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Senators Target New York Nonprofits

WASHINGTON (AFP eWire - Oct. 20, 2003) - New York nonprofits are fighting proposed legislation that targets tax-exempt land.

A coalition of 38 organizations have banded together to fight six bills that would change the eligibility requirements for land owned by nonprofits to be considered exempt from property taxes.

Versions of the bills, introduced by Sens. John J. Bonacic and Elizabeth Little, have been brought up in previous years, but they gained ground this year, spurring nonprofits into action.

In part, the bills would:

  • require organizations claiming tax exemption on land to prove each year to the local assessor that the property is used exclusively for exempt purposes,
  • require an organization to develop and implement plans to use land within two years of purchasing,
  • require organizations claiming exemptions based on providing for the 'moral or mental improvement of men, women or children' to prove that each acre is used for that purpose at least 120 days a year, and
  • allow school districts to charge tuition for students who live on tax-exempt property.

In a press release in May, Bonacic said that while tax exemptions sometimes serve important public purposes, 'too often, however, they do little more than serve the personal preferences of a few while causing homeowners to pay more in property taxes.'

The bills would harm nonprofits in a variety of ways, said Ron Soloway, managing director of government relations for the United Jewish Appeal - Federation of New York Inc. Organizations that have summer camps or retreat centers in wooded areas may find it difficult to prove that every acre is used for 'moral or mental improvement of men, women or children.' Also, the seasonal nature of the camps and outings may not fit the requirement that the land be used 120 days every year.

In addition, nonprofits may have a hard time developing land within two years of obtaining it. For example, an organization may receive a piece of property as a donation, decide it wants to build a child care center and begin fundraising efforts to develop the center, possibly taking more than two years to carry out the plan.

Soloway also worries about the effect these bills would have on donors: If philanthropists thought they were giving money for an organization's programs and services, and that money, in turn, was given to the government to pay taxes, would the donor want to make a contribution?

'In the last 10 years there's not been a serious thought that these [bills] might pass,' Soloway said.

But this year was different as the state and local governments found themselves financially strapped.

'They're looking for revenue [increases] wherever they can find them,' he said.

This summer, as the New York legislative session was coming to a close, the bills began to find supporters.

'We had to spring to action in June because these bills were getting serious consideration,' Soloway said.

A coalition was formed and a joint letter was sent to all the state legislators outlining the detrimental effects the bills would have on nonprofits and the services they provide.

The lobbying efforts paid off temporarily as discussion of the bills was postponed until the legislative session resumes in January. The coalition has continued its lobbying efforts - including meeting with key legislators and writing letters - and will step up efforts next spring if the legislature reconsiders the bills, Soloway said.

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