The decisions to change some entities' tax-exempt status were not made in a day.
The process has been going on for more than a year, but there are still questions about the procedure, the authority of the appeal board, and why some entities allegedly failed the tests.
The original Pennsylvania Supreme Court Hospital Utilization Test (HUP) ruling was handed down in 1985.
The state legislature passed the Institutions of Purely Public Charity Act in 1997.
In the past few years, culminating with the state Supreme Court decision in the Mesivtah Eitz Chaim of Bobov case in April 2012, the HUP Test and Purely Public Charities Act have come into increasing use in determining whether tax-exempt properties will continue to enjoy that advantage.
Jewish summer camps aren't the only entities seeing their tax-exempt status go away. Some hospitals and even churches and cemeteries have had to start paying.
In Warren County, Warren General Hospital, the Rouse, Warren YMCA, the Crary Home, Warren County Memorial Park, and Calvary Chapel were notified that they were no longer fully tax-exempt. Those entities were notified in May.
Late in 2011, the Warren County Commissioners met with members of the Warren County Board of Assessment Appeals.
"We're responsible for preparing the tax rolls," Board Chairman Bernard J. Hessley said. That preparation includes determining which properties are tax-exempt and which are not. "We were asked by the county commissioners to examine them all," Hessley said.
"We asked the assessment appeals board to look at all the tax-exempt properties and determine whether they still qualified or not," Commissioner John Eggleston said. "One of the taxing bodies, Warren County, asked them to take a look at it. They're fairly independent, we can't tell them to do this or that."
The task was not a simple one. "We spent a lot of time on it," Hessley said.
Nor was it a pleasant one. "Are all of these things worthwhile? You bet they are," he said. "but that doesn't mean they're tax-exempt."
But it fit in with the board's responsibilities, Hessley said.
"They gave us that responsibility," Hessley said. "We took this seriously. If we don't live up to our responsibilities, we're not good public stewards."
The commissioners, or the officials of any taxing body, asking the board to investigate tax-exempt status is not enough, according to WGH Board Chairman Timothy Bevevino. "The board simply does not have the authority to do what it did."
"The board has the authority to 'hear and determine appeals,'" he said. "Neither this statute, nor any other statute, gives the board the authority to initiate appeals."
"The proper procedure would have been for one of the taxing districts to have filed the appropriate petition to challenge our exempt status," Bevevino said. "We would then have received notice and an opportunity to be heard by the board before any action was taken. That manifestly did not happen here."
That hearing, he said, is a necessary step in a process to revoke tax-exempt status. "Once a non-profit is granted tax exempt status, that status cannot be revoked without a hearing," he said. "We never got one until after the revocation."
"If a government entity is going to attempt to deprive me of a right or privilege I possess, I have the right to notice and an opportunity to be heard," Bevevino said.
Further, if the proper challenge had been made, paperwork would have been created, he said. "You don't initiate this process by making an informal request or casually suggesting that it be done. A taxing district has to file a formal challenge."
"Show me the documentation," Bevevino said. "They can't because it doesn't exist."
The board met Dec. 16, 2011, and sent out letters three days later.
"It was discussed and unanimously voted upon to review each tax exempt property to determine continued tax exempt eligibility for the 2012 tax year," the letter to Warren General Hospital said. "As such all properties that are currently considered tax exempt will now be considered taxable until a determination of continued eligibility is established."
The board members requested more information by March 1.
A copy of a letter provided to the Times Observer indicates the hospital's data was sent on Feb. 20.
YMCA officials also sent information to the board, but considered the notice routine. "We didn't react as strongly as we should have, because we didn't realize that was going to happen," YMCA CEO Thad Turner said.
On May 18, the board sent another group of letters, again stating the tax-exempt status had been revoked. This letter outlined the method of appealing the decision.
In August, the hospital's attorneys at MacDonald Illig Attorneys filed an appeal and called the decision arbitrary and capricious, and... "null and void."
"WGH satisfied all statutory and constitutional requirements to be classified as a purely public charity..." according to the letter.
The board must complete the assessment roll by the first day in July, according to Commonwealth Code.
With the decision letters mailed in May, that deadline was, according to the board, met.
Some of the entities that received letters indicating their tax-exempt status was revoked appealed.
The board heard an initial round of appeals in October.
On Dec. 31, the board sent another set of letters informing the six entities that at least portions of their properties were still ruled taxable.
Those taxes, should they withstand any possible legal challenges, apply for 2013.
Bevevino said the hospital will fight the ruling "to the Supreme Court if we have to."
"The YMCA of the USA will fight," Turner said. "If the corporate office... loses one of these, that's gigantic. We'll fight this to the Supreme Court."
Other groups are looking into the cost and the prospects. "I feel litigating this process only furthers to erode our community and waste precious resources," Rouse CEO Jasen Diley said to the Warren County School District's board of directors.
At the moment, the agencies considering appeals are working at a blank slate.
There are no charges - that they fail to meet a particular portion of one test or the other - nor areas they've been told they don't have to worry about.
The assessment appeals board's letters did not tell the entities why the board members ruled the way they did.
A property must meet all five of the HUP Test standards and all five of the very similar Purely Public Charities act requirements. The act is more specific than the HUP test. Both require that an entity: advances a charitable purpose; donates or renders gratuitously a substantial portion of its services; benefits a substantial and indefinite class of persons who are legitimate subjects of charity; relieves the government of some of its burden; and operates entirely free from private profit motive.
"Reasons for denying the appellants' appeals were not provided to the appellants," Board of Appeals Solicitor Barry Klenowski said. "It is my opinion that the board of assessment appeals was not required to provide reasons."
"That may be true," Bevevino said, "but I would submit that, given the importance of the hospital and these other institutions to our community, they had a community/moral obligation to provide their reasons."
"Additionally, it is my position that any appeal that is filed will require a de novo (brand new) hearing before the trial court, so in this respect, the reason for denying the administrative appeal (by appeal before the board) are meaningless upon appeal," Klenowski said.
"We don't want to limit the county solicitor (also Klenowski) in how he establishes or responds to their positions," Hessley said. "We're making a finding."