Back in the summer of 2013, I wrote an article entitled The Vagaries of Pennsylvania Exemption Law. The article tracked the tensions dividing nonprofits from municipalities over HUP v. Act 55. It is now 2015 – and the debate continues. Today it has taken the form of an inter-branch conflict over whether the courts or the legislature have the ability to define what constitutes “an institution of purely public charity.” S.B. 4 (the constitutional amendment that places definitional authority in the legislature) has worked its way through two sessions of the General Assembly and is now poised on the brink of a public referendum to authorize a constitutional amendment.
In reaching this point, S.B. 4 has been placed before the Senate Finance Committee and the Senate Appropriations Committee. When the Senate Finance Committee recently heard testimony, a number of Committee members voted to oppose the proposed legislation because they feared that a change in definitional authority could have a detrimental effect on municipalities and their revenue raising ability. The municipal spokesmen argued that (1) there is a continuing need to have an open dialogue; (2) S.B. 4 was moving too quickly and without adequate vetting and (3) without a comparable judicial standard, Act 55 would become the default, thus favoring the nonprofits and bolstering their tax exempt status.
Senate Finance Committee Chair John Eichelberger (R-Blair), in language reminiscent of HUP asked for statewide hearings and a new definition of “purely public charity.” Following the Committee meeting, advocates for the municipalities and the First Responders came together in the Main Rotunda, calling upon on state lawmakers to reject S.B. 4 and, at the very least, to hold public hearings. The President of the PA Firefighters Assoc. warned that a constitutional amendment would jeopardize our communities’ abilities to provide basic services and would financially cripple First Responders and other municipal workers. In other words, “…We need to take our time and not rush to change our constitution to benefit a few.”
The proposed amendment is expected to be placed before the electorate by the next general election. It has been criticized as vague and imprecise. So the debate continues unresolved with both sides still at partisan barriers.