New York Assembly Bill A03252

New York 2025-2026 Regular Session

• Introduced: 1/27/25
• Refer: 1/27/25
• Refer: 1/7/26

Caption

Requires the state pay taxes on the assessed value of properties of closed state prisons until such prison is reopened, used by another state agency, or is conveyed to a non-governmental entity.

Summary

A03252 would amend New York’s real property tax law to require the state to pay property taxes, based on assessed value, on land and improvements that were formerly used as state prisons after correctional operations have ceased. The tax obligation would continue until the property is put back into use by a state agency or sold to a non-governmental entity. If the former prison is conveyed to a not-for-profit non-governmental entity, that entity would be required to enter into a payment-in-lieu-of-taxes agreement with the local municipality. The bill is aimed at closed prison sites that remain state-owned but no longer serve a correctional function. It would create a specific tax treatment for these properties, effectively removing their exemption from local property taxation once prison operations end, while also preserving a local revenue stream through PILOT agreements in certain nonprofit transfer situations.

Impact

The bill would narrow the state’s property tax exemption for state-owned prison lands by adding a new category of taxable state property under the Real Property Tax Law. Local governments would gain a potential new source of revenue from closed prison facilities that remain in state ownership, and the state would assume a direct tax liability on those parcels until they are repurposed, transferred, or reopened. The measure would also affect nonprofit transferees of former prison sites by requiring PILOT arrangements with the host municipality.

Sentiment

The available voting history suggests the bill has some support but is not yet broadly settled, as it was reported as held for consideration by the Assembly Real Property Taxation Committee on a 7-3 vote. That result indicates a generally favorable reception among a majority of committee members, but not unanimous agreement. No transcript discussion was provided, so the record shows procedural movement rather than a fully developed public debate.

Contention

The main point of contention is likely whether the state should be required to pay local property taxes on property it still owns after a prison closes, versus preserving the traditional tax exemption for state-owned land. Supporters are likely focused on compensating municipalities for lost economic activity and tax base when prisons shut down, while opponents may view the proposal as an added fiscal burden on the state or question whether closed state property should be treated like taxable private property. The bill also raises a secondary issue for nonprofit entities that receive former prison property, since they would be required to negotiate PILOT agreements rather than receive the property tax treatment typically associated with charitable ownership.