Court Opinion

ID: 9635228
Source: CourtListenerOpinion
Date Created: 2023-08-22 13:42:27.464418+00
Date Added: 2024-06-11T09:53:54.646160
License: Public Domain

*65LARSEN, Justice,
dissenting.
The majority states that appellant, G.D.L. Plaza Corporation, “while undertaking a worthwhile and commendable task for the benefit of the public, is not ‘maintained by public or private charity’ as required by the Assessment Law in order to be entitled to an exemption.” Maj.Op. at 64-65. The basis for its conclusion is that all of the criteria listed in Hospital Utilization Project v. Commonwealth, 507 Pa. 1, 487 A.2d 1306 (1985), for establishing a “purely public charity” have been met in this case, but because appellant is subsidized by the federal government and assumes no financial risk in providing its services, it is not an institution that is maintained by public charity. Because I find that federal funding of a purely public charity does not destroy its charitable purpose, I believe that appellant is maintained by public charity and I hereby dissent.
The majority determines that federal subsidies do not constitute public charity, without defining what the legislature meant when it used the phrase “public charity” in the General County Assessment Law, Act of May 22, 1933, P.L. 853, Art. II, as amended, 72 P.S. § 5020-204(a)(3).
This Court has carefully established the criteria for determining when an institution is a “purely public charity” pursuant to Art. VIII, sec. 2(a)(v) of the Pennsylvania Constitution. Hospital Utilization Project, supra. The majority concedes that appellant meets all of the criteria for establishing a purely public charity where it states that “Commonwealth Court erred in overlooking the chancellor’s findings as to the extent of services provided, and in overestimating the degree to which the institution must relieve the government of its burden.” Maj.Op. at 62.1
*66Then, the majority looks to the second and third prongs of the Woods School Tax Exemption Case, 406 Pa. 579, 178 A.2d 600 (1962), and determines that federal subsidies and financial viability remove appellant from the category of institutions exempt from taxation pursuant to legislative enactment.
It is important to recall why “only certain institutions are relieved of their normal tax load. The legislature has recognized by this statute that some organizations actually serve a public, rather than a private, purpose, and should be relieved of their tax burden accordingly.” Pittsburgh Institute of Aeronautics Tax Exemption Case, 435 Pa. 618, 623, 258 A.2d 850, 852 (1969). Appellant, in the case sub judice, serves a public purpose, as the majority acknowledges. The source of funding has no impact upon the purpose served where, as here, no one realizes any profit from this housing project for the elderly and handicapped with limited means.
This Court has analyzed cases in which federal funds launched varying projects and has implicitly recognized that this source of funding is part of the legislative term “public charity.” In the Woods School Tax Exemption Case, supra, a construction grant from the federal government contributed to a Child Study, Treatment and Research Center, and yet, this Court found that the institution of learning in that case was “founded in charity.”
In Four Freedoms House of Philadelphia, Inc. v. City of Philadelphia, 443 Pa. 215, 279 A.2d 155, 157 (1971), construction of low-cost housing for the aged was financed by a federal mortgage. This Court stated that there was no “question that appellant was founded by both public and private charity” and was maintained by public charity. Case law, therefore, does not exclude federally funded projects on the basis of legislative exemption from taxation.
The majority states that “neither the corporation nor the beneficiaries of the housing service would be adversely *67affected by subjecting the Plaza property to payment of real estate tax,” Maj.Op. at 64, and thus implies that a public charity must be on the brink of financial ruin before we will recognize that it is exempt from taxation. The imposition of such an additional requirement is not mandated by the standards set forth in our cases on this issue and imposes an unnecessary burden upon those claiming tax exempt status as a public charity. As our citizenry ages, it is critical that encouragement be given to those agencies and governmental entities which assume the responsibility for providing essential services to the elderly with limited means. Turning federal tax dollars approved for low-income housing for the elderly over to a school district for purposes of subsidizing public education makes little sense.2
In addition, I take issue with the majority’s assumption that the U.S. Department of Housing and Urban Development (HUD) will reimburse appellant in some way for the residential construction tax assessed by appellee, Council Rock School District. The federal statute states that “substantial general increases in ... costs” may be compensated for by adjustments in the maximum monthly rent for subsidized units. 42 U.S.C. § 1437f(c)(2)(B) (emphasis added). The residential construction tax herein does not represent an increase in real property taxes, therefore HUD would be justified in refusing to adjust the monthly rent upward to absorb this cost.
Accordingly, I would reverse the Order of Commonwealth Court and would affirm the Final Decree of the Chancellor.
HUTCHINSON, J., joins in this dissenting opinion.

. The majority cogently notes that the legislature lacks the authority to extend a tax exemption to entities that do not pass constitutional muster as purely public charities. Maj.Op. at 59, n. 2. The question remains, however, as to whether the legislature may limit what is a public charity once it has exercised its authority under the Constitution to exempt public charities from taxation.

. I note that the county board of assessment granted appellant tax exempt status, effective January 1982, therefore appellant, at least for the year 1983, was not liable for any local taxes.