the courts of such
28 U.S.C. § 1341. Defendants contend that it would violate the
Act for this court to interfere with the City of Philadelphia's
collection of local real estate taxes when, it is undisputed,
SEPTA has a "plain, speedy and efficient remedy" to challenge the
tax in the courts of Pennsylvania.
In support of its position, defendants cite the Supreme Court's
decision in Tully v. Griffin, Inc., 429 U.S. 68, 73, 97 S.Ct.
219, 50 L.Ed.2d 227 (1976), and its progeny, that the Tax
Injunction Act is to be interpreted broadly. It "has its roots in
equity practice, in principles of federalism, and in recognition
of the imperative need of a State to administer its own fiscal
operations." Tully, 429 U.S. at 73, 97 S.Ct. 219. In keeping with
the Act's purpose, it has been read not only to prohibit
injunctions but declaratory judgments as well. See Behe v.
Chester County Bd. of Assessment Appeals, 952 F.2d 66, 68 (3d
Cir. 1991). The Tax Injunction Act, when applicable, is a
jurisdictional bar to an action in the federal courts. See id.
Despite the Tax Injunction Act, 49 U.S.C. § 24301(l)(2)
provides that "[t]he district courts of the United States have
original jurisdiction over a civil action Amtrak brings to
enforce this subsection [prohibiting local taxes] and may grant
equitable or declaratory relief requested by Amtrak." In its
previous enactment as 45 U.S.C. § 546(b), the section contained
the additional language that the federal courts had authority to
enforce this tax exemption provision "[n]otwithstanding the
provision of section 1341 of Title 28 [the Tax Injunction Act]."
The present version omits the reference to the Tax Injunction
Act. Nonetheless, the congressional report accompanying the
amendments explained that the specific reference to the Act was
simply omitted as surplusage. See H.R.Rep. No. 103-180, at 123
(1994), reprinted in 1994 U.S.C.C.A.N. 4, 940. Thus, it is clear
that the Tax Injunction
Act does not prevent a federal action by Amtrak to enjoin states
and their political subdivisions from taxing it.
The question remains whether the access to the federal courts
afforded Amtrak also applies to commuter authorities such as
SEPTA. While § 24301(l)(2) does not specifically refer to suits
by such entities, we do not view this deficiency as controlling.
For purposes of local taxation, § 24501(g) treats SEPTA like
Amtrak: a commuter authority "is exempt . . . from paying a tax
or fee to the same extent Amtrak is exempt." Under the
legislative scheme designed to save financially threatened
commuter authorities, it would be anomalous for Congress to have
required local tax exemptions and then to have withheld from the
authorities the right to enforce those exemptions in the federal
courts. In Southeastern Pa. Transp. Auth., 802 F. Supp. at
1278-79, Judge Louis Pollak of this court faced the same issue as
we confront here. He held, correctly in our view, that subject
matter jurisdiction existed to enjoin the Pennsylvania Public
Utility Commission ("PUC") from making certain assessments
against SEPTA. The Court of Appeals ultimately affirmed the
District Court's injunction against the PUC. Southeastern Pa.
Transp. Auth. v. Pa. Pub. Util. Comm'n, 826 F. Supp. 1506 (E.D.Pa.
1993), aff'd, 27 F.3d 558 (3d Cir. 1994). Although the Court of
Appeals did so with an unpublished opinion, the very act of
affirmance necessarily signified that subject matter jurisdiction