BILL NUMBER:  S519

 TITLE OF BILL :
An act to amend the not-for-profit corporation law, in relation to the
sale of real property

 PURPOSE :
Relates to sales of real property by not-for-profit corporations.

 SUMMARY OF PROVISIONS :
This legislation amends §509 of the Not-For-Profit Corporation Law by
adding a new subdivision 2 to provide that any corporation that has
received capital funding, grants or financing within 10 years
preceding a sale of real property to any entity other than the state
of New York or another not-for-profit shall reimburse the state and/or
municipality for such funding.

Additionally, such property shall not be exempt from the payment of
real property transfer tax and shall reimburse any real property tax
abatements.

 JUSTIFICATION :
The State of New York supports many not-for-profit and charitable
institutions that purchase real property to carry out their
charitable, or educational purposes. The State, recognizing the good
work that is done by these agencies, has given State grants, financing
              

and tax abatement to facilitate the mission of the institution.

However, the value of these properties have caused some of these
institutions to look at the real estate not as the State does, as a
resource for the community, but rather as a potential source of
revenue. They are selling the real property and making substantial
amounts of money on the transactions.

While the purpose of this sale may be to raise money to further
benefit the work done by the institution, the State and local
governments still have a vested interest in the sale of the real
property. The governments have invested in this real property by
forgoing real property taxes, transfer taxes or providing capital
assistance that has often increased the value of the property to
facilitate the development of the institution, and to maintain the
facility in the community.

If an institution is selling real property to an entity (other than
the State or another not-for-profit corporation) for the purpose of
making money, the taxpayers, through the State or municipality, should
recoup the public capital money and unpaid taxes that made it so
valuable to the institution in the first place.

This bill would require the not-for-profit corporation, or charitable
entity to reimburse the state or municipality from the proceeds of the
sale of the real property for those benefits bestowed upon the
institution for the 10 years prior to the sale.

 LEGISLATIVE HISTORY :
2008:  S.5604 - Third Reading Calendar/A.8489 - Referred to
Corporations
2007:  S.5604 - Reported to Rules/A.8489 - Referred to Corporations
2006:  S.4064 - Referred to Corporations, Authorities & Commissions

 FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
This act shall take effect immediately.