116 A.3d 1176
Pa. Commw. Ct.2015Background
- Duke Energy owned a 60-acre tract with a gas-fired generating station completed and operational in 2003 within a parcel in Fayette County; countywide reassessment occurred in 2001.
- Duke obtained KOZ (Keystone Opportunity Zone) tax abatement for the 60 acres effective 2001–2011, which delayed payment of real-estate taxes but did not, as the court found, remove the property from being a subject of assessment.
- Fayette County knew of the completed improvements in 2003 but initially set the assessed value at $1,800,000 and delayed a new appraisal because of appraisal costs and the KOZ abatement.
- In 2011, after KOZ abatement expired, the county increased the land assessment to $27,000,000 and improvements to $8,181,260 (total $35,181,260); Duke appealed to the Board and then to the trial court, which bifurcated issues and upheld the reassessment.
- On appeal to the Commonwealth Court, the panel majority reversed the trial court, holding the county improperly delayed assessing the improvements until 2011 and that the 2011 reassessment constituted an impermissible spot reassessment; the matter was remanded to reinstate the 2003 assessment.
Issues
| Issue | Plaintiff's Argument (Duke Energy) | Defendant's Argument (Taxing Bodies) | Held |
|---|---|---|---|
| Whether expiration of KOZ status justified reassessment timing | Expiration of KOZ is not a triggering event; county had to assess when improvements were made | County argued timing was reasonable and not arbitrary; they waited until abatement ended to assess | County erred; improvements should have been assessed in 2003 when made, not deferred until KOZ expiration |
| Whether 2011 reassessment was an impermissible spot reassessment | 2011 change was a spot reassessment because county selectively reassessed one parcel outside countywide reassessment | Section 8817 authorizes assessment when improvements are made and such changes are not "spot reassessment" per statute | 2011 reassessment was an impermissible spot reassessment because county knew of improvements in 2003 but delayed reassessment until 2011 |
| Whether county may lawfully delay assessment based on appraisal cost/financial considerations | Cost and desire to defer appraisal until taxable did not justify ignoring statutory duty to assess when improvements made | County claimed it was reasonable to wait until abatement expired to avoid expense and then assess omitted property | Court rejected cost-based delay; municipalities must follow statutory timing even if appraisal is costly |
| Whether any statute of limitations barred the reassessment | Duke argued reassessment was time-barred or otherwise improper due to delay | Taxing Bodies relied on precedent (Butch) to argue no statute of limitations bars reassessment for improvements | Court found Butch inapposite; no statute of limitations saved the county because it had actual knowledge of improvements in 2003 and intentionally delayed assessment |
Key Cases Cited
- Shenandoah Mobile Co. v. Dauphin Cnty. Bd. of Assessment Appeals, 869 A.2d 562 (Pa. Cmwlth. 2005) (assessment of previously unassessed class of property added to tax rolls is not spot assessment)
- Atlantic City Electric Co. v. United Sch. Dist., 780 A.2d 766 (Pa. Cmwlth. 2001) (assessment after statutory abolition of exemption is addition to tax rolls, not spot assessment)
- In re Young, 911 A.2d 605 (Pa. Cmwlth. 2006) (improvements must be assessed when made; delaying risks spot reassessment)
- Radecke v. York Cnty. Bd. of Assessment Appeals, 798 A.2d 265 (Pa. Cmwlth. 2002) (same principle against arbitrary delayed assessments)
- Taylor Borough Appeal, 182 A.2d 754 (Pa. 1962) (boards must comply with statutory assessment duties; delay may deprive taxpayer of due process)