Court Opinion

ID: 4639132
Source: CourtListenerOpinion
Date Created: 2020-12-03 14:21:44.879114+00
Date Added: 2024-06-11T07:58:53.942048
License: Public Domain

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.

                                        PKB-2