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Plan to Change Charity Tax Law Clears First Big Hurdle

State lawmakers are one step closer to wresting control over tax-exempt charity decision from the courts.

The House has passed a constitutional amendment to put the Legislature in charge of deciding whether an organization qualifies as what's called a purely public charity. The distinction excuses title-bearers from paying property taxes.

A recent state court ruling limited lawmakers' power to broaden the definition. House Republicans argued Wednesday the proposed amendment is a simple way to reassert legislative authority.

"Who has the authority to determine what is a charity in Pennsylvania?" said Rep. John Lawrence (R-Chester). "Is it the courts, or is the Legislature? That's the question that is before us today."

But Democrats said the proposal should be accompanied by legislation defining purely public charities, saying that to do otherwise would be to opening the lobbying floodgates as organizations seek tax-exempt status.

"This constitutional amendment, if it passes, is still years away from becoming law but every member here knows that bills are already being introduced to expand the definition of public charity," said Rep. Mark Painter (D-Montgomery).

House Republicans say nailing down what qualifies as a purely public charity would only be appropriate after the Legislature has assumed authority to have the final word on such a decision.

The proposed constitutional amendment, which has already passed the Senate, does not have to go to the governor. To take hold, it must pass the General Assembly again in the next legislative session beginning in 2015 and then clear a voter referendum.