A04534 Summary:

BILL NOA04534
 
SAME ASNo Same As
 
SPONSORO'Donnell
 
COSPNSR
 
MLTSPNSR
 
Amd §420-a, RPT L
 
Relates to not-for-profit lease of real property; provides that when real property not used exclusively to carry out one or more exempt purposes is leased or otherwise used for commercial for-profit purposes, such property shall be subject to taxation and no portion shall be exempt.
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A04534 Actions:

BILL NOA04534
 
02/04/2021referred to real property taxation
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A04534 Committee Votes:

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A04534 Floor Votes:

There are no votes for this bill in this legislative session.
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A04534 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A4534
 
SPONSOR: O'Donnell
  TITLE OF BILL: An act to amend the real property tax law, in relation to not-for-profit lease of real property   PURPOSE OR GENERAL IDEA OF BILL: Under this bill, not-for-profits would lose their real property exemptions when they act like for-profit real estate businesses by leas- ing land to commercial developers to construct for-profit buildings that are unrelated to the not-for-profits' core purposes, and that have a significant effect on the neighboring community's population density or character.   SUMMARY OF PROVISIONS: Section one of the bill amends Real Property Tax Law section 420-a by adding language at the end of the subdivision 2. The new language provides that if a not-for-profit entity leases a portion of its real property purposes other than the not-for-profit's religious, charitable, educational, etc. purposes, then it will lose its real property tax exemption for the entire parcel if the following are true: 1) the prop- erty is leased for commercial for-profit purposes, 'and 2) the use of the property will have a significant effect on existing patterns of population concentration, or will have a significant effect on the existing or neighborhood character. The second determination will be made by the local governing body after a public hearing.   JUSTIFICATION: Current law grants certain not-for-profit entities a real property tax exemption, and also provides that any portion of the real property that is leased or used for purposes other than those served by the not-for- profit will lose the tax exemption. Existing law is inadequate to address circumstances in which not-for-Profit entities in essence become for-profit developers by leasing land for massive real estate develop- ments that negatively affect the surrounding communities without any opportunity for meaningful input from those affected by overzealous development. When not-for-profits act in this manner, is appropriate for the law to treat them as though they have indeed become for-profit enti- ties. This bill would therefore remove the real property tax exemption from the entire parcel rather than simply the leased portion, thus creating an incentive for more responsible behavior, as well as a mech- anism for public review of overdevelopment that involves land owned by not-for-profit entities.   PRIOR LEGISLATIVE HISTORY: A.8753 (2019-20) A.4751 (2017-2018) A.4235 (2015-16); A.9794 (2014)   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: To be determined. Possible revenue enhancement for local governments.   EFFECTIVE DATE: This act shall take effect immediately.
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A04534 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          4534
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 4, 2021
                                       ___________
 
        Introduced  by  M.  of  A.  O'DONNELL  --  read once and referred to the
          Committee on Real Property Taxation
 
        AN ACT to amend the real property tax law, in relation to not-for-profit
          lease of real property
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Subdivision  2  of section 420-a of the real property tax
     2  law, as amended by section 17 of part A of chapter 68  of  the  laws  of
     3  2013, is amended to read as follows:
     4    2.  If any portion of such real property is not so used exclusively to
     5  carry out thereupon one or more of such purposes but is leased or other-
     6  wise used for other purposes, such portion shall be subject to  taxation
     7  and  the remaining portion only shall be exempt; provided, however, that
     8  such real property shall be fully exempt from taxation although it or  a
     9  portion  thereof  is  used (a) for purposes which are exempt pursuant to
    10  this section or sections four hundred twenty-b, four hundred twenty-two,
    11  four hundred twenty-four, four hundred twenty-six, four hundred  twenty-
    12  eight,  four  hundred  thirty  or  four hundred fifty of this chapter by
    13  another corporation which owns real property exempt from taxation pursu-
    14  ant to such sections or whose real property if it  owned  any  would  be
    15  exempt  from  taxation pursuant to such sections, (b) for purposes which
    16  are exempt pursuant to section four hundred six or section four  hundred
    17  eight  of  this chapter by a corporation which owns real property exempt
    18  from taxation pursuant to such section or  if  it  owned  any  would  be
    19  exempt  from  taxation  pursuant to such section, (c) for purposes which
    20  are exempt pursuant to section four hundred sixteen of this  chapter  by
    21  an  organization  which owns real property exempt from taxation pursuant
    22  to such section or whose real property if it owned any would  be  exempt
    23  from  taxation  pursuant  to  such section, (d) for purposes relating to
    24  civil defense pursuant to the New  York  state  defense  emergency  act,
    25  including  but  not limited to activities in preparation for anticipated
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08895-01-1

        A. 4534                             2
 
     1  attack, during attack, or following attack or false warning thereof,  or
     2  in  connection  with  drill or test ordered or directed by civil defense
     3  authorities, or (e) for purposes of a tax-free NY  area  that  has  been
     4  approved pursuant to article twenty-one of the economic development law,
     5  subject to the conditions that the real property must have been owned by
     6  the  corporation  or  association  organized exclusively for educational
     7  purposes and exempt pursuant to this section on June first, two thousand
     8  thirteen, and that the exemption shall apply only to the portion of such
     9  real property that is used for purposes of the START-UP NY program;  and
    10  provided  further  that such real property shall be exempt from taxation
    11  only so long as it or a portion thereof, as the case may be, is  devoted
    12  to  such  exempt purposes and so long as any moneys paid for such use do
    13  not exceed the amount of  the  carrying,  maintenance  and  depreciation
    14  charges  of  the property or portion thereof, as the case may be[.]; and
    15  provided further that if the portion of  such  real  property  not  used
    16  exclusively  to  carry  out  thereupon  one  or more of such purposes is
    17  leased or otherwise used for commercial  for-profit  purposes  and  will
    18  have  a  significant  effect  on existing patterns of population concen-
    19  tration, distribution or growth, or on the existing community or  neigh-
    20  borhood  character,  as  determined  by the local governing body after a
    21  public hearing, then the entire parcel of such real  property  shall  be
    22  subject to taxation and no portion shall be exempt.
    23    § 2. This act shall take effect immediately.
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