Opinion ID: 696213
Heading Depth: 3
Heading Rank: 1

Heading: Whether Payment Will Come from the State's Treasury

Text: 13 Pursuant to the Turnpike Organization, Extension and Toll Road Conversion Act (The Act), 36 P.S. Secs. 651.1 et seq., the Commission is authorized to obtain funds through the collection of tolls for the use of the Pennsylvania Turnpike System. 36 P.S. Sec. 651.16. The Commission is also authorized to collect rents and charges for telephone and electric lines, gas stations, garages, stores, hotels, restaurants and advertising signs. Id. The Act also authorizes the Commission to obtain funds through the issuance of bonds, notes and other obligations. Id. at Sec. 651.12. In addition, the Act authorizes the Commission to obtain funds from the federal government. Id. at Sec. 651.19. Finally, the Commission receives some funding out of Pennsylvania's oil company franchise tax collections. 75 Pa.C.S.A. Sec. 9511(h). 14 The Commission notes that only one of these funding sources--tolls--is not subject to state control. According to the Commission, the state's regulation and control of the Commission's funding is crucial to our analysis of the funding factor. Also significant, according to the Commission, is the fact that upon retiring its debts, or setting aside funds sufficient to do so, the Commission is to be dissolved and all of the Commission's property is to be vested in the Department of Highways. See 36 P.S. Sec. 652o. 15 We do not know what percentage of the Commission's funding might be attributed to each of the funding sources identified above. We are, of course, able to observe that only one of the five available sources of funding--the oil company franchise tax--is obtained from the state. The other four sources--tolls, rents, bond and note revenues, and federal funding--are not state-derived. That four of the five established sources of the Commission's funding are not state-derived is, we think, even in the absence of additional information, some support for the conclusion that the Commission is not the alter ego of Pennsylvania. 6 16 The degree of state regulation of the Commission's funding does not alter our conclusion that the funding factor weighs against according immunity to the Commission. We have explained that state control is only significant to the funding analysis where such control indicates state ownership of the funds. Fitchik, 873 F.2d at 661. In other words, state control over an entity's ability to obtain funds is inadequate to demonstrate state ownership of the funds where the state is not shown to have a financial interest that would be directly and adversely affected by the diminution of the funds in question. See id. Otherwise, the degree of state control over the entity's funding is relevant to the autonomy inquiry, which we discuss below. Id. Here, the state's control over the Commission's authority to issue bonds, notes and other obligations falls short of indicating state ownership of the funds obtained through the issuance of such bonds, notes and other obligations. Likewise, state control over the Commission's ability to obtain federal funding falls short of indicating state ownership of the federal funds obtained. The Commission's evidence of state control over its ability to obtain funds simply fails to show a financial interest on the part of Pennsylvania that would be directly and adversely affected by the diminution of the Commission's funds obtained through the issuance of bonds or from the federal government. 17 Nor is our conclusion with respect to the funding factor altered by the fact that the Commission will one day be dissolved and all its remaining funds and property vest in the Department of Highways. Pursuant to 36 P.S. Sec. 652o: 18 When all bonds and the interest thereon shall have been paid or a sufficient amount for the payment of all bonds and the interest to maturity thereon, shall have been set aside in trust for the benefit of the bondholders, and shall continue to be held for that purpose, the turnpike and the connecting tunnels and bridges shall become a part of the system of State highways, and shall be maintained by the Department of Highways free of tolls, and thereupon the commission shall be dissolved, and all funds of the commission not required for the payment of the bonds and all machinery, equipment and other property belonging to the commission, shall be vested in the Department of Highways. 19 36. P.S. Sec. 652o. Thus, the dissolution of the Commission is statutorily contingent upon the Commission satisfying, or being able to satisfy, all of its debts and obligations. If anything, this provision provides further support for our conclusion by illustrating the state's reluctance to take on the Commission's financial obligations as its own. 20