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.
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.
STATE OF NEW YORK ________________________________________________________________________ 2546 2011-2012 Regular Sessions IN SENATE 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.