In a previous post and recent podcast, we discussed that uncertainty exists with respect to the prevailing standards for determining real estate tax exemptions for nonprofits in Pennsylvania, largely due to a tug of war between Pennsylvania’s legislative and judicial branches regarding the meaning of a “purely public charity.”
Unfortunately, attempts to resolve the uncertainty may have stalled. In 2013, Senate Bill 4 was introduced to amend the state constitution to give the legislature the right to determine the criteria for whether a particular institution qualifies as a purely public charity. The Bill passed both the House and Senate, but must pass a second time in order to be submitted to Pennsylvania voters for final approval. Although the Bill has again passed the Senate, it is now stalled in the House, with no timetable for movement, threatening the likelihood the proposed amendment will appear on voters’ ballots in November.
If the House takes no action during the current legislative session, the Bill will die, and the amendment process will have to begin again. Given that a bill containing a constitutional amendment must pass two consecutive sessions of the legislature in both the Senate and House, that would mean a delay of at least 2-3 more years for a constitutional solution to the uncertainty.
We will continue to monitor the Bill closely, and provide updates as appropriate.