STATE OF NEW YORK
________________________________________________________________________
3272
2013-2014 Regular Sessions
IN ASSEMBLY
January 24, 2013
___________
Introduced by M. of A. RABBITT -- read once and referred to the Commit-
tee on Real Property Taxation
AN ACT to amend the real property tax law, in relation to the exemption
from taxation for non-profit organizations; and making an appropri-
ation therefor
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 1 of section 420-a of the real property tax law
2 is amended by adding a new paragraph (c) to read as follows:
3 (c) When used in this section:
4 (i) "organized or conducted exclusively" shall require that a corpo-
5 ration's or association's organizational documents limit the purposes of
6 such corporation or association to one or more exempt purposes, as set
7 out in paragraph (a) of this subdivision;
8 (ii) "used exclusively" shall require that a corporation or associ-
9 ation use its property only for exempt purposes. Uses which may be help-
10 ful to the exempt organization but would not, if done on land owned by
11 an otherwise taxable entity, qualify for tax exemption shall subject the
12 portion of the property so used to real property taxation. Such phrase
13 shall be strictly construed and shall be intended to limit exemptions to
14 property and improvements utilized solely for exempt purposes. Where an
15 exempt organization utilizes its land for other purposes, including but
16 not limited to, the sale of products made on the land commercially or
17 the sale of timber, or otherwise leases the land for commercial
18 purposes, or allows the placement or construction of improvements on the
19 land for commercial purposes, that portion of such property and any
20 improvements thereon if such improvements are not utilized for wholly
21 exempt purposes shall be subject to real property taxation;
22 (iii) "religious purposes" shall mean an activity that is fundamental,
23 necessary and intrinsic to the practice of a religion. Meditation or
24 the maintenance of open space or property utilized primarily for hiking
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05251-01-3
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1 shall not be considered a fundamental or intrinsic religious purpose. A
2 corporation or association organized or conducted exclusively for a
3 religious purpose shall have its own beliefs, form of worship and form
4 of organization. No exemption may be claimed for religious purposes for
5 buildings which are on a parcel where persons live if such persons work
6 in income producing ventures where the income either goes to the indi-
7 vidual or to another claiming the exemption or to an organization which
8 is legally associated or affiliated with the income producing venture,
9 unless such goods or services are exclusively and without exception sold
10 to or provided to individuals of the same religion except in the case of
11 a spouse or child of an officiant, the income is earned by the widow or
12 widower of such officiant when such officiant regularly and actively
13 leads (or led prior to such officiant's death or admission to a medical
14 care facility) the religious service at a house of worship of such reli-
15 gion, which officiant has also been trained in a curriculum to undertake
16 such responsibilities and has the primary responsibility for officiating
17 at a particular house of worship. For the purposes of this paragraph,
18 the term "income" need not include payment of money but may include the
19 receipt by an individual who has provided work for his or her family of
20 food, clothing or shelter. The fact that individuals live in a classless
21 society shall not be a factor in granting or denying an exemption based
22 on religious purposes. The provisions of this subparagraph shall not
23 affect the provisions of section four hundred thirty-six, four hundred
24 sixty or four hundred sixty-two of this title;
25 (iv) "educational purpose" shall mean either:
26 (A) an activity which shall be undertaken in a manner which satisfies
27 the compulsory education requirements of the education law or an activ-
28 ity which is done under the supervision of an entity which is tax exempt
29 pursuant to the not-for-profit corporation law or the internal revenue
30 code and the entity which conducts such activities can issue a diploma
31 and also holds a certificate of registration issued by the board of
32 regents. Such term shall also mean purposes which are exclusively used
33 to increase the knowledge of individuals and which are owned by an
34 institution of higher learning or a school of medicine, dentistry or
35 osteopathy created by law or otherwise authorized by the board of
36 regents of the state university of New York to confer degrees and which
37 meet standards of educational quality comparable to those as may be
38 established from time to time by the board of regents of the state
39 university of New York; such term shall also include property owned by
40 one claiming an exemption from taxation for educational purposes which
41 is used to house individuals who are actively engaged at least one
42 hundred twenty days per year in seeking to satisfy the compulsory educa-
43 tion requirements of the education law or who are seeking a degree,
44 certificate, or diploma, through a property owner or lessee which holds
45 a certificate of registration issued by the board of regents or who
46 holds a charter granted by the New York state education department. An
47 entity claiming exemption for educational purposes shall utilize each
48 acre at least one hundred twenty days a year exclusively for educational
49 purposes in order to maintain an exemption from property taxation pursu-
50 ant to this subparagraph; or
51 (B) property owned by an organization which is a not-for-profit corpo-
52 ration or is otherwise tax exempt pursuant to the Internal Revenue Code,
53 each exempt acre of which is actively and exclusively used at least
54 sixty days per year by persons under the age of twenty-one who are
55 learning skills related to nature, the outdoors and/or personal and
56 civic responsibilities. The provisions of this subparagraph shall be
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1 strictly interpreted. Notwithstanding any other portion of this subpar-
2 agraph, the property may also be utilized by organizations or individ-
3 uals for community meetings or community classes or events when no more
4 than the actual expenses of utilizing the facility are charged to the
5 organization or individual; provided no activity described in this
6 subparagraph shall count as part of the day requirements otherwise
7 provided for in this subparagraph. Property necessary for the carrying
8 out of educational purposes, including property necessary for transpor-
9 tation facilities, athletic facilities, parking facilities, or adminis-
10 trative offices shall be considered an educational purpose if owned by
11 an organization which otherwise qualifies as exempt for educational
12 purposes;
13 (v) "charitable purposes" shall mean an activity done without profit
14 which actually and exclusively either:
15 (A) undertakes significant blood donation initiatives, as well as
16 other health related initiatives, including, but not limited to the
17 teaching of classes, and also responds to disasters; or
18 (B) which actively and exclusively alleviates the condition of poor or
19 physically or mentally disabled humans. The intended beneficiaries shall
20 not be specified individuals and the services provided by an organiza-
21 tion claiming charitable exemption shall be open to the public based on
22 economic or physical criteria. An entity claiming exemption for charita-
23 ble purposes shall utilize each acre at least one hundred twenty days a
24 year exclusively for charitable purposes in order to maintain an
25 exemption from property taxation pursuant to this subparagraph. For the
26 purposes of this section and section four hundred twenty-b of this
27 title, no person who receives food, clothing, or housing from an educa-
28 tional, charitable, religious, moral or mental improvement of men,
29 women, and children entity shall be determined to be poor because such
30 person or his or her family gives as much or more of their income to the
31 charitable entity or another entity which is tax exempt pursuant to the
32 Internal Revenue Code or exempt from real property taxation under this
33 section, or both, as would be required to make a determination that that
34 person or his or her spouse or child is poor;
35 (vi) "hospital purposes" shall mean a hospice facility as defined in
36 article forty of the public health law as well as a hospital facility or
37 institution engaged principally in providing services by or under the
38 supervision of a physician for the prevention, diagnosis or treatment of
39 human disease, pain, injury, deformity or physical condition and which
40 is certified or licensed pursuant to article twenty-eight of the public
41 health law, and which on an ongoing and constant basis provides over-
42 night accommodations to those in need of medical services. It shall also
43 include facilities owned by a hospital facility or corporation related
44 thereto which provides medical care, even if not on a constant basis. It
45 shall also include related parking facilities which exclusively serve
46 the hospital as well as related grounds which are used by hospital
47 patients; and shall also include an emergency room, which is defined to
48 mean a center open on a continuous basis which provides emergency care
49 for those in need of medical services and which is in the same building
50 as a hospital. It shall not include living accommodations for hospital
51 personnel or their families;
52 (vii) "moral or mental improvement of men, women, or children" shall
53 include each of the following categories of real property described in
54 this subparagraph. In order to be exempt from taxation, each acre shall
55 have to be actively and actually utilized for an exempt purpose at least
56 one hundred twenty days in any year an exemption is claimed for or
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1 sought. In addition, the property, in addition to any other requirement,
2 shall be classified as not-for-profit or tax exempt under the Internal
3 Revenue Code.
4 (A) Real property primarily used to facilitate or enhance the arts;
5 (B) Real property primarily used in the study of sciences, biology,
6 and horticulture;
7 (C) Real property primarily used for the benefit of non-human animals;
8 (D) Real property which is open to the public and is primarily unim-
9 proved and is kept open for hiking, walking, or forms of exercise which
10 do not commonly use mechanized devices except by those persons who are
11 disabled or otherwise unable to walk without mechanized assistance. Such
12 open space may be open to the public upon the payment of a fee which is
13 directly related to the costs of maintaining the property, including the
14 improvements thereon. Open space shall not include any property or
15 portion therefor from which the public is excluded except for exclusions
16 based exclusively on public health purposes, as determined by a govern-
17 mental agency, or for public safety reasoning, as determined by the
18 property owner, such determination to be reviewable in any court having
19 equity jurisdiction and a presumption shall be attached thereto that the
20 property owner's determination is reasonable. Attorney's fees may be
21 awarded, at the discretion of the court, for any primarily prevailing
22 party who commences or defends a civil action based on the public safety
23 aspects of this subparagraph;
24 (E) "Land trust" shall mean real property which is primarily unim-
25 proved. No owner shall be entitled to a property tax exemption as a land
26 trust unless that property owner meets all of the following criteria:
27 (1) enters into a contract with the assessing unit which provides that
28 the land in the land trust may not be sold or encumbered, except by
29 mortgage or conservation easement, without the property owner, within
30 thirty days of such sale or encumbrance, entering into a valid contract
31 to purchase land of at least an equal value in the state of New York to
32 be placed in a land trust and actually so purchasing within one year of
33 entering into such contract; (2) is included as part of a lawfully
34 enacted comprehensive plan by the county, city, town, or village which
35 such property is in or is identified in an official open space or
36 natural resources protection plan duly adopted by a federal, state or
37 local government or agency thereof; (3) exists as a land trust to
38 protect ecological resources which are considered valuable in a lawfully
39 enacted comprehensive plan provided that public access shall not be a
40 criteria in deterring an exemption from taxation for land trust
41 purposes; and (4) unless the governing board of the town, city, or
42 village where the property is situated passes a resolution to the
43 contrary, if the purchase, referred to in item one of this clause does
44 not occur within the time limitations provided in such item, the land
45 trust shall be liable for all tax payments which such land trust would
46 have paid on the property such land trust sold for the period of time
47 which such land trust would have owed to all lawful taxing jurisdictions
48 unless the title to the land such land trust entered into a contract to
49 purchase was unmarketable or the seller of such property withdrew the
50 offer to sell in which case such land trust shall have an additional
51 three hundred sixty-five day period to purchase and close title on prop-
52 erty in the state of New York, the value of which is at least equal to
53 the value of the property such land trust sold which required the
54 purchase of the property whose title was unmarketable or whose offer to
55 sell was withdrawn;
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1 (F) "Personal improvement" shall mean real property other than that
2 provided for in clause (B) of subparagraph (iv) of this paragraph, which
3 is used primarily by persons under the age of twenty-one who are learn-
4 ing skills related to nature, the outdoors and/or personal and civic
5 responsibilities. Such property shall be owned by organizations or asso-
6 ciations which are tax exempt under the Internal Revenue Code. Notwith-
7 standing any part of this subdivision to the contrary, each acre of
8 property exempted as personal improvement property need only be utilized
9 ninety days per year in order to maintain such property's exemption;
10 (G) "Non-scholastic educational" shall mean real property owned by an
11 organization which is tax exempt under the Internal Revenue Code and
12 which is primarily used to improve the intellectual capabilities of
13 human beings which do not otherwise qualify for tax exemption pursuant
14 to this section;
15 (H) "Recreational" shall mean real property owned by an organization
16 which is tax exempt under the Internal Revenue Code and which provides
17 recreational opportunity for individuals regardless of ability to pay.
18 Recreational opportunities can be either indoors or outdoors and may
19 include overnight opportunities primarily for persons under the age of
20 twenty-one years;
21 (I) "Medical purposes" shall mean real property otherwise owned by an
22 organization which is tax exempt under the Internal Revenue Code and
23 which is not a hospital as defined by this section but which qualifies
24 as a hospital as defined in article twenty-eight of the public health
25 law. Notwithstanding any provision of this subdivision to the contrary,
26 property exempted for medical purposes need not meet any minimum usage
27 requirement in terms of the number of days each acre is actively and
28 actually used;
29 (J) "Home care services" shall mean real property otherwise owned by
30 an organization which is tax exempt under the Internal Revenue Code and
31 is a home care services agency as defined in article thirty-six of the
32 public health law, notwithstanding any provision of this subdivision to
33 the contrary, property exempted for home care services purposes need not
34 meet any minimum usage requirement in terms of the number of days each
35 acre is actively and actually used and may also operate or contract to
36 have operated on its premises a cafeteria which the owner can reasonably
37 demonstrate primarily serves the patients and/or staff of such facility;
38 (K) "Residential health care facility" shall mean real property other-
39 wise owned by an organization which is tax exempt as a residential
40 health care facility as defined in article twenty-eight of the public
41 health law. Notwithstanding any provision of this subdivision to the
42 contrary, property exempted for residential health care facility
43 purposes need not meet any minimum usage requirement in terms of the
44 number of days each acre is actively and actually used;
45 (L) "Other medical purposes" shall mean real property which otherwise
46 is owned by an organization which is tax exempt under the Internal
47 Revenue Code and is used to provide medical services to those in need.
48 Notwithstanding any provision of this subdivision to the contrary, prop-
49 erty exempted for other medical purposes need not meet any minimum usage
50 requirement in terms of the number of days each acre is actively and
51 actually used;
52 (M) "Primarily charitable purposes" shall mean an activity done on
53 real property owned by an organization which is tax exempt under the
54 Internal Revenue Code and which actually and primarily alleviates the
55 condition of poor or physically or mentally disabled humans. The
56 intended beneficiaries shall not be specified individuals and the
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1 services provided by an organization claiming charitable exemption shall
2 be open to the public based on economic or physical criteria; and
3 (N) "Other moral or mental improvement" shall mean real property owned
4 by an organization which is tax exempt under the Internal Revenue Code
5 and which is dedicated in a manner other than as provided in this para-
6 graph to the moral or mental improvement of men, women, or children.
7 § 2. Subdivision 1 of section 420-b of the real property tax law is
8 amended by adding a new paragraph (d) to read as follows:
9 (d) When used in this section:
10 (i) "organized exclusively" shall require that a corporation's or
11 association's organizational documents limit the purpose of such corpo-
12 ration or association to one or more exempt purposes, as set out in
13 paragraph (a) of this subdivision. Furthermore, the corporation or asso-
14 ciation shall not be empowered to engage in activities which in them-
15 selves are not in furtherance of one or more such purposes; and
16 (ii) "used exclusively" shall require that a corporation or associ-
17 ation use its property only for exempt purposes. Uses which may be help-
18 ful to the exempt organization but would not, if done on land owned by
19 an otherwise taxable entity, qualify for tax exemption shall subject the
20 portion of the property so used to real property taxation. Such phrase
21 shall be strictly construed and shall be intended to limit exemptions to
22 property and improvements utilized solely for exempt purposes. Where an
23 exempt organization utilizes its land for other purposes, including but
24 not limited to, the sale of products made on the land commercially or
25 the sale of timber, or otherwise leases the land for commercial
26 purposes, or allows the placement or construction of improvements on the
27 land for commercial purposes, that portion of such property and any
28 improvements thereon if such improvements are not utilized for wholly
29 exempt purposes shall be subject to real property taxation.
30 § 3. The real property tax law is amended by adding a new section
31 420-d to read as follows:
32 § 420-d. State aid payments for properties exempted from taxation. 1.
33 Definitions. (a) For the purpose of this section, the phrase "taxing
34 district" shall include schools, counties, cities, towns, villages, as
35 well as lawfully formed districts which provide services, including, but
36 not limited to fire protection districts, ambulance districts, as well
37 as other lawfully formed districts which do not receive payments from an
38 affected property owner.
39 (b) For the purposes of this section, the phrase "affected property
40 owner" shall mean an organization which is exempt from taxation pursuant
41 to the Internal Revenue Code and which owns property described in clause
42 (B) of subparagraph (iv) of paragraph (c) of subdivision one of section
43 four hundred twenty-a of this title.
44 2. State aid payments. A taxing district in which property is situated
45 which property is owned by an affected property owner shall, subject to
46 the provisions of this section, be entitled to receive up to one hundred
47 percent of the taxes which would have been paid on such property had
48 such property not been owned by an affected property owner.
49 3. Application. (a) The chief executive officer of a taxing district
50 in which there is property owned by an affected property owner may make
51 application for state assistance pursuant to this section. Such applica-
52 tion shall be on a form developed by the department. Upon receipt of
53 the application for state assistance, such property shall be valued by
54 the commissioner and the cumulative value of all such lands shall be
55 equalized by applying thereto the appropriate state equalization rate or
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1 special equalization rate established in accordance with the rules of
2 the commissioner.
3 (b) Subject to an acceptable application, the commissioner shall
4 compute the amount of state assistance payable to or for the benefit of
5 each taxing district by multiplying the value of the assessed property
6 by the tax rate per thousand for each taxing district who makes applica-
7 tion pursuant to the provisions herein. Such amount shall then be paid
8 to the taxing district upon the audit and warrant of the state comp-
9 troller out of moneys appropriated by the legislature. In the event that
10 the total moneys payable pursuant to this section shall exceed ten
11 million dollars in any state fiscal year, the payments to the taxing
12 district shall be reduced proportionately for each taxing district which
13 has timely made application pursuant to this section.
14 4. Rules. The commissioner is authorized to develop rules and regu-
15 lations or guidelines for the implementation of this section.
16 § 4. The sum of ten million dollars ($10,000,000) or so much thereof
17 as may be necessary, is hereby appropriated to the department of taxa-
18 tion and finance from any moneys in the state treasury in the general
19 fund to the credit of the state purposes account not otherwise appropri-
20 ated for services and expenses of the department of taxation and finance
21 for the purposes of carrying out the provisions of this act. Such sum
22 shall be payable on the audit and warrant of the state comptroller on
23 vouchers certified or approved by the commissioner of taxation and
24 finance, or his or her duly designated representative in the manner
25 provided by law. No expenditure shall be made from this appropriation
26 until a certificate of approval of availability shall have been issued
27 by the director of the budget and filed with the state comptroller and a
28 copy filed with the chair of the senate finance committee and the chair
29 of the assembly ways and means committee. Such certificate may be
30 amended from time to time by the director of the budget and a copy of
31 each such amendment shall be filed with the state comptroller, the chair
32 of the senate finance committee and the chair of the assembly ways and
33 means committee.
34 § 5. This act shall take effect on the first of January next succeed-
35 ing the date on which it shall have become a law and shall apply to
36 assessment rolls prepared on the basis of taxable status dates occurring
37 on or after such date.
