senate Bill S2546

2011-2012 Legislative Session

Relates to the discretion in granting real property tax exemptions for certain corporations or associations; repealer

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Senate Actions - UPPERCASE
Jan 04, 2012 referred to local government
Jan 25, 2011 referred to local government

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S2546 - Bill Details

Current Committee:
Law Section:
Real Property Tax Law
Laws Affected:
Amd §§420-a & 420-b, rpld §430, RPT L
Versions Introduced in 2009-2010 Legislative Session:
S6837

S2546 - Bill Texts

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Relates to the discretion of localities in granting real property tax exemptions to real property owned by a corporation or association which is organized exclusively for purposes related to the moral or mental improvement of men, women or children.

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BILL NUMBER:S2546

TITLE OF BILL:
An act
to amend the real property tax law, in relation to the discretion of
localities in
granting exemptions for certain organizations
and to repeal certain provisions
of such law relating thereto

PURPOSE:
To provide localities greater discretion in granting or refusing to
grant real property tax exemptions to certain organizations or
corporations.

SUMMARY OF PROVISIONS:
Section 1. Amends subdivision 1 of section 420-a of the real property
tax law by removing the phrase "or moral or mental improvement of
men, women or children purposes," from the first sentence of
paragraph a.

Section 2. Amends subdivision 1 of section 420-b of the real property
tax law by adding "purposes related to the moral or mental
improvement of men, women, or children, or for" to the first sentence
of paragraph a.

Section 3. Amends subdivision 1 of section 420-b of the real property
tax law by adding a new paragraph d which defines what uses may deem
property subject to taxation provided a local law, ordinance, or
resolution is passed.

Section 4. Repeals Section 430 of the real property tax law.

Section 5. Effective date.

EXISTING LAW:
Article XVI of the New York State Constitution provides that property
used exclusively (emphasis added) for religious, educational, or
charitable purposes shall be exempt from taxation. The Constitution,
however, leaves to the State Legislature the power of defining the
terms "religious", "educational" and "charitable."

Title 2 of Article 4 of the Real Property Tax Law (Section 420-a in
particular) speaks of various types of exempt properties, including
"religious", "educational" and "charitable". That Section of law
exempts those types of properties (as well as others) provided the
property is "used exclusively" for carrying out one or more of the
exempt purposes. However, for the purposes of the Real Property Tax
Law, those terms have not been defined. Since the Legislature has not
defined those terms, the Courts have defined them, thus creating
existing law which provides for a myriad of exempt properties - even

when not "used exclusively" for "religious", "educational", or
"charitable" purposes.

JUSTIFICATION:
Court-developed broadening of what qualifies as an exempt purpose has
diminished the real property tax base and defeated the legislative
pronouncement that only property "used exclusively" for exempt purposes
can qualify for an exemption. Courts have, for example, ruled that
"used exclusively" actually means the "principal" or "primary" use of
a property. Mohonk Trust v. Board of Assessors of Town of Gardiner 47
NY2d 476,483 (1979). Courts have also authorized commercial timbering
on property - clearly not a tax exempt use but still allowed a tax
exemption. In the Matter of Nassau County Council Boy Scouts of
America v. Board of Assessors of the Town of Rockland 444 N.Y.S. 2d
755 (1981). That same case said that even if the property is in a
state of non-use for much of the year, it is still entitled to the
tax exemption. In addition, the Courts have authorized religious
exemptions even in cases where the property owner "does not maintain
a church, has no clergy and does not conduct religious services." In
the matter of Foundation for "A Course in Miracles", Inc. v.
Theadore, as Chairman of the Town of Fremont Board of Assessors. 568
N.Y.S. 2d 666 (1991).

LEGISLATIVE HISTORY:
S.6837 of 2010: Referred to Local Government
S.1398A of 2003: Referred to Local Government

FISCAL IMPLICATIONS:
None to State.

LOCAL FISCAL IMPLICATIONS:
Undetermined, however, it is anticipated the bill will offer improved
local oversight of exemptions with a salutary effect on school,
municipal and special district (i.e. fire protection) tax rolls.

EFFECTIVE DATE:
This act would take effect on the first of January next succeeding the
date on which it shall have become a law and would apply to
assessment rolls prepared on the basis of taxable status dates
occurring on or after such date.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  2546

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            January 25, 2011
                               ___________

Introduced  by  Sens. BONACIC, LARKIN -- read twice and ordered printed,
  and when printed to be committed to the Committee on Local Government

AN ACT to amend the real property tax law, in relation to the discretion
  of localities in granting exemptions for certain organizations and  to
  repeal certain provisions of such law relating thereto

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph (a) of subdivision 1 of section 420-a of the real
property tax law, as amended by chapter 920 of  the  laws  of  1981,  is
amended to read as follows:
  (a)  Real  property owned by a corporation or association organized or
conducted exclusively for religious, charitable, hospital,  educational,
[or  moral or mental improvement of men, women or children purposes,] or
for two or more such purposes, and used  exclusively  for  carrying  out
thereupon  one or more of such purposes either by the owning corporation
or association or by another such corporation or association as  herein-
after  provided  shall  be  exempt  from  taxation  as  provided in this
section.
  S 2. Paragraph (a) of subdivision 1 of section 420-b of the real prop-
erty tax law, as added by chapter 919 of the laws of 1981, is amended to
read as follows:
  (a) (I) Real property owned by a corporation or association  which  is
organized  exclusively  for  PURPOSES  RELATED  TO  THE  MORAL OR MENTAL
IMPROVEMENT OF MEN, WOMEN, OR CHILDREN, OR FOR bible, tract, benevolent,
missionary, infirmary,  public  playground,  scientific,  literary,  bar
association, medical society, library, patriotic or historical purposes,
for  the  development of good sportsmanship for persons under the age of
eighteen years through the conduct of supervised athletic games, for the
enforcement of laws relating to children or animals, or for two or  more
such  purposes,  and  used exclusively for carrying out thereupon one or
more of such purposes either by the owning corporation  or  association,

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01422-01-1

S. 2546                             2

or  by  another such corporation or association as hereinafter provided,
shall be exempt from taxation; provided,  however,  that  such  property
shall be taxable by any municipal corporation within which it is located
if the governing board of such municipal corporation, after public hear-
ing,  adopts  a local law, ordinance or resolution so providing. None of
the following subdivisions of this section providing that certain  prop-
erties  shall  be  exempt under circumstances or conditions set forth in
such subdivisions shall exempt such property from taxation by a  munici-
pal corporation whose governing board has adopted a local law, ordinance
or  resolution providing that such property shall be taxable pursuant to
this subdivision.
  (II) NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH (B) OF THIS  SUBDIVI-
SION,  ONCE  A PROPERTY IS EXEMPTED FROM TAXATION PURSUANT TO LOCAL LAW,
ORDINANCE, OR RESOLUTION, SUCH PROPERTY, SO LONG AS IT CONTINUES  TO  BE
USED EXCLUSIVELY FOR PURPOSES OF EXEMPT ACTIVITIES, SHALL CONTINUE TO BE
EXEMPT FROM TAXATION FOR NO MORE THAN THIRTY YEARS, UNLESS SUCH PROPERTY
IS  SOLD OR LEASED; PROVIDED, HOWEVER, THAT SUCH EXEMPTION SHALL BE LOST
AFTER IT HAS BEEN ENJOYED FOR THIRTY YEARS IF A LOCAL LAW, ORDINANCE  OR
RESOLUTION HAS BEEN ENACTED PROVIDING FOR THE TAXATION OF ALL PROPERTIES
IN THE SUB-CATEGORY THAT THE PARTICULAR PROPERTY IS IN, EXCEPT ANY OTHER
WHICH  IS  ENJOYING AN EXEMPTION FOR THIRTY YEARS PURSUANT TO THIS PARA-
GRAPH. SUCH LOCAL LAW MAY SPECIFY A MINIMUM NUMBER  OF  DAYS  EACH  ACRE
MUST  ACTUALLY  BE USED IN ORDER TO QUALIFY FOR THE EXEMPTION AUTHORIZED
IN THIS SECTION, PROVIDED, HOWEVER, THE NUMBER  OF  DAYS  SHALL  NOT  BE
GREATER THAN NINETY.
  S  3.  Subdivision  1 of section 420-b of the real property tax law is
amended by adding a new paragraph (d) to read as follows:
  (D) PROPERTY ORGANIZED EXCLUSIVELY FOR PURPOSES RELATED TO  THE  MORAL
OR  MENTAL  IMPROVEMENT OF MEN, WOMEN, OR CHILDREN SHALL INCLUDE EACH OF
THE FOLLOWING CATEGORIES OF REAL PROPERTY. SUCH PROPERTY SHALL BE  OWNED
BY  A  CORPORATION  CLASSIFIED AS TAX EXEMPT OR NOT-FOR-PROFIT UNDER THE
FEDERAL INTERNAL REVENUE CODE. ANY SUCH CATEGORY MAY BE SUBJECT TO TAXA-
TION PROVIDED A LOCAL LAW, ORDINANCE, OR RESOLUTION IS PASSED CONSISTENT
WITH THIS SECTION:
  (I) ARTS. REAL PROPERTY PRIMARILY USED TO FACILITATE  OR  ENHANCE  THE
ARTS;
  (II)  SCIENCES. REAL PROPERTY PRIMARILY USED IN THE STUDY OF SCIENCES,
BIOLOGY, AND HORTICULTURE;
  (III) BENEFIT OF ANIMALS. REAL PROPERTY PRIMARILY USED FOR THE BENEFIT
OF NON-HUMAN ANIMALS;
  (IV) OPEN SPACE. REAL PROPERTY WHICH IS OPEN TO THE PUBLIC, IS  PRIMA-
RILY UNIMPROVED, AND IS KEPT OPEN FOR HIKING, WALKING, OR FORMS OF EXER-
CISE  WHICH  DO  NOT  COMMONLY  USE  MECHANIZED  DEVICES EXCEPT BY THOSE
PERSONS WHO ARE DISABLED OR OTHERWISE UNABLE TO WALK WITHOUT  MECHANIZED
ASSISTANCE.   SUCH OPEN SPACE MAY BE OPEN TO THE PUBLIC UPON THE PAYMENT
OF A FEE WHICH IS DIRECTLY RELATED  TO  THE  COSTS  OF  MAINTAINING  AND
IMPROVING  THE  PROPERTY.  OPEN  SPACE SHALL NOT INCLUDE ANY PROPERTY OR
PORTION OF PROPERTY FROM WHICH THE PUBLIC IS EXCLUDED EXCEPT FOR  EXCLU-
SIONS  SOLELY FOR PUBLIC HEALTH PURPOSES AS DETERMINED BY A GOVERNMENTAL
AGENCY OR FOR PUBLIC SAFETY AS DETERMINED BY THE  PROPERTY  OWNER,  WITH
SUCH DETERMINATION TO BE REVIEWABLE IN ANY COURT OF EQUITY JURISDICTION;
PROVIDED,  HOWEVER  A PRESUMPTION SHALL ATTACH THAT THE PROPERTY OWNER'S
DETERMINATION IS REASONABLE. ATTORNEYS  FEES  MAY  BE  AWARDED,  AT  THE
DISCRETION  OF  THE  COURT,  FOR  ANY  PREVAILING PARTY WHO COMMENCES OR
DEFINES A CIVIL ACTION BASED ON THE PUBLIC SAFETY EXCLUSIONS PERMISSIBLE
BY THIS SUBPARAGRAPH;

S. 2546                             3

  (V) LAND TRUST. REAL PROPERTY WHICH IS PRIMARILY UNIMPROVED. NO  OWNER
SHALL  BE  ENTITLED  TO  A PROPERTY TAX EXEMPTION AS A LAND TRUST UNLESS
THAT PROPERTY OWNER AND THE SUBJECT PROPERTY MEETS ALL OF THE  FOLLOWING
CRITERIA:  (1)  ENTERS INTO A CONTRACT WITH THE ASSESSING UNIT PROVIDING
THAT  THE LAND IN THE LAND TRUST MAY NOT BE SOLD OR ENCUMBERED EXCEPT BY
MORTGAGE OR CONSERVATION EASEMENT, UNLESS  THE  PROPERTY  OWNER,  WITHIN
THIRTY DAYS OF SUCH SALE OR ENCUMBRANCE, ENTERS INTO A VALID CONTRACT TO
PURCHASE  LAND IN NEW YORK STATE OF AT LEAST AN EQUAL VALUE TO BE PLACED
IN A LAND TRUST, AND THE OWNER DOES SO PURCHASE  SUCH  LAND  WITHIN  ONE
YEAR  OF  ENTERING INTO SUCH PURCHASE AND SALE CONTRACT; (2) IS INCLUDED
AS PART OF A LAWFULLY ENACTED COMPREHENSIVE PLAN BY  THE  COUNTY,  CITY,
TOWN,  OR  VILLAGE  IN WHICH SUCH PROPERTY IS IN; OR IS IDENTIFIED IN AN
OFFICIAL OPEN SPACE OR NATURAL RESOURCES PROTECTION PLAN DULY ADOPTED BY
A FEDERAL, STATE, OR LOCAL GOVERNMENT OR AGENCY THEREOF; (3) EXISTS AS A
LAND TRUST TO PROTECT ECOLOGICAL  RESOURCES  CONSIDERED  VALUABLE  IN  A
LAWFULLY ENACTED COMPREHENSIVE PLAN. PUBLIC ACCESS SHALL NOT BE A CRITE-
RIA  IN  DETERMINING AN EXEMPTION FROM TAXATION FOR LAND TRUST PURPOSES;
(4) UNLESS THE GOVERNING BOARD OF THE COUNTY, CITY, TOWN OR  VILLAGE  IN
WHICH  THE  PROPERTY IS SITUATED PASSES A RESOLUTION TO THE CONTRARY, IF
THE PURCHASE, REFERRED TO IN CLAUSE ONE OF THIS  SUBPARAGRAPH  DOES  NOT
OCCUR  WITHIN  THE  TIME LIMITATIONS THEREUNDER, THE LAND TRUST SHALL BE
LIABLE FOR ALL TAX PAYMENTS WHICH IT WOULD HAVE PAID ON THE PROPERTY  IT
SOLD  FOR  THE PERIOD OF TIME WHICH IT WOULD HAVE OWED SUCH TAX PAYMENTS
TO ALL LAWFUL TAXING JURISDICTIONS, UNLESS  THE  TITLE  TO  THE  EQUALLY
VALUED  LAND  UNDER CONTRACT FOR PURCHASE AND SALE WAS DEEMED UNMARKETA-
BLE, OR THE SELLER OF SUCH PROPERTY WITHDREW THE OFFER TO SELL, IN WHICH
CASE THE LAND TRUST SHALL HAVE AN ADDITIONAL  THREE  HUNDRED  SIXTY-FIVE
DAYS  TO  PURCHASE AND CLOSE TITLE ON ANOTHER PROPERTY IN NEW YORK STATE
PURSUANT TO THE PROVISIONS OF CLAUSE ONE OF THIS SUBPARAGRAPH;
  (VI) NON-SCHOLASTIC EDUCATIONAL. REAL PROPERTY OWNED BY  AN  ORGANIZA-
TION  WHICH  IS  TAX  EXEMPT UNDER THE FEDERAL INTERNAL REVENUE CODE AND
WHICH IS PRIMARILY USED TO  IMPROVE  THE  INTELLECTUAL  CAPABILITIES  OF
PERSONS,  AND  WHICH  DOES  NOT  QUALIFY  FOR  TAX EXEMPTION PURSUANT TO
SECTION FOUR HUNDRED TWENTY-A OF THIS TITLE;
  (VII) RECREATIONAL. REAL PROPERTY OWNED BY AN  ORGANIZATION  WHICH  IS
TAX  EXEMPT  UNDER  THE FEDERAL INTERNAL REVENUE CODE AND WHICH PROVIDES
RECREATIONAL OPPORTUNITY FOR  PERSONS  REGARDLESS  OF  ABILITY  TO  PAY.
RECREATIONAL  OPPORTUNITIES  MAY  BE  EITHER INDOORS OR OUTDOORS AND MAY
INCLUDE OVERNIGHT OPPORTUNITIES FOR PERSONS UNDER THE AGE OF TWENTY-ONE;
  (VIII) MEDICAL PURPOSES. REAL PROPERTY OWNED BY AN ORGANIZATION  WHICH
IS TAX EXEMPT UNDER THE FEDERAL INTERNAL REVENUE CODE AND WHICH IS NOT A
HOSPITAL  AS DEFINED BY SECTION FOUR HUNDRED TWENTY-A OF THIS TITLE, BUT
WHICH QUALIFIES AS A HOSPITAL AS DEFINED IN ARTICLE TWENTY-EIGHT OF  THE
PUBLIC HEALTH LAW;
  (IX)  HOME CARE SERVICES. REAL PROPERTY OWNED BY AN ORGANIZATION WHICH
IS TAX EXEMPT UNDER THE FEDERAL INTERNAL REVENUE CODE AND IS A HOME CARE
SERVICES AGENCY AS DEFINED IN ARTICLE THIRTY-SIX OF  THE  PUBLIC  HEALTH
LAW;
  (X) RESIDENTIAL HEALTH CARE FACILITY. REAL PROPERTY OWNED BY AN ORGAN-
IZATION  WHICH  IS  TAX  EXEMPT AS A RESIDENTIAL HEALTH CARE FACILITY AS
DEFINED IN ARTICLE TWENTY-EIGHT OF THE PUBLIC HEALTH LAW;
  (XI) OTHER MEDICAL PURPOSES. REAL PROPERTY WHICH IS OWNED BY AN ORGAN-
IZATION WHICH IS TAX EXEMPT UNDER THE FEDERAL INTERNAL REVENUE CODE  AND
IS  USED  TO  PROVIDE  MEDICAL SERVICES TO PERSONS WITH LIMITED ECONOMIC
MEANS;

S. 2546                             4

  (XII) INTERDENOMINATIONAL CENTERS. (1) REAL PROPERTY OWNED BY A CORPO-
RATION ORGANIZED FOR THE PURPOSES OF ESTABLISHING AN INTERDENOMINATIONAL
CENTER TO ASSIST IN THE WORK OF, AND TO PROMOTE COOPERATION AMONG, VARI-
OUS RELIGIOUS DENOMINATIONS, AND TO  ACQUIRE  OR  ERECT  A  BUILDING  OR
BUILDINGS FOR SUCH CENTER, AND TO LEASE A PORTION OR PORTIONS FOR USE BY
RELIGIOUS,  EDUCATIONAL, MISSIONARY AND CHARITABLE CORPORATIONS OR ASSO-
CIATIONS; OR REAL PROPERTY LEASED TO  CORPORATIONS  ORGANIZED  FOR  SUCH
PURPOSES  BY A CORPORATION ORGANIZED FOR PURPOSES WHICH ARE EXEMPT UNDER
THIS SECTION, OR SECTION FOUR HUNDRED TWENTY-A, FOUR HUNDRED TWENTY-TWO,
FOUR HUNDRED TWENTY-FOUR, FOUR HUNDRED TWENTY-SIX OR FOUR HUNDRED  TWEN-
TY-EIGHT  OF  THIS  TITLE, SHALL BE EXEMPT FROM TAXATION AND EXEMPT FROM
SPECIAL AD VALOREM LEVIES AND SPECIAL ASSESSMENTS TO THE EXTENT PROVIDED
IN SECTION FOUR HUNDRED NINETY OF THIS ARTICLE, TO THE SAME  EXTENT  AND
SUBJECT  TO  THE  SAME CONDITIONS AND EXCEPTIONS AS PROPERTY OF A CORPO-
RATION ORGANIZED EXCLUSIVELY FOR RELIGIOUS, EDUCATIONAL,  MISSIONARY  OR
CHARITABLE PURPOSES.
  (2)  IN  ADDITION  TO ANY OTHER RENTAL FEES CHARGED FOR SUCH USE, WITH
THE CONSENT OF EACH CORPORATION OR ASSOCIATION LEASING A PORTION OF SUCH
REAL PROPERTY, THE INTERDENOMINATIONAL CENTER MAY REQUIRE EACH LESSEE TO
MAKE ANNUAL PAYMENTS INTO A CAPITAL IMPROVEMENT FUND TO BE  USED  EXCLU-
SIVELY  FOR  CAPITAL IMPROVEMENTS, IN ACCORDANCE WITH A CAPITAL IMPROVE-
MENT PLAN ADOPTED OR UPDATED ANNUALLY BY THE INTERDENOMINATIONAL CENTER.
FOR PURPOSES OF THIS SUBPARAGRAPH, "CAPITAL IMPROVEMENT" SHALL MEAN  ANY
ADDITION  TO,  REPLACEMENT  OF,  OR REMODELING OF PHYSICAL PLANT, STRUC-
TURES, OR EQUIPMENT NOW OR HEREAFTER  OWNED  BY  AN  INTERDENOMINATIONAL
CENTER,  WHICH IS USED OR IS TO BE USED IN CONNECTION WITH THE OPERATION
OF THE INTERDENOMINATIONAL CENTER, AND WHICH SHALL INCLUDE  IMPROVEMENTS
TO LAND, BUT NOT LAND ITSELF;
  (XIII)  PRIMARILY  CHARITABLE  PURPOSES. AN ACTIVITY CONDUCTED ON REAL
PROPERTY OWNED BY AN ORGANIZATION WHICH IS TAX EXEMPT UNDER THE  FEDERAL
INTERNAL REVENUE CODE, AND WHICH ACTIVITY ACTUALLY AND PRIMARILY ALLEVI-
ATES  THE CONDITION OF POOR, OR PHYSICALLY OR MENTALLY DISABLED PERSONS;
AND
  (XIV) OTHER MORAL OR MENTAL IMPROVEMENT. REAL  PROPERTY  OWNED  BY  AN
ORGANIZATION WHICH IS TAX EXEMPT UNDER THE FEDERAL INTERNAL REVENUE CODE
AND WHICH IS DEDICATED, IN A MANNER OTHER THAN AS PROVIDED IN THIS PARA-
GRAPH, TO THE MORAL OR MENTAL IMPROVEMENT OF MEN, WOMEN, OR CHILDREN.
  S 4. Section 430 of the real property tax law is REPEALED.
  S 5. This  act shall take effect on the first of January next succeed-
ing the date on which it shall have become a  law  and  shall  apply  to
assessment rolls on and after such date.

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