THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY DeLUCA, OCTOBER 17, 2012

REFERRED TO COMMITTEE ON STATE GOVERNMENT, OCTOBER 17, 2012  

AN ACT

Providing for disclosure by charitable health care institutions;

imposing duties on charitable health care institutions; and

providing for public records.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the Charitable

Health Care Institutions Disclosure Act.

Section 2.  Legislative findings and intent.

(a)    Findings.--The General Assembly finds and declares as

follows:

(1)  It is in the best interest of the Commonwealth and

its citizens to have an adequate network of institutions that

provides high-quality and affordable health care.

(2)  Most of the institutions providing health care to

residents of this Commonwealth are classified as purely

public charities.

(3)  A classification as an institution of purely public

charity enables an institution to reduce the cost of the

health care it provides to its patients because the

classification exempts it from paying various Federal, State

and local taxes.

(4)  There is increasing concern that health care

institutions classified as purely public charities are

purchasing too many properties and setting compensation at

levels inconsistent with their charitable missions.

(5)  Additional public disclosure regarding the finances,

compensation levels and real estate transactions of health

care institutions will enable the Commonwealth and its

residents to better determine if the institutions are truly

following their charitable missions, meriting their tax-

exempt status.

(b)  Intent.--It is the intent of the General Assembly to

alleviate public concerns regarding the purely public charity

designation of this Commonwealth's many charitable health care

institutions by providing for greater public disclosure of their

finances and operations.

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Affiliate."  A domestic or foreign corporation, association,

trust or other organization which owns a 10% or greater interest

in a charitable health care institution. A domestic or foreign

corporation, association, trust or other organization in which a

charitable health care institution owns a 10% or greater

interest.

"Bureau."  The Bureau of Charitable Organizations of the

Department of State of the Commonwealth. 

"Charitable health care institution."  An institution that

has a primary mission of providing direct health care services

to patients and is classified as a purely public charity. The

term includes, but is not limited to, hospitals, health clinics

and nursing homes.

"Department."  The Department of State of the Commonwealth.

"Government agency."  A Federal or Commonwealth agency or a

political subdivision or municipal or other local authority or

an officer or agency of a political subdivision or local

authority.

"Political subdivision."  A county, city, borough, town,

township, school district, vocational school district and county

institution district.

"Program service revenue."  Income earned from the provision

of goods or services, including any government fees and

contracts associated with the institution's charitable mission.

"Purely public charity."  An institution of purely public

charity as defined in section 3 of the act of November 26, 1997

(P.L.508, No.55), known as the Institutions of Purely Public

Charity Act.

Section 4.  Disclosure and annual report.

(a)  Disclosure.--A charitable health care institution that

generates more than $1,000,000 in combined annual program

service revenue from government agencies shall disclose the

following financial information of the charitable health care

institution and its affiliates to the bureau:

(1)  the compensation and salary of the entity's

executives, board members and the 20 other highest-paid

employees;

(2)  the entity's real estate transactions that occurred

during the previous ten years;

(3)  the lobbying expenses the entity incurred in the

previous two years; and

(4)  the administrative expenses the entity incurred in

the previous year.

(b)    Annual report.--Charitable health care institutions

shall make the disclosures required in subsection (a) in an

annual report to the bureau. The report must be filed within 135

days after the close of the charitable health care institution's

fiscal year and in a form and manner to be determined by the

department.

Section 5.  Public record.

The information contained in a charitable health care

institution's annual report is considered a public record

subject to the act of February 14, 2008 (P.L.6, No.3), known as

the Right-to-Know Law. Within 30 days of receiving a charitable

health care institution's annual report, the bureau shall make

the report available to the public on the department's Internet

website.

Section 19.  Applicability.

Nothing in this act may be construed to require a hospital

plan corporation or a professional health services plan

corporation to make a disclosure or to file an annual report

with the bureau.

Section 20.  Effective date.

This act shall take effect in 60 days.