HARRISBURG — Pennsylvania voters are getting a heads up about a proposed change in determining how public charities obtain tax-exempt status as a result of a public notice published recently in newspapers. This issue is important to the tax base of older cities where nonprofit institutions are often concentrated.
The notice by the Department of State provides the text of three proposed amendments to the state Constitution in order to meet legal advertising requirements.
The amendments would give the Legislature ultimate authority to set standards to determine which institutions are purely a public charity and thus eligible for tax-exempt status, increase the mandatory retirement age for judges from 70 to 75 and abolish the Philadelphia Traffic Court.
The public charity amendment stems from a 2012 state Supreme Court ruling denying tax-exempt status to a religious camp in Pike County. The Mesivtah Eitz Chaim of Bobov Inc. did not meet a standard set in a 1985 court case to determine charitable status, the ruling said.
The ruling gave precedence to the 1985 court case over a 1997 state law governing charities, thus prompting lawmakers to push for the amendment to restore legislative primacy in this matter.
A proposed amendment needs to win approval in two consecutive sessions of the General Assembly before it can go on the ballot for final voter approval.
The three amendments have already won first approval from the General Assembly during the current session.
This notice is for round one, said Department of State spokesman Ron Ruman Tuesday.
A second approval vote for the charity amendment in the 2015-16 legislative session could hinge on what happens on election day regarding party control of the Senate. Republicans hold a 27-23 seat majority.
When the charity amendment came up for a Senate vote in early 2013, Senate Democratic leaders voted against it. Senate Minority Leader Jay Costa, D-43, Pittsburgh, said lawmakers needed to rewrite the 1997 law as part of the amendment process because it gives too much of an advantage to nonprofits over municipalities in tax exemption cases.
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