Testimony of Bernard R. Miller, Director of the Essex County Real Property Tax Services Agency, at a Public Hearing of the Senate Committee on Local Government and the Senate Committee on Housing Construction & Community Development held in Lake Placid, New York on March 13, 2003.
I strongly support the efforts of Senators Bonacic and Little and their Committees in reviewing and, where necessary, proposing reforms to real property exemption law. The Senators have correctly recognized that the implementation of public policies have put ever heavier burdens on the real property tax. They have also recognized that the ability to shoulder the burden has been weakened by the extent to which certain properties have been exempted from real property taxes.
The proposed amendments to Sections 480 & 480a of the Real Property Tax Law (RPTL) contained in Senate bill 1415 (S1415) would provide direct financial relief to municipalities; while the amendments to Sections 420a & 420b RPTL (Sl123, Sl126, Sl127 & S1398) and Section 3202 of the Education Law (Sl125) would provide municipalities with measures that would limit the scope and mitigate the financial impact of Sections 420a & 420b RPTL. Both initiatives are greatly appreciated and endorsed.
In regards to S1415, I do not see any problems with it in its current form. With approximately 16% of the land in Essex County benefiting from the 480 & 480a RPTL exemptions (see attached summary), the relief provided is entirely welcome. However, in regard to the proposed amendments concerning Sections 420a & 420b RPTL , they could go a bit further; although, passage in their current form would also be welcomed and supported.
I believe the original intent of Sections 420a & 420b RPTL was to provide certain non-profit organizations with wholly exempt status, because they either augmented public services and policies, or they supplied services which were in the public interest, consistent with public policy but were not publicly funded. It was not the intent of the legislature to provide wholly exempt status if public policy and interests were to be supplanted or disrupted, or if organizations were to impose their own versions of what is in the public interest. Unfortunately, there is a current trend concerning certain reputed “land trusts,” which seems to distort the intent of the legislature.
In Essex County there have been instances where property owners or members of property owner associations, in residential neighborhoods, have formed “land trusts” and have purchased vacant property in those neighborhoods (see attached samples). They have also claimed that their organization and the property use are either educational or charitable; and they have, accordingly, applied for wholly exempt status.
Thus far, local assessors and boards of assessment review have denied such “land trusts” exempt status. Perhaps the assessors and review boards thought that the intent was more the protection of individual privacy than protection of the environment. But, in any event, it should be the local community that decides what is in the public interest and what, as in these cases, best protects the environment. It should not be up to private organizations.
“Land trusts,” therefore, should be added to the permissive class of wholly exempt properties covered by Section 420b RPTL. For although the definitions of Sl127 would effectively block the “educational” claim, the courts might still find such trusts “charitable” or contributing to “moral or mental improvement” in some broad sense of the terms. Addition to the permissive class would prevent this and be consistent with the principles of home-rule, which are so clearly recognized in Section 420b RPTL, in S1398 and in such exemptions as the Senior Citizen, Alternative Veteran and Business Investment exemptions.
Moreover, language should be included in Section 420b RPTL that would require the proposed property use by “land trusts” be consistent with local land use planning. Again, exemptions should be framed to supplement not supplant public policy.
To lend further support to the home-rule principles of Section 420b RPTL, sub-paragraph (1) (a) of that law should also be amended, so that it would take a local law to allow the exemption for any of the types of non-profit listed; rather than a local law to disallow the exemption as is now the case. Thus, non-profits would have to demonstrate that the public interest is being served and municipalities would not have to play the “Grinch.” In other words, instead of having to “opt out,” municipalities, having been persuaded of the public interest involved, would merely have to “opt in.”
In summary, then, the proposed amendments to Sections 480 & 480a RPTL should be supported and passed into law. The proposed amendments concerning Sections 420a & 420b RPTL are also acceptable in their current form; but they could go further in terms of the horne-rule principles they already express. Accordingly, land trusts should be added to the list of non-profits in the permissive class, intended property use by land trusts should be consistent with local land use plans, and municipalities should be required to “opt in,” rather than “opt out” under Section 420b RPTL. The horne-rule principles underlying these amendments are that municipalities should have the greatest possible control of their tax base and in determining what is in the best interest of their communities.
Thank you for this opportunity and thank you for your efforts.
Bernard R. Miller
Essex County Real Property
Tax Services
2002-2003 Summary of Private Forest Exemptions (Essex County)
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