BILL NUMBER: S9168

SPONSOR: MURRAY
 
TITLE OF BILL:

CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY proposing an amendment
to section 1 of article 16 of the constitution, in relation to real
property tax exemptions for certain educational institutions

 
PURPOSE:

Allows the alteration or repeal of real property tax exemptions for
certain private institutions of higher education by a private bill by
the legislature, approved by the governor.

 
SUMMARY OF PROVISIONS:

Section 1 amends section 1 of article 16 of the constitution to provide
that the legislature, by passage of a private bill approved by the
governor, may alter or repeal a real or personal property tax exemption
of a private institution of higher education.

              

Section 2 provides for the steps in the process of adoption in accord-
ance with article 19 of the constitution.

 
JUSTIFICATION:

Private institutions of higher education in this state are considered
not-for-profit institutions under state law. The New York State Consti-
tution provides that a tax exemption for a not-forprofit organization in
this state may be granted through a general law by the Legislature.

However, the Constitution states this exemption from taxation may not be
altered or repealed for those not-for-profit institutions which are
religious, educational, or charitable in nature. This includes private
colleges and other higher education institutions.

Notably, NYS Not-For-Profit Corporation Law, Article 1, Section 109
does, however, provide that the Legislature has ultimate oversight of
not-for-profits, including the higher education institutions that have
tax exempt status. This section of Not-For-Profit state law makes them
ultimately accountable to the Legislature for their operations in that
it states that "The legislature reserves the right, 'at pleasure' to
alter, amend, suspend or repeal in whole or in part  
... any certif-
icate of incorporation or any authority to do business in this state, or
any domestic or foreign corporation."

Therefore, since the Legislature already has the broad authority to
change and even remove the certificate of incorporation of non-profits,
including private colleges, it is prudent to also allow the Legislature
a determinative role in weighing whether the public benefits that
private institutions of higher education receive by virtue of the tax
exempt status they enjoy should be reconsidered.

This bill gives the Legislature such oversight by giving it the authori-
ty by passage of legislation to alter or repeal their tax-exempt status.
This bill is needed to allow elected representatives of the State Legis-
lature who represent taxpayers from every corner of the state, the
authority to determine if it is in the public interest to continue to
provide public tax benefits to a particular higher education institu-
tion.

 
LEGISLATIVE HISTORY:

This is a new bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect the first regular legislative session conven-
ing after the next succeeding general election of members of the assem-
bly.