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        PRIOR PRINTER'S NOS. 64, 994                  PRINTER'S NO. 1071

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 55 Session of 1997


        INTRODUCED BY BOYES, TRELLO, KENNEY, TIGUE, ITKIN, BROWNE,
           NAILOR, CAWLEY, DENT, DeLUCA, DEMPSEY, COY, FLICK, READSHAW,
           GANNON, PRESTON, BOSCOLA, BROWN, CURRY, GRUPPO, BELARDI,
           ARMSTRONG, ROONEY, LAWLESS, COLAIZZO, LYNCH, ROBERTS,
           GODSHALL, OLASZ, TRAVAGLIO, MUNDY, MELIO, WOJNAROSKI,
           C. WILLIAMS, GIGLIOTTI, YOUNGBLOOD, SAYLOR, L. I. COHEN,
           STEVENSON, WILT, BELFANTI, O'BRIEN, ZUG, BUNT, ADOLPH,
           GLADECK, LESCOVITZ, E. Z. TAYLOR, EACHUS, LaGROTTA, HASAY,
           LEH AND ROSS, JANUARY 28, 1997

        AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES,
           MARCH 18, 1997

                                     AN ACT

     1  Providing for the tax exemption of institutions of purely public
     2     charity; exempting real property owned by State-related
     3     universities or Federal Government instrumentalities from
     4     taxation; and providing for unfair competition.

     5                         TABLE OF CONTENTS
     6  Section 1.  Short title.
     7  Section 2.  Legislative intent.
     8  Section 3.  State-related universities.
     9  Section 4.  Definitions.
    10  Section 5.  Criteria.
    11  Section 6.  Multiple jurisdictions.
    12  Section 7.  Existing agreements.
    13  Section 8.  Unfair competition with small businesses.
    14  Section 9.  Accountability and disclosure.
    15  Section 10.  Litigation reduction.                                <--

     1  Section 11 10.  Exemption for Federal Government                  <--
     2                 instrumentality.
     3  Section 12 11.  Repeals.                                          <--
     4  Section 13 12.  Applicability.                                    <--
     5  Section 14 13.  Effective date.                                   <--
     6     The General Assembly of the Commonwealth of Pennsylvania
     7  hereby enacts as follows:
     8  Section 1.  Short title.
     9     This act shall be known and may be cited as the Institutions
    10  of Purely Public Charity Act.
    11  Section 2.  Legislative intent.
    12     (a)  Findings.--The General Assembly finds and declares as
    13  follows:
    14         (1)  It is in the best interest of this Commonwealth and
    15     its citizens that the recognition of tax-exempt status be
    16     accomplished in an orderly, uniform and economical manner.
    17         (2)  For more than 100 years, it has been the policy of
    18     this Commonwealth to foster the organization and operation of
    19     charitable organizations by exempting charitable
    20     organizations from taxation.
    21         (3)  Because charitable organizations contribute to the
    22     common good or lessen the burdens of government, the historic
    23     policy of exempting charitable institutions from taxation
    24     should be continued.
    25         (4)  The General Assembly recognizes that it is
    26     unrealistic today to expect charitable organizations to rely
    27     completely upon private philanthropy and that there is an
    28     appropriate role and responsibility for government support
    29     with respect to activities historically recognized as
    30     charitable.
    19970H0055B1071                  - 2 -

     1         (5)  The General Assembly recognizes that the lack of
     2     specific legislative standards defining the term
     3     "institutions of purely public charity" has led to increasing
     4     confusion and confrontation among traditionally tax-exempt
     5     organizations and local governments to the detriment of the
     6     public.
     7         (6)  There is increasing concern that the eligibility
     8     standards for charitable tax exemptions are being applied
     9     inconsistently, which may violate the uniformity provision of
    10     the Constitution of Pennsylvania.
    11     (b)  Intent.--It is the intent of the General Assembly to
    12  eliminate inconsistent application of eligibility standards for
    13  charitable tax exemptions, reduce confusion and confrontation
    14  among traditionally tax-exempt organizations and local
    15  governments and insure that charitable and public funds are not
    16  unnecessarily diverted from the public good to litigate
    17  eligibility for tax-exempt status by providing standards to be
    18  applied uniformly in all proceedings throughout this
    19  Commonwealth for determining eligibility for exemption from
    20  State and local taxation which are consistent with traditional
    21  legislative and judicial applications of the constitutional term
    22  "institutions of purely public charity."
    23  Section 3.  State-related universities.
    24     (a)  General rule.--It is the intent of the General Assembly
    25  to recognize that the State-related universities provide a
    26  direct public benefit and serve the public purposes of this
    27  Commonwealth by declaring the real property of State-related
    28  universities to be public property for purposes of exemption
    29  from State and local taxation when the property is actually and
    30  regularly used for public purposes, provided that nothing in
    19970H0055B1071                  - 3 -

     1  this section is intended or shall be construed to affect the
     2  title to real property of State-related universities or the
     3  power and authority of the governing bodies of State-related
     4  universities with respect to such real property. Further,
     5  nothing in this section is intended or shall be construed to
     6  affect, impair or terminate any contract or agreement in effect
     7  on or before the effective date of this act by and between a
     8  State-related university and any county, city, borough, township
     9  or school district wherein the State-related university pays
    10  real estate taxes, amounts in lieu of real estate taxes or other
    11  charges, fees or contributions for municipal services.
    12     (b)  Real property.--All real property owned by State-related
    13  universities, or owned by the Commonwealth and used by a State-
    14  related university, is and shall be deemed public property for
    15  purposes of the Constitution of Pennsylvania and the laws of
    16  this Commonwealth relating to the assessment, taxation and
    17  exemption of real estate and shall be exempt from all State and
    18  local taxation when actually and regularly used for public
    19  purposes.
    20     (c)  Exemption.--This section shall not include the property
    21  of a State-related university the possession and control of
    22  which has been transferred to a for-profit entity not otherwise
    23  entitled to tax-exempt status, irrespective of whether that
    24  entity is affiliated with the university. The execution of a
    25  management services contract with a third party entity to
    26  provide operational services to the university which would
    27  otherwise be provided or conducted directly by the university
    28  shall not, however, be considered a transfer of possession and
    29  control of real property within the meaning of this section.
    30     (d)  Definitions.--As used in this section, the following
    19970H0055B1071                  - 4 -

     1  words and phrases shall have the meanings given to them in this
     2  subsection:
     3     "Public purposes."  All activities relating to the
     4  educational mission of State-related universities, including,     <--
     5  without limitation, teaching, research, service and activities
     6  incident or ancillary thereto which provide services to or for
     7  students, employees or the public.
     8     "State-related universities."  The Pennsylvania State
     9  University and its affiliate, the Pennsylvania College of
    10  Technology, the University of Pittsburgh, Temple University and
    11  its subsidiaries Temple University Hospital, Inc., and Temple
    12  University Children's Hospital, Inc., and Lincoln University.
    13  Section 4.  Definitions.
    14     The following words and phrases when used in this act shall
    15  have the meanings given to them in this section unless the
    16  context clearly indicates otherwise:
    17     "Commercial business."  The sale of products or services that
    18  are principally the same as those offered by an existing small
    19  business in the same community.
    20     "Goods or services."  Goods or services which promote any of
    21  the six enumerated purposes under section 5(b) and which are
    22  valued in accordance with generally accepted accounting
    23  principles applicable to the institution. If the institution's
    24  purpose is to provide health care services, the term shall
    25  include, but not be limited to, medically necessary goods or
    26  services in life-threatening situations.
    27     "Government agency."  Any Commonwealth agency or any
    28  political subdivision or municipal or other local authority or
    29  any officer or agency of any political subdivision or local
    30  authority.
    19970H0055B1071                  - 5 -

     1     "Institution of purely public charity."  A domestic or
     2  foreign nonprofit corporation, association, trust or other
     3  organization which meets the criteria under section 5.
     4     "Net operating income."  The amount of funds remaining after
     5  deducting all operating expenses related to the provision of
     6  goods or services associated with the institution's charitable
     7  purpose from payments received from providing these goods or
     8  services, as determined in accordance with the generally
     9  accepted accounting principles applicable to the institution.
    10     "Small business."  Any self-employed individual, sole
    11  proprietorship, firm, corporation, partnership, association or
    12  other entity that:
    13         (1)  has fewer than 101 full-time employees; and
    14         (2)  is subject to income taxation under the act of March
    15     4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
    16     "Tax Reform Code."  The act of March 4, 1971 (P.L.6, No.2),
    17  known as the Tax Reform Code of 1971.
    18     "Total operating expenses."  The costs related to the
    19  provision of goods or services associated with the institution's
    20  charitable purpose, as determined in accordance with generally
    21  accepted accounting principles applicable to the institution.
    22  Section 5.  Criteria.
    23     (a)  General rule.--An institution of purely public charity
    24  is a nonprofit corporation, association, trust or other
    25  organization which meets the criteria set forth in this section.
    26  A nonprofit parent corporation, together with all of its
    27  subsidiary nonprofit corporations, may elect to be considered as
    28  a single institution in meeting the criteria set forth in this
    29  section as long as all of the following are met:
    30         (1)  Each subsidiary:
    19970H0055B1071                  - 6 -

     1             (i)  is a nonstock corporation of which the nonprofit
     2         parent corporation is the only member; and
     3             (ii)  meets the requirements of subsections (b), (c),
     4         (d), (e) and (f).
     5         (2)  The parent:
     6             (i)  is a nonstock corporation;
     7             (ii)  is duly qualified by the Internal Revenue
     8         Service as meeting the requirements of section 501(c)(3)
     9         of the Internal Revenue Code of 1986 (Public Law 99-514,
    10         26 U.S.C. § 501(c)(3));
    11             (iii)  meets the requirements of subsections (b) and
    12         (c); and
    13             (iv)  except for services that meet the requirements
    14         of subsections (b), (c), (d), (e) and (f), does not
    15         render services for a fee to an individual or entity that
    16         does not meet the requirements of paragraph (1).
    17  An institution of purely public charity shall meet all of the
    18  criteria contained in subsections (b), (c), (d), (e) and (f).
    19  Institutions of purely public charity which meet the criteria
    20  specified in this section shall be considered to be founded,
    21  endowed and maintained by public or private charity.
    22     (b)  Charitable purpose.--The institution shall advance a
    23  charitable purpose. This criterion is satisfied if the
    24  institution is organized and operated primarily to fulfill any
    25  one or combination of the following purposes:
    26         (1)  Relief of poverty.
    27         (2)  Advancement of education, including, but not limited
    28     to, postsecondary education.
    29         (3)  Advancement of religion.
    30         (4)  Prevention and treatment of disease or injury.
    19970H0055B1071                  - 7 -

     1         (5)  Government or municipal purposes.
     2         (6)  Accomplishment of any purpose which is beneficial to  <--
     3     the community, including, but not limited to, advancement of
     4     the arts and sciences, advancement of the cultural,
     5     spiritual, mental, physical, social or emotional welfare or
     6     improvement of others.
     7         (6)  ACCOMPLISHMENT OF A PURPOSE WHICH IS BENEFICIAL TO    <--
     8     THE COMMUNITY, INCLUDING ADVANCEMENT OF THE ARTS AND
     9     SCIENCES, ADVANCEMENT OF THE CULTURAL, SPIRITUAL, MENTAL,
    10     PHYSICAL, SOCIAL OR EMOTIONAL WELFARE OR IMPROVEMENT OF
    11     OTHERS.
    12     (c)  Private profit motive.--The institution shall operate
    13  entirely free from private profit motive. Compensation,           <--
    14  including benefits of any director, officer or employee, shall
    15  not be based primarily upon the financial performance of the
    16  organization. Notwithstanding whether the institution's revenues
    17  exceed its expenses, this criterion is satisfied if the
    18  institution meets ALL OF the following:                           <--
    19         (1)  Neither the institution's net earnings nor donations
    20     which it receives inures to the benefit of private
    21     shareholders or other individuals, as the private inurement
    22     standard is interpreted under section 501(c)(3) of the
    23     Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
    24     501(c)(3)). The purchase of tangible or intangible assets,
    25     including professional practices for fair market value, shall
    26     not, by itself, be construed to constitute evidence of
    27     operation for a private profit motive.
    28         (2)  The institution applies or reserves any revenue in
    29     excess of expenses in furtherance of its charitable purpose
    30     or to funding of other charitable organizations which meet
    19970H0055B1071                  - 8 -

     1     the provisions of this subsection.
     2         (3)  COMPENSATION, INCLUDING BENEFITS, OF ANY DIRECTOR,    <--
     3     OFFICER OR EMPLOYEE, IS NOT BASED PRIMARILY UPON THE
     4     FINANCIAL PERFORMANCE OF THE ORGANIZATION.
     5     (d)  Community service.--
     6         (1)  The institution shall donate or render gratuitously
     7     a substantial portion of its services. This criterion is
     8     satisfied if the institution benefits the community by
     9     actually providing any of the following:
    10             (i)  Goods or services to all who seek them without
    11         regard to their ability to pay for what they receive if
    12         all of the following apply:
    13                 (A)  The institution has a written policy to this
    14             effect.
    15                 (B)  The institution has published this policy in
    16             a reasonable manner.
    17                 (C)  The institution provides uncompensated goods
    18             or services at least equal to 75% of the
    19             institution's net operating income but not less than
    20             3% of the institution's total operating expenses.
    21             (ii)  Goods or services for fees that are based upon
    22         the recipient's ability to pay for them if all of the
    23         following apply:
    24                 (A)  The institution can demonstrate that it has
    25             implemented a written policy and a written schedule
    26             of fees based on individual or family income. An
    27             institution will meet the requirement of this clause
    28             if the institution consistently applies a formula to
    29             all individuals requesting consideration of reduced
    30             fees which is in part based on individual or family
    19970H0055B1071                  - 9 -

     1             income.
     2                 (B)  At least 20% of the individuals receiving
     3             goods or services from the institution pay no fee or
     4             a fee which is lower than the cost of the goods or
     5             services provided by the institution.
     6                 (C)  At least 10% of the individuals receiving
     7             goods or services from the institution receive a
     8             reduction in fees of at least 10% of the cost of the
     9             goods or services provided to them.
    10                 (D)  No individual receiving goods or services
    11             from the institution pays a fee which is equal to or
    12             greater than the cost of the goods or services
    13             provided to them, or the goods or services provided
    14             to the individuals described in clause (B) are
    15             comparable in quality and quantity to the goods or
    16             services provided to those individuals who pay a fee
    17             which is equal to or greater than the cost of the
    18             goods or services provided to them.
    19             (iii)  Wholly gratuitous goods or services to at
    20         least 5% of those receiving similar goods or services
    21         from the institution.
    22             (iv)  Financial assistance or uncompensated goods or
    23         services to at least 20% of those receiving similar goods
    24         or services from the institution if at least 10% of the
    25         individuals receiving goods or services from the
    26         institution either paid no fees or fees which were 90% or
    27         less of the cost of the goods or services provided to
    28         them, after consideration of any financial assistance
    29         provided to them by the institution.
    30             (v)  Uncompensated goods or services which, in the
    19970H0055B1071                 - 10 -

     1         aggregate, are equal to at least 5% of the institution's
     2         costs of providing goods or services.
     3             (vi)  Goods or services at no fee or reduced fees to
     4         government agencies or goods or services to individuals
     5         eligible for government programs if one of the following
     6         applies:
     7                 (A)  The institution receives 75% or more of its
     8             gross operating revenue from grants or fee-for-
     9             service payments by government agencies and if the
    10             aggregate amount of fee-for-service payments from
    11             government agencies does not exceed 95% of the
    12             institution's costs of providing goods or services to
    13             the individuals for whom the fee-for-services
    14             payments are made.
    15                 (B)  The institution provides goods or services
    16             to individuals with mental retardation, to
    17             individuals who need mental health services, to
    18             members of an individual's family or guardian in
    19             support of such goods or services or to individuals
    20             who are dependent, neglected or delinquent children,
    21             as long as the institution performs duties that would
    22             otherwise be the responsibility of government and the
    23             institution is restricted in its ability to retain
    24             revenue over expenses or voluntary contributions by
    25             any one of the following statutes or regulations or
    26             by contractual limitations with county children and
    27             youth offices in this Commonwealth:
    28                     (I)  Sections 1315(c) and 1905(d) of the
    29                 Social Security Act (49 Stat. 620, 42 U.S.C. §§
    30                 1396d(d) and 1396n(c)).
    19970H0055B1071                 - 11 -

     1                     (II)  42 CFR  440.150 (relating to
     2                 intermediate care facility (ICF/MR) services.
     3                     (III)  42 CFR Pt. 483 Subpt. I (relating to
     4                 conditions of participation for intermediate care
     5                 facilities for the mentally retarded).
     6                     (IV)  The act of October 20, 1966 (3rd
     7                 Sp.Sess., P.L.96, No.6), known as the Mental
     8                 Health and Mental Retardation Act of 1966.
     9                     (V)  Articles II, VII, IX and X of the act of
    10                 June 13, 1967 (P.L.31, No.21), known as the
    11                 Public Welfare Code.
    12                     (VI)  23 Pa.C.S. Ch. 63 (relating to child
    13                 protective services).
    14                     (VII)  42 Pa.C.S. Ch. 63 (relating to
    15                 juvenile matters).
    16                     (VIII)  55 Pa. Code Chs. 3170 (relating to
    17                 allowable costs and procedures for county
    18                 children and youth), 3680 (relating to
    19                 administration and operation of a children and
    20                 youth social service agency) 4300 (relating to
    21                 county mental health and mental retardation
    22                 fiscal manual), 6400 (relating to community homes
    23                 for individuals with mental retardation), 6500
    24                 (relating to family living homes), 6210 (relating
    25                 to participation requirements for the
    26                 intermediate care facilities for the mentally
    27                 retarded program), 6211 (relating to allowable
    28                 cost reimbursement for non-State operated
    29                 intermediate care facilities for the mentally
    30                 retarded) and 6600 (relating to intermediate care
    19970H0055B1071                 - 12 -

     1                 facilities for the mentally retarded).
     2             (vii)  Funds to corporations, associations, trusts or
     3         other organizations which meet the criteria of this
     4         section, funds to government agencies or funds to
     5         organizations which qualify under section 501(c)(3) of
     6         the Internal Revenue Code of 1986 (Public Law 99-514, 26
     7         U.S.C. § 501(c)(3)), if the institution providing the
     8         funds is primarily engaged in fundraising on behalf of or
     9         making grants to such corporations, associations, trusts,
    10         such government agencies or such organizations.
    11         (2)  The institution may elect to average the applicable
    12     data for its five most recently completed fiscal years for
    13     the purposes of calculating any formula or meeting any
    14     quantitative standard in paragraph (1).
    15         (3)  An institution that does not satisfy the provisions   <--
    16     of paragraph (1)(i) through (vii) may meet this criterion by
    17     demonstrating that it donates or renders gratuitously a
    18     substantial portion of its goods or services.
    19         (4) (3)  For the purposes of calculating the number of
    20     individuals for use in the percentage calculations in this
    21     subsection, educational institutions may use full time
    22     equivalent students as defined by the Department of
    23     Education.
    24         (5) (4)  As used in this subsection, the term              <--
    25     "uncompensated goods or services" shall include all benefits
    26     provided to the community the institution serves, including,
    27     but not limited to, the following:
    28             (i)  The full cost of all goods or services provided
    29         by the institution for which the institution has not
    30         received monetary compensation or the difference between
    19970H0055B1071                 - 13 -

     1         the full cost and any lesser fee received for the goods
     2         or services, including the cost of the goods or services
     3         provided to individuals unable to pay.
     4             (ii)  The difference between the full cost of
     5         education and research programs provided by or
     6         participated in by the institution and the payment made
     7         to the institution to support the education and research
     8         programs.
     9             (iii)  The difference between the full cost of
    10         providing the goods or services and the payment made to
    11         the institution under any government program, including
    12         individuals covered by Medicare or Medicaid.
    13             (iv)  The difference between the full cost of the
    14         community services which the institution provides or
    15         participates in and the payment made to the institution
    16         to support such community services.
    17             (v)  The reasonable value of any moneys, property,
    18         goods or services donated by the primary donor to another
    19         institution of purely public charity or to a government
    20         agency or the reasonable value of the net donation made
    21         by a secondary donor to a primary donor. As used in this
    22         subparagraph, the following words and phrases shall have
    23         the following meanings:
    24             "Net donation."  In the case of a donation of money,
    25         property or identical goods and services made by a
    26         secondary donor, the difference between the value of the
    27         donation made by the secondary donor and the value of the
    28         donation made by the primary donor, provided such value
    29         is positive.
    30             "Primary donor."  An institution which makes a
    19970H0055B1071                 - 14 -

     1         donation of any money, property, goods or services to
     2         another institution of purely public charity.
     3             "Secondary donor."  An institution which receives a
     4         donation of any money, property, goods or services from a
     5         primary donor and then makes a donation back to that
     6         primary donor within three years of having received such
     7         donation.
     8             (vi)  The reasonable value of volunteer assistance
     9         donated by individuals to the institution. The reasonable
    10         value of volunteer assistance, computed on an hourly
    11         basis, shall not exceed the "Statewide average weekly
    12         wage" as defined in section 105.1 of the act of June 2,
    13         1915 (P.L.736, No.338), known as the Workers'
    14         Compensation Act divided by 40.
    15             (vii)  The cost of goods or services PROVIDED TO AN    <--
    16         INDIVIDUAL by charitable health care facilities licensed
    17         by the Department of Health or the Department of Public
    18         Welfare, which are bad debts, as determined in accordance
    19         with the generally accepted accounting principles
    20         applicable to the institution.
    21             (VIII)  THE REASONABLE VALUE OF ANY MONEYS, PROPERTY,  <--
    22         GOODS OR SERVICES DONATED TO A POLITICAL SUBDIVISION. IF
    23         THE INSTITUTION OF PURELY PUBLIC CHARITY DONATES TO A
    24         POLITICAL SUBDIVISION AN AMOUNT EQUAL TO OR GREATER THAN
    25         25% OF THE TAX LIABILITY THE EXEMPT ENTITY WOULD INCUR IF
    26         ITS CURRENTLY TAX-EXEMPT PROPERTY WERE TAXABLE, THE
    27         INSTITUTION CAN CREDIT THE DONATION AT 200% OF THE ACTUAL
    28         VALUE FOR PURPOSES OF MEETING THE REQUIREMENTS OF THIS
    29         SUBSECTION.
    30     (e)  Charity to persons.--
    19970H0055B1071                 - 15 -

     1         (1)  The institution shall benefit a substantial and
     2     indefinite class of persons who are legitimate subjects of
     3     charity.
     4         (2)  As used in this subsection, the following words and
     5     phrases shall have the meanings given to them in this
     6     paragraph:
     7         "Legitimate subjects of charity."  Those individuals who
     8     are unable to provide themselves with what the institution
     9     provides for them.
    10         "Substantial and indefinite class of persons."  Persons
    11     not predetermined in number, provided that, where the goods
    12     or services are received primarily by members of the
    13     institution, membership cannot be predetermined in number and
    14     cannot be arbitrarily denied by a vote of the existing
    15     members. This section specifically recognizes that the use of
    16     admissions criteria and enrollment limitations by educational
    17     institutions do not constitute predetermined membership or
    18     arbitrary restrictions on membership so as to violate this
    19     section and recognizes that an institution may reasonably
    20     deny membership based on the types of services it provides,
    21     as long as denial is not in violation of Federal or State
    22     antidiscrimination laws, such as the Civil Rights Act of 1964
    23     (Public Law 88-352, 78 Stat. 241) and the act of October 27,
    24     1955 (P.L.744, No.222), known as the Pennsylvania Human
    25     Relations Act.
    26         (3)  An institution shall be considered to benefit a
    27     substantial and indefinite class of persons who are
    28     legitimate subjects of charity if the institution is
    29     primarily engaged in fundraising on behalf of or making
    30     grants to:
    19970H0055B1071                 - 16 -

     1             (i)  corporations, associations, trusts or other
     2         organizations which meet the criteria set forth in this
     3         section;
     4             (ii)  government agencies; or
     5             (iii)  organizations which qualify under section
     6         501(c)(3) of the Internal Revenue Code of 1986 (Public
     7         Law 99-514, 26 U.S.C. § 501(c)(3)).
     8         (4)  AN INSTITUTION SHALL NOT BE CONSIDERED TO BENEFIT A   <--
     9     SUBSTANTIAL AND INDEFINITE CLASS OF PERSONS WHO ARE
    10     LEGITIMATE SUBJECTS OF CHARITY IF:
    11             (I)  THE INSTITUTION IS NOT QUALIFIED UNDER SECTION
    12         501(C)(3) OF THE INTERNAL REVENUE CODE OF 1986; AND
    13             (II)  THE INSTITUTION IS QUALIFIED UNDER SECTION
    14         501(C)(4), (5), (6), (7), (8) OR (9) OF THE INTERNAL
    15         REVENUE CODE OF 1986 AS ANY OF THE FOLLOWING:
    16                 (A)  AN ASSOCIATION OF EMPLOYEES, THE MEMBERSHIP
    17             OF WHICH IS LIMITED TO THE EMPLOYEES OF A DESIGNATED
    18             PERSON OR PERSONS.
    19                 (B)  A LABOR ORGANIZATION.
    20                 (C)  AN AGRICULTURAL OR HORTICULTURAL
    21             ORGANIZATION.
    22                 (D)  A BUSINESS LEAGUE, CHAMBER OF COMMERCE, REAL
    23             ESTATE BOARD, BOARD OF TRADE OR PROFESSIONAL SPORTS
    24             LEAGUE.
    25                 (E)  A CLUB ORGANIZED FOR PLEASURE OR RECREATION.
    26                 (F)  A FRATERNAL BENEFICIARY SOCIETY, ORDER OR
    27             ASSOCIATION.
    28     (f)  Government service.--The institution shall relieve the
    29  government of some of its burden. This criterion is satisfied if
    30  the institution meets any of the following:
    19970H0055B1071                 - 17 -

     1         (1)  provides a service to the public that the government
     2     would otherwise be obliged to fund or to provide directly or
     3     indirectly or assure that a similar organization exists to
     4     provide the service;
     5         (2)  provides services in furtherance of its charitable
     6     purpose which are either the responsibility of the government
     7     by law or which historically have been assumed or offered or
     8     funded by the government;
     9         (3)  receives on a regular basis payments for services
    10     rendered under a government program if the payments are less
    11     than the full costs incurred by the institution for the
    12     rendering of the services or if the institution can
    13     demonstrate that comparable services are more expensive when
    14     provided by the government; or
    15         (4)  provides a service which advances important
    16     community, public, spiritual, mental, physical, educational,
    17     emotional, civic, historical or cultural objectives.
    18     (g)  Standards.--Nothing contained in this act shall be        <--
    19  deemed to prohibit a charitable organization from conducting
    20  activities intended to influence legislation. Nothing in this
    21  act shall prohibit a political subdivision from filing
    22  challenges to or making determinations as to whether a
    23  particular parcel of property is being used to advance the
    24  charitable purpose of an institution of purely public charity.
    25  No additional criteria shall be imposed on any organization in
    26  order to be recognized as an institution of purely public
    27  charity.
    28     (G)  STANDARDS.--                                              <--
    29         (1)  EXCEPT AS PROVIDED IN PARAGRAPH (2), NOTHING IN THIS
    30     ACT SHALL BE DEEMED TO PROHIBIT A CHARITABLE ORGANIZATION
    19970H0055B1071                 - 18 -

     1     FROM CONDUCTING ACTIVITIES INTENDED TO INFLUENCE LEGISLATION.
     2         (2)  NO SUBSTANTIAL PART OF THE ACTIVITIES OF AN
     3     INSTITUTION OF PURELY PUBLIC CHARITY SHALL CONSIST OF
     4     CARRYING ON PROPAGANDA OR OTHERWISE ATTEMPTING TO INFLUENCE
     5     LEGISLATION, EXCEPT AS OTHERWISE PROVIDED IN SECTION 501(H)
     6     OF THE INTERNAL REVENUE CODE OF 1986 OR PARTICIPATING IN OR
     7     INTERVENING IN, INCLUDING THE PUBLISHING OR DISTRIBUTING OF
     8     STATEMENTS, ANY POLITICAL CAMPAIGN ON BEHALF OF, OR IN
     9     OPPOSITION TO, ANY CANDIDATE FOR PUBLIC OFFICE AS SUCH
    10     LIMITATIONS ARE INTERPRETED UNDER SECTION 501 OF THE INTERNAL
    11     REVENUE CODE OF 1986.
    12         (3)  NOTHING IN THIS ACT SHALL AFFECT, IMPAIR OR HINDER
    13     THE RESPONSIBILITIES OR PREROGATIVES OF THE POLITICAL
    14     SUBDIVISION RESPONSIBLE FOR MAINTAINING REAL PROPERTY
    15     ASSESSMENT ROLLS TO MAKE A DETERMINATION WHETHER A PARCEL OF
    16     PROPERTY OR A PORTION OF A PARCEL OF PROPERTY IS BEING USED
    17     TO ADVANCE THE CHARITABLE PURPOSE OF AN INSTITUTION OF PURELY
    18     PUBLIC CHARITY, OR TO ASSESS THE PARCEL OR PART OF THE PARCEL
    19     OF PROPERTY AS TAXABLE BASED ON THE USE OF THE PARCEL OR PART
    20     OF THE PARCEL FOR PURPOSES OTHER THAN THE CHARITABLE PURPOSE
    21     OF THE INSTITUTION. SUCH DETERMINATION AND ASSESSMENT SHALL
    22     BE MADE IN ACCORD WITH APPLICABLE STATUS REGARDING THE
    23     ASSESSMENT OF REAL PROPERTY FOR TAXATION PURPOSES AND SHALL
    24     BE MADE WITHOUT REGARD TO THE CORPORATE STRUCTURE OF THE
    25     INSTITUTION, THE SUBSIDIARY NATURE OF THE USE OR THE FORM OR
    26     NATURE OF OWNERSHIP OR ACQUISITION OF THE PROPERTY.
    27         (4)  NOTHING IN THIS ACT SHALL PROHIBIT A POLITICAL
    28     SUBDIVISION FROM FILING CHALLENGES TO OR MAKING
    29     DETERMINATIONS AS TO WHETHER A PARTICULAR PARCEL OF PROPERTY
    30     IS BEING USED TO ADVANCE THE CHARITABLE PURPOSE OF AN
    19970H0055B1071                 - 19 -

     1     INSTITUTION OF PURELY PUBLIC CHARITY.
     2         (5)  NO ADDITIONAL CRITERIA SHALL BE IMPOSED ON ANY
     3     ORGANIZATION IN ORDER TO BE RECOGNIZED AS AN INSTITUTION OF
     4     PURELY PUBLIC CHARITY.
     5  Section 6.  Multiple jurisdictions.
     6     (a)  Intent.--It is the intent of the General Assembly to      <--
     7     (A)  INTENT.--                                                 <--
     8         (1)  IT IS THE INTENT OF THE GENERAL ASSEMBLY TO foster
     9     uniformity in the application of the standards contained
    10     within this act for determining status as an institution of
    11     purely public charity. The General Assembly recognizes that
    12     multiple jurisdictions at different levels of government will
    13     be required to determine whether an organization requesting
    14     tax exemption meets such standards. Because many
    15     organizations will be required to seek and receive approval
    16     from different governmental entities, the General Assembly
    17     believes that an organization which demonstrates compliance
    18     with the standards at the State level shall be entitled to a
    19     rebuttable presumption that it has met those standards when
    20     determining qualification for local property tax exemptions.
    21     Such a presumption is not intended to in any way limit or      <--
    22     preclude the ability of a local taxing jurisdiction to
    23     challenge a tax exemption based on the use of a particular
    24     parcel.
    25     (b)  Effect of prior qualification.--An organization
    26  possessing a valid exemption from the tax imposed by Article II
    27  of the Tax Reform Code, pursuant to an administrative or
    28  judicial determination that the organization qualifies for
    29  exemption under section 204(10) of the Tax Reform Code, shall be
    30  presumed to meet the criteria contained in section 5(b), (c),
    19970H0055B1071                 - 20 -

     1  (d), (e) and (f), and any person challenging such presumption
     2  before any agency or court shall bear the burden of proving the
     3  contrary. Any person challenging such presumption may request
     4  from the institution all relevant financial statements, records
     5  and documents used to obtain the exemption under section 204(10)
     6  of the Tax Reform Code. Failure by the institution to supply
     7  such information within 30 days shall remove the presumption
     8  with respect to that challenge.
     9         (2)  THE GENERAL ASSEMBLY, RECOGNIZING THE INTEREST OF     <--
    10     THE TAXPAYERS IN A FAIR AND EQUITABLE SYSTEM OF PROPERTY TAX
    11     ASSESSMENT AND THE ATTENDANT STATUTORY REQUIREMENTS FOR THE
    12     POLITICAL SUBDIVISION RESPONSIBLE FOR MAINTAINING REAL
    13     PROPERTY ASSESSMENT ROLES TO ADMINISTER THE SYSTEM OF
    14     PROPERTY ASSESSMENT, BELIEVES THAT SUCH A PRESUMPTION SHALL
    15     NOT IN ANY WAY LIMIT THE RESPONSIBILITIES, PREROGATIVES OR
    16     ABILITIES OF COUNTIES OR LOCAL JURISDICTIONS WITH RESPECT TO
    17     THE DETERMINATION OF, OR CHALLENGES TO, THE TAXABLE STATUS OF
    18     A PARCEL OR PART OF A PARCEL OF PROPERTY BASED ON THE USE OF
    19     THE PARCEL OR PART OF THE PARCEL OF PROPERTY.
    20     (B)  PRESUMPTION.--AN ORGANIZATION POSSESSING A VALID
    21  EXEMPTION FROM THE TAX IMPOSED BY ARTICLE II OF THE TAX REFORM
    22  CODE, PURSUANT TO ADMINISTRATIVE OR JUDICIAL DETERMINATION THAT
    23  THE ORGANIZATION QUALIFIES FOR EXEMPTION UNDER SECTION 204(10)
    24  OF THE TAX REFORM CODE, SHALL BE ENTITLED TO ASSERT A
    25  PRESUMPTION THAT IT MEETS THE CRITERIA CONTAINED IN SECTION
    26  5(B), (C), (D), (E) AND (F), AND ANY PERSON CHALLENGING SUCH
    27  PRESUMPTION BEFORE ANY AGENCY OR COURT SHALL BEAR THE BURDEN, BY
    28  THE PREPONDERANCE OF EVIDENCE, OF PROVING THE CONTRARY. THE
    29  DEPARTMENT OF REVENUE SHALL FURNISH TO ANY INSTITUTION APPLYING
    30  FOR EXEMPTION A WRITTEN DETERMINATION OF THE DEPARTMENT OF
    19970H0055B1071                 - 21 -

     1  REVENUE'S DECISION INCLUDING SPECIFIC INFORMATION CONCERNING HOW
     2  THE APPLICANT DOES OR DOES NOT MEET EACH OF THE CRITERIA IN
     3  SECTION 5. ANY ORGANIZATION ASSERTING SUCH A PRESUMPTION SHALL
     4  BE DEEMED TO HAVE WAIVED ANY RIGHT TO CONFIDENTIALITY AND
     5  CONSENTED TO RELEASE OF ANY INFORMATION SUPPORTING THE EXEMPTION
     6  FROM THE TAX IMPOSED BY ARTICLE II OF THE TAX REFORM CODE UNDER
     7  SECTION 204(10), AND SUCH INFORMATION, ALONG WITH THE WRITTEN
     8  DETERMINATION OF THE DEPARTMENT OF REVENUE'S DECISION IN SUPPORT
     9  OF THAT EXEMPTION, SHALL BE PUBLIC RECORD WHICH THE DEPARTMENT
    10  OF REVENUE SHALL FURNISH TO ANY PERSON UPON REQUEST. ANY PERSON
    11  CHALLENGING SUCH PRESUMPTION MAY REQUEST FROM THE INSTITUTION
    12  ALL RELEVANT FINANCIAL STATEMENTS, RECORDS AND DOCUMENTS USED TO
    13  OBTAIN THE EXEMPTION UNDER SECTION 204(10) OF THE TAX REFORM
    14  CODE. FAILURE BY THE INSTITUTION TO SUPPLY, OR AT ITS OPTION, TO
    15  PERMIT INSPECTION OF SUCH INFORMATION IN ITS POSSESSION WITHIN
    16  30 DAYS SHALL REMOVE THE PRESUMPTION WITH RESPECT TO THAT
    17  CHALLENGE.
    18     (c)  Applicability of presumption.--The provisions of this
    19  section shall apply only to sales and use tax exemptions granted
    20  or renewed on or after the effective date of this act.
    21  Section 7.  Existing agreements.
    22     Nothing in this act shall be construed to affect, impair,
    23  terminate or supersede any contract, agreement or arrangement in
    24  effect on or before the effective date of this act which
    25  authorizes or requires payment of taxes, amounts in lieu of
    26  taxes, or other charges or fees for the services of a political
    27  subdivision of this Commonwealth. Further, nothing in this act
    28  shall be construed to impair, or otherwise inhibit, the right or
    29  ability of any institution or political subdivision to enter
    30  into such agreements after the effective date of this act.
    19970H0055B1071                 - 22 -

     1  Section 8.  Unfair competition with small businesses.
     2     (a)  Intent.--It is the policy of this act that institutions
     3  of purely public charity shall not use their tax-exempt status
     4  to compete unfairly with small business.
     5     (b)  Rule.--An institution of purely public charity may not
     6  fund, capitalize, guarantee the indebtedness of, lease
     7  obligations of, or subsidize a commercial business that is
     8  unrelated to the institution's charitable purpose as stated in
     9  the institution's charter or governing legal documents.
    10     (c)  Exceptions.--Institutions of purely public charity are
    11  not in violation of subsection (b) if any of the following
    12  apply:
    13         (1)  The commercial business is intended only for the use
    14     of its employees, staff, alumni, faculty, members, students,
    15     clients, volunteers, patients or residents. For purposes of
    16     this paragraph, a person shall not be considered an employee,
    17     staff, member, alumnus, faculty, student, client, volunteer,
    18     patient or resident if the person's only relationship with
    19     the institution is to receive products or services resulting
    20     from the commercial business.
    21         (2)  The commercial business results in sales to the
    22     general public that are incidental or periodic rather than
    23     permanent and ongoing.
    24     (d)  Support for other charities.--Nothing in this section
    25  shall be construed as prohibiting or limiting the ability of an
    26  institution of purely public charity to fund, capitalize,
    27  guarantee the indebtedness of or otherwise subsidize another
    28  institution of purely public charity.
    29     (e)  Investments.--An institution of purely public charity
    30  that invests in publicly traded stocks and bonds; real estate;
    19970H0055B1071                 - 23 -

     1  or other investments is not in violation of subsection (b).
     2     (f)  Educational functions.--An institution of purely public
     3  charity that uses its facilities to host groups for educational
     4  purposes only is not in violation of subsection (b).
     5     (g)  Government functions.--An institution of purely public
     6  charity may engage in a new commercial business that may
     7  otherwise be in violation of subsection (b) if the institution
     8  is formally requested to do so by the Commonwealth or a
     9  political subdivision.
    10     (h)  Existing arrangements.--An institution of purely public
    11  charity that prior to the effective date of this act funded,
    12  capitalized, guaranteed the indebtedness of, leased obligations
    13  of or subsidized a commercial business may continue to own and
    14  operate such businesses without violating subsection (b) as long
    15  as the institution does not substantially expand the scope of
    16  the commercial business. In the event an injunction is issued
    17  under subsection (i), the effect of such injunction shall be
    18  limited to restraining the substantial expansion of the scope of
    19  the commercial business which was initiated after the effective
    20  date of this act.
    21     (i)  Remedies.--Whenever the Attorney General receives a
    22  complaint from an aggrieved small business or has reason to
    23  believe that any institution of purely public charity is
    24  violating this section and the proceedings would be in the
    25  public interest, the Attorney General may bring an action in the
    26  name of the Commonwealth against that institution to restrain
    27  such violation by temporary or permanent injunction. The
    28  Attorney General must either bring an action or issue a written
    29  determination to the aggrieved small business within 120 days of
    30  the filing of a complaint.
    19970H0055B1071                 - 24 -

     1         (1)  If the Attorney General fails to bring an action or
     2     to issue a written determination to a small business
     3     complainant within 120 days of the filing of a complaint, the
     4     small business may petition the Commonwealth Court for a writ
     5     of mandamus ordering the Attorney General either to bring an
     6     action under this section or to provide the reason or reasons
     7     why the Attorney General has declined to do so.
     8         (2)  Nothing in this subsection shall preclude either an
     9     aggrieved small business or an institution of purely public
    10     charity that has been affected by a decision of the Attorney
    11     General from pursuing an appeal of that decision under 2
    12     Pa.C.S. Ch. 7 Subch. A (relating to judicial review of
    13     Commonwealth agency action).
    14  Section 9.  Accountability and disclosure.
    15     (a)  Intent.--An institution which qualifies for a tax
    16  exemption by virtue of being designated an institution of purely
    17  public charity has a unique responsibility to periodically
    18  demonstrate to the public that it is fulfilling the purpose for
    19  which the exemption is granted. The citizens of this
    20  Commonwealth expect an organization which is granted tax
    21  exemption to adhere to a high standard of accountability and
    22  public disclosure. Therefore, the institution should make an
    23  annual report in which it makes available certain information
    24  about its organization and its charitable activities. The report
    25  should be made consistent with the desire of the General
    26  Assembly to avoid burdensome reporting requirements which unduly
    27  distract the organization from its charitable purposes.
    28     (b)  Report required.--It shall be the duty of the president,
    29  chairman or principal officer of an institution which files, or
    30  is required to file, an annual return with the Internal Revenue
    19970H0055B1071                 - 25 -

     1  Service under the Internal Revenue Code of 1986 (Public Law 99-
     2  514, 26 U.S.C. § 1 et seq.) to file a report with the bureau no
     3  later than the date, including any extensions granted by the
     4  Internal Revenue Service, the institution files or is required
     5  to file an annual return with the Internal Revenue Service. The
     6  following information shall be included in the report required
     7  by this section and shall be in a format approved by the
     8  Secretary of the Commonwealth:
     9         (1)  A copy of the annual return filed or required to be
    10     filed with the Internal Revenue Service.
    11         (2)  The date the institution was organized under
    12     applicable law and a reference to any determination of its
    13     tax-exempt status under the Internal Revenue Code of 1986,     <--
    14     including, if applicable, its Internal Revenue tax 1986,       <--
    15     INCLUDING, IF APPLICABLE:
    16             (I)  THE INSTITUTION'S INTERNAL REVENUE TAX exemption
    17         number and the tax-exempt purposes as established by the
    18         Internal Revenue Service.
    19             (II)  A REVOCATION OF TAX-EXEMPT STATUS BY THE         <--
    20         INTERNAL REVENUE SERVICE.
    21         (3)  The following information on each affiliate of the
    22     institution of purely public charity:
    23             (i)  The name and type of organization.
    24             (ii)  Whether the affiliate is organized on a for-
    25         profit or nonprofit basis.
    26             (iii)  The relationship of each affiliate to the
    27         institution making the report.
    28         (4)  The institution's relationship with any other
    29     nonprofit corporation or unincorporated association if the
    30     relationship involves formal governance or the sharing of
    19970H0055B1071                 - 26 -

     1     revenue.
     2     (c)  Amendments to annual returns.--It shall be the duty of
     3  the president, chairman or principal officer of any institution
     4  which files an amended annual return with the Internal Revenue
     5  Service to file a copy of the amended annual return with the
     6  bureau within ten days of its filing with the Internal Revenue
     7  Service.
     8     (d)  Exemption from filing.--
     9         (1)  An institution which is not required to file an
    10     annual return with the Internal Revenue Service shall be
    11     exempt from the requirements of this section.
    12         (2)  An institution which files a consolidated annual
    13     return with the Internal Revenue Service shall not be
    14     required to file any report except as otherwise required by
    15     this subsection. The institution shall file with the bureau a
    16     statement giving the name and tax-exempt number of the
    17     organization filing the consolidated annual return.
    18     (e)  Paperwork reduction.--The Secretary of the Commonwealth
    19  shall implement procedures and may modify the reporting
    20  requirements of this section in order to reduce or eliminate
    21  duplicate filing by institutions subject to this section. The
    22  Secretary of the Commonwealth shall allow the president,
    23  chairman or principal officer of an institution subject to this
    24  section to substitute the registration statement required under
    25  section 5 of the act of December 19, 1990 (P.L.1200, No.202),
    26  known as the Solicitation of Funds for Charitable Purposes Act,
    27  for those portions of the report required under subsection (b)
    28  which duplicate the information required under section 5 of the
    29  Solicitation of Funds for Charitable Purposes Act. The Secretary
    30  of the Commonwealth shall allow the institution to certify that
    19970H0055B1071                 - 27 -

     1  the information required in subsection (b)(2), (3) or (4) has
     2  not changed since the prior report in lieu of providing the same
     3  information in the report required by subsection (b). The
     4  Secretary of the Commonwealth may obtain from the Internal
     5  Revenue Service copies of annual returns of institutions which
     6  file annual returns with the Internal Revenue Service on
     7  computer disk or other electronic or paper media.
     8     (f)  Retention of records.--The Secretary of the Commonwealth
     9  shall retain the reporting information required by this section
    10  for three years after the reports are required to be filed.
    11     (g)  Utilization of reports.--The Secretary of the
    12  Commonwealth shall make reports submitted under this section
    13  available for public inspection TO THE EXTENT THAT THE            <--
    14  INFORMATION IS AVAILABLE FOR PUBLIC INSPECTION UNDER SECTION
    15  6104 OF THE INTERNAL REVENUE CODE OF 1986. The Secretary of the
    16  Commonwealth shall provide any government agency a copy of the
    17  report filed under this section upon request. Nothing in this
    18  subsection shall prevent a government agency from requiring any
    19  organization seeking exemption as an institution of purely
    20  public charity to provide the information described in
    21  subsection (b) to that agency as part of a determination of the
    22  tax exempt status of the institution.
    23     (h)  Definitions.--As used in this section, the following
    24  words and phrases shall have the meanings given to them in this
    25  subsection:
    26     "Affiliate."  A domestic or foreign corporation, association,
    27  trust or other organization which owns a 10% or greater interest
    28  in the institution. A domestic or foreign corporation,
    29  association, trust or other organization in which the
    30  institution owns a 10% or greater interest.
    19970H0055B1071                 - 28 -

     1     "Annual return." The annual information return required to be
     2  filed with the Internal Revenue Service by organizations exempt
     3  from tax by virtue of section 501(a) of the Internal Revenue
     4  Code of 1986 (Public Law 99-514, 26 U.S.C. §1, et seq.). The
     5  annual information return consists of Internal Revenue Service
     6  Form 990 or Form 990EZ and Schedule A.
     7     "Bureau."  The Bureau of Charitable Organizations of the
     8  Department of State of the Commonwealth.
     9     "Institution."  A domestic or foreign nonprofit corporation,
    10  association, trust or other organization which qualifies as an
    11  institution of purely public charity under the provisions of
    12  this act and which receives or claims exemption from the real
    13  property tax imposed by any political subdivision in this
    14  Commonwealth or which receives or claims exemption from the tax
    15  imposed by Article II of the Tax Reform Code.
    16  Section 10.  Litigation reduction.                                <--
    17     (a)  Institutions.--An institution of purely public charity
    18  may bring an action against the challenging party or parties for
    19  recovery of reasonable litigation expenses and attorney fees on
    20  account of any challenge pertaining to the tax-exempt status of
    21  any property initiated within three years of the initiation of
    22  an earlier challenge involving, in any part, the same property
    23  if:
    24         (1)  the institution successfully defends its tax exempt
    25     status as an institution of purely public charity in a court
    26     of common pleas, Commonwealth Court or the Pennsylvania
    27     Supreme Court; and
    28         (2)  appeals by the challenging party or parties are
    29     exhausted and there has been a final unappealed or
    30     unappealable adjudication or judgment.
    19970H0055B1071                 - 29 -

     1     (b)  Government agencies.--A government agency may bring an
     2  action for recovery of reasonable litigation expenses and
     3  attorney fees on account of any application pertaining to the
     4  tax-exempt status of any property filed within three years of an
     5  earlier application involving, in any part, the same property
     6  against an organization claiming tax-exempt status as an
     7  institution of purely public charity if:
     8         (1)  the organization relies on section 5(d)(3) in
     9     claiming tax-exempt status as an institution of purely public
    10     charity;
    11         (2)  the organization is determined by a court of common
    12     pleas, Commonwealth Court or the Supreme Court not to meet
    13     the requirement in section 5(d) that it donate or render
    14     gratuitously a substantial portion of its services; and
    15         (3)  appeals by the organization are exhausted and there
    16     has been a final unappealed or unappealable adjudication or
    17     judgment.
    18  Section 11.  Exemption for Federal Government instrumentality.
    19     It is the intent of the General Assembly to affirm that, for
    20  purposes of the Constitution of Pennsylvania and the laws of
    21  this Commonwealth relating to the assessment and taxation of
    22  real estate, real property is property of a Federal Government
    23  entity and is, thus, exempt from all State and local taxation if
    24  the real property is owned by a corporation which is:
    25             (1)  established by Federal statute; and
    26             (2)  required to submit to Congress annual reports of
    27         its activities, containing itemized accounts of all
    28         receipts and expenditures, after being fully audited by
    29         the Department of Defense.
    30  SECTION 10.  EXEMPTION FOR FEDERAL GOVERNMENT INSTRUMENTALITY.    <--
    19970H0055B1071                 - 30 -

     1     IT IS THE INTENT OF THE GENERAL ASSEMBLY TO AFFIRM THAT ALL
     2  REAL PROPERTY OWNED BY ANY CORPORATION ESTABLISHED BY AN ACT OF
     3  THE CONGRESS OF THE UNITED STATES, THAT IS REQUIRED TO SUBMIT
     4  ANNUAL REPORTS OF ITS ACTIVITIES TO CONGRESS CONTAINING ITEMIZED
     5  ACCOUNTS OF ALL RECEIPTS AND EXPENDITURES AFTER BEING FULLY
     6  AUDITED BY THE DEPARTMENT OF DEFENSE, FOR PURPOSES OF THE
     7  CONSTITUTION OF PENNSYLVANIA AND THE LAWS OF THIS COMMONWEALTH
     8  RELATING TO THE ASSESSMENT AND TAXATION OF REAL ESTATE, IS
     9  PROPERTY OF A FEDERAL GOVERNMENT INSTRUMENTALITY AND THUS EXEMPT
    10  FROM ALL STATE AND LOCAL TAXATION.
    11  Section 12 11.  Repeals.                                          <--
    12     All acts and parts of acts are repealed insofar as they are
    13  inconsistent with this act except for section 204(a)(3) of the
    14  act of May 22, 1933 (P.L.853, No.155), known as The General
    15  County Assessment Law, as it applies to charitable organizations
    16  providing residential housing services.
    17  Section 13 12.  Applicability.                                    <--
    18     This act shall not apply to nor affect 40 Pa.C.S. § 6103 or
    19  6301 or the entities subject to those sections.
    20  Section 14 13.  Effective date.                                   <--
    21     This act shall take effect January 1, next following the date
    22  of final enactment.






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