NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A278
SPONSOR: Gunther 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 nonpro-
fit 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. Exempts children's overnight camps and
summer day camps
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 build-
ings 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 realis-
tically contemplating the satisfaction of the requirement that the prop-
erty 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 char-
itable organization has not commenced activities to further the charita-
ble purpose, then such land will be placed back on the tax rolls.
LEGISLATIVE HISTORY:
2019-20: A3692B Referred to Real Property Taxation
2017-18: A270 Referred to Real Property Taxation/53298 Referred to Local
Government
2015-2016: A855 Referred to Real Property Taxation
2013-2014: A1711A Referred to Real Property Taxation/53993A Referred to
Local Government
2011-2012: A499 Held in Real Property Taxation
2009-2010: A981 Referred to Real Property Taxation/S670 Referred to
Local Government
2007-2006: A1259 Referred to Real Property Taxation/S529 Referred to
Local Government
2005-2006: A9C20 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.
STATE OF NEW YORK
________________________________________________________________________
278
2021-2022 Regular Sessions
IN ASSEMBLY(Prefiled)
January 6, 2021
___________
Introduced by M. of A. GUNTHER, COOK -- read once and referred to the
Committee on Real Property Taxation
AN ACT to amend the real property tax law, in relation to the duration
of the exemption for property of mandatory class nonprofit organiza-
tions 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
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 3 of section 420-a of the real property tax
2 law, such section as renumbered by chapter 919 of the laws of 1981, is
3 amended and a new subdivision 17 is added to read as follows:
4 3. Such real property from which no revenue is derived shall be exempt
5 though not in actual use therefor by reason of the absence of suitable
6 buildings or other physical improvements thereon if:
7 (a) the construction of such buildings or other physical improvements
8 is in progress or is in good faith contemplated by such corporation or
9 association within seven years after such property has been acquired by
10 such corporation or association; for the purposes of calculating such
11 seven years' period, with respect to property acquired before the effec-
12 tive date of the chapter of the laws of two thousand twenty-one which
13 amended this subdivision, such seven years' period shall commence on
14 such effective date, and with respect to property acquired on or after
15 such effective date, such seven years' period shall commence on the date
16 of acquisition; or
17 (b) such real property is held by such corporation or association upon
18 condition that the title thereto shall revert in case any building not
19 intended and suitable for one or more such purposes shall be erected
20 upon such premises or some part thereof.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02660-01-1
A. 278 2
1 17. Notwithstanding any provision of this section to the contrary,
2 real property used for the purpose of a children's overnight camp or
3 summer day camp, as such terms are defined in section thirteen hundred
4 ninety-two of the public health law, shall be exempt from the provisions
5 of this section.
6 § 2. This act shall take effect on the first of January next succeed-
7 ing the date on which it shall have become a law.
