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April 30, 1997


Before: Honorable Jim Flaherty, Judge, Honorable Bonnie Brigance Leadbetter, Judge, Honorable Silvestri Silvestri, Senior Judge. Opinion BY Judge Leadbetter

The opinion of the court was delivered by: Leadbetter


FILED: April 30, 1997

Appellants, Mars Area School District (the district) and the County of Butler, appeal from an order of the Court of Common Pleas of Butler County (trial court) which reversed the decision of the Board of Assessment Appeals of Butler County (the board) and exempted the United Presbyterian Women's Association of North America (UPWA), as a "purely public charity," from real estate taxes under Section 204(a)(3) of The General County Assessment Law, Act of May 22, 1933, P.L. 853, as amended, 72 P.S. §§ 5020-204(a)(3). The threshold issue is whether UPWA is a "purely public charity" and, therefore, entitled to a statutory exemption from the payment of real estate taxes for the property on which it operates the Mars Home for Youth (MHY), a residential treatment facility for adjudicated dependent and delinquent youth.

UPWA, a federal tax exempt charitable organization, was formed in 1878 to attend to the needs of orphans. In 1891, UPWA's charitable purpose extended to establish and maintain a hospital for the treatment of sick and disabled women and children and to establish a home for the aged. *fn1 In 1929, UPWA acquired farmland Butler County of which approximately 70 acres *fn2 is used today to operate MHY.

MHY offers two types of programs. The intensive supervision program consists of a twenty-four hour per day supervised living arrangement and is designed to help children with chronic problems. The other main program is the residential treatment program which includes: (1) managed independent training on living skills and educational or vocational opportunities for adolescents and (2) programs fashioned to aid younger adolescents in their emotional and social development and to enable them to return to a family environment. Other types of treatment include psychiatric and psychological services, including both individual and family therapy. In addition, MHY offers group therapy dealing with sexual abuse, drug and alcohol abuse, eating disorders, self-esteem, and expressive arts. MHY also provides special educational services, such as individual tutoring and enrollment in Mars Area School District.

On April 20, 1995, after holding a hearing on the district's challenge to UPWA's real estate tax exemption, the board upheld the district's appeal and determined that the property and improvements on the 72.868 acres, which UPWA uses to operate MHY, were taxable by the district beginning with the 1995-1996 tax period and taxable by Adams Township and Butler County commencing in 1995. UPWA appealed, and the trial court, after holding a de novo hearing on August 25, 1995, reversed the board's decision. *fn3 The trial court determined that UPWA met its burden of demonstrating that it is a "purely public charity" under the standards set forth in Hospital Utilization Project v. Commonwealth, 507 Pa. 1, 487 A.2d 1306 (1985) (HUP). The court further held that UPWA qualified for a real estate tax exemption under Section 204(a)(3) of The General County Assessment Law. This appeal followed.

Whether an institution is a "purely public charity" is a mixed question of law and fact on which the trial court's decision is binding absent an abuse of discretion or lack of supporting evidence. City of Washington v. Board of Assessment Appeals of Washington County, 666 A.2d 352, 358 (Pa. Commw. 1995), alloc. granted Pa. , 681 A.2d 1344 (1996). In G.D.L. Plaza v. Council Rock School District, 515 Pa. 54, 526 A.2d 1173 (1987), the Supreme Court noted that in deciding whether an institution is one of purely public charity "'prior cases have limited value as precedent,' . . . because of the continually changing nature of the concept of charity and the many variable circumstances of time, place, and purpose." 515 Pa. at 59-60, 526 A.2d at 1175 (citation omitted).

Article 8, Section 2 of the Pennsylvania Constitution gives the General Assembly the power to exempt institutions of "purely public charity" from taxation, but in the case of real property, only that portion of real property which is actually and regularly used for the purposes of the institution shall be exempt. Pa. Const. art. VIII, § 2(a)(v). Pursuant to this authority, the General Assembly enacted Section 204 of The General County Assessment Law, *fn4 and Section 202 of The Fourth to Eighth Class County Assessment Law, *fn5 which grant real estate tax exemptions to institutions of "purely public charity."

Initially, we note that because the land in question is located in Butler County, a fourth class county, The Fourth to Eighth Class County Assessment Law, and not The General County Assessment Law, applies. Therefore, the trial court erred in finding that UPWA qualified for tax exemption under the latter law. Appellants argue that this is reversible error; we disagree. The statutes are substantially similar. See West Allegheny Hosp. v. Board of Property Assessment, 500 Pa. 236, 242, 455 A.2d 1170, 1173 (1982) (stating that the provisions of the two statutes are comparable); Mount Zion New Life Ctr. v. Board of Assessment and Revision of Taxes and Appeals, 94 Pa. Commw. 439, 503 A.2d 1065, 1067 n.3 (Pa. Commw. 1986) (applying arguments under one statute to tax status under the other statute). Moreover, the evidence and the trial court's findings establish that UPWA qualified under both statutes. Thus the fact that the trial court based its analysis on Section 204 rather than Section 202 was harmless error.

In determining whether UPWA is entitled to an exemption, we must first determine whether UPWA qualifies as a "purely public charity" within the meaning of the Pennsylvania Constitution. City of Washington, 666 A.2d at 357. On appeal, appellants contend that UPWA failed to satisfy its burden under HUP, where our Supreme Court concluded that an entity qualifies as a "purely public charity" if it:

(a) Advances a charitable purpose;

(b) Donates or renders gratuitously a substantial portion of its services;

(c) Benefits a substantial and indefinite class of persons who are legitimate ...

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