*1 96 A.2d 881 AND CONSTRUCTION STATE BUILDING
PENNSYLVANIA AFL-CIO, COUNCIL, аnd Central TRADES Pennsylvania Building Trades Council
v. BOARD, APPEALS PREVAILING WAGE Pennsylvania, Department Labor Appeals of Commonwealth (at Compliance, Industry, Intervenor Labor Law Bureau of Casualty 59/01) Insurance Mutual National (at 60/01). Company, Intervenor Pennsylvania. Supreme Court of 11, Argued Sept. 2001. Aug.
Decided 31, 2002. Reargument Denied Oct. *2 Caffier,
Roger Roy, H. Kenneth Lengler, Scott Richard C. Sheehan, Harrisburg, appellant, James M. for Bureau of La- Compliance bor Law in No. 59 MAP 2001. Getz, Wenger,
Thomas L. David Russell Harrisburg, for Assoc, appellant curiae, amici Tp. Sup’rs, Pa. St. in et al. No. 59 MAP 2001. Smith, Bell,
Stager Clay Schwartz, Harrisburg, Blue Lee C. appellee, for Prevailing Wage Appeal Bd. in No. 59 MAP 2001. Kupchinsky, Aronson, Hill, John T. Camp Irwin William for appellees, Const., Bldg. Pa. St. & al. in No. 59 MAP et 2001. Tokarsky, Harrisburg,
Diane Marie Eric Athey, N. Lancas- ter, for intervenor PA Nat. Mut. Ins. Cas. Co. No. 59 MAP Tokarsky, Kutz,
Diane Harrisburg, Marie James William Lаncaster, Athey, appellant Eric N. for PA Nat. Mut. Cas. Ins. Co. No. 60 MAP 2001. Davies, Lancaster, appellant
Thomas Richard for amicus curiae, Keystone Chapter, Associated Builders and Contrac- tors, Inc. in No. 60 MAP 2001.
Stager Smith, Bell, Clay appellee, Prevailing Wage Blue for Appeal Bd. No. 60 MAP 2001. Caffier, Lengler, Richard Roy, C.
Roger H. Kenneth Scott intervenor, Sheehan, Harrisburg, for Bureau M. James in No. 60 MAP 2001. Compliance Labor Law C.J, ZAPPALA, CAPPY, FLAHERTY, Before SAYLOR, CASTILLE, NIGRO, NEWMAN and JJ. OPINION ZAPPALA. Chief Justice remand, Court, following
This case is before Mutual Pennsylvania National Casu- of whether determination (PNI) financing of tax increment use alty Insurance Co.’s Financing 53 P.S. Tax Increment pursuant (TIF fund, Act), part, construction §§ 1661-1676 facilities makes parking garage costs of its office tower Prevailing purposes work” for such Act), The Com- §§ 165-1-165-17. (Wage usе of tax increment Court held monwealth *3 Act, thus, requires the Prevailing Wage and implicate does the and, agree, accordingly, prevailing wages. of We payment affirm. 1991, PNI, Pennsylvania mutual insur- in late a Sometime ' headquarters, existing that its company, determined
ance Thus, Harrisburg (City), inadequate. were city within the of facilities, its explore feasibility moving to the began PNI location. to a new suburban The up employees, and to 900 Reed, to PNI in proposals made several city’s mayor, Stephen city a viable remaining PNI’s the attempt an to make did not include tax increment option. proposals The first two proposal that rejected PNI them. The third financing and financing and tax increment Mayor Reed offered included parking and for PNI’s of an office tower sites construction accepted this a downtown location. PNI garage at central proposal.
Thereafter, Harrisburg Redevelopment the City the and/or (HRA) Agreement with Authority Development into a entered agreement, to the January 1994. Pursuant the PNI dated following responsible preparation HRA for site City and were as convey project to PNI site bare they which were to the this, the and HRA first had to City In to do order ground. up project site and the made the acquire properties on properties. those existing structures demolish years, City HRA the of several the Over course and/or Harrisburg. properties in downtown acquired a number of by a partially costs financed City’s acquisition land were The (EDP) $1,500,000 Development Partnership grant Ecоnomic Pennsylvania Department of Com- City by the issued Law, and Housing Redevelopment under Assistance merce apply Initially, City §§ intended to 35 P.S. 1661-1676. costs, however, EDP toward grant some of the the demolition acquisition prior esti- the actual land costs exceeded since mates, was toward cost of grant applied all of EDP grant.1 acquisition land and administration phase complet- was acquisition the land Once ed, began ready to part preparation, City the site Thus, $109,000 into City for construction. entered site with Hazard contract Environmental asbestos removal CMC Abatement, agreement It also entered into an with Inc. work other perform preparation contractor to site demolition than the asbestos removal. once Develоpment Agreement,
Pursuant to demolition conveyed ground” completed, City the “bare was headquarters parking ga- its new and PNI constructed fi- garage of the office was rage. Construction tower nanced, City, Act. The part, pursuant the TIF (collec- District County Dauphin Harrisburg and the School bodies) a tax tively, approved the creation of of the TIF pursuant district Section 5 6930.5, effect, and, adopting resolutions *4 in the tax district.2 agreed participate and, exclusively acquisition grant the was used for land 1. As noted EDP construction, thus, City any entity “by or toward was not used the other reconstruction, repair the or alteration work on demolition and/or Prevailing Wage Appeals Project site.” Final Decision Order of the Board, Finding 20 at 6. of Fact 5(a)(7) speсifies governing body TIF Act “the of a 2. Section property taxes within the municipality or district levies school shall, proposed of a ordinance or boundaries increment district Thereafter, Prevailing Wage the Division of Pennsylva- the nia Department of Labor Industry, by letter dated Sep- 9, 1994, tember issued a concluding determination that the building project, entirety, its not subject was Wage Act. This decision was subject prior the of our opinion in and, therein, this case following we stated the regarding the procedural history of the matter: September 13, 1994,
On Building State Council, and Construction Trades AFL-CIO and the Cen- (the tral Pennsylvania Building “Unions”), Trades. Council which are councils of labor unions representing employees building and construction industry throughout Penn- sylvania and central Pennsylvаnia, respectively, filed grievance Board, with pursuant 165.2.2(e)(1) to 43 P.S. regarding the Division’s determination. joint
After consideration of a request relief, for expedited Board, by 18, 1994, alia, order dated October inter set a briefing schedule, and parties ordered that the address the issue of whether the had standing to challenge Unions Division’s determination in this PNI, case. Subsequently, City and HRA grievance intervened proceedings in support of position. the Division’s Although parties agree facts, could not on stipulated an evidentiary hearing held; was not only documentary presented evidence was the Board’s consideration. The Board heard orál argument on November 1994 and rendered a decision and order on 13,1995. January
In its unanimous decision reversing the Division’s deter- minаtion, the Board concluded that the Unions standing had grievances to file their and that because the asbestos remov- al constituted work” as [Wage] Act, defined [Wage] applies to the entire PNI building project. Appellants appealed this determination and the Division separate filed a appeal of the Board’s order. The Common- wealth Court consolidated appeals, and affirmed the Board’s order. resolution, agree participate opt participate or not to in whole or in
part in the tax increment district.”
101 Depart- v. Casualty Ins. Co. Mutual National 1068, 1070 Pa. 715 A.2d Industry, and Labor ment of omitted). (footnote (1998) limited appeal, allowance granted Court
Our standing 1) had the Unions issues: whether following three 2) applies Wage Act case; whether grievаnce file initially because building project to the entire 3) whether and project; asbestos removal for the paid it is because building project to the entire applies Act Act, or Act, Redevelopment the Urban the TIF under financed Law. Assistance Redevelopment Housing and standing had decision, that the Unions we concluded In our the second Regarding in this case. grievance their to file issue, following: we noted that: requires [Wage] § 165-5
43 P.S. as deter- wages minimum prevailing than the Not less on employed all workmen paid to shall be mined hereunder work. must be work” Thus, “public labor on only workmen who 2(5) of the wage. prevailing Section minimum paid the 165-2(5), work” as: “public defines 43 P.S. [Wage] demolition, reconstruction, alteration Construction, work, done than maintenance repair work other and/or out of the part or for whole contract under cost of the body where the estimated of a funds thousand dollars twenty-five is in excess project total under a ($25,000), performed include work but shall not training program. manpower or rehabilitation on the performed work Therefore, look at the we must to constitute it is deemed whether project determine Initially, thus, Act. we work,” and, subject to the us is before Board, pattern the fact note, did the building in the City of the role unique. The circumscribed land. Once the vacant and deliver prepare was to and demo- for asbestos removal its contracts City completed PNI, its limited involve- lition, conveyed property altogether. ceased property development in ment City The will evidently party any post-convey- be ance construction contract. Other than possible state fi- nancing below, addressed in issue three no post-conveyance construction contracts will be paid in whole or in part Thus, until public the factual scenario before us is *6 funds. unlike other situations in which a public body contracts for work which is paid entirely to be for public with monies.
Again, to “public constitute work” four elements must be satisfied:
(1) work; must there be certain (2) contract; such work must be under (3) such work paid must be or in part whole with funds; public
(4) the estimated cost of total project must be $25,000. excess of case,
Under the facts of this the lower tribunals found $109,000,000 that the asbestos removal work met this defini- tion. The asbestos removal was the kind of work covered Act, i.e., by work, contract, demolition it was under by tribunals, as determined the lower was for in whole or in part out of public $25,000 the funds of a body. The clearly threshold was met. The lower tribunals then found that because the asbestos work, removal public constituted i.e., the entire PNI building project, work, the remaining constituted purposes work for Act. added).
Id. at 1073-74 (emphasis Board, We noted that the in accepting the argu- Union’s ment, Wage found that the speaks Act project,” the “total and not individual phases, contracts or and establishes cover- age any where work is In rejecting work. analysis, this we noted following: agree
We do not with interpretation the Board’s “public definition of work.” Assuming, arguendo, that the “total project” is the million PNI building project, $30 term “total project,” is referred to in the definition of “public only work” in the context of establishing a monetary threshold which coverage excludes from projects $25,000. prong interpret than do not costing less We work work which otherwise fails to status to confer “public of the definition of satisfy the other three elements Rather, must all of the definition be work.” elements work to work.” satisfied for constitute Thus, that “under the distinct facts Id. at 1074. we concluded not building project that of this case” “the entire asbestos removal [Wage] simply because covered public work.” Id. at 1075. was deemed to be issue, addressing In the third we noted neither addressed the issue Board nor the Commonwealth Court implicated not its statutory financing and whether or use an Aсt. Board failed to conduct We noted and, thus, hearing provide detailed factual evidentiary did statutory financing. particu- In findings regarding the use of lar, following regard: in this we noted the *7 no of fact findings detailed were made
Specifically, alia, streams; to, funding specific what Board inter grants; specific and for what entities utilized monies used; grant process work the tax and monies were which tax and what through increment bonds were issued any public played role if entities the issuance of the bonds; purpose generated what interest income from the for; ultimately responsible bonds is used what entities are same; bonds and debt service on the payment for public entity’s pledged a was in connection whether credit bonds; merely foregone with the whether tax monies were actually by public or whether these monies were collected redistributed; public entity and and whether the entities to such has access monies. Thus, hold
Id. n. 11. we remanded the matter to the Board to evidentiary hearing, conduct and to proceedings, further an specific findings regarding: and conclusions of law make building PNI [Wage] applies whether the Act to the entire Tax project because it is financed under the Increment Act, Financing Redevelopment the Urban and/or Law.[3] Housing Redevelopment and Assistance Id. facts, remand, stipulation
Upon parties entered Thereafter, evidentiary hearing. the Board conducted an and, of law findings Board issued its of fact and conclusions ultimately, Wage its The Board concluded that the decision. building project because the apply Act does not to. part or in out construction contract was not for whole i.e., body, financing TIF Act does not public of the funds of a conclud- implicate the use of funds. The Board further body construc- party that because a was not a ed contract, “public did not the definition of tion meet Act. pursuant work” reversed, first, noting, that our The Commonwealth Court remand did not ask the Board to consider the issue of whether public body required signatory was a to the construction of TIF contract. The court went on conclude the use funds, which, in turn use of involved the partially project. fund the construction were used While Court concluded that this Court the Commonwealth prong asked the Board to consider the “contract” never test, аnd, issue, accordingly, work” did address grant parties’ petition appeal we did for allowance of Thus, of this address this issue. we consider review issue addressing our the merits of properly before Court. Before decisions, factual the lower tribunals’ we first set forth the circumstances, basis, statutory TIF Act financ- ing arrangement in this case. *8 earlier, in TIF Act conjunction
As noted with the use of financing, taxing approved of a tax creation district, by adopt- and to agreed participate increment therein Thereafter, ing part resolutions to that effect. as of the implicated indeed 3. Because we conclude that Act is based upon financing, TIF Act we do not address the use of the Urban Housing Redevelopment Redevelopment Act and Assistance and/or Law. gross tax bоnds in a HRA issued increment project plan,4 $10,500,000. a than The bonds were amount of not less face, HRA, and, of on their indicated that obligation limited of, or pledge payment principal of the interest HRA does bonds, which, on, purchased all of these the bonds. 9(d) Act, period TIF mature over a pursuant to Section twenty years from the date issue. The not to exceed from the sale of the bonds were held trust under proceeds Bank, trustee, by and were disbursed PNC an indenture PNRT, pay portion a of the construction costs of the to by mortgage security a and project.5 The bonds were secured PNRT, Bank, agreement mortgagor, between as and PNC as building parking garage. mortgagee, on the office Act, payable TIF from Pursuant the bonds are deposited that have in an estab- positive tax increments6 been fund.7 The tax increment fund is a fund lished tax increment into are all tax increments and all revenues from which tax or and from *9 106
HRA)
represent
of
tax monies that
portion
that
the collected
earlier,
monies are then
the tax increment.9 As noted
these
bonds,
which
pay
proceeds
off
tax
the
of
used to
the
increment
project.
construction costs for
pay
were used to
the
Court,
concluding
use of
The
the
Commonwealth
Act,
implicates Wage
forego-
the
found the
financing
TIF
court noted
ing statutory
significant. Specifically,
scheme
the
Board,
remand,
had
on
to consid-
that this Court
directed
merely
er, among
things, “whether tax monies were
other
actually
by
collected
forgone or whether these monies were
”
State
Pennsylvania
entities
redistributed....
Council,
Prevailing
Trades
AFL-CIO v.
Bldg. & Constr.
Bd.,
(Pa.Cmwlth.2001)
(citing
767 A.2d
608
Wage Appeals
11).
National,
n.
In this
53. At no time do the coffers, by payments made PNRT enter any body lay claim to tax increment nor could attempt appropriate because a payments or monies imposed payments. trust is on the (cid:127) any expenditure TIF does involve by any public body, taxing bodies public funds since the time, disclaim, any merely period right for a which, project, but for TIF would increased revenues not exist. at
Board’s Final Decision and Order 15-16. Court, upon statutory relying The Commonwealth apparently concluding framework of the TIF Act and that the 6930.7(b), 7(b) TIF 9. Pursuant to Section of the municipality the finance officer for the which created the district any municipality which the finance officer for or school district shall, participates in a tax increment district on the next settlement law, pay issuing authority, provided date over to the out of all such collected, represents portion which been which taxes have issuing authority. tax increment allocable to the record, noted the support lacked findings Board’s regard: following in this actually increments
Here, collect taxing Bank, later, to PNC and, pay the tax increment from PNRT Thus, period for a fund. tax increment trustee *10 Then, literally, in treasuries. time, money public the exists public body” into funds of a “out of the money is the tax increment fund. the into pay money the tаxing bodies must fact that the
The character of the not alter the fund does tax increment the in deposited as taxes it has been collected money once Indeed, great difficulty we have public treasuries. the funds, private dollars as conceiving of the tax increment funds, in they public rest the public while rather than pay must taxing bodes only reason the coffers. The fund is into the tax increment tax increment dollars the they agreed to do so when taxing the bodies because district.17 In in the tax increment participate to resolved in the effect, taxing agreed participate when the bodies for district, pay tax increment dollars they allocated their project. TIF the 17 taxing might opted partici not to more of the bodies have One or 6930.5(a)(7).
pate in the tax increment district. 53 P.S. Council, AFL- Trades Bldg. State & Constr. Board, A.2d 608-9. Prevailing Wage Appeals CIO v. essentially argues position the taken appeal, On maintains that because the Board in its decision and the to TIF tax increment never have access taxing authorities no risk whatsoever to the because there is payments, because, for, alia, repayment of the bonds bodies inter district, pay TIF the increment but the creation exist, implicate TIF does would not ments part in or in funds of funds are not whole since the hand, argument, on the other public body. Appellee’s a Court by the Commonwealth mirrors the decision reached “public funds” and of the funds as regarding the nature maintains that the of such implicates use dollars Wage Act. Court, As did thе support Commonwealth we find scheme, statutory record, as well as the for the conclu- sion that money at issue constitutes funds for purposes of triggering Wage Act. record,
In reviewing testimony Disney, of David B. counsel to PNI on financial project, structure of the generally, relevant. He regarding statutory testified scheme set forth the TIF as specifically well as regarding financing arrangement here. On direct exami- nation, testified, part, he relevant follows: Actually,
A. under the TIF pays statute when PNRT its taxes, they [go] taxing will body they go and then over to PNC. There’s date set the statute when those payments have be made. There’s a trust created on bodies, taxing again, those monies so foregone have they go title interest to them. But they’re paid PNC, then over tо the trustee of the bonds. *11 account, fund, Then the monies are held in an in a bond they’re pay principal used to in interest. just understand,
Chairman Smith: So so I can money that goes then back to PNI pay off the bonds that it pur- chased? Right,
A. right. Okay. Chairman Smith: And out of all of that the just are loop being done, is a that’s they just —this happen segue to be a in loop the move because statutory provision. They have to be particu- there for this type financing. lar
A. Yes. they,
Chairman Smith: But money fact—this is all that’s just coming just a circle. I’m trying say And that way that’s—that that’s the that’s way working. it’s —but A. way That’s the Although the statutes are set. remem- ber the getting bodies are still existing their But in they rates. other words they get still that haven’t— during the term the life of the bonds. 1, 1998 at 84- Testimony, December hearing, Notes
Board as follows: cross, Disney testified further Mr. On that the to this scheme Now, respect with you testified Q. now, they that will you I’m agree, quoting taxing bodies base, forego will the tax they the tax only receive increase? A. Correct. increase Now, however on the incremental
Q. the taxes property paid by the property are indeed value of the owner; they not? are
A. Correct. they not? taxing body; are they’re paid to the
Q. And A. Correct.
Id. at 118-19. up by set as to how the scheme
Finally, Disney Mr. testified tax abatement. TIF Act differs from financing stat- tax increment get But we Q. before previously you’ve described is a statute ute there taxing body passed by that’s my questions response ar- particular in this voluntarily participate agreed who rangement? an or whatever.
A. is ordinance There why I used the broader style it. That’s Q. However we statute? term Right.
A. taxing body that ordinance Q. passing And in tax increment conditions of the agreeing to the statute; that correct? isn’t
A. Yes. tax; collecting that isn’t include And those conditions
Q. that correct? so, yes.
I A. believe contrast, with a tax example, for be in Q. That would be, paid? tax never abatement, [is] it not where the would lio
A. That’s correct.
Q. How does this scheme differ from a tax abatement?
A. In tax payment abatement there would not be a made any entity. to In this a payment scheme there is made to taxing impressed the bodies which is with a trust and a lien PNC, must be made favor of the the bond trustee. Attorney Shoop: Also tax paid the on the level the property value at that it’s the time declared— A. Correct.
Id. at 121-23. upon
Based the statutory foregoing scheme and the testimo- view, ny, in our paid the to taxing monies authorities as increments, turn, which, tax are to pay used off the bonds pаy are used to cost of construction are funds above, for purposes Wage of the Act. As pursuant noted Act, TIF taxing actually bodies collect the tax increment in question. dollars Although taxing only bodies retain paid property’s on the monies base and the tax increment dollars are over to the to trustee be used bonds, nevertheless, pay off the tax by as noted Court, Commonwealth for a time these monies do rest in the Significantly, coffers.10 statutory financing at issue abatement, here is not a tax taxing authority agrees where the forego receiving property on a property taxes certain for a contrary, certain To money time. the tax is actually by bodies, and, turn, taxing collected these dollars are pay off used thе tax increment bonds that pay are used to the cost of on project. construction
Although work, i.e., we conclude that the the cost of construction, at “paid issue here was for in or part whole funds,” with public purposes inquiry our Moreover, Court, as was noted the Commonwealth one or more taxing might opted participate have not to in the tax case, 6930.5(a)(7). increment district. 53 P.S. In that body would be entitle the tax property on the increased value.
Ill portion the Board also that this does end since concluded project of the failed to meet the “work must be under con- Wage of prong Specifically, tract” test. as noted previously, public body Board concluded that because a issue, party was not a to thе construction contracts at “public pursuant did not meet the definition of work” conclusion, Wage Act.11 In reaching the Board 2(5) Act, language Wage examined the of Section of the work, defining public although and concluded that the Act provides that the work in contract” question be done “under really that what term contract means is work done “under public body.” disagree. with a We noted, 2(5),
As plainly Section states that the of definition work, applies meeting statutory work otherwise requirements, ambigui- done “under contract.” As no there is ty in meaning provision, statutory interpretation, of the as 1921(b) Board, conducted was not warranted. Section 1921(b), Statutory Act, of the Construction 1 Pa.C.S. man- dates that “when the words of a statute are clear free ambiguity, from аll of it is not disregarded letter be under This, however, pretext pursuing spirit.” of its is exactly what Board has done.
Because we conclude that the work at issue was here done contract,” “under statutory otherwise meets the definition purposes Act, work” for Wage pursuant of the Section 165-5 of the than prevailing “[n]ot less ... wages minimum shall employed be to all workmen on Accordingly, work.” [such] the order the Common- wealth Court is affirmed.
Former Chief Justice FLAHERTY participate did not the decision this matter.
Justice a dissenting opinion SAYLOR files in which Justice joins. CASTILLE
11. The Commonwealth Court did not address this determination decision, concluding Board in its that our initial remand did not seek Court, however, question. granted the Board’s answer to this This appeal allowance of to address this issue. dissenting. SAYLOR
Justice whether, can be framed appeal in this The central issue encourage financing mechanism creating an indirect of urban communi- and revitalization development economic to convert otherwise ties, Assembly intended the General purposes into ones development projects private *14 agencies The administrative wage precepts. prevailing statutory of both salient implementation with the charged not intend to Legislature that did concluded the schemes have financing by implicating of tax increment temper the benefits imposed in connection obligations are prevailing wage interpre- agencies’ that the works. I believe public with Since case, is a tation, Board in this by Prevailing Wage followed assess- comports comprehensive with a one that reasonable enactments, respectfully I must dissent. ment of the relevant Act, 43 P.S. Prevailing Wage requirement of the The core 165-1-165-17, “public on employed that all workers §§ pursu wage as calculated prevailing works” must receive 165-5; salutary aim is enactment, § 43 ant to see P.S. from public projects on sub protect employed workers to Nat’l compensation. generally See standard Pa., Labor Dep’t. Ins. v. Commonwealth Mut. Cas. Co. of of Bd., 385, 394, Pa. 715 Indus., 552 Prevailing Wage Appeal and Commonwealth, (1998). De Appellant, 1072 As A.2d Law Industry, Bureau of Labor Com of Labor and partment (the “Bureau”), emphasizes, the substan particular in pliance directed to Prevailing Wage are requirements of the tive еntities,1 support lending some private and not governmental See, (addressing every "specifications § for e.g., 43 P.S. 165-3 § body party”); P.S. 165-4 any "public is a 43 to which contract” making every public body proposes which (describing "duty of work”); § 165-6 any project public 43 P.S. of of a contract right inspect body awarding to (granting the contract” “the subcontractors); 165-10(a), (b) § 43 P.S. the records of contractors regard to and their officers with (placing duties on bodies certain Act); Prevailing Wage compliance with the requiring certifications of 165-11(a), (c) body having public (referring "any public § to 43 P.S. the “fiscal imposing certain notification duties on performed” and work (empow- § "any public body”); 43 P.S. 165-12 or financial officer" body” Industry "public to ering Secretary to direct of Labor
113 simply Aрpellants’ to contention the enactment was intended, general application, govern private to as matter development projects.
Nevertheless, alignment majority’s analysis, with the it is consider, also essential under the definition ascribed (with work,” Legislature to the term which includes limitation) construction contract and for in “done under part public body,” or in out the funds of a whole P.S. 165-2(5), financing whether tax increment and of itself funding purposes entails for construction for Prevailing Wage Act. Financing §§ Increment 6930.1-
The Tax 6930.13, permits private developer, cooperation with the bodies, taxing apply involved increases real estate tax (tax increments) qualified project value of a site toward devel- costs, 6930.5, 6930.6, opment By §§ see 53 P.S. 6930.7. con- district, senting participate a tax increment agree temporarily forego revenue increments improvements proper- that would otherwise result from *15 6930.9(d). 6930.7, ty. §§ by See 53 P.S. The method which applied the tax increments are to construction costs is de- testimony financing “loop.” govern- in the as a A local scribed bonds, authority may proceeds ment issue tax the costs, pay development of which can used to see be 53 P.S. 6930.9(2); case, present § in the this occurred via a loan to the (a project subsidiary). owner progresses, As work project taxing owner must tender to the bodies both the base (the amount), predevelopment real estate as well as the resulting improvements. tax increment from taxing The enti- required ties retаin the base tax as revenues but are furnish issuing authority, allocate and the increments to the 6930.7, § see 53 which can P.S. monies be disbursed for bonds, payment of the debt service see 53 6930.9(h), case, thereby completing loop. present In (albeit essentially through this is what occurred the involve- trustees). subsidiary of the PNI ment various any person intentionally terminate the contract of or firm found to have Act). Prevailing Wage violated the that are features of this scheme Appellants point to several First, direct public appropriation. from markedly different accomplished by project development of costs is payment (as here), that, that the such to the extent owner occurred tax increments agreement forego potential tаxing bodies’ occurs in the public financing, as can be viewed statutorily role in taxing prescribed bodies’ background. The calculation, collection, retention, and dis- temporary of terms conditioning pre- In is ministerial.2 bursement of increments upon payment of construction vailing wage obligations funds, Appellants argue, persuasively, costs from contemplated more direct and substan- Assembly the General body. Significantly, tial involvement of pre- structured in an effort to avoid arrangements were not public project, an vailing wage obligations on otherwise cf. Ass’n, Inc. v. Nursing Department Home Lycoming County 280, 289-91, 627 A.2d 156 Pa.Cmwlth. Industry, Labor of a (1993), consequence as a of utilization 243-44 but facilitating pri- statutorily approved and endorsed method projects. develоpment vate and revitalization Further, only is the Appellants emphasize, as also indirect, also, funds is but the source of the aspect funding noted, tax incre- regards, and conditional. In these unique from revenues separately general are treated ment revenues on tax specifically in that allocated to debt service they are Prevailing Wage Appeals 2. As framed Board:' taxing specifically bodies are not entitled The TIF statute states that Rather, taxing the TIF statute. to funds collected under only period the established base tax for the are entitled to receive The TIF Act establishes that the district existence. project only pledge payment must TIF funds to the authorities paid by property The TIF funds payment or of the TIF bonds. Trust, (PNRT)[, Realty PNI subsid- owner National PNRT, directly paid by from .the iary,] when taxes are are forwarded *16 body taxing to the fund trustee.... TIF funds, taxing only ... never receive title to the TIF The bodies Thus, retaining amounts. the TIF funds used for the base tax project actually public financing the never enter coffers construction taxing pledged elsewhere. authorities have these funds since Pennsylvania Bldg. Pennsylvania Co. v. State Nat’l Mut. Cas. Ins. Council, AFL-CIO, PWAB-1G-1998, (April at 24 Trades Constr. 2000) (citations omitted).
115 6930.7(a); siipra § 53 P.S. financing bonds. See expendi- present from a Moreover, use is distinct their 2. note likely monies, would since the increments public ture of temporarily taxing bodies of the agreement for the but exist 6930.7(a), § See entitlement. forego prospective their base reve- (b). and retain their taxing receive entities The for the real responsible owner remains nues, project since redevelop- prior property for the assessed taxes estate truly may be monies therefore id.3 Tax increment See ment. See, in this case. funds, out as the record bears sole-purpose PWAB-1G-1998, Ins., Mut. Nat’l Cas. Pennsylvania e.g., “[wjithout ¶ financing, PNI tax increment (finding that FOF have relocated city in the and would remained would not have location”). from Additionally, apparent as is to a suburban Prevailing Wage Appeals opinion of the TIF record, imposes transaction Board, testimony of and the - See, body. any or other taxing entities no risk to the 6930.9(h) alia, that, “each bond (providing inter e.g., 53 P.S. that it is necessary to show contain recitals as are or note shall an indebtedness that it dоes not constitute only payable so charge against a or school district or any municipality thereof’).4 general taxing power taxing forego opportunity do be noted that It should developed by were to be event that the district increased revenues financing. The likelihood of of tax increment without the benefit others however, obviously part development, calculus such alternative determining whether or not to make in which the bodies must Moreover, factor, cooperate of the incentive. affordance view, designating my speculative to serve as the basis for is too public work. Prevailing Wage Appeals findings is reflected in the
4. This also Board: body guaranteed at risk should a default is otherwise 37. No occur; holder of the party at risk is PNI as on the bonds the sole bonds. body authority guaranteed bonds. The TIF or 38. No authority] government from prevents local [the statute financing. guaranteeing or otherwise such pledging its own assets point being [its the risk of taxes lowered 39. PNI bears to cover debt subsidiary’s] payments are insufficient tax increment the bonds. service on ¶¶ (cita Ins., PWAB-1G-1998, FOF 37-39 Mut. Cas. Nat'l omitted). tions *17 116 substantial funding general
The differences between via public appropriations and financing persuade tax increment that development accomplished by me of means the latter regarded having should not be been for from the funds of public body and therefore as a purposes work” for Rather, of prevailing wage enactment. in of light conditional, unique, funding directed character of the sаlutary, involved, the separate, purposes incentive-based I that, Assembly believe had the General to implicate intended prevailing wage obligations making available, it expressly provided.5 would have so Accord Foun dation Fair Contracting v. New Jersey Dep’t. State of Div., Wage Compliance 437, and Hour 316 N. J.Super. Labor— 619, (App.Div.1998) 720 A.2d 625 (explaining, light legis of concerning silence prevailing wage obligations lative connected legislation with certain remedial aimed at economic revitaliza tion: Legislature apparently “The has concluded that goals expressed in Fair Housing Act and Long Term Law, Exemption is, Tax provide to bring incentives private developers partnership government into with the housing state; create аffordable in communities around the improve areas; conditions certain run-down urban and to maintain strict projects, cost controls over such prece take Act.”). goals Prevailing dence over the Wage Finally, it my bears on interpretation assessment that this is in alignment with judgment the reasonable administrative Bureau, charged which is with enforcing the Prevailing Department and the of Community and Economic Development, charged which is with carrying out of the See, Tax Financing Increment Act.6 e.g., 34 Pa.Code 9.101(a). 1921(c)(8) § 1 generally § See Pa.C.S. (identifying interpretations administrative as a tool in ascertaining viable regard, In this in other Assembly instances in which the General has enlarge prevailing wage coverage, by undertaken to it has done so See, express language. A(10)(iii) e.g., 24 (requiring 17-1715 boards trustees and contractors charter schools to abide Act). Prevailing Wage agencies’ positions 6. The are reflected in briefs filed this Court and in the Commonwealth Court.
117
Higher
intent);
v.
Cherry
accord
legislative
186, 188,
A.2d
464
Pa.
Agency,
Educ. Assistance
charged with a stat
(1994) (“An
agency
an
interpretation by
weight and will be
great
is accorded
implementation
ute’s
erroneous”).
clearly
if
a construction
only
such
overturned
dissenting opinion.
joins this
Justice CASTILLE
*18
Supreme Court 15, May Argued 2002. 20, Sept. 2002.
Decided Reargument Nov. Denied the sale of increment finance bonds notes money pay project which is disbursed to costs for the district satisfy or to claims of holders of tax increment bonds or notes.8 PNRT, case, buildings, In project as owner of the was paying property for on responsible the real estate taxes Thus, taxing responsible paying bodies. PNRT was taxing property bodies both the base real estate tax on the turn, In property. and the tax increment on the (here required pay issuing authority bodies were over to the district, municipality creating approves project 4. A a tax increment plan conjunction pursuant therewith to section 5 of the TIF § 6930.5. 6930.9(a) specifies § “[playment may 5. 53 P.S. costs be funds,” [pjayment municipalities general made ... out of a or “payment proceeds of tax out the sale bonds or notes.” revenues, Generally, this term is defined “the incremental base, resulting with reference to the tax from determined incremental property increase the increase values or from the commercial activity project.” as a result of 6930.9(b)(1) 9(h). §§ 7. 53 P.S. 8. 53 P.S. 6930.3.