Relates to the discretion in granting real property tax exemptions for certain corporations or associations

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. Repeals certain sections of the real property tax law as added by pending legislation.

Section 4. Amends subdivision 1 of section 420-b of the real property tax law by adding a paragraph d which defines what uses may deem property subject to taxation provided a local law, ordinance, or resolution is passed.

Section 5. Repeals Section 430 of the real property tax law.

Section 6. 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." re is "no church, no clergy, and no 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.1398-A of 2003: Referred to Committee on 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.