HUP test in Pennsylvania

2026The trial court acknowledged that each purpose “could be deemed charitable on its face” but that the word “charitable” implicated the other HUP factors, in particular, the requirement to “benefit ‘a substantial and indefinite class of persons.’” Id. at 9-10 (quoting HUP, 487 A.2d at 1317 ).

2026The trial court acknowledged that each purpose “could be deemed charitable on its face” but that the word “charitable” implicated the other HUP factors, in particular, the requirement to “benefit ‘a substantial and indefinite class of persons.’” Id. at 9-10 (quoting HUP, 487 A.2d at 1317 ).

2025The trial court next examined two leading cases from the Commonwealth Court which addressed whether particular bonus compensation structures for executives of non-profit entities made the amount of their bonuses too heavily dependent on the financial performance of the entity, so as to disqualify it under the HUP test from receiving a charitable tax exemption: In re Dunwoody Village, 52 A.3d 408 (Pa. Cmwlth. 2012), and Phoebe Services v. City of Allentown, 262 A.3d 660 (Pa. Cmwlth. 2021).

2025The trial court next examined two leading cases from the Commonwealth Court which addressed whether particular bonus compensation structures for executives of non-profit entities made the amount of their bonuses too heavily dependent on the financial performance of the entity, so as to disqualify it under the HUP test from receiving a charitable tax exemption: In re Dunwoody Village, 52 A.3d 408 (Pa. Cmwlth. 2012), and Phoebe Services v. City of Allentown, 262 A.3d 660 (Pa. Cmwlth. 2021).

2014If the entity satisfies the HUP test, it must then also show that it meets the statutory requirements of the Institutions of Purely Public Charity Act (the Charity Act). 4 Community Options, Inc., 813 A.2d at 685 ; Camp Hachshara Moshava of New York, 47 A.3d at 1275-76 .

2014In Community Options, our Supreme Court held that a non-profit corporation that provided supervised group homes and services for the intellectually disabled satisfied the HUP test’s fourth requirement because the government has “a statutory duty to provide for the care of individuals diagnosed with mental retardation under the Mental Health and Mental Retardation Act of 1966,” 5 and such an entity relieves the government of the burden of providing facilities for the care of those individuals. 813 A.2d at 685 .

2023Further, an institution relieves the government of some of its burden where “the institution bears a substantial burden that would otherwise fall to the government”; the institution need not “fully fund[] the care of some people who would otherwise be fully funded by the government.” Id. at 384 . 13 The final criterion of the HUP test, operating “entirely free from private profit motive,” is a major issue in this appeal.

2023Further, an institution relieves the government of some of its burden where “the institution bears a substantial burden that would otherwise fall to the government”; the institution need not “fully fund[] the care of some people who would otherwise be fully funded by the government.” Id. at 384 . 13 The final criterion of the HUP test, operating “entirely free from private profit motive,” is a major issue in this appeal.

2016Mesivtah Eitz Chaim of Bobov, Inc. v. Pike County Board of Assessment Appeals, 615 Pa. 463 , 44 A.3d 3 , 9 (2012) (holding that "if you do not qualify under the HUP test, you never get to the statute.").

2016Mesivtah Eitz Chaim of Bobov, Inc. v. Pike County Board of Assessment Appeals, 615 Pa. 463 , 44 A.3d 3 , 9 (2012) (holding that "if you do not qualify under the HUP test, you never get to the statute.").

2018In Unionville, 714 A.2d at 401 , our Supreme Court did hold that to meet the fourth prong of the HUP test, an entity does not have to show that the burden relieved is either constitutionally or statutorily imposed.

2018In Unionville, 714 A.2d at 401 , our Supreme Court did hold that to meet the fourth prong of the HUP test, an entity does not have to show that the burden relieved is either constitutionally or statutorily imposed.

2007The Court further pointed out that the contract provided for the HUD secretary to make additional adjustments to the monthly rent to reflect increases as a result of necessary expenses of owning and maintaining the units resulting from substantial general increases in real property taxes among other costs. 21 More recently, in WRC North Fork Heights, Inc. v. Board of Assessment Appeals, Jefferson County, 917 A.2d 893 (Pa.Cmwlth.2007), this Court, also citing G.D.L., held that a low-income housing facility for the elderly relying solely on federal subsidies was not exempt from real estate taxes

2007The Court further pointed out that the contract provided for the HUD secretary to make additional adjustments to the monthly rent to reflect increases as a result of necessary expenses of owning and maintaining the units resulting from substantial general increases in real property taxes among other costs. 21 More recently, in WRC North Fork Heights, Inc. v. Board of Assessment Appeals, Jefferson County, 917 A.2d 893 (Pa.Cmwlth.2007), this Court, also citing G.D.L., held that a low-income housing facility for the elderly relying solely on federal subsidies was not exempt from real estate taxes

2013The criteria for qualifying as an institution of public charity under Act 55 tracks the criteria set forth in the HUP test and “continues further to dictate what is sufficient or insufficient to meet each individual criterion.” Alliance Home of Carlisle, Pa. v. Bd. of Assessment Appeals, 919 A.2d 206 (Pa. 2007).

2013The criteria for qualifying as an institution of public charity under Act 55 tracks the criteria set forth in the HUP test and “continues further to dictate what is sufficient or insufficient to meet each individual criterion.” Alliance Home of Carlisle, Pa. v. Bd. of Assessment Appeals, 919 A.2d 206 (Pa. 2007).

2015See Camp Hachshara Moshava of New York v. Wayne County Board, 47 A.3d 1271 , (Pa. Cmwlth. 2012), appeal denied, 69 A.3d 603 (Pa. 2013).

2014If the entity satisfies the HUP test, it must then also show that it meets the statutory requirements of the Institutions of Purely Public Charity Act (the Charity Act). 4 Community Options, Inc., 813 A.2d at 685 ; Camp Hachshara Moshava of New York, 47 A.3d at 1275-76 .

2025As our Court has recognized, application of the HUP test requires consideration of whether the utilization of the revenue by the entity seeking the tax exemption “inures, directly or indirectly, to any private individual related to the charitable entity or related organization(s).” Wilson Area School District, 747 A.2d at 880 .

2025As our Court has recognized, application of the HUP test requires consideration of whether the utilization of the revenue by the entity seeking the tax exemption “inures, directly or indirectly, to any private individual related to the charitable entity or related organization(s).” Wilson Area School District, 747 A.2d at 880 .

2018Accordingly, the trial court affirmed the Board’s decision denying HELPS’ request for an exemption for the Windermere Property and HELPS filed the instant appeal.3 HELPS first claims that the trial court erred in determining that it failed to demonstrate that it met the third prong of the HUP test, i.e., that it benefits a substantial and indefinite class of persons who are legitimate subjects of charity.4 However, as we have explained, “In Appeal of Sewickley Valley YMCA, 774 A.2d 1 3 As this Court has explained: Whether a parcel of property qualifies for tax exemption is a question of law.

2018Accordingly, the trial court affirmed the Board’s decision denying HELPS’ request for an exemption for the Windermere Property and HELPS filed the instant appeal.3 HELPS first claims that the trial court erred in determining that it failed to demonstrate that it met the third prong of the HUP test, i.e., that it benefits a substantial and indefinite class of persons who are legitimate subjects of charity.4 However, as we have explained, “In Appeal of Sewickley Valley YMCA, 774 A.2d 1 3 As this Court has explained: Whether a parcel of property qualifies for tax exemption is a question of law.

2018See, e.g., Lehighton Area School District v. Carbon County Board of Assessment, 708 A.2d 1297, 1302 (Pa. Cmwlth. 1998) (“We first review the HUP standard, keeping in mind that the applicant must satisfy all five criteria of the HUP test.

2018See, e.g., Lehighton Area School District v. Carbon County Board of Assessment, 708 A.2d 1297, 1302 (Pa. Cmwlth. 1998) (“We first review the HUP standard, keeping in mind that the applicant must satisfy all five criteria of the HUP test.

2020Id. at 116 .

2020Id. at 116 .

2022Bd. of Assessment Appeals, 107 A.3d 839, 845 (Pa. Cmwlth. 2014).

2022Bd. of Assessment Appeals, 107 A.3d 839, 845 (Pa. Cmwlth. 2014).

2017As we have noted, because charitable exemption cases are fact-intensive, “prior cases have limited value as precedent.” Associated YM-YWHA v. Cnty. of Wayne, 613 A.2d 125, 127 (Pa. Cmwlth. 1992).7 For the foregoing reasons, the trial court’s order is vacated, and the matter is remanded to the trial court to make findings of fact and conclusions of law as to each of the five prongs of the HUP test, the five parts of Section 5 of Act 55, 10 P.S. §375(a)-(f), and the Consolidated County Assessment Law. ____________________________________ BONNIE BRIGANCE LEADBETTER, Senior Judge Judge Simpson con

2017As we have noted, because charitable exemption cases are fact-intensive, “prior cases have limited value as precedent.” Associated YM-YWHA v. Cnty. of Wayne, 613 A.2d 125, 127 (Pa. Cmwlth. 1992).7 For the foregoing reasons, the trial court’s order is vacated, and the matter is remanded to the trial court to make findings of fact and conclusions of law as to each of the five prongs of the HUP test, the five parts of Section 5 of Act 55, 10 P.S. §375(a)-(f), and the Consolidated County Assessment Law. ____________________________________ BONNIE BRIGANCE LEADBETTER, Senior Judge Judge Simpson con

2007City of Washington v. Board of Assessment Appeals of Washington County, 550 Pa. 175, 186 , 704 A.2d 120, 125, n. 8 (1997). [11] Indeed, the majority finds that WRC failed the same two HUP test factors that were failed by the low-income housing provider in G.D.L.

2007City of Washington v. Board of Assessment Appeals of Washington County, 550 Pa. 175, 186 , 704 A.2d 120, 125, n. 8 (1997). [11] Indeed, the majority finds that WRC failed the same two HUP test factors that were failed by the low-income housing provider in G.D.L.

2022Br. at 28.) The District cites Fellowship International Mission v. Lehigh County Board of Assessment Appeals, 690 A.2d 1271, 1274 (Pa. Cmwlth. 1997), for the proposition that the second prong of the HUP test requires a showing of “a bona fide effort to service those persons unable to afford the usual fee.

2022Br. at 28.) The District cites Fellowship International Mission v. Lehigh County Board of Assessment Appeals, 690 A.2d 1271, 1274 (Pa. Cmwlth. 1997), for the proposition that the second prong of the HUP test requires a showing of “a bona fide effort to service those persons unable to afford the usual fee.

2020In its broadest meaning it 7 In Church of the Overcomer, 18 A.3d at 391 , this Court held that a property owner’s entitlement to a tax exemption is a mixed question of law and fact.

2020In its broadest meaning it 7 In Church of the Overcomer, 18 A.3d at 391 , this Court held that a property owner’s entitlement to a tax exemption is a mixed question of law and fact.

2012See, e.g., HUP, 507 Pa. at 23-24 , 487 A.2d at 1318 (citing numerous cases for the proposition that its holding "adhere[s] to the principles established by a long line of prior case law"); see also Ogontz School Tax Exemption Case, 361 Pa. 284, 291-92 , 65 A.2d, 150, 153 (1949) ("Any institution which by its charitable activities relieves the government of part of this burden is conferring a pecuniary benefit upon the body politic, and in receiving exemption from taxation it is merely being given a `quid pro quo' for its services in providing something which otherwise the government would have

2012See, e.g., HUP, 507 Pa. at 23-24 , 487 A.2d at 1318 (citing numerous cases for the proposition that its holding "adhere[s] to the principles established by a long line of prior case law"); see also Ogontz School Tax Exemption Case, 361 Pa. 284, 291-92 , 65 A.2d, 150, 153 (1949) ("Any institution which by its charitable activities relieves the government of part of this burden is conferring a pecuniary benefit upon the body politic, and in receiving exemption from taxation it is merely being given a `quid pro quo' for its services in providing something which otherwise the government would have

2023See Stilp v. Commonwealth, 905 A.2d 918 , 928 n.14 (Pa. 2006) (noting that amici must take the issues as raised by the parties and cannot inject new issues that the parties have not preserved).

2023See Stilp v. Commonwealth, 905 A.2d 918 , 928 n.14 (Pa. 2006) (noting that amici must take the issues as raised by the parties and cannot inject new issues that the parties have not preserved).

2020“Charity to Persons” The third prong of the HUP test requires the public charity to benefit a substantial and indefinite class of persons who are legitimate subjects of charity. 14 Mars Area School District v. United Presbyterian Women’s Association of North America, 693 A.2d 1002, 1007 (Pa. Cmwlth. 1997).

2020“Charity to Persons” The third prong of the HUP test requires the public charity to benefit a substantial and indefinite class of persons who are legitimate subjects of charity. 14 Mars Area School District v. United Presbyterian Women’s Association of North America, 693 A.2d 1002, 1007 (Pa. Cmwlth. 1997).

2018See Betsy King LPGA Classic, Inc. v. Twp. of Richmond, 739 A.2d 612 (Pa. Cmwlth. 1999), as amended on clarification (Nov. 12, 1999). 10 “Our scope of review in a real estate tax assessment appeal is limited to determining whether the trial court’s findings are supported by substantial evidence or whether the trial court abused its discretion or committed an error of law.” Camp Hachshara Moshava of New York v. Wayne Cty.

2018In contrast, this requirement is not met where the government provides funding that fully subsidizes all of the entity’s expenses. 6 Nat[’l] Church Residences of Mercer C[ty.] v. Mercer C[ty.] B[d.] of Assessment Appeals, 925 A.2d 220, 231 (Pa. Cmwlth. 2007) (low-cost housing provider did not donate or gratuitously supply services where government subsidy covered all costs above tenants’ reduced rent).