The Senate Tuesday passed a proposal sponsored by Sen. Ryan P. Aument (R-Lancaster) that would amend the Pennsylvania Constitution to give the General Assembly the power to determine whether an institution is a purely public charity and thus exempt from paying local property taxes.
Senate Bill 4 specifies that the General Assembly, not the judiciary, has the exclusive right to set the parameters for an organization to qualify as a purely public charity. The measure is necessary following a 2012 Pennsylvania Supreme Court ruling which created a great deal of confusion among charities and local governments regarding the criteria for an organization to qualify for a tax exemption.
“The Supreme Court’s decision created a confusing and expensive problem for local governments and charities, forcing both parties to spend resources that would be better spent improving our communities,” Sen. Aument said. “Senate Bill 4 is not designed to tie the hands of local governments or expand the number of charities that qualify for a tax exemption. The goal is simply to set clear, concrete standards by which a purely public charity can be defined.”
Because the bill would amend the state Constitution, the proposal must pass in two consecutive legislative sessions before being decided by the voters via referendum. The proposal was already approved once by the General Assembly during the 2013-14 session.
The bill now goes to the House for consideration. A summary and Senate Fiscal Note are available.
