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Senate of Pennsylvania
Session of 2015 - 2016 Regular Session

MEMORANDUM

Posted: January 23, 2015 02:22 PM
From: Senator Mario M. Scavello
To: All Senate members
Subject: Purely Public Charities Legislative Committee
 
I plan to introduce legislation to establish a special legislative committee to study and make recommendations to address the definition and treatment of “Purely Public Charities” in the
Commonwealth.

The Supreme Court in Mesivtah Eitz Chaim of Bobov, Inc. v. Pike County Board of Assessment (2012) recently 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. Therefore, a Constitutional amendment is required 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. 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.

In order to achieve that balance, my legislation would create the Select Committee on Purely Public Charities. The committee would be charged with the responsibility to collect input from stakeholders across the Commonwealth. The committee will determine whether additional legislation is needed and make recommendations relating to legislation or the treatment of purely public charities in the Commonwealth.

The bipartisan select committee would consist of

1. Two House members appointed by the Speaker of the House and one member by the Minority Leader of the House;
2. Two Senate members appointed by the President Pro Tempore and one member by the Minority Leader of the Senate;
3. The chairman and minority chairman of the Senate Finance Committee and the chairman and minority chairman of the House Finance Committee;
4. The chairman and minority chairman of the Senate Local Government Commission and the chairman and minority chairman of the House Local Government Commission;
5. The Secretary of Revenue.

The committee will conduct hearings in various geographic areas across the Commonwealth and work with non-profits, elected officials, tax experts, public safety organizations and other stakeholders to determine if legislation is needed and, if so, to develop recommendations for that legislation.

The committee shall have one year to develop and report its findings.

If you have any questions regarding this legislation, please contact Christine Zubeck in my office at 717-787-6123 or czubeck@pasen.gov. Thank you for your consideration.


Introduced as SB446