Senate Bill S3993A

                                BILL NUMBER:S3993

TITLE OF BILL:  An act to amend the real property tax law, in relation
to the duration of the exemption for property of mandatory class
nonprofit organizations by reason of the absence of suitable buildings
or improvements thereon if construction of such buildings or
improvements is in progress or is in good faith contemplated

PURPOSE:

To establish stricter standards for non-profit organizations that
purchase land and file an application for municipal real property
exemption. The purpose of this bill is to ensure that properties
exempt from real property taxes are being used in a manner that
supports the specific exemption granted.

SUMMARY OF PROVISIONS:

Section 1: Amends Real Property Law section 420-a (3) to permit a
non-profit organizations that purchase real property that is on the
tax rolls to obtain a real property exemption if such organization
within 7 years after such property is acquired constructs buildings or
other capital improvements or is in good faith contemplating such
construction to further its charitable purposes.

EXISTING LAW:
              

Under current law, if a non-profit organization purchases property
that is on the tax rolls, such organization can obtain an exemption
from real property taxes if the construction of buildings or other
improvements are in progress or are in "good faith" contemplated.
This bill tightens qualifications for obtaining tax exempt status by
requiring that buildings or improvements must be constructed to
further the organization's charitable purpose within 7 years of
purchasing such Property.

JUSTIFICATION:

Under current law, non-profit charitable organizations can purchase
land as an investment vehicle and then obtain the real property's tax
exempt status (to the detriment of the local taxing authority) without
realistically contemplating the satisfaction of the requirement that
the property is used in the furtherance of the organizations'
charitable mission. This bill amends the law so that only properties
that are truly acquired to further an organization's charitable
purpose are granted tax exempt status. If 7 years after the
acquisition of the parcel, the charitable organization has not
commenced activities to further the charitable purpose, then such land
will be placed back on the tax rolls.

LEGISLATIVE HISTORY:

2011-2012: A499 Held in Real Property Taxation
2009-2010: A981 Referred to Real Property Taxation/S670 Referred to
Local Government
2007-2008: Al259 Referred to Real Property Taxation/S529 Referred to
Local Government


200--2006: A9020 Referred to Real Property Taxation/S4714 Referred to
Local Government

FISCAL IMPLICATIONS:

None.

LOCAL FISCAL IMPLICATIONS:

Would place certain parcels back on the tax rolls that were in fact
not used for a bona fide exempt use.

EFFECTIVE DATE:

January 1st of the year next succeeding the date on which it shall
have become law.