subsection (b)(4) that lists the institution as subject to a
disqualification order.
(b) Disqualification.--The following shall apply:
(1) The Department of State may issue an order
disqualifying an institution from claiming an exemption from
sales and use tax as an institution of purely public charity
if the Department of State finds that the institution has
failed to expend at least 60% of the institution's total
annual functional expenses on program services when those
expenses are averaged over the most recent three fiscal years
for which the Department of State has reports containing
expense information. The calculation of program services
expenses and total functional expenses shall be based on the
amounts of program services expenses and total functional
expenses identified by the institution in the institution's
Internal Revenue Service Form 990 return. If the institution
does not file a full Internal Revenue Service Form 990
return, the Department of State may require an institution to
file the amounts spent on program services expenses and total
functional expenses identified by the institution on a form
prescribed by the Department of State. All actions taken by
the Department of State shall be taken subject to the right
of notice, hearing and adjudication and the right of appeal,
in accordance with 2 Pa.C.S. (relating to administrative law
and procedure).
(2) A disqualification order shall remain in effect
until such time as the institution submits sufficient
information to the Department of State to demonstrate that
the institution's program services expenses meet the minimum
percentage provided under paragraph (1). An institution may
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