A proposed constitutional amendment to change the way tax-exempt entities are defined won’t make it onto the spring ballot.
State Sen. John Eichelberger (R-Blair) said lawmakers have run out of time to pass the amendment and send it to a voter referendum.
“I think we’ve already missed that deadline,” said Eichelberger, “so it’ll be in the fall.”
He added that it’s also possible lawmakers will study the matter further, and even revise the proposed amendment, restarting the three-part process of changing the state constitution.
At a Wednesday hearing on the proposal, two legal professors essentially said the Legislature doesn’t have the power to define tax-exempt entities known as purely public charities, though lawmakers could decide how to treat entities classified that way.
“This was the big question on my mind,” said Sen. John Blake (D-Lackawanna). “We could still find a court case that would bounce us back to where we are today.”
Eichelberger, chairman of the committee that held the hearing, agreed that legal experts had flagged an important issue.
“We need to make sure, if we going to go through this process, that... we’re doing what we expect to do,” he said.
The proposed constitutional amendment had been on track for relatively speedy passage. Such measures must be approved in two consecutive legislative sessions followed by a voter referendum. The amendment passed the Legislature last session, and was approved last month by a Senate committee.
It hit some speed bumps. Local government groups began loudly opposing it, voicing fears that if lawmakers changed the rules for tax-exempt entities, municipalities could lose much-needed revenue. They don’t care for the 1997 state law setting specific guidelines determining tax-exempt status. A 2012 Supreme Court ruling established separate rules for such entities. Local government groups say the ruling gave them the upper hand when challenging an entity’s tax-exempt status.
Lawmakers began grousing about the perception of a rushed amendment. A hearing was scheduled. Eichelberger said there may be more. A commission might even be put together, at the behest of another GOP senator who says further study is necessary.
