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Lehigh Gorge Railroad Closing

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Posted by daveklepper on Monday, November 4, 2019 12:25 AM

Exactly

And Lehigh Gorge provides awe and enjoyment, defined by the Town as "amusement," to viewers, who may arrive and leave by rail or hiking or private car or taxi or motorcycle or bicycle or bus or kiyak or whatever; and the railroad provides transportation to and from the Gorge for many, but not all, of the viewers.

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Posted by tree68 on Monday, November 4, 2019 12:15 AM

daveklepper
What would the Federal Supreme Court say if some towns got together and decided that all would slap an "Amusement Tax" on  Brightline?   And the Florida Supreme Court?

Brightline is a transportation system.  Using your logic, Greyhound, Trailways, Uber, Lyft, and Checker Cab should all be paying an amusement tax.  After all, people use them to reach places of "amusement."

 

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Posted by daveklepper on Sunday, November 3, 2019 10:23 PM

But the Florida PUC did need to approve, and Brightline does operate under a host of other Federal regulations.

What would the Federal Supreme Court say if some towns got together and decided that all would slap an "Amusement Tax" on  Brightline?   And the Florida Supreme Court?

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Posted by MidlandMike on Sunday, November 3, 2019 9:47 PM

daveklepper

Also, as a  common carrier, the railroad must meet numerous Federal regulations that an amusement in the Town does not.  On that basis, the Federal Surpreme Court could decide to take the case.  This is not a case of Federal Law overturning state or local law, but rather the mis-application of a local law to something other than what the letter of the law and its original intent apply.

This is a different case than a strictly tourist railroad that does not provide freight and/or passenger service as part of the national network and connected to the national network.   Such operations  are exempt from most of the Federal juristiction.  This operation is not exempt in any respect.

 

FRA regulates safety.  STB is not involved.

"Brightline/All Aboard Florida successfully argued that the STB did not need to provide approval for its services, as the system was not an interstate one."

http://www.oppaga.state.fl.us/MonitorDocs/Reports/pdf/18-RAILrpt.pdf

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Posted by MidlandMike on Sunday, November 3, 2019 9:14 PM

The statute is the state law that authorizes local amusement taxes.  The municiplity(s) could pass an ordinance.  It's what they do.

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Posted by Overmod on Sunday, November 3, 2019 6:54 AM

MidlandMike
I doubt that there is an acre of land in Pa. that doesn't come under some local taxing authority.

This may be so ... but the only relevant discussion is which of the putative 'local taxing authorities' actually have statutes.  If you can show one such statute for the land, say, that Mr. Klepper was talking about RBMN developing north of the Jim Thorpe line, I would be delighted to see it.  (But I won't exactly be holding my breath for it.)

As I noted, there might be a reason for an area without a current statute to develop one, but the cost to establish and then enforce it would be at least substantial.  It again would be up to you to tell me why you think that would happen.

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Posted by daveklepper on Saturday, November 2, 2019 11:40 PM

Also, as a  common carrier, the railroad must meet numerous Federal regulations that an amusement in the Town does not.  On that basis, the Federal Surpreme Court could decide to take the case.  This is not a case of Federal Law overturning state or local law, but rather the mis-application of a local law to something other than what the letter of the law and its original intent apply.

This is a different case than a strictly tourist railroad that does not provide freight and/or passenger service as part of the national network and connected to the national network.   Such operations  are exempt from most of the Federal juristiction.  This operation is not exempt in any respect.

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Posted by MidlandMike on Saturday, November 2, 2019 10:26 PM

Overmod
Remember it's been brought up that there are few incorporated municipalities with formal taxing authority in the area the train ran; Old Penn Haven being the largest apparent such community at least from RBMN's published map which is why I used it as the specific 'test case' for published code. 

Penn Haven may have been some unincorporated place name, however, from everything I read, townships are incorporated municipalities under Pennsylvania law.  I doubt that there is an acre of land in Pa. that doesn't come under some local taxing authority.

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Posted by daveklepper on Friday, November 1, 2019 1:36 AM

As a  common carrier, the railroad may have been obligated to file all its charges, all its prices for all services, either with the Federal STB for anything interstate or international, and with the Pennsylvania PSC for all intrastate business of any kind that involves transportation.  Whether or not the State PSC  (or PUC) commented or not, the fares are probably on file.  This is not true of the Town's amusements, and on that basis alone, the State Supreme Court can rule that the fares charged are for transportation, and not for amusement. 

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Posted by Overmod on Thursday, October 31, 2019 10:32 PM

MidlandMike
Regarding moving the tourist train operation out of Jim Thorpe; any town or township he moves to should have the same taxing authority.

The specific case in point involved not moving the operation 'to' another incorporated jurisdiction, but just outside the published city limits (or far enough away that the 'free' bus could service it cost-effectively but keep Jim Thorpe from pushing its borough limits there).  That automatically eliminates Jim Thorpe's statutory ability to charge any amusement tax whatsoever under the plain-language interpretation of its statute or the law that enabled it.

You are likely correct that moving to any other 'suitably large tourist-attracting town' -- assuming that town were incorporated and could pass an amusement statute -- would re-involve LG&N's potential liability for the tax.  But I see no such convenient option for the runs to the Gorge.

I do think it will be interesting to see where Andy chooses to use the LG&N stock in the event he does terminate the LG&N.  I suspect as 'a sadder man but wiser now' the service would either operate point-topoint or from a location with fewer potential tax liabilities... or citizens wanting some cheap additional bucks.

Additionally, a rail line has some unique considerations.  Most "amusements" are located in a single spot.  A rail line may travel thru several local jurisdictions, and may be subject to those taxes in each of them.

Remember it's been brought up that there are few incorporated municipalities with formal taxing authority in the area the train ran; Old Penn Haven being the largest apparent such community at least from RBMN's published map which is why I used it as the specific 'test case' for published code.  Of course it's possible that some tiny community of interest could file for incorporation, develop a statute pursuant to PL 1257, and try to claim some pro rata share of applicable tax -- we covered a couple of prospective collected-tax-allocation methodologies on RyPN, and several of these don't necessarily involve 'payment of tax at point of admission'.  But I suspect the 'windfall' extent of tax collected would be far insufficient to cover the actual cost of such incorporation, and the additional revenue that would be required to sustain incorporated status.  I'm not familiar with rural and semi-rural unincorporated towns in Pennsylvania, but have intensive and sometimes participatory interest further west and south.

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Posted by Overmod on Thursday, October 31, 2019 10:31 PM

MidlandMike
Regarding moving the tourist train operation out of Jim Thorpe; any town or township he moves to should have the same taxing authority.

The specific case in point involved not moving the operation 'to' another incorporated jurisdiction, but just outside the published city limits (or far enough away that the 'free' bus could service it cost-effectively but keep Jim Thorpe from pushing its borough limits there).  That automatically eliminates Jim Thorpe's statutory ability to charge any amusement tax whatsoever under the plain-language interpretation of its statute or the law that enabled it.

You are likely correct that moving to any other 'suitably large tourist-attracting town' -- assuming that town were incorporated and could pass an amusement statute -- would re-involve LG&N's potential liability for the tax.  But I see no such convenient option for the runs to the Gorge.

I do think it will be interesting to see where Andy chooses to use the LG&N stock in the event he does terminate the LG&N.  I suspect as 'a sadder man but wiser now' the service would either operate point-topoint or from a location with fewer potential tax liabilities... or citizens wanting some cheap additional bucks.

Additionally, a rail line has some unique considerations.  Most "amusements" are located in a single spot.  A rail line may travel thru several local jurisdictions, and may be subject to those taxes in each of them.

Remember it's been brought up that there are few incorporated municipalities with formal taxing authority in the area the train ran; Old Penn Haven being the largest apparent such community at least from RBMN's published map which is why I used it as the specific 'test case' for published code.  Of course it's possible that some tiny community of interest could file for incorporation, develop a statute pursuant to PL 1257, and try to claim some pro rata share of applicable tax -- we covered a couple of prospective collected-tax-allocation methodologies on RyPN.  But I suspect the 'windfall' extent of tax collected would be far insufficient to cover the actual cost of such incorporation, and the additional revenue that would be required to sustain incorporated status.  I'm not familiar with rural and semi-rural unincorporated towns in Pennsylvania, but have intensive and sometimes participatory interest further west and south.

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Posted by charlie hebdo on Thursday, October 31, 2019 9:48 PM

+1

Since the tourist line claims to be providing the service at cost,  it seems reasonable for them to pass the tax on to customers. 

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Posted by MidlandMike on Thursday, October 31, 2019 9:43 PM

Regarding moving the tourist train operation out of Jim Thorpe; any town or township he moves to should have the same taxing authority.  Additionally, a rail line has some unique considerations.  Most "amusements" are located in a single spot.  A rail line may travel thru several local jurisdictions, and may be subject to those taxes in each of them.   All of them legitimatly provide town services, such as police (eg, investigation of Western Maryland Scenic brass thefts), fire (eg., Durango & Silverton forest fire), EMT (eg., I have been on trains where people had to be medically evacuated).

I also want to address what some one said to the effect that other taxes like property taxes should take care of any local services provided to tourist.  I live in rural northern Michigan, and this month a local township EMT service had to be disbanded because they lost their required paid professional (the rest were volunteers), apparently because he left for a good paying job.  Townships are also having problems with trying to retain volunteer firemen and pay the thousands of dollars to train and equip them.  Some have referred to it as a looming crises.  I have no problem with local governments trying to get reimbursement for services provided for mass tourism.  I also want to see tourist trains thrive, but they should not expect a free ride.

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Posted by MidlandMike on Thursday, October 31, 2019 9:07 PM

Overmod
I thought it would be almost self-evident that only Pennsylvania law, and not any other state's law, would apply when arguing about the terms or application of the law in Pennsylvania. 

I have been around legal matters enough to know what you were saying in the original post.  It was more about what you didn't say.

 

Overmod
 However, just as other state Attorneys General watch what happens in other states and then think about applying that in their own (through new or amended legislation)...

This fills in what you didn't say, and I don't have any more issue with any contradiction.

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Posted by Paul_D_North_Jr on Thursday, October 31, 2019 8:18 PM

Maybe 20 - 30 years ago I believe there were several boroughs in Pennsylvania that annexed land from adjoining townships.  My understanding is that the state statutes were changed to prevent - or at least make more difficult, such as by requiring an affirmative vote from the township - such land grabs.

- PDN.  

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Posted by Overmod on Thursday, October 31, 2019 10:45 AM

daveklepper
The railroad has land to develop near Jim Thorpe, could build facilities on that land that could compete and even outstrip Jim Thorpe as a tourist center, and run trains between that location and the Gorge without going through Jim Thorpe, if they wish to do so.

If Andy Muller wants to set up for such a development, or find partners to do so, he will; you may want to send him a confidential letter (NOT e-mail) including some of the specific items involved.  I'd be pretty sure, though, that the opportunity cost of such a project would be ridiculously high considering the other places he could put the financing that would be involved.

The other very significant risk is that, if he were to build out a PUD, Jim Thorpe Borough may move to expand its town limits to include the development, or formally annex it.  We had a number of instances of this in the Memphis area, including both the City of Memphis 'grabbing' high-end subdivisions and shopping-mecca areas and the City of Oakland getting several miles of a U.S.Highway and implementing their trademark speed traps on it.  The more effective the project were to be at appealing to tourists, the more it would also appeal to local officials, and the taxpayers behind them.

The fact remains that they earn their income from the freight railroad business, and they could also exit the passenger train business.

 

[/quote]

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Posted by daveklepper on Thursday, October 31, 2019 10:24 AM

The railroad has land to develop near Jim Thorp, could build facilities on that land that could compete and even outstrip Jim Thorp as a tourist center, and run trains between that location and the Gorge without going through Jim Thorp, if they wishes to do so.

The fact remains that they earn their income from the freight railroad business, and they could also exit the passenger train business.

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Posted by Overmod on Thursday, October 31, 2019 5:02 AM

daveklepper
But is not the logical first line of defense of the railroad's position something that could go to the Federal Supreme Court?

I think it's unlikely that there is some Federal principle that would allow 'appeal' over a decision on state law made in state courts on this issue.  In the past, where that has happened, there is some explicit Congressional legislation, itself passed on constitutionality, that overrides state precedent.  One example (not entirely comparable, but useful as a model) is the passage of civil-rights legislation in the 1960s intended to eliminate things like the poll tax and the 'separate-but-equal' laws that so proliferated after Plessey v. Ferguson.  I don't think it likely that any Federal law would override provisions of Pennsylvania PL1257, and in the absence of something comparably specific I doubt a Federal interest -- say, a supposed violation of some kind of civil right -- could be cobbled up sufficient for the Supreme Court to grant cert.  

That the enjoyment (whether or not amusement) is at the Gorge, and that the railroad only provides transportation to and from, and thus the statutes are not applicable because they apply only to the enjoyment, which is outside the Town?

The statutory language has been carefully engineered, in Jim Thorpe's "new" amusement-tax statute (post-2010) to try to make the whole of the 'entertainment' predicated on the fact of admission.  A somewhat contrived example would be a circus largely provided on land outside the Borough, but with ticket and gate access solely within it.  Since the only 'legal' way to partake of the entertainment is to do so within the Borough, and the town has the right under PL 1257 to tax 'at the point of entry' the town might argue that the fact of admission necessarily precedes any subsequent 'amusement'.

I don't think it's likely you can "prove" either way that none of the 'amusement' involved in a scenic railroad like LG&N occurs in its tourist-trap origin and destination.  Something no one else seems to have mentioned is that an operation of this kind beginning and ending, say, somewhere out in the Gorge itself would likely suffer the same problems as, say, the Shay operations out of Cass, or the trolley museum in Rockhill: very large numbers of 'potential' tourists wouldn't think the trip just for the ride would be worth enough to go to the boonies.  Jim Thorpe as a 'strategic' destination with multiple attractions ... among which is attractive surrounding scenery ... certainly had considerable value to LG&N's operations, and I for one would not be able with a straight face to claim none of those were not important at all.
 
As I noted before, however, I think there will be ways to allocate some pro rata share of the 'value' of something like these trips between what is provided 'within the Borough' (for which, I think, the end result of upcoming legislation will be to uphold the applicability of 10% tax collected at point of sale or admission) and outside its nominal limits.  That all the amusement-tax statutes in Pennsylvania that I have read contain specific language that they apply only 'in' or 'within' the municipalities passing them is, I think, an indication that the enabling law includes or requires that language, and hence a court finding, the inevitable appeals, and cert by the Pennsylvania Supreme Court will be required to determine how this matter is considered.
 
I'd also note that there's considerable risk that the question might be mooted if LG&N does, in fact, permanently leave Jim Thorpe for the duration of the period an amusement tax would be applied to it -- in any amount.  That appears to be how the situation stands as of the end of October ... I of course having no good information that would indicate the contrary.  We'd still have some of the same logic applying to the important question of applicability of the 'back tax' that the service provider is trying to dun Andy for, but it's entirely possible for courts to say that LG&N 'sat on its rights' if the Borough did, in fact, note in prior years that the tax was applicable to the operation, and therefore owes whether or not "justified".
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Posted by daveklepper on Wednesday, October 30, 2019 11:54 PM

But is not the logical first line of defense of the railroad's position something that could go to the Federal Supreme Court?

That the enjoyment (whether or not amusement) is at the Gorge, and that the railroad only provides transportation to and from, and thus the statutes are not applicable because they apply only to the enjoyment, which is outside the Town?

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Posted by Overmod on Wednesday, October 30, 2019 10:16 PM

MidlandMike
 
Overmod
Not sure why this wasn't clear.

 However, just as other state Attorneys General watch what happens in other states and then think about applying that in their own (through new or amended legislation) other states that have municipalities with tourist railroads may be looking with interest to see how they, too, might best be able to impose a valid 'amusement tax' law which local municipalities might use as enabling legislation for statutes like Jim Thorpe's section VI that would be wholly enforceable.

Note that, technically, that is true whether or not the course of this matter actually changes anything statutorily, in Pennsylvania.  Pennsylvania law wouldn't bind any other state, and Pennsylvania precedent would be useful only as a model example.

Knowing that, I didn't think what I said actually contradicted itself, but that's a language problem on my part, not a comprehension problem on anyone else's.

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Posted by MidlandMike on Wednesday, October 30, 2019 9:57 PM

Overmod
Not sure why this wasn't clear.

What wasn't clear was why your two referenced remarks contradicted each other. 

 

Overmod
That doesn't mean that other states and statutes won't be considered ...

That response helps to clear up the contradiction.

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Posted by Paul_D_North_Jr on Wednesday, October 30, 2019 9:23 PM

Albany Township, Berks County, PA contains the unincorporated community of Kempton, which is the home of the Wanamaker, Kempton & Southern tourist railroad: https://www.kemptontrain.com/ 

Also part of world-renowned Hawk Mountain Sanctuary for raptor conservation is in Albany Twp.: https://www.hawkmountain.org/ 

I have no knowledge which - if either - collects an amusement tax.  But the Township has the paperwork for it:

http://www.co.berks.pa.us/Muni/Albany/Pages/PublicInformationRequestForm.aspx 

- PDN.

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Posted by Overmod on Wednesday, October 30, 2019 7:35 AM

CSSHEGEWISCH
I doubt that the Supreme Court would even consider such a case.  Definition of terms in a statute is viewed as a legislative function and outside the purview of the court.

You're killing me.  Over 200 years of constitutional interpretation says different.  Much of the timeless topic of 'judicial activism' is concerned precisely with the interpretation and application of statutory 'language' under the Constitution.

However, here the Supreme Court of the United States isn't what he'd be talking about, it would be the Supreme Court of Pennsylvania.]  And that Court would only be reached on appeal (relevant rules here) and even then could refuse to grant certiorari.

Personally I see no applicability of Federal law (which is a separate court system) as there's no impingement on railroad operations per se. being imposed by the tax, but I'd certainly listen to arguments to the contrary.

It is also true that Jim Thorpe Borough has the right to review their statute and, as in Albany, PA, put in a special definition concerning railroads.  This would likely have to include the specific language on exception in Albany's statute, of course, and I expect the precise interpretation of the subject to be covered in the initial court case concerning the 'tax bill due', at least if the lawyers representing RBMN are on their toes ... and can't prevail on other grounds first.

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Posted by CSSHEGEWISCH on Wednesday, October 30, 2019 7:04 AM

I doubt that the Supreme Court would even consider such a case.  Definition of terms in a statute is viewed as a legislative function and outside the purview of the court.

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Posted by daveklepper on Wednesday, October 30, 2019 3:54 AM

My question was poorly stated.  I was really referring to the previous post, and referring only to Chicago departure and return railfan trips.  But my mistake did produce a useful and interesting and possibly valuable discussion, and I am glad to have all the information produced.

I wonder if the Supreme Court would confirm local courts and legislation that defines enjoyment and entertainment and amusement as identical services to the public.  A lot of you would answer "of course."  But I still wonder.

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Posted by Overmod on Wednesday, October 30, 2019 12:02 AM

MidlandMike
Why are legal proceedings in other states irrelevant to Pensylvania, but Pensylvania's legal proceedings are relevant to other states?

Because anything taking place regarding a Pennsylvania law incorporated into borough statutes in Pennsylvania will be entirely adjudicated in Pennsylvania.

That doesn't mean that other states and statutes won't be considered ... only that they don't apply in Pennsylvania.  And for them to do so, Pennsylvania would have to enact them.  Law in any other state is not binding there.

Should Pennsylvania decide that tourist railroads are, or are not, subject to amusement tax, other states interested in additional revenue may choose to enact or amend their own statutes accordingly.  But they would only be using the Pennsylvania law as a guide; they too would be enacting or amending their own applicable law.

Not sure why this wasn't clear.

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Posted by MidlandMike on Tuesday, October 29, 2019 10:24 PM

daveklepper
I think once the Surface Transportation Board gets involved, the Town's game will be over, because the Town is clearly labeling a transportatoin service a common-carrier railroad is providing as an "amusement."

The Colorado case previously referenced shows that a state can authorize a tourist type tax on tourist lines even though they may be common carriers.  STB does not involve themselves in tourist operations.  I don't believe they are even involved in Brightline, which is an intrastate regular passenger operation.

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Posted by MidlandMike on Tuesday, October 29, 2019 10:03 PM

Overmod
Anything in other states is irrelevant to a legal proceeding in the state of Pennsylvania.   ... Where I think the 'weasel words' most interesting to see entering precedent will be ... and I do think precedent of potentially multi-state consequence may follow if this gets litigated ...

Why are legal proceedings in other states irrelevant to Pensylvania, but Pensylvania's legal proceedings are relevant to other states?

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Posted by MidlandMike on Tuesday, October 29, 2019 9:55 PM

daveklepper
Amusement connotes a lack of seriousness, a seance of lightness, and legal terms should have some relevevance to reality. I'll stay with my English,  thanks.

Legal terms are there for consistancy, so all cases can be treated equally.  Substituting your own preferred meanings will not win any cases.

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Posted by rdamon on Tuesday, October 29, 2019 7:22 PM

Those also may have been run under some 403b or other non-profit org that bypassed taxation 

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