What's happening
This bill requires not-for-profit corporations selling real estate to non-governmental or for-profit entities to reimburse prior public funding and tax abatements and pay real property transfer taxes.
Why it matters
Ensures public investment is returned. By requiring not-for-profit corporations to reimburse government agencies for capital funding, grants, or financing received within the previous ten years when selling real estate to for-profit or non-governmental buyers, this bill aims to prevent private interests from benefiting from public subsidies without compensation to taxpayers.
Closes tax loopholes on property sales. The bill removes the real property transfer tax exemption for these sales, generating additional tax revenue for the state and ensuring that not-for-profit sellers do not have an unfair advantage when selling to non-charitable entities.
Recaptures tax abatements. Any real property tax abatements granted to the not-for-profit within the last ten years must be repaid to the taxing authority upon such a sale, discouraging organizations from leveraging tax breaks and then profiting through private sale without community benefit.
May impact not-for-profit real estate strategies. The new rules could influence how not-for-profits approach property ownership and sale, potentially reducing speculative practices and ensuring that public resources invested in these organizations are not diverted to private gain.
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Who cares
Headline styles
Tax Rules for Nonprofit Property Sales
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
1 Multi-sponsor
History
- Referred to corporations, authorities and commissions
- Referred to corporations, authorities and commissions
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7420
2017-2018 Regular Sessions
IN ASSEMBLY
April 25, 2017
Introduced by M. of A. TITONE, JAFFEE -- Multi-Sponsored by -- M. of A. CUSICK -- read once and referred to the Committee on Corporations, Authorities and Commissions
AN ACT to amend the not-for-profit corporation law, in relation to the sale of real property
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 509 of the not-for-profit corporation law, as amended by chapter 549 of the laws of 2013, is amended to read as follows: § 509. Purchase, sale, mortgage and lease of real property.
(a) 1. No corporation shall purchase real property unless such purchase is authorized by the vote of a majority of directors of the board or of a majority of a committee authorized by the board, provided that if such property would, upon purchase thereof, constitute all, or substantially all, of the assets of the corporation, then the vote of two-thirds of the entire board shall be required, or, if there are twenty-one or more directors, the vote of a majority of the entire board shall be sufficient.
[(b)] 2. No corporation shall sell, mortgage, lease, exchange or otherwise dispose of its real property unless authorized by the vote of a majority of directors of the board or of a majority of a committee authorized by the board; provided that if such property constitutes all, or substantially all, of the assets of the corporation, then the vote of two-thirds of the entire board shall be required, or, if there are twenty-one or more directors, the vote of a majority of the entire board shall be sufficient.
[(c)] 3. If a corporation authorizes a committee to act pursuant to [paragraphs (a) and (b)] subparagraphs one and two of this [section] paragraph, the committee shall promptly report any actions taken to the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11033-01-7
A. 7420 2
board, and in no event after the next regularly scheduled meeting of the board.
(b) 1. A corporation which sells real property to any entity other than the state or another not-for-profit corporation which is subject to the provisions of this chapter shall reimburse the state and/or a municipality for any capital funding, grants or financing received through the state or a municipal agency or public benefit corporation within the ten years preceding such sale.
2. A sale of real property by a not-for-profit corporation to any entity other than the state or another not-for-profit corporation which is subject to the provisions of this chapter shall not be exempt from the payment of the real property transfer tax imposed by section fourteen hundred two of the tax law.
3. Any corporation which has received a real property tax abatement within the last ten years for real property taxes assessed on such property shall reimburse the taxing authority the total amount of any such abatement upon the sale of such real property to any entity other than the state or another not-for-profit corporation which is subject to the provisions of this chapter.
§ 2. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.