Provides for a financial exploitation prevention outreach, education and training program and fund

Summary of provisions

Section 1: Amends subdivision 1 of section 420-a of the Real Property Tax Law by adding a new paragraph (c) to define the following phrases as related to nonprofit organizations: "organized or conducted exclusively": "used exclusively"; "religious purposes"; "charitable purposes"; "hospital purposes"; "educational purpose"; and "moral or mental improvement of men, women, or children."

Section 2: Amends section 420-b of the Real Property Tax Law by adding a new paragraph (d) to incorporate the aforementioned definitions of: "organized exclusively" and "used exclusively."

Section 3: Adds a new section 420-d to the Real Property Tax Law, authorizing state aid payments to local taxing districts as a reimbursement for revenues lost to such districts as a result of tax exemptions granted to real property parcels actively and exclusively used at least 60 days per year by persons under the age of 21 who are learning skills related to nature, the outdoors and/or personal & civic responsibilities.

Section 4: Appropriates the sum of $10,000,000 or so much thereof as may be necessary, to the Commissioner of Taxation and Finance from the State General Fund to carry out the provisions of this act.

Section 5: 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 strength of the Constitutional provision that real 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 46 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" (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.2552 of 2012: Died in Senate Finance S.2552 of 2011: Died in Senate Finance S.6836 of 2010: Died in Senate Finance S.1127-A of 2004: Died in Senate Local Government, Died in Assembly Real Property Taxation S.1127-A of 2003: Died on Senate Floor Calendar

Fiscal implications

The sum of §10 million, or so much thereof as may be necessary, would be appropriated out of the State General Fund to support reimbursement to local taxing jurisdictions.

Local fiscal implications

Undetermined, however, in addition to the grant of state reimbursement for certain exempt properties, 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 shall take effect on the first of January next succeeding the date on which it shall have become a law and shall apply to

assessment rolls prepared on the basis of taxable status dates occurring on or after such date.