IUP v. Jefferson County Bd. of Assess. Appeals v. Punxsutawney Area SD & Boro of Punxsutawney

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Indiana University of Pennsylvania, :

Appellant :

:

v. :

:

Jefferson County Board of :

Assessment Appeals :

:

v. : No. 775 C.D. 2019

: Argued: May 14, 2020

Punxsutawney Area School District :

and Borough of Punxsutawney :

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge

HONORABLE RENÉE COHN JUBELIRER, Judge

HONORABLE P. KEVIN BROBSON, Judge

HONORABLE ANNE E. COVEY, Judge

HONORABLE MICHAEL H. WOJCIK, Judge

HONORABLE CHRISTINE FIZZANO CANNON, Judge

HONORABLE J. ANDREW CROMPTON, Judge

OPINION

BY PRESIDENT JUDGE LEAVITT FILED: December 3, 2020

The Indiana University of Pennsylvania (University) appeals an order

of the Court of Common Pleas of Jefferson County (trial court) holding that those

portions of University buildings leased to commercial tenants are subject to local

real estate taxes. The trial court held that the University is not immune from local

taxation and is not entitled to a tax exemption. On appeal, the University argues

that the Pennsylvania State System of Higher Education is immune from local

taxation, as is every Commonwealth agency, except where the legislature has

expressly authorized the local taxing authority to levy tax. Because no such

statutory authorization exists here, the University contends that the trial court

erred.

Background

At issue are properties located in the Borough of Punxsutawney,

Jefferson County, which were acquired by the University in August 2018. The

first property, known as the Fairman Centre, is located at 101 West Mahoning

Street and was occupied on the first floor by an insurance agency at the time of

acquisition. The second property, known as the Agape and Miller Buildings, is

located at 105 and 115-121 West Mahoning Street. At the time of the acquisition,

the Agape Building was vacant, and the Miller Building had three commercial

tenants.

By letter dated August 31, 2018, the University notified the Jefferson

County Assessment Office that the properties should be removed from the

County’s tax rolls because they were not subject to local taxation. Accompanying

the letter was an application for exemption stating that each parcel is “owned by an

instrumentality of the Commonwealth of Pennsylvania and [] immune from

taxation.” Reproduced Record at 32a, 34a (R.R.___).1 The Jefferson County

Board of Assessment Appeals (Board) conducted a hearing. It denied the

University’s application with respect to the Agape and Miller Buildings, but it

exempted that part of the Fairman Centre used for the University’s Culinary

Institute. The University appealed, and the trial court held a de novo hearing on

May 3, 2019.

1

The University noted in its August 31, 2018, letter that it was applying for a tax exemption

because “some systems used by assessment offices do not have the capability to mark parcels as

‘immune’, only as exempt.” R.R. 31a.

2

Before the trial court, the University, the Board and the Punxsutawney

Area School District (School District) agreed that the county had the burden of

proof on its authority to tax. Nevertheless, the University proceeded first with its

case.2

The University presented the testimony of Susanna Sink, Interim Vice

President for Administration and Finance, who is responsible for University

facilities. She testified that the University purchased the properties for the

Culinary Institute and has “future plans to renovate these buildings” beginning in

March 2021. Notes of Testimony (N.T.), 5/3/2019, at 24; R.R. 90a. The

renovations will allow the University “to expand the culinary program, upgrade the

facility, and promote the culinary certificate and the baking certificate as well as

offer potential associate degrees.” Id. The Fairman Centre, which was recently

renovated, will remain as is, but the Agape and Miller Buildings will be razed.

Shortly before the hearing, the University had “put out bidding for architectural

designs” but had not yet applied for building permits. Id.

Sink described the commercial leases that were in place when the

University acquired the properties. The insurance agency had entered a three-year

lease on May 31, 2016, for the first floor of the Fairman Centre. The lease in the

Miller Building for a chiropractor office was scheduled to end on April 30, 2020.

A restaurant at the Miller Building was on a month-to-month lease. The beauty

salon that occupied part of the Miller Building moved out in October 2018. Sink

2

In immunity cases, the local taxing body bears the burden of demonstrating taxability, and all

doubts are to be resolved in favor of the taxpayer. Lehigh-Northampton Airport Authority v.

Lehigh County Board of Assessment Appeals, 889 A.2d 1168, 1175-76 (Pa. 2005). The trial

court, however, allowed the University to present its case first.

3

testified that the University permitted the existing tenants to stay in their respective

locations until they found new locations.

At the time of the hearing, the University was using the second floor

of the Fairman Centre for its culinary classes and the first floor (not occupied by

the insurance agency) “for the baking program.” N.T. 25; R.R. 91a. Sink

estimated that approximately 125 students were taking culinary classes in the

Fairman Centre. The University intends to convert the third floor for classrooms

and faculty offices. The unleased portion of the Miller Building and the entire

Agape Building are vacant.

Sink explained that the University’s primary mission under the Public

School Code of 19493 is to provide “instruction for undergraduate and graduate

students to and beyond the master’s degree in the liberal arts and sciences and in

applied fields including the teaching profession.” N.T. 16; R.R. 82a. She

conceded that the commercial leases do not directly advance the University’s

educational mission. Sink stated that the vacant portions of the buildings advance

the University’s statutory purpose because they are slated “for future

development.” N.T. 28; R.R. 94a.

Neither the School District nor the Board presented evidence.

Trial Court Decision

In an opinion and order filed May 24, 2019, the trial court partially

granted the University’s appeal. It concluded that the University was immune

from paying local property tax on the land underlying the buildings and the vacant

3

Act of March 10, 1949, P.L. 30, as amended, 24 P.S. §§1-101 – 27-2702. The University is

one of 14 universities in the Pennsylvania State System of Higher Education. Section 2002-

A(a)(7) of the Public School Code of 1949, 24 P.S. §20-2002-A(a)(7). Sections 2002-A, 2004-

A, 2006-A, and 2008-A were added by the Act of November 12, 1982, P.L. 660, No. 188.

Section 2018-A was added by the Act of July 11, 1990, P.L. 424, No. 103.

4

space in each building, but it was subject to taxation on the portions of the

buildings encumbered by commercial leases. The trial court recognized that the

Public School Code of 1949 authorizes the University to lease property to

commercial third parties, but it concluded that the University’s primary mission of

educational instruction is “in no way furthered by its maintenance of the

commercial leases here at issue.” Trial Court Decision, 5/24/2019, at 3; R.R. 310a.

The trial court concluded that “[w]here the leases are concerned, [the University] is

no longer immune from paying local property taxes.” Id.

In granting the University’s appeal with respect to the vacant building

space, the trial court explained as follows:

When [the University] acquired the property, [] it did so for the

specific purpose of expanding the Culinary Academy and has

developed a detailed master plan to achieve that goal. See

[Exhibit] B. To that end, it intends to raze and completely

replace at least two of the buildings and is currently putting out

bids for various phases of the project, which is scheduled to

commence next year. Although the bulk of the property is

vacant, [the University’s] active engagement in the

transformational process outlined in Exhibit B means, for all

practical purposes, that it is currently using that space in

conformity with the purpose for which it was created.

Id. The trial court further noted that the School District did not present any

evidence that the University’s “failure to immediately utilize the vacant space for

educational activities was tantamount to using it for commercial endeavors

unrelated to its mission.” Id. The University’s appeal to this Court followed.

5

Appeal

On appeal,4 the University contends that the trial court erred in

holding that any portion of its properties could be subjected to local taxation. It

asserts that real property owned by the Commonwealth, which includes the

University, is immune from taxation, regardless of how it is used, unless the local

taxing authority has been granted explicit statutory authority by the General

Assembly to tax the property. Here, the local taxing authorities have not been

granted express statutory authority to tax University property. The University

further argues that the Pennsylvania Supreme Court’s decision in Southeastern

Pennsylvania Transportation Authority (SEPTA) v. Board of Revision of Taxes,

833 A.2d 710 (Pa. 2003) (SEPTA), on which the trial court relied, is inapposite to

the question of whether the University is immune from taxation.

In response, the School District5 argues that the University is not

immune from local tax if its property is used in a way that does not advance its

statutory purpose to provide education. At the time the University applied for tax

immunity, only part of one building, the Fairman Centre, was in active use for

educational purposes. The School District asserts that the University’s leases do

not coincide with the University’s statutory purpose, i.e., to provide education.

4

This Court’s review determines whether the trial court abused its discretion, committed an error

of law, or rendered a decision unsupported by substantial evidence. Walnut-Twelve Associates v.

Board of Revision of Taxes of City of Philadelphia, 570 A.2d 619, 622 (Pa. Cmwlth. 1990). The

trial court, as fact finder, has discretion over evidentiary weight and credibility determinations.

1198 Butler Street Associates v. Board of Assessment Appeals, County of Northampton, 946

A.2d 1131, 1138 n.7 (Pa. Cmwlth. 2008).

5

The Board joins the School District’s brief on this matter.

6

Analysis

We begin with the legal standards for determining whether

government property can be subjected to local tax. The power “to determine what

property shall be subject to taxation and what shall be immune is traditionally

within the province of the General Assembly.” Commonwealth v. Dauphin

County, 6 A.2d 870, 871 (Pa. 1939). “An arm, agency, subdivision, or

municipality of the Commonwealth enjoys sovereign immunity from local real

estate taxation…. Property owned by the Commonwealth and its agencies and

instrumentalities is presumed to be immune, with the burden on the local taxing

body to demonstrate taxability.” City of Philadelphia v. Cumberland County

Board of Assessment Appeals, 81 A.3d 24, 50 (Pa. 2013). The local taxing body

may tax real property of the Commonwealth only where it has express statutory

authorization to do so. Dauphin County, 6 A.2d at 872 (“The legislators did not

intend to upset the orderly processes of government by allowing the sovereign

power to be burdened by being subjected to municipal taxes.”).

A tax exemption differs from a tax immunity. An exemption “carves

out specified property from taxation that the taxing body otherwise has the

authority to tax.” SEPTA, 833 A.2d at 713. Article VIII, Section 2 of the

Pennsylvania Constitution authorizes the General Assembly to exempt certain

classes of property from taxation, including the portion of property “which is

actually and regularly used for public purposes.” PA. CONST. art. VIII, §2.

However, “the distinction between tax immunity and tax exemption is unnecessary

in the context of government-owned property.” Norwegian Township v. Schuylkill

County Board of Assessment Appeals, 74 A.3d 1124, 1131 (Pa. Cmwlth. 2013).

See also Dauphin County, 6 A.2d at 873 (where property is owned outright by the

7

Commonwealth, “the revenues therefrom could only be devoted to public purposes

under the Constitution”); East Stroudsburg University Foundation v. Office of

Open Records, 995 A.2d 496, 504 (Pa. Cmwlth. 2010) (“the government always

acts as the government”).

The Supreme Court has explained that with regard to tax immunity,

the “pivotal factor” should be “whether the institution’s real property is so

thoroughly under the control of the Commonwealth that, effectively, the

institution’s property functions as Commonwealth property.” Pennsylvania State

University v. Derry Township School District, 731 A.2d 1272, 1276 (Pa. 1999)

(Penn State II). A factor in this inquiry is whether the Commonwealth has

majority control of the board of governors or board of trustees.6 Id. at 1275-76.

Here, the University is a member of the State System of Higher

Education (System). Section 2002-A(a) of the Public School Code of 1949

provides, in relevant part, as follows:

(a) Subject to the regulatory powers conferred by law upon the

State Board of Education, there is hereby established a body

corporate and politic constituting a public corporation and

government instrumentality to be known as the State System of

Higher Education, independent of the Department of

Education, hereinafter referred to as the system, which is

granted sovereign immunity and official immunity pursuant to 1

Pa.C.S. §2310 (relating to sovereign immunity reaffirmed;

specific waiver) and which shall consist of the following

institutions and such other institutions, presently existing or

6

In Penn State II, the Court found that Penn State’s real property was controlled by a board of

trustees. Of the 32 trustees, only ten represented “government” seats held or appointed by the

Governor. The remaining 22 members include Penn State’s president, nine members elected by

alumni and 12 members elected by various agricultural and industrial societies. The Court

concluded that because the Commonwealth did not have either functional or legal control over

Penn State’s real property, there was no basis upon which the university-owned property could

be deemed immune from local taxation.

8

until changed as provided under subsections (a.1), (a.2), (a.3),

(a.4), (a.5), (a.6) and (a.7):

***

(7) Indiana University of Pennsylvania[.]

24 P.S. §20-2002-A(a)(7) (emphasis added). The System is governed by the Board

of Governors, which consists of 20 members including the Governor; the Secretary

of Education; a Senator appointed by the President pro tempore of the Senate; a

Senator appointed by the Minority Leader of the Senate; a Representative

appointed by the House Speaker; and a Representative appointed by the House

Minority Leader.7 Section 2004-A of the Public School Code, 24 P.S. §20-2004-

A. Each institution has a council of trustees that consists of 11 members “who,

except for student members, shall be nominated and appointed by the Governor

with the advice and consent of the Senate.” Section 2008-A(a) of the Public

School Code, 24 P.S. §20-2008-A(a).

In general, the Board of Governors is responsible for the development

and operation of the System and its member universities. Section 2006-A(a) of the

Public School Code, 24 P.S. §20-2006-A(a). This responsibility includes

7

With respect to the rest of the Board of Governors, Section 2004-A(a)(7), (8) provides:

(7) Eleven (11) members shall be appointed by the Governor with the advice and

consent of the Senate, of which six (6) members shall be selected from the

residents of this Commonwealth and five (5) members shall be selected from

trustees of constituent institutions, except that no more than one trustee may

represent a constituent institution.

(8) Three (3) of the members shall be students appointed by the board under

section 2006-A(a)(17). The student members shall be selected with the advice and

consent of institution presidents. A student’s term shall expire upon graduation,

separation or failure to maintain good academic standing at the institution in

which the student is enrolled.

24 P.S. §20-2004-A(a)(7), (8).

9

overseeing the University’s dealings in real estate to fulfill its statutory mission.8

The University is tasked with providing “appropriate educational facilities” as

deemed necessary by the Board of Governors. Section 2003-A(a) of the Public

School Code, 24 P.S. §20-2003-A(a). The Board of Governors evaluates when

new facilities are needed to advance the University’s mission, 24 P.S. §20-2003-

A(b)(3), and must report all real property decisions to the Secretary of the Budget.

24 P.S. §20-2006-A(a)(9). If the System “deems that it is necessary or desirable to

sell, transfer or dispose of real property acquired by and titled to it, it shall request

authorization from the General Assembly to sell, transfer or dispose of said real

property[.]” Section 2018-A(a) of the Public School Code, 24 P.S. §20-2018-A(a)

(emphasis added).

The above provisions demonstrate the Commonwealth’s control of the

University’s acquisition and development of real property. Notably, the University

cannot sell or transfer any of its property without legislative approval. We

conclude that the University’s properties are “so thoroughly under the control of

the Commonwealth that, effectively, the institution’s property functions as

Commonwealth property.” Penn State II, 731 A.2d at 1274. Thus, the

8

The University’s primary mission, as a member university in the System, is to provide

education “for undergraduate and graduate students to and beyond the master’s degree in the

liberal arts and sciences and in applied fields[.]” Section 2003-A(a) of the Public School Code,

24 P.S. §20-2003-A(a). As to academia, Section 2003-A(a) also provides that “[p]rograms of

research and service may be provided which are approved by the Board of Governors, and which

are consistent with the primary mission of the system.” Id. at §20-2003-A(a). The Board of

Governors establishes “broad fiscal, personnel and educational policies under which the

institutions of the [System] shall operate” and approves “new undergraduate and graduate degree

programs.” Section 2006-A(a)(4), (5) of the Public School Code, 24 P.S. §20-2006-A(a)(4), (5).

It also has the power to “do and perform generally all of those things necessary and required to

accomplish the role and objectives of the system[.]” Id. §20-2006-A(a)(15).

10

University’s properties are immune from taxation. See also Bucks County

Community College v. Bucks County Board of Assessment Appeals, 608 A.2d 622,

624 (Pa. Cmwlth. 1992) (observing that the state-owned universities encompassed

in the System are agencies of the Commonwealth entitled to tax immunity).

With the presumption of tax immunity established, the burden shifted

to the local taxing entity to demonstrate express legislative authorization to levy a

property tax on the real estate in question. Dauphin County, 6 A.2d at 872. Here,

the School District did not offer any evidence or relevant statutory authority to

support its position.

Instead, the School District relied upon SEPTA, 833 A.2d 710. The

School District argues that the facts in SEPTA “mirror the case at issue” and that

the Supreme Court’s decision in that case “remains determinative and fatal to the

University’s immunity claim.” School District Brief at 4, 7.

SEPTA involved a building in downtown Philadelphia used by

SEPTA as its headquarters. It leased unused portions of the building to

commercial, non-profit and government organizations. SEPTA applied to have the

building declared immune and exempt from taxation. The board of revision of

taxes granted a partial tax exemption for the portions of property used by SEPTA

and leased to other government and non-profit entities. The trial court reversed

this decision, finding that the entire building was exempt from taxation. On

appeal, this Court reversed. We concluded that SEPTA was not immune from

taxation on property it leased to commercial tenants, and it was not entitled to a tax

exemption because a commercial real estate business is not a governmental

function.

11

On review, the Supreme Court applied what is commonly referred to

as the “government use” test, under which a reviewing court considers (1) whether

the agency’s actions with respect to the property at issue are within its authorized

purposes and powers; and (2) whether the property was acquired or used for a

purpose that is within the operation of the agency. SEPTA, 833 A.2d at 716. The

Supreme Court held that SEPTA was authorized to acquire and dispose of

property, including the lease of property to third parties to raise revenue and reduce

expenses. However, the test’s second prong proved problematic. The Supreme

Court stated “clearly the leasing of real estate, solely to raise revenue, is not an

activity connected to SEPTA’s purpose.” Id. at 717. It reasoned:

[SEPTA’s enabling legislation] does not provide a basis for

concluding that in becoming a commercial landlord, SEPTA is

absolved or exempted from its responsibility for paying real

estate tax on the portion of the property that is utilized for such

a commercial venture. In that respect, SEPTA is like any other

commercial landlord with which it competes as a landlord.

Id. Accordingly, the Supreme Court concluded that the portion of SEPTA’s

property leased to commercial entities was not immune from taxation.9

9

Justice Nigro dissented, arguing that:

The majority claims to reach its conclusion that SEPTA is not immune by

clarifying, then applying, the legal standards governing tax immunity. Instead of

clarifying these standards, however, the majority materially alters them,

improperly blending those standards with the separate and distinct standards

applicable in the tax exemption context.

SEPTA, 833 A.2d at 718 (Nigro, J., dissenting). Justice Nigro wrote that Delaware County Solid

Waste Authority v. Berks County Board of Assessment Appeals, 626 A.2d 528 (Pa. 1993), did not

require a determination of whether SEPTA’s leasing activities were related to its purpose as a

metropolitan transportation authority. He further explained that because the General Assembly

empowered SEPTA to lease real estate for the authorized governmental purpose of raising

revenue and reducing expenses, he would have held that SEPTA’s leased property was immune

from taxation.

12

SEPTA is distinguishable. SEPTA and the University are different

entities, and they are governed by very different enabling statutes.

SEPTA was established by the Metropolitan Transportation

Authorities Act of 1963.10 SEPTA is governed by a transportation board that

“shall not involve itself in the day-to-day administration of the authority’s

business.” Section 1712(b) of the Public Transportation Law, 74 Pa. C.S.

§1712(b). The transportation board is made up of residents of the service area, and

members appointed by the Governor, by legislative leaders and by the County of

Philadelphia.11 The transportation board has powers over “the authority’s

operating and capital budgets, the authority’s standard of services, utilization of

10

Act of August 14, 1963, P.L. 984, No. 450, repealed by the Act of July 10, 1980, P.L. 427, No.

1010. It was replaced by the current Metropolitan Transportation Authorities Act, 74 Pa. C.S.

§§1701-1785, which is part of the Public Transportation Law, 74 Pa. C.S. §§1101-2107. All

transportation authorities are deemed to have been created under the current act. 74 Pa. C.S.

§1711(c)(1).

11

Section 1713(a) of the Public Transportation Law explains the appointment of transportation

board members:

(1) The Governor may appoint as a member of the board one person, who may be

an ex officio appointee from among the various officials in this Commonwealth

and whose term as a board member shall run concurrently with that of his

Commonwealth position, if any, or the term of the appointing Governor,

whichever is shorter.

(2) The Majority Leader and the Minority Leader of the Senate and the Majority

Leader and the Minority Leader of the House of Representatives may each

appoint one person to serve as a board member, whose term shall be concurrent

with the term and who shall serve at the pleasure of the appointing legislative

leader.

(3) The county commissioners or the county council in each county and, in any

county of the first class containing a city of the first class, the mayor, with the

approval of the city council, may appoint two persons from each county to serve

as board members.

74 Pa. C.S. §1713(a). All members of the transportation board, except for the appointee of the

Governor, must be residents of the metropolitan area. 74 Pa. C.S. §1712(b).

13

technology, the organizational structure and, subject to the provisions of this

chapter, the selection of and the establishment of salaries for personnel.” 74 Pa.

C.S. §1712(b).

SEPTA is authorized to engage in real estate activities under Section

1741(a)(12) of the Public Transportation Law, 74 Pa. C.S. §1741(a)(12). SEPTA

has the power to acquire property, 74 Pa. C.S. §1742, and can sell or lease real

property at its discretion. 74 Pa. C.S. §1750. However, neither the General

Assembly nor the Secretary of the Budget has any role to play in SEPTA’s real

estate transactions.

By contrast, a Commonwealth agency, including the State System of

Higher Education, cannot transfer its real property without the approval of the

General Assembly. Section 2018-A of the Public School Code provides, in part, as

follows:

(a) Whenever the system deems that it is necessary or desirable

to sell, transfer or dispose of real property acquired by and titled

to it, it shall request authorization from the General Assembly

to sell, transfer or dispose of said real property; and from time

to time, as necessary, the system shall submit to the Chief Clerk

of the House of Representatives and the Secretary of the Senate

requests to sell, transfer or dispose of real property acquired by

and titled to the system for consideration by the General

Assembly.

(b) Each request for authorization to sell, transfer or dispose of

real property transmitted to the General Assembly shall be

proposed as a resolution, and shall be placed on the calendar of

each house for the next legislative day following its receipt, and

shall be considered by each house within thirty (30) calendar

days of continuous session of the General Assembly.

(c) Each request for authorization to sell, transfer or dispose of

real property shall take effect if it is approved by a majority

14

vote of the duly elected membership of each house during such

thirty-day period or may be disapproved by either house during

that period by a majority vote of the duly elected membership

of each house.

24 P.S. §20-2018-A.

SEPTA is also distinguishable on its facts. The University purchased

the buildings for the purpose of turning them into University facilities. It inherited

commercial leases but had no intention to continue them for the long haul. Rather,

it acted like a responsible landlord by allowing the tenants to stay until they found

new space. By contrast, SEPTA acquired its building with the intention to use at

least part of the building as an ongoing commercial real estate business.

The University is not a municipal authority. Rather, it was created by

the General Assembly to carry out one of the central missions of the

Commonwealth, i.e., education. To allow local taxation of University property for

that part leased to private parties has implications for all Commonwealth property.

It would allow, for example, the City of Harrisburg to tax that part of the State

Capitol leased for the operation of a cafeteria.

Conclusion

Because the University-owned real estate at issue in this case is

effectively under the control of the Commonwealth government, it is

presumptively immune from local taxation.12 The School District did not

12

The School District refers us to this Court’s unpublished decisions in The Pennsylvania State

System of Higher Education v. Indiana Area School District (Pa. Cmwlth., No. 184 M.D. 2011,

filed April 5, 2012), aff’d per curiam, 69 A.3d 236 (Pa. 2013), and Indiana University of

Pennsylvania v. Indiana County Board of Assessment Appeals (Pa. Cmwlth., No. 1923 C.D.

2014, filed September 17, 2015), appeal denied, 140 A.3d 14 (Pa. 2016). These cases involved

the University-owned Robertshaw Property, which was used to operate the Indiana County Small

Business Incubator and for administrative offices and classrooms. The Incubator is part of the

University’s College of Business and provides assistance to start-up or developing companies in

15

demonstrate that it has legislative authority to levy property taxes on the University

properties. Accordingly, we affirm the trial court’s order insofar as it held the

University is immune from paying tax on the land and vacant building space. The

order of the trial court is reversed insofar as it imposed local real estate tax on the

buildings encumbered by commercial leases.

_____________________________________

MARY HANNAH LEAVITT, President Judge

Indiana County. The property was originally tax exempt under the Keystone Opportunity

Enterprise Zone, which expired in 2011. In both appeals to this Court, we determined that the

property was not immune or exempt from local property tax because the commercial leases to

third parties did not further the University’s purpose of educating undergraduate and graduate

students.

To the extent that these cases contain language that is inconsistent with today’s decision,

they are overruled. We acknowledge that our Supreme Court affirmed this Court’s decision in

the first Incubator case cited above. The Court did so by per curiam order, however, and did not

explain its rationale or provide any guidance on the legal issues.

16

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Indiana University of Pennsylvania, :

Appellant :

:

v. :

:

Jefferson County Board of :

Assessment Appeals :

:

v. : No. 775 C.D. 2019

:

Punxsutawney Area School District :

and Borough of Punxsutawney :

ORDER

AND NOW, this 3rd day of December, 2020, the order of the Court of

Common Pleas of Jefferson County dated May 23, 2019, is AFFIRMED in part

and REVERSED in part in accordance with the foregoing opinion.

_____________________________________

MARY HANNAH LEAVITT, President Judge

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Indiana University of Pennsylvania, :

Appellant :

:

v. :

:

Jefferson County Board of Assessment :

Appeals :

:

v. : No. 775 C.D. 2019

: Argued: May 14, 2020

Punxsutawney Area School District :

and Borough of Punxsutawney :

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge

HONORABLE RENÉE COHN JUBELIRER, Judge

HONORABLE P. KEVIN BROBSON, Judge

HONORABLE ANNE E. COVEY, Judge

HONORABLE MICHAEL H. WOJCIK, Judge

HONORABLE CHRISTINE FIZZANO CANNON, Judge

HONORABLE J. ANDREW CROMPTON, Judge

DISSENTING OPINION

BY JUDGE BROBSON FILED: December 3, 2020

Notwithstanding appealing aspects of the majority opinion, I respectfully

cannot join. The Court of Common Pleas of Jefferson County did not err in its

application of the Pennsylvania Supreme Court’s binding precedent in Southeastern

Pennsylvania Transportation Authority (SEPTA) v. Board of Revision of

Taxes, 833 A.2d 710 (Pa. 2003), to the facts of this case. Moreover, I respectfully

disagree with the majority’s decision to overrule this Court’s prior unreported

decisions in Pennsylvania State System of Higher Education v. Indiana Area School

District (Pa. Cmwlth., No. 184 M.D. 2011, filed April 5, 2012), aff’d per curiam,

69 A.3d 236 (Pa. 2013), and Indiana University of Pennsylvania v. Indiana County

Board of Assessment Appeals (Pa. Cmwlth., No. 1923 C.D. 2014, filed

September 17, 2015), appeal denied, 140 A.3d 14 (Pa. 2016).

I, therefore, respectfully dissent.

P. KEVIN BROBSON, Judge

Judge Covey joins in this Dissenting Opinion.

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