Senate Approves Brubaker's Purely Public Charity Bill
Clarifying the Authority & Criteria for Charitable Institutions
HARRISBURG – Legislation authored by Senator Mike Brubaker (R-36) that would
give the General Assembly the authority to determine what constitutes a purely
public charity received approval today by the Senate and will now make its way
to the House of Representatives.
Senate Bill 4, also cosponsored by Senate President Pro Tempore Joe Scarnati
(R-25), would amend the Pennsylvania Constitution to clarify that the
Legislature has the exclusive role in determining what constitutes institutions
of purely public charity. The bill is in response to a 2012 Pennsylvania
Supreme Court case (Mesivtah v. Pike County Board of Assessment Appeals)
which determined a charitable organization must first satisfy a set of criteria
outlined in the court's opinion in order to qualify for tax exempt status. In
doing so, the court marginalized a separate test for tax exempt status
established by the General Assembly under Act 55 of 1997.
"The Supreme Court ruling disregarded the comprehensive work done by the General
Assembly through Act 55, which was the culmination of years of work including
public hearings throughout the Commonwealth and input from all appropriate and
interested parties in the creation of the law," said Brubaker. "The lack of a
uniform statewide standard has created confusion at the local level due to
different interpretations by county courts. This confusion and litigation costs
surrounding the current situation benefits no one."
Brubaker also addressed concerns raised by the opponents of Senate Bill 4 who
have been questioning the intent of the legislation and criticizing the speed of
the process. "The goal of Senate Bill 4 is simple: To clarify both the
authority and criteria regarding our public charities. This then allows for a
clear set of standards to be established for our non-profits and taxing
authorities by which to base their charitable status decisions."
"The concepts of my bill are not new, but rather a reintroduction of legislation
that passed the Senate during the 2011-2012 legislative session by a vote of
46-1. Furthermore, it's impossible to claim this measure is on the 'fast track'
considering it requires amending Pennsylvania's Constitution, which is a lengthy
process in itself," he added.
Based upon the Supreme Court ruling, local taxing authorities have called into
question the eligibility of many charities. For example, tax exempt statuses
for Warren Hospital, Warren County YMCA, and four other non-profit organizations
located in Warren County have already been revoked.
"Much to my dismay, this ruling will only continue to lead to new challenges
pertaining to the charitable status of other institutions if we don't act now.
Many other non-profits will be impacted as some local governments plan
county-wide reviews and the criteria for purely public charity status is again
left to the courts. That's why it is time we move this bill through the
legislative process and give the people of Pennsylvania an opportunity to have
their voices heard on an issue that will ultimately impact each and every one of
us," he said.
Because Senate Bill 4 would require amending the Pennsylvania Constitution, the
measure must receive approval by the General Assembly in two consecutive
legislative sessions followed by the voters' approval in a public referendum.