Bill Text: NY S01951 | 2021-2022 | General Assembly | Introduced


Bill Title: Provides that real property tax exemptions granted to real property owned by corporations or associations organized or conducted exclusively for hospital or for purposes related to the moral or mental improvement of men, women, or children and used exclusively for carrying out such purposes shall only be granted if the property owner can prove by clear and convincing evidence that each acre is actually used for such purpose at least 120 days a year.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2021-01-16 - REFERRED TO LOCAL GOVERNMENT [S01951 Detail]

Download: New_York-2021-S01951-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                          1951

                               2021-2022 Regular Sessions

                    IN SENATE

                                    January 16, 2021
                                       ___________

        Introduced  by  Sen.  AKSHAR -- read twice and ordered printed, and when
          printed to be committed to the Committee on Local Government

        AN ACT to amend the real property tax law, in relation to the  exemption
          from taxation for non-profit organizations

          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
    25  shall  not be considered a fundamental or intrinsic religious purpose. A

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD04321-01-1

        S. 1951                             2

     1  corporation or association organized  or  conducted  exclusively  for  a
     2  religious  purpose  shall have its own beliefs, form of worship and form
     3  of organization. No exemption may be claimed for religious purposes  for
     4  buildings  which are on a parcel where persons live if such persons work
     5  in income producing ventures where the income either goes to  the  indi-
     6  vidual  or to another claiming the exemption or to an organization which
     7  is legally associated or affiliated with the income  producing  venture,
     8  unless such goods or services are exclusively and without exception sold
     9  to  or provided to individuals of the same religion. For the purposes of
    10  this paragraph, the term "income" need not include payment of money  but
    11  may include the receipt by an individual who has provided work or his or
    12  her  family  of  food, or clothing or shelter. The fact that individuals
    13  live in a classless society shall not be a factor in granting or denying
    14  an exemption based on religious purposes. The provisions of this subpar-
    15  agraph shall not affect the provisions of section four  hundred  thirty-
    16  six, four hundred sixty or four hundred sixty-two of this title;
    17    (iv) "educational purpose" shall mean either:
    18    (A)  an activity which shall be undertaken in a manner which satisfies
    19  the compulsory education requirements of the education law or an  activ-
    20  ity which is done under the supervision of an entity which is tax exempt
    21  pursuant  to  the not-for-profit corporation law or the internal revenue
    22  code and the entity which conducts such activities can issue  a  diploma
    23  and  also  holds  a  certificate  of registration issued by the board of
    24  regents. Such term shall also mean purposes which are  exclusively  used
    25  to  increase  the  knowledge  of  individuals  and which are owned by an
    26  institution of higher learning or a school  of  medicine,  dentistry  or
    27  osteopathy  created  by  law  or  otherwise  authorized  by the board of
    28  regents of the state university of New York to confer degrees and  which
    29  meet  standards  of  educational  quality  comparable to those as may be
    30  established from time to time by the  board  of  regents  of  the  state
    31  university  of  New York; such term shall also include property owned by
    32  one claiming an exemption from taxation for educational  purposes  which
    33  is  used  to  house  individuals  who  are actively engaged at least one
    34  hundred twenty days per year in seeking to satisfy the compulsory educa-
    35  tion requirements of the education law or  who  are  seeking  a  degree,
    36  certificate,  or diploma, through a property owner or lessee which holds
    37  a certificate of registration issued by the  board  of  regents  or  who
    38  holds  a  charter granted by the New York state education department. An
    39  entity claiming exemption for educational purposes  shall  utilize  each
    40  acre at least one hundred twenty days a year exclusively for educational
    41  purposes in order to maintain an exemption from property taxation pursu-
    42  ant to this subparagraph; or
    43    (B) property owned by an organization which is a not-for-profit corpo-
    44  ration or is otherwise tax exempt pursuant to the internal revenue code,
    45  each  exempt  acre  of  which  is actively and exclusively used at least
    46  sixty days per year by persons under  the  age  of  twenty-one  who  are
    47  learning  skills  related  to  nature,  the outdoors and/or personal and
    48  civic responsibilities.  The provisions of this  subparagraph  shall  be
    49  strictly interpreted.  Notwithstanding any other portion of this subpar-
    50  agraph,  the  property may also be utilized by organizations or individ-
    51  uals for community meetings or community classes or events when no  more
    52  than  the  actual  expenses of utilizing the facility are charged to the
    53  organization or individual;  provided  no  activity  described  in  this
    54  subparagraph  shall  count  as  part  of  the day requirements otherwise
    55  provided for in this subparagraph.  Property necessary for the  carrying
    56  out  of educational purposes, including property necessary for transpor-

        S. 1951                             3

     1  tation facilities, athletic facilities, parking facilities, or  adminis-
     2  trative  offices  shall be considered an educational purpose if owned by
     3  an organization which otherwise  qualifies  as  exempt  for  educational
     4  purposes;
     5    (v)  "charitable  purposes" shall mean an activity done without profit
     6  which actually and exclusively either:
     7    (A) undertakes significant blood  donation  initiatives,  as  well  as
     8  other  health  related  initiatives,  including,  but not limited to the
     9  teaching of classes, and also responds to disasters; or
    10    (B) which actively and exclusively alleviates the condition of poor or
    11  physically or mentally disabled humans. The intended beneficiaries shall
    12  not be specified individuals and the services provided by  an  organiza-
    13  tion  claiming charitable exemption shall be open to the public based on
    14  economic or physical criteria. An entity claiming exemption for charita-
    15  ble purposes shall utilize each acre at least one hundred twenty days  a
    16  year  exclusively  for  charitable  purposes  in  order  to  maintain an
    17  exemption from property taxation pursuant to this subparagraph.  For the
    18  purposes of this section and  section  four  hundred  twenty-b  of  this
    19  title,  no person who receives food, clothing, or housing from an educa-
    20  tional, charitable, religious,  moral  or  mental  improvement  of  men,
    21  women,  and  children entity shall be determined to be poor because such
    22  person or his or her family gives as much or more of their income to the
    23  charitable entity or another entity which is tax exempt pursuant to  the
    24  Internal  Revenue  Code or exempt from real property taxation under this
    25  section, or both, as would be required to make a determination that that
    26  person or his or her spouse or child is poor;
    27    (vi) "hospital purposes" shall mean a hospice facility as  defined  in
    28  article forty of the public health law as well as a hospital facility or
    29  institution  engaged  principally  in providing services by or under the
    30  supervision of a physician for the prevention, diagnosis or treatment of
    31  human disease, pain, injury, deformity or physical condition  and  which
    32  is  certified or licensed pursuant to article twenty-eight of the public
    33  health law, and which on an ongoing and constant  basis  provides  over-
    34  night accommodations to those in need of medical services. It shall also
    35  include  facilities  owned by a hospital facility or corporation related
    36  thereto which provides medical care, even if not on a constant basis. It
    37  shall also include related parking facilities  which  exclusively  serve
    38  the  hospital  as  well  as  related  grounds which are used by hospital
    39  patients; and shall also include an emergency room, which is defined  to
    40  mean  a  center open on a continuous basis which provides emergency care
    41  for those in need of medical services and which is in the same  building
    42  as  a  hospital. It shall not include living accommodations for hospital
    43  personnel or their families;
    44    (vii) "moral or mental improvement of men, women, or  children"  shall
    45  include  each  of the following categories of real property described in
    46  this subparagraph. In order to be exempt from taxation, each acre  shall
    47  have to be actively and actually utilized for an exempt purpose at least
    48  one  hundred  twenty  days  in  any  year an exemption is claimed for or
    49  sought. In addition, the property, in addition to any other requirement,
    50  shall be classified as not-for-profit or tax exempt under  the  Internal
    51  Revenue Code.
    52    (A) Real property primarily used to facilitate or enhance the arts;
    53    (B)  Real  property  primarily used in the study of sciences, biology,
    54  and horticulture;
    55    (C) Real property primarily used for the benefit of non-human animals;

        S. 1951                             4

     1    (D) Real property which is open to the public and is  primarily  unim-
     2  proved  and is kept open for hiking, walking, or forms of exercise which
     3  do not commonly use mechanized devices except by those persons  who  are
     4  disabled or otherwise unable to walk without mechanized assistance. Such
     5  open  space may be open to the public upon the payment of a fee which is
     6  directly related to the costs of maintaining the property, including the
     7  improvements thereon. Open space  shall  not  include  any  property  or
     8  portion therefor from which the public is excluded except for exclusions
     9  based  exclusively on public health purposes, as determined by a govern-
    10  mental agency, or for public safety  reasoning,  as  determined  by  the
    11  property  owner, such determination to be reviewable in any court having
    12  equity jurisdiction and a presumption shall be attached thereto that the
    13  property owner's determination is  reasonable.  Attorneys  fees  may  be
    14  awarded,  at  the  discretion of the court, for any primarily prevailing
    15  party who commences or defends a civil action based on the public safety
    16  aspects of this subparagraph;
    17    (E) "Land trust" shall mean real property  which  is  primarily  unim-
    18  proved. No owner shall be entitled to a property tax exemption as a land
    19  trust  unless  that  property owner meets all of the following criteria:
    20  (1) enters into a contract with the assessing unit which  provides  that
    21  the  land  in  the  land  trust may not be sold or encumbered, except by
    22  mortgage or conservation easement, without the  property  owner,  within
    23  thirty  days of such sale or encumbrance, entering into a valid contract
    24  to purchase land of at least an equal value in the state of New York  to
    25  be  placed in a land trust and actually so purchasing within one year of
    26  entering into such contract; (2) is  included  as  part  of  a  lawfully
    27  enacted  comprehensive  plan by the county, city, town, or village which
    28  such property is in or is  identified  in  an  official  open  space  or
    29  natural  resources  protection  plan duly adopted by a federal, state or
    30  local government or agency thereof;  (3)  exists  as  a  land  trust  to
    31  protect ecological resources which are considered valuable in a lawfully
    32  enacted  comprehensive  plan  provided that public access shall not be a
    33  criteria  in  deterring  an  exemption  from  taxation  for  land  trust
    34  purposes;  and  (4)  unless  the  governing  board of the town, city, or
    35  village where the property  is  situated  passes  a  resolution  to  the
    36  contrary,  if  the purchase, referred to in item (A) of this clause does
    37  not occur within the time limitations provided in such  item,  the  land
    38  trust  shall  be liable for all tax payments which such land trust would
    39  have paid on the property such land trust sold for the  period  of  time
    40  which such land trust would have owed to all lawful taxing jurisdictions
    41  unless  the title to the land such land trust entered into a contract to
    42  purchase was unmarketable or the seller of such  property  withdrew  the
    43  offer  to  sell  in  which case such land trust shall have an additional
    44  three hundred sixty-five day period to purchase and close title on prop-
    45  erty in the state of New York, the value of which is at least  equal  to
    46  the  value  of  the  property  such  land  trust sold which required the
    47  purchase of the property whose title was unmarketable or whose offer  to
    48  sell was withdrawn;
    49    (F)  "Personal  improvement"  shall mean real property other than that
    50  provided for in clause (B) of subparagraph (iv) of this paragraph, which
    51  is used primarily by persons under the age of twenty-one who are  learn-
    52  ing  skills  related  to  nature, the outdoors and/or personal and civic
    53  responsibilities. Such property shall be owned by organizations or asso-
    54  ciations which are tax exempt under the Internal Revenue Code.  Notwith-
    55  standing  any  part  of  this  subdivision to the contrary, each acre of

        S. 1951                             5

     1  property exempted as personal improvement property need only be utilized
     2  ninety days per year in order to maintain such property's exemption;
     3    (G)  "Non-scholastic educational" shall mean real property owned by an
     4  organization which is tax exempt under the  Internal  Revenue  Code  and
     5  which  is  primarily  used  to  improve the intellectual capabilities of
     6  human beings which do not otherwise qualify for tax  exemption  pursuant
     7  to this section;
     8    (H)  "Recreational"  shall mean real property owned by an organization
     9  which is tax exempt under the Internal Revenue Code and  which  provides
    10  recreational  opportunity  for individuals regardless of ability to pay.
    11  Recreational opportunities can be either indoors  or  outdoors  and  may
    12  include  overnight  opportunities primarily for persons under the age of
    13  twenty-one years;
    14    (I) "Medical purposes" shall mean real property otherwise owned by  an
    15  organization  which  is  tax  exempt under the Internal Revenue Code and
    16  which is not a hospital as defined by this section but  which  qualifies
    17  as  a  hospital  as defined in article twenty-eight of the public health
    18  law. Notwithstanding any provision of this subdivision to the  contrary,
    19  property  exempted  for medical purposes need not meet any minimum usage
    20  requirement in terms of the number of days each  acre  is  actively  and
    21  actually used;
    22    (J)  "Home  care services" shall mean real property otherwise owned by
    23  an organization which is tax exempt under the Internal Revenue Code  and
    24  is  a  home care services agency as defined in article thirty-six of the
    25  public health law, notwithstanding any provision of this subdivision  to
    26  the contrary, property exempted for home care services purposes need not
    27  meet  any  minimum usage requirement in terms of the number of days each
    28  acre is actively and actually used;
    29    (K) "Residential health care facility" shall mean real property other-
    30  wise owned by an organization which  is  tax  exempt  as  a  residential
    31  health  care  facility  as defined in article twenty-eight of the public
    32  health law.  Notwithstanding any provision of this  subdivision  to  the
    33  contrary,   property  exempted  for  residential  health  care  facility
    34  purposes need not meet any minimum usage requirement  in  terms  of  the
    35  number of days each acre is actively and actually used;
    36    (L)  "Other medical purposes" shall mean real property which otherwise
    37  is owned by an organization which  is  tax  exempt  under  the  Internal
    38  Revenue  Code  and is used to provide medical services to those in need.
    39  Notwithstanding any provision of this subdivision to the contrary, prop-
    40  erty exempted for other medical purposes need not meet any minimum usage
    41  requirement in terms of the number of days each  acre  is  actively  and
    42  actually used;
    43    (M)  "Primarily  charitable  purposes"  shall mean an activity done on
    44  real property owned by an organization which is  tax  exempt  under  the
    45  Internal  Revenue  Code  and which actually and primarily alleviates the
    46  condition of  poor  or  physically  or  mentally  disabled  humans.  The
    47  intended  beneficiaries  shall  not  be  specified  individuals  and the
    48  services provided by an organization claiming charitable exemption shall
    49  be open to the public based on economic or physical criteria; and
    50    (N) "Other moral or mental improvement" shall mean real property owned
    51  by an organization which is tax exempt under the Internal  Revenue  Code
    52  and  which is dedicated in a manner other than as provided in this para-
    53  graph to the moral or mental improvement of men, women, or children.
    54    § 2. Subdivision 1 of section 420-b of the real property  tax  law  is
    55  amended by adding a new paragraph (d) to read as follows:
    56    (d) When used in this section:

        S. 1951                             6

     1    (i)  "organized  exclusively"  shall  require  that a corporation's or
     2  association's organizational documents limit the purpose of such  corpo-
     3  ration  or  association  to  one  or more exempt purposes, as set out in
     4  paragraph (a) of this subdivision. Furthermore, the corporation or asso-
     5  ciation  shall  not  be empowered to engage in activities which in them-
     6  selves are not in furtherance of one or more such purposes; and
     7    (ii) "used exclusively" shall require that a  corporation  or  associ-
     8  ation use its property only for exempt purposes. Uses which may be help-
     9  ful  to  the exempt organization but would not, if done on land owned by
    10  an otherwise taxable entity, qualify for tax exemption shall subject the
    11  portion of the property so used to real property taxation.  Such  phrase
    12  shall be strictly construed and shall be intended to limit exemptions to
    13  property  and improvements utilized solely for exempt purposes. Where an
    14  exempt organization utilizes its land for other purposes, including  but
    15  not  limited  to,  the sale of products made on the land commercially or
    16  the sale  of  timber,  or  otherwise  leases  the  land  for  commercial
    17  purposes, or allows the placement or construction of improvements on the
    18  land  for  commercial  purposes,  that  portion of such property and any
    19  improvements thereon if such improvements are not  utilized  for  wholly
    20  exempt purposes shall be subject to real property taxation.
    21    §  3.  The  real  property  tax law is amended by adding a new section
    22  420-d to read as follows:
    23    § 420-d. State aid payments for properties exempted from taxation.  1.
    24  Definitions.  (a)  For  the  purpose of this section, the phrase "taxing
    25  district" shall include schools, counties, cities, towns,  villages,  as
    26  well as lawfully formed districts which provide services, including, but
    27  not  limited  to fire protection districts, ambulance districts, as well
    28  as other lawfully formed districts which do not receive payments from an
    29  affected property owner.
    30    (b) For the purposes of this section, the  phrase  "affected  property
    31  owner" shall mean an organization which is exempt from taxation pursuant
    32  to the internal revenue code and which owns property described in clause
    33  (B)  of subparagraph (iv) of paragraph (c) of subdivision one of section
    34  four hundred twenty-a of this title.
    35    2. State aid payments. A taxing district in which property is situated
    36  which property is owned by an affected property owner shall, subject  to
    37  the provisions of this section, be entitled to receive up to one hundred
    38  percent  of  the  taxes  which would have been paid on such property had
    39  such property not been owned by an affected property owner.
    40    3. Application. (a) The chief executive officer of a  taxing  district
    41  in  which there is property owned by an affected property owner may make
    42  application for state assistance pursuant to this section. Such applica-
    43  tion shall be on a form developed by the commissioner.  Upon receipt  of
    44  the  application  for state assistance, such property shall be valued by
    45  the commissioner and the cumulative value of all  such  lands  shall  be
    46  equalized by applying thereto the appropriate state equalization rate or
    47  special  equalization  rate  established in accordance with the rules of
    48  the commissioner.
    49    (b) Subject to  an  acceptable  application,  the  commissioner  shall
    50  compute  the amount of state assistance payable to or for the benefit of
    51  each taxing district by multiplying the value of the  assessed  property
    52  by the tax rate per thousand for each taxing district who makes applica-
    53  tion  pursuant  to the provisions herein. Such amount shall then be paid
    54  to the taxing district upon the audit and warrant  of  the  state  comp-
    55  troller out of moneys appropriated by the legislature. In the event that
    56  the  total  moneys  payable  pursuant  to  this section shall exceed the

        S. 1951                             7

     1  amount appropriated by the legislature in any  state  fiscal  year,  the
     2  payments  to  taxing  district shall be reduced proportionately for each
     3  taxing district which has  timely  made  application  pursuant  to  this
     4  section.
     5    4.  Rules.  The  commissioner is authorized to develop rules and regu-
     6  lations or guidelines for the implementation of this section.
     7    § 4. This act shall take effect on the first of January next  succeed-
     8  ing  the  date  on  which  it shall have become a law and shall apply to
     9  assessment rolls prepared on the basis of taxable status dates occurring
    10  on or after such date.
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