BILL NUMBER: S2608

SPONSOR: AKSHAR
 
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 a manner which
supports the specific exemption granted.

 
SUMMARY OF PROVISIONS:

Section 1: Amends section 420-a of the Real Property Tax Law by repeal-
ing subdivision 3 and replacing it with a new subdivision 3 which
provides 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 to commence within five years and the full
              

execution of such plans within seven years. If no part of the physical
improvements to the land are commenced within five years and completed
within seven years of taking title to the property, the property owner
who received the benefit of the exemption shall pay all property taxes
that would have been owed.

Section 2: Effective date.

 
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 reconstruct-
ing the framework for granting real property tax exemptions across the
state. Based on year 2012 assessment rolls, there are over 5.7 million
parcels of property in New York State (valued at a total of over $2.5
trillion). Of this number, some 3.5 million parcels enjoy at least 1
real property tax exemption. From a taxable status standpoint, over
32.4% of the total value of property in New York State ($826 billion) is
either wholly or partially exempt from real property taxation.

The lion's share of real property tax exemptions 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.

The State must help provide tools which promote greater accountability
from those seeking real property exemptions in order to balance public
needs and benefits. This specific legislation offers such a tool by
seeking to ensure that organizations which seek tax exemption truly met
those public purposes, and that lands receiving relief from real proper-
ty taxation are being fully used in support of such purposes.

 
LEGISLATIVE HISTORY:

S.993 of 2018: Died in Senate Local Government

S.1679 of 2016: Died in Senate Local Government, Died in Assembly Real
Property Taxation

S.1679 of 2015: Died in Senate Local Government, Died in Assembly Real
Property Taxation

S.879 of 2014: Died in Senate Local Government 5.879 of 2013: Died in
Senate Local Government

S.2544-A of 2012: Died in Senate Local Government, Died in Assembly Real
Property Taxation

S.2544 of 2011: Passed Senate, Died in Assembly Real Property Taxation

S.6838 of 2010: Died in Senate Local Government

S.1126-A of 2004: Died in Senate Local Government, Died in Assembly Real
Property Taxation

S.1126-A of 2003: Died on Senate Floor Calendar

 
FISCAL IMPLICATIONS:

None to the state.

 
LOCAL FISCAL IMPLICATIONS:

Undetermined, however, it is anticipated the bill will offer improved
local oversight of exemptions, with a salutary effect on school, munici-
pal 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 and shall apply to property irrespective of the date of
the transfer of title.