Relates to the exemption from taxation for non-profit organizations; repealer

3 Co-sponsors

• John A. DeFrancisco
• William J. Larkin Jr.
• Betty Little

BILL NUMBER:S2544A

Title of bill

An act to amend the real property tax law, in relation to the exemption from taxation for non-profit organizations and to repeal certain provisions of such law relating thereto

Purpose

To ensure that exempt properties are being used in the manner which supports the specific exemption granted.

Summary of provisions

Repeals subdivision 3 of section 420-a of the real property tax law to add a new subdivision 3 to provide that vacant or otherwise unimproved land shall only be deemed tax exempt if there are definite plans for utilizing and adapting the property for exempt purposes within five years and the full execution of such plans within seven years.

Existing law

Existing law does not provide a date certain by which real property not in actual use for its exempt purpose(s) must be developed or otherwise improved to facilitate such activity.

Justification

Land-banking occurs when tax exempt organizations purchase land for contemplated use. The problem is that often times contemplated use does not occur or takes years to occur. While that land is tied up, taxes are not being paid, and the land is not being put to productive use. This diminishes the overall tax base of a locality. When the tax base of a locality is diminished, the remaining taxpayers burden increases. This makes home ownership less affordable as property taxes grow.

This proposed measure is one of a series of bills aimed at restructuring the framework for granting real property tax exemptions across the state. Based on year 2000 assessment rolls, there are over five million parcels of property in New York State (valued at a total of 1.3 trillion dollars). Of this number, some three million parcels enjoy at least 1 real property tax exemption. From a taxable status standpoint, about 1/3 of the total value of property in New York State (441 billion dollars) is either wholly or partially exempt from real property taxation.

The lion's share of real property tax exemptions (around 68%) are state mandated, and while the state has provided some reimbursement to relieve local taxing jurisdictions (i.e., through the STAR program), high levels of tax exemptions can present a serious burden to other property Owners who must support the cost of school district, municipal and special district operations.

It is imperative that the State address and limit exemptions to those organizations and purposes which most broadly benefit the public. This specific legislation promotes this thrust by ensuring that organizations seeking tax exemptions truly meet those public purposes, and that lands receiving relief from real property taxation are being fully used in support of such purposes.

Legislative history

S.6838 of 2010: Referred to Local Government S.1126A of 2003: Referred to Local Government

Fiscal implications

None to the state.

Local fiscal implications

None to the state.

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 is 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.