Senate Bill 4, which has been approved by the Senate Finance Committee, and House Bill 724 both propose the change. Local legislators Sen. Mike Brubaker, R-Lancaster and Chester counties, and Rep. Ryan Aument, R-Lancaster County, are among sponsors of the bills.
Fifteen organizations including The Hospital & Healthsystem Association of Pennsylvania, Association of Independent Colleges & Universities of Pennsylvania, Pennsylvania Association of Nonprofit Organizations and Pennsylvania Chamber of Business and Industry have signed a letter in support of the legislation, saying it could prevent “a surge of costly litigation.”
They consider an amendment necessary, the letter says, because of a Pennsylvania Supreme Court decision last year that denied public charity status to an organization that qualified under the Pennsylvania Institutions of Purely Public Charity Act, Act 55 of 1997. The ruling said charities must satisfy a 1985 judicially created test.
“Charitable organizations now will need to prove their tax-exempt status in different courtrooms facing different interpretations by different judges based upon a very vague judicial test created in the mid-1980s,” the letter said. By contrast, the desired amendment “will allow the legislature to maintain certainty and uniformity across the state in this area of the law, rather than allowing the standards to be built one court decision at a time.”