Harrisburg – State Senator Mario Scavello (R-40) announced today he is introducing legislation, Senate Bill 446, to establish a special legislative committee to study and make recommendations to address the definition and treatment of “Purely Public Charities” in Pennsylvania.
The state Supreme Court in Mesivtah Eitz Chaim of Bobov, Inc. v. Pike County Board of Assessment (2012) dismantled Act 55 and reinstated the “HUP” test established by the courts as the means to determine the definition of a charity. The decision has created uncertainty and the potential for increased litigation. The court further held that the legislature was prohibited by the Constitution of Pennsylvania from enacting changes to the law. A constitutional amendment, Senate Bill 4, was introduced to allow the General Assembly to develop a statute that addresses this issue.
“Since the adoption of Act 55 in 1997, many non-profit institutions have grown dramatically. While there is universal agreement that the Commonwealth needs a legal environment in which charities can thrive, municipalities and school districts are struggling with the increasing costs of services and the expansion of charitable tax deductions,” said Scavello. “The interests of our counties, municipalities and school districts, and the interests of taxpayers, must be carefully balanced with the interests of charities which provide critical services to the public.”
Senator Scavello’s legislation would create the bipartisan Select Committee on Purely Public Charities. The committee will conduct statewide hearings and work with non-profits, elected officials, tax experts, public safety organizations and other stakeholders to determine whether additional legislation is needed and make recommendations relating to legislation or the treatment of purely public charities in Pennsylvania.
“I’ve been contacted by many constituents who are concerned that this issue has not been vetted enough, and Senate Bill 446 will ensure that the legislature will take a careful, deliberative approach to considering all sides of this topic,” said Scavello.
The select committee would consist of legislators appointed by Senate and House leaders, members of the Senate and House Finance committees, members of the Senate and House Local Government committees, and the Secretary of Revenue.
The committee would have six months to report its findings.
Christine Zubeck firstname.lastname@example.org (717) 787-6132