American Ass'n for Lost Children v. Westmoreland County Board of Assessment Appeals

DISSENTING OPINION BY

Judge COHN JUBELIRER.

I must respectfully dissent because I believe there is a sufficient basis to conclude that the American Association for Lost Children, Inc. (Association) “relieve[s] the government of some of its burden.” 10 P.S. § 375(f).

In support of the Association’s position that it qualified for the real estate tax exemption as a public charity, the Association offered into evidence the testimony of its Director, Mark R. Miller, as well as various letters from law enforcement officials and news clippings detailing the Association’s successful efforts. The trial court found the testimony of Miller to be “generally credible” as to the work of the Association in “search[ing] for and recovering] missing children” (Trial Ct. Op. Findings of Fact (FOF) ¶¶ 1, 7), but also found that much of this work was either “international or involve[d] States other than Pennsylvania.” (FOF ¶ 6.)

In this case, the trial court focused its examination on: (1) whether the government has a duty to do what the Association does; and (2) by what specific amounts the Association’s efforts reduce the government’s financial burden.

The trial court also stated that “[n]either the memorandum submitted by appellant, nor the Court’s research, have produced any law that precisely defines the scope of the government’s burden to find a missing or abducted child” (Trial Ct. Op. at 5), and that it was “not persuaded by Miller’s testimony regarding the government’s burden to find lost children or the Association’s relief of that burden.” (FOF ¶ 7.) The trial court based this finding on the “little weight” it gave to the Association’s documentary evidence “due to [the] low quality” of that evidence. (FOF ¶ 8.)

In discussing the trial court opinion, the majority notes that “the trial court did not conclude that the government had no burden to find missing and abducted children,” American Association for Lost Children, Inc. v. Westmoreland County Board of Assessment Appeals, 977 A.2d at 598 (Pa.Cmwlth., No. 1928 C.D. 2008, filed July 2, 2009)(emphasis added), but that “the government’s burden with regard to finding missing or abducted missing children [is] not precisely defined.” American Association, majority op. at 597 (emphasis added). The majority also explains “that the Association failed to introduce any evidence showing that it relieves any financial burden on law enforcement agencies.” American Association, majority op. at 597. 1 Thus, the majority and trial court treat the issue of duty by the government as an evidentiary one, and conclude that Miller simply did not meet his burden. I believe the majority and trial court, in focusing on the factual aspect of the “relieve[s] the government of some of its burden” component of the “purely public charity” analysis, do not fully consider the legal aspect of that determination.

*600 The real estate tax exemption for public charities has its foundation in the Pennsylvania Constitution, in particular, article VIII, § 2, which permits the General Assembly to exempt from taxation: “[institutions of purely public charity.” Based on this language, the General Assembly enacted the Institutions of Purely Public Charity Act (Act), Act of November 26, 1997, P.L. 508, 10 P.S. §§ 871 — 385. Section 5 of the Act provides five criteria that an institution must satisfy to be a public charity. The criteria are drawn from the Pennsylvania Supreme Court’s articulation of the five requirements an entity must meet to qualify as a purely public charity:

(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 subjects of charity;

(d) Relieves the government of some of its burden; and

(e) Operates entirely free from private profit motive.

Hospital Utilization Project v. Commonwealth, 507 Pa. 1, 21-22 , 487 A.2d 1306, 1317 (1985); see also 10 P.S. § 375. Examination of these criteria is a “mixed question of law and fact.” G.D.L. Plaza Corp. v. Council Rock School District, 515 Pa. 54, 59 , 526 A.2d 1173, 1175 (1987). Although the Act provides detailed factors to consider when analyzing each of the five criterion, 10 P.S. § 375, the focus of the present case is the fourth criterion, that the entity “relieve[s] the government of some of its burden,” and the accompanying factors. 2 Of particular relevance for this case, is the factor in Section 5(f)(2) which provides that the criterion is met if the institution “[pjrovides services in furtherance of its charitable purpose which are either the responsibility of the government by law or which historically have been assumed or offered or funded by the government.” 10 P.S. § 375(f)(2). Examination of this factor involves both issues of law and of fact.

We must first determine whether a particular type of service is a “responsibility of the government by law” — i.e., whether it is a governmental duty. Examination of this issue is a question of law. Factual evidence is not necessary to determine if the government has a particular duty. Further, any perceived lack of evidence produced in this case as to a particular government duty does not render the obli *601 gation imprecise or beyond the court’s ability to recognize.

The government has an inherent duty to enforce the law. Concomitant with that duty is a duty to investigate criminal wrongdoing. In this case there is no dispute that the abduction of children is illegal. It follows that the investigation of child abductions is a duty of the government. This duty is made more apparent through legislation such as the Missing Children’s Assistance Act, which among other things, noted the existence of a “national resource center and clearinghouse,” the National Center for Missing and Exploited Children (Center), which “works in partnership” with governmental agencies “in the effort to find, missing children and prevent child victimization.” 42 U.S.C. § 5771 (9)(A)-(B) (emphasis added). 3 Similarly, law enforcement agencies at all levels are required to report cases of missing children to the National Crime Information Center, and are also required to “institute or assist with appropriate search and investigation procedures; and maintain close liaison with the National Center for Missing and Exploited Children for the exchange of information and technical assistance in the missing children cases.” 42 U.S.C. § 5780 (4)(B)-(C). 4 Thus, I would find that the government’s duty to investigate the abduction of children is sufficiently established by the inherent duty of the government to investigate criminal activity, as well as by the explicit commands of statutory authority, such as the Missing Children’s Assistance Act.

We must next determine whether the particular institution that is seeking a charitable exemption “provides services in furtherance of its charitable purpose.” This is a question of fact and, in this case, I would conclude that the testimony presented by Miller, found “generally credible” by the trial court, met this burden and established that the Association investigated the abduction of children.

The majority and trial court engraft an additional component to the factual analysis that is not required by Section 5(f)(2); in particular, what tangible financial impact the Association’s efforts have on the government. Section 5(f)(2) contains no references to finances, but looks only at whether the government has a legal duty to do a particular service, and whether the institution also performs that service. 5

*602 In this case, the government’s duty is to investigate the abduction of children, which is an inherent duty as well as one established by statute. Here, because the Association investigates the abduction of children, I would conclude that the legal and factual requirements of Section 5(f)(2) are satisfied. As the remaining criteria are not at issue, I would reverse the trial court and find that the Association is eligible for the real estate tax exemption. 6

For these reasons, I respectfully dissent from the majority.

. Although the parties reference memoranda that were being submitted to the trial court at the start of the trial court’s hearing, the certified original record from the trial court does not contain any memoranda from the parties, and the trial court docket contains no indication of such briefs having been filed.

. Section 5 of the Act sets forth the factors for evaluating the government service criterion,

(f) Government service. — The institution must relieve the government of some of its burden. This criterion is satisfied if the institution meets any one of the following:

(1) Provides a service to the public that the government would otherwise be obliged to fund or to provide directly or indirectly or to assure that a similar institution exists to provide the service.

(2) Provides services in furtherance of its charitable purpose which are either the responsibility of the government by law or which historically have been assumed or offered or funded by the government.

(3) Receives on a regular basis payments for services rendered under a government program if the payments are less than the full costs incurred by the institution, as determined by generally accepted accounting principles.

(4) Provides a service to the public which directly or indirectly reduces dependence on government programs or relieves or lessens the burden borne by government for the advancement of social, moral, educational or physical objectives.

(5) Advances or promotes religion and is owned and operated by a corporation or other entity as a religious ministry and otherwise satisfies the criteria set forth in section 5.

(6) Has a voluntary agreement under section 7 [10 P.S. § 377].

. In particular, this Center:

(B) works in partnership with the Department of Justice, the Federal Bureau of Investigation, the United States Marshals Service, the Department of the Treasury, the Department of State, the Bureau of Immigration and Customs Enforcement, the United States Secret Service, the United States Postal Inspection Service, and many other agencies in the effort to find missing children and prevent child victimization.

42 U.S.C. § 5771 (9)(B).

. This particular section was enacted in the Crime Control Act of 1990, P.L., 101-647, XXXVII, § 3702.

. The majority's approach would essentially allow government to forgo duties it otherwise has by simply not allocating funds toward meeting that duty. That the ability to carry out the search for abducted children may be hampered by budgetary constraints does not eviscerate the duty to search for abducted children. See generally, 42 U.S.C. § 5771 (3) (legislative finding by the United States Congress in the Missing Children’s Assistance Act that, "in many cases, parents and local law enforcement officials have neither the resources nor the expertise to mount expanded search efforts”). It is unclear to me what type of evidence the majority would deem sufficient to establish that an institution has financially relieved the government of a burden. I would suggest that requiring a reviewing body to look at the exact amounts of money that a taxpayer’s efforts saved the government is an approach that few, if any, taxpayers will, or can, ever succeed at, particularly if the government's own spending on that duty is negligible to non-existent.

. The trial court and the majority reference The Private Detective Act of 1953 (Detective Act), Act of August 21, 1953, P.L. 1273, as amended, 22 P.S. §§ 11-30 and, in no small measure, rely on this act in concluding that the Association does not relieve the government of a burden. I note that neither the Westmoreland Township County Board of Assessment Appeals, nor the Township of Unity (where the property is located) raise the Detective Act in their briefs before this Court. I also note that it was the trial court itself that, at the end of the hearing, after all parties had testified, astutely asked Miller whether he was a private detective or whether the Association employed private detectives. (Trial Ct. Hr’g Tr. at 30.) Because the Detective Act was not raised by the parties, but was sua sponte raised by the trial court, I would conclude that we cannot rely on it in this particular appeal.