Senate Bill S6968

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6968
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                              March 27, 2025
                                ___________
 
 Introduced  by  Sen.  LANZA  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Budget and Revenue
 
 AN ACT to amend the tax law and the real property tax law,  in  relation
   to  removing  the tax exempt status of not-for-profit corporations for
   convictions of criminal facilitation of the organization or its  offi-
   cers, members or employees
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 208 of the tax law  is  amended  by  adding  a  new
 subdivision 9-a to read as follows:
   9-A.  NOTWITHSTANDING  THE  PROVISIONS  OF  SUBDIVISION  NINE  OF THIS
 SECTION, THE TERM "ENTIRE NET INCOME" MEANS TOTAL NET  INCOME  FROM  ALL
 SOURCES WHICH THE TAXPAYER, IN THE CASE OF A CORPORATION WHICH IS EXEMPT
 FROM  FEDERAL INCOME TAX PURSUANT TO SECTION 501 (C) (3) OF THE INTERNAL
 REVENUE CODE, WOULD HAVE BEEN REQUIRED TO REPORT TO  THE  UNITED  STATES
 TREASURY DEPARTMENT, IF SUCH TAXPAYER OR ANY OFFICER, MEMBER OR EMPLOYEE
 THEREOF  SHALL  BE  CONVICTED OF CRIMINAL FACILITATION UNDER ARTICLE ONE
 HUNDRED FIFTEEN OF THE PENAL LAW.
   § 2. Paragraph (b) of subdivision 1 of section 420-a of the real prop-
 erty tax law, as amended by chapter 919 of the laws of 1981, is  amended
 to read as follows:
   (b)  Real property such as specified in paragraph (a) of this subdivi-
 sion shall not be exempt if any  officer,  member  or  employee  of  the
 owning corporation or association shall receive or may be lawfully enti-
 tled to receive any pecuniary profit from the operations thereof, except
 reasonable  compensation  for  services in effecting one or more of such
 purposes,  or  as  proper  beneficiaries  of  its  strictly   charitable
 purposes; or if the organization thereof for any such avowed purposes be
 a  guise or pretense for directly or indirectly making any other pecuni-
 ary profit for such corporation or association or for any of its members
 or employees; or if it be not  in  good  faith  organized  or  conducted
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11233-02-5
              

 S. 6968                             2
 
 exclusively  for  one  or more of such purposes; OR IF THE OWNING CORPO-
 RATION OR ASSOCIATION OR ANY OFFICER, MEMBER OR EMPLOYEE  THEREOF  SHALL
 BE  CONVICTED OF CRIMINAL FACILITATION UNDER ARTICLE ONE HUNDRED FIFTEEN
 OF THE PENAL LAW.
   § 3. Paragraph (c) 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:
   (c)  Real property such as specified in paragraph (a) of this subdivi-
 sion shall not be exempt if any  officer,  member  or  employee  of  the
 owning  corporation  or  association  shall receive any pecuniary profit
 from the operations thereof, except reasonable compensation for services
 in effecting one or more of such purposes, or as proper beneficiaries of
 its strictly charitable purposes; or if the organization thereof for any
 such avowed purposes be a guise or pretense for directly  or  indirectly
 making any other pecuniary profit for such corporation or association or
 for  any  of  its  members  or  employees; or if it be not in good faith
 organized exclusively for one or more of such purposes; OR IF THE OWNING
 CORPORATION OR ASSOCIATION OR ANY OFFICER, MEMBER  OR  EMPLOYEE  THEREOF
 SHALL  BE  CONVICTED  OF CRIMINAL FACILITATION UNDER ARTICLE ONE HUNDRED
 FIFTEEN OF THE PENAL LAW.
   § 4. Paragraph 4 of subdivision (a) of section 1116 of the tax law, as
 amended by chapter 407 of the laws  of  2019,  is  amended  to  read  as
 follows:
   (4)  Any  corporation,  association,  trust, or community chest, fund,
 foundation, or limited liability company, organized and operated  exclu-
 sively for religious, charitable, scientific, testing for public safety,
 literary or educational purposes, or to foster national or international
 amateur  sports  competition  (but  only  if  no  part of its activities
 involve the provision of athletic facilities or equipment), or  for  the
 prevention  of  cruelty to children or animals, no part of the net earn-
 ings of which inures to the benefit of any private shareholder or  indi-
 vidual,  no  substantial  part of the activities of which is carrying on
 propaganda, or otherwise attempting to influence legislation, (except as
 otherwise provided in subsection (h) of section five hundred one of  the
 United  States  internal revenue code of nineteen hundred fifty-four, as
 amended), and which does not participate in, or intervene in  (including
 the publishing or distributing of statements), any political campaign on
 behalf  of  or  in  opposition  to  any candidate for public office. The
 provisions of this paragraph regarding political campaign activity shall
 be interpreted in the same manner as section  501(c)(3)  of  the  United
 States  internal  revenue  code has been interpreted as of the effective
 date of the chapter of the laws of two thousand  nineteen  that  amended
 this  paragraph.   THE PROVISIONS OF THIS PARAGRAPH SHALL NOT APPLY TO A
 CORPORATION, ASSOCIATION, TRUST OR COMMUNITY CHEST, FUND, FOUNDATION, OR
 LIMITED LIABILITY COMPANY WHERE ANY SUCH ENTITY OR ANY  OFFICER,  MEMBER
 OR  EMPLOYEE  THEREOF SHALL HAVE BEEN CONVICTED OF CRIMINAL FACILITATION
 UNDER ARTICLE ONE HUNDRED FIFTEEN OF THE PENAL LAW;
   § 5. This act shall take effect immediately.