Provides that real property tax exemption for professional basketball and hockey franchises in a city of one million or more shall be subject to local law

Title of bill

An act to amend the real property tax law, in relation to authorizing the local legislative body of a city having a population of one million or more the authority to grant an exemption for real property used for professional major league sports

Purpose

Provides that real property tax exemption for professional basketball and hockey franchises in a city of one million or more shall be subject to local law.

Summary of provisions

The bill amends section 429 of the real property tax law, "real property used for professional major league sports," granting authority to local municipalities to exempt from taxation real property used for professional major league sports. The Garden currently enjoys a curiously worded exemption from taxes, based on the fact that it meets the following criteria, which are applicable to no other property in New York:

1. It is located in a city with a population of one million or more, and used by both a professional major league hockey team which is a member of the National Hockey League and a professional major league basketball team which is a member of the National Basketball Association to play their home games.

2. It is exempt from taxation to the extent that the taxes are the obligation by lease or otherwise of the owners of franchises for such teams, provided that such owners enter into a written agreement with the chief executive officer of the municipality in which such property is located to play their home games within such municipality for a period of at least ten consecutive years.

3. The tax exemption is granted on the date the agreement is executed and applies to taxes which become due and payable after the agreement is executed. The Exemption continues as long as both of the professional teams play their home games there and no longer.

4. The exemption also applies to improvements used for the provision of facilities or services related to sports, entertainment, expositions, conventions or trade shows.

5. If one or both of said teams ceases to play their home games at the property at any time, the tax exemption ceases immediately. The amendment adds new language to the section, to make it clear that the property is still subject to taxation, and that the full amount of such taxes are and shall be the obligations of the owners of such property, and may not be made obligations by lease or otherwise of the owners of the teams referred to hereinabove. The amendment also makes it clear that any provision in a lease, agreement, or any other written instrument requiring that any such taxes or their equivalent in the form of any charges of any kind whatsoever, imposed by whatever name, be made obligations of the owners of such teams shall be void on and after the effective date of this act as against state policy.

Justification

No exemption is granted in perpetuity. The purpose of this bill is to eliminate the exemption, but to insure that fans are not penalized by the owners of the facility, in the form of passing onto them any charges or other costs as a proxy for the taxes the owners must pay.

Legislative history

This is a new bill. FISCAL IMPLICATIONS : None.

Effective date

This act shall take effect immediately.