Delaware County Solid Waste Auth. v. Berks County Bd. of Assessment Appeals

Opinion

 [*83]   [**529]  OPINION OF THE COURT

MR. JUSTICE MONTEMURO

The issues presented for our review concern the extent to which property owned by a municipal authority and used as a landfill is either immune or exempt from taxation. The undisputed facts are as follows: The Delaware County Solid Waste Authority ("Authority") is a municipal authority created pursuant to the Municipal Authorities Act of 1945, Act of May 2, 1945, P.L. 382, 53 P.S. § 301, et seq. The Authority owns and operates the Colebrookdale Landfill ("Landfill") which is located in Berks County and is part of the Boyertown Area School District. ¹ On January 29, 1985, the Authority entered into a stock purchase agreement ("Agreement")  [***2]  with R.R.M. Corporation ("R.R.M.") for the acquisition of all of R.R.M. outstanding stock. Settlement on the Agreement occurred on March 26, 1985.

Prior to this Agreement, R.R.M. ran Landfill as a private concern with Delaware County as one of its major users. Pursuant to the Agreement, the land owned by R.R.M was transferred to the  [**530]  Authority, and members of the Authority became the officers of R.R.M. The Landfill continued to be operated through the corporate vehicle of R.R.M. from the March 26, 1985 settlement, until April 26, 1986 when a Department of Environmental Resources ("DER") permit to run the operation could be transferred to the Authority.

The structure of the Agreement provided a payment of $ 17,490,000.00 to R.R.M. at closing. An additional $ 18,500,000.00 was deposited in an escrow account to be paid to stockholders of R.R.M. upon, inter alia, the approval by DER  [*84]  of a proposed expansion of the Landfill. ² When the Authority acquired R.R.M., the [***3]  Landfill property consisted of approximately 320 acres, of which 60 acres was actually used for rubbish disposal. Through various purchases and condemnations, the Authority acquired an additional 224 acres of land to bring the total area of the Landfill to approximately 544 acres. Pursuant to DER regulation, a landfill disposal area must be surrounded by a buffer zone. Presently, 296 of the 544 acres of the Landfill are not essential to either the disposal area or as part of the required buffer zone. ³

During the period of the Agreement, the principal stockholder undertook to use his best efforts to obtain the necessary authorizations for the additional storage capacity. In the event [***4]  that any of the land obtained could not be used by the Authority as either a disposal area or as a buffer zone, former stockholders of R.R.M. were given an option to repurchase this land at fair market value.

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