Com., Higher Ed. Assistance Agency v. Abington Memorial Hospital

• Decision Date: 22 April 1976
• Citation: 24 Pa.Cmwlth. 352,356 A.2d 837
• Parties: COMMONWEALTH of Pennsylvania, Pennsylvania HIGHER EDUCATION ASSISTANCE AGENCY v. ABINGTON MEMORIAL HOSPITAL et al., Appellants, Pennsylvania Association of Colleges and Universities, Intervening Appellee.
• Court: Pennsylvania Commonwealth Court

356 A.2d 837

24 Pa.Cmwlth. 352

COMMONWEALTH of Pennsylvania, Pennsylvania HIGHER EDUCATION

ASSISTANCE AGENCY v. ABINGTON MEMORIAL HOSPITAL et al., Appellants, Pennsylvania Association of Colleges and Universities, Intervening Appellee.

Commonwealth Court of Pennsylvania.

April 22, 1976

Argued March 2, 1976.

Nauman, Smith, Shissler & Hall, James H Stewart, Jr., Harrisburg, for appellants.

John D. Killian, Killian & Gephart, Robert W. Barton, McNees Wallace & Nurick F. Murray Bryan, G Thomas Miller, Harrisburg, for intervening appellee.

Before BOWMAN, President Judge, and CRUMLISH, Jr., WILKINSON, MENCER, ROGERS and BLATT, JJ.

MENCER Judge.

Abington Memorial Hospital and 50 other hospitals providing nursing school programs in this Commonwealth (appellants) appeal to this Court from an order of the Board of Directors of the Pennsylvania Higher Education Assistance Agency (PHEAA) which denied to appellants financial assistance benefits provided by the terms of The Institutional Assistance Grants Act (Act), Act of July 18, 1974, P.L. 483, As amended, 24 P.S. § 5181 et seq. ^[1]

Our scope of review in this appeal is prescribed by Section 44 of the Administrative Agency Law, Act of June 4, 1945, P.L. 1388, As amended, 71 P.S. § 1710.44. Therefore, the adjudication of PHEAA must be affirmed unless it is not in accordance with law or unless it constitutes an arbitrary, capricious, or unreasonable determination due to the absence of substantial evidence to support its findings.

Initially, appellants contend that PHEAA committed an error of law when it concluded that hospitals providing nursing programs do not conform to the restrictions imposed upon institutions seeking the benefits of the grant program. With this we cannot agree.

Section 5 of the Act, 24 P.S. § 5185, clearly limits the allotment of assistance grants to eligible institutions as defined in Section 3, 24 P.S. § 5183. Section 3 sets forth the definition for an eligible institution as follows:

"Eligible institution' shall mean an independent institution of higher education located in and chartered by, the Commonwealth, which is neither a State-owned institution, State-related institution nor a community college, which is operated not for profit, which is determined by the agency not to be a theological seminary or school of theology or a sectarian and denominational institution and which is approved by the agency for assistance grants pursuant to the provisions of this act.'

The findings below reveal that appellants are not directly connected with the Commonwealth, are not operated for profit, and are not denominational or sectarian. At issue before us then is merely the proper construction of the phrase 'an independent institution of higher education located in and chartered by, the Commonwealth.'

In its adjudication, PHEAA interpreted the word 'independent' to modify the word 'chartered' and therefore denied assistance benefits to appellants because their nursing programs were not chartered independently from their hospital programs. We reject the manner of this construction, for our reading of the statute as a whole leads us to the conclusion that the word 'independent' stands merely in contraposition to the word 'public'. ^[2] It does not describe charters but merely relates to the control exercised over an institution by the Commonwealth. Since PHEAA specifically found appellants to be free of state control, appellants cannot now be precluded from assistance benefits merely because of the independence restriction.

However, we are compelled to deny benefits to appellants for they are not institutions of higher education. On first reflection, this conclusion may seem unreasonable, for who would deny, barring a statutory declaration to the contrary, that nursing schools provide for higher education? Nevertheless, when one closely examines the phrase 'institution of higher education', it becomes abundantly clear the hospitals operating nursing schools are not institutions of higher education. Hospitals are institutions providing health care. The mere presence of a nursing program does not change a hospital's status. A nursing program is merely peripheral to the hospital's basic function for which it was chartered--that of a health care provider. This construction of course, results in benefits being denied because the nursing schools here are not separately chartered. We have reached the same result as PHEAA but by different reasoning.

Appellants strenuously argue that such a construction of this particular provision of the Act violates the Fourteenth Amendment to the Constitution of the United States and Article 3, Section 32 of the Pennsylvania Constitution, by denying to appellants equal protection of the law and by setting forth invalid classifications not based on real and substantial differences which may be reasonably related to the purpose of the law.

The test for determining the validity of legislative classifications under Article 3 of the Pennsylvania Constitution is not significantly different from the test concerning violations of equal protection in legislative enactments under the Fourteenth Amendment to the United States Constitution. Goodman v. Kennedy, 459 Pa. 313, 329 A.2d 224 (1974). The law in both matters may be summarized as follows.

Although it is true, of course, that the General Assembly is generally prohibited from passing special legislation, it has long been established that '(l)egislation for a class, distinguished from a general subject, is not special, but general; and classification is a legislative question, subject to judicial revision only so far as to see that it is founded on real distinctions in the subjects classified, and not on artificial or irrelevant ones, used for the purpose of evading the constitutional prohibition. If the distinctions are genuine, the courts cannot declare the classification void, though they may not consider it to be on a sound basis. The test is not wisdom, but good faith in the classification.' Seabolt v. Commissioners of Northumberland County, 187 Pa. 318, 323, 41 A. 22, 23 (1898).

'The purpose of Article III, Section 7 (amended and renumbered as § 32) was to 'put an end to the flood of privileged legislation for particular localities and for private purposes which was common in 1873. The Section said what it meant. It was aimed at laws that were in the proper sense local and special. . . . (It) was not intended to prevent the legislature from meeting diverse needs ..' Haverford Twp. v. Siegle, 346 Pa. 1, 6, 28 A.2d 786, 788 (1942).' Chartiers Valley Joint Schools v. Allegheny County Board of School Directors, 418 Pa. 520, 540, 211 A.2d 487, 498 (1965)....